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2500 - Qiao Garden Hotel Investment Inc - Sale of 8832 Glendon Way MAYOR: 1 City, of Rosemead STEVEN LY MAYOR PRO TEM: uvia rs,ne MARGARET CLARK '11/1/11"WPY- 8838 E.VALLEY BOULEVARD P.O BOX 399 ROSEMEAD,CALIFORNIA 91770 COUNCIL ARMENIA MEMBERS- O .� TELEPHONE(626)569-2100 SANDRA � � SEAN DANG FAX(626)307-9218 f POLLY Low January 31, 2019 Qiao Garden Hotel Investment, Inc. Mr. Liars Yue Song, President and CEO do Ms. Helen Wang 808 S. Atlantic Boulevard, Suite E Monterey Park, CA 91754 Hello Ms. Wang, This letter is to confirm that Promissory Note secured by.Deed of Trust for below has been paid in full.' . Property Address: 8832 Glendon Way, Rosemead CA 91770 APN: .. 5390-018-038 Loan Amount: $2,247,700.30 Trustor: Qiao Garden Hotel Investment, Inc., a California corporation BeneficiaryThe Rosemead Community Development Commission, a Public bondy corporate and politic Recorded: December.30, 2011 as Instrument Number 20111787047 Please find attached the original executed and signed Promissory Note Secured by Deed of.Trust Thank you and please let meRnow-if you have any_questions. Sincerely, im Director of Community Development Attachments: Promissory Note Secured by Deed of Trust Payment Copies PROMISSORY NOTE SECURED BY DEED OF TRUST $2,247,700.30 Rosemead, California December 29, 2011 For value received, QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation ( "Borrower "), does hereby covenant and promise to pay to the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body, corporate and politic ( "Commission "), or order, the principal sum of $2,247,700.30, together with interest thereon as provided below. Principal and interest are payable in lawful money of the United States of America without setoff, deduction or counterclaim and shall be paid to the Commission, in installments as provided in Section 1 below, at 8838 E. Valley Boulevard, Rosemead, California 91770, or at such other place as Commission may from time to time designate by written notice to Borrower, 1. Terms of the Loan. (a) Interest is payable on the outstanding principal at the rate of 6.25% per annum. Principal, together with accrued interest thereon, is payable in seven (7) annual installments, the first and second of which annual installments are each in the principal amount of $500,000, and the remaining five of which annual installments are each in the principal amount of $360,000. The annual installments of principal, together with interest thereon, are payable commencing on December 30, 2012 (the "Commencement Date "), and continuing thereafter on the same day of each succeeding year until December 30, 2018 (the "Maturity Date "), at which time all outstanding principal shall be fully due and payable. (b) To the extent that Borrower makes any payment or Commission receives any payment or proceeds for Borrower's benefit, which are subsequently invalidated, declared to be fraudulent or preferential; or are required to be set aside or to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the obligations of Borrower hereunder intended to be satisfied shall be revised and continue as if such payment or proceeds had not been received by Commission. (c) Borrower shall pay to Commission a charge ( "Late Charge ") for the collection of late payments in an amount equal to three percent (3 %) of any payment required hereunder which is not paid within ten (10) days after the date such payment is due, as liquidated damages and not as a penalty. Without limiting the foregoing, Borrower agrees that the Late Charge shall be due and payable upon the entire unpaid principal amount if not paid when due upon the Maturity Date. Acceptance of any Late Charge does not constitute a waiver by Commission of the default with respect to the overdue amount and shall not prevent Commission from exercising any other rights or remedies available to it. From and after the Maturity Date of this Note or such earlier date as all sums owing on this Note become due and payable by acceleration or otherwise, all sums owing on this Note, at Commission's option, will bear interest until paid in full at a rate equal to ten percent (10 %) per annum. -I- (d) All payments on this Note will be applied first to the payment of any costs, fees, Late Charges, or other charges incurred in connection with the indebtedness evidenced by this Note; then to the reduction of the principal balance. (e) The Deed of Trust and Assignment of Rents ( "Deed of Trust ") which secures the indebtedness evidence by this Note provides as follows: "In the event of any Transfer (as defined below) of said property, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, `Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said property or any interest of Trustor therein, or the further hypothecation or encumbering of said property or any part thereof, or the entry into any agreement to do any of the foregoing, without the prior written consent of Beneficiary. Notwithstanding the foregoing provisions, so long as said property is being operated as a hotel, Beneficiary shall have the right to rent rooms in such hotel for periods not exceeding thirty (30) consecutive days to any person or entity without the Beneficiary's consent." (f) The parties hereto intend to conform strictly to the applicable usury laws. In no event shall the Commission be entitled to interest exceeding the maximum rate permitted by law. If fulfillment of any provision of this Note, or of any other document pertaining to the indebtedness evidenced hereby, at the time performance of such provisions shall be due, would involve exceeding the maximum rate of interest prescribed by law, then the obligation to be fulfilled shall be reduced automatically so as to equal such maximum rate. If the Commission shall ever receive anything of value deemed interest under applicable law which would exceed interest at the highest lawful rate, an amount equal to any amount which would have been excessive interest shall be applied to the reduction of principal installments payable with respect to this Note in the inverse order of their maturity and not to the payment of interest, or if such amount which would have been excessive interest exceeds the unpaid balance of principal hereof, such excess shall be refunded to Borrower. All sums paid or agreed to be paid to the Commission for the use, forbearance or detention of the indebtedness of the Borrower to the Commission hereunder shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of such indebtedness so that the amount of interest on account of such indebtedness does not exceed the maximum permitted by applicable law. 2. Prepayment. Borrower may prepay the outstanding principal balance of the Loan in whole or in part at any time and from time to time; provided, however, that in no event shall Borrower be entitled to reborrow any amounts prepaid. If Borrower desires to prepay, Borrower shall give Commission ten (10) days' prior written notice, which notice shall specify the date on which Borrower will prepay and the amount of outstanding principal which Borrower will prepay. Partial prepayments must be in integral multiples of $1,000. In connection with any prepayment, in addition to payment of the outstanding principal amount being prepaid, and all accrued interest thereon, Borrower shall pay a prepayment premium ( "Prepayment Premium ") equal to all unaccrued interest through the Maturity Date on the principal amount being prepaid. For purposes of calculating the Prepayment Premium, Borrower and Commission agree that the -2- f total principal and interest due for the entire term of the loan under Section 1(a) shall be $2,800,000 ( "Total Payment "). In the event of prepayment by Borrower, the outstanding principal and the Prepayment Premium shall not exceed the unpaid balance of the Total Payment. By way of illustration, if Borrower decides to prepay the loan after the initial two annual payments, the total principal Prepayment Premium that Borrower is obligated to pay the Commission shall be $2,800,000 - $1,000,000 = $1,800,000. 3. Acceleration on Default. If Borrower fails to pay the principal of or any other amount payable by Borrower under this Note, as and when the same is due and payable, or if Borrower fails to pay any amount or perform any obligation to be paid or performed by Borrower under the Deed of Trust, as and when required thereby, then, in addition to all rights and remedies of the Commission under the Deed of Trust, applicable law or otherwise, all such rights and remedies being cumulative, the Commission may, at its option, declare all amounts owing under this Note to be immediately due and payable ( "Acceleration "). (a) If, following an Acceleration, all or any portion of the unpaid principal is paid ( "Satisfaction Amount "), whether through sale of the property encumbered by the Deed of Trust or any other agreement securing this Note, at a foreclosure held thereunder, or through tender of payment at any time following Acceleration, but prior to such a foreclosure sale, then payment of the Satisfaction Amount shall be deemed an evasion of the prepayment provision set forth above in this Note, and Commission, automatically and without notice or demand, shall be entitled to receive, concurrently with the Satisfaction Amount, an amount ( "Evasion Premium ") equal to all unaccrued interest through the Maturity Date on the Satisfaction Amount. (b) By initialing below, Borrower acknowledges and agrees that Commission would not lend to Borrower the loan evidenced by this Note without (i) Borrower's agreement as set forth above to pay Commission the Evasion Premium upon the satisfaction of all or any portion of the principal indebtedness evidenced by this Note following an Acceleration and (ii) Borrower's waiver, which the Borrower hereby makes, of any rights it may have under California Civil Code Section 2954.10 to prepay this Note in whole or in part, without penalty, upon an Acceleration. By initialing below, Borrower further acknowledges and agrees that (1) the general partners, members or other principals, as the case may be, of Borrower are knowledgeable real estate developers or investors, (2) Borrower fully understands the effect of the acknowledgements, agreements and waiver being made by Borrower in this paragraph, (3) the making of the loan evidenced by this Note at the interest rate set forth in this Note is sufficient consideration for such acknowledgments, agreements and waiver, and (4) Commission would not make the loan without such acknowledgements, agreements and waiver. Borrower's Initials Borrower's Initials 4. Borrower Acknowledgments. By initialing below, Borrower acknowledges and agrees that (i) absent payment of the Prepayment Premium or the Evasion Premium, as applicable, a prepayment would cause damage to Commission and deprive Commission of the full amount agreed to be paid by Borrower during the term of this Note, payment of which amount is a material consideration to Commission in connection with the transaction of which this Note is a part, (ii) the Prepayment Premium and the Evasion Premium, as applicable, are intended to protect Commission against the loss of its bargain and the expense incurred and time and effort associated with making the loan evidenced by this Note, and (iii) the Prepayment Premium and the Evasion Premium represent Commission's and Borrower's agreement as to the amount which Commission is entitled to receive upon a prepayment or an Acceleration, as applicable, are reasonable, and are not a penalty. Borrower's Initials Borrower's Initials 5. Cost of Collection. Borrower agrees to pay the following costs, expenses and attorneys' fees paid or incurred by Commission: (i) costs and expenses of collection or enforcement of, and attorneys' fees paid or incurred in connection with the collection or enforcement of, this Note, whether or not suit is filed; and (ii) costs of suit and such sum as the Court may adjudge as attorneys' fees in an action to enforce payment of this Note or any part of it. 6. Forbearance Not a Waiver. No delay or omission on the part of Commission in exercising any rights under this Note or the Deed of Trust on breach or default by Borrower shall operate as a waiver of such right or any other right under this Note or the Deed of Trust for the same breach or default or any other breach or default. 7. Assignment. Commission shall have the right to sell, assign or otherwise transfer, in whole or in part, this Note, the Deed of Trust, and any other instrument evidencing or securing the indebtedness of this Note with the consent of Borrower. Borrower shall not sell, assign or otherwise transfer this Note, in whole or in part, without the prior written consent of Commission which consent the Commission is under no obligation to give. 8. No Oral Modifications. Neither this Note nor any of the terms or provisions hereof can be altered, modified, amended, waived, extended, changed, discharged or terminated orally or by a course of conduct, but only by an agreement in writing signed by the party against whom enforcement of any alteration, modification, amendment, waiver, extension, change, discharge or termination is sought. 9. Time is of the Essence. Time is of the essence for each and every obligation under this Note. QIAO GARDEN HOTEL INVESTMENT, INC. By: Soi4, LAW GZo (Print Name & Title) me (Print Name & Title) -5- P Lawvers Title' January 18, 2012 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION 8838 E. VALLEY BOULEVARD ROSEMEAD, CALIFORNIA 91770 ATTN: COMMISSION SECRETARY Lawyers Title Company 7530 N. Glenoaks Blvd. Burbank, CA 91504 Phone: (818) 767 -2000 Fax: (818) 504 -4937 FES 2 9 2092 ICE YOUR REF: QIAO GARDEN HOTEL INVESTMENT, INC. OUR NO.: 111091144 POLICY NO.: CA- FXDB -ICL- 81067 -1 -11- 111091144 Property: 8832 Glendon Way, (Rosemead Area), Los Angeles County, California Dear Customer: On behalf of Lawyers Title - LA, please find your CLTA Joint Protection policy of title insurance. NOTE: Your policy is a Computer Generated Product. Although lacking color and "live" signatures, it is the original of your policy. Thank you for selecting Lawyers Title - LA for your transactional management needs. Enclosure Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 This policy has been issued through the offices of LawyersTitle Lawyers Title Company 7530 N. Glenoaks Blvd. Burbank, CA 91504 Phone: (818) 767 -2000 Fax: (818) 504 -4937 We wish to take this opportunity to thank you for allowing us to assist you in your recent real estate transaction. We appreciate your confidence in us and take pride in our ability to service all your title needs. The enclosed title policy was carefully prepared in accordance with your agent's instruction and should be kept in a safe place with your other important documents as it continues to protect you as long as you have an interest in the subject real property. We hope we can be of assistance to you in all your future real estate transactions. Cordially, /o-- 4 James M. John Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 Effective Date: 5/1/2008 Fidelity National Financial, Inc. Privacy Statement Fidelity National Financial, Inc. and its subsidiaries ( "FNF ") respect the privacy and security of your non - public personal information ( "Personal Information ") and protecting your Personal Information is one of our top priorities. This Privacy Statement explains FNF's privacy practices, including how we use the Personal Information we receive from you and from other specified sources, and to whom it may be disclosed. FNF follows the privacy practices described in this Privacy Statement and, depending on the business performed, FNF companies may share information as described herein. Personal Information Collected We may collect Personal Information about you from the following sources: • Information we receive from you on applications or other forms, such as your name, address, social security number, tax identification number, asset information, and income information; • Information we receive from you through our Internet websites, such as your name, address, email address, Internet Protocol address, the website links you used to get to our websites, and your activity while using or reviewing our websites; • Information about your transactions with or services performed by us, our affiliates, or others, such as information concerning your policy, premiums, payment history, information about your home or other real property, information from lenders and other third parties involved in such transaction, account balances, and credit card information; and • Information we receive from consumer or other reporting agencies and publicly recorded documents. Disclosure of Personal Information We may provide your Personal Information (excluding information we receive from consumer or other credit reporting agencies) to various individuals and companies, as permitted by law, without obtaining your prior authorization. Such laws do not allow consumers to restrict these disclosures. Disclosures may include, without limitation, the following: • To insurance agents, brokers, representatives, support organizations, or others to provide you with services you have requested, and to enable us to detect or prevent criminal activity, fraud, material misrepresentation, or nondisclosure in connection with an insurance transaction; • To third -party contractors or service providers for the purpose of determining your eligibility for an insurance benefit or payment and /or providing you with services you have requested; • To an insurance regulatory authority, or a law enforcement or other governmental authority, in a civil action, in connection with a subpoena or a governmental investigation; • To companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements and /or • To lenders, lien holders, judgment creditors, or other parties claiming an encumbrance or an interest in title whose claim or interest must be determined, settled, paid or released prior to a title or escrow closing. We may also disclose your Personal Information to others when we believe, in good faith, that such disclosure is reasonably necessary to comply with the law or to protect the safety of our customers, employees, or property and /or to comply with a judicial proceeding, court order or legal process. Page 1 of 2 Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 Effective Date: 5/1/2008 Disclosure to Affiliated Companies - We are permitted by law to share your name, address and facts about your transaction with other FNF companies, such as insurance companies, agents, and other real estate service providers to provide you with services you have requested, for marketing or product development research, or to market products or services to you. We do not, however, disclose information we collect from consumer or credit reporting agencies with our affiliates or others without your consent, in conformity with applicable law, unless such disclosure is otherwise permitted by law. Disclosure to Nonaffiliated Third Parties - We do not disclose Personal Information about our customers or former customers to nonaffiliated third parties, except as outlined herein or as otherwise permitted by law. Confidentiality and Security of Personal Information We restrict access to Personal Information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard Personal Information. Access To Personal Information/ Requests for Correction, Amendment, or Deletion of Personal Information As required by applicable law, we will afford you the right to access your Personal Information, under certain circumstances to find out to whom your Personal Information has been disclosed, and request correction or deletion of your Personal Information. However, FNF's current policy is to maintain customers' Personal Information for no less than your state's required record retention requirements for the purpose of handling future coverage claims. For your protection, all requests made under this section must be in writing and must include your notarized signature to establish your identity. Where permitted by law, we may charge a reasonable fee to cover the costs incurred in responding to such requests. Please send requests to: Chief Privacy Officer Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, FL 32204 Changes to this Privacy Statement This Privacy Statement may be amended from time to time consistent with applicable privacy laws. When we amend this Privacy Statement, welwill post a notice of such changes on our website. The effective date of this Privacy Statement, as stated above, indicates the last time this Privacy Statement was revised or materially changed. Page 2 of 2 Q0 Commonwealthf LAND TITLE INSURANCE COMPANY POLICY NO.: STANDARD COVERAGE POLICY OF TITLE INSURANCE Issued by Commonwealth Land Title Insurance Company SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, Commonwealth Land Title Insurance Company, a Nebraska corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; 4. Lack of right of access to and from the land; and in addition, as to an insured lender only 5. The invalidity or unenforceability of the lien of the insured mortgage upon the title; 6. The priority of any lien or encumbrance over the lien of the insured mortgage, said mortgage being shown in Schedule B in the order of its priority; 7. The invalidity or unenforceability of any assignment of the insured mortgage, provided the assignment is shown in Schedule B, or the failure of the assignment shown in Schedule B to vest title to the insured mortgage in the named insured assignee free and clear of all liens. - The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title or the lien of the insured mortgage, as insured, but only to the extent provided in the Conditions and Stipulations. IN WITNESS WHEREOF, Commonwealth Land Title Insurance Company has caused its corporate name and seal to be hereunto affixed by its duly authorized officers, the Policy to become valid when countersigned by an authorized officer or agent of the Company. Lawyers Title, A Division of Commonwealth Commonwealth Land Title Insurance Company Land Title Insurance Company I A P(-.�EA ay;President ATTEST / Y// Countersigned Secretary EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees are expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulations (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Dale of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained 9 the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. U nenforceabi lily of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth - intending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, slate insolvency or similar creditors' rights lava. Yvi ll.l IYV": CONDITIONS AND STIPULATIONS 1. Definition d Terms. The following terms when used in this pdicy mean: (a) 'insured': the insured named in Schedule A, and, subject to any rights or defenses the Company would have had against the named insured, those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to, heirs, disWbutees, devisees, survivors, personal representatives, next of kin, or corporate or fiduclary successors. The term'insured- also includes: (i) the owner of the indebtedness secured by the insured mortgage and each successor in ownership of the indebtedness except a successor who is an obligor under the provisions of Section 12(c) of these Conditions and Stipulations (reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor insured, unless the successor acquired the indebtedness as a purchaser for value without knowledge of the asserted defect, lien, encumbrance, adverse claim on other matter insured against by this policy as affecting title to the estate or interest in the land): (it) any governmental agency or governmental instrumentality which is an insurer or guarantor under an insurance contract or guaranty insuring or guaranteeing the indebtedness secured by the insured mortgage, or any pad thereof, whether named as an insured herein or not; (iii) the parties designated in Section 2ad of these Conditions and Stipulations. (b) 'insured ctainni an insured claiming loss or damage. (c) 'insured lendeh the owner of an insured mortgage. (d) 'insured mortgage ": a mortgage shown in Schedule B, the owner of which is named as an insured in Schedule A. (e) 'knowledge" or 'known': actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of the public records as defined in this policy or any other records which impart constructive notes of matters affecting the land. (p 'land': the land described or referred to in Schedule A and improvements affixed thereto which by law constitute real property. The term "land' does not include any property beyond the lines of the area described or referred to in Schedule A nor any right. tide, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy. (g) -mortgage': mortgage. deed of trust trust dead, or other security instrument. (h) 'public records': records established under state statutes at Date of Policy for the purpose of impairing constructive notice of matters relating to real property to purchasers for value and without knowledge. (i) 'unmarketability of the tide': an alleged or apparent matter affecting the due to the land, not excluded or excepted from coverage, which would anode a purchaser of the estate or interest descrbed in Schedule A or the insured mortgage to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of marketable life. 2. Continuation of Insurance. (a) After Acquisition of Title by Insured Lender. If this policy insures the owner of the indebtedness secured by the insured mortgage, the coverage of this policy shall contlnce in force as of Date of Policy in favor of (i) such insured lender who acquires all or any pan of the estate a interest in the land by foreclosure, trustees sale, conveyance in lieu of foreclosure, or other legal manner which discharges the lien of the insured mortgage; (it) a transferee of the estate or interest so acquired from an insured corporager, provided the transferee is the parent or wholly -awned subsidiary of the insured corporation, and their corporate successors by operation of law and not by purchase, subject to any rights or defenses the Company may have against any predecessor insureds; and (iii) any governmental agency or governmental instrumentality which acquires all a any pan of the estate or interest pursuant to a contend of insurance or guaranty insuring or guaranteeing the indebtedness secured by the insured mortgage. (b) After Conveyance of Title by an Insured. The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the insured retains an estate or interest in the land, or holds an indebtedness secured by a purchase money mortgage given by a purchaser from the insured or only so long as the insured shall have liability by reason of covenants of warranty made by the insured in any transfer or conveyance of the estate or interest, This policy shall not continue in force in favor of any purchaser from an insured of either (i) an estate or interest in the land, or (it) an indebtedness secured by a purchase money mortgage given to an insured. (c) Amount of Insurance. The amount of insurance after the acquisition or after the conveyance by an insured lender shall in neither event exceed the least of: (i) The amount of insurance stated in Schedule A; (ii) The amount of the principal of the indebtedness secured by the insured mortgage as of Date of Policy, Interest thereon, expenses of foreclosure, amounts advanced pursuant to the insured mortgage to assure compliance with laws or to protect the lien of the insured mortgage prior to the time of acquisition of the estate or interest in the land and secured thereby and reasonable amounts expended to prevent deterioration of improvements, but reduced by the amount of all payments made; or (iii) The amount paid by an governmental agency or governmental instrumentality, if the agency or the instrumentality is the insured claimant, in the acquisition of the estate or Interest in satisfaction of its insurance contract or guaranty. 3. Notice of Claim to be Given by Insuretl Claimant. An insured shall notify the Company promptly in writing (i) in one of any litigation as set forth in 4(a) below, (ii) in case knowledge shall come to an insured hereunder of any claim of tide or interest which is adverse to the title to the estate or interest or the lien of the insured mortgage, as insured, and which might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if file to the estate or interest or the lien of the insured mortgage, as Insured, is rejected as unmarketable. If prompt notice shall not be given to the Company, then as to that insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, however, that failure to notify the Company shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. 6. Defense and Prosecution of Actions; Duty of Insured Claimant to Cooperate. (a) Upon written request by an insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the defense of such insured in litigation in which any third party asserts a claim adverse to the tide or interest as insured, but only as to those stated causes of action alleging a defect, lien or encumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of such insured to object for reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of any other counsel. The company will not pay any fees, costs or expenses incurred by an standard Coverage Policy Form 1183 -2Z insured in the defense of those causes of action which allege matters not insured against by this policy. (b) The Company shall have the right, al1%own cost, to institute and prosecute any action or Proceeding or to do any other ad which in its opinion may be necessary or desirable to establish the title to the estate or interest or the lien of the insured mortgage, as insured, or to prevent or reduce loss or damage to an insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a defense as required or permitted by the provisions of this policy, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or Order. (d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding, an insured shall secure to the Company the fight to so prosecute or provide defense in the action or proceeding, and all appeals therein, and permit the Company to use, at its option, the name of such insured for this purpose. Whenever requested by the Company, an insured, at the Company's expense, shall give the Company all reasonable aid (i) in any action or proceetling, securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (it) in any other lawful act which in the opinion of the Company may be necessary or desirable to establish the tide to the estate or interest or the lien of the insured mortgage, as insured. If the Company is prejudiced by the failure of an insured to furnish the required cooperation, the Company's obligations to such insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation. 5. Proof of Lpes or Damage. In addition to and after the notices required under Section 3 of these Conditions and Stipulations have been prodded the Company, a proof of loss or damage signed and sworn to by each insured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain the facts giving rise to the loss or damage. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the tide, or other matter insured against by this policy which constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of an insured claimant to provide the required proof of loss or damage, the Company's obligations to such insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such proof of loss or damage. In addition, an insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company, all records, books, ledgers, checks, correspondence and memoranda, whether bearing a date before or after Date of Policy, which reasonably pertain to the lass or damage. Further, it requested by any authorized representative of the Company, the insured claimant shall grant its permission, in writing, for any authorized representative of the Company to examine, inspect and copy all records, books, ledgers, checks, correspondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated as confidential by an insured claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of an insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary information from third parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that insured for that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance or to Purchase the Indebtedness. (i) to pay or tender payment of the amount of insurance under this policy together with any casts, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay; or (it) in case loss or damage is claimed under this policy by the owner of the indebtedness secured by the insured mortgage, to purchase the indebtedness secured by the insured mortgage for the amount awning thereon together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of purchase and which the Company is obligated to pay. If the Company offers to purchase the indebtedness as herein provided, the owner of the indebtedness shall transfer, assign, and convey the indebtedness and the insured mortgage, together with any collateral security, to the Company upon payment therefor. Upon the exercise by the Company of the option prodded for In paragraph ad), all liability and obligations to the insured under this policy, other than to make the payment required in that paragraph, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, and the policy shall be surrendered to the Company for cancellation. Upon the exercise by the Company of the option prodded for in paragraph alit) the Company's obligation to an insured Lender under this policy for the claimed loss or damage, other than the payment required to be made, shall terminate, including any liability or obligation to tlefend, prosecute or continue any litigation. (b) To Pay or Otherwise Settle with Parties Other than the Insured or With the Insured Claimant. (i) to pay or otherwise sells with other pares for or in the name of an insured claimant any claim insured against under this polity, together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay; or (ii) to pay or otherwise aside with the insured claimant the loss or damage provided for under this policy, together with any costs. attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to payUpon the exercise by the Company of either of the options provided for in paragraphs b(i) or b(ii). the Company's obligations to the insured under this policy for the daimed loss or damage, other than Me payments required to be made, shall terminate, including any liability or obligation to defend, prosecute or contends any litigation. Conditions and Stipulations Continued Valid only if Schedules A and B and Cover are attached ru"',T 1 1u.: CONDITIONS AND STIPULATIONS — CONTINUED 7. DETERMINATION AND EXTENT OF LIABILITY. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy to an insured lender shall not exceed the least of: (i) the Amount of Insurance stated in Schedule A, or, if applicable, the amount of insurance as defined in Section 2 (c) of these Conditions and Stipulations: (ii) the amount of the unpaid principal indebtedness secured by the insured mortgage as limited or provided under Section 8 of these Conditions and Stipulations or as reduced under Section 9 of theses Conditions and Stipulations, at the time the loss or damage insured against by this policy occurs, together with interest thereon; or (iii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (b) In the event the insured lender has acquired the estate or interest in the manner described in Section 2(a) of these Conditions and Stipulations or has conveyed the title, then the liability of the Company shall continue as set forth in Section 7(a) of these Conditions and Stipulations. (c) The liability of the Company under this policy to an insured owner of the estate or interest in the land described in Schedule A shall not exceed the least of: (i) the Amount of Insurance stated in Schedule A; or, (ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (d) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. LIMITATION OF LIABILITY. (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the land, or cures the claim of unmarketability of title, or otherwise establishes the lien of the insured mortgage, all as insured, in a reasonably diligent manner by any method, including litigation and the completion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby. (b) In the event of any litigation, including litigation by the Company or with the Companys consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title, or, if applicable, to the lien of the insured mortgage, as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. (d) The Company shall not, be liable to an insured lender for: (i) any indebtedness created subsequent to Dale of Policy except for advances made to protect the lien of the insured mortgage and secured thereby and reasonable amounts expended to prevent deterioration of improvements; or (ii) construction loan advances made subsequent to Date of Policy, except construction loan advances made subsequent to Date of Policy for the purpose of financing in whole or in part the construction of an improvement to the land which at Date of Policy were secured by the insured mortgage and which the insured was and continued to be obligated to advance at and after Date of Policy. 9. Reduction of Insurance; Reduction or Termination of Liability. (a) All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the amount of insurance pro tanto. However, as to an insured lender, any payments made prior to the acquisition of title to the estate or interest as provided in Section 2(a) of these Conditions and Stipulations shall not reduce pro tanto the amount of insurance afforded under this policy as to any such insured, except to the extent that the payments reduce the amount of the indebtedness secured by the insured mortgage. (b) Payment in part by any person of the principal of the indebtedness, or any other obligation secured by the insured mortgage, or any voluntary partial satisfaction or release of the insured mortgage, to the extent of the payment, satisfaction or release, shall reduce the amount of insurance pro tanto. The amount of insurance may thereafter be increased by accruing interest and advances made to protect the lien of the insured mortgage and secured thereby, with interest thereon, provided in no event shall the amount of insurance be greater than the Amount of Insurance stated in Schedule A. (c) Payment in full by any person or the voluntary satisfaction or release of the insured mortgage shall terminate all liability of the Company to an insured lender except as provided in Section 2(a) of these Conditions and Stipulations. 10. LIABILITY NONCUMULATIVE. It is expressly understood that the amount of insurance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. The provisions of this Section shall not apply to an insured lender, unless such insured acquires title to said estate or interest in satisfaction of the indebtedness secured by an insured mortgage. 11. PAYMENT OF LOSS. (a) No payment shall be made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 12. SUBROGATION UPON PAYMENT OR SETTLEMENT. (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies which the insured claimant would have had against any person or property in respect to the claim had this policy not been issued. If requested by the Company, the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall be subrogated (i) as to an insured owner, to all rights and remedies in the proportion which the Company's payment bears to the whole amount of the loss: and (ii) as to an insured lender, to all rights and remedies of the insured claimant after the insured claimant shall have recovered its principal, interest, and costs of collection. If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy, but the Company, in that event, shall be required to pay only that part of any losses insured against by this policy which shall exceed the amount, if any, lost to the Company by reason of the impairment by the insured claimant of the Companys right of subrogation. (b) The Insured's Rights and Limitations. Notwithstanding the foregoing, the owner of the indebtedness secured by an insured mortgage, provided the priority of the lien of the insured mortgage or its enforceability is not affected, may release or substitute the personal liability of any debtor or guarantor, or extend or otherwise modify the terms of payment, or release a .portion of the estate or interest from the lien of the insured mortgage, or release any collateral security for the indebtedness. When the permitted acts of the insured claimant occur and the insured has knowledge of any claim of title or interest adverse to the title to the estate or interest or the priority or enforceability of the lien of an insured mortgage, as insured, the Company shall be required to pay only that part of any losses insured against by this policy which shall exceed the amount, if any, lost to the Company by reason of the. impairment by the insured claimant of the Companys right of subrogation. (C) THE COMPANY'S RIGHTS AGAINST NON- INSURED OBLIGORS. The Companys right of subrogation against non - insured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. The Companys right of subrogation shall not be avoided by acquisition of an insured mortgage by an obligor (except an obligor described in Section 1(axii) of these Conditions and Stipulations) who acquires the insured mortgage as a result of an indemnity, guarantee, other policy of insurance, or bond and the obligor will not be an insured under this policy, notwithstanding Section l(aj(i) of these Conditions and Stipulations. 13. Arbitration. Unless prohibited by applicable law, either the Company or the insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be arbitrated at the option of either the Company or the insured. All arbitrable matters when the Amount of Insurance is in excess of $1,000.000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 14. Liability Limited to This Policy; Policy Entire Contract. (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the lien of the insured mortgage or of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 15. Severabilfty. In the event any provision of the policy is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 16. Notices Where Sent. All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number of this policy and shall be addressed to: Commonwealth Land Title Insurance Company, P.O. Box 45023, Jacksonville, Florida 32232 -5023 Attn: Claim's Dept. Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 CLTA JOINT PROTECTION POLICY OWNERS COVERAGE - 1990 POLICY OF TITLE INSURANCE Issued by Commonwealth Land Title Insurance Company SCHEDULE A Amount of Insurance: $3,247,700.30 File No.: 111091144 Premium: $5,068.00 Endorsement Fees: $ -0- Date of Policy: December 30, 2011 AT 08:00 AM 1. Name of Insured: Rosemead Community Development Commission, a public body, corporate and politic Qiao Garden Hotel Investment, Inc., a California corporation 2. The estate or interest in the land described herein and which is covered by this policy is: A FEE 3. The estate or interest referred to herein is at the Date of Policy vested in: Qiao Garden Hotel Investment, Inc., a California corporation 4. The land referred to in this policy is situated in the County of Los Angeles, State of CALIFORNIA, and is more particularly described in Exhibit "A" attached hereto and made a part hereof. Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 File No.: 111091144 EXHIBIT "A" All that certain real property situated in the County of Los Angeles, State of California, described as follows: Parcel 1 The Northerly 220 feet of the West 100 feet of the East 184.09 feet of that portion of Lot 3 in Block 7 of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3, thence along the Southerly line of said lot, South 890 10' West 84.09 feet to a point in the Northeasterly line of the storm drain right of way, shown on Recorder's Filed Map No. 5510, Records of said county; thence along said Northeasterly line, North 400 01' 55" West 678.43 feet to a point in the Southerly line of the land described in the deed to the County of Los Angeles for road purposes, recorded in Book 105 Page 237, Official Records of said county; thence along said Southerly line, North 890 10' East 512.50 feet to a point in the Easterly line of said Lot 3; thence along said Easterly line, South 90 58' 30" East 525 feet to the point of beginning Said measurements being made on the North line of said described tract of land, and the East and West lines of the property hereby conveyed being parallel to the East line of the above described Lot Except the Easterly 50 feet of the Northerly 100 feet, and the Easterly 45 feet of the Southerly 120 feet thereof. Parcel 2 The Northerly 220 feet of the West 100 feet of the East 184.09 feet of that portion of Lot 3 in Block 7 of Rosemead, in the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3; thence along the Southerly line of said lot, South 090 10' West 84.09 feet to a point in the Northeasterly line of the storm drain right of way shown as Recorder's Filed Map No. 310, Records of said county; thence along said Northeasterly line North 400 O1' 55" West 678.43 feet to a point in the Southerly line of the land described in the deed to said County of Los Angeles for road purposes, recorded in Book 105 Page 237 of Official Records of said county; thence along said Southerly line North 890 10' East 512.50 feet to a point in the Easterly line of said Lot 3; thence along said Easterly line, South 00 58' 30" East 525 feet to the point of beginning. Said measurements being made on the North line of said described tract of land and the East and West lines of the property hereby conveyed being parallel to the East line of the above described Lot 3. Except the Westerly 50 feet of the Northerly 100 feet and the Westerly 55 feet of the Southerly 120 feet thereof. EXHIBIT "A" continued Parcel 3 File No. 111091144 That portion of Lot 3 in Block 7 of Rosemead, in the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3; thence along the Southerly line of said lot, South 890 10' West 84.09 feet to a point in the Northeasterly line of the storm drain right of way shown on Recorder's Filed Map No. 310, in the office of the recorder of said county; thence North 00 50' 30" West parallel to the East line of said lot, 525 feet to a point in the Southerly line of the land described in the deed of said county of Los Angeles, for road purposes, recorded in Book 105 Page 237, Official Records; thence along said Southerly line North 090 01' East 84.09 feet to a point in the Easterly line of said Lot 3; thence along said Easterly line South 00 50' 30" East 525 feet to the point of beginning. Except therefrom the South 382.5 feet thereof. Parcel 4: The North 60 feet of the South 382.5 feet of that portion of Lot 3 in Block 7 of Rosemead, in the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3; thence along the Southerly line of said lot, South 890 10' West 84.09 feet to a point in the Northeasterly line of the storm drain right of way shown on Recorder's Filed Map No. 310, in the office of the county recorder of said county; thence North 00 50' 30" West parallel to the East line of said Lot 525 feet to a point in the Southerly line of the land described in the deed of said county of Los Angeles for road purposes recorded in Book 105 Page 237, Official Records; thence along said Southerly line North 890 10' East 84.09 feet to a point in the Easterly line of said Lot 3; thence along said Easterly line South 00 58' 30" East 525 feet to the point of beginning. Assessor's Parcel No: 5390- 018 -904 Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 File No.: 111091144 SCHEDULE B EXCEPTIONS FROM COVERAGE THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEY'S FEES OR EXPENSES) WHICH ARISE BY REASON OF: PART I 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interest or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material not shown by the public records END OF SCHEDULE B - PART I Policy No.: CA- FXDB -ICL- 81067 -1 -11- 111091144 SCHEDULE B PART II File No.: 111091144 A. Supplemental or escaped assessments of property taxes, if any, assessed pursuant to the Revenue and Taxation Code of the State of California. 1. Water rights, claims or title to water, whether or not shown by the public records. 2. The provisions in the deed from Huntington Land and Improvement Company, recorded in Book 5114 Page 282 of Official Records, which provides that said land shall not be used for developing or boring for, or otherwise extracting oil, asphaltum or other mineral substances. Said matter affects: Parcel 1 3. An easement for the purpose shown below and rights incidental thereto as set forth in a document Purpose: Utilities Recorded: October 26, 1956 as Instrument No. 2951 of Official Records Affects: The Easterly 6 feet of Parcel 4 4. An easement for the purpose shown below and rights incidental thereto as set forth in a document Purpose: Public utilities Recorded: October 26, 1956 as Instrument No. 2952 of Official Records Affects: The Easterly 6 feet of Parcel 3 5. An easement for the purpose shown below and rights incidental thereto as set forth in a document Purpose: Power lines Recorded: In Book D -1235 Page 32 of Official Records Affects: Parcel 1 6. An easement for the purpose shown below and rights incidental thereto as set forth in a document Purpose: Public utilities Recorded: May 26, 1961 as Instrument No. 4776 of Official Records Affects: The Westerly 6 feet of the Northerly 60 feet of Parcel 3 7. Any rights, interests or claims of the parties in possession of said land, including but not limited to those based on an unrecorded agreement, contract or lease. 8. A deed of trust to secure an thereby. Amount: Dated: Trustor: Trustee: Beneficiary: Recorded: Loan No.: Endorsements: NONE indebtedness in the amount shown below, and any other obligations secured $2,247,700.30 April 5, 2011 Qiao Garden Hotel Investment, Inc., a California corporation Chicago Title Company, a California corporation Rosemead Community Development Commission, a public body, corporate and politic December 30, 2011 as Instrument No. 20111787047, Official Records QIAO GARDEN HOTEL INVESTMENT, INC. END OF SCHEDULE B - PART II 1 1 ii (A I 1 a �I 1 OV3W3S0a E a' � I LL I .1 I1 I 1� 1 1 ILL 1 I I� 12CAN I n10 s? $1 Q �'I Z J p� I W 1 m I� Y 3 Y m m� 5390-018-904 v a 2-1787046-02 PLEASE READ YELLOW SHEET FIRST _me m+»+cma mvmmImm 8838 VAL o m» »p CA 91770-1714 g_Rww&_awwW &UaG� _ \� $7 / 4 ! �4wZ» R :6 m }- �2 \± -r« �&a§ � &\ o.e-f :° - �z ■) §U0 §§ }J) k {�\ §!\§ ■®4 \f z }e!{ § }B 2$ °f\ q \E7| oa / «, o ;! =$ _ U - ƒ \ / ;f §� \)#; \ _/§ \ �f {} ±0 Z}) /J o §,= k,; 04;¢- §) \$\ §I 0- k /$ § /f \ \ 2 !z « §7, 4- }( ■ � 7R § �0j } k7n z a. o,¥, 77� �aWD o-° u 0 .� dx 4iƒ {/0 ��` S«`0 -G� 0u 7/± <_ PLEASE READ YELLOW SHEET FIRST _me m+»+cma mvmmImm 8838 VAL o m» »p CA 91770-1714 g_Rww&_awwW &UaG� _ \� $7 / 4 ! �4wZ» R :6 m }- �2 \± -r« �&a§ � &\ o.e-f :° - �z ■) §U0 §§ }J) k {�\ §!\§ ■®4 \f z }e!{ § }B 2$ °f\ q \E7| oa / «, o ;! =$ _ U - ƒ \ / ;f §� \)#; \ _/§ \ �f {} ±0 Z}) /J o §,= k,; 04;¢- §) \$\ §I 0- k /$ § /f \ \ 2 !z « §7, 4- }( ■ � 7R A F1 ..mb This page Is part of your document - DO NOT DISCARD of 103 20111787046 { �+ I� II�IIII IIII Recordeffiled Records k f Recorders office, Los Angeles County, California ;e FoRM 12130/11 AT 00:OOAM FEES: TAXES: OTHER: PAID: IIIIIIIIIII�I�IIGIIIII LEADSHEET N�II IA�IIlII�IAl111Y11 003710500 SEQ: 08 DAR - Tit le Compapllpnlylll ll(Hap�rapduppmCapy) IIIIOI 'a�a'II'00'�'II�IpppN���lllllIl11lll�lll �IIIIIIII�IgyWayO�iIIII�I�IUtr�rnrnlppIIIGI�II�I�R�gqal�I�plpplii��p�apaa�� III�IIIIN�III�IIWI�III�I� IIII� IIIIIallll lllllt I�I�IIIOW.I THIS FORM IS NOT TO BE DUPLICATED m III Pa es: 0000 41.00 MPH 0.00 NEPR A A,f "1 1. aw 0IS . RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Leo Qiao Garden Hotel Investment, Inc. 1406 Palm Ave. Suite D San Gabriel California 91776 1 1\OCA114q APN: 5390 -018 -904 ISPACE ABOVE POR RECORDER "S CSE ONLY] DOCUMENTARY TRANSFER TAX NOT SHOWN PURSUANT TOSECTIDN 11932 OF THE REVENUE AND TAXATION CODE, AS AMENDED GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body, corporate and politic ( "Grantor ") hereby grants to QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation (` Granted'), certain real property located inthe ,County of Los Angeles. State of California, more particularly described on Exhibit A attached hereto and incorporated herein by reference. SUBJECT TO: 1. General and special real property taxes and assessments and supplemental assessments for the current fiscal year; 2. All liens, encumbrances, easements, covenants, conditions and restrictions of record; and All matters which would be revealed or disclosed in an accurate survey of the property. IN WITNT.SS WHEREOF, Grantor has executed this Grant Deed on l'), -'11 2011. ROSEMEAD COMMUNITY DEVELOPMEN "1' COMMISSION By: E cutive etor Exhibit D 1 ATTEST: 61-0 611 L Commission Secretary 2 E L STATE OF CALIFORNIA ) ss. COUNTY OF LOS ANGELES ) On .t Y�r 2Z Z rnl I before me, Gkyrta t AI IIe -e4ct. , a notary public, personally appeared j�IyF}}— .tY,�n�l�v who proved to me on the basis of satisfactory evidence to be the person(.*) whose name(&) Witte subscribed to the within instrument and acknowledged to me that he /sbakhey executed the same in hisllrer/ttteir authorized capaciiy(.ieSf, and that by hisAte'k. it signature(sj on the instrument the person(4 or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY underthe laws ofthe State of Califomiathat the foregoing paragraph is true and correct. WITNESS my hand � ands official seal. ; 4CM Ot)S6� CJl It Notary Public SEAL: STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , before me, 6RIA l MB OItkDA Aaon 1 Co 7 Notary PublIC - California toe Angeles Courtly Comm, s r7.7a17 notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged tome that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s) or the entity upon behalf of which the persm(s) acted, executed the instrument. I certify tender 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 SEAL: Exhibit D 2 File No: 113091144 EXHIBIT "A" All that certain real property situated in the County of Los Angeles, State of California, described as follows: Parcel 1: The Northerly 220 feet of the West 100 feet of the East 184.09 feet of that portion of Lot 3 in Block 7 of Rosemead, County of Los Angeles, State of California, as per map recorded In Book 21, Pages 114 and 115 of Maps, In the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3, thence along the Southerly line of said lot, South 890 10' West 84.09 feet to a point In the Northeasterly line of the storm drain right of way, shown on Recorder's Fled Map No. 5510, Records of said county; thence along said Northeasterly line, North 40° 01' 55" West 678.43 feet to a point in the Southerly line of the land described In the deed to the County of Los Angeles for road purposes, recorded in Book 105 Page 237, Official Records of said county; thence along said Southerly line, North 89° 10' East 512.50 feet to a point In the Easterly line of said Lot 3; thence along said Easterly line, South 90 58' 30" East 525 feet to the point of beginning. Said measurements being made on the North line of said described tract of land, and the East and West lines of the property hereby conveyed being parallel to the East line of the above described Lot 3. Except the Easterly 50 feet of the Northerly 100 feet, and the Easterly 45 feet of the Southerly 120 feet thereof. Parcel 2: The Northerly 220 feet of the West 100 feet of the East 184.09 feet of that portion of Lot 3 in Block 7 of Rosemead, In the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said county, described as follows: Beginning at the Southeast corner of said Lot 3; thence along the Southerly line of said lot, South 090 10' West 84,09 feet to a point in the Northeasterly line of the storm drain right of way shown as Recorder's Filed Map No. 310, Records of said county; thence along said Northeasterly line North 40° 01' 55" West 678.43 feet to a point in the Southerly line of the land described In the deed to said County of Los Angeles for road purposes, retarded in Book 105 Page 237 of Official Records of sold county; thence along said Southerly line North 890 10' East 512,50 feet to a point In the Easterly line of said Lot 3; thence along said Easterly line, South 00 58' 30" East 525 feet to the point of beginning. Said measurements being made on the North line of said described tract of land and the East and West lines of the property hereby conveyed being parallel to the East line of the above described Lot 3. Except the Westerly 50 feet of the Northerly 100 feet and the Westerly 55 feet of the Southerly 120 feet thereof. Parcel 3: That portion of Lot 3 in Block 7 of Rosemead, in the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, In the office of the county recorder of CLTA Prellminary Report Form - Modified (11- 17-06) Page 3 r File No: 111091144 said county, described as follows: Beginning at the Southeast corner of said Lot 3; thence: along the Southerly line of said lot, South 890 10' West 84.09 feet to a point In the Northeasterly line of the storm drain right of way shown on Recorder's Filed Map No. 310, in the office of the recorder of said county; thence North 00 5o' 30" West parallel to the East line of said lot, $25 feet to a point In the Southerly line of the land described In the deed of said county of Los Angeles, for road purposes, recorded In Book 105 Page 237, Official Records; thence along said Southerly line North 090 01' East 84.09 feet to a point In the Easterly line of said Lot 3; thence along said Easterly fine South 00 50' 30" East 525 feet to the point of beginning. Except therefrom the South 362.5 feet thereof. Parcel 4: The North 60 feet of the South 382.5 feet of that portion of Lot 3 in Block 7 of Rosemead, in the County of Los Angeles, State of California, as per map recorded in Book 21, Pages 114 and 115 of Maps, in the office of the county recorder of said country, described as follows: Beginning at the Southeast corner of said Lot 3; thence along the Southerly line of said lot, South 890 10' West 84.09 feet to a point in the Northeasterly fine of the storm drain right of way shown on Recorder's Filed Map No. 310, In the office of the county recorder of said county; thence North 00 50' 30" West parallel to the East line of said Lot 525 feet to a paint In the Southerly line of the land described In the deed of said county of Los Angeles for road purposes recorded in Book 105 Page 237, Official Records; thence along said Southerly line North 890 10' East 84.09 feet to a point In the Easterly line of sold Lot 3; thence along said Easterly line South 00 58' 30" East 525 feet to the point of beginning, Assessor's Parcel No: 5390- 018.904 CLTA Prelhnlnary Report Farm - Modified (11- 17 -06) Page 4 A.- Exhibit A. to Grant Deed LEGAL DESCRIPTION OF THE PROPERTY [ATTACHED] Exhibit D ll THIS PAGE INTENTIONALLY LEFT BLANK i U LEASE AGREEMENT This Lease Agreement (the "Agreement ") is entered into as of 29,W—i j (the "Effective Date ") by and between the CITY OF ROSEMEAD, a mumcipa col rporation (the "Landlord "), and QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation (the "Tenant "), who agree as follows: 1.1 Premises. Subject to Landlord's rights specified in Section 3 [Use of Facilities, Tenant Improvements & Compliance with Laws], Landlord leases to Tenant and Tenant leases from Landlord the real property defined and described in Attachment A hereto ( "Premises "). 2. Term. 2.1 Term. The term of this Agreement commences on the date on which Tenant receives from the City of Rosemead the land use entitlements required to erect a sign on the Premises ( "Commencement Date ") and continues thereafter until such time as Tenant ceases to operate a hotel on the parcel known as 5390- 018 -904 and commonly known as 8832 Glendon Way in the City of Rosemead ( "Hotel Property "). The parties agree that, notwithstanding Section 13 of this Agreement, Tenant may request Landlord's consent to and assignment of this Agreement to any third party that purchases or takes over management control of the hotel at the Hotel Premises. Landlord further agrees that its consent to such requested assignment will not be unreasonably withheld. 2.2 Cancellation. The parties agree that this Agreement may be cancelled in the event of war, strikes, acts of government entities other than the City of Rosemead, acts of God, or other events which are beyond the reasonable control of Tenant or Landlord, as the case may be. In addition, the parties agree that the Agreement may be cancelled at any time upon mutual written consent of the parties. Finally, the parties agree that the Agreement may be cancelled at the sole discretion of Tenant and with or without cause, upon the giving of written notice from Tenant to Landlord within 120 days of the Commencement Date. In the event of any cancellation of this Agreement, the parties agree that each party shall bear its own costs and that Section 20 of this Agreement shall apply to any such cancellation. 3. Use of Facilities, Tenant Improvements & Compliance with Laws. 3.1 Use. The Premises shall be used by Tenant for the sole purpose of maintaining and operating an off -site sign oriented toward the San Bernardino Freeway /Interstate 10 (the "Sign "). All improvements to the Premises and activities conducted thereon shall be in compliance with all applicable federal, state, and City laws, regulations and ordinances. 3.2 Tenant Improvements. Tenant shall, within thirty (30) days of the Effective Date of this Agreement, present to Landlord and the Department for review and approval plans for parkway improvements and associated street improvements to the Premises for the purpose of locating and constructing the Sign on the Premises, which construction and placement shall be completed no later than one hundred and twenty (120) days following approval of the plans by Landlord. Tenant is aware of and agrees to abide by the provisions of California Labor Code Sections 1720, et seq., including specifically but not limited to Sections 1771, 1773, 1773.1, 1773.6, 1773.7, 1775 and 1776, pertaining to the obligation to pay 5r- prevailing wages with respect to the construction of the parkway and street improvements and the construction of the Sign. Tenant further agrees to indemnify and defend Landlord against any and all claims arising under the California Labor Code, including but not limited to sections 1726 and 1771.6 of the Code. 3.3 Tenant shall bear all costs of constructing, placing, and maintaining the Sign, including but not limited to 3.3.1 Costs associated with those certain improvements to the Premises necessary to create and secure a parkway on which the Sign will be located, including but not limited to the design and construction of a parkway on the Premises, the fencing of the parkway, and landscaping of the parkway area. 3.3.2 Costs associated with those improvements to the Premises required to re- design or re -orient the portion of the street that will not be modified to create the parkway such said remaining portion of the street remains in compliance with all applicable laws and regulations governing streets and highways, including but not limited to design, paving, cement, and landscape work. 3.3.3 Costs associated with the design, construction, and installation of the Sign on the Premises. 3.3.4 All applicable permits and fees. 3.4 Security. 3.4.1 Tenant agrees that Tenant is solely responsible for the security, protection and insuring of the Premises, Tenant's Sign, and other improvements and property. Tenant is also solely responsible for the security, protection and insuring of its employees, servants, contractors, guests and invitees working or passing or about the Premises. Tenant agrees that Landlord will have no liability of any kind or nature respecting any injury to any person (unless proximately caused by Landlord's willful misconduct or sole negligence) or the loss or theft of, or damage to, any equipment, materials or other property located on or about the Premises and Tenant will indemnify Landlord for and from any liability arising out of Tenant's use, security, protection, or insuring of the Premises pursuant to Tenant's obligations under Section 8 [Indemnification] of this Agreement. 3.5 Compliance with Laws. Tenant agrees that its use of the Premises will at all times be in strict compliance with all applicable laws, rules and regulations of all governmental authorities having jurisdiction, and Tenant, at its sole cost and expense, agrees to comply with all such laws, rules and regulations. 4. Rent. As rent for the Premises, Tenant agrees to pay to Landlord the sum of One Dollar ($1.00) per year for the Term of this Agreement. Rent is to be paid in advance, without abatement, deduction or offset. 2 5. "AS -IS" Lease. Tenant warrants and agrees that it has inspected and is thoroughly familiar with the Premises and all aspects thereof, including, without limitation, the physical condition of the Premises, the zoning of the Premises and all other restrictions and limitations applicable to the Premises (whether or not of public record). Tenant agrees that neither Landlord nor anyone acting on Landlord's behalf has made any representation or warranty of any kind or nature whatsoever respecting the condition of the Premises, their suitability for Tenant's use, or any other matter relating to the Premises or this Agreement, and Tenant agrees that it is leasing the Premises in their "AS -IS CONDITION AND WITH ALL FAULTS ". 6. Maintenance. Tenant agrees that it will, at its sole cost and expense, during Tenant's occupancy of the Premises, maintain the Premises and all portions thereof, whether structural or non - structural, in its current state as of the date of execution of this Agreement, with the exception of the tenant improvements to be constructed pursuant to Section 2 [Tenant Improvements]. This shall include weekly maintenance of all landscaping. Except as expressly provided for herein, Tenant agrees that Landlord has no obligation of any kind or nature to maintain, repair or replace the Premises or any portion of the Premises. 7. Insurance. Tenant agrees to keep and maintain public liability and personal injury insurance respecting the Premises, including a certificate of endorsement amending the policy to name Landlord as an additional insured, in form and amounts (not less than $1,000,000 per occurrence) and with insurers reasonably satisfactory to Landlord. In no event shall insurance be placed with any other insurer with a current A.M. Best's rating of less than A:VII. Tenant also agrees to keep and maintain worker's compensation insurance coverages for its employees working on the Premises in the minimum amounts required by California law. All such insurance will be primary and not contributing with any insurance which Landlord may maintain, and the insurer providing such insurance must agree that such insurance will not be changed or cancelled except upon at least thirty (30) days prior written notice to Landlord. Tenant waives any and all rights of recovery against Landlord and its officials, officers, agents and employees on account of loss or damage occasioned to Tenant or its property or the property of others under its control; and Tenant shall cause each policy required to be kept and maintained by it under this Lease to provide that the insurer waives all right of recovery by way of subrogation against Landlord in connection with any damage covered by such policy. Tenant will provide Landlord with copies of the policies of such insurance and certificates evidencing such insurance upon execution of this Agreement and from time to time thereafter as reasonably requested by Landlord. 8. Indemnification. Tenant shall indemnify, defend (with legal counsel selected by City) and hold the City harmless from and against any actions (whether legal, equitable or declaratory in nature), proceedings (whether in courts or administrative bodies), alternative dispute resolution procedures (whether arbitration, mediation, or otherwise) demands, claims, and causes of action of whatever nature, costs and expenses (including attorneys fees), judgments, orders, decrees, liens and other encumbrances, liabilities, injuries to person (including without limitation death, dismemberment, and emotional distress), damages (whether to person, property, or business, including without limitation, all forms of monetary recovery, whether for general, special, compensatory, or punitive damages, loss of earnings, loss of earning capacity, loss of profits or other damages of whatever nature), known or unknown, existing or future, arising from or in any way related to the Tenant's use of the Premises or any 3 other act or omission of Tenant or its successors, assigns, officers, directors, employees, agents, contractors, volunteers, and invitees in any way related thereto. 9. Utilities. Except as is expressly provided herein to the contrary, Tenant agrees to pay, before delinquency, for any and all water, sewer, gas, heat, light, power, telephone service and all other utilities or services of any kind supplied to the Premises. Landlord, at its sole cost and expense, shall provide the Premises with standard trash and refuse collection and disposal services, including a single large dumpster on an as needed basis, from the exterior of the Premises, on a regular schedule determined by Landlord. It is agreed that Landlord is not liable for any failure or interruption of any utility or service, and the failure or interruption of any utility or service will not entitle Tenant to terminate this Agreement or stop making any rental or other payments due under this Agreement. 10. Taxes. Although the Premises are understood to be exempt from property taxes, if county determines Tenant is subject to taxes then Tenant shall pay before delinquency all real property taxes and assessments (both general and special) levied or assessed against the Premises during the term of this Agreement. Tenant shall promptly furnish Landlord with satisfactory evidence that such taxes and assessments have been paid. If any such taxes and assessments cover any period of time after the expiration of the term of this Agreement, Tenant's share of such taxes and assessments will be equitably prorated to cover only the period of time within the tax fiscal year this Agreement is in effect. Tenant shall also pay before delinquency all taxes levied or assessed against Tenant's improvements, equipment and personal property located at the Premises or elsewhere. If Tenant fails to pay any taxes or assessments required to be paid by it under this Agreement, Landlord, at its option, may pay the same and Tenant agrees to reimburse Landlord therefor immediately upon demand. Tenant acknowledges that this Agreement may create a possessory interest subject to taxation and that Tenant may be subject to payment of any and all taxes levied on that possessory interest. 11. Ownership of Equipment and Improvements. All equipment and personal property of Tenant located on the Premises, including but not limited to the Sign, will remain the property of Tenant during the term of this Agreement and may be removed by Tenant at any time and shall be removed by Tenant prior to the expiration or other termination of the term of this Agreement, except for the tenant improvements constructed pursuant to Section 3.2 [Tenant Improvements]. Those Section 3.2 improvements, with the exception of the Sign, shall be deemed the property of Landlord and may not be removed by Tenant at any time during or after the expiration or termination of this Agreement. 12. Damage and Destruction. If the Premises, any improvements made a part of the Premises or any portion thereof are damaged or destroyed by any casualty (whether or not insured), Tenant, at Tenant's sole cost and expense, shall promptly repair and restore the same. 13. Assignment. Tenant acknowledges and agrees that Tenant may not assign this Agreement, except as set forth in Section 2. 1, nor sublet all or any part of the Premises. 14. Default. The occurrence of any one or more of the following shall constitute a default by Tenant: 14.1 Failure by Tenant to make payment of rent or any other payments required to be made by Tenant hereunder as and when due. 4 14.2 Failure by Tenant to keep and maintain any of the insurance required to be kept and maintained by Tenant under this Agreement. 14.3 Failure by Tenant to complete timely the tenant improvements in accordance with Section 3.2 [Tenant Improvements]. 14.4 Failure by Tenant to provide adequate security for the Premises in accordance with Section 3.3 [Security]. 14.5 Failure by Tenant to observe or perform any other covenant or provision of this Agreement, when such failure continues for a period of 30 days after written notice of such failure is given by Landlord to Tenant; provided, that if the nature of Tenant's failure is such that more than 30 days are reasonably required for its cure, then Tenant will not be deemed to be in default if Tenant commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. 15. Remedies. If Tenant is in default, then, in addition to all other rights and remedies which Landlord may have at law or in equity, Landlord has the following rights and remedies which are not exclusive but are cumulative: 15.1 Landlord can, with or without terminating this Agreement, reenter the Premises and remove all property and persons therefrom, and any such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant. If Landlord elects to reenter or take possession of the Premises pursuant to legal proceedings or pursuant to any notice provided by law, and if Landlord has not elected to terminate this Agreement, Landlord may either recover all rent as it becomes due under this Agreement or relet the Premises or any part or parts thereof for such term or terms and upon such provisions as Landlord may deem advisable and will have the right to make repairs to and alterations of the Premises. No reentry or taking possession of the Premises by Landlord is to be construed as an election to terminate this Agreement unless a written notice of such intention is given to Tenant by Landlord. 15.2 Landlord can terminate Tenant's right to possession of the Premises at any time. No act by Landlord other than giving written notice to Tenant will terminate this Agreement. Acts of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord's initiative to protect Landlord's interest under this Agreement shall not constitute a termination of Tenant's right to possession. 15.3 Landlord can have a receiver appointed to collect rent and conduct Tenant's business. Neither the 'filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by Landlord to terminate this Agreement. 15.4 Without waiving the default, Landlord can, at its sole option, pay such sums and/or take such actions as are necessary in Landlord's reasonable judgment in order to cure the default, and all sums expended or incurred by Landlord in connection therewith, together with interest thereon at the maximum rate permitted by law, shall be paid by Tenant to Landlord immediately on demand. 16. Late Payment. Rent and other amounts not paid by Tenant when due under this Agreement shall bear interest at the rate of ten percent (10 %) per annum from the date due until the date paid. 17. Landlord Entry. Landlord and its authorized representatives shall have the right upon reasonable prior written notice to Tenant to enter all portions of the Premises for any of the following purposes: (a) to determine whether the Premises are in good condition and whether Tenant is complying with its obligations under this Agreement; (b) to inspect the Premises; and (c) to post notices of non - responsibility. Notwithstanding the foregoing to the contrary, Landlord and its authorized representatives shall have the right to enter the Premises at any time and without notice to Tenant, where an emergency situation necessitates such entry. No exercise by Landlord of its rights under this Section shall entitle Tenant to any damages for any injury or inconvenience occasioned thereby or to any abatement of rent or other amounts payable under this Agreement. 18. Surrender of Premises. Upon the expiration or termination of the term of this Agreement, Tenant agrees to surrender possession of the Premises, and every party thereof, to Landlord in generally the same condition as it was at commencement date of the Agreement, ordinary wear and tear alone excepted. "Ordinary wear and tear" does not include any damage or deterioration that would have been prevented by Tenant performing all of its obligations under this Agreement. 19. Notices. Except as otherwise provided, all notices required or permitted to be given under this Agreement must be in writing and addressed to the parties at their respective notice addresses set forth below; provided, that notices to Tenant may also be effectively given in writing and addressed to Tenant at the Premises address. Notices must be given by personal delivery (including by commercial delivery service) or by first -class mail, postage prepaid. Notices will be deemed effectively given, in the case of personal delivery, upon receipt (or if receipt is refused, upon attempted delivery), and in the case of mailing, three (3) days following deposit into the custody of the United States Postal Service. The notice addresses of the parties are as follows: If to Landlord: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attention: City Manager If to Tenant: Qiao Garden Hotel Investment, Inc. 801 E. Valley Boulevard, Suite 203 San Gabriel, California 91776 Attn.: Mr. Lian Yue Song, President and CEO Copy to: Qiao Garden Hotel Investment, Inc. 1406 Palm Ave. Suite D San Gabriel California 91776 20. Waiver and Release of Benefits. Lessee acknowledges that upon expiration of the Term, upon cancellation of the Agreement, or upon termination of any holdover tenancy (collectively "Expiration of Tenancy "), Lessee might be or become eligible to receive compensation, reimbursement, assistance, including, but not limited to, the fair market value of real and personal property, loss of goodwill, loss of profits, actual and reasonable expenses for moving a business, loss of tangible personal property as a result of moving the business, expenses incurred in searching for a replacement site for the business, expenses to reestablish the business at the new site, "in -lieu payments," and other such benefits (collectively "Benefits ") under the California Relocation Assistance Act (Government Code §7260, et seq.), Title 25 of the California Code of Regulations, Article 1, § 19 of the California Constitution, the California Eminent Domain Law (Code of Civil Procedure §1230.010, et seq.), or other similar local, state, or federal statute, ordinance, regulation, rule, or decisional law (collectively "Compensatory Laws "). Lessee further acknowledges that it has received full and fair compensation of all Benefits Lessee is or might be or might become entitled to recover from the City of Rosemead ( "City ") as a result of, or in any way related to, Expiration of the Tenancy and City's occupancy and possession of the Premises. Therefore, being fully informed of and understanding the acknowledgments made herein and of Lessee's rights or potential rights to Benefits under the Compensatory Laws, Lessee hereby expressly and unconditionally waives, and Releases the City from, any and all rights of Lessee to claim, demand, sue for, or receive any Benefits which Lessee is or might be or might become entitled to recover from the City as a result of, or in any way related to, Expiration of the Tenancy, City's acquisition of the Premises, and City's occupancy and possession of the Premises. 21. General. 21.1 The acceptance by Landlord of any rental or other payments due hereunder with knowledge of the breach of any of the terms, covenants or provisions of this Agreement by Tenant shall not be construed as a waiver of any such breach. The acceptance at any time or times by Landlord of any sum less than that which is required to be paid by Tenant shall, unless Landlord specifically agrees otherwise in writing, be deemed to have been received only on account of the obligation for which it is paid, and shall not be deemed an accord and satisfaction notwithstanding any provisions to the contrary written on any check or contained in any writing transmitting the same. 21.2 The titles to the sections of this Agreement are for convenience of reference only and are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part of this Agreement. Any exhibits attached to this Agreement are, however, a part of this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to any otherwise governing principles of conflicts of law. In construing this Agreement, none of the parties to it shall have any term or provision construed against it solely by reason of its having drafted the same. 21.3 Any provision of this Agreement that is invalid, illegal or unenforceable shall be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating, diminishing or rendering unenforceable the rights and obligations of the parties under the remaining provisions of this Agreement. 21.4 No term or provision of this Agreement may be amended, altered, modified or waived orally or by a course of conduct, but only by an instrument in writing signed by a duly authorized officer or representative of the party against which enforcement of such amendment, alteration, modification or waiver is sought. Any amendment, alteration, modification or waiver shall be for such period and subject to such conditions as shall be specified in the written instrument affecting the same. Any waiver shall be effective only in the specific instance and for the specific purpose for which given. 21.5 This Agreement and all exhibits attached to it constitutes the entire agree- ment of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements (whether written or oral) with respect to that subject matter. 21.6 This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 21.7 If either party hereto brings an action to enforce the terms hereof or declare rights hereunder, the prevailing .party in such action, on trial or appeal, shall be entitled to reasonable attomeys' fees to be paid by the losing party as fixed by the court. [Signatures on following page] F The parties have caused this Agreement to be duly executed by their respective duly authorized officers or representatives as of the date first set forth above. CITY OF ROSEMEAD QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation By: By: Jq,WAlIr6d Mr. Lian Yue 56ng City Manager President and CEO ATTEST: Iona Molleda City Clerk APPROVED AS TO FORM: d2 vi, 6"/ Rachel H. Richman Burke, Williams & Sorensen, L 'P City Attorney /")�/ .7- Y�vl/ PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS This Purchase and Sale Agreement and Escrow Instructions (this "Agreement ") is made and entered into as of March 15, 2011 (the "Effective Date "), by and between die ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body, corporate and politic (the `Seller "), and QIAO CARDEN HOTEL INVESTMENT, INC., a California corporation (the "Buyer "), with respect to the following facts: RECITALS A. Seller is the owner of and desires to sell to Buyer: (a) that certain land situated in the City of Rosemead, County of Los Angeles, State of California, commonly know as 8832 Glendon Way, bearing Assessor's Parcel Number 5390 -018 -904, and more particularly described on Exhibit A attached hereto and made a part hereof, together with all of the interest of Seller in any and all rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of- way (collectively, the "Land "); and (b) the buildings, structures, fixtures and other improvements on the land (collectively, the "Improvements "). The Land and the Improvements are hereinafter sometimes referred to collectively as the "Property." B. Buyer desires to purchase the Property from Seller. C. By this Agreement, Seller is agreeing to sell the Property to Buyer upon and subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the terms and conditions of this Agreement and for other valuable consideration, the receipt of which is hereby acknowledged, the Buyer and Seller agree as follows: 1. Purchase and Sale. Subject to and in accordance with the terms and conditions hereinafter set forth, on the Close of Escrow (as defined in Section 2 , Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Property. i 2. Opening and Closing of Escrow. Within five (5) days after the Effective Date, an escrow (the "Escrow ") shall be opened with Mutual Escrow (the "Escrow Holder "), 5825 Rosemead Boulevard, Temple City, California 91780, Attention: Ruby Tsai, Escrow Officer, Telephone: (626) 451 -5999, Far: (626) 292 - 5777, Email: rub}asai@mutualescrow.com (the "Opening of Escrow "). Upon the Opening of Escrow, the parties shall deposit a fully executed original of this Agreement with Escrow Holder and this Agreement shall serve as the instructions to Escrow Holder for consummation of the transactions contemplated hereby. Seller and Buyer agree ' to execute such additional and supplementary escrow instructions as may be appropriate to enable Escrow holder to comply with the temis of this Agrcemcnt; provided, however, that in the event of noi any conflict between the terms and provisions of this Agreement and the terms and provisions of any supplementary escrow instructions, the terms and provisions of this Agreement shall control. The "Close of Escrow" or "Closing" shall be the date that a grant deed for the Property in favor of Buyer is recorded in the Official Records of the Los Angeles County Recorder's Office. The Close of Escrow shall occur on the later of either June 30, 2011 or the Entitlements Period as described in Section 9(b) (the "Closing Date"). Purchase Pricc: Deposit: Escrow Account. (a) The purchase price for the Property to be paid by Buyer is the sum of $3,247,700.30 (the "Purchase Price'D and is agreed to be the fair market value of the property with the Entitlements (as defined and described in Section 9(b) below). The Purchase Price shall be paid by Buyer at Closing as follows: (i) The sum of $1,000,000 shall be paid in cash (the "Cash Portion'); and (ii) The sum of $2,247,700.30 shal l be paid and evidenced by the delivery to Seller of Buyer's Promissory Note Secured by Deed of Trust (the "Note ") in the form of Exhibit B attached hereto and made a part hereof, which Note is to be secured by u Deed of Trust with Assignment of Rents as Additional Security (the "Deed of "frust "), from Buyer, as Tmstor, in favor of Seller, as Beneficiary, in the form of Exhibit C attached hereto and made a part hereof. (b) Within five (5) days after the Effective Date, Buyer shall deliver to Escrow Holder an earnest money deposit in the amount of $100,000 (the "Deposit ") in the form of a cashier's check, by a federal wire transfer, or other form acceptable to the Escrow Holder. The Deposit shall be placed in an interest - bearing bank account (the "Escrow Account ") and all interest accruing thereon shall increase and become a part of the Deposit. On the Close of Escrow, the Deposit shall be applied toward the Cash Portion of the Purchase Price. The remaining balance of the Cash Portion of the Purchase Price shall be payable by Buyer in the form of a cashier's check, federal wire transfer, or other form acceptable to Seller and the Escrow Holder and placed in the Escrow Account no later than one (1) business day prior to the Close of Escrow. In the event that Buyer terminates this Agreement by written notice to Seller on or prior to the expiration of the Due Diligence Period (as defined in Section 9 in accordance with the terms and provisions hereof, the Deposit shall be refunded to Buyer. Upon the expiration of the Due Diligence Period, if this Agreement has not been terminated or deemed terminated as provided herein, the Deposit shall become non- refmdable and shall be applied toward the Cash Portion of the Purchase Price at the Close of Escrow or released to and retained by Seller if the Close of Escrow does not occur as the result of (i) a default by Buyer or (ii) Buyer's termination of this Agreement (except in the event of a default by Seller or the failure of a condition precedent to Buyer's obligations under this Agreement as provided in Section 12 . The Deposit shall also be refundable to the Buyer in accordance with the terms and conditions hereof. 4. Delivery of Documents on the Close of Escrow. (a) On the Close of Escrow, Seller agrees to cause to be delivered to Buyer a duly executed and acknowledged Grant Deed in the form attached as Exhibit D hereto (the "Grant MJ0000"t Deed ") conveying to Buyer all of Seller's interest in the Property subject only to the Permitted Title Exceptions (as defined in Section 5 approved by Buyer, as provided below; and Buyer agrees to cause to be delivered to Seller the Note, duly executed by Buyer, and the Deed of Trust, duly executed and acknowledged by Buyer, granting Seller a lien on the Property to secure payment by Buyer of the Note. (b) At the Close of Escrow, Buyer shall receive the Title Policy (as defined in Section 5 issued by Lawyer's Title (the "Title Company ") insuring in Buyer fee simple title to the Property, free and clear of all liens and encumbrances other than the Permitted Title Exceptions (as defined in Section 5). 5. Title and Title Insurance. (a) Within five (5) days after the Fffective Date, the Title Company shall deliver to Buyer and Seller a preliminary report for the Property, together with copies of all instruments noted as exceptions therein (the "Preliminary Title Report "), and Seller shall deliver to Buyer the most recent ALTA survey of the Property, if any, in Seller's possession. Buyer shall also have the option of ordering, at its cost, an ALTA survey for the Property pursuant to the terms set forth in Section 14 (the "Survey "). (b) Buyer shall have until the expiration of the Due Diligence Period to disapprove any exceptions to title shown on the Preliminary Title Report or reflected on the Survey (collectively, "Disapproved Exceptions ") and to provide Seller with notice of disapproval in writing describing the defect with reasonable particularity (the "Disapproval Notice "). Any exceptions to title not disapproved by Buyer within such period shall be deemed approved. Within five (5) business days of Seller's receipt of a Disapproval Notice, Seller shall have the right, but not the obligation, to give written notice to Buyer that Seller intends to remove or cause to be insured over some or all of the Disapproved Exceptions. If Seller notifies Buyer of an intention to remove or cause to be endorsed over some or all the Disapproved Exceptions, Seller shall do so concurrently with or prior to the Close of Escrow, provided,'however, if any such Disapproved Exception is not susceptible of being removed or endorsed over prior to the Close of Escrow despite Seller's commercially reasonable efforts, the scheduled date for the Close of Escrow shall be automatically extended by a reasonable additional time to effect such removal or endorsement, but in no event shall the extension exceed thirty (30) days after the Closing Date. If Seller does not elect to remove or endorse overall of the Disapproved Exceptions, Buyer, by written notice given to Seller within three (3) business days after the expiration of Seller's election period, may elect to terminate this Agreement or to take the Property subject to the Disapproved Exceptions which Seller will not remove or endorse over. Buyer's failure to so give such notice of election shall be deemed Buyer's election to terminate this Agreement. In any event, Seller covenants to pay in full all loans secured by mortgages and deeds of trust encumbering the Property and to remove any mechanics liens and any other monetary liens encumbering the Property (other than current real property taxes and assessments which are not due and payable) prior to or concurrently with the Close of Escrow, provided, however, Seller shall have the right to bond over mechanic's liens so long as such bond is reasonably acceptable in form and substance to the Buyer and is sufficient to allow the Title Company to insure over such liens in the Title Policy (defined below). The Title Policy shall include such endorsements as Buyer shall reasonably request and which Title Company agrees to issue on or before the expiration of the Due tl( L__ r Diligence Period. Any such title policy endorsements are to be paid for by Buyer; provided, however, that Seller shall pay for any title policy endorsements obtained by Seller in response to Buyer's Disapproval Notice. Whether or not Buyer shall have furnished to Seller any notice of Disapproved Exceptions pursuant to the foregoing provisions of this Agreement, Buyer may, at or prior to the Close of Escrow, notify Seller in writing of any objections to title first raised by the Title Company between (a) the last date on which Buyer is entitled to make such an objection as set forth above and (b) the date on which the transaction contemplated herein is scheduled to close. With respect to any Disapproved Exceptions set forth in such notice, Seller shall have the same option to cure (or in the case of a monetary lien, the obligation to obtain the removal or bonding thereof as provided above) and Buyer shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of Disapproved Exceptions made by Buyer before the expiration of the Due Diligence Period. If Seller elects to attempt to cure any such matters, the scheduled date for the Close of Escrow shall be automatically extended by a reasonable additional time to affect such a cure, but in no event shall the extension exceed thirty (30) days after the scheduled date for the Close of Escrow set forth in Section 2. (c) Buyer's obligation to consummate the purchase contemplated by this Agreement is conditioned upon the irrevocable commitment by the Title Company to issue a CLTA Standard Coverage Owner's Policy of Title Insurance in the amount of the Purchase Price, issued by Title Company (the "Title Policy "). The Title Policy shall insure Buyer's fee interest in the Property subject only to the following permitted conditions of title (the "Permitted Title Exceptions "): (i) General and special real property taxes and assessments for the then current tax fiscal year which are a lien not then due and payable; (ii) The applicable zoning, building and development regulations of any municipality, county, state or federal jurisdiction affecting the Property; (iii) Such other exceptions listed in the Preliminary Title Report that have been approved, or been deemed approved, by Buyer as provided in Section 5(b); and (iv) Any exceptions directly or indirectly caused by Buyer or Buyer's agents, employees or contractors. At Buyer's election and cost, Buyer may cause the Title Company to provide Buyer with an ALTA Extended Coverage Owner's Policy. Notwithstanding the foregoing, Buyer's receipt of an ALTA policy shall only be a condition to closing provided that Buyer pays the cost of the ALTA policy in excess of the cost of a CLTA policy and Buyer obtains an ALTA survey acceptable to the Title Company prior to the expiration of the Due Diligence Period. Seller shall not encumber or agree to sell the Property to any other party during the period from the Effective Date to the Close of Escrow or the date of the tennination of this Agreement i L1 6. Deposit of Documents and Funds in Escrow. (a) Seller and Buyer, as applicable, hereby covenant and agree to deliver to Escrow Holder at least one (1) business day prior to the Close of Escrow the below listed instruments, documents, and funds, the delivery of each of which shall be a condition of the Close of Escrow. (b) Seller shall deliver: (i) The Grant Deed duly executed and acknowledged by Seller; (u) A Withholding Exemption Certificate Form 593 -C as contemplated by California Revenue and Taxation Code §18662 (the "Withholding Affidavit ") duly executed by Seller, (iii) A Certification of Non - Foreign Status in accordance with Internal Revenue Code Section 1445 duly executed by Seller; (iv) Such funds as are required to pay for costs and expenses payable by Seller hereunder; and (v) Such proof of Seller's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue the Title Policy. (c) Buyer shall deliver: (i) The Cash Portion of the Purchase Price (less the amount of the Deposit) together with such funds as are required to pay for costs and expenses payable by Buyer hereunder; (ii) One (1) original of the Note duly executed by Buyer; (iii) One (1) original of the Deed of Trust duly executed and acknowledged by Buyer; and (iv) Such proof of Buyer's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue the Title Policy. Each of the Buyer and Seller may waive any condition of the Close of Escrow to be performed by the other and set forth in this Section 6. 7. Authorization to Record Documents and Disburse Funds. Upon the Close of Escrow, Escrow Holder is hereby authorized to record the Grant Deed in the Official Records of Los Angeles County, California, followed immediately by the recording of the Deed of Trust in the Official Records of Los Angeles County, California, and to disburse the funds and distribute the other documents called for hereunder, provided each of the following conditions has then been fulfilled: . (a) The Title Company is irrevocably committed to issue in favor of Buyer the Title Policy, with a liability in the amount of the Purchase Price, as set forth in Section 5(c). L (b) Escrow Holder shall have received Buyer's authorization to close and Buyer's notice of approval or satisfaction or waiver of all of the contingencies/conditions to Buyer's obligations hereunder, as provided for in Section 12; (c) Escrow Holder shall have received Seller's authorization to close and Seller's notice of approval or satisfaction or waiver of all of the contingencies /conditions to Seller's obligations hereunder, as provided for in Section 13; and (d) Seller and Buyer shall have deposited in Escrow the documents and funds required pursuant to Section 6. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for the issuance of the Title Policy, 8. Escrow Charges and Proration. (a) Seller shall pay (i) one -half (1/2) of the fees and charges of Escrow Holder, (ii) the cost of the premium for the CLTA Standard Coverage portion of the Title Policy and the cost of any endorsements obtained by Seller in response to Buyer's Disapproval Notice, and (iii) Seller's share of the charges prorated under this Agreement. If the Escrow shall fail to close for any reason other than Buyer's default, Seller shall pay one -half (112) of any applicable Escrow cancellation charges. (b) Buyer shall pay (i) one -half (1/2) of the fees and charges of Escrow Holder, (ii) the cost of the premium for the Title Policy in excess of the premium for a CLTA Standard Coverage policy, ifany, (iii) the cost of all endorsements to the Title Policy other than those payable by Seller as provided in Section 8(a) above, (iv) all costs and charges for the recordation of the Grant Deed and all documentary or other local transfer taxes on the transfer of the Property, and (v) Buyer's share of the charges prorated under this Agreement. If the Escrow shall fail to close for any reason other than Seller's default, Buyer shall pay one- balf.(1/2) of any applicable Escrow cancellation charges. (c) Current real property taxes, special taxes, and assessments, if any, shall be prorated to the close of Escrow, with Seller responsible for the portion attributable to the period prior to the Closing Date and Buyer responsible for the portion attributable to the period from and after the Closing Date. All supplemental taxes for the Property which are attributable to time periods prior to the Closing Date shall be paid for in full by Seller regardless of whether the tax bill is received before or after the Close of Escrow. All supplemental tax bills and all future tax bills attributable to time periods from and after the Closing Date shall be paid for by Buyer. (d) All prorations shall be determined on the basis of a 365 day year. The provisions of this Section 8 shal l survive the Close of Escrow. I' AI' L_. r 9. Due Diligence Period: Access: Entitlements Period (a) During the period commencing on the Effective Date and ending at 5:00 p.m. on the last day of the Entitlement Period as defined in Section 9(b) below (the "Due Diligence Period "), Buyer may inspect the Property as necessary to approve all zoning and land use matters relating to the Property (including Buyer's approval of Entitlements as defined and described in Section 9(b) below) and to approve the physical condition of the Property subject to the limitations set forth below. (i) Within five (5) days after the Effective Date, Seller shall provide to Buyer, any and all of the following documents to the extent in Seller's possession or under Seller's control: environmental testings and reports, soils and geological testings and reports, structural engineering reports, surveys, and plans and specifications. Seller agiees to have its Phase I environmental testing report updated and will provide it to the buyer ten (10) days after the Effective Date. (collectively, the "Seller Information Documents'. (ii) It is understood and agreed by Buyer that Seller does not make any representation or warranty, express or implied, as to the accuracy or completeness of any of the Seller Information Documents, including without limitation, any environmental testings and reports, it being understood and agreed that the Seller Information Documents are provided for informational purposes only. To the extent pemtitted by law, Buyer shall keep all Seller Information Documents provided by the Seller confidential and shall not disclose it to any third parties except ils accountants, legal counsel, and other consultants employed in connection with its acquisition of the Property. In the event this Agreement is terminated, Buyer shall promptly return to Seller all Seller Information Documents (and shall not retain any copies of the same) provided by Seller. Buyer shall provide Seller, at no cost to Seller, with copies of all reports, test results, surveys and other written materials obtained by Buyer in connection with its investigation of the Property promptly following Buyer's receipt thereof. Buyer may terminate this Agreement in Buyer's sole and absolute discretion if for any reason Buyer is dissatisfied with the results of any of its inspections of the Property or the Seller Information Documents by giving written notice to the Seller prior to and including the final day of the Due Diligence Period. (iii) Subject to Buyer's compliance with the terms of this Section 9 Buyer and its agents, attorneys, accountants, and other representatives shall have the right, at Buyer's sole cost and expense, to enter upon the Property during the Due Diligence Period to make inspections and other examinations of the Property'and the improvements thereon, including without limitation, the right to perform surveys, soil and geological tests of the Property and the right to perform environmental site assessments and studies of the Property. Buyer's physical inspection of the Property shall be conducted during normal business hours at times mutually acceptable to Buyer and Seller. Buyer shall give Seller at least 24 hours prior notice of any entry onto the Property and Seller shall have the right to have its representatives present during any such entry or inspections. No invasive testing or boring shall be done without the prior notification of Seller and Seller's written permission of the same, which permission may be withheld in Seller's sole and absolute discretion. Buyer shall promptly repair any damage to the Property caused by its inspections and investigations. To evidence Buyer's right of entry to the Property, the parties shall execute and deliver that certain /t Right of Entry Agreement attached hereto as Exhibit E within three (3) days following the Effective Date. (b) Within fifteen (15) days following the Effective Date, Buyer shall prepare and deliver to the City of Rosemead (the "City") drawings and specifications providing for the addition of twelve (12) rental units (hotel rooms) to the hotel building Improvements located on the Land (the "Additional Units "). The date on which such drawings and specifications are accepted by the City for processing is referred to herein as the " Acceptancc Date ". Following the Acceptance Date, Seller agrees to cooperate with Buyer in seeking the grant by the City of all City approvals (the "Entitlements' necessary for the Additional Units. If, on or before 5:00 p.m. on the day which is two hundred seventy (270) days following the Acceptance Date (the "Entitlements Period ") the Entitlements have not been granted by the City, then Buyer shall have the right to terminate this Agreement by giving written notice to the Seller ,prior to and including the final day of the Entitlements Period. 10. Renresentations of Seller. Seller hereby represents to Buyer the following, it being expressly understood and agreed that all such representations are true and correct in all material respects as of the Effective Date. If the Seller acquires additional knowledge regarding the matters which are the subject of the representations contained in this Section 10 which would cause any of such representations to be incorrect in any material respect prior to the Close of Escrow, Seller shall give prompt written notice thereof to Buyer. Within seven (7) business days following receipt of such notice, Buyer may elect to cancel this Agreement and receive a refund of the Deposit. As of the Close of Escrow, the representations contained in this Section 10 shall be true and correct in all material respects, subject to any matters disclosed in writing by Seller to Buyer as provided herein. (a) Seller has full right and power to execute, deliver and perform its obligations under this Agreement, and when executed and delivered, Seller and all parties having an interest in the Property shall be lawfully bound by the terms of this Agreement. Seller is the sole owner of the Property. (b) There is no pending or, to Seller's actual knowledge, threatened litigation, which does or may adversely affect the Property. (c) This Agreement and all documents executed by Seller which are to be delivered to Buyer at or prior to the Closing are, or at the time of Closing will be, duly authorized, executed, and delivered by Seller, are or at the time of Closing, will be legal, valid and binding obligations of Seller, enforceable in accordance with their terms, and do not and at the time of Closing will not violate any provisions of any agreement orjudicial order to which Seller is a party or to which Buyer is subject. (d) Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code. (e) Seller agrees to indemnify Buyer and agrees to defend and hold Buyer harmless from all actual, reasonable out -of- pocket loss, costs, liability, expense, damage, or other injury, including without limitation, attorneys' fees and expenses, and all other costs and expenses incurred by reason of, or in any manner resulting from the breach of any representations in this Section 10. The provisions of this Section 10 shall survive the Close of Escrow orthe termination of this Agreement for a period of two (2) years. 11. Representations of Buyer. Buyer hereby represents to Seller the following, it being expressly understood and agreed that all such representations are true and correct in all material respects as of the Effective Date. If Buyer acquires additional knowledge regarding the matters which are the subject of the representations contained in this Section 11 which would cause any of such representations to be incorrect in any material respect prior to the Close of Escrow, Buyer shall give prompt written notice thereof to Seller. Within seven (7) business days of receipt of such notice, Seller may elect to cancel this Agreement and Buyer shall be entitled to receive a refund of the Deposit. As of the Close of Escrow, the representations contained in this Section 11 shall be true and correct in all material respects, subject to any matters disclosed in writing by Buyer to Seller as herein provided. (a) Buyer has the full right, power and authority to enter into this Agreement and has taken all action necessary to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement has been duly and validly authorized by Buyer, and no other action by Buyer is requisite to the valid and binding execution, delivery, and performance of this Agreement by Buyer. (b) There is no pending litigation or, to the best of Buyer's knowledge, threatened litigation, which does or will materially adversely affect Buyer's ability to consummate this transaction. (c) This Agreement and all documents executed by Buyer which are to be delivered to Seller at or prior to the Closing are, or at the time of Closing will be, duly authorized, executed, and delivered by Buyer, are or at the time of Closing, will be legal, valid and binding obligations of Buyer, enforceable in accordance with their terms, and do not and at the time of Closing will not violate any provisions of any agreement or judicial order to which Buyer is a party or to which Buyer is subject. (d) Other than Seller's representations set forth in Section 10, Buyer has not relied on any representation made by Seller or any representative of Seller in connection with this Agreement and the transactions contemplated hereby. (e) Buyer is not a Prohibited Person. For purposes of this Section 11, "Prohibited Person" means any of the following: (i) a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001) (the "Executive Order "); (ii) a person or entity owned or controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (c) a person or entity that is named as a "specially designated national" or "blocked person" on the most current list published by the U.S. Treasury Department's Office of Foreign Assets Control ( "OFAC ") at its official website, http:// www. trras .gov /officcs/enforcement/ofac; (d) a person or entity that is otherwise the target of any economic sanctions program currently administered by OFAC; or (e) a person or entity that is affiliated with any person or entity identified in clause (a), (b), (c) and/or (d) above. (I) To Buyer's knowledge, none of its investors, affiliates or brokers or other agents (if any), acting or benefiting in any capacity in connection with this Agreement is a Prohibited Person. (g) The funds or other assets Buyer will transfer to Seller under this Agreement are not the property of, or beneficially owned, directly or indirectly, by a Prohibited Person. (h) The funds or other assets Buyer will transfer to Seller under this Contract are not the proceeds of specified unlawful activity as defined by 18 U.S.C. § 1956(c)(7). (i) Buyer agrees to indemnify Seller and agrees to defend and hold Seller harmless from all actual, reasonable out -of- pocket loss, costs, liability, expense, damage, or other injury, including without limitation, attorneys' fees and expenses, and all other costs and expenses incurred by reason of, or in any manner resulting from the breach of any warranties and representations in this Section 11. The provisions of this Section 11 shall survive the Close of Escrow or the termination of this Agreement for a period of two (2) years. 12. Buyer's Conditions. For the benefit of the Buyer, the Close of Escrow and Buyer's obligation to consummate the purchase of Property shall be contingent upon and subject to the occurrence of all of the following conditions precedent (or Buyer's written waiver thereof, it being agreed that Buyer can waive any or all such contingencies) on or before the Close of Escrow: (a) Buyer's obtaining a satisfactory commitment, on or before the Close of Escrow, issued by Title Company to issue the Title Policy in favor of Buyer with a liability amount equal to the Purchase Price showing Buyer's fee interest in the Property subject only to the Permitted Title Exceptions, and being otherwise in accordance with the provisions of Section 5 of this Agreement. (b) Buyer's verifying, on or before the Close of Escrow, that there are no mechanics' and/or materialmen's liens, or lis pendens actions affecting the Property, and that all taxes, sewer, water, and utility bills have been paid. (c) That as of the Close of Escrow the representations of Seller contained in this Agreement are either all true and correct in all material respects or, to the extent that is not the case, have been waived by Buyer. (d) Seller's delivery of all documents required to be delivered by Sellerpursuant to Section 6 hereof. (e) , Buyer's not electing to terminate this Agreement within the times and as provided in Section 9(a)(i) and Section 9(b). (f) If Buyer has elected to obtain the same, Buyer's obtaining and approving the Survey provided for herein . prior to the expiration of the Due Diligence Period. IC If all the foregoing conditions precedent have not been either met or expressly waived in writing, or been deemed to have been waived, by Buyer on or before the respective dates set forth therein, or ifno date is set forth therein on or prior to the Close of Escrow, then this Agreement shall, at the option of Buyer, become null and void, in which event, except as expressly set forth in this Agreement, neither party shall have any further rights, duties and obligations hereunder, and Buyer shall be entitled to the immediate refund of the Deposit. 13. Seller's Conditions. For the benefit of Seller, the Close of Escrow and Seller's obligation to consummate the sale of the Property, shall be contingent upon and subject to written notice to the Escrow Holder by Seller of the occurrence of all of the following conditions precedent (or Seller's written waiver thereof, it being agreed that Seller can waive any or all such contingencies) on or before the Close of Escrow: (a) Deposit by Buyer of the Purchase Price and all other sums to be deposited by Buyer in Escrow in accordance with the requirements hereof. (b) Buyer's delivery of all documents required to be delivered by Buyer pursuant to Section 6 hereof and performance of all other material covenants and agreements to be performed by Buyer under this Agreement. (c) That as of the Close of Escrow the representations and warranties of Buyer contained in this Agreement are all either true and correct in all material respects or, to the extent that is not the case, have been waived by Seller. 14. Survev. Buyer, at Buyer's sole cost and expense, may obtain an ALTA survey acceptable to the Title Company prior to the expiration of the Due Diligence Period. 15. Destruction/Condemnation. In the event that prior to the Close of Escrow, the Property, or any portion thereof, is damaged by fire, earthquake, or other casualty, or is subject to a taking by a public authority, then Buyer shall have the right, exercisable by giving notice to Seller within fifteen (1.5) days after receiving written notice of such damage or taking, either (a) to terminate this Agreement or. (b) to accept the Property in its then condition and proceed with the Closing, and to receive an assignment of all of Seller's rights to any proceeds of insurance or condemnation awards payable by reason of such damage or taking. If Buyer elects to proceed under the preceding clause (b), there shall be no adjustment to the Purchase Price and Seller shall not compromise, settle or adjust any claims to such proceeds of insurance or condemnation awards. Seller agrees to give Buyer prompt notice of any damage to or taking of the Property promptly after Seller receives notice of the same. Buyer's Initials: Seller's Initial 16. Disposition of Deposit. IF THE TRANSACTION HEREIN PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER THIS'AGREEMENT OR THE FAILURE OF SATISFACTION OF THE CONDITIONS DESCRIBED IN SECTION 12 HEREOF, AND BUYER SHALL NOT HAVE DEFAULTED UNDER THIS AGREEMENT, T14EN THE DEPOSIT SHALL BE RETURNED TO BUYER, AND NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER; PROVIDED, HOWEVER, IF THE TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE BY REASON OF SELLER'S DEFAULT, AND BUYER SHALL HAVE FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL BE READY, WILLING AND ABLE TO CLOSE, THEN BUYER SHALL BE ENTITLED TO SPECIFICALLY ENFORCE THIS AGREEMENT (BUT NO OTHER ACTION, FOR DAMAGES OR OTHERWISE, SHALL BE PERMITTED). IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, IT IS AGREED THAT THE DEPOSIT SHALL BE NON - REFUNDABLE AND SELLER SHALL BE ENTITLED TO SUC14 DEPOSIT, WHICH AMOUNT SHALL BE ACCEPTED BY SELLER AS LIQUIDATED DAMAGES AND NOT AS A PENALTY AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY. IT IS AGREED .THAT SAID AMOUNT CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ETSF.Q. BUYER AND SELLERAGREE THAT IT WOULD BE IMPRACTICAL OR IMPOSSIBLE TO PRESENTLY PREDICT WHAT MONETARY DAMAGES SELLER WOULD SUFFER UPON BUYER'S FAILURE TO COMPLETE ITS PURCHASE OF THE PROPERTY. BUYER DESIRES TO LIMIT THE MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE HEREUNDER AND BUYER AND SELLER DESIRE TO AVOID THE COSTS AND DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCED TO RECOVER DAMAGES OR OTHERWISE ENFORCE SELLER'S RIGHTS. IF FURTHER INSTRUCTIONS ARE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE TERMS OF THIS PARAGRAPH, BUYER AND SELLER AGREE TO EXECUTE THE SAME. THE PARTIES ACKNOWLEDGE THIS PROVISION BY PLACING THEIR INITIALS BELOW: SELLER BUYER 17. As -Is Sale. BUYER ACKNOWLEDGES AND AGREESTIATBUYER WILL BE CONCLUDING THE PURCHASE OF THE PROPERTY BASED SOLELY UPON BUYER'S INSPECTION AND INVESTIGATION OF THE PROPERTY, AND THAT BUYER WILL BE PURCHASING THE PROPERTY ON AN "AS-IS, WIIERE IS" BASIS, WITH ALL FAULTS, LATENT AND PATENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, IS NOT HEREBY MAKING, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, EXCEPT THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED IN 'PHIS AGREEMENT, AS TO ANY MATTER CONCERNING THE PROPERTY, INCLUDING, WITHOUI' LIMITATION, MATTERS RELATING TO THE ZONING, LAND -USE OR OTHER ENTITLEMENTS, THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT LIMITATION, THE EXISTING ENVIRONMENTAL CONDITION), AND /OR SOILS, SEISMIC, GEOTECIINICAL, THE CONSTRUCTION OF THE IMPROVEMENTS ON TILE PROPERTY, THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS, THE FINANCIAL CONDITION OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS, AFFECTING OR CONCERNING TI IL PROPERTY OR ANY PART THEREOF, AND SELLER SPECIFICALLY DISCLAIMS ANY SUCH REPRESENTATIONS OR WARRANTIES, AND /OR OTHER MATTERS RELATING TO THE CONDITION OF THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT' TO THE PROPERTY BY OR ON BEHALF OF SELLER, INCLUDING, WITHOUT LIMITATION, THE SELLER INFORMATION DOCUMENTS AND THE OTHER DOCUMENTS AND INSTRUMENTS TO BE DELIVERED TO, OR OTHERWISE MADE AVAILABLE TO, BUYER WAS OBTAINED FROM A VARIETY OF SOURCES, THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION, THAT ALL SUCH INFORMATION HAS BEEN AND SHALL BE PROVIDED SOLELY AS AN ACCOMMODATION TO BUYER, AND THAT SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION. AS PART OF BUYER'S AGREEMENT TO PURCHASE AND ACCEPT THE PROPERTY' "AS -IS, WHERE -IS," AND "WITH ALL FAULTS ", AND NOT AS A LIMITATION ON SUCH AGREEMENT, BUYER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL ACTUAL OR POTENTIAL CLAIMS OR RIGHTS AGAINST THE SELLER ARISING OUT OF THE INACCURACY OR INCOMPLETENESS OF ANY MATERIALS SO FURNISHED, ARISING OUT OF OR IN CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND ANY AND ALL ACTUAL OR POTENTIAL CLAIMS OR RIGHTS BUYER MIGHT HAVE REGARDING ANY FORM OF REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY, OTHER THAN IN CONNECTION WITH THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED IN THIS AGREEMENT. SUCH WAIVER IS ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. AS PART OF THE PROVISIONS OF THIS SECTION, BUT NOT AS A LIMITATION THEREON, BUYER HEREBY AGREES, REPRESENTS AND WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND BUYER HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH. IT NOW HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE ORLOCALLAWS, RULES OR REGULATIONS, INCLUDING WITHOUT LIMITATION, SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA OR ANY SIMILAR STATUTE, LAW, RULE OR REGULATION OF ANY OTI -IER STATE. BUYER ACKNOWLEDGES THAT SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTION THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." SELLER AND BUYER HAVE EACH INITIALED THIS SECTION TO FURTHER INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF. ell Z11 SELL'LR BUYER 1__�/ 13 i� 17. Effect of Termination or Cancellation. Except where this Agreement is terminated due to the default of a party, if this Agreement is tenninated or cancelled at the election of a party as provided herein, neither party shall have any further tights, liabilities or obligations hereunder except for such as have accrued prior to the date of termination or cancellation and (i) Buyer and Seller shall each be responsible for one half ( %a) of any cancellation fees charged by the Escrow Holder and/or the Title Company and (ii) the Deposit and any other funds deposited into Escrow by Buyer, including interest thereon, shall be refunded to Buyer 18. Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement by one party to the other shalt be in writing addressed to the recipient party's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the party's Notice Address; then as of the date delivered (or ifdelivery is refused, on presentation), or (b) if mailed by certified mail to the party�s Notice Address, postage prepaid and return receipt requested, then at the time received at the parry's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the party's Notice address, postage prepaid, then on the third (3rd) business day following deposit in the United States Mail. Any party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the parties are: Buyer: Qiao Garden Hotel Investment, Inc. 808 S. Atlantic Boulevard, Suite E Monterey Park, California 91754 Attn.: Mr. Lian Yue Song, President and CEO Copy to: Law Offices of Mike Z. Mak 701 S. Atlantic Boulevard, Suite 368 Monterey Park, California 91754 Atm.: Mr. Mike (Mai) Z. Mak, Esq. Seller: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Ms. Michelle G. Ramirez Community Development Manager Copy to: Mr. Neil F. Yeager, Esq. Burke, Williams & Sorensen, LLP 444 South Flower Street, Suite 2400 Los Angeles, California 90071 - 19. Broker's Commissions. The Buyer and Seller each represent and warrant to the other that it has not used a broker, agent, finder or other person in connection with this transaction to whom a brokerage or other commission may be payable. Each party shall defend, indemnify and 14 hold the other party harmless from and against any and all claims for any broker's commission or similar compensation that may be payable to any broker, finder or other person or entity based upon such party's own acts. The indemnification obligations contained in this Section 19 shall survive the Close of Escrow and the delivery of the Grant Deed. 20. Removal of Personal Property. Title to all personal property located on the Property shall remain in the Seller, and the Seller, at its sole expense, shall cause all such personal property to be removed from the Property prior to the Close of Escrow. 21. Time is of the Essence. The parties hereto agree that time is of the essence with respect to each tern, condition and covenant hereof. 22. Successors and Assigns. Subject to the provisions of Section 30, the provisions of this Agreement are expressly binding upon, and shall inure to the benefit of, the parties hereto and their successors in interest and assigns. 23. Entire Agreement. Thus Agreement, together with all exhibits hereto, integrates all of the terns and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 24. Severability. Invalidation of any of the terms, conditions, covenants, or other provisions contained herein by judgment or court order shall in no way affect any of the other terms, conditions, covenants, or provisions hereof, and the same shall remain in full force and effect. 25. Amendments. Any amendments to this Agreement shall be effective only when duly executed by Seller and Buyer and deposited with Escrow Holder. 26. Attorneys' Fees. In the event that suit is brought for the enforcement of this Agreement or as the result of any alleged breach thereof, the prevailing party or parties in such suit shall be entitled to recover their reasonable attorneys' fees, costs, and expenses from the losing party or parties, and anyjudgment or decree rendered in such proceedings shall include an award thereof. 27. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of Seller and Buyer and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall.have any right in, under or to this Agreement. 28. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 29. Counterparts: This Agreement may be executed simultaneously in one or more counterparts, each ofwhich shall be deemed an original, but all ofwhich together shall constitute one and the same instrument. For purposes of this Agreement, facsimile signatures shall be deemed to be original signatures, and shall be followed by the immediate overnight delivery of original signature pages. 15 X 30. Assignment of Agreement. Buyer shall have the right to assign or transfer this Agreement without Seller's consent only to a related person or entity of Buyer, which for purposes for this Agreement shall mean any entity in which Qiao Garden Hotel investment, Inc. a California corporation and /or Leo Song individually or collectively have a minimum of fifty -one percent (51 %) of the ownership interest and management control. Except as provided in the preceding sentence, neither Party shall have the right to assign any of their rights or obligations set forth in this Agreement without the written consent of the other Party, which consent maybe withheld in such other Party's sole and absolute discretion. Any assignment must be in writing and executed by both assignor and assignee in order to be enforceable and after the effective date of the assignment the assignor shall be released and discharged from any liability or responsibility hereunder. 31. Interpretation. Whenever used herein, the term "including" shall be deemed to be followed by the words "without limitation." Words used in the singular number shall include the plural, and vice- versa, and any gender shall be deemed to include each other gender. 32. Captions. The captions and headings of the Articles and Sections of this Agreement are for convenience of reference only, and shall not be deemed to define or limit the provisions hereof. 33. Exhibits. The exhibits and schedules attached hereto are hereby incorporated by reference herein. 34. Effect of Waiver. A waiver by either party hereto shall not affect either party's right to enforce the provisions contained herein, nor shall any extension or waiver be held to be an extension of time or waiver of any prior or subsequent breach of the satne or any other obligation under this Agreement. 35. Confidentiality. Buyer acknowledges that, during the course of its due diligence, the information it will receive with respect to the Property and Seller is confidential in nature. Buyer agrees (unless otherwise required by law) not to disclose such information to any third party and to keep such information confidential, except for disclosures which may be made to Buyer's attorneys, accountants, and other consultants employed for the purpose of facilitating the transactions contemplated hereby, provided that Buyer makes all such parties aware of the confidentiality requirements set forth herein, and causes such parties to abide by this Section. 36. No Memorandum. The parties agree that neither this Agreement nor a memorandum hereof shall be recorded, as the parties intend to maintain the confidentiality of the transactions contemplated hereby. 37 Third Party Parcel. Buyer and Seller acknowledge that the adjacent properly located at 8828 Glendon Way ( "Third Party Parcel ") is a vacant land. According to the Buyer, the current conditions of the Third Party Parcel constitute both public and private nuisance. Buyer believes that, if such conditions are left unabated, they will adversely affect Buyer's planned hotel development and operation. Seller agrees to work with the appropriate agencies to encourage regular monitoring of the Third Party Parcel to ensure its compliance with the City codes and ordinances and other health and safety standards. In the event Buyer subsequently acquires the Third Party Parcel, Seller V further agrees to work with the Buyer through the necessary City approval procedures in the development of the Third Party Parcel. The parties have caused this Agreement to be duly executed by their respective duly authorized officers or representatives as of the date first above written. [Signatures are on the Next Page] SELLER: BUYER: Rosemead Community Development Qiao Garden Hotel Investment, Inc. Commission By: � . 4ullesoaj (P int Name Tide ass4 . Exet: N-e Dl�c�ot ATTEST: Commission Secretary APPROVED AS TO FORM: 6d" "( i,;, Commission Counsel By: S oN j, L (,9� (Print Name & Title) By: (Print Name & Title) WA i _J STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS. CITY OF ROSEMEAD ) I, Gloria Molleda, City Clerk of the City of Rosemead City Council, do hereby certify the foregoing instrument (Purchase and Sale Agreement and Escrow Instruction between the Rosemead Community Development Commission and Oiao Garden Hotel Investment, Inc. ) is a full, true and correct copy of the original on file in this office. In witness whereof, I have hereunto set my hand and affixed this seal of the City of Rosemead, this I 81 day of January, 2012 4 cr �-CL Molleda City Clerk PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS This Purchase and Sale Agreement and Escrow Instructions (this "Agreement") is made and entered into as of March 15, 2011 (the "Effective Date" ), by and between the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION; a public body; corporate and politic (the "Seller "), and QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation (the `Buyer "), with respect to the following facts: RECITALS A. Seller is the owner of and desires to sell to Buyer: (a) that certain land situated in the City of Rosemead, County of Los Angeles, State of California, connnonly know as 8832 Glendon Way, bearing Assessor's Parcel Number 5390- 018 -904, and more particularly described on Exhibit A attached hereto and made apart hereof, together with all of the interest of Seller in any and all rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of- way (collectively, the "Land "); and (b) the buildings, structures, fixtures and other improvements on the Land (collectively, the "Improvements "). The Land and the Improvements are hereinafter sometimes referred to collectively as the "Property." B. Buyer desires to purchase the Property from Seller. C. By this Agreement, Seller is agreeing to sell the Property to Buyer upon and subj ect to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the terms and conditions of this Agreement and for other valuable consideration, the receipt of which is hereby acknowledged, the Buyer and Seller agree as follows: 1. Purchase and Sale. Subject to and in accordance with the terns and conditions hereinafter set forth, on the Close of Escrow (as defined in Section 2 , Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Property. 2. Opening and Closing of Escrow. Withiru five (5) days after the Effective Date, an escrow (the "Escrow") shall be opened with Mutual Escrow (the "Escrow Holder "), 5825 Rosemead Boulevard, Temple City, California 91780, Attention: Ruby Tsai, Escrow Officer, Telephone: (626) 451 -5999, Fax: (626) 292 -5777, Email: rubytsal inutualescrow.com (the "Opening of Escrow "). Upon the Opening of Escrow, the parties shall deposit a fully executed original of this Agreement with Escrow Holder and this Agreement shall serve as the instructions to Escrow Holder for consummation of the transactions contemplated hereby. Seller and Buyer agree to execute such additional and supplementary escrow instructions as may be appropriate to enable Escrow Holder to comply with the terms of this Agreement; provided, however, that in the event of Z:�- 'T any conflict between the terms and provisions of this Agreement and the terms and provisions of any supplementary escrow instructions, the terms and provisions of this Agreement shall control. The "Close of Escrow" or "Closing" shall be the date that a grant deed for the Property in favor ofBuyer is recorded in the Official Records of the Los Angeles County Recorder's Office. The Close of Escrow shall occur on the later of either June 30, 2011 or the Entitlements Period as described in Section 9(b) (the "Closing Date "). 3. Purchase Price; Deposit; Escrow Account. (a) The purchase price for the Property to be paid by Buyer is the sum of $3,247,700.30 (the "Purchase Price ") and is agreed to be the fair market value of the property with the Entitlements (as defined and described in Section 9(b) below). The Purchase Price shall be paid by Buyer at Closing as follows: (i) The sum of $1,000,000 shall be paid in cash (the "Cash Portion "); and (ii) The sum of $2,247,700.30 shall be paid and evidenced by the delivery to Seller of Buyer's Promissory Note Secured by Deed of Trust (the "Note ") in the form of Exhibit B attached hereto and made a part hereof, which Note is to be secured by a Deed of Trust with Assignment of Rents as Additional Security (the "Deed of Trust "), from Buyer, as Trustor, in favor of Seller, as Beneficiary, in the form of Exhibit C attached hereto and made a part hereof.. (b) Within five (5) days after the Effective Date, Buyer shall deliver to Escrow Holder an earnest money deposit in the amount of $100,000 (the "Deposit ") in the form of a cashier's check, by a federal wire transfer, or other form acceptable to the Escrow Holder. The Deposit shall be placed in an interest - bearing bank account (the "Escrow Account ") and all interest accruing thereon shall increase and become a part of the Deposit. On the Close of Escrow, the Deposit shall be applied toward the Cash Portion of the Purchase Price. The remaining balance of the Cash Portion of the Purchase Price shall be payable by Buyer in the form of a cashier's check, federal wire transfer, or other form acceptable to Seller and the Escrow Holder and placed in the Escrow Account no later than one (1) business day prior to the Close of Escrow. In the event that Buyer terminates this Agreement by written notice to Seller on or prior to the expiration of the Due Diligence Period (as defined in Section 9 in accordance with the terms and provisions hereof, the Deposit shall be refunded to Buyer. Upon the expiration of the Due Diligence Period, if this Agreement has not been terminated or deemed terminated as provided herein, the Deposit shall become non - refundable and shall be applied toward the Cash Portion of the Purchase Price at the Close of Escrow or released to and retained by Seller if the Close of Escrow does not occur as the result of (i) a default by Buyer or (ii) Buyer's termination of this Agreement (except in the event of a default by Seller or the failure of a condition precedent to Buyer's obligations under this Agreement as provided in Section 12 . The Deposit shall also be refundable to the Buyer in accordance with the terms and conditions hereof. 4. Delivery of Documents on the Close of Escrow. (a) On the Close of Escrow, Seller agrees to cause to be delivered to Buyer a duly executed and acknowledged Grant Deed in the form attached as Exhibit D hereto (the "Grant 2 Deed ") conveying to Buyer all of Seller's interest in the Property subject only to the Permitted Title Exceptions (as defined in Section 5 approved by Buyer, as provided below; and Buyer agrees to cause to be delivered to Seller the Note, duly executed by Buyer, and the Deed of Trust, duly executed and acknowledged by Buyer, granting Seller a lien on the Property to secure payment by Buyer of the Note. (b) At the Close of Escrow, Buyer shall receive the Title Policy (as defined in Section 5} issued by Lawyer's Title (the "Title Company ") insuring in Buyer fee simple title to the Property, free and clear of all liens and encumbrances other than the Permitted Title Exceptions (as defined in Section 5). 5. Title and Title Insurance. (a) Within five (5) days after the Effective Date, the Title Company shall deliver to Buyer and Seller a preliminary report for the Property, together with copies of all instruments noted as exceptions therein (the "Preliminary Title Report"), and Seller shall deliver to Buyer the most recent ALTA survey of the Property, if any, in Seller's possession. Buyer shall also have the option of ordering, at its cost, an ALTA survey for the Property pursuant to the terms set forth in Section 14 (the "Survey "). (b) Buyer shall have until the expiration of the Due Diligence Period to disapprove any exceptions to title shown on the Preliminary Title Report or reflected on the Survey (collectively, "Disapproved Exceptions ") and to provide Seller with notice of disapproval in writing describing the defect with reasonable particularity (the "Disapproval Notice "). Any exceptions to title not disapproved by Buyer within such period shall be deemed approved. Within five (5) business days of Seller's receipt of a Disapproval Notice, Seller shall have the right, but not the obligation, to give written notice to Buyer that Seller intends to remove or cause to be insured over some or all of the Disapproved Exceptions. If Seller notifies Buyer of an intention to remove or cause to be endorsed over some or all the Disapproved Exceptions, Seller shall do so concurrently with or prior to the Close of Escrow, provided, however, if any such Disapproved Exception is not susceptible of being removed or endorsed over prior to the Close of Escrow despite Seller's commercially reasonable efforts, the scheduled date for the Close of Escrow shall be automatically extended by a reasonable additional time to effect such removal or endorsement, but in no event shall the extension exceed thirty (30) days after the Closing Date. If Seller does not elect to remove or endorse over all of the Disapproved Exceptions, Buyer, by written notice given to Seller within three (3) business days after the expiration of Seller's election period, may elect to terminate this Agreement or to take the Property subject to the Disapproved Exceptions which Seller will not remove or endorse over. Buyer's failure to so give such notice of election shall be deemed Buyer's election to terminate this Agreement. In any event, Seller covenants to pay in full all loans secured by mortgages and deeds of trust encumbering the Property and to remove any mechanics liens and any other monetary liens encumbering the Property (other than current real property taxes and assessments which are not due and payable) prior to or concurrently with the Close of Escrow, provided, however, Seller shall have the right to bond over mechanic's liens so long as such bond is reasonably acceptable in form and substance to the Buyer and is sufficient to allow the Title Company to insure over such liens in the Title Policy (defined below). The Title Policy shall include such endorsements as Buyer shall reasonably request and which Title Company agrees to issue on or before the expiration of the Due Diligence Period. Any such title policy endorsements are to be paid for by Buyer; provided, however, that Seller shall pay for any title policy endorsements obtained by Seller in response to Buyer's Disapproval Notice. Whether or not Buyer shall have furnished to Seller any notice of Disapproved Exceptions pursuant to the foregoing provisions of this Agreement, Buyer may, at or prior to the Close of Escrow, notify Seller in writing of any objections to title first raised by the Title Company between (a) the last date on which Buyer is entitled to make such an objection as set forth above and (b) the date on which the transaction contemplated herein is scheduled to close. With respect to any Disapproved Exceptions set forth in such notice, Seller shall have the same option to cure (or in the case of a monetary lien, the obligation to obtain the removal or bonding thereof as provided above) and Buyer shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of Disapproved Exceptions made by Buyer before the expiration of the Due Diligence Period. If Seller elects to attempt to cure any such matters, the scheduled date for the Close of Escrow shall be automatically extended by a reasonable additional time to affect such a cure, but in no event shall the extension exceed thirty (30) days after the scheduled date for the Close of Escrow set forth in Section 2. (c) Buyer's obligation to consummate the purchase contemplated by this Agreement is conditioned upon the irrevocable commitment by the Title Company to issue a CLTA Standard Coverage Owner's Policy of Title Insurance in the amount of the Purchase Price, issued by Title Company (the "Title Policy "). The Title Policy shall insure Buyer's fee interest in the Property subject only to the following permitted conditions of title (the "Permitted Title Exceptions "): (i) General and special real property taxes and assessments for the then current tax fiscal year which are a lien not then due and payable; (ii) The applicable zoning, building and development regulations of any municipality, county, state or federal jurisdiction affecting the Property; (iii) Such other exceptions listed in the Preliminary Title Report that have been approved, or been deemed approved, by Buyer as provided in Section 5(b); and (iv) Any exceptions directly or indirectly caused by Buyer or Buyer's agents, employees or contractors. At Buyer's election and cost, Buyer may cause the Title Company to provide Buyer with an ALTA Extended Coverage Owner's Policy. Notwithstanding the foregoing, Buyer's receipt of an ALTA policy shall only be a condition to closing provided that Buyer pays the cost of the ALTA policy in excess of the cost of a CLTA policy and Buyer obtains an ALTA survey acceptable to the Title Company prior to the expiration of the Due Diligence Period. Seller shall not encumber or agree to sell the Property to any other party during the period from the Effective Date to the Close of Escrow or the date of the termination of this Agreement 6. Deposit of Documents and Funds in Escrow. (a) Seller and Buyer, as applicable, hereby covenant and agree to deliver to Escrow Holder at least one (1) business day prior to the Close of Escrow the below listed instruments, documents, and funds, the delivery of each of which shall be a condition of the Close of Escrow. (b) Seller shall deliver: (i) The Grant Deed duly executed and acknowledged by Seller; (ii) A Withholding Exemption Certificate'Form 593 -C as contemplated by California Revenue and Taxation Code §18662 (the "Withholding Affidavit ") duly executed by Seller; (iii) A Certification of Non - Foreign Status in accordance with Internal Revenue Code Section 1445 duly executed by Seller; (iv) Such funds as are required to pay for costs and expenses payable by Seller hereunder; and (v) Such proof of Seller's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue the Title Policy. (c) Buyer shall deliver: (i) The Cash Portion of the Purchase Price (less the amount of the Deposit) together with such funds as are required to pay for costs and expenses payable by Buyer hereunder; (ii) One (1) original of the Note duly executed by Buyer; (iii) One (1) original of the Deed of Trust duly executed and acknowledged by Buyer; and (iv) Such proof of Buyer's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue the Title Policy. Each of the Buyer and Seller may waive any condition of the Close of Escrow to be performed by the other and set forth in this Section 6. 7. Authorization to Record Documents and Disburse Funds. Upon the Close of Escrow, Escrow Holder is hereby authorized to record the Grant Deed in the Official Records ofLos Angeles County, California, followed immediately by the recording of the Deed of Trust in the Official Records of Los Angeles County, California, and to disburse the funds and distribute the other documents called for hereunder, provided each of the following conditions has then been fulfilled: (a) The Title Company is irrevocably committed to issue in favor of Buyer the Title Policy, with a liability in the amount of the Purchase Price, as set forth in Section 5(c). (b) Escrow Holder shall have received Buyer's authorization to close and Buyer's notice of approval or satisfaction or waiver of all of the contingencies /conditions to Buyer's obligations hereunder, as provided for in Section 12; (c) Escrow Holder shall have received Seller's authorization to close and Seller's notice of approval or satisfaction or waiver of all of the contingencies /conditions to Seller's obligations hereunder, as provided for in Section 13; and (d) Seller and Buyer shall have deposited in Escrow the documents and funds required pursuant to Section 6. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for the issuance of the Title Policy. 8. Escrow Charges and Prorations. (a) Seller shall pay (i) one -half (1/2) of the fees and charges of Escrow Holder, (ii) the cost of the premium for the CLTA Standard Coverage portion of the Title Policy and the cost of any endorsements obtained by Seller in response to Buyer's Disapproval Notice, and (iii) Seller's share of the charges prorated under this Agreement. If the Escrow shall fail to close for any reason other than Buyer's default, Seller shall pay one -half (1/2) of any applicable Escrow cancellation charges. (b) Buyer shall pay (i) one -half (1/2) of the fees and charges of Escrow Holder,. (ii) the cost of the premium for the Title Policy in excess of the premium for a CLTA Standard Coverage policy, if any, (iii) the cost of all endorsements to the Title Policy other than those payable by Seller as provided in Section 8(a) above, (iv) all costs and charges for the recordation ofthe Grant Deed and all documentary or other local transfer taxes on the transfer of the Property, and (v) Buyer's share of the charges prorated under this Agreement. If the Escrow shall fail to close for any reason other than Seller's default, Buyer shall pay one- half.(1 /2) of any applicable Escrow cancellation charges. (c) Current real property taxes, special taxes, and assessments, if any, shall be prorated to the close of Escrow, with Seller responsible for the portion attributable to the period prior to the Closing Date and Buyer responsible for the portion attributable to the period from and after the Closing Date. All supplemental taxes for the Property which are attributable to time periods prior to the Closing Date shall be paid for in full by Seller regardless of whether the tax bill is received before or after the Close of Escrow. All supplemental tax bills and all future tax bills attributable to time periods from and after the Closing Date shall be paid for by Buyer. (d) All prorations shall be determined on the basis of a 365 day year. The provisions of this Section 8 shall survive the Close of Escrow. 9. Due Diligence Period; Access; Entitlements Period (a) During the period commencing on the Effective Date and ending at 5:00 p.m. on the last day of the Entitlement Period as defined in Section 9(b) below (the "Due Diligence Period "), Buyer may inspect the Property as necessary to approve all zoning and land use matters relating to the Property (including Buyer's approval of Entitlements as defined and described in Section 9(b) below) and to approve the physical condition of the Property subject to the limitations set forth below. (i) Within five (5) days after the Effective Date, Seller shall provide to Buyer, any and all of the following documents to the extent in Seller's possession or under Seller's control: environmental testings and reports, soils and geological testings and reports, structural engineering reports, surveys, and plans and specifications. Seller agrees to have its Phase I environmental testing report updated and will provide it to the buyer ten (10) days after the Effective Date. (collectively, the "Seller Information Documents "). (ii) It is understood and agreed by Buyer that Seller does not make any representation or warranty, express or implied, as to the accuracy or completeness of any of the Seller Information Documents, including without limitation, any environmental testings and reports, it being understood and agreed that the Seller Information Documents are provided for informational purposes only. To the extent permitted by law, Buyer shall keep all Seller Information Documents provided by the Seller confidential and shall not disclose it to any third parties except its accountants, legal counsel, and other consultants employed in connection with its acquisition of the Property. In the event this Agreement is terminated, Buyer shall promptly return to Seller all Seller Information Documents (and shall not retain any copies of the same) provided by Seller. Buyer shall provide Seiler, at no cost to Seller, with copies of all reports, test results, surveys and other written materials obtained by Buyer in connection with its investigation of the Property promptly following Buyer's receipt thereof. Buyer may terminate this Agreement in Buyer's sole and absolute discretion if for any reason Buyer is dissatisfied with the results of any of its inspections of the Property or the Seller Information Documents by giving written notice to the Seller prior to and including the final day of the Due Diligence Period (iii) Subject to Buyer's compliance with the terms of this Section 9 Buyer and its agents, attorneys, accountants, and other representatives shall have the right, at Buyer's sole cost and expense, to enter upon the Property during the Due Diligence Period to make inspections and other examinations of the Property and the improvements thereon, including without limitation, the right to perform surveys, soil and geological tests of the Property and the right to perform environmental site assessments and studies of the Property. Buyer's physical inspection of the Property shall be conducted during normal business hours at times mutually acceptable to Buyer and Seller. Buyer shall give Seller at least 24 hours prior notice of any entry onto the Property and Seller shall have the right to have its representatives present during any such entry or inspections. No invasive testing or boring shall be done without the prior notification of Seller and Seller's written permission of the same, which permission may be withheld in Seller's sole and absolute discretion. Buyer shall promptly repair any damage to the Property caused by its inspections and investigations. To evidence Buyer's right of entry to the Property, the parties shall execute and deliver that certain e5:5��l Right of Entry Agreement attached hereto as Exhibit E within three (3) days following the Effective Date. (b) Within fifteen (15) days following the Effective Date, Buyer shall prepare and deliver to the City of Rosemead (the "City") drawings and specifications providing for the addition of twelve (12) rental units (hotel rooms) to the hotel building Improvements located on the Land (the "Additional Units "). The date on which such drawings and specifications are accepted by the City for processing is referred to herein as the "Acceptance Date ". Following the Acceptance Date, Seller agrees to cooperate with Buyer in seeking the grant by the City of all City approvals (the "Entitlements ") necessary for the Additional Units. If, on or before 5:00 p.m, on the day which is two hundred seventy (270) days following the Acceptance Date (the "Entitlements Period ") the Entitlements have not been granted by the City, then Buyer shall have the right to terminate this Agreement by giving written notice to the Seller .prior to and including the final day of the Entitlements Period. 10. Representations of Seller. Seller hereby represents to Buyer the following, it being expressly understood and agreed that all such representations are true and correct in all material respects as of the Effective Date. If the Seller acquires additional knowledge regarding the matters which are the subject of the representations contained in this Section 10 which would cause any of such representations to be incorrect in any material respect prior to the Close of Escrow, Seller shall give prompt written notice thereof to Buyer. Within seven (7) business days following receipt of such notice, Buyer may elect to cancel this Agreement and receive a refund of the Deposit. As of the Close of Escrow, the representations contained in this Section 10 shall be true and correct in all material respects, subject to any matters disclosed in writing by Seller to Buyer as provided herein. (a) Seller has full right and power to execute, deliver and perform its obligations under this Agreement, and when executed and delivered, Seller and all parties having an interest in the Property shall be lawfully bound by the terms of this Agreement. Seller is the sole owner of the Property. (b) There is no pending or, to Seller's actual knowledge, threatened litigation, which does or may adversely affect the Property. (c) This Agreement and all documents executed by Seller which are to be delivered to Buyer at or prior to the Closing are, or at the time of Closing will be, duly authorized, executed, and delivered by Seller, are or at the time of Closing, will be legal, valid and binding obligations of Seller, enforceable in accordance with their terms, and do not and at the time of Closing will not violate any provisions of any agreement or judicial order to which Seller is a party or to which Buyer is subject. (d) Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code. (e) Seller agrees to indemnify Buyer and agrees to defend and hold Buyer harmless from all actual, reasonable out -of- pocket loss, costs, liability, expense, damage, or other injury, including without limitation, attorneys' fees and expenses, and all other costs and expenses incurred by reason of, or in any manner resulting from the breach of any representations in this Sectionl0. The provisions of this Section 10 shall survive the Close of Escrow or the termination of this Agreement for a period of two (2) years. 11. Representations of Bu}_er. Buyer hereby represents to Seller the following, it being expressly understood and agreed that all such representations are true and correct in all material respects as of the Effective Date. If Buyer acquires additional knowledge regarding the matters which are the subject of the representations contained in this Section 11 which would cause any of such representations to be incorrect in any material respect prior to the Close of Escrow, Buyer shall give prompt written notice thereof to Seller. Within seven (7) business days of receipt of such notice, Seller may elect to cancel this Agreement and Buyer shall be entitled to receive a refund of the Deposit. As of the Close of Escrow, the representations contained in this Section 11 shall be true and correct in all material respects, subject to any matters disclosed in writing by Buyer to Seller as herein provided. (a) Buyer has the full right, power and authority to enter into this Agreement and has taken all action necessary to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement has been duly and validly authorized by Buyer, and no other action by Buyer is requisite to the valid and binding execution, delivery, and performance of this Agreement by Buyer. (b) There is no pending litigation or, to the best of Buyer's knowledge, threatened litigation, which does or will materially adversely affect Buyer's ability to consummate this transaction. (c) This Agreement and all documents executed by Buyer which are to be delivered to Seller at or prior to the Closing are, or at the time of Closing will be, duly authorized, executed, and delivered by Buyer, are or at the time of Closing, will be legal, valid and binding obligations of Buyer, enforceable in accordance with their terms, and do not and at the time of Closing will not violate any provisions of any agreement orjudicial order to which Buyer is aparty or to which Buyer is subject. (d) Other than Seller's representations set forth in Section 10, Buyer has not relied on any representation made by Seller or any representative of Seller in connection with this Agreement and the transactions contemplated hereby. (e) Buyer is not a Prohibited Person. For purposes of this Section 11, "Prohibited Person" means any of the following: (i) a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001) (the "Executive Order "); (ii) a person or entity owned or controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (c) a person or entity that is named as a "specially designated national" or "blocked person" on the most current list published by the U.S. Treasury Department's Office of Foreign Assets Control ( "OFAC ") at its official website, http: / /www.treas.gov /offices /enforcement/ofac; (d) a person or entity that is otherwise the target of M any economic sanctions program currently administered by OFAC; or (e) a person or entity that is affiliated with any person or entity identified in clause (a), (b), (c) and/or (d) above. (f) To Buyer's knowledge, none of its investors, affiliates or brokers or other agents (if any), acting or benefiting in any capacity in connection with this Agreement is a Prohibited Person. (g) The funds or other assets Buyer will transfer to Seller under this Agreement are not the property of, or beneficially owned, directly or indirectly, by a Prohibited Person. (h) The funds or other assets Buyer will transfer to Seller under this Contract are not the proceeds of specified unlawful activity as defined by 18 U.S.C. § 1956(c)(7). (i) Buyer agrees to indemnify Seller and agrees to defend and hold Seller harmless from all actual, reasonable out -of- pocket loss, costs, liability, expense, damage, or other injury, including without limitation, attorneys' fees and expenses, and all other costs and expenses incurred by reason of, or in any manner resulting from the breach of any warranties and representations, in this Section 11. The provisions of this Section 11 shall survive the Close of Escrow or the termination of this Agreement for a period of two (2) years. 12. Buyer's Conditions. For the benefit of the Buyer, the Close of Escrow and Buyer's obligation to consummate the purchase of Property shall be contingent upon and subject to the occurrence of all of the following conditions precedent (or Buyer's written waiver thereof, it being agreed that Buyer can waive any or all such contingencies) on or before the Close of Escrow: (a) Buyer's obtaining a satisfactory commitment, on or before the Close ofEscrow, issued by Title Company to issue the Title Policy in favor of Buyer with a liability amount equal to the Purchase Price showing Buyer's fee interest in the Property subject only to the Permitted Title Exceptions, and being otherwise in accordance with the provisions of Section 5 of this Agreement. (b) Buyer's verifying, on or before the Close of Escrow, that there are no mechanics' and/or materiahnen's liens, or lis pendens actions affecting the Property, and that all taxes, sewer, water, and utility bills have been paid. (c) That as of the Close of Escrow the representations of Seller contained in this Agreement are either all true and correct in all material respects or, to the extent that is not the case, have been waived by Buyer. (d) Seller's delivery of all documents required to be delivered by Seller pursuant to Section 6 hereof. (e) Buyer's not electing to terminate this Agreement within the times and as provided in Section 9(a)(i) and Section 9(b). (f) If Buyer has elected to obtain the same, Buyer's obtaining and approving the Survey provided for herein prior to the expiration of the Due Diligence Period. 10 If all the foregoing conditions precedent have not been either met or expressly waived in writing, or been deemed to have been waived, by Buyer on or before the respective dates set forth therein, or if no date is set forth therein on or prior to the Close of Escrow, then this Agreement shall, at the option of Buyer, become null and void, in which event, except as expressly set forth in this Agreement, neither party shall have any further rights, duties and obligations hereunder, and Buyer shall be entitled to the immediate refund of the Deposit. 13. Seller's Conditions. For the benefit of Seller, the Close of Escrow and Seller's obligation to consummate the sale of the Property, shall be contingent upon and subject to written notice to the Escrow Holder by Seller of the occurrence of all of the following conditions precedent (or Seller's written waiver thereof, it being agreed that Seller can waive any or all such contingencies) on or before the Close of Escrow: (a) Deposit by Buyer of the Purchase Price and all other sums to be deposited by Buyer in Escrow in accordance with the requirements hereof. (b) Buyer's delivery of all documents required to be delivered by Buyer pursuant to Section 6 hereof and performance of all other material covenants and agreements to be performed by Buyer under this Agreement. (c) That as of the Close of Escrow the representations and warranties of Buyer contained in this Agreement are all either true and correct in all material respects or, to the extent that is not the case, have been waived by Seller. 14. Survey. Buyer, at Buyer's sole cost and expense, may obtain an ALTA survey acceptable to the Title Company prior to the expiration of the Due Diligence Period. 15. Destruction/Condemnation. In the event that prior to the Close of Escrow, the Property, or any portion thereof, is damaged by fire, earthquake, or other casualty, or is subject to a taking by a public authority, then Buyer shall have the right, exercisable by giving notice to Seller within fifteen (1.5) days after receiving written notice of such damage or taking, either (a) to terminate this Agreement or (b) to accept the Property in its then condition and proceed with the Closing, and to receive an assignment of all of Seller's rights to any proceeds of insurance or condemnation awards payable by reason of such damage or taking. If Buyer elects to proceed under the preceding clause (b), there shall be no adjustment to the Purchase Price and Seller shall not compromise, settle or adjust any claims to such proceeds of insurance or condemnation awards. Seller agrees to give Buyer prompt notice of any damage to or taking of the Property promptly after Seller receives notice of the same. Buyer's Initials: .Seller's Initials: 16. Disposition of Deposit. tF THE TRANSACTION HEREIN PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER THIS AGREEMENT OR THE FAILURE OF SATISFACTION OF THE CONDITIONS DESCRIBED IN SECTION 12 HEREOF, AND BUYER SHALL NOT HAVE DEFAULTED UNDER THIS AGREEMENT, THEN THE DEPOSIT SHALL BE RETURNED TO BUYER, AND NEITHER PARTY SHALL 11 HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER; PROVIDED, HOWEVER, IF THE TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE BY REASON OF SELLER'S DEFAULT, AND BUYER SHALL HAVE FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL BE READY, WILLING AND ABLE TO CLOSE, THEN BUYER SHALL BE ENTITLED TO SPECIFICALLY ENFORCE THIS AGREEMENT (BUTNO OTHER ACTION, FOR DAMAGES OR OTHERWISE, SHALL BE PERMITTED). IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, IT IS AGREED THAT THE DEPOSIT SHALL BE NON - REFUNDABLE AND SELLER SHALL BE ENTITLED TO SUCH DEPOSIT, WHICH AMOUNT SHALL BE ACCEPTED BY SELLER AS LIQUIDATED DAMAGES AND NOT AS A PENALTY AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY. IT IS AGREED THAT SAID AMOUNT CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ETSEQ. BUYER AND SELLERAGREE THAT IT WOULD BE IMPRACTICAL OR IMPOSSIBLE TO PRESENTLY PREDICT WHAT MONETARY DAMAGES SELLER WOULD SUFFER UPON BUYER'S FAILURE TO COMPLETE ITS PURCHASE OF THE PROPERTY. BUYER DESIRES TO LIMIT THE MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE HEREUNDER AND BUYER AND SELLER DESIRE TO AVOID THE COSTS AND DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCED TO RECOVER DAMAGES OR OTHERWISE ENFORCE SELLER'S RIGHTS. IF FURTHER INSTRUCTIONS ARE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE TERMS OF THIS PARAGRAPH, BUYER AND SELLER AGREE TO EXECUTE THE SAME. THE PARTIES ACKNOWLEDGE THIS PROVISION BY PLACING THEIR INITIALS BELOW: SELLER BUYER 17. As -Is Sale. BUYER ACKNOWLEDGES AND AGREES THAT BUYER WILL BE CONCLUDING THE PURCHASE OF THE PROPERTY BASED SOLELY UPON BUYER'S INSPECTION AND INVESTIGATION OF THE PROPERTY, AND THAT BUYER WILL BE PURCHASING THE PROPERTY ON AN "AS -IS, WHERE -IS" BASIS, WITH ALL FAULTS, LATENT AND PATENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, IS NOT HEREBY MAKING, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATIONS OR WARRAN'T'IES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, EXCEPT THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED IN THIS AGREEMENT, AS TO ANY MATTER CONCERNING THE PROPERTY, INCLUDING, WITHOUT LIMITATION, MATTERS RELATING TO THE ZONING, LAND -USE OR OTHER ENTITLEMENTS, THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT LIMITATION, THE EXISTING ENVIRONMENTAL CONDITION), AND /OR SOILS, SEISMIC, GEOTECHNICAL, THE CONSTRUCTION OF THE IMPROVEMENTS ON THE PROPERTY, THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS, THE FINANCIAL CONDITION OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS, AFFECTING OR CONCERNING THE PROPERTY OR ANY PART THEREOF, AND SELLER SPECIFICALLY 12 DISCLAIMS ANY SUCH REPRESENTATIONS OR WARRANTIES, AND /OR OTHER MATTERS RELATING TO THE CONDITION OF THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY BY OR ON BEHALF OF SELLER, INCLUDING, WITHOUT LIMITATION, THE SELLER INFORMATION DOCUMENTS AND THE OTHER DOCUMENTS AND INSTRUMENTS TO BE DELIVERED TO, OR OTHERWISE MADE AVAILABLE TO, BUYER WAS OBTAINED FROM A VARIETY OF SOURCES, THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION, THAT ALL SUCH INFORMATION HAS BEEN AND SHALL BE PROVIDED SOLELY AS AN ACCOMMODATION TO BUYER, AND THAT SELLERMAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION. AS PART OF BUYER'S AGREEMENT TO PURCHASE AND ACCEPT THE PROPERTY "AS -IS, WHERE -IS," AND "WITH ALL FAULTS ", AND NOT AS A LIMITATION ON SUCH AGREEMENT, BUYER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL ACTUAL OR POTENTIAL CLAIMS OR RIGHTS AGAINST THE SELLER ARISING OUT OF THE INACCURACY OR INCOMPLETENESS OF ANY MATERIALS SO FURNISHED, ARISING OUT OF OR IN CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND ANY AND ALL ACTUAL OR POTENTIAL CLAIMS OR RIGHTS BUYER MIGHT HAVE REGARDING ANY FORM OF REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY, OTHER THAN IN CONNECTION WITH THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED IN THIS AGREEMENT. SUCH WAIVER IS ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY, AS PART OF THE PROVISIONS OF THIS SECTION, BUT NOT AS A LIMITATION THEREON, BUYER HEREBY AGREES, REPRESENTS AND WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND BUYER HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH. IT NOW HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE OR LOCAL LAWS, RULES OR REGULATIONS, INCLUDING WITHOUT LIMITATION, SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA OR ANY SIMILAR STATUTE, LAW, RULE OR REGULATION OF ANY OTHER STATE. BUYER ACKNOWLEDGES THAT SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTION THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." SELLER AND BUYER HAVE EACH INITIALED THIS SECTION TO FURTHER INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF. SELLER BUYER 13 17. Effect of Termination or Cancellation. Except where this Agreement is terminated due to the default of a party, if this Agreement is terminated or cancelled at the election of a party as provided herein, neither party shall have any further rights, liabilities or obligafiBouserand Seller hall cancellation fees charged by the Escrow Holder and /or for such h have accrued prior to the date of termination or cancellation and (1 Y an Buyer, each be responsible for one half ( /z) of any other funds deposited into Escrow by Y the Title Company and (ii) the Deposit and any including interest thereon, shall be refunded to Buyer Bement by one party to the other shall be in writing lg. Notices. All notices, requests, demands and other communications require or permitted to be given under the terms of this Agr addressed to the recipient parry's Notice Address set forth blo d commercial courier or delivery ave serves ) duly given or made (a) if delivered personally (including Y to the parry Notice Address, postage prepaid and return receipt s Notice Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the party's 's Notice Address as evidencd bhe re ur he third requested, then at the time received at the patty's Notice address, postage prepaid, change its Notice or (c) if mailed by first class mail to the party (3rd) business day following deposit in the United States Mail Any Notice may Address by a notice given in the foregoing form and manner. The Notice Addresses of the parties are: Buyer: Qiao Garden Hotel Investment, Inc. 801 E. Valley Boulevard, Suite 203 San Gabriel, California 917President and CEO Attn.: Mr. Lian Yue Song, Copy to: Qiao Garden Hotel Investment, Inc. 1406 Palm Ave. Suite D San Gabriel California 91776 Attn.: Helen Wang Seller: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Community uni y De relopme Development Manager Community Copy to: Mr. Neil F. Yeager, Esq. Burke, Williams & Sorensen, LLP 444 South Flower Street, Suite 2400 Los Angeles, California 90071 the other 19. Broker's Commissions. The Buyer and Seller in connection twith this transaction to that it has not used a broker, agent, finder or other p shall defend, indemnify and whom a brokerage or other commission may be payable. Each party 14 hold the other party harmless from and against any and all claims for any broker's commission or similar compensation that may be payable to any broker, finder or other person or entity based upon such party's own acts. The indemnification obligations contained in this Section 19 shall survive the Close of Escrow and the delivery of the Grant Deed. 20. Removal of Personal Property. Title to all personal property located on the Property shall remain in the Seller, and the Seller, at its sole expense, shall cause all such personal property to be removed from the Property prior to the Close of Escrow. 21. Time is of the Essence. The parties hereto agree that time is of the essence with respect to each term, condition and covenant hereof. 22. Successors and Assigns. Subject to the provisions of Section 30, the provisions of this Agreement are expressly binding upon, and shall inure to the benefit of the parties hereto and their successors in interest and assigns. 23. Entire Afreement. This Agreement, together with all exhibits hereto, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 24. Severabilitv. Invalidation of any of the terms, conditions, covenants, or other provisions contained herein by j udgment or court order shall in no way affect any of the other terms, conditions, covenants, or provisions hereof, and the same shall remain in full force and effect. 25. Amendments. Any amendments to this Agreement shall be effective only when duly executed by Seller and Buyer and deposited with Escrow Holder. 26. Attorneys' Fees. In the event that suit is brought for the enforcement of this Agreement or as the result of any alleged breach thereof, the prevailing party or parties in such suit shall be entitled to recover their reasonable attorneys' fees, costs, and expenses from the losing party or parties, and any judgment or decree rendered in such proceedings shall include an award thereof. 27. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of Seller and Buyer and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement. 28. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 29. Countemarts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes of this Agreement, facsimile signatures shall be deemed to be original signatures, and shall be followed by the immediate overnight delivery of original signature pages. 15 30. Assignment of A erg ement. Buyer shall have the right to assign or transfer this Agreement without Seller's consent only to a related person or entity of Buyer, which for purposes for this Agreement shall mean any entity in which Qiao Garden Hotel Investment, Inc. a California corporation and /or Leo Song individually or collectively have a minimum of fifty -one percent (51 %) of the ownership interest and management control. Except as provided in the preceding sentence, neither Party shall have the right to assign any of their rights or obligations set forth in this Agreement without the written consent of the other Party, which consent may be withheld in such other Party's sole and absolute discretion. Any assignment must be in writing and executed by both assignor and assignee in order to be enforceable and after the effective date of the assignment the assignor shall be released and discharged from any liability or responsibility hereunder. 31. Interpretation. Whenever used herein, the term. "including" shall be deemed to be followed by the words "without limitation." Words used in the singular number shall include the plural, and vice - versa, and any gender shall be deemed to include each other gender. 32. Ca to ions. The captions and headings of the Articles and Sections of this Agreement are for convenience of reference only, and shall not be deemed to define or limit the provisions hereof. 33. Exhibits. The exhibits and schedules attached hereto are hereby incorporated by reference herein. 34. Effect of Waiver. A waiver by either party hereto shall not affect either party's right to enforce the provisions contained herein, nor shall any extension or waiver be held to be an extension of time or waiver of any prior or subsequent breach of the same or any other obligation under this Agreement. 35. Confidentiality. Buyer acknowledges that, during the course of its due diligence, the information it will receive with respect to the Property and Seller is confidential in nature. Buyer agrees (unless otherwise required by law) not to disclose such information to any third party and to keep such information confidential, except for disclosures which may be made to Buyer's attorneys, accountants, and other consultants employed for the purpose of facilitating the transactions contemplated hereby, provided that Buyer makes all such parties aware of the confidentiality requirements set forth herein, and causes such parties to abide by this Section. 36. No Memorandum. The parties agree that neither this Agreement nor a memorandum hereof shall be recorded, as the parties intend to maintain the confidentiality of the transactions contemplated hereby. 37 Third Party Parcel. Buyer and Seller acknowledge that the adjacent property located at 8828 Glendon Way ( "Third Party Parcel ") is a vacant land. According to the Buyer, the current conditions of the Third Party Parcel constitute both public and private nuisance. Buyer believes that, if such conditions are left unabated, they will adversely affect Buyer's planned hotel development and operation. Seller agrees to work with the appropriate agencies to encourage regular monitoring of the Third Party Parcel to ensure its compliance with the City codes and ordinances and other health and safety standards. In the event Buyer subsequently acquires the Third Party Parcel, Seller 16 further agrees to work with the Buyer through the necessary City approval procedures in the development of the Third Party Parcel. The parties have caused this Agreement to be duly executed by their respective duly authorized officers or representatives as of the date first above written. [Signatures are on the Next Page] SELLER.: Rosemead Community Development Commission Qiao Garden Hotel Investment, Inc. BY: n By: (Print Name & Title) ATTEST: Commission Secretary APPROVED AS TO FORM: Commission Counsel 6 oN J, L 1,9N * (Print Name & Title) By: i�frint Name & Title) 17 SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT This SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT ( "Second Amendment') is made as of this 281' clay of September 2010. by and between the COMMUNITY DEVELOPMEN 'I' COMMISSION OF "THE CITY Oh ROSEMEAD, a public body, corporate and politic (the "Coin inission" ), and QIAO GARDEN GROUP REAL ESTATE COMPANY. LTD (the "Purchaser'), and amends that certain Exclusive Negotiation Agreement ( "Agreement ") entered into by and between the Commission and the Purchaser on May 25, 2010 and .lulu 27.2010. RECITALS: WHEREAS, the Parties continue to negotiate in good faith to permit the execution of a Purchase and Sale Agreement for the Site located at 8832 Glendon Way, Rosemead California; 91770; and WHEREAS, the Purchaser requires additional time to evaluate the terms of a potential Purchase and Sale Agreement in light of the fact that City staff is preparing amendments for City Council consideration which will affect Flotel uses within the City; and WI- IIREAS, the Commission desires to provide additional time to Purchaser to determine whether such changes are approved by the City Council to permit the Purchaser's to proceed with its development plans: and WHEREAS, in exchange for the extension of time by the Commission. the Purchaser agrees to make a good faith Deposit in the amount of $100.000.00. Section 1. Section 1a. of the Agreement is hereby amended in its entirety to read as follows: "3. Negotiation Period. a. Negotiation Period. The term of this Agreement shall extend through and include April 11 2011, subject to extension or termination as provided helow (the "Negotiation Section 2. Section 21 of the Agreement is hereby added to read as follows: "21. Deposit. No later than ten clays following Commission approval of this Second Amendment, and prior to execution of this Second Amendment by Commission; Purchaser shall deposit with Commission the amount of $100,000.00 (the "Deposit "). It. Use of Deposit. The Commission shall deposit the check in a Commission account during the term of the ENA. The Commission shall be under no duty to place the Deposit in an interest bearing account. However, if the Deposit is placed in an interest bearing account interest earned thereon shall be added to the Deposit for the account of the Purchaser. b. Disposition of Deposit If Parties Enter Into a Purchase and Sale Agreement (PSA). If the parties enter into a PSA prior to the end of the Negotiation Period, then the Commission shall apply the Deposit towards Purchaser's monetary obligations under the PSA. 17NA -0wo OurdCTI Oruup Real I "MZHC Co. Ltd 1 09/38/2010 C. Disposition of Deposit If Parties Do Not Enter Into a PSA. If the Purchaser does not execute a PSA at the end of the ENA period and the City Council has approved amendments to the Rosemead General Plan and Municipal Code affecting Hotel development within the City, then the Deposit will be Iorleited to the Commission. It' the parties do not enter into a PSA because either the City Council does not approve the amendments or the Commission determines not to enter into a PSA for the Site then the Commission shall refund the entire Deposit to Purchaser within seven (7) days of the expiration of the ENA term." ' Section 3. Except as expressly amended herein, all other terms and provisions of the Agreement are and remain in full force and effect. In witness whereof the parties have had their duly authorized officers execute this First Amendment this 28°i day of'Septenber 2010. PURCHASER: QIAO GARDEN GROUP REAL ESTATE CO. LTD Lay: COMMISSION: ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body corporate and politic By: Gary Ta y . Chairman APPROVED AS TO FORM By: Burke, Will✓ms & Sorensen, LLP Commission General Counsel ATTEST: By:�dlY�Fy yt Gloria Molleda. Commission Secretary ENA —Qiao Garden Group Real Estate Co. Lid i 09/28/2010 FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT This FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT ( "First Amendment ") is made as of this 27`" day of July 2010, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD, a public body, corporate and politic (the "Commission "), and QIAO GARDEN GROUP REAL ESTATE COMPANY, LTD (the "Purchaser "), and amends that certain Exclusive Negotiation Agreement ("Agreement ") entered into by and between the Commission and the Purchaser on May 25, 2010. Section 1. Section 3.a. of the Agreement is hereby amended in its entirety to read as follows: "3. Negotiation Period. a. Negotiation Period. The term of this Agreement shall extend through and include November 20, 2010, subject to extension or termination as provided below (the "Negotiation Period ")." Section 2. Except as expressly amended herein, all other terms and provisions of the Agreement are and remain in full force and effect. In witness whereof the parties have had their duly authorized officers execute this First Amendment this 27th day of July 2010. PURCHASER: QIAO GARDEN GROUP REAL ESTATE CO. LTD Zi Lian Yue Song, President ano CEO COMMISSION: ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body corporate and politic li By: 1% r- G-T ,04W Taylor, Ch 'rman ENA —Qiao Garden Group Real Estate Co. Ltd 1 07272009 APPROVED AS TO FORM By: ,1Q'" ✓vvl ,U/n" Rachel H. Richman Burke, Williams & Sorensen, LLP Commission General Counsel ATTEST: B y�,t 6M" " Gloria Molleda, Commission Secretary ENA — Qiao Garden Group Real Estate Co. Ltd 2 07/272010 EXCLUSIVE NEGOTIATION ACREDIENT "Phis EXCLUSIVE NEGOIiA "1-10; AGREEMENT ( "Agreement ") is made as of this 25`I' day oP V(ay 2010. by and hetveen the COMMUNH Y DEVELOPMENrI COM9,dISS1ON OF THE CITY OF ROSLN401111 a puhhe body. corporate and politic (the "CommisMon"I and QIA) GARDEN GI<OUP REAL I:.STAI-L CUVIPAIyY. L I'I) tthe '`Purchaser''), an the terms. and subject to the conditions. set forth bel ". The Commission and the Purchaser are sometimes Ielerred to herein collectiveh° as the -Parties." and either indi%idually as a -Party." RECITALS A. The Commission desires to retain an c_xperienccd and qualified KiNhaser who has the potential and Financial capacity to purchase the Glendon Hotel located at 8832 Glendon Wny. Rosemead. California 90703 (see Exhibit A) for the existin_t land use of a hotel. B. This Site ties within Redevelopment Pr iect Arca No.. 2 ( "Project Area "). and is subject to the Project Areas governing redevelopment plans The She is composed of one (1) parcel aggregating nppmxhnately 39.030 square Peet (see Exhibit B). C. Purchaser desires to determine the feasibility and terms by which it could acquire the Site and develop a hotel (the 'Project ") and to negotiate with the Commission the potential terms of a Ptuchaw and Sales Agreement (tic " PSA" ). D. The Parties es desire to enter into this .Agreement to exclusively nego6aw mutually acceptable terms and conditions for purchasing, developing and operating the Project upon the Site in the manner proposed by the Purchaser and specifically. to determine if mutually acceptable teens and conditions can be agreed upon for the PS,A. which would specify the rights, obi .adors and method of participation of to Parties with respect to development. :t, A - - ,I acokmn I."mI^, IhJdiI) ..I.I( I i 251) AGRGI -, NIENT 1. Exclusive Good Faith Negotiations. The Parties agree that. during the Negotiation Period (as defined in Section ; below). and so lon« as the Purchaser time(, meets its obligations under this A�,recment. they shall negotiate evtcl Lis nel_,, and in good faith regarding the proposed purchase. Lie velopmmit and operation of the Project upon the Site, and the tents of the PSA. Good faith negotiarons shall include. without limitation, attending scheduled mrctings. directing consultants to cooparatc with the other Para to the extent reasonably practicable and necessary to negotiations, providing iniorntation reasonably available and necessary to negotiations, and promptly reNicv%ing and returning any comments on correspondence, reports. documents, or agreements received from the other Part,. 2. DCyclOpment Concept /Scope. The negotiations hereunder are based on a development concept that will include the components described in Recital C. above. 3. Negotiation Period. a. Initial Negotiation Period. fhe terns of this lA2reement shall be for a period of ninety (90) calendar days from the date the Agreement is approved by the Commission_ subject to extension or termination as provided below (the "Ne'-otiation Pcriod`�). b. Ex[ension of Negotiation PeriotL If Purchaser has made substantial progress rov yard development of the project. as reasonabh° determined by the Commission in its sole discretion. the Commission may extend this Agreement for another ninety (90) calendar days ('Extension Period-). C. FNA Schedule of Performance. The ENA Schedule of Performance. attached hereto as hxhibit C and incorporated into this u,neement by reference, may be considered by the Commission as one means to determine whether the Purchaser is making necessary and satisfactory progress toward the development project. 4. Negotiation of the PSA. During the Negotiation Period, the Commission and the PnfChaSCr shall negotiate diligently and in good faith to prepare and enter into the PSA. Both of the parties shall cxctcise best ctforts to eomplete LLSeuSSions relannto to the final terms and conditions of the PSA and such other matters, as mad be uuduallA acceptable to the parties for the purchase and development of the Site, prior to the expiration of the Negotiation Period. It is contemplated that the PSA will include. at a minimmi, the following particulars a. PnopeIt; _ file Site will consist Sf approxint n } 39.000 square icct bordered by ivar Aeemte on the east. a vacant 23.500 square foot parcel (8528 Glendon Way, Rosemead) on the west, Glendon Way on the north. and a U -Haul Business (3527 Ivar Avcnue. Rosemead) Oil the south. ENA — OmoGardcn Group R <11 8st2lc Cu. Litt I� o,(=?�— u 10 b. t_tse. The Purchaser shall, -at its sole cost and expense; promptly after it has acquired possession to the Property and received entitlement for tho Project, renovate and rehabilitate the existing hotel. The developmcut shall ❑tilize a high quality of architectural dengn and inaterials. C. Schedule ofPerfonnance. The PSA shall include a Schedule of Performance which among other milestone dates. will require the completion of construction of the project no hater than twelve ( 12) months, front the date that all necessury project entitlements are granted by the City ofRosemead ( (: o"), subject to delays due to tbrce majeure. d. Approvals. The PSA shall provide thai the Purchaser wilt obtain from the CnN any sl,leeiflc plan and;or zone changes that trial he necessary for the Project while. the Commission will "M with the Chy to obtain any necessary General Plan changes. C. Indenulilicabon. The PSA will include provisions for the defense and indemnification of the Commission and City by Purchaser tit claims arising out of any agreements h enters into with the Purchaser including any claims relating to the payment of prevailaig %s ages for the Project. Purcfwser wits not be Plgtl red to iuclemntfy the Commission or City frir the Comml3Mon's negligent or intentional :lets or onitsslons_ f. No Third Party Bent liciarke The PSA is dratted as the sole benefit of the Panics and their successors in interest. No other person shall have any right of action based upon any provision of the PSA. g. Governing Law. The laws of the State of CaHfimiia shall govern interprelation and enforcement o' the PSA. Any action, suit or proceeding related to, or arising, lion the PSA shall be filed in the appropriate court having jurisdiction in the County of Los Angeles. 5. Commission Responsibilities. a.. The Commission agrees that it Nyill a -urk with the City of Rosemend and the Purchaser to analyze and amrnd, as necessary, existing zoning, includin <_ the preparation anet processing of' a CFQA Compliance Document for the Project. the PSA and the Project entidentents. b. The Commission agrees that the Purchaser may modify the description of the Project ect at an time; provided however. that substantial modifications or the Project shall: L be subject to the acceptance and approval of the Commission which approval shall not be uureasoriably withheld,. conditioned or delayed: ii. depending on the nature ol'such a modification. a suitable modification of the CSQA Compliance Document or other elements of the Project Study as motifi d may also be indicated. I'he C onimission may request that the Purchaser consider modifications to the description of the Project from time -to -time. Each such tiloditication shall be subject to the reasonable approval of the Purchaser. 6. Purchaser Tasks. DuHng the 41gotiation Period Purchaser shall undertake such tests. investigations, surveys inquiries and due diligence as Purchaser shall deem necessary or t.N7\ -Qiau Gnnlm2 Gtrngl ?a_al Bias <Cu. Lid 0 092li U appropriate in order to determine if the Site is suitable and appropriate I'or the construction and operation of the development contemplated by this Agreement. Purchaser shall pay; at no expense to Commission. all costs of perfaiming the Purchaser "Casks. 7. Rinht of access. Commission shall provide Purchaser access to the Site for the purposes of conducting surveys. collecting soil samples and performing other Studies necessary At determining the suitability, of the Site for the development contemplated by this Agwermem. Purchaser shall indemnify. defend and hold the Commission. its employees. officers. agents and representatives harmless agamsi any Who for damages to person or property artsllig from any activity of Purchaser. its employees, officers, aents. representatives, contractors, subcontractors of consultants on the Site. Commission shall indemni[' -. defend and hold the Purchaser, its employees, officers_ agents and representatives harmless against any claim For damages to person or property arising from any activity of Commission, its employees, officers. agents. representatives. conti actors. subconn'acH'trs or consulnuns on the Site. . 8. Access to Reports and Studies. a. Commission Will provide Purchaser with all documents and inforn ation in Commission's possession, if amp. regarding the environmental and soils conditions of the Site and the availability and capacity of utility services to the Site. b. Provided that disclosure will not compromise the exemption. if any, of the documents from public inspection under the California Public Records Act, Commission shall provide Purchaser access to all studies. reports and analyses secured in performance of the Commission Tasks. C. Plot ided that disclosure will not coiopromise the exemption. if' any, of the documents from public inspection under the Calibr-ma Public Records Act. Purchaser shall provide Commission access to all studies, reports and analyses secured in performance of the Purchaser'hasks. d. Except as may be othcnvise required by the California Public Records Act. the Commission agrees that during the Negotiation Period it will not disclose to third patties any information that Purchaser identifies as a "trade secret provided, however. Own Commission shall not be liable to Purchaser for any damages arising bons tm inadvertent. negligent or wil!M breach of this conticlentiality. 9. Chance in 0%%nershin or Control of Purchaser. Purchaser understands C'omntission is entering into this FNA based on the prior experience and qualifications of Purchaser. Therefore. Purchaser shall not assign_ sell or otherwise transfer nny or all of its rights under this l"'NA to any party not in the majority. of controlled by Qiao Garden Group Real L.State Company. Ltd., without the prior %%ritten approval of Commission, at its sole discretion. 10. No t)blittation by Commission to enter in PSA or other related Agreements. This Agreement does not constitute a disposition of propert) or exercise of control over property, by the Commission or Chy. It is merely an agreement to enter into a period of excursive negotiations according to the terms hereof. resen•ing final discretion by the Corrurnission and City as to any PSA and all proceeding and decision in connection therewith. By its eseattion of this Agreement. Commission is not committing itself to or agreeing: (a) to enter into a PSA with - 7-010 IiNA— QieaCGjljcn Croup ltcal BSiatr e'o. Ltd. 0 > ='_jl=lO Purchaser. (b) to acquire land front third patties; (c) to dispose of land to the Purchaser. (d) to effect any, changes to City zoning ordinances or the City, General Plan or (e) to undenalce any other acts or activities requiring the subsequent independent exercise of discretion by the Commission_ the Cite or any agency or department thereof: Purchaser understands and acknowledges that and PSA resulting from the negotiations hereunder Shall become eflective only after and only if such PSA has been considered and approved by the Commission board and TOO Council of the City at a public hearing called for such purpose. 11. Cornniksion Not Responsible for- costs. 13Ncept as set firth herein or in the PSA. Commission shall not be liable for any costs associated with the planning and development of the Project Site under this ENA. 12. PSA to Sunersede this ETNA. This ENA yvill be superseded by the PSA executed by Patch tser and aoprcn"d by Compassion and city in the manner required by law, and executed by Commission. 13. Limitation on Liabilih. Neither Party would have as,recd to any part of this 1 NA it it w=en: to be liable to the other Party for any amount of monetary damages. Accordingly. both Parties acknowledge and agree each i ny's exclusive right and remody upon any breach of default of the other patty to negotiate in good faith, as set forth in this EN-A, is to terminate this ENA or seek specific performance of this ENA, as applicable. The prevailing Party in any action brought pursuant to this subsection A shall also be entitled to an award of actual y incurred and rcas mahle attorney's lees and costs. ld. Inclentniry. Purchaser agrees to and hereby dies defend, hold humloss and indcmnily Commission- C ihy and each of their elected or appointed officials, officers. agents and employees (the -htdcrimi "tied Parties`) tram third -parry claims for Wages arising from Purchaser's acts or omissions; provided, that the obligation to defend does not apply to actions arising.. solely from Me h4enirined Parties acts or omission, and provided, further. that the oblgation to indemnify and hold harmless applies only to the extent damages arc the result of or Purchaser's agents or employees. negligent acts or omission; or w0ifitl misconduct. 15. Non - Discrimination. The Purchaser shall not discriminate against nor segregate any person; or group of persons on accomtt of race, color, creed, religion, sex, marital status. handicap. national origin, sexual orientation, or ancestry in undertaking its obligations under this Agreement. 16. Tnvironntental Requirements. Certain state and local environmental requirements (including. without limitations; the (71-QA of 1970. Public Resources Code Section 21000 et scq.) may he applicable to the Site. Pursuant to such requirements, certain environmental documents may be required to be prepared I'm the Site. The Purchaser agrees to coopertae k0d! the Commission in obtaining information to deterntine the environmental impact of the Site. 17. Notice. Any notices pursuant to this Agreement shall be in writing_ and sent (i) by Federal Express (or other established express delivery service which maintains delivery records). (ii) by hand delivery. or (iii) by certified or registered mail, postage prepaid. return receipt requested, to the following addresses: F' ,A —Qia, O11&11 inoup Kral E >rarc 1-- -o Ud 5 Oa2r. -W TO COM-MISSION: Rosemead Community Development Commission Arm: 7eff Allred. Executive Director 8838 6. Valley Boulevard Rosemead; California 91771) Email: atlted+citcafro >emcad_ ore Telephone: (626) 569 -2106 facsimile: (626)J07-9218 TO PURCHASER : - Qiao Garden Group Real Estate Company. Ltd. Attu: Flclen wane 1=106 Palm .Avenue. Suite D San Gabriel, California 91776 Email: hs'commrrcalrral =.qr < uvaahoo.com telephone_ 1626) 780 -3261 Facsimile: (626) 572 -8836 18. Entire Agreement: Time is of the Essence. This Agreement (iucludir.L, all exhibits attached hereto) constitutes the entire undersuaudine and agreement of the parties integrates all of the terms and conditions mentioned herein or incidental hereto; and supersedes all negotiations or previous agreemerns between the parties ofthen predecessors in interest s °ith respect to all or ally part of the subject matter hereof. 'this Agreement may be c�zct.tted in one or more counterparts_ each of which shall he an original. and all of which together shall constitute it singte insu-ummut. 'Circe is of the essence in this Agreement. 19. Governing Law. 'this Agreement shall be consmucd in accordance ,� nh the hays of the State of California. 20. Implementation of Agreement. The Commission shalt maintain authority to implement this Agreement through the Cotnmission's F ecutive Director (or his duty authiuilcd representatives. Specivcath-. the lsecutis °c Director shall have the authority to issue interpretations for the achministration of the Agreement so long as such actions do not n:atcrialh or substantiall} change the uses or devcloptnent permitted on the Site. or add to the cows incurred of to be incurred Im the Commission as speciiued herein. The granting of extension periods to perform or amendments to this Agreement shall only be permitted if approved b) the Commission. In witness whereof the parties hme had their duly MJ11067ed OtIicers execute this Agreement this, 25`I' day of Mzly 2010. PURCHASER: QlAO CiARI)F l GROUP RBAI I:StATC CO. 1_ "LD Linn Yuc Sono: Pres, lent and CEO 6 \':1 —riaV Gzrtler. =group Ni^d I-sl:+k Cn. Lut 6 D.(—` 7,�'24l ) CONUMISSION: ROSE-N/lEAD CO-Mi-MUNITY DEAT"LOPIN41"N'l COMNIIIISISION. a public body corporate and politic IN: Gary Taylo . C hairman �C� APPROVED AS TO FORNI By:--a: � —- ,jo�cril —.— �moiuc , Burke, Williams& Sorensen. LLP Commission Gencral Counsel ATTEST: By Uv"- - 44il,�I - 1011CLIN Commission Scanta-v INA - Qi5nGni&n; Group Real f'ctaic Co. J,j MAW)