CDC - Item 3A - To Conduct a CRL 33433 Public Hearing and Consider Approval of A Purchase and Sale Agreement for 8832 Glendon•
SEEM
IM'1 mak
TO: THE HONORABLE CHAIRMAN AND COMMISSION MEMBERS
THE HONORABLE MAYOR AND CITY COUNCIL
FROM: JEFF ALLRED, EXECUTIVE DIRECTOR
DATE: FEBRUARY 22, 2011 0
SUBJECT: TO CONDUCT A CRL § 33433 PUBLIC HEARING AND CONSIDER
APPROVAL OF A PURCHASE AND SALE AGREEMENT FOR THE
SITE LOCATED AT 8832 GLENDON WAY, ROSEMEAD, CA
SUMMARY
The purpose of the public hearing is to allow the City Council and the public the
opportunity to review and comment on the essential terms of a proposed Purchase and
Sale Agreement ( "PSA") between the Rosemead Community Development Commission
( "CDC ") and Qiao Garden Hotel Investment, Inc., a California corporation ( "Buyer ") for
the property located at 8832 Glendon Way, Rosemead, CA 91770 owned by the CDC
( "the Site "). Section 33433 of the California Redevelopment Law (Cal. Health & Safety
Code sections 33000, et seq.) requires that before the CDC sells its property, the City
Council shall prepare and approve a report (the "Summary Report," attached with this
staff report) that describes the potential costs of the sale and the estimated value of the
interest in property to be sold.
On May 25, 2010, the Commission approved an Exclusive Negotiating Agreement
(ENA) with the Qiao Garden Hotel Investment, Inc. for the development of a PSA of
8832 Glendon Way (Glendon Hotel). On September 28, 2010, the ENA was extended
to April 13, 2011 to allow both parties needed time to complete several matters before a
PSA could be finalized. All matters have since been resolved and a PSA has been
finalized.
Staff Recommendation
It is recommended that the following actions are taken:
1. The Community Development Commission and the City Council hold the
noticed public hearing, receive public comment;
2. The City Council adopt Resolution No. 2011 -09 and file the Notice of
Exemption for the project; and
3. The Community Development Commission approve the Purchase and Sale
Agreement and authorize the Commission to enter into escrow with the Qiao
Garden Hotel Investment, Inc. for the sale of the Glendon Hotel
ITEM ® _
APPROVED FOR CITY COUNCIL AGENDA:
Community Development Commission & City Council
February 22, 2011
Page 2 of 3
BACKGROUND
The Rosemead Community Development Commission will consider approval of an
agreement for the purchase of the Glendon Hotel by the Qiao Garden Hotel Investment,
Inc.. As a result of the transaction, the Commission will be paid a total of $3.8 million.
In addition, the Qiao Garden Group has submitted plans to renovate the hotel into an
upscale facility that will generate increased Transient Occupancy Tax (TOT) revenues
to the City. The terms of the sale include a purchase price of $3,247,700.30, a $1
million down payment, and the execution of promissory note in the amount of
$2,247,700.30 to be paid over seven years at a 6.25% annual interest rate. Again, at
the completion of the seven years, a total of $3.8 million will have been paid to the
Commission.
Purchase and Sale Agreement (`PSA')
The proposed PSA provides that the Site is to be sold to the Buyer for the sum of
$3,247,700.00, plus interest for a total of $3,800,000.00. The site is comprised of one
parcel totaling 39,030 square feet. There is presently an operational 53 -room motel
(22,507 square feet of total space per City building permits) on the Site. The CDC
purchased the Site in 2008 with the intention of consolidating the Site and other parcels
into one larger parcel for redevelopment. With the downturn in the economy, that
project became infeasible and since 2008 the CDC has owned the Site and the existing
motel and had contracted with Rosemead Inn Hotel Partners, LLC to operate the Site as
the Glendon Hotel. The operator failed to properly operate the motel and the CDC
terminated that agreement of May 31, 2010. Because the CDC is not in the business
of serving as a property owner or landlord, and because the state of the economy
makes the consolidation of the Site and other parcels infeasible, the CDC is selling the
Site to Buyer under the PSA to provide for the efficient use of the Site as a hotel.
33433 Report
The attached Summary Report describes the estimated cost of the PSA, the estimated
value of the property to be sold and payments to be made to the CDC and pertinent
terms of the PSA
Rosemead Planning Commission
Prior to this public hearing, the Planning Commission adopted Resolution No. 2010 -19
finding, pursuant to California Government Code 65402, that the sale of the Glendon
Hotel property from the CDC to a private party is consistent with the Rosemead General
Plan.
ENVIRONMENTAL REVIEW
The hotel building and use is preexisting to the PSA, therefore the transfer of the
property contemplated by the PSA could not possibly have a significant effect on the
environment. Therefore, the project is exempt from CEQA review per CEQA Guideline
15061(b)(3).
Community Development Commission & City Council
February 22, 2011
Page 3 of 3
PUBLIC NOTICE PROCESS
Notice of the public hearing was published in the San Gabriel Valley Tribune on
February 8, 2011 and February 15, 2011, as well as through the regular agenda
notification process.
LEGAL REVIEW
The attached 33433 Report, Resolution No. 2011 -09, and Purchase and Sale
Agreement have been reviewed and approved by the Commission's Attorney and the
City Attorney.
Attachment A: 33433 Report
Attachment B: Resolution 2011 -09
Attachment C: Purchase and Sale Agreement
. 1l
SUMMARY REPORT
On the
Acquisition Agreement
By and Between
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
And
QIAO GARDEN HOTEL INVESTMENT, INC.
Glendon Hotel
8832 Glendon Way, Rosemead, CA 91770
This report represents the
Summary Report required
by Section 33433 of the
California Redevelopment
Law
Dated
February 8, 2011
I. INTRODUCTION
The Rosemead Community Development Commission (CDC) is considering the
disposition of real property to Qiao Garden Hotel Investment, Inc. (Buyer) pursuant to a
Purchase and Sale Agreement (Agreement) between the CDC and the Buyer. This
Summary Report is prepared in accordance with Section 33433 of the California
Community Redevelopment Law. This summary consists of six additional sections, as
follows:
• Section II, Description of the Proposed Project.
• Section III, Estimated Cost to be Incurred by the CDC under the Proposed
Agreement.
• Section IV, Estimated Value of the Site at the Highest and Best Use
Permitted.
• Section V, Estimated Fair Re -Use Value of the Interest to be Conveyed.
• Section VI, Purchase Price the Buyer will be Required to Pay.
• Section VII, Explanation of Why Sale of the Property will Assist in Elimination
of Blight.
II. DESCRIPTION OF THE PROPOSED PROJECT
Background
The site of the proposed project ( "Site ") is comprised of one parcel totaling 39,030
square feet. There is presently an operational 53 -room motel (22,507 square feet of
total space per City building permits) on the Site. The CDC purchased the Site in 2008
with the intention of consolidating the Site and other parcels into one larger parcel for
redevelopment. With the downturn in the economy, that project became infeasible and
since 2008 the CDC has owned the Site and the existing motel and has contracted with
Rosemead Inn Hotel Partners, LLC to operate the Site as the Glendon Hotel. The
operator failed to properly operate the motel and the CDC terminated that agreement of
May 31, 2010. Because the CDC is not in the business of serving as a property owner
or landlord, and because the state of the economy makes the consolidation of the Site
and other parcels infeasible, the CDC is selling the Site to Buyer under the Agreement
to provide for the efficient use of the Site as a hotel. As such, other than the statutory
restrictions required by Redevelopment Law, the CDC is placing no restrictions on the
Buyer's use of the Site
The Site and the Proposed Development
The Site consists of Assessor's Parcel Number 5390 - 018 -904 located at 8832 Glendon
Way at the southeast corner of Glendon Way and Ivar Avenue in the City of Rosemead,
County of Los Angeles. The Site is located in the CDC's Redevelopment Project Area
Number 2 and consists of a slightly irregular rectangular parcel with 184.09 feet fronting
Glendon Way and 202.5 feet fronting Ivar Avenue. The west property line dimension is
220 feet and the irregular south property line is 184.09 feet.
The Agreement calls for the CDC to transfer the Site to the Buyer in whole and
unencumbered, other than by those statutory restrictions which the Community
Redevelopment Law requires be placed on all property disposed of by the CDC. The
Agreement contains no requirements on future development or operation of the motel,
except for these statutory nondiscrimination requirements. The Buyer has agreed any
future changes to the Site will be subject to the City's Zoning Code and other City
requirements.
Specific Rights and Responsibilities of the Parties
Brief listings of each party's responsibilities under the Agreement are included below:
CDC Responsibilities
1. Convey the Site to the Buyer.
2. Work with the City to cause the closure of a portion of Ivar Avenue for the purpose of
allowing additional freeway- facing signage for the existing hotel.
3. Deposit into escrow prior to its close documents necessary to complete the sale.
4. Pay certain transfer costs including 50 per cent of the escrow costs.
Buyer Responsibilities
1. Deposit into escrow $1,000,000. Pay the remaining amount of $2,247,070.30 plus
interest over a period not to exceed 7 years for a total amount of $3,800,000.00 as
further described in the Purchase and Sale Agreement
2. Pay certain transfer costs, including 50 percent of the escrow costs.
3. Accept conveyance of the Site.
4. Accept the Site in "as is" "where -is" condition for the purchase price following the
elapsing of a contingency period for the Buyer to complete its due diligence
(presuming the Buyer has not disapproved of conditions of the Site or title to the
Site, which conditions would be subject to cure by CDC).
5. Operate the existing motel on the Site and /or develop a retail commercial, office, or
other service uses that serve local and regional needs on the Site consistent with the
Redevelopment Plan for Redevelopment Project Area Number 2 and the City of
Rosemead's General Plan.
6. Operate and /or develop the Site in compliance with the nondiscrimination covenants
of California Redevelopment law.
III. ESTIMATED COST TO BE INCURRED BY THE AGENCY UNDER THE
PROPOSED AGREEMENT
Section 33433 of the Law requires that the CDC disclose its costs associated with
acquiring, holding and selling real property. The net cost for the CDC is defined as
equaling the CDC's out -of- pocket costs less the revenues it is to receive in the
disposition of the Site. The CDC's participation in the proposed development involves
selling the Site to the Buyer for a total consideration of $3,247,000.30 plus interest in an
amount not to exceed $3,800,000. A brief discussion of the CDC's costs is included
below.
2
Costs
The CDC's primary costs associated with the Agreement include expenditures related to
acquisition of the Site, operation of the Site for 15 months (through Rosemead Inn Hotel
Partners, LLC), and escrow and disposition costs related to the sale. All actual prior
costs and estimates for future disposition costs total $4,478,878.59 and are summarized
by cost category in Table 1.
Revenues
The CDC will receive $3,247,700.30, plus interest for a total of $3,800,000.00 in land
sale proceeds from the Buyer, which will serve to offset its costs. In addition to the
purchase price, the City will receive Transient Occupancy Tax (TOT) revenue.
IV. ESTIMATED VALUE OF THE SITE AT THE HIGHEST AND BEST USE
PERMITTED.
The CDC commissioned an appraisal from R. P. Laurain & Associates (the
"Appraiser "). The Appraiser prepared a land value study which established the market
value for the Site as a whole. The per square foot value set by the Appraiser was
$64.05 per square foot. The value conclusion for the Site, based on the Appraiser's
valuation and established by CDC Staff, is $2,500,000.
V. ESTIMATED FAIR RE -USE OF THE INTEREST TO BE CONVEYED
This section presents an analysis of the fair re -use of the interest to be conveyed to the
Buyer subject to the nondiscrimination restrictions contained in the proposed
Agreement. This amount is equal to the estimated value at highest and best use,
because the nondiscrimination restrictions do not restrict the actual use of the Site or
modify the use of the Site from the scope or range of uses otherwise allowed by the
City's Zoning Code.
VI. PURCHASE PRICE THE BUYER WILL BE REQUIRED TO PAY.
The Site is being sold to the Buyer for the sum of $3,247,700.00, plus interest in for a
total of $3,800,000.00. The value of the Site totals $83.21 per square foot. Thus the
sale price substantially exceeds the appraised value. The Buyer has agreed to this
additional payment because of the desired location and interest in expanding.
VII. EXPLANATION OF WHY SALE OF THE PROPERTY WILL ASSIST IN
ELIMINATION OF BLIGHT.
The development described above is consistent with the Implementation Plan for
redevelopment in the Project Area Plan adopted by the CDC in 2009. One of the
primary programs discussed in the Implementation Plan is property acquisition for
removal of blight. While the hotel on the Site has been closed since May 31, 2010, the
improvements made by the previous operator were a substantial benefit to the Site, as
explained below.
K
Under the previous owner, the motel was blighted due to poor upkeep and low vacancy
and the CDC was unable to spur development in the area due to the existence of the
motel. While the CDC's purchase of the Site was initially intended to be part of a larger
redevelopment plan for the immediate area, the purchase has at the very least resulted
in the elimination of the motel as a blighting condition. The operator with which the
CDC contracted made improvements to the Site, including exterior renovations (i.e. new
landscaping and signage, remodeled entrance, painting, etc.) and interior renovation
(i.e. painting, flooring, lighting, upgraded bathrooms, etc.), and the CDC's upkeep of the
Site since May 31, 2010 means the Site is in better condition than it was when the CDC
purchased it. Because the economy has eliminated any plan to acquire and consolidate
a number of parcels in the area of the Site for a larger redevelopment projects, the best
way to eliminate blight in the immediate area in the short term is to have a functioning
hotel at the Site.
Buyer is willing to utilize the Site for the operation of a four star hotel catering to
overseas travelers visiting Rosemead and the surrounding area. This will maintain the
Site in good condition, without blight, and will improve the immediate area around the
Site. When the economic climate is favorable, Buyer may seek to increase the size and
operations of the hotel and /or the local area may be the subject of a more concentrated
redevelopment effort. At this time, however, with the CDC seeking to relieve itself of the
responsibilities of property ownership and with the need for the Site to be maintained in
a clean, operable, and non - blighted condition, sale to the Buyer is consistent with the
Implementation Plan and the Redevelopment Plan for Project Area Number 2.
Specifically, the sale reflects the goals set forth in the original Redevelopment Plan,
which included the following:
1. Encourage employment opportunities.
2. Provide for the acquisition, management, and disposition of real property for
redevelopment.
The proposed development meets both of these selected goals. Specifically, the
proposed development is consistent with the General Plan in that the Site has been
zoned for commercial use and the Buyer will maintain the motel as a four star hotel,
creating a freeway -close option for visitors to the City. The development thus retains in
an existing employer — the hotel — and could expand the employment opportunities by
providing a better hotel product. In addition, Buyer has plans to renovate, upgrade, and
expand, which will keep the building on the Site in a clean and non - blighted condition,
enhancing the Rosemead Boulevard corridor. The CDC is utilizing the powers granted
it to meet the goals of the original Redevelopment Plan by acquiring and disposing of
the Site and working with a commercial entity that will ensure the Site remains both a
high -class building and a provider of job opportunities to the Redevelopment Project
Area.
M
The CDC's acquisition of a Site that was in poor condition and was hindering economic
development in its immediate area is an example of direct blight elimination. The motel
on the Site was, in poor condition because poor upkeep and poor vacancy rate. This
presented a serious deterrent to the reinvestment in the commercial neighborhood
along Glendon and in the Rosemead Boulevard corridor. These obstacles were initially
overcome with the Agency's operation of the motel by Rosemead Inn Hotel Partners,
LLC and are expected to continue to be overcome with the operation of a four star hotel
and the ultimate expansion of the hotel or addition of future commercial development at
the Site.
5
TABLE 1
Rosemead Community Development Commission
Redevelopment Project Area Number 2
PURCHASE AND SALE AGREEMENT
8832 Glendon Way
Estimated Agency Expenditures Related to the Agreement
DESCRIPTION
Acquisition and Related Costs
Maintenance /Holding Costs
Escrow Costs /Estimated
Broker's Fee
Appraisal
TOTAL COSTS INCURRED BY AGENCY
C
COST
$4,336,243.84
$ 132,434.75
$ 7,000.00
$ 0.00
$ 3,200.00
$4.478.878.59
r
RESOLUTION NO. 2011-09
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ROSEMEAD TO APPROVE THE SALE OF THAT PROPERTY
KNOWN AS ASSESSOR'S PARCEL NUMBER 5390- 018 -904 AND
MORE COMMONLY KNOWN AS 8832 GLENDON WAY IN THE
CITY OF ROSEMEAD TO QIAO GARDEN HOTEL
INVESTMENT, LTD IN ACCORDANCE WITH CALIFORNIA
HEALTH AND SAFETY CODE SECTION 33433, AND MAKING
FINDINGS IN SUPPORT THEREOF
WHEREAS, on July 2, 2008 the Rosemead Community Development Commission
( "Commission ") purchased that parcel of real property known as Assessor's Parcel number
5930- 018 -904 and more commonly known as 8832 Glendon Way in the City of Rosemead
( "Site "), for which the Commission paid the then -fair market price of Four Million Three
Hundred Thirty -Six Thousand Two Hundred Forty -Three Dollars and Eighty -Four Cents
($4,336,243.84) for redevelopment purposes; and
WHEREAS, QIAO GARDEN HOTEL INVESTMENT, LTD ( "Buyer ") has agreed to
purchase the Site according to a Purchase and Sale Agreement ( "Agreement ") a copy of which is
attached hereto as Exhibit A and to operate the existing hotel on the Site and /or utilize the Site as
a part of a greater commercial development project in the area of the Site which will assist in the
elimination of blight and to encourage economic revitalization in that area; and
WHEREAS, there is no possibility that the sale of the site will have a significant effect
on the environment, the project is exempt from review under the California Environmental
Quality Act, pursuant to section 15061(b)(3) of the CEQA guidelines.
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and
Safety Code Section 33490, which provides, among other things, revitalize areas that exhibit
adverse physical and economic conditions, stimulate private investment and complementary
development, and provide tax increment funds for the redevelopment activities that are needed to
alleviate blighting conditions; and
WHEREAS, the Implementation Plan does not call for the Commission to acquire
parcels of real property other than for the elimination of blight and neither plan calls for the
retention of parcels of real property other than as part of site assembly; and
WHEREAS, the Agency has made available for public inspection a report and copy of
the Agreement required by Health and Safety Code Section 33433 ( "Report"), which Report is
also on file with the Secretary of the Agency and City Clerk of the City; and,
WHEREAS, Health and Safety Code Section 33433 requires that prior to the sale of
property by the CDC that such sale be approved by Resolution of the City Council after a duly
noticed public hearing; and,
WHEREAS, on February 22, 2011, the City Council conducted a duly noticed public
hearing with respect to the Agreement and has considered all oral and written comments
submitted thereto prior to the adoption of this Resolution.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEMEAD
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1: The City Council finds that the above recitations are true and correct and,
accordingly, are incorporated as a material part of this Resolution.
SECTION 2: The City Council finds that all terms of the Agreement are in substantial
conformance with the Implementation Plan and, that the Site has received all required review in
compliance with CEQA prior to the approval of this Resolution.
SECTION 3: The City Council finds and determines the following
A. That the real property is to be sold for a price not less than the fair market value at
its highest and best use as. allowed by the Redevelopment Plan; and
B. That the sale of the Property as contemplated in the Agreement will assist in the
elimination of blight within the Project Area; and
C. The sale of the Property as contemplated in the Agreement is consistent with the
Agency's adopted Implementation Plan.
SECTION 4: The Report prepared and made available pursuant to California Health and
Safety Code Section 33433 is hereby approved.
SECTION 5: The sale of the Property as contemplated in the Agreement is hereby
approved.
SECTION 6: The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 22nd day of February, 2011.
Gary Taylor, Mayor
ATTEST:
Gloria Molleda, City Clerk
APPROVED AS TO FORM:
Rachel Richman, City Attorney
Burke, Williams & Sorensen, LLP
FLYMA
a VIN 'ma I
XMI -.- a F
On the
Acquisition Agreement
By and Between
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
And
QIAO GARDEN HOTEL INVESTMENT, INC.
Glendon Hotel
8832 Glendon Way, Rosemead, CA 91770
This report represents the
Summary Report required
by Section 33433 of the
California Redevelopment
Law
Dated
February 8, 2011
I. INTRODUCTION
The Rosemead Community Development Commission (CDC) is considering the
disposition of real property to Qiao Garden Hotel Investment, Inc. (Buyer) pursuant to a
Purchase and Sale Agreement (Agreement) between the CDC and the Buyer. This
Summary Report is prepared in accordance with Section 33433 of the California
Community Redevelopment Law. This summary consists of six additional sections, as
follows:
Section II, Description of the Proposed Project.
Section III, Estimated Cost to be Incurred by the CDC under the Proposed
Agreement.
Section IV, Estimated Value of the Site at the Highest and Best Use
Permitted.
Section V, Estimated Fair Re -Use Value of the Interest to be Conveyed.
Section VI, Purchase Price the Buyer will be Required to Pay.
Section VII, Explanation of Why Sale of the Property will Assist in Elimination
of Blight.
II. DESCRIPTION OF THE PROPOSED PROJECT
Background
The site of the proposed project ( "Site') is comprised of one parcel totaling 39,0
square feet. There is presently an operational 53 -room motel (22,507 square feet of
total space per City building permits) on the Site. The CDC purchased the Site in 2008
with the intention of consolidating the Site and other parcels into one larger parcel for
redevelopment. With the downturn in the economy, that project became infeasible and
since 2008 the CDC has owned the Site and the existing motel and has contracted with
Rosemead Inn Hotel Partners, LLC to operate the Site as the Glendon Hotel. The
operator failed to properly operate the motel and the CDC terminated that agreement of
May 31, 2010. Because the CDC is not in the business of serving as a property owner
or landlord, and because the state of the economy makes the consolidation of the Site
and other parcels infeasible, the CDC is selling the Site to Buyer under the Agreement
to provide for the efficient use of the Site as a hotel. As such, other than the statutory
restrictions required by Redevelopment Law, the CDC is placing no restrictions on the
Buyer's use of the Site
The Site and the Proposed Development
The Site consists of Assessor's Parcel Number 5390 - 018 -904 located at 8832 Glendon
Way at the southeast corner of Glendon Way and Ivar Avenue in the City of Rosemead,
County of Los Angeles. The Site is located in the CDC's Redevelopment Project Area
Number 2 and consists of a slightly irregular rectangular parcel with 184.09 feet fronting
Glendon Way and 202.5 feet fronting Ivar Avenue. The west property line dimension is
220 feet and the irregular south property line is 184.09 feet.
1
The Agreement calls for the CDC to transfer the Site to the Buyer in whole and
unencumbered, other than by those statutory restrictions which the Community
Redevelopment Law requires be placed on all property disposed of by the CDC. The
Agreement contains no requirements on future development or operation of the motel,
except for these statutory nondiscrimination requirements. The Buyer has agreed any
future changes to the Site will be subject to the City's Zoning Code and other City
requirements.
Specific Rights and Responsibilities of the Parties
Brief listings of each party's responsibilities under the Agreement are included below:
CDC Responsibilities
1. Convey the Site to the Buyer.
2. Work with the City to cause the closure of a portion of Ivar Avenue for the purpose of
allowing additional freeway- facing signage for the existing hotel.
3. Deposit into escrow prior to its close documents necessary to complete the sale.
4. Pay certain transfer costs including 50 per cent of the escrow costs.
Buyer Responsibilities
1. Deposit into escrow $1,000,000. Pay the remaining amount of $2,247,070.30 plus
interest over a period not to exceed 7 years for a total amount of $3,800,000.00 as
further described in the Purchase and Sale Agreement
2. Pay certain transfer costs, including 50 percent of the escrow costs.
3. Accept conveyance of the Site.
4. Accept the Site in "as is" "where -is" condition for the purchase price following the
elapsing of a contingency period for the Buyer to complete its due diligence
(presuming the Buyer has not disapproved of conditions of the Site or title to the
Site, which conditions would be subject to cure by CDC).
5. Operate the existing motel on the Site and /or develop a retail commercial, office, or
other service uses that serve local and regional needs on the Site consistent with the
Redevelopment Plan for Redevelopment Project Area Number 2 and the City of
Rosemead's General Plan.
6. Operate and /or develop the Site in compliance with the nondiscrimination covenants
of California Redevelopment law.
III. ESTIMATED COST TO BE INCURRED BY THE AGENCY UNDER THE
PROPOSED AGREEMENT
Section 33433 of the Law requires that the CDC disclose its costs associated with
acquiring, holding and selling real property. The net cost for the CDC is defined as
equaling the CDC's out -of- pocket costs less the revenues it is to receive in the
disposition of the Site. The CDC's participation in the proposed development involves
selling the Site to the Buyer for a total consideration of $3,247,000.30 plus interest in an
amount not to exceed $3,800,000. A brief discussion of the CDC's costs is included
below.
Fa
Costs
The CDC's primary costs associated with the Agreement include expenditures related to
acquisition of the Site, operation of the Site for 15 months (through Rosemead Inn Hotel
Partners, LLC), and escrow and disposition costs related to the sale. All actual prior
costs and estimates for future disposition costs total $4,478,878.59 and are summarized
by cost category in Table 1.
Revenues
The CDC will receive $3,247,700.30, plus interest for a total of $3,800,000.00 in land
sale proceeds from the Buyer, which will serve to offset its costs. In addition to the
purchase price, the City will receive Transient Occupancy Tax (TOT) revenue.
IV. ESTIMATED VALUE OF THE SITE AT THE HIGHEST AND BEST USE
PERMITTED.
The CDC commissioned an appraisal from R. P. Laurain & Associates (the
"Appraiser "). The Appraiser prepared a land value study which established the market
value for the Site as a whole. The per square foot value set by the Appraiser was
$64.05 per square foot. The value conclusion for the Site, based on the Appraiser's
valuation and established by CDC Staff, is $2,500,000.
V. ESTIMATED FAIR RE -USE OF THE INTEREST TO BE CONVEYED
This section presents an analysis of the fair re -use of the interest to be conveyed to the
Buyer subject to the nondiscrimination restrictions contained in the proposed
Agreement. This amount is equal to the estimated value at highest and best use,
because the nondiscrimination restrictions do not restrict the actual use of the Site or
modify the use of the Site from the scope or range of uses otherwise allowed by the
City's Zoning Code.
VI. PURCHASE PRICE THE BUYER WILL BE REQUIRED TO PAY.
The Site is being sold to the Buyer for the sum of $3,247,700.00, plus interest in for a
total of $3,800,000.00. The value of the Site totals $83.21 per square foot. Thus the
sale price substantially exceeds the appraised value. The Buyer has agreed to this
additional payment because of the desired location and interest in expanding.
VII. EXPLANATION OF WHY SALE OF THE PROPERTY WILL ASSIST IN
ELIMINATION OF BLIGHT.
The development described above is consistent with the Implementation Plan for
redevelopment in the Project Area Plan adopted by the CDC in 2009. One of the
primary programs discussed in the Implementation Plan is property acquisition for
removal of blight. While the hotel on the Site has been closed since May 31, 2010, the
improvements made by the previous operator were a substantial benefit to the Site, as
explained below.
3
Under the previous owner, the motel was blighted due to poor upkeep and low vacancy
and the CDC was unable to spur development in the area due to the existence of the
motel. While the CDC's purchase of the Site was initially intended to be part of a larger
redevelopment plan for the immediate area, the purchase has at the very least resulted
in the elimination of the motel as a blighting condition. The operator with which the
CDC contracted made improvements to the Site, including exterior renovations (i.e. new
landscaping and signage, remodeled entrance, painting, etc.) and interior renovation
(i.e. painting, flooring, lighting, upgraded bathrooms, etc.), and the CDC's upkeep of the
Site since May 31, 2010 means the Site is in better condition than it was when the CDC
purchased it. Because the economy has eliminated any plan to acquire and consolidate
a number of parcels in the area of the Site for a larger redevelopment projects, the best
way to eliminate blight in the immediate area in the short term is to have a functioning
hotel at the Site.
Buyer is willing to utilize the Site for the operation of a four star hotel catering to
overseas travelers visiting Rosemead and the surrounding area. This will maintain the
Site in good condition, without blight, and will improve the immediate area around the
Site. When the economic climate is favorable, Buyer may seek to increase the size and
operations of the hotel and /or the local area may be the subject of a more concentrated
redevelopment effort. At this time, however, with the CDC seeking to relieve itself of the
responsibilities of property ownership and with the need for the Site to be maintained in
a clean, implementpationbPlan and the Rede elopme t Plan lfor Project Area Number 2.
with the
Specifically, the sale reflects the goals set forth in the original Redevelopment Plan,
which included the following:
1. Encourage employment opportunities.
2. Provide for the acquisition, management, and disposition of real property for
redevelopment.
The proposed development meets both of these selected goals. Specifically, the
proposed development is consistent with the General Plan in that the Site has been
zoned for commercial use and the Buyer will maintain the motel as a four star hotel,
creating a freeway -close option for visitors to the City. The development thus retains in
an existing employer — the hotel — and could expand the employment opportunities
providing a better hotel product. In addition, Buyer has plans to renovate, upg rade, and
expand, which will keep the building on the Site in a clean and non - blighted condition,
enhancing the Rosemead Boulevard corridor. The CDC is utilizing the powers granted
it to meet the goals of the original Redevelopment Plan by acquiring and disposing of
the Site and working with a commercial entity that will ensure the Site remains both a
high -class building and a provider of job opportunities to the Redevelopment Project
Area.
11
The CDC's acquisition of a Site that was in poor condition and was hindering economic
development in its immediate area is an example of direct blight elimination. The motel
on the Site was, in poor condition because poor upkeep and poor vacancy rate. This
presented a serious deterrent to the reinvestment in the commercial neighborhood
along Glendon and in the Rosemead Boulevard corridor. These obstacles were initially
overcome with the Agency's operation of the motel by Rosemead Inn Hotel Partners,
LLC and are expected to continue to be overcome with the operation of a four star hotel
and the ultimate expansion of the hotel or addition of future commercial development at
the Site.
5
TABLE 1
Rosemead Community Development Commission
Redevelopment Project Area Number 2
PURCHASE AND SALE AGREEMENT
8832 Glendon Way
Estimated Agency Expenditures Related to the Agreement
DESCRIPTION
Acquisition and Related Costs
Maintenance /Holding Costs
Escrow Costs /Estimated
Broker's Fee
Appraisal
TOTAL COSTS INCURRED BY AGENCY
6
COST
$4,336,243.84
$ 132,434.75
$ 7,000.00
$ 0.00
$ 3,200.00
$4,478,878.59
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Escrow Instructions (this "Agreement ") is made and
entered into as of February 22, 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, 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 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 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.
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, Fax: (___) - , Email: (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 any conflict
I
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 or before 2011 (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
Deed ") conveying to Buyer all of Seller's interest in the Property subject only to the Permitted Title
R
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 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
Diligence Period. Any such title policy endorsements are to be paid for by Buyer; provided,
3
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 effect such a cure, but in no event shall the extension exceed thirty (3 0) 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 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).
(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 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 -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. hi
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
7
Right of Entry Agreement attached hereto as Exhibit E within three (3) days following the Effective
Date.
(b) Within (__) 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 fifteen (15) 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
Section 10. 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 Buffer. 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 parry 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 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 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 (15) 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. 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,
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
(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 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 ET SEQ. BUYER AND SELLER AGREE 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 WARRANTIES 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 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 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
13
BUYER
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 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 (' /z) 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 shall be in writing
addressed to the recipient parry'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 parry'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 Notice Address, postage prepaid and return receipt
requested, then at the time received at the party's Notice Address as evidenced by the return receipt,
or (c) if mailed by first class mail to the parry's Notice address, postage pprepmad chap e it the
e third
(3rd) business day following deposit in the United States Mail. Any party Y g
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, except that Buyer has
14
Wang of Qiao Garden Group (the "Buyer's Broker ") to whom Buyer shall pay a commission
pursuant to a separate commission agreement. Each party shall defend, indemnify and 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 Agreement. 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. 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 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. Counterparts. 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 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 may be withheld in such
other Parry'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 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
T
further agrees to work with the Buyer through the necessary City approval procedures in the
development of the Third Parry 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.
SELLER:
Rosemead Community Development
Commission
C
(Print Name & Title)
ATTEST:
Commission Secretary
APPROVED AS TO FORM:
Commission Counsel
BUYER:
Qiao Garden Hotel Investment, Inc.
In
LE
(Print Name & Title)
(Print Name & Title)
17
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
[ATTACHED]
Exhibit A
Title No. 08- 725112701 -DI
Locate No. CAFNT0972- 0972 - 0051- 0725112701
LEGAL DESCRIPTION
EXHIBIT "A"
PARCEL 1:
THE NORTHERLY 220 FEET OF THE WEST 100 FEET OF THE EAST 184.09 FEET OF THAT PORTION OF LOT 3,
BLOCK 7, OF ROSEMEAD, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS
PER MAP RECORDED IN BOOK 21 PAGE(S) 114 AND 115 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOW:
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 3, THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 89° 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. 510, RECORDS OF SAID COUNTY; THENCE ALONG
SAID NORTHEASTERLY LINE NORTH 400 01'55" WEST 678,43 FEETTO A POINT IN THE SOUTHERLY LINE OF
THE LAND DESCRIBED IN THE DEED TO THE COUNTY OF LOS ANGELES FOR ROAD PURPOSE, 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 SLANG SAID
EASTERLY LINE, SOUTH 9° 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
EASTAND WEST LINES OF THE PROPERTY HEREBY CONVEYED BEING PARALLELTO THE EAST LINE OFTHE
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 CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
AS PER MAP RECORDED IN BOOK 21 PAGE(S) 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 SLANG 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 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, 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 0° 58'30" EAST 525 FEET TO THE POINT OF BEGINNING.
SAID MEASUREMENT BEING MADE ON THE NORTH LINE OF SAID DESCRIBED TRACT OF LAND AND THE
EASTAND WEST LINES OFTHE PROPERTY HEREBY CONVEYED BEING PARALLELTOTHE EAST LINE OFTHE
ABOVE DESCRIBED LOT 3.
EXCEPT THE WESTERLY 50 FEAT OF THE NORTHERLY 100 FEET AND THE WESTERLY 55 FEET OF THE
SOUTHERLY 120 FEET THEREOF.
PARCEL 3:
THAT PORTION OF LOT 3, BLOCK 7 OF ROSEMEAD, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGE(S) 114 AND 115 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOW:
BEGINNING ATTHE SOUTHEAST CORNER OF SAID LOT 3: THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 89° 10' WEST 84.09 FEET TO A POINT IN THE NORTHEASTERLY LINE OF THE STORM DRAIN
RIGHT OF WAY SHOWN ON THE RECORDER'S FILED MAP NO. 310., IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY; THENCE NORTH 0° 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
CLTA Preliminary Report Farm - Madlfed (11/17/06)
EXHIBIT "A" (continued)
Title No. 08- 725112701 -D]
Locate No. CAFNT0972- 0972 -0051- 0725112701
ALONG SAID SOUTHERLY LINE NORTH 890 10' EAST 84.09 FEETTO A POINT IN THE EASTERLY LINE OF SAID
LOT 3; THENCE ALONG SAID EASTERLY LINE SOUTH 00 50'30 EAST 525 FEETTO THE POINTOF BEGINNING,
EXCEPT THEREFROM THE SOUTH 382.5 FEAT THEREOF.
PARCEL 4:
THE NORTH 60 FEET OF THE SOUTH 382.5 FEET OF THAT PORTION OF LOT 3, BLOCK 7, OF ROSEMEAD, IN
THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 21, PAGE(S) 114 AND 115 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,
DESCRIBED AS FOLLOWS;
BEGINNING ATTHE 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 FEETTO
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 FEETTO 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.
APN: 5390- 018 -031
CLTA Rdlhhary Repo� Form - Modifed (11/17106)
1 *14,411,1118 3
PROMISSORY NOTE SECURED BY DEED OF TRUST
[ATTACHED]
Exhibit B
$2,247,700.30
PROMISSORY NOTE SECURED BY DEED OF TRUST
Rosemead, California
February 22,2011
For value received, QIAO GARDEN HOTEL INVESTMENT, INC., ROSEMEAD
corporation ( "Borrower "), does hereby covenant and promise to pay orate and politic
COMMUNITY DEVELOPMENT COMMISSION, a public body, core
( "Commission "), or order, the principal sum of $2,247,700.30, together with interest thereon as
provde below. thout setoff, pdeducdtionteorscounte claim and shall l be paid t of tt e Commission, ssion, in
America
written rtide below, Boulevard,
installments as 91770, or at such therplaceas Commission may from time to time designate by noce
to Borrower,
1. Terms o,_ f the Loan.
(a) Interest is payable on the outstanding principal at the rate annual of 6.2mst per ats the
Principal, together with accrued interest thereon, is payable in seven (7) and
first d second of f which annual ins allments are eachlin the
principal amount $360000. are each in
the remaining able commencing on
The annual installments of principal, together with interest thereon, are pay
April= _1 2012 (the "Commencement Date "), and continuing thereafter hch time aall outstanding
on the
succeeding year until April —t--1 -2018 (the "Maturity Date "),
principal shall be fully due and payable.
(b) To the extent that Borrower makes any payment or Commission receives any
payment or preferential, areerequired benefit,
o be set aside or tube repaid to invalidated, ruteel debtor in
p other party under any bankruptcy law, common law or
possession, receiver, custodian or any
equitable cause, then, to such extent, the obligations of Borrower hereunder intended to e
ed shall be revised and continue as if such payment or proceeds had not been received by
satisfied
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 as liquidated damages
which is not paid (10) days payment s
and not as a penalty. Withoutmring the foregoing, agrees the Late Charge shall
be due and payable upon the entire unpaid principal amount if not paid when due upon the
Maturity Date. respect Acceptance
to they overdue amount sand shall constitute ot prev nt Commission r from
the default
able b acceleration
exercising any other rights or remedies available to it. From and after the Maturity Date oft s
Note or such earlier date as all sums owing on this Note become due and pay Y
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.
-1-
(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 unacerued 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-
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
-3-
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.
IC
(Print Name & Title)
-4-
Few
(Print Name & Title)
-5-
EXHIBIT C
DEED OF TRUST AND ASSIGNMENT OF RENTS
[ATTACHED]
Exhibit C
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Rosemead Community Development
Commission
8838 E. Valley Boulevard
Rosemead, California 91770
Attn.: Commission Secretary
APN: 5390- 018 -904
Space Above This Line For Recorder's Use
DEED OF TRUST
WITH ASSIGNMENT OF RENTS AS ADDITIONAL SECURITY
This DEED OF TRUST, made as of , 2011, between QIAO
GARDEN HOTEL INVESTMENT, INC., a California corporation, herein called
TRUSTOR, whose address is 808 S. Atlantic Boulevard, Suite E, Monterey Park,
California 91754, CHICAGO TITLE COMPANY, a California corporation, herein
called TRUSTEE, and the ROSEMEAD COMMUNITY DEVELOPMENT
COMMISSION, a public body, corporate and politic, herein called BENEFICIARY.
Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale,
that property in the City of Rosemead, County of Los Angeles, State of California,
described as:
See Attached Exhibit A
Together with the rents, issues and profits thereof, subject, however, to the right, power
and authority hereinafter given to and conferred upon Beneficiary to collect and apply
such rents, issues and profits.
For the purpose of securing (1) payment of the sum of $3,247,700.30 according to the
terms of a promissory note of even date herewith made by Trustor, payable to the order
of Beneficiary, and extensions or renewals thereof; (2) the performance of each
agreement of Trustor incorporated by reference or contained herein or reciting it is so
secured; (3) payment of additional sums and interest thereon which may hereafter be
loaned to Trustor, or it successors or assigns, when evidenced by a promissory note or
notes reciting that they are secured by this Deed of Trust.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair; not to remove or demolish
any building thereon; to complete or restore promptly and in good and workmanlike
manner any building which may be constructed, damaged or destroyed thereon and to pay
when due all claims for labor performed and materials furnished therefor; to comply with
I
all laws affecting said property or requiring any alterations or improvements to be made
thereon; not to commit or permit waste thereof; not to commit, suffer, or permit any act
upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and
do all other acts which from the character or use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and
with loss payable to Beneficiary. The amount collected under any fire or other insurance
policy may be applied by Beneficiary upon any indebtedness secured hereby and in such
order as Beneficiary may determine, or at option of Beneficiary the entire amount so
collected or any part thereof may be released to Truster. Such application or release shall
not cure or waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice. Without limiting the foregoing, said insurance shall consist of a
policy or policies of fire and extended coverage insurance in the amount of the full
replacement cost of all buildings and other improvements on said property and with such
deductibles and having such endorsements as are satisfactory to Beneficiary, including,
without limitation, endorsements for vandalism, malicious mischief, earthquake and flood
coverages.
(3) To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and
expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in
any action or proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting
said property, including assessments on appurtenant water stock; when due, all
encumbrances, charges and liens, with interest, on said property or any part thereof,
which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary or Trustee, but without obligation so to do and without notice to or demand
upon Trustor and without releasing Trustor from any obligation hereof, may, make or do
the same in such manner and to such extent as either may deem necessary to protect the
security hereof, Beneficiary or Trustee being authorized to enter upon said property for
such purposes; appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest
or compromise any encumbrance, charge, or lien which in the judgment of either appears
to be prior or superior hereto; and, in exercising any such powers, pay necessary
expenses, employ counsel and pay his or her reasonable fees.
(5) To pay immediately and without demand all sums so expanded by Beneficiary or
Trustee, with interest from date of expenditure at the amount allowed by law in effect at
the date hereof, and to pay for any statement provided for by law in effect at the date
hereof regarding the obligation secured hereby, any amount demanded by the Beneficiary
not to exceed the maximum allowed by law at the time when said statement is demanded.
2
B. It is mutually agreed
(1) That any award of damages in connection with any condemnation for public use
of or injury to said property or any part thereof is hereby assigned and shall be paid to
Beneficiary who may apply or release such moneys received by him or her in the same
manner and with the same effect as provided above in paragraph A(2) regarding
disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive his or her right either to require prompt payment when due of
all other sums so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and without
notice, upon written request of Beneficiary and presentation of this Deed of Trust and
said note for endorsement, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: reconvey any part of said
property; consent to the making of any map or plat thereof; join in granting any easement
thereon; or join in any extension agreement or any agreement subordinating the lien or
charge hereof.
(4) That upon written request of Beneficiary stating that all sums secured hereby have
been paid, and upon surrender of this Deed of Trust and said note to Trustee for
cancellation and retention or other disposition as Trustee in its sole discretion may choose
and upon payment of its fees, Trustee shall reconvey, without warranty, the property then
held hereunder. The recitals in such reconveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be
described as "the person or persons legally entitled thereto."
(5) That as additional security, Trustor hereby gives to and confers upon Beneficiary
the right, power and authority, during the continuance of these Trusts, to collect the rents,
issues and profits of said property, reserving unto Trustor the right, prior to any default
by Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder, to collect and retain such rents, issues and profits as they become
due and payable. Upon any such default, Beneficiary may at any time without notice,
either in person, by agent, or by a receiver to be appointed by a court, and without regard
to the adequacy of any security for the indebtedness hereby secured, enter upon and take
possession of said property or any part thereof, in his or her own name sue for or
otherwise collect such rents, issues, and profits, including those past due and unpaid, and
apply the same, less costs and expenses of operation and collection, including reasonable
attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary
may determine. The entering upon and taking possession of said property , the collection
of such rents, issues and profits and the application thereof as aforesaid, shall not cure or
waive any default or notice of default hereunder or invalidate any act done pursuant to
such notice.
K3
(6) That upon default by Trustor in payment of any indebtedness secured hereby or in
performance of any agreement hereunder, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration of
default and demand for sale and of written notice of default and of election to cause to be
sold said property, which notice Trustee shall cause to be filed for record. Beneficiary
also shall deposit with Trustee this Deed of Trust, said note and all documents evidencing
expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as then
required by law, Trustee, without demand on Trustor, shall sell said property at the time
and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in
such order as it may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may postpone sale of all or
any portion of said property by public announcement at such time and place of sale, and
from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or implied.
The recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including
cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale
to payment of: all sums expended under the terms hereof, not then repaid, with accrued
interest at the amount allowed by law in effect at the date hereof, all other sums then
secured hereby; and the remainder, if any, to the person or persons legally entitled
thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness secured hereby,
may from time to time, by instrument in writing, substitute a successor or successors to
any Trustee named herein or acting hereunder, which instrument, executed by the
Beneficiary and duly acknowledged and recorded in the office of the recorder of the
county or counties where said property is situated, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall, without conveyance from
the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said
instrument must contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page where this Deed of Trust is recorded and the name and
address of the new Trustee.
(8) That this Deed of Trust applies to, inures to the benefit of, and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns.
The term Beneficiary shall mean the owner and holder, including pledgees of the note
secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust,
whenever the context so requires, the masculine gender includes the feminine and /or the
neuter, and the singular number includes the plural.
4
(9) The Trustee accepts this Trust when this Deed of Trust, duty executed and
acknowledged, is made a public record as provided by law. Trustee is not obligated to
notify any party hereto of pending sale under any other Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by
Trustee.
(10) 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 fiirther 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.
Beneficiary may charge for a statement regarding the obligation secured hereby,
provided the charge thereof does not exceed the maximum allowed by laws.
The undersigned Trustor, requests that a copy of any notice of default and any
notice of sale hereunder be mailed to him at his address hereinbefore set forth.
QIAO GARDEN HOTEL INVESTMENT, INC.
a California corporation
(Print Name & Title)
(Print Name & Title)
ACKNOWLEDGMENT
State of California )
ss
County of )
On before
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is /are subscribed to the within instrument and acknowledged to me that he /she /they
executed the same in his/her /their authorized capacity(ies), and that by his /her /their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
TO CHICAGO TITLE COMPANY
The undersigned is the legal owner and holder of the note or notes and of all other
indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with
all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied;
and you are hereby requested and directed, on payment to you of any sums owing to you
under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and
all other evidence of indebtedness secured by said Deed of Trust delivered to you
herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the
parties designated by the terms of said Deed of Trust, all the estate now held by you
under the same.
Dated:
Please mail Deed of Trust,
Note and Reconveyance to
Do not lose or destroy this Dead of Trust OR THE NOTE which it secures. Both must be
delivered to the Trustee for cancellation before reconveyance will be made.
7
EXHIBIT D
FORM OF GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Qiao Garden Hotel Investment, Inc.
808 S. Atlantic Boulevard, Suite E
Monterey Park, California 91754
APN: 5390- 018 -904
[SPACE ABOVE FOR RECORDER'S USE ONLY]
DOCUMENTARY TRANSFER TAX NOT SHOWN PURSUANT TOSECTION 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 ( "Grantee "), certain real property located in the City of Rosemead, 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;
All liens, encumbrances, easements, covenants, conditions and restrictions of record;
r M14
3. All matters which would be revealed or disclosed in an accurate survey of the
property.
IN WITNESS WHEREOF, Grantor has executed this Grant Deed on 12011.
ROSEMEAD COMMUNITY DEVELOPMENT ATTEST:
COMMISSION
LE
Executive Director
Exhibit D
Commission Secretary
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On , before me, , a
notary public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are
subscribed to the within instrument and acknowledged to me that he /she /they executed the same in
his /her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the
person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On
notary public, personally appeared
before me,
who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are
subscribed to the within instrument and acknowledged to me that he /she /they executed the same in
his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the
person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
Exhibit D
2
Exhibit A
to Grant Deed
LEGAL DESCRIPTION OF THE PROPERTY
[ATTACHED]
Exhibit D
Title No. 08- 725112701 -D1
Locate No. CAFNT0972- 0972-0051- 0725112701
LEGAL DESCRIPTION
EXHIBIT "A"
PARCEL 1:
THE NORTHERLY 220 FEET OF THE WEST 100 FEET OF THE EAST 184.09 FEET OF THAT PORTION OF LOT 3,
BLOCK 7, OF ROSEMEAD, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS
PER MAP RECORDED IN BOOK 21 PAGE(S) 114 AND 115 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOW:
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 3, THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 89° 10' WEST 84.09 FEETTO A POINT IN THE NORTHEASTERLY LINE OF THE STORM DRAIN
RIGHT OF WAY, SHOWN ON RECORDER'S FILED MAP NO. 510, RECORDS OF SAID COUNTY; THENCE ALONG
SAID NORTHEASTERLY LINE NORTH 400 01'55" WEST 678,43 FEETTO A POINT IN THE SOUTHERLY LINE OF
THE LAND DESCRIBED IN THE DEED TO THE COUNTY OF LOS ANGELES FOR ROAD PURPOSE, 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 SLANG SAID
EASTERLY LINE, SOUTH 9° 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 OFTHE PROPERTY HEREBY CONVEYED BEING PARALLEL TO THE EAST LINE OFTHE
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 CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
AS PER MAP RECORDED IN BOOK 21 PAGE(S) 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 SLANG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 09' 10' WEST 84.09 FEETTO 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 01'55" WEST 678.43 FEETTO 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 FEETTO A POINT IN THE EASTERLY LINE OF SAID LOT 3; THENCE ALONG SAID
EASTERLY LINE, SOUTH 0° 58'30" EAST 525 FEET TO THE POINT OF BEGINNING.
SAID MEASUREMENT BEING MADE ON THE NORTH LINE OF SAID DESCRIBED TRACT OF LAND AND THE
EAST AND WEST LINES OF THE PROPERTY HEREBY CONVEYED BEING PARALLELTOTHE EAST LINE OFTHE
ABOVE DESCRIBED LOT 3.
EXCEPT THE WESTERLY 50 FEAT OF THE NORTHERLY 100 FEET AND THE WESTERLY 55 FEET OF THE
SOUTHERLY 120 FEET THEREOF.
PARCEL 3:
THAT PORTION OF LOT 3, BLOCK 7 OF ROSEMEAD, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES.
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGE(S) 114 AND 115 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOW:
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 3: THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 89° 10' WEST 84.09 FEET TO A POINT IN THE NORTHEASTERLY LINE OF THE STORM DRAIN
RIGHT OF WAY SHOWN ON THE RECORDER'S FILED MAP NO. 310., IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY; THENCE NORTH 0° 50'30" WEST PARALLEL TO THE EAST LINE OF SAID LOT,
525 FEETTO A POINT IN THE SOUTHERLY LINE OFTHE LAND DESCRIBED IN THE DEED OF SAID COUNTY
OF LOS ANGELES, FOR ROAD PURPOSES, RECORDED IN BOOK 105, PAGE 237, OFFICIAL RECORDS; THENCE
CLTA Preliminary Report Farm -Modified (11117/06)
EXHIBIT "A" (continued)
Title No. 08-725112701 -D7
Locate No. CAFNT0972- 0972 -0051- 0725112701
ALONG SAID SOUTHERLY LINE NORTH 890 10' EAST 84.09 FEETTO A POINT IN THE EASTERLY LINE OF SAID
LOT 3; THENCE ALONG SAID EASTERLY LINE SOUTH 00 50'30 EAST 525 FEETTO THE POINTOF BEGINNING.
EXCEPT THEREFROM THE SOUTH 382.5 FEAT THEREOF.
PARCEL 4:
THE NORTH 60 FEET OF THE SOUTH 382.5 FEET OF THAT PORTION OF LOT 3, BLOCK 7, OF ROSEMEAD, IN
THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 21, PAGE(S) 114 AND 115 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,
DESCRIBED AS FOLLOWS;
BEGINNING ATTHE SOUTHEAST CORNER OF SAID LOT 3; THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT, SOUTH 89° 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 PARALLELTO THE EAST LINE OF SAID LOT 525 FEETTO
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 FEETTO 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.
APN: 5390- 018 -031
CLTA Preliminary Report Form - Modified (I 1/L]/06)
EXHIBIT E
RIGHT OF ENTRY AND ACCESS AGREEMENT
THIS RIGHT OF ENTRY AND ACCESS AGREEMENT (herein called this "Agreement ")
is made and entered into as of 2011 by the ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION, a public body, corporate and politic (herein called "Grantor "),
and QIAO GARDEN HOTEL INVESTMENT, INC., a California corporation (herein called
"Grantee ").
WITNESSETH:
WHEREAS, Grantor is the owner of the real property more particularly described in the
Purchase Agreement (as defined below) (herein called the "Property ");
WHEREAS, Grantor and Grantee have entered into a Purchase and Sale Agreement and
Escrow Instructions related to the Property (the "Purchase Agreement ");
WHEREAS, Grantee has requested the right of entry upon and access to the Property for the
purpose of undertaking tests, inspections and other due diligence activities (herein called the "Due
Diligence Activities ") in connection with the proposed acquisition by Grantee of the Property;
WHEREAS, Grantor has agreed to grant to Grantee, and Grantee has agreed to accept from
Grantor, a non - exclusive, revocable license to enter upon the Property to perform the Due Diligence
Activities in accordance with the terms and provisions of this Agreement;
WHEREAS, Grantor and Grantee desire to execute and enter into this Agreement for the
purpose of setting forth their agreement with respect to the Due Diligence Activities and Grantee's
entry upon the Property.
NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual
covenants and agreements contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Grantor and Grantee do hereby covenant and
agree as follows:
Access by Grantee.
(a) Subject to Grantee's compliance with the terms and provisions of this
Agreement, until the earlier to occur of (i) the date which is thirty (30) days following the Effective
Date (as defined in the Purchase Agreement), or (ii) the earlier termination of this Agreement,
Grantor grants to Grantee and Grantee's agents, employees, contractors, representatives and other
designees (herein collectively called "Grantee's Designees ") a revocable license to enter upon the
Property for the purpose of conducting the Due Diligence Activities.
Exhibit E
(b) Grantee expressly agrees as follows: (i) any activities by or on behalf of
Grantee, including, without limitation, the entry by Grantee or Grantee's Designees onto the
Property in connection with the Due Diligence Activities shall not irreparably damage the Property in
any manner whatsoever, (ii) in the event the Property is altered, damaged or disturbed in any manner
in connection with the Due Diligence Activities, Grantee shall immediately return the Property to the
condition existing prior to the Due Diligence Activities, and (iii) Grantee, to the extent allowed by
law, shall indemnify, defend and hold Grantor harmless from and against any and all claims,
liabilities, damages, losses, costs and expenses of any kind or nature whatsoever (including, without
limitation, attorneys' fees and expenses and court costs) suffered, incurred or sustained by Grantor as
a result of, by reason of, or in connection with the Due Diligence Activities or the entry by Grantee
or Grantee's Designees onto the Property. Notwithstanding any provision of this Agreement to the
contrary, Grantee shall not have the right to undertake any invasive activities or tests upon the
Property, or any environmental testing on the Property beyond the scope of a standard "Phase I"
investigation, without the prior written consent of Grantor of a workplan for such "Phase II" or
invasive testing. If Grantor does not respond or reject any workplan within five (5) business days of
Grantee's delivery of the written workplan proposal to Grantor pursuant to the notice provisions of
this Agreement, then Grantor shall be deemed to have approved the submitted workplan and Grantee
may proceed with such testing. If Grantor rejects such proposed workplan in whole or in part, then
this Agreement shall become null and void at the sole option of Grantee. If Grantee terminates this
Agreement under the foregoing provision, then neither party shall have any further rights, duties and
obligations.
2. Lien Waivers. Upon receipt of a written request from Grantor, Grantee will provide
Grantor with lien waivers following completion of the Due Diligence Activities from each and every
contractor, materialman, engineer, architect and surveyor who might have lien rights, in form and
substance reasonably satisfactory to Grantor and its counsel. To the extent permitted by applicable
law, Grantee hereby indemnifies Grantor from and against any claims or demands for payment, or
any liens or lien claims made against Grantor or the Property as a result of the Due Diligence
Activities.
3. Insurance. Prior to entry onto the Property, Grantee shall, and shall cause all of
Grantee's Designees performing the Due Diligence Activities to, procure or maintain a policy of
commercial general liability insurance issued by an insurer reasonably satisfactory to Grantor
covering each of the Due Diligence Activities with a single limit of liability (per occurrence and
aggregate) of not less than $1,000,000, and to deliver to Grantor a certificate of insurance evidencing
that such insurance is in force and effect, and evidencing that Grantor has been named as an
additional insured thereunder with respect to the Due Diligence Activities. Such insurance shall be
maintained in force throughout the term of this Agreement.
4. Successors. To the extent any rights or obligations under this Agreement remain in
effect, this Agreement shall be binding upon and enforceable against, and shall inure to the benefit
of, the parties hereto and their respective heirs, legal representatives, successors and permitted
assigns.
Exhibit E
2
5. Limitations. Grantor does not hereby convey to Grantee any right, title or interest in
or to the Property, but merely grants the revocable license and specific rights and privileges expressly
set forth in this Agreement.
6. Notices. All notices, demands and requests required or permitted to be given under
this Agreement shall be given in the manner and with the effect set forth in the Purchase Agreement.
7. Assignment. This Agreement may not be assigned by Grantee except to the assignee
in connection with a permitted assignment of the Purchase Agreement.
g, Governing Law. This Agreement shall be construed, enforced and interpreted in
accordance with the laws of the State of California.
g. Termination. This Agreement can be terminated by Grantor at any time and for any
reason, or no reason, upon written notice from Grantor to Grantee.
lo. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of such counterparts together shall constitute one and the
same instrument.
11. No Recording of Agreement or Memorandum of Agreement. In no event shall this
Agreement or any memorandum hereof be recorded in the Official Records of Los Angeles County,
California or elsewhere, and any such recordation or attempted recordation shall constitute a breach
of this Agreement by the party responsible for such recordation or attempted recordation.
GRANTOR:
ROSEMEAD COMMUNITY DEVELOPMENT
COMISSION
OR
(Print Name & Title)
ATTEST:
Commission Secretary
Exhibit E
GRANTEE:
QIAO GARDEN HOTEL
INVESTMENT, INC.
C
(Print Name & Title)
(Print Name & Title)