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HomeMy WebLinkAboutCalifornia Resorts International, Inc./Haseko Associates - 1989-10-02(Recordable Document Per Government Code §§ 27279, 27280 and 27281.5) Recording Requested by, and When Recorded Return to: i Recorded in Official Records, County of Orange Darlene Bloom, Interim Clerk -Recorder Connie Brockway, City Clerk IIII I II II Illllilllllllllll I IIIII I II IIIIINO FEE Office of the City Clerk 2002082674911.-10am 09/26/02 City of Huntington Beach 115 3 R08 5 2000 Main Street 0.00 0.00 0;00 0.00 0.00 0.00 0.00 0.00 Huntington Beach, CA 92648 SPACE ABOVE THIS LINE FOR RECORDER'S USE RELEASE OF CONSTRUCTION COVENANTS_ (CERTIFICATE OF COMPLETION) Pierside Pavilion/Huntington Pier Colony (Main Pier Phase I Project) WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") and California Resorts, a California Partnership, (the "Developer") entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 (the "DDA"), which required the Developer to construct, on that certain real property situated in the City of Huntington Beach, California (more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by reference) and at, certain other off -site locations, certain improvements specified in the Scope of Development attached to the DDA (the "Improvements"); and WHEREAS, pursuant to Section 415 of the DDA, upon the completion of the improvements and the. request of the Developer, the Agency is required to issue for recordation a Certificate of Completion (the "Certificate") acknowledging the completion of the Improvements and terminating, and releasing Developer from, certain covenants contained in the DDA and the Subordinated Deed of Trust regarding the construction and development of the improvements upon the Property and the uses to which the Property may be devoted; and WHEREAS, Developer has completed the construction and development of the Improvements on the Property as required by the DDA and has requested that the Agency issue the Certificate for the Improvements; and -1— G:\GUS\REDEV\PiersideRelease.doc WHEREAS, Agency, upon inspection of the Property and review of the Scope of Development, the Final Tract Map, Final Building Plans and the applicable Development Agreement, has determined that the construction and development of the Improvements have been satisfactorily completed and now desires to issue the Certificate pursuant to the terms and conditions of the DDA; and WHEREAS, during its attempt to record the Certificate with the Recorder, the Agency was informed that due to certain recording requirements by the Recorder, the Certificate can no longer be accepted by the Recorder as a recordable instrument in Orange County; and WHEREAS, as a result of the non-recordability of the Certificate, the Agency now desires and intends to use this Release as a substitute to and in place of the Certificate to evidence, in a form acceptable for recording by the Recorder, the satisfactory completion by the Developer of the construction and development of the Improvements on the Property; NOW THEREFORE, it is hereby acknowledged and certified by the Agency that: 1. The construction and development of the Improvements on the Property: (i) have been fully and satisfactorily performed and completed as required by the DDA; (ii) are in substantial compliance with the plans, drawings and related documents referred to in the DDA; and (iii) are in full compliance with all other terms and conditions of the DDA. 2. Pursuant to the DDA, after the recordation of this Release, any party then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the Property (or any portion thereof) shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under the DDA, except that any such parties shall be bound by any covenants contained in the Grant Deed. 3. The issuance and recording of this Release shall cancel and release any rights, remedies or controls that the parties would otherwise have or be entitled to exercise under the DDA and the Subordinated Deed of Trust as a result of a default in or breach of any provision thereof, and the respective rights and obligations of the parties with reference to the Property (or any portion thereof) shall thereafter be limited to those that, by the express terms of the DDA, survive the issuance and recordation of this Release. -2— G:1G US1RE DEV1PiersideRelease.doc IN WITNESS WHEREOF, Agency has executed this Release this ),day of J' , 2002. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Ray Sliver Executive Director G:\GUS\REDEV\PiersideRelease.doc EXHIBIT A LEGAL DESCRIPTION OF PROPERTY That portion of Huntington Beach, County of Orange, State of California as shown on a map recorded in Book 3, Page 36 of Miscellaneous Maps in the office of the County Recorder of said county described as follows: Beginning at the centerline intersection of Pacific Coast Highway and Lake Street shown as Ocean Avenue and First Street respectively on said mentioned map; thence along the center line of Pacific Coast Highway south 48' 21' 42" east 37.50 feet to the intersection with the southwesterly extension of the southeast right of way line of Lake Street; thence north 410 38' 18" east 50.00 feet; thence north 48' 21' 42" west 355.00 feet; to the true point of beginning; thence north 41 ° 38' 18" east 410.00 feet; thence north 480 21' 42" west 465.00 feet; thence south 410 38' 18" east 235.00 feet; thence north 480 21' 42" west 200.00 feet; thence south 410 38' 18" east 175.00 feet; thence south 480 21' 42" east 665.00 feet to the true point of beginning. Gr:\G1,?;` \R1i1)1 1%` 1iersid Yelease.doc 3 • CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On ld before me, ----- --- Laura A. Nelson, Notary Public ------- Date Name and Title of Officer (e.g., 'Jane Doe, Notary Public') personally appeared ------ Ray Silver ------------------ ---- ----------- ---- Name(s) of Signers) LAURA A. NELSON Commission # 1226066 z� Notary Public - Califomia Z Orange County My Comm. Spires Jul 23, MM �6 personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/afe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/lawn/their authorized capacity(iec), and that by his/U@4their signature(s) on the instrument the person(s), or the entity upon. behalf of which the person(s) acted, executed the instrument. WITNES y hand and official seal. 7 Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Release of Construction Covenants (Certificate of Completion) Pierside Pavilion/ Huntington Pier Colony(Main Pier Phase I Project Document Date: Number of Pages: Signer(* Other Than Named Above: Eunice Bobert, Gail Hutton Capacity(We) Claimed by Signer Signer's Name: Ray Silver 4M Individual Corporate Officer — Title(s): Executive Director Partner — ❑ Limited ❑ General ❑ Attorney in Fact Q rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: The Redevelopment Agency of the City of Huntington Beach 4 O 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 - Chatsworth, CA 91313.2402 - www.nationekafary.org Prod. No. 51107 Reorder. Cell Toll -Free 1. W"76-8a27 CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK September 20, 1994 Terry Torack, V.P. Haseko Pier Colony, Inc. World Trade Center, Suite 601 350 South Figueroa Street Los Angeles, CA 90071 CALIFORNIA 92648 Our office has submitted the Certificate of Completion - Pierside Pavilion/Huntington Pier Colony (Main Pier Phase 1 Project) to the County of Orange for recordation and the county has returned the document unrecorded. After consulting with the City Attorney's office the document was again submitted to the county for recordation and was again returned unrecorded. After the third rejection by the county of our request to record the document the City Attorney's office advised there are no further options for us to pursue in attempting to record the document. This letter is to advise you of the fact that the unrecorded Certificate of Completion is on file in the City Clerk's office. Enclosed is an executed copy of the document for your records. If you have any questions regarding this matter please call the Office of the City Clerk (714) 536-5227. Connie Brockway, CMC City Clerk Evelyn Schubert Deputy City Clerk Enclosure cc: Gary Lubliner� ,3 /.S' d S Pe.� ��e M flunimel^n - 330 % g:cc\cbmcm\scacliff t Telephone: 714536-5227 ) IN TO: FROM: SUBJECT: DATE: CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Art Folger, Deputy City Attorney Connie Brockway, City Clerk RECORDATION OF CERTIFICATE OF COMPLETION February 14, 1994 Would you provide a memo to the City Clerk authorizing the City Clerk's Office to file the Certificate of Completion for California Resorts (Pierside Pavilionllfuntington Pier Colony (Main Pier Phase I Project) and Holly Seacliff Development Agreement Compliance in order that the City Clerk can cease efforts to have the documents recorded. The County Recorder has stated they can find no provision in the law authorizing the recording of the documents. The City Clerk's Office has provided the developer with certified copies of the Certificate of Compliance. 1452K 12 „� CITY' OF HUNTINGTON BEACH P 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONME BROCKWAY CITY CLERK TO: Art Folger, Deputy City Attorney FROM: Connie Brockway, City Clerk DATE: April 12, 1994 SUBJECT: RECORDING OF CERTIFICATE OF COMPLETIONS/CERTIFICATE OF COMPLIANCES Please let me know how to proceed with this as the recorder will not record these documents using the code reference we have provided them. Thank you. CB . bt 6�/ ..� uu-OL(" c� a- e_I, -Pe u-d " -�.e.e C� , /It--- J ITelephone, 714-536-5227) CITY OF HUNTINGTON BEACH v 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CRY CLERK CALIFORNIA 92648 Lee A. Branch, Recorder Ccunty of Orange P. 0. Box 238 Santa Ana, CA 92702 L, p07CG71! p Enclosed please find to be recorded and returned to the Office of the City Clerk, City of Funtington Peach, 2000 Main Street, Huntington Beach, California 92648. e?bo arc -1 h ct-, co* h Gh Connie Brockway City Cleric Enclosure d4we cl4l -1k fir- 6 • ` 41,11$7 (Telephone: 714.53E-5227 ) V OF N G E LEE A. BRANCH COUNTY RECORDER Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 & COU/ - a ;I Pd,,,t NTY RECORDER: 630 N. Broadway. Rm. 10t P.O. Box 238 Santa Ana. CA 92702 Telephone: 714,134.2500 FAX. 7141834-2622 April 1, 1994 We are returning UNRECORDED the enclosed certificates. In response to your letter of March 9, 1994, we offer the following: The code section, Government Code 65867.5, you have supplied does not provide for recording. Government Code, section 65868.5 does not provide for the recording of an Agreement. While your letter states that the agreements provide for recording the enclosed "Certificate of Development Agreement Compliance", the Recorder is governed by state law and must record only that which there is a provision in the state law to record. LEE A. BRANCH COUNTY RECORDER By GifNTHIA L, MALL Supervising Recordable Documents Examiner CV: KW HB CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION TO: CONNIE BROCKWAY, City Clerk FROM: ART FOLGER, Deputy City Attorney DATE: March 9, 1994 SUBJECT: RLS 93-132 RLS 94-068 Recording Certificate of Completion/Certificate of Compliance Attached is a copy of Government Code Section 65868.5 which requires that development agreements must be recorded. Within the agreements themselves is the provision that a certificate of completion and/or certificate of compliance be recorded when the development is completed. So essentially, these certificates are filed in accordance with Government Code Section 65868.5. I suggest you reference this code section when attempting to file the documents with the recorder's office. ART FOLGER, Deputy City Attorney AJF:k CLERK.DOC r-- § 65867 PLANNING AND ZONING Title 7 shall be given as providea in Section's 65854, 65854.5, and 65856 in addition to such other Notice as may be required by law for other ac- tions to be considered concurrently with the development agreement. (Added by Stats.1979, c. 934, p. 3231, 11.) Library References Zoning and Planning e=134. CJ.3 Zoning and irnd Planning if 1-1 to 14, 16. § 65867.5. Approval by ordinance; referendum A development agreement is a Iegislative act which shall be ap- proved by ordinance and is subject to referendum. A development agreement shall not be approved unless the legislative body finds that the provisions of the agreement are consistent with the general plan and any applicable specific plan. (Added by Stats.1979, c. 934, p. 3231, 11.) - § 65868.• Amendment or cancellation; notice of Intent A development agreement may be amended, or canceled in whole or in part, by mutual consent of the parties to the agreement or their successors in interest. Notice of intention to amend or cancel any portion of the agreement shall be given in the manner provided by Section 65967. An amendment to an agreement shall be subject to the provisions of Section 65867.5. (Added by 5tats.1979, c. 934, p. 3231, $ 1.) Library References • Zonlag and Planning e-131. CJ S. Zoning and Land Planning 15 65. 6T, 71. § 65868.5. Recording copy of agreement; effect No later than 10 days after a city, county, or city and county en- ters into a development agreement, the clerk of the legislative body shall record with the county recorder a copy of the agreement, which shall describe the land subject thereto. From and after the time of such recordation, the agreement shall impart such notice thereof to all persons as is afforded by the recording Iaws of this state. The burdens of the agreement shall be binding upon, and the benefits of the agreement shall inure to, all successors in Interest to the parties to the agreement. (Added by Sta.t-0979, c. 934, p. 3231, 11.) 94 Lim -- --- ------ -Jh-_...-.r--.. -- . . . r` TY Q F COUNT oadway. 630 N. RmE 01 P.Q. Box 238 Santa Ana, CA 92702 Telephone: 714,S34.2500 A N G E FAX: 7141834-2622 LEE A. BRANCH COUNTY RECORDER Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 April 1, 1994 We are returning UNRECORDED the enclosed certificates. In response to your letter of March 9, 1994, we offer the following: The code section, Government Code 65867.5, you have supplied does not provide for recording. Government Code, section 65868.5 does not provide for the recording of an Agreement. While your letter states that the agreements provide for recording the enclosed "Certificate of Development Agreement Compliance", the Recorder is governed by state law and must record only that which there is a provision in the state law to record. LEE A. BRANCH COUNTY RECORDER By CYWffllA L, MALL Supervising Recordable Documents Examiner CV: KW RETURN ADDRESS: C `E 0 r11 �2 647 We are retuurrring UNRECORDED a'-^ = - naming together with your remittance of $ , Ck. o. for the reasons checked below: (1) The recorder can find no provision in the law authorizing the recording of the enclosed document(s). (2) Recording cannot be performed in this county, please forward to county shown on the document. (3) For proper indexing: a. "Et al" is not acceptable; all parties must be named. b. The name of the company, corporation or partnership must be at the signature point. c. The trustee of a trust must be identified as such. d. The names in the caption, execution and notary acknowledgment must match. (4) The Documentary Transfer Tax declaration must be completed to show either the amount of tax due or an acceptable reason for exemption. (see bulletin) (5) The city where the property is located or "unincorporated area" must be stated on the deed and the tax declaration must indicate how the tax was computed. (6) The preliminary change of ownership report is incomplete or unsigned. Please complete or correct the areas checked in red. (7) The notary acknowledgment is incomplete (please see red check) or is an incorrect form. A form is required. (8) The notary seal/signature is missing or is illegible. (9) Portion(s) of the document are illegible (please see red check). You may either execute and submit a new original or you may add a legible copy and a certification by the party creating the copy under penalty of perjury that it is a true copy of the original. (Gov. Code section 27361.7) (10) The legal description/exhibit has been omitted. All exhibits must also be referenced in the body of the document and appropriately labeled. (11) Recording reference (date and document number or book and page) of the prior recorded document is incorrect or was omitted. (12) Abstracts of judgment must contain the address of the judgment creditor(s), the address of the judgment debtor(s) and the address at which the summons was served or mailed. (13) Pursuant to Government Code sections 27288.1 and 27201, all parties whose interest is affected must be identified (i.e. owner etc.) (14) To properly perfect a security interest, this UCC-1 must be filed with the Secretary of State, Uniform Commercial Code Division, P.O. Box 1738, Sacramento, CA 95808, unless it is a "fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must include a statement that it is a fixture filing to be recorded in the real estate records, a description of real property in Orange County and, if the debtor does not own the real property, the name of the owner. (15) We have received your check without a document or letter of instruction. We are unable to determine the intent of the fees. (16) The correct fees will be $ _. If an attachment is added to the document, the fee will increase $3.00 per page or portion thereof. (17) OTHER: ! 14Z - +.� --, � - t -1 .i �� 0 LEE A. BRANCH, ORANGE COUNTY RECORDER MA Deputy Recorder c0622-105 (R10/911 Li Austin RETURN ADDRESS: Cyr a060 inn a ,rl We are retur ng UNRECORDED together with your remittance of $ for the reasons checked below: Cr_ 9a 647 Nov DATE 3-3 1 -Q T naming C-0�4 (1) The recorder can find no provision in the law authorizing the recording of the enclosed document(s). (2) Recording cannot be performed in this county, please forward to county shown on the document. (3) For proper indexing: a. "Et al" is not acceptable; all parties must be named. b. The name of the company, corporation or partnership must be at the signature point. c. The trustee of a trust must be identified as such. d. The names in the caption, execution and notary acknowledgment must match. (4) The Documentary Transfer Tax declaration must be completed to show either the amount of tax due or an acceptable reason for exemption. (see bulletin) (5) The city where the property is located or "unincorporated area" must be stated on the deed and the tax declaration must indicate how the tax was computed. (6) The preliminary change of ownership report is incomplete or unsigned. Please complete or correct the areas checked in red. (7) The notary acknowledgment is incomplete (please see red check) or is an incorrect form. A form is required. (8) The notary seal/signature is missing or is illegible. (9) Portion(s) of the document are illegible (please see red check). You may either execute and submit a new original or you may add a legible copy and a certification by the party creating the copy under penalty of perjury that it is a true copy of the original. (Gov. Code section 27361.7) (10) The legal description/exhibit has been omitted. All exhibits must also be referenced in the body of the document and appropriately labeled. (11) Recording reference (date and document number or book and page) of the prior recorded document is incorrect or was omitted. (12) Abstracts of judgment must contain the address of the judgment creditor(s), the address of the judgment debtor(s) and the address at which the summons was served or mailed. (13) Pursuant to Government Code sections 27288.1 and 27201, all parties whose interest is affected must be identified (i.e. owner etc.) (14) To properly perfect a security interest, this UCC-1 must be filed with the Secretary of State, Uniform Commercial Code Division, P.O. Box 1738, Sacramento, CA 95808, unless it is a "fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must include a statement that it is a fixture filing to be recorded in the real estate records, a description of real property in Orange County and, if the debtor does not own the real property, the name of the owner. (15) We have received your check without a document or letter of instruction. We are unable to determine the intent of the fees. (16) The correct fees will be $ If an attachment is added to the document, the fee will increase $3.00 per page or portion thereof. (17) OTHER: ,"� -4- " LEE A. BRANCH, ORANGE COUNTY RECORDER BY Li Austin Deputy Recorder W F0622-105 (R10191) �.r` CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION TO: CONNIE BROCKWAY, City Clerk FROM: ART FOLGER, Deputy City Attorney DATE:' March 9, 1994 SUBJECT: RLS 93-132 RLS 94-068 Recording Certificate of CompletiorXertificate of Compliance Attached is a copy of Government Code Section 65868.5 which requires that development agreements must be recorded. Within the agreements themselves is the provision that a certificate of completion and/or certificate of compliance be recorded when the development is completed. So essentially, these certificates are fled in accordance with Government Code Section 65868.5. suggest you reference this code section when attempting to file the documents with the recorder's office. ART FOLGER, Deputy City Attorney AJF:k CLERKDOC r� 0 65867 PLANNING AND ZONING - Title 7 shall be given as provided in Sections 65854, 65854.5, and 65856 in addition to such other notice as may be required by law for other ac- tions to be considered concurrently with the development agreement. (Added by Stats.1979, c. 934, p. 3231, § 1.) Library References Zoning and Planning Z=131. C.J.S.- Zoning and Land Planning if 12 - to 1.3. 16. - 65867.5. Approval by ordinance; referendum A development agreement is a Iegislative act which shall be ap- proved by ordinance and is subject to referendu n. A development agreement shall not be approved unless the legislative body finds that the provisions of the agreement are corsistent with the general plan and any applicable specific plan. (Added by Stats.1979, c. 934, p. 3231. 11.) - f 5868.• Amendment or cancellation; notice of intent A development agreement may be amended, or canceled In whole or in part, by mutual consent of the parties to the agreement or their successors in interest. Notice of intention to amend or cancel any portion of the agreement shall be given In the manner provided by Section 65867. An amendment to an agreement shall be subject to the provisions of Section 65867.5. (Added by Stats.1979, c. 934, p. 3231, § 1.) Llbrsry References Zoning and Planning 0=151. C.J.3. Zoning and Land Planning If 65, 67.71. § 65868.5. Recording copy of agreement; effect No later than 10 days after a city, county, or city and county en- ters into a development agreement, the clerk of the legislative body shall record with the county recorder a copy of the agreement, which shall describe the land subject thereto. From and after the time of such recordation, the agreement shall impart such notice thereof to all persons as is afforded by the recording laws of this state. The burdens of the agreement shall be binding upon, and the benefits of the agreement shall inure to, all successors in interest to the parties to the agreement. (Added by Stats.1979, c. 934, p. 3231, § 1.) 94 109 CITY" OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK CALIFORNIA 92648 Lee A. Branch, Recorder County of Orange P. 0. Box 238 Santa Ana, CA 92702 Enclosed please find to be recorded and returned to the Office of the City Clerk, City of Huntington Eeach, 2000 Main Street, Huntington Beach, California 92648. Connie Brockway City Clerk Enclosure * "-// ,L�c �� �* ere- C.- r ITolephons: 714-5 35-5227) FE CITY OF HUNTINGTON BEACH INTER•DEPARTMENT COMMUNICATION IIUKnW.T0N 1EACM TO: Art Folger, Deputy City Attorney FROM: Connie Brockway, City Clerk SUBJECT: RECORDATION OF CERTIFICATE OF COMPLETION DATE: February 14, 1994 Would you provide a memo to the City Clerk authorizing the City Clerk's Office to file the Certificate of Completion for California Resorts (Pierside Pavilion/Huntington Pier Colony (Main Pier Phase I Project) and Holly Seacliff Development Agreement Compliance in order that the City Clerk can cease efforts to have the documents recorded The County Recorder has stated they can find no provision in the law authorizing the recording of the documents. The City Clerk's Office has provided the developer with certified copies of the Certificate of Compliance. 1452K RETURN ADDRESS: ��.. , �� •. C c,. aby $ We are returning UNRECORDED together with your remittance of g for the reasons checked below: C e r+- t'+l` c-Ot e ,_—� , Ck. No. a-r r TE -1 C."'on naming CXA'-C. 1p'eSor- s (1) The recorder cat find no provision in the law authorizing the recording of the enclosed document(s). (2) Recording cannot be performed in this county, please forward to county shown on the document. (3) For proper indexing: a. "Et al" is not acceptable; all parties must be named. b. The name of the company, corporation or partnership must be at the signature point. c. The trustee of a trust must be identified as such. d. The names in the caption, execution and notary acknowledgment must match. (4) The Documentay Transfer Tax declaration must be completed to show either the amount of tax due or an acceptable reason for exempticr. (see bulletin) (5) The city where the property is located or "unincorporated area" must be stated on the deed and the tax declaration must indicate how the tax was computed. (6) The preliminary change of ownership report is incomplete or unsigned. Please complete or correct the areas checked in red. (7) The notary acknowledgment is incomplete (please see red check) or is an incorrect form. A form is required. (8) The notary seal/signature is missing or is illegible. (9) Portion(s) of the document are illegible (please see red check). You may either execute and submit a new original or you may add a legible copy and a certification by the party creating the copy under penalty of perjury that it is a tru-3 copy of the original. (Gov. Code section 27361.7) (10) The legal descriptionlexhibit has been omitted. All exhibits must also be referenced in the body of the document and appropriately labeled. (11) Recording reference (date and document number or book and page) of the prior recorded document is incorrect or was omitted. (12) Abstracts of judgment must contain the address of the judgment creditor(s), the address of the judgment debtors) and the address at which the summons was served or mailed. (13) Pursuant to Government Code sections 27288.1 and 27201, all parties whose interest is affected must be identified (i.e. owner etc.) (14) To properly perfect a security interest, this UCC-1 must be filed with the Secretary of State, Uniform Comme'cial Code Division, P.O. Box 1738, Sacramento, CA 95808, unless it is a "fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must include a statement that it is a fixture filing to be recorded in the real estate records, a description of real property in Orange County and, if the debtor does not own the real property, the name of the owner. (15) We have received your check without a document or letter of instruction. We are unable to determine the intent of the fees. (16) The correct fees will be $ . If an attachment is added to the document, the fee will increase $3.00 per page or portion thereof. , C� _ (17) OTHER: LEE ft. BRANCH, ORANGE COUNTY TCORDER Byja Deputj Recorder a FOE2. •1051R10911 • RETUhN At, ESS: DATE } VV We are returning UNRECORDED C A--- }' c-o4 r+ naming cox ct'Q5Or+5 together with your remittance of $ z� , Ck. No. for the reasons checked below: (1) The recorder can find no provision in the law authorizing the recording of the enclosed documeni(s). (2} Recording cannot be perfcrmed In this county, please forward to county shown on the document. (3) For proper Indexing: a. "Et al" is not axeptable; all parties must be named. b. The name of the company, corporation or partnership must be at the signature point. e. The trustee of a trust must be Identified as such. d. The names in the caption, execution and notary acknowledgment must match. (4) The Documentary Transfer Tax declaration must be completed to show either the amount of tax due or an acceptable reason for exemption. (see bulletin) (5) The city where the property is located or "unincorporated area" must be stated on the deed and the tax declaration must indicate how the tax was computed. (6) The preliminary change of ownership report Is incomplete or unsigned. Please complete or correct the areas checked In red. (7) The notary acknowledgment Is incomplete (please see red check) or is an incorrect form. A form is required. (8) The notary seallsignature is missing or Is Illegible. (9) Portion(s) of the document are illegible (please see red check). You may either execute and submit a new original or you may add a legible copy and a certification by the party creating the copy under penalty of perjury that It is a true copy of the original. (Gov. Code section 27361.7) (10) The legal descriptionlexhibit has been omitted. All exhibits must also be referenced in the body of the document and app-cpdately labeled. 01) Recording reference (date and document number or book and page) of the prior recorded document is incorrect or was omitted. (12) Abstracts of judgment must contain the address of the judgment creditor(s), the address of the judgment debtor(s) and the address at which the summons was served or mailed. (13) Pursuant to Government Code sections 27288.1 and 27201. all parties whose interest is affected must be Identified (l.e. owner etc.) (14) To property perfect a security interest, this UCC-1 must be filed with the Secretary of State, Uniform Commercial Coda Division. P.O. Box 1738. Sacramento. CA 95808, unless it is a "fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must Include a statement that it is a fixture riling to be recorded In the real estate records. a description of real property in Orange County and, if the debtor does not own the real property, the name of the owner. (15) We have received your check without a document or letter of instruction. We are unable to determine the Intent of the fees. (16) The correct fees will be $ If an attachment is added to the document, the fee will increase $3.00 per page or portion thereof. (17) OTHER: LEE A. BRANCH, ORAN E COUNTY CORDER BY Deputy Recorder 9 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION 14UNTINCTON BEACH . TO: Connie Brockway, City Clerk FROM: Keith B. Bohr, Assistant Project Manager SUBJECT: Recordation of Cert(ficate of Completion DATE: January 4, 1994 Connie, please have the attached Certificate of Completion for the Pierside Pavilion/Huntington Pier Colony (Main -Pier Phase I Project) recorded. Once recorded please send a certified copy to my attention for transmittal to the developer. Thank you for your assistance. KBB: jar 913j 0 Order No. Escrow No. Loan No. Recording requeste3 by: � Connie BBrockway,City Clerk 1t?1EC AbWa1LTch o Cor nie BrockwayCity Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 SPACE ABOVE THIS LINE FOR RECORDER'S USE PIERSIDE PAVILIONIHUNTINGTON PIER COLONY (MAIN PIER PHASE 1 PROJECT) WHEREAS, the developer, CALIFORNIA RESORTS, a California partnership, has requested a Certificate of Completion for the above captioned project, more particularly described in Exhibit "A" hereto; and We the undersigned have reviewed the attached Scope of Development, the Final Tract Map, Final Building Plans and the Development Agreement within our respective jurisdictions relating to such project; and All of the developer's responsibilities have been completed, including but not limited to all construction and development together with all of the improvements off of the site which are required to be completed by the developer prior to the commencement of business on said site; and We know of no reason to withhold the release of the developer's subordinated deed of trust in the sum of $1,500,000. NOW THEREFORE, we the undersigned do hereby recommend approval of the within Certificate of Completion and further recommend that the Redevelopment Agency authorize release and reconveyance of the Deed of Trust securing such performance by the developer as set forth in that certain 5lmemo%ce rt.doc101/06/94 Second Amended and Restated Disposition and Develo ment Agreement dated August 26, 1988. DATED: %',1- '1-0 LOUIS ANDOVAL Directo of ublic Works DATED. 11-1q-93 DATED: DATED: 1� xti 9 3 DATED. Ja 13 DATED: 21 "? DATED: - jzha Building Official Planning Director Aw&�� 451919-1 RAY ER Director of Community Development MICHAEL,P. DO ROBERT FRA�Z I Director of Administrative S BARBARA KAISER Director of Economic Development 5%memolcertdoc112110M3 This within Certificate of Completion is hereby approved this 21 st day of December, 1993. Executive Director APPROVED AS TO FORM: A -- ;?/. 7 t i -:: � . GAIL HUTT N City Attorney i-ia -s'c< 61-r-11V STATE OF CALIFORNIA ) COUNTY OF ORANGE )SS. On 9 before me, the undersigned, a Nota ublic in and f& said 6tate, personally appeared Michael T. Uberuaga, persona y known to me to be the person whose name is subscribed to the within instrument and acknowledge to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. 5lmem o%ce rt. d x101 l06194 "14 ATTACHMENT NO. 7 SCOPE OF DEVELOPMENT I. ARCHITECTURAL AND DESIGN: Each Separate Development Parcel within the Site shall be designed and developed as an integrated complex in which the buildings will have architectural excellence, both individually, as well as in the context of a total complex. The impi-bvements to be constructed on the Site shall be of high architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed. The shape, scale of volune, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancement to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within the Project Area. The open spaces between buildings where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity with the Redevelopment Plan for the Project Area. II. DEVELOPER'S RESPONSIBILITIES: A. The Project. The Project to be constructed by the Developer on the Site shall be consistent with the Approvals referenced in Section 203, the final tract map(s) and final building plans yet to be approved by the City, and the Development x.greement between the City and Developer, as the same may be amended from time to time. As of the Effective Date of this Agreement, the Project consists of the following: 1. On the Residential Portion of the Site, approximately one hundred thirty (130) residential condominium units in a four-story building over two (2) levels of subterranean parking in conformance with Division 9 of the Municipal Code of the City of Huntington Beach. Amenities will include a swimming pool, jacuzzi, gym, clubhouse, security, and four (4) elevators. The Developer shall maintain an on -site sales office ind shall exercise reasonable diligence to market the condominium units for sale. The Developer agrees that in no event shall the Developer lease or rent or ATTACHMENT NO. 7 06/10/88 Page 1 of 5 1� � agree to lease or rent any of the condominiun units during the six (6) month period -commencing after .the later of the following two (2) dates: (i) the date on which the Developer obtains its final public report for the condominium portion of the Project from the California Department of Real Estate, and (ii) the date that the Developer opens its on -site sales office and commences its marketing program to sell condoninium units to the public. 2. on the Commercial Portion of the Site, approximately ninety thousand (90,000) square feet of gross building area-,(79,500 square feet of gross leaseable area) in a three-story retail/commercial center over two (2) levels of subterranean parking. A six-plex movie theatre will be included in the Project. The theatres will have a maximum of one thousand seven hundred fifty (1,750) seats and shall contain approximately twenty-seven thousand (27,000) square feet of building area. Retail space will be on two levels with approximately thirty-six thousand sir. hundred (36,600) square feet plus approximately fifteen thousand nine hundred (15,900) square feet of office space on the third floor and mezzanine. The retail space will include a maximum of ten thousand (10,000) square feet of restaurants and a maximum of three thousand (3,000) square feet of nightclub -type uses. 3. Two hundred ninety-seven (297) parking spaces located in the two -level subterranean parking structure. 4. All landscaping, driveways, open areas, and other incidental on -Site improvements required in accordance with the Approvals, and the following off - Site improvements, to be constructed in accordance with the City's Downtown Design Guidelines 'and Public Works standards: (i) curbs, gutters, landscaping, sidewalks, and street lights (but not signals) around the Perimeter of the Site, and (ii) a ten -foot widening of the western side of Walnut Avenue adjacent to the Site. B. Building Setbacks. Minimum building and parking setbacks shall be in conformance with the Huntington Beach Municipal Code. C. building Construction. Buildings shall be constructed in conformance with the Huntington Beach ;- ATTACHMEVT NO. 7 Page 2 of 6 06/10/88 �\J L� Municipal Code and in accordance with the approved final building plans. D. signs. Signs shall be in conformance with the Huntington Beach Municipal Code and more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the exterior of the improvements unless such signs.and signing have been submitted to and approved by the City/Agency staff. Developer shall submit and implement a Planned Signing Program with respect to all signage on the Site. E. Screening. All- outdoor storage of materials or equipment shall be enclosed or screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by the City/Agency staff and the provisions of the Huntington Beach Municipal Code. F. Landscapinq. The Developer shall provide and maintain all landscaping on the Site, including the public rights -of -way within the Site and the setback areas, in accordance with the approved landscape plans. G. Utilities. The Developer shall extend all utilities required for the development, use, and maintenance of the improvements on the Site (water, sewer, gas, electrical, and telephone) from their nearest available locations in the public rights -of -way at the boundary of the Site. The Developer shall be responsible for all costs relating to such utility work, including the costs relating to (i) extending utilities from the perimeter of the Site to the improvements to be constructed thereon by the Developer, (ii) the tie-in of said utilities into the lines in the public rights -of -way on or immediately adjacent to the Site, and (iii) the utility.meters. To the extent that utilities are located in the public rights -of -way on or adjacent to the Site, including without limitation any of the public alleys within the Site which are to be .vacated and abandoned by the City in accordance with Section 202 of this Agreement, and said utilities are required to be undergrounded and/or relocated in order to accommodate the development of the Site, the Developer agrees to underground and/or relocate such utilities, or cause them to be undergrounded and/or relocated. The Agency shall be responsible for all costs related to such utility undergrounding and/or relocation. The Agency shall reimburse the Developer for the costs for which the Agency is responsible in accordance with the following provisions. ATTACHMENT NO. 7 Page 3 of 6 06/10/86 06 I Prior to entering into any contracts far the planning, design, engineering, or construction of any of the work required to be reimbursed by the Agency as set forth above, the Developer shall first submit a copy of each proposed contract to the Agency for approval. Prior to entering into any constructicn contract for any such work., the Developer shall first obtain a minimum of three (3) bids from qualified and responsible contractors, and shall submit such bids to the Agency for approval. The Developer's overhead or management fee for such work shall not exceed six percent (6%) of the balance of its costs for the reimbursable items and Developer shall not be paid any amount for profit on said portion of the work. It is understood and agreed that the Developer may enter into contracts with respect to all or any portion of the work required to be paid or reimbursed by the Agency pursuant to this Paragraph 1I.G which contracts include work beyond the scope of the Agency's reimbursement obligation. In such event, the Developer shall, to the extent practicable, require each proposed contractor to separately bid the portion of its work required to be paid by the Agency from the portion of the work required to be paid by the Developer. If it is not practical to separately bid the work on this basis, the Agency and Developer shall agree upon a fair and reasonable allocation of costs between that portion of the work required to be paid or reimbursed by the Agency and that portion of the work required to be paid by the Developer. It is further understood and agreed that the Developer shall comply with applicable requirements of lake relating to such contracts, including without limitation non-discrimination and prevailing wage requirements, but the Developer shall not be required to comply with requirements applicable to the Agency but not to the Developer (including without limitation public competitive bidding procedures). After the Agency has approved a contract, the Developer shall not authorize any extra work or change orders which would increase the amount of the Agency's payment or reimbursement obligation pursuant to this Paragraph II.G without first obtaining the Agency's approval; provided, however, that in the event of emergency work or if the Developer reasonably determines that the delays in obtaining Agency approval would result in additional costs being incurred, the Developer shall be entitled to approve such change orders or extra work as long as the overall scope of work is not thereby increased and Developer promptly notifies Agency of the action taken. In all circumstances, the Developer agrees to act reasonably to have the work required to be paid or reimbursed by the Agency pursuant to this Paragraph II.G completed at a reasonable cost, consistent with the parties' mutual objective of having such work performed by contractors with a reputation for high quality, experience, and reliability. The Agency shall have the authority on behalf of the Agency to approve or -U 06/10/88 ATTACHMENT NO. 7 Page 4 of 6 disapprove the. Developer's proposed contracts (and change orders and. extra -work) required to be paid for or reimbursed by the Agency. Approval shall not be unreasonably delayed, conditioned, or denied, and provided that the Developer shall have provided full information to the Agency, the Agency shall exercise reasonable diligence to take final action on a request for approval of a contract no later than forty --five (45) days after request for approval is received and on a request for a change order or extra work no later than fifteen (15) days after request for approval is received. Any disapproval shall be in writing and shall state the reasons therefor. Upon receipt of a disapproval, the Developer shall exercise reasonable diligence to promptly remedy the problem (assuming the disapproval was reasonable) and resubmit the matter for approval within a reasonable time; provided, however, that notwithstanding any other provision of this Agreement to the contrary, the Developer's times for performance shall be extended for a reasonable period of time to accomplish such tasks. During the course of development of the Site, but not more frequently than monthly, the Developer shall submit to the Agency's Executive Director an itemized statement, with such supporting information as the Executive Director may reasonably require, docunenting all of the Developer's costs eligible for- reimbursement from the Agency pursuant to this Paragraph II.G. Each such itemized statement shall separately identify the costs incurred with respect to each separate contract approved by the Agency and, if applicable, the allocation of costs between those costs required to be paid or reimbursed by the Agency and those costs required to be -paid by the Developer. The Agency shall promptly reimburse the Developer for all costs eligible for reimbursement within thirty (30) days after receipt of each itemized statement. H. Vehicular Access. The number and location of vehicular driveways and curb breaks shall be in accordance with the approved plans. I. Off -Site Parking Facilities. The Developer shall have no responsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph II.A.3 above. To the extent that either the City or Agency determine, at any time before or after the issuance ox Certificates of Completion for the Residential Portion and commercial Portion, that the parking on the Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. ATTACHMENT NO. 7 Page 5 of 6 06/10/88 W In the event of any inconsistency between. the Approvals and the narrative description of the Project in this Agreement, the Approvals shall govern. III. AGENCY'S RESP098IBILITIES: A. off -Site Parking Facilities. The Developer shall have no responsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph II.A.3 above. To the extent that either the city or Agency determine, at any time before or after the issuance of Certificates of Completion for the Residential Portion and Commercial Portion, that the parking on the Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. B. Utilities. The Agency agrees to provide, or cause to be provided, at no expense to the Developer, and within the time required in the Schedule of Performance, all utilities (water, sewer, gas, electrical, and telephone) required for the development, use, and maintenance of the Project on the Site, with sufficient capacities to adequately service the Site, with such utilities to be located in the public streets or rights -of -way adjacent to the Site. The Developer shall be responsible for extending utilities from said location(s) to the improvements located on the Site in accordance with Paragraph II.G above. C. Easements and Peririts. The Agency agrees to cooperate with the Developer in connection with the filing and processing of any and all applications for permits and other approvals which may he required by the City in accordance with the Development Agreement or which may be required'by any other governmental agency in connection with the development of the Site. 6/112/ 0123 04 -0001/004 ATTACHMENT NO. 7 Page 6 of 6 06/10/88 REQUEST FOR REDEVELOPMENT AGENCY ACTION ED 93-" Date: December 6, 1993 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Executive Director / Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic D v lopment — Subject: CONFIRM IIASEKO PIER COLONY, INC., AS EXISTLtiG OWNER AND APPROVE ORIX CORPORATION AS PROPOSED NEW OW NTR OF THE THE PIERSIDE PAVILiON/IIUNTLNGTON PIER COLONW DEVELOPMENT (MAMPIER PHASE A APPROVED BY CITE' COUtiCIL Consistent with Council Policy? Pq Yes [ ] New Policy or Exception 19 Statement of Issue, Recommendation, Analysis, Funding Source, Alternative T TEMENT OF i s Haseko Pier Colony, Inc. has requested the Redevelopment Agency's confirmation and approval of their previous acquisition of California Resorts/Haseko Associate's interest in the Pierside Pavilion/Huntington Pier Colony development, as well as, approval of its proposed sale to the Orix Corporation. RECONlYMEh'DED AQFNCY ACTION: 1. Confirm and approve the previous acquisition by Haseko Pier Colony, Inc., of the Pierside Pavilion/Huntington Pier Colony development. 2. Approve Orix USA Corporation (or subsidiary thereof) as the newly proposed assignee (buyer) of the Pierside Pavilion/Huntington Pier Colony development, provided that section 107 of the Second Amended and Restated Disposition and Development Agreement are complied with. ANALYSIS: On June 27, 1988, the Redevelopment Agency of the City of Huntington Beach entered into a Second Amended and Restated Disposition and Development Agreement (DDA) with California Resorts for the disposition and development of certain property. The development is a mixed use project now known as Pierside Pavilion/Huntington Pier Colony, and is located between Main and Second Streets, Pacific Coast Highway and Walnut Avenue. Crry CLERK %'W1 RAA ED 93-44 November 23, 1993 Page two On November 21, 1988, at the request of California Resorts, International, Inc., the Agency approved Haseko (California) Inc. as a financial partner in the Main -Pier Phase I development. As of December 1, 1992, Haseko acquired all of California Resorts, International's interest (absent formal Agency approval), becoming sole proprietor of the project. Haseko Pier Colony, Inc., on November 23, 1993, sent the attached letter requesting confirmation and approval of their acquisition of the Pierside Pavilion/Huntington Pier Colony development. Keyser Marston Associates, Inc. has reviewed both the previous assignment and the proposed assignment and has confirmed that both Haseko Pier Colony, Inc.(Attachment 2), and the Orix Corporation (Attachment 4), are "financially stable and acceptable assignees (buyers) of the Pierside Pavilion/Huntington Pier Colony Development. Further, the sales agreement provides that Haseko will be retained as Asset Manager for the project and will provide an income guarantee for five years to the Orix USA Corporation. Therefore, Haseko-Dunn, (subsidiary of Haseko Pier Colony), the current property manager, will continue as Property Manager on behalf of Orix and Haseko ensuring quality management and a vested financial interest in the property by Haseko. Haseko has also requested a Certificate of Completion pursuant to Section 415 of the DDA. Staff is currently compiling the necessary information needed to process the Certificate of Completion. This information includes documentation that all Building Division requirements have been satisfactorily completed. The last outstanding issue yet to be settled is California Resorts claim for reimbursement of costs for off -site improvements constructed for the project. California Resorts is currently working with the City Attorney's office to document approximately $300,000 ir reimbursement costs. IIIN'DINQ SOURCE; None as a result of the recommended action. ALTERNATIVE ACTION: Do not approve the Orix Corporation as the buyer of Pierside Pavilion/Huntington Pier Colony development. ATTACIINTE)V ; 1. RCA dated June 27, 1988 2. RCA dated November 21, 1988 3. Haseko Pier Colony letter dated November 23, 1993 4. Keysor Marston letter dated November 5, 1993 MTU/BAK/KBB: jar REQ(%i�ST FOR REDEVELOPMENT CITY CCU' f"AL/ AGENCY A41ON RII 88--35 Date .Tune 27, 1998 Submitted to: Honorable Mayor/Chairman and City Council/Redevelopment Members Submitted by: Paul E. Cook, City Administrator/Executive Director -` Prepared by: Douglas N. La Belle, Deputy City Administrator/Community Developme t Subject: SECOND AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN CALIFORNIA RESORTS AND THEREDEVELOPMENT AGENCY Consistent with Counc�FOWW? CITY Pf JWNTING�qfh �&My or Exception Statement of issue, Recommendation, Analysis, Funding Source, Aitemative Actions, Attachments: 4)Z STATEMENT OF 1551M Transmitted for the City Council/Redevelopment Agency's consideration is the Second Amended and Restated Disposition and Development Agreement with California Resorts. Additionally, there are resolutions that, when adopted and implemented, will lead to the development of improvements in a portion of the Main -Pier subarea of the Main -Pier Redevelopment Project Area. RECOMMENDATION: Staff recommends that the following separate actions be taken: 1) Conduct a joint public hearing on the Second Amended and Restated Disposition and Development Agreement; and 2) Adopt appropriate resolutions between the City Council/Agency and California Resorts. On August 20, 1984, the Redevelopment Agency entered into an Exclusive Negotiating Agreement with Huntington Pacifica Development Group. This Agreement was subsequently extended for a 180-day period on November 19, 1984, and additional 60-day periods on May 18 and July 15, 1985. On August 19, 1985, the original Disposition and Development Agreement was approved by the City and Agency and subsequently was modified by an Implementation Agreement on February 18, 1986. On October 20, 1986, the Agency amended the original Agreement with Huntington Pacifica I group. The recommended actions are intended to supersede the original Disposition and Development Agreement and the Implementation Agreement. The First Amended Agreement proposed a hotel of not less that 280 rooms with associated retail shops, meeting rooms, banquet facilities and restaurant, including a minimum of 450 parking spaces beneath and adjacent to the hotel. PIn A roA In addition to the hotel, a retail commercial and office building with a minimum gross Ieasable area of approximately 47,000 sq.ft., plus an optional theatre complex of approximately 25,000 sq.ft. The development also proposed a public plaza of approximately 5,000 sq.ft., and an elevated connecting pedestrian walkway to Pierside Village. California Resorts (formerly Huntington Pacifica I) is now proposing in the Second Amended Agreement to develop at least Twenty -Five Million Dollars ($25,000,000) in improvements, exclusive of land value. The developer is proposing a mixed -use project with an entertainment/commercial center consisting of a 1,750 seat, six-plex movie theatre, 23,575 sq.ft. of commercial, 15,925 sq.ft. of office space; a 10,000 sq.ft. restaurant, and a maximum of a 3,000 sq.ft. night club. The entertainment complex will include approximately 2,000 sq.ft. of public plaza areas and two levels of subterranean parking (approximately 300 spaces). In addition to the commercial portions of the project, the developer is proposing 130 residential condominium units with all required parking in a subterranean structure. On April 5, 1988, the Planning Commission approved the proposed project's Conditional Use Permit No. 88-7 with special permits, Coastal Development Permit No. 88-3, and Tentative Tract Map No. 13478. The Planning Commission's action included project amendments, and imposed many conditions on the project that the developer has concurred with. The described development is proposed over an approximate 5-acre area bounded by Walnut Avenue on the north; Second Street on the east; Pacific Coast Highway on the south; and Main Street and the alley between Main & Third Streets on the west. A 33433 Summary Report has been prepared and is attached as required by the California Health and Safety Code. This report is required before any property of the Agency acquired directly or indirectly can be sold or Ieased for development pursuant to a redevelopment plan. VT Pursuant to Section 15262 of the California Environmental Quality Act, the proposed Agreement is considered a statutory exemption. The project area has been analyzed in Environmental Impact Report 82.2 for the Downtown Specific PIan approved by the Planning Commission on February 15, 1983, and certified by City Council on July 18, 1983, in an Environmental Impact Report for the Main -Pier Redevelopment Plan approved by the Planning Commission on August 17, 1982, and certified by the Agency on September 7, 1982. EIINDINQ OURCE: The proposed Agreement provides for the Developer to acquire all parcels within the project area. The cost of any land acquisition by the Agency will be borne by the developer. The Agreement proposes that the City will have constructed improvements to the water delivery facilities in the downtown area and make all connections with the developers improvements and pay actual costs the pro rata portion of which is estimated at $1,000,000. The Agreement also calls for the City to have constructed underground utility Improvements in conjunction with the developer's project, and pay actual costs which are estimated at $350,000. Funding to come from Underground Utility District funds. The Agreement states that the Agency is to provide funding for the relocation of residents and businesses and oil interests within the Project Area up to $1,000,000. ALTE RNATIVEJI CTiO LV: 1) Continue action on the Second Amended and Restated DDA and related documents to allow for additional review time. 2) Direct staff to further negotiate specific points of the Agreement with the developer. 3) Deny the approval of the Agreement and/or related documents, and continue with the provisions of the existing Disposition and Development Agreement. ATTACUhMNTS: 1) Summary Comparison Report Main -Pier Phase I Project. 2) 33433 Reports. 3) Tom Clark's letter dated April 26, 1988. 4) Keyser Marston Economic Analysis dated April 13, 1988. 5) Project Pro Forma dated April 15, 1988. 6) Redevelopment Agency Resolution. 7) City Council Resolution. 8) Second Amended Disposition and Development Agreement. 9) Planning Commission Staff Report dated April 5, 1988. 10) Final Findings and Conditions of Approval dated April 7, 1988. PEC/DLB/MA:lp 3867h 'REQUEST FC �'IEDEVELOPMENT .ENCY ACTION ArrROVED BY C= 1COUNC:. i RH 88 78 21 198 tyat� November 8 �n �� --i�onorabie ChniZ'fnan and Redevelopment Agency Members Submitted by: Paul Cook, Executive Director�.�� Prepared by: Douglas.La Belle, Deputy City Administrator/Economic Developme APPROVAL OF IIASEKO (CALIFORNIA), INC. AS FINANCIAL PAR NERS TO Subject: CALIFORNIA RESORTS INTERNATIONAL. INC., FOR THE PRISE I ENTERTAINMENT COMPLEX DEVELOPMENT Consistent with Council Policy? I ] Yes I j New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: SIATEMENT OF ISSUE: California Resorts International, Inc., has requested the Redevelopment- Agency's approval of Haseko (California) Inc., financial partner pursuant to Section 107 of the Second Amended and Restated Disposition and Development Agreement. ,RECOMMENDATION: Approve the assignment of Haseko (California) Inc., as financial partners in the Phase I, entertainment complex development. On October 13, 1999, California Resorts International, Inc., requested the Agency's approval of Haseko (California) Inc., as a financial partner in the Main —Pier Phase I development. Section 107 of the Second Amended Disposition and Development Agreement requires the Agency to exercise reasonable diligence to complete its review within forty—five (4S) days after receipt of the developer's proposed assignment. The DDA further requires any disapproval to be in writing, specifying reasons for the disapproval, and outlining conditions necessary in order to obtain Agency approval. Keyser Marston Associates, Inc., has subsequently reviewed the proposed assignment and has submitted a letter which states that Haseko (California), Inc., is a "financially stable and acceptable, joint —venture partner for the proposed retail/entertainment/residential complex project" (see attached report). The report also stipulates that any firms used during the construction process which are affiliated with Haseko must be monitored to ensure competitive quality levels and budgetary restrictions. This suggested requirement is based upon Haseko's potential position as a 50% partner and potential decision maker. Attached herewith is a copy of the assignment from California Resorts International, Inc. to Haseko (California), Inc. for Agency approval. FUNDING SOL!RCE: None P1a1irss ALTERNATM ACTION: Do not approve Haseko (California) Inc., as financial partner for California Resorts International, Inc. 1) Communication from California Resorts International, Inc. 2) Communication from Keyser Marston Associates, Inc. 3) Assignment and Assumption of Second Amended and Restated Disposition and Development Agreement and Consent to Assign. PEC/DLB/SJH:lp 4230h HASEKO Pier Colony, Inc. • Suite 601 World Trade Center NASEKD 350 S Figueroa Street Los Angeles, CA 90071 November 23.19 Tel: 213:601 1 11 Fax:21316801a18i Huntington Beach Redevelopment Agency' v q3 Attention: Mr. Keith Bohr 15 Department of Economic Development ��I 2000 Main Street CF��N� Huntington Beach, California 92648 o�eP�� sl !! Op Dear Keith: �CQNQM�G Pursuant to the Second Amended & Restated Disposition & Development Agreement (DDA) of August 26,1988, Section 107 & our discussions with Arthur DeLaLoza from the City Attorney's office, we request that the Agency confirm & approve Haseko Pier Colony's December,1992 acquisition of California Resorts/Haseko Associate's interest in the Pierside Pavilion/ Pier colony project. Since that date, Haseko Pier Colony,Inc. has been the sole owner of the project & has assumed full financial responsibility for its successful completion. The project is clear of any third party debt and Haseko Pier Colony,Inc. a California Corporation, agrees to comply with all requirements set forth in such Section 107 of the DDA. We believe that the project has now earned a Certificate of Completion & we hereby confirm &/or renew our request of November 2, 1993 that the Certificate be issued pursuant to Section 415 of the DDA.The timing of the issuance is critical to us so that we may meet our commitment to sell the project to a subsidiary of Orix USA Corporation. Therefore, if for some reason there is any further delay in this process, we respectfully request the approval of Orix Corporation on the basis that Haseko will continue to guarantee to provide the financial resources necessary to gain the Certificate of Completion and futher, on condition that all requirements of Section 107 of the DDA shall be performed by the assignee & the assignor. We hope that these declarations will fully comply with the DDA & provide the level of assurance necessary to safeguard the City's interests so that action may be taken on this matter at the December 6, 1993 meeting.Thank you for your cooperation in this matter. Sincerely, erry E. Tornek Senior Executive Vice President cc: Barbara Kaiser Gail Hutton,Arthur DeLaLoza Richard L Botti Calvin E. {loll is,11 Kathleen 11.11ead SAN DI EGO W, %4:-0380 Heinz A. Schilling SAN FRANCISCO415,'398.3050 Timothy C. Kelly A. Jerry Keyser Kate Earle Funk Robert I Wetmon. Michael Conlon Denise E. Conley November 5, 1993 Mr. Keith Bohr Redevelopment Project Manager Huntington Beach Redevelopment Agency 2000 Main Street Huntington Beach, California 92648 Dear Keith: 500 South Grand Menue• Suite 1480 Los Andes, California 90071 213,'622-8095 Fax W/622-5201 RECEIVED PJ0V 151993 DEPARTMENT Or ECONOMIC DEVELOPil Eff- In accordance with your request, Keyser Marston Associates, Inc. (KMA) reviewed the 1993 Annual Report submitted by the ORIX Corporation. The purpose of this review is to determine whether ORIX (USA), a wholly owned subsidiary of the ORIX Corporation, is a "financially stable and acceptable assignee" of the Pierside Pavilion/Huntington Pier Colony Development. The Annual Report indicates that the ORIX Corporation currently holds approximately $39 billion in assets, of which $1.3 billion is in cash. The parent corporation was founded in 1964, and is publicly traded. ORIX (USA) was established in 2981, and has offices in Los Angeles, San Francisco and New York. A review of the ORIX Corporation Annual Report indicates that the corporation's involvement in real estate transactions includes collateralized lending, asset management, project leasing and real estate brokerage, ORIX (USA) Real Estate Equities, Inc. was founded in 1987 to invest in United States real estate developments. It is our understanding that the proposed transfer of the property from Haseko Pier Colony, Inc. includes a requirement for Haseko to provide ORIX (USA) with income guarantees for the next five years of the project's operation. In addition, Haseko has agreed to remain as the project's Asset Manager for the next five years. Thus, the stability of the project will be maintained by both entities over the near -term. Real Est ate Predeweloptnen t & Ex -al untion Senices Mr. Keith Bohr November 5, 1993 Page 2 Based on the available information, it is the KMA conclusion that ORIX (USA) represents a "financially stable" purchaser of the project. As such:, it is the KMA recommendation that the Agency approve the proposed transfer of project ownership. If you have any questions, or if any other issues arise, please do not hesitate to call. Yours very truly, KEYSER MARSTON ASSOCIATES; INC. Kathleen H. Head KHH12P 9,3811.HT8 14066.0002 Key_serMarmonAssociatesl nc, REQUEST -TA _ . ANT A&NCY ACTION ED 93-4Z Date: November 15, 1993 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Executive Director Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development Subject: APPROVAL OF ORIX CORPORATION AS THE BUYER OF THE PIERSIDE PAVILION/I[UNTLNGTON PIER COLONY (NIAiN-PIER PHASE n DEVELOPIIENT FROM HASEKO PIER COLONY, INC. Consistent with Council Policy? M Yes I ] New Policy or Exception Statement or Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISM'- Haseko Pier Colony, Inc. has requested the Redevelopment Agency's approval of Orix Corporation as the buyer of Pierside Pavilion/Huntington Pier Colony pursuant to Section U7 of the Second Amended and Restated Disposition and Development Agreement. c RECO1LititENDED AGENCY ACTION: 7 Approve Orix USA Corporation (or subsidiary thereof) as the buyer of Pierside Pavilion/Huntington Pier Colony. w ANALYSIS: On June 27, 1988, the Redevelopment Agency of the City of Huntington Beach entered into a Second Amended and Restated Disposition and Development Agreement (DDA) with California Resorts for the disposition and development of certain property. The development is a mixed use project now known as Pierside Pavilion/Huntington Pier Colony, and is located between Main and Second Streets, Pacific Coast Highway and Walnut Avenue. On November 21, 1988, a: the request of California Resorts, International, Inc., the Agency approved Haseko (California) Inc. as a financial partner in the Main -Pier Phase I development. As of December 1, 1992, Haseko acquired all of California Resorts, International's interest (absent formal Agency approval), becoming sole proprietor of the project. Haseko Pier Colony, Inc., on November 2, 1993, sent the attached letter requesting approval of a subsidiary of the Orix USA Corporation as buyer of Pierside Pavilion!Huntington Pier Colony. Keyser Marston Associates, Inc. has subsequently reviewed the proposed assignment and submitted the attached letter dated November 5, 1993, which states that Orix USA Corporation, is a "financially stable and acceptable assignee (buyer) of the Pierside Pavilion/Huntington Pier 1 n 6 1 d Colony Development. RAA ED 93-44 November 15, 1993 Page two Further, the sales agreement provides that Haseko will be retained as Asset Manager for the project and will provide an income guarantee for five years to the Orix USA Corporation. Therefore, Haseko-Dunn, the current Property Manager of the development will continue as Property Manager on behalf of Orix and Haseko ensuring quality management and a vested financial interest in the property by Haseko. In their November 2, 1993, Haseko has also requested a Certificate of Completion pursuant to Section 415 of the DDA. Staff is currently compiling the necessary information needed to process the Certificate of Completion. This information includes documentation that all Building Division requirements have been satisfactorily completed. The last outstanding issue yet to be settled is California Resorts claim for reimbursement of costs for off -site improvements constructed for the project. California Resorts is currently working with the City Attorney's office to document approximately $300,000 in reimbursement costs. Staff anticipates bringing the Certificate of Completion before the Agency for their consideration at their December 6th meeting. Via-PILYM191011OW None as a result of the recommended action. ALTERNATIVE ACTION: Do not approve the Orix Corporation as the buyer of Pierside Pavilion/Huntington Pier Colony development. ATTACHMENTS: 1. RCA dated June 27, 1988 2. RCA dated November 21, 1988 3. Haseko Pier Colony letter dated November 2, 1993 4. Keyser Marston letter dated November 5, 1993 M TU/BAK/KBB jar 822j CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONME KWAY rh CRY ffCLE CLERK F � � p R lS 1C 4 Se. ems, S° P1 cr C66 1 �hC. Gary Lublincr ��I �Tar Cc� 1p I� S ccT r 315 3rd Strect, Suite M �-I� � d� Huntington Beach, CA 92648 �SO Sn lej. G 9pG7� Our office has submitted the Certificate of Completion - Piersidc Pavilion/Huntington Pier Colony (Bain Pier Phase 1 Project) to the County of Orange for recordation and the county has returned the document unrecorded. After consulting «ith the City Attorney's office the document %%as again submitted to the county for recordation and Ami again returned unrecorded. After the third rejection by the county of our request to record the document the City Attorney's office advised there are no further options for us to pursue in attempting to record the document. This letter is to advise you of the fact that the unrecorded Certificate of Completion is on file in the City Clerk's office. Enclosed is an executed copy of the document for your records. If you have any questions regarding; this matter please call the Office of the City Clerk (714) 536-5227. Connie Brockway, CIVIC City Clerk CB/ES/cc Enclosure p e ; Te.rry 7 Or4tck� gxekbmem4eadiff G [any, 1 Hc, (Telephone. 714-536-5 227 ) CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK 'ppRFT Gary Lubliner 315 3rd Street, Suite M Huntington Beach, CA 92648 CALIFORNIA 92648 Our office has submitted the Certificate of Completion - Pierside Pavilion/Huntington Pier Colony (Main Pier Phase 1 Project) to the County of Orange for recordation and the county has returned the document unrecorded. After consulting with the City Attorney's office the document was again submitted to the county for recordation and was again returned unrecorded. After the third rejection by the county of our request to record the document the City Attorney's office advised there are no further options for us to pursue in attempting to record the document. This letter is to advise you of the fact that the unrecorded Certificate of Completion is on file in the City Clerk's office. Enclosed is an executed copy of the document for your records. If you have any questions regarding this matter please call the Office of the City Clerk (714) 536-5227. Connie Brockway, CMC City Clerk CB/ES/cc Enclosure g:cc\cbmem\seacliff (Telephone: 714-536-5227 ) J.` CITY OF HUNTINOTON BE•4CH INTER -DEPARTMENT COMMUNICATION WNUI(T1NGT40PN BFAOi TO: Ray Silver, Assistant City Administrator Department Heads FROM: Barbara A. Kaiser, Deputy City Administrator/Ecomic Development SUBJECT: Certificate of Completion - Pierside Pavilion DATE: January 19, 1993 Pierside Pavilion at Main Street and Pacific Coast Highway has informally requested a Certificate of Completion (C of Q. A formal request of the C of C is anticipated within the next week which then gives the Agency 30 days to deny the request with cause or the C of C is otherwise deemed approved (per the Agreement). I am requesting that all departments review this project and the appropriate documents to assure that all conditions of development have been met. To my knowledge, there is only one outstanding issue to be resolved, payment for public improvements. I would appreciate a response by February 4, 1993. =� BAK: jar 263j xc: Michael T. Uberuaga, City Administrator rW.3 REQUEST FOr o REDEVELOPMENT) aENCY ACTION C7) / - --7 RH 91-61 Date October 7, 1991 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Executive Director� 1�---- Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development Subject: Reimbursement Payment to California Resorts for Assistance League Relocation/Main-Pier Redevelopment Project Area Consistent with Council Policy? M Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: ! APPROVED BY CITY Ci�I1� 1°y19-91, STATEMENT OF ISSUE: r C CI.EitK. While negotiating property acquisitions within the Main -Pier Redevelopment Project Area's Phase I development, (Pierside Pavilion and Pier Colony), Agency staff and consultants had reached a point of impasse regarding purchase of the Assistance League parcel located on Walnut Avenue. Under the Disposition and Development Agreement, the Agency was responsible for acquisition and business relocation. Since the Phase I project was in jeopardy of being unable to meet critical performance schedules, the developer, California Resorts, Inc., agreed, with Agency staff concurrence, to negotiate and complete the Assistance League's parcel acquisition and relocation. California Resorts has submitted to the Agency a final cost of $100,364.54, which covers acquisition of the relocation site, site preparation, and relocation expenses, and is requesting reimbursement for these costs. RECOMMENDATION: Approve the payment of $100,364.54 to California Resorts, Inc., as payment in full for relocating the Assistance League. ANALYSIS: The Assistance League property on Walnut Avenue was needed to complete the site for development of Pierside Pavilion. Although it was the Agency's responsibility under the DDA to complete site acquisition and relocation, the developer, California Resorts, assumed these responsibilities and acquired the Assistance League property and relocated them to a new site at 417 Main Street. In September of 1988, California Resorts, Inc., acquired the property located at 417 Main ' Street and negotiated sale of that property to the Assistance League. As part of that transaction, it was agreed that the 417 Main Street parcel would be modified to include P10/1/85 amenities such as kitchen facilities, conference room, additional restrooms and an instructional area which, coupled with the property acquisition cost, totaled $560,364.54. This fully unproved parcel at 417 Main Street was in turn sold to the Assistance League for $460,000, a price that equaled proceeds derived from the Assistance League Walnut Avenue parcel plus monies received from Agency as partial relocation expenses, leaving California Resorts, Inc. a net deficit of $100,364.54. Exhibit A outlines the costs incurred by California Resorts in completing this transaction. Staff has reviewed the invoices as submitted, and validated the expenditures. In approximately 60 days, staff anticipates another invoice of $250.000 to be submitted by California Resorts to cover public improvement construction, as provided for under the DDA. This is the final Agency obligation for the project. FUNDING SOUBC : hiain-Pier Debt Repayment Account savings of $372,000. Under the budget for FY 91/92, the Agency was to pay the Omohundro Trust $597,000 this fiscal year on the outstanding mortgage, but now will pay only $225,000 this fiscal year, with the remaining $372,000 due i a three years. ATTACHMENTS: 1) Statement of Costs Incurred. 2) California Resorts International, Inc., reimbursement request dated October 15, 1990. 3) California Resorts International, Inc., reimbursement request dated September 7, 1990. ?JTU/BAK/MJG:ls 9508r EXHIBIT A California Resorts/Haseko Associates Costs Incurred to Relocate Assistance League to 417 Main Street, Huntington Beach Purchase Price (see Sea Wind escrow dated Sr,tewer 16, 19331 Improve:ent Costs (per schedule attachedl Interest 140C.CCO x 101 Septerber 16,1938 - August 30, 1981 I-Yrave-ent Costs $110,347.54 x 101 - 6 month avera7e Line Adjustzent - in process Isee attached contract with tialden i Associates) Total cost to buy aid isprove building Sale to Assistance League Isee Chicago Title Settlement Statement dated 8-30-891 340o,000.00 110,347.54 40,COO.CO 5,517.00 45,517.00 4,500.00 560,364.54 460,000.00 let deficit on relocation S100.364.54 I _ _ ' 19- J4n--90 ASSISTANCE LEAGUE REIMBURSEMENT :"C CAL I TORN Z A RESORTS CHI CK PAYEE A.1�OUNT IC;75 SO CALIF EDISO^! 127.46 073 R!•.'.:NBCW CI.SPOSA. _ 5 i .54. 1035 RAINBOW DISPOSAL 51 .54 1037 30 CALIF E_DISON 74.S2 038 CITY OF HUNTINGTON 3EACH 3:3.56 1041 BROADPAY GLASS 316.20 000 RA:,MBCK CISPOSAL 49.00 1 :01 RAINBOW DISPOSAL 4S.�Cl 1016 CA CUSTGN LIFT 2,800.00 1017 '_''' ' ERTON EQUIPMENT 24300.00 1092 SO CA .=E01SCN 99.35 '; 1 02_ AA BEST LOOKS 116.73 126 SO CA OISON 236.32 1ll6 SILL ASSOTTS PAMOING 366.87 02.5 RAINBOW DISPOSAL S1.5/ .1430 RA.iNBCW OISPc SA'-- 51 -5". 1214 SOUTHERN CALIFORNIA E DISON 82.S:i oo RAINBOW DISPOSAL - :9.00 1203 E:,t ILLIP S 1VEERS 4,7SI1.5, r , .0, � _ .. 8 ASSISTANCE LEAGUE --61 C: T Y OF H {3 35 c.. '1058* CALORIC APPLIANCES . 1922.7 1059* HOLLYWOOD REFRIGERATION 953.45 .336* CIANOND INTERIORS 747.57 1423 PROPERTY TAXES 1,770.29 1054* O:AMONO !NT`=RIORS 767-67 1063* 0A".WONO INTPRIORS 392.20 TCTA1_ TO CA.LI E=OR1•.IA RESORTS 1 P , 9C7 . 54 REINS RSEMENT TO J A HILL CORD CHECK PAYEE AMCjNT '1 029 OEi':l L_�; & :SO�i'� 94.13 1 064 BECKY LUTWE=I 1_E=I: 5 J 10 _. . 205 SH I PLEY RENTALS 6 _ 9.0 1207 CALIFORNIA nCTOM LIFT J 6 .. ;u _ 1199 LAMSERT ELECrRVC r , 33 7 . 5,., 012 FUL1_ERTON RES7AURAN-; SUPPLY LY Z,152.00 1211 MIKE R. JAC,KSON tis J . J.J 12..10 RERTANA. FLOORING 6,159-00 1201 T&R PAINTING 5,53:S.00 -1121 J S 3ACKUS 1,S75-0C 11S0 ,..AWSCN HUGHE S 2 467-00 1204 BILL NELSON DRYWALL 1203 CONROYS PLASTE:'RIN(3 £0 0.,^.0 1202 PRESTIGE CLEANUP .� lJ J V \J 00 1195 RAINGUARD ROOE=ING' 204.35 ' 1 9-Jun-9C ASSISTANCE LEAGUE 1323 LONG BEACH HEATING & AIR 176.46 197 UN! 7`;C NOTTINGH.AM 41.51. "20 WiN sspp._Y 1C2.7� 1 2C6 GANAHL LUMB8R 029 1.0.0.0 THE KEI'IH COMPANIES S,SCC.CC 1441 AMERICAN CITY PEST CCNTROl_ 1,40C.00 1343 DAIL ONE JARVIS aRO7AZRS 1 , 616. co 1442 WILLIE'S TIC: SHOP 22C.01,C 443 RAINGUAi7D ROOFING 300.Ci: 1444 wco smi m 63C.5C 1445 LAMBER! ELECTRIC 675.01 61267 .,A H : ►.L RQUQH CARREN RY ?AYRq.. 3 , 371 . i s — 6S809 WA HILL ROOM CARPENTRY fAYROL 2.,132.84 iC37 PHILLIP ST IVERS 1,6:0.52 1C42 PACIFIC WASTE 37C.0C 1033 UNITED NOTTINGHAM 03.36 i CSF GDLOENWE= S7 YA;;.^.= 9 s'' ^ 1096 WILLIE_5 TIN SHOP 1,775.0C 04 . G:,fYl+PL Ll11+?M 25' , 4 . i u53 GANAHL LU!:SER i 2 4 .7", :097 GANAHL LUMDER E4.34 C92 ABCO HARCWARE 351.91, i C;15 PAC I F: C PLAS7I C COON T ERTOPS - , 7 S2 . C, 'C93 RILL A39077'S PLUMBING S53.35 iCSi RAINGWARD 150E NG ::,.:29.35 iC3s ARC ?ROG TS i0.i3 iC35 BILL ABBOTTS PLUE+MG 3.500.CC 1133 LAMERT ELE07MC 2,362.0 1i5C WOODSMITH, INC' 4cc.31C, i1S4 F.M. HEATON PLUMBING 743.CC icsD CAL;FCRNIA CiSTOa ._I: . 2,240.130 1205 LONG BEACH HEATENG & AIR 1,695.4c i 23C J S BACKUS 1 , S75 . CC 1 147 F-RED AR ZAS 25.1C 094 RAINGUARD ROOFING i4S.55 ------------------------------------------------------ -OTAL J A Hit_'- CORPORATION 9 i, 4 4 C. C,. V alifomia Resorts r International, Inc. October 15, 1990 Barbara Kaiser Deputy City Administrator/ Economic Development 215 1/2 Main Street Huntington Beach, CA 92648 Dear Ms. Kaiser: According to the Redevelopment Agreement between the City of Huntington Beach and California Resorts, it was the City's responsibility to relocate existing property owners to new locations. The City originally set aside a budget of $1 million to accomplish this task. Beginning In 1988, Doug LaBelle ion behalf of the City) asked me to help expedite the relocation of the Assistance League by having California Resorts take on the responsibility of moving them. The City hired a relocation consultant (Pacific Relocators) who determined that $53,000 be paid to the Assistance League to help them relocate. This amount was approved and paid by the City directly to the Assistance League. However, the consultant did not take into consideration all the costs incurred that California Resorts has had to absorb to accomplish the Assistance League relocation. All the costs are documented in the enclosed package. California Resorts should be reimbursed for the balance of $100,364.54. Sincerely, CALIFORNIA ROSORTS--Ii(TERNATIONAL, INC. Uri Gati President pv 90-335 Attachment 222 51h. Street, Hunt.ngton Beach, CA 92648 (714) 960-3307 FAX (714) 960-2637 alifornia Resorts Intemabonal, Inc September 7, 1990 Barbara Kaiser Deputy City Administrator City of Huntington Beach 2000 Main Street - Huntington Beach, CA 92648 Dear Barbara: RECEIVED SEP 12150 DEPARTMENT OF �r;ONOMjC DEVELDPA4EN� Please refer to the Second Amended and Restated Disposition and Development Aareement (DDA) by and between Huntington Beach Redevelopment Agency and California Resorts International Inc., dated August 26, 1990. Page 11, Section 4A-11 discusses the Agency's obligations. Under Section 4A-ii (a), the Agency is obligated for the first $1 million spent under (a) benefits and assistance to be provided to relocate occupants of the Site who may be entitled to such payments. This $1 million was to be available to the occupants of the Site and also to reimburse California Resorts for expenses incurred relocating the tenants. Also, the additional $100,000 was spent at the request of Doug LaBelle who requested that I take on the Agency's responsibility of moving the Assistance League. Sincerely, CALIFORNIA /RESORTS Uri Gati V President pv 90-286 Attachment INTERNATIONAL, INC. 222 5th. Street, Hunt ngton Beach, CA 92648 (714) 960-3307 FAX (714) 960-2637 Upon the request of the Title Company, the Agency shall execute an indemnification agreement in form satisfactory to sudh Title Company and reasonably satisfactory to the Agency by which the Agency shall agree to indemnify the Title Company for any losses, damages and expenses incurred by the Title Company in the event of the Agency's abandonment of the eminent domain proceedings. Nothing herein shall be deemed to obligate the Agency to pay for any additional premium or other charge necessary for the issuance of said title policy. In the event that the Title Company declines to issue a title insurance policy under such circunstances, the Developer's obligation to commence and complete the construction shall not commence to run until title to the Site is held by the Developer consistent with the Approved Title Condition. 4. The Developer'shall advance to the Agency all of the "Acquisition- Costs," as defined --below, -for the Agency Sales Parcels. Subject to the other terms and conditions of this Agreement, the Agency shall submit written invoices to the Developer as funds are required, together with such written documentation supporting such invoices as may be reasonably requested by the Developer. Invoices shall be due and payable within fifteen (15) days after receipt. If the Developer fails to timely pay an invoice (but not before), the Agency may make a direct demand on the letter of credit required to be provided by the,Developer in accordance with paragraph 2 above. In the 'event that the Agency reasonably determines at any time that the letter of credit is insufficient to cover the Agency's Acquisition Costs, the Developer shall, upon fifteen (15) days written notice from the Agency, increase the amount of the letter of credit accordingly. The Developer shall renew or obtain a substituted letter of credit (meeting the same requirements for the initial letter of credit) within forty-five (45) days prior to expiration thereof or the Agency, upon fifteen (15) days written notice to the Developer, shall be entitled to demand full payment under the existing letter of credit. In the event that the amount of the letter of credit at any time exceeds -the remaining amount required to cover the Agency's Acquisition Costs, the Agency agrees, upon written request of the Developer, to act reasonably to acknowledge such, if such be the case, and authorize an appropriate reduction in the amount thereof. The obligation of the Developer to maintain the letter of credit (in such adjusted principal amount) shall be terminated when all of the Agency's Acquisition costs have been fully paid. The term Agency's "Acquisition Costs" as used herein shall mean all costs reasonably incurred by the Agency after the Effective Date of the First Amended DDA for acquisition of any of the individual parcels and property interests comprising the Agency Sales Parcels. -10- 06/l0/88 Notwithstanding any other provision of this Agreement to the contrary, the term Agency,s _"Acquisition Costs" shall exclude the following,_ which are an Agency responsibility under Paragraph 2 of the "Method of Financing" (Attachment No. 8); (i) Agency administrative, overhead, and personnel expense; provided, however, that if the Agency utilizes the City Attorneys office to prosecute an eminent domain action or actions, the term "Acquisition Costs" shall include the salary, fringe- benefit, and other personnel expenses reasonably allocable to such services; (ii) the first One Million Dollars- ($1,000,0001 of expenses incurred for the - following limited purposes: (a) benefits an assistance to be Prov ed to relocate occupants of the Site who nay be entitled to such payments; (r)) costs relating to the acquisi zon of rights -of surface entry to drill into, through, and to use and occupy any part of the Site lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals; and (c) compensation• for the acquisition of oil wells, oil drilling equipment, pipelines, tanks, and related property, together with benefits and assistance to be provided to relocate any such property from the Site; it being understood and agreed th t the Agen y has expended the sum of ,w��et 5 000��- Dollars ($ :r 2E.o ) of such amount between the Effective Date of the First Amendment ---and the -Effective Date herecf; (iii) expenses incurred to extend certain utilities to the Site and to relocate and underground certain existing utilities (water, sewer, gas, electrical, and telephone) on the Site, including the public streets and alleys to be abandoned, as more particularly described in Paragraphs II.G and III.B of the Scope of Development (Attachment No. 7); and (iv) Agency payments, prior to the final award of compensation in an eminent domain -11- 05j10j88 action, to the owner of a parcel or property interest being acquired, to the extent such payments exceed.the amount of the approved updated acquisition appraisal for such parcel or property interest as referenced in paragraph 2 above, unless the Developer shall have agreed in writing to pay such higher amount. Except as specifically limited hereinabove, the Agency's Acquisition Costs shall include, but not be limited to, costs for real estate purchases and option agreements, escrow fees and charges, title insurance, relocation expenses, court judgments, court costs, attorney's fees, appraisal fees, and expert witness fees. The Agency shall exercise all reasonable efforts to conserve funds so as to minimize its Acquisition Costs, consistent with its obligations under applicable laws. During the entire property acquisition process, the Agency and Developer shall informally consult with and inform one another regarding the status of the acquisitions and any matters which may significantly affect the timing and costs of the acquisition(s). Prior to the Effective Date of this Agreement, the Agency has informed the Developer that the Agency has retained the following contract consultants to assist the Agency in the acquisition process: John Cutler and Associates (acquisition consultants), Richard Metcalf (appraiser), Redwine and Sherrill and Justin McCarthy and Stradling, Yocca, Carlson and Rauth and Thomas P. Clark, Jr. (special legal counsel), and Pacific Reloca-tYvn-Consultants (relocation consultants). The Agency agrees that it shall not utilize any additional or different contract consultants, and shall not change its existing contractual arrangements with its existing contract consultants, without the Developer's prior written approval, which approval shall not be unreasonably withheld. B. [§202] Street Vacation Provided that the Developer is not in default of its obligation under this Agreement, within 'the time set forth in the Schedule of Performance (Attachment No. 3), the Agency shall request the City to initiate proceedings and determine whether to vacate certain portions of city streets and alleys (the "Vacation Portion") as depicted on the Site Map (Attachment No. 1), and to convey all of the City's right, title, and interest in the Vacation Portion to the Developer. It is understood that the resolution approving such street and alley vacations shall be conditioned to be -12- 06/10/88 y r .ji CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION NuNTINGIQN RACK To Barbara Kaiser From Arthur DeLaLoza Director of Economic Deputy City Attorney Development S.ibject California Resorts, Date March 6, 1991 International Partial Reconveyance Per your Request for Legal Services, attached is the Request for Partial Reconveyance on the Pier Colony Condominiums for execution by the executive director, Michael Uberuaga. Please secure his signature and messenger to Mr. George Bull at Chicago Title Insurance Co., 825 N. Broadway, Santa Ana, CA 92701, for recordation. Your at fantion is appreciated. (Dictated but not read) ARTHUR DELALOZA Deputy City Attorney cc: Gail Hutton, City Attorney �REQUL-J FOR PARTIAL RECMN ZYANCE i0 CHICAGO TITLE INSURANCE COMPANY, TRUSTEE You are hereby authorized to reconvey to the person or persons legally entitled thereto, the hereinafter c'escribed property, being a portion of the premises described in a certain, deed of trust dated —hay ~`____— ~—~— , 19 89, made by HUNTINGTON BEACH REDEVELOPMENT bGENCY, a public body, corporate and politic of the State of California to the CHICAGO TITLE INSURANCE COMPANY, Trustee, a Corporation organized and existing under the taws of the State of California, as second party, which said deed of trust was recorded June 7 , 1 69 , in Book —~`--`--` of Official Records, page—~`— —`— Records of ----------------- County. California, as Instrumeit Number 89-29927.7 All that certain real property situated in the County of__Oranae State of California, dt!scribed as follows. Lot 1 of Tract No. 13473, in the City of Huntington Beach as per Map filed in Book 636, Page 42 through 44 inclusive of Miscellaneous Maps, records of Orange County, California. Dated this 5th day of March . 1991 See Schedule attached hereto. .y:. C.vj Ittarnuy 1314 111!6R) SCHEDULE 1 HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corporate and politic of the State of California State of California ) )ss. County of Orange ) On this /a274day of , in the year I9-U, before me, the undersigned, a Notary Public in and for said State, personally appeared T. personally known to me instrument as of Huntington Be Huntington Beach o be the, person who executed this cam .l- of the City acknowledqed to me that the City of executed said instrument. �a� •. na.r. tr��wic�.e.ri�:•roro-s orrICIAL.SF.AL I INDA S. FATTJNSOR ho7ARY NVDLIC•C,ALIFOnINJA rRANCE CUuNiY �!V LUNA. EY.P. OCT. 8.1994 WITNESS my hand and of ' is seal ry FtOblic in n For said State 5/267/012304-0002/183 3/5/41 From the desk of - City of Huntington Beach P.O. BOX 190 CALIFORNIA 92648 CONNIE BROCKWAY CITY CLERK J. Ntr.TINGTON ,tACH To Barbara Kaistr. CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION From Connie Brockway Subject 12/17/90 Agenda. Item -Pierside Date 3/8/91 Will you please provide a date that this office can expect to receive'the original documents on the Pierside Pavilion/Huntington Pier Colony' Certificate of Completion etc; Thanks, Connie rn F � �= REQUEST F REDEVELQ,PMENT XGENCY ACTION ; APPROCGVED BY CITY Rli 90-37 Date December 17, 1990 Submitted to: Honorable Chairman and Redevelgxmt Agency N=bers •� Submitted by: Michael Executive D' � � T. Uberua �' r�,,,�,� Prepared by: Barbara A. Kaiser, Deputy City Administrator/Econcruc Development ff Subject: 7•M.•.-Tr R • • • t E • PIM CIDUVY CUU=CAME OF •• N=• TM•• • r•, . MN -PIER • • E Consistent with CTnTciffi7o "icy kJ Yes New Policy or Exception 102A,LJ v46 ol, /0 Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: FTI-ViN kD WWIi • With the exception of outstanding tenant irprovo nts within the cormrnrcial portion and minor cleanup, the Pierside PwriliaVqhMtington Pier Colony (Main -Pier Phase I) project has been ca:pletted and is in satisfactory ompliaanoe with conditions imposed under the ,Disposition and Development Agreement with the Redevelopment Agency. RE7 TIC": 1) Authorize the Agency Clerk and Chairman to execute the attached Redevelopnent Agency Resolution No. ;-/ O , authorizing the Agency's Executive Director to execute full re=weyance of the Subo-rdinated Deed of Trust; and 2) Authorize the Agency's Executive Director to execute and have recorded the Certificate of Completion for the Main -Pier Phase I project. On August 26, 1988, the Redevelopment Agency of the City of Huntington Beach entered into a second Amended and Restated Disposition and Development Agree-ent.(DOA) with California Resorts for the disposition of certain property and the development of cam. rcial, residential, and related improvE0ents . Section 415 of the DOA states that once the developer has ca:pleted all =Ls =uction and development required within the agreen, ant, excluding normal and custanary tenant improvement items, the Agency shall furnish the developer with a Certificate of Completion upon written request therefore by the developer, and record the full reconveyance subordinated Dead of Trust of city prvpezty being conveyed to the project. t�- rinnras MW Briefly stated, the developer's responsibilities included the camstruction of: 130 residential condaminium units, appracimately 90,000 square feet of gross Wilding area in a wIti-story retail/vial venter over two levels of subterranean Barking, and all onsite irprovewrrts, as required. As illustrated on the attached Certificate of Ompletion, the developer has cxpleted the abave-described obligations, as required by the DM - MOM MINE SOURCE: ?:one required as a result of this action. 1) Certificate of Gmpletion. 2) Resolution. 3) California Resorts letter dated November 2, 1990. r�v/atMWKBB:lp LOPM0400141WOOKS)•. PIERSIDE PAVILIONfHUNTINGTON PIER COLONY (MAIN PIER THASE I PROJECT) WHEREAS, the developer, CALIFORNIA RESORTS, a California partnership, has requested a Certificate of Completion for the above captioned project, more particularly described in Exhibit "A" hereto; and We the undersigned have reviewed the attached Scope of Development, the Final Tract Map, Final Building Plans and the Development Agreement within our respective jurisdictions relating to such project; and All of the developer's responsibilities have been completed, including but not limited to all construction and development together with all of the improvements off of the site which are required to be completed by the developer prior to the commencement of business on said site; and We know of no reason to withhold.the release of the developer's subordinated deed of trust in the sum of $1,500,000. ROW, THEREFORE, we the undersigned do hereby recommend approval of the within Certificate of Completion and further recommend that the Redevelopment Agency authorize release and reconveyance of the Deed of Trust securing such performance 'by the developer as set forth in that certain Second Amended and - 1 - r 1 r j Restated Disposition and Development Agreement dated August 26, 1988. DATED: DATED: DATED• DATED: DATED: DATED: DATED: LOUIS J. SANDOVAL Director of Public Works ROSS CRANMER Assistant Building Official HOWARD ZELEFSKY Planning Director MIKE ADAMS Director of Community Development RAY PICARD Fire Chief ROBERT FRANZ Director of Administrative Services BARBARA KAISER Director of Economic Development The within Certificate of Completion is hereby approved this day of November, 1990. Executive Director APPROVED AS TO FORM: UAlL HUTTUN Agency Attorney - 2 - �r1 ATTACHMENT NO. 7 SCOPE OF DEVELOPMENT I. ARCHITECTURAL AND DESIGN: Each Separate Development Parcel within the Site shall be designed and developed as an integrated complex in which the buildings will have architectural excellence, both individually, as well as in the context of a total complex. The improvements to be constructed on the Site shall be of high architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed. The shape, scale of volume, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancement to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within the Project Area. The open spaces between buildings where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in -conformity with the Redevelopment Plan for the Project Area. II. DEVELOPER'S RESPONSIBILITIES: A. The Project. The Project to be constructed by the Developer on the Site shall be consistent with the Approvals referenced in Section 203, the final tract map(s) and final building plans yet to be approved by the City, and the Development Agreement between the City and Developer, as the same nay be amended from time to time. As of the Effective Date of this Agreement, the Project consists of the following: 1. On the Residential Portion of the Site, approximately one hundred thirty (130) residential condominium units in a four-story building over two (2) levels of subterranean parking in conformance with Division 9 of the Municipal Code of the City of Huntington Beach. Amenities will include a swimming pool, ja--uzzi, gym, clubhouse, security, and four (4) elevator:. The Developer shall maintain an on -site sales office and shall exercise reasonable diligence to market the condominium units for sale. The Developer agrees that iri no event shall the Developer lease or rent or ATTACHMENT NO. 7 Page 1 of 6 06/10/88 C—x1; t a { i , A" agree to lease or rent any of the condominium units during the six (6) month period commencing after the later of the following two (2) dates: (i) the date on which the Developer obtains its final public report for the condominium portion of the Project from the California Department of Real Estate, and (ii) the date that the Developer opens its on -site sales office and commences its marketing program to sell condominium units to the public. 2. On the Commercial Portion of the Site, approxi'nately ninety thousand (90,000) square feet of gross building area (79,500 square feet of gross leaseable area) in a three-story retail/commercial center over two (2) levels of subterranean parking. A six -plea novie theatre will be included in the Project. The theatres will have a maximum of one thousand sever hundred fifty (1,750) seats and shall contain approximately twenty-seven thousand (27,000) square feet of building area. Retail space will be on two levels with approximately thirty-six thousand six hundred (36,600) square feet plus approximately fifteen thousand nine hundred (15,900) square feet of office space on the third floor and mezzanine. The retail space will include a Maximum of ter. thousand (10,000) square feet of restaurants and a raximun of three thousand (3,000) square feet of nightclub -type uses. 3. Two hundred ninety-seven (297) parking spaces located in the two -level subterranean parking structure. 4. All landscaping, driveways, open areas, and other incidental on -Site improvements required in accordance with the Approvals, and the following off - Site improvements, to be constructed in accordance with the City's Downtown Design Guidelines•and Public Works standards: (i) curbs, gutters, landscaping, sidewalks, and street lights (but not signals) around the perimeter of the Site, and (ii) a ten -foot widening of the western side of Walnut Avenue adjacent to the. Site. B. Building Setbacks. Minimum building and parking setbacks shall. be in conformance with the Huntington Beach Municipal Code. C. Building Construction. Buildings shall be constructed in conformance with the Huntington Beach ATTACHMENT NO. 7 Page 2 of 6 O6/10/88 I �W' Municipal Code and in accordance with the approved final building plans. D. Signs. Signs shall be in conformance with the huntington Beach Municipal Code and more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the exterior of the improvements unless such signs and signing have been submitted to and approved by the City/Agency staff. Developer shall submit and implement a Planned Signing Program with respect to all signage on the Site. E. Screening. All outdoor storage of materials or equipment shall be enclosed or screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by the City/Agency staff and the provisions of the Huntington Eeach Municipal Code. F. Landscaping. The Developer shall provide and maintain all landscaping on the Site, including the public rights -of -way within the Site and the setback areas, in accordance with the approved landscape plans. G. Utilities. The Developer shall extend all utilities required for the development, use, and maintenance of the improvements on the Site (water, sewer, gas, electrical, and telephone) from their nearest available locations in the public rights -of -way at the boundary of the Site. The Developer shall be -responsible for all costs relating to such utility work, including the costs relating to (i) extending utilities from the perimeter of the Site to the improvements to be constructed thereon by the Developer, (ii) the tie-in of said utilities into the lines in the public rights -of -way on or immediately adjacent to the Site, and (iii) the utility meters. To the extent that utilities are located in the public rights -of -way on or adjacent to the Site, including without limitation any of the public alleys within the Site which are to be .vacated and abandoned by the City in accordance with Section 202 of this Agreement, and said utilities are required to be undergrounded and/or relocated in order to accommodate the development of the Site, the Developer agrees to underground and/or relocate such utilities, or cause them to be undergrounded and/or relocated. The Agency shall be responsible for all costs related to such utility undergrounding and/or relocation. The Agency shall reimburse the Developer for the costs for which the Agency is responsible in accordance with the following provisions. ATTACHMENT NO. 7 Page 3 of 6 06/10/86 Prior to entering into any contracts for the planning, design, engineering, or construction of any of the work required to be reimbursed by the Agency as set forth above, the Developer shall first submit a copy of each proposed contract to the Agency for approval. Prior to entering into any construction contract for any such work., the Developer shall first obtain a minimum of three (3) bids from qualified and responsible contractors, and shall submit such bids to the Agency for approval. The Developer's overhead or management fee for such work shall not exceed six percent (6%) of the balance of its costs for the reimbursable items and Developer shall not be paid any amount for profit on said portion of the work. It is understood and agreed that the Developer may enter into contracts with respect to all or any portion of the work required to be paid or reimbursed by the Agency pursuant to this Paragraph 1I.G which contracts include work beyond the scone of the Agency's reimbursement obligation. In such event, the Developer shall, to the extent practicable, require each proposed contractor to separately bid the portion of its work required to be paid by the Agency from the portion of the work required to be paid by the Developer. If it is not practical to separately bid the work on this basis, the Agency and Developer shall agree upon a fair and reasonable allocation of costs between that portion of the work required to be paid or reimbursed by the Agency and that portion of the work required to be paid by the Developer. It is further understood and agreed that the Developer shall comply with applicable requirements of law relating to such contracts, including without limitation non-discrimination and prevailing wage requirements, but the Developer shall not be required to comply with requirements applicable to the Agency but not to the Developer (including without limitation public competitive bidding procedures). After the Agency has approved a contract, the Developer shall not authorize any extra work or change orders which would increase the ariount of the Agency's payment or reimbursement obligation pursuant to this Paragraph II.G without first obtaining the Agency's approval; provided, however, that in the event of emergency work or if the Developer reasonably determines that the delays in obtaining Agency approval would result in additional costs being incurred, the Developer shall be entitled to approve such change orders or extra work as long as the overall scope of work is not thereby increased and Developer promptly notifies Agency of the action taken. In all circumstances, the Developer agrees to act reasonably to have the work required to be paid or reimbursed by the Agency pursuant to this Paragraph II.G completed at a reasonable cost, consistent with the parties' mutual objective of having such work performed by contractors with a reputation for high quality, experience, and reliability. The Agency shall have the authority on behalf of the Agency to approve or ATTACHME14T NO. 7 Page 4 of 6 06/10/88 U %woo disapprove the Developer's proposed contracts (and change orders and extra work) required to be paid for or reimbursed by the Agency. Approval shall not be unreasonably delayed, conditioned, or denied, and provided that the Developer shall have provided full information to the Agency, the Agency shall exercise reasonable diligence to take final action on a request for approval of a contract no later -than forty-five (45) days after request for approval is received and on a request for a change order or extra work no later than fifteen (15) days after request for approval is received. Any disapproval shall be in writing and shall state the reasons therefor. Upon receipt of a disapproval, the Developer shall exercise reasonable diligence to promptly remedy the problem (assuming the disapproval was reasonable) and resubmit the matter for approval within a reasonable time; provided, however, that notwithstanding any other provision of this Agreement to the contrary, the Developer's times -for performance shall be extended for a reasonable period of tine to accomplish such tasks. During the course of development of the Site, but not more frequently than monthly, the Developer shall submit to the Agency's Executive Director an itemized statement, with such supporting information as the Executive Director may reasonably require, documenting all of the Developer's costs eligible for reimbursement from the Agency pursuant to this Paragraph II.G. Each such itemized statement shall separately identify the costs incurred with respect to each separate contract approved by the Agency and, if applicable, the allocation of costs between those costs required to be paid or reimbursed by the Agency and those costs required to be paid by the Developer. The Agency shall promptly reimburse the Developer for all costs eligible for reimbursement within thirty (30) days after receipt of each itemized statement. H. Vehicular Access. The number and location of vehicular driveways and curb breaks shall be in accordance with the approved plans. I. Off -Site Parking Facilities. The Developer shall have no responsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph II.A.3 above. To the extent that either the City or Agency determine, at any time before or after the issuance of Certificates of Completion for the Residential Portion and Commercial Portion, that the parking on the Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. ATTACHMEP:T NO. 7 Page 5 of 6 06/10/88 In the event of any inconsistency between the Approvals and the narrative description of the Project in this Agreement, the Approvals shall govern. III. AGENCY'S RESPONSIBILITIES: A. Off -Site Parking Facilities. The Developer shall have no respcnsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph II.A.3 above. To the extent that either the City or Agency determine, at any time before or after the issuance of Certificates of Completion for the Residential Portion and Commercial Portion, that the parking on the 'Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. B. Utilities. The Agency agrees to provide, or cause to be provided, at no expense to the Developer, and within the time required in the Schedule of Performance, all utilities (water, sewer, gas, electrical, and telephone) required for the development, use, and maintenance of the Project on the Site, with sufficient capacities to adequately service the site, with such utilities to be located in the public streets or rights--of-way adjacent' to the Site. The Developer shall be responsible for extending utilities from said location(s) to the improvements located on the Site in accordance with Paragraph I1.G above. C. Easements and Permits. The Agency agrees to cooperate with the Developer in connection with the filing and processing of any and all applications for pernits and other approvals which may be required by the City in accordance with the Development Agreement or which may be required by any other governmental agency in connection with the development of the Site. 6/112/012304-0001/004 ATTACHMENT NO. 7 Page 6 of 6 06/10/88 aliforrlia Resorts lnternafonal, Inc November 2, 1990 Redevelopment Agency City of Huntington Beach 215 1/2 Main Street Huntington Beach, CA 92648 Subject: Tract 13478 To Whom It May Concern: California Resorts/Haseko Associates is requesting that the Redevelopment Agency issue a Certificate of Completion for the Pierside Pavilion project. All work on the Pierside Pavilion has been completed with the exception of tenant improvements on several spaces. Sincerely, CALIFORNIA RESORTS/HASEKO ASSOCIATES By: California esorts International, Inc. He ry Pens Project Manager pv 90-358 VF D R� fr p V �o�vE1op4,16Nro EPr. 222 5th. Street, Huntington Beach, CA 92648 (714) 960-3307 FAX (714) 960-2637 F. J' CITY OF HUNTINGTON BEACH t. INTER -DEPARTMENT COMMUNICATION 14UKTP.G10N UACM To Barbara Kaiser From Gail Hutton Director of Economic City Attorney Development Subject Date Pierside Pavilion/ November 14, 1990 Huntington Pier Colony Certificate of Completion and Reconveyance and Release of Deed of Trust The above captioned Certificate of Completion is completed and attached hereto per your request. To date however, we have not yet received the original Deed of Trust which we were told was sent to the developer's counsel after recording. Keith Bohr is to secure a certified copy from the County Recorder's office. After we have received and examined such copy we will be in a position to seek Agency authorization to execute the release at the neat Agency meeting. A resolution to accomplish such objective is transmitted herewith. GAIL HUTTON City Attorney cc: Arthur DeLaLoza, Deputy City Attorney Connie Brockway, City Clerk u Iw RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUEST FOR FULL RECONVEYANCE OF THE SUBORDINATED DEED OF TRUST IN CONNECTION WITH THE CALIFORNIA RESORTS MAIN PIER PHASE I PROJECT WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Agency") and California Resorts, a California general partnership ("Developer") have entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 ("Agreement"); and �v Such Agreement required the Developer to secure performance by executing a Subordinated Deed of Trust, a copy of which is attached hereto as Exhibit "A", and based upon the Certificate of Completion attached hereto as Exhibit "B", the Agency now wishes to release such Deed of Trust, NOW, THEREFORE, the Redevelcpment Agency of the City of Huntington Beach hereby authorizes the Executive Director to execute the Request for Full Reconveyance on such Deed. of Trust and any other document which is necessary to carry out the intent of this resolution so long as the same has been approved as to form by the Agency's counsel. PASSED AND ADOPTED by the Redevelopment Agency of the City i i of Huntington Beach at a regular meeting thereof held on _ day of , 1990. ATTEST: Agency Clerk INITIATED, REVIEWED AND APPROVED: Executive -Director Chairman APPROVED AS TO FORM: Agency Counsel •'iy..�,'r--li 2 - r�/ V ' Page 6 - 12/17 90 - Courc!l/Agency Agenda'/ (6)f` E--13. (RedFvelQpment_lcency) APPROVAL OF A?1NUAL_ REPORT OF THE HUNTINGTON BEACH REDEVELOPMENT EN F R FISCALYMR 1989/90 400.20 - Approve the Annual Report of the Huntington Beach Redevelopment Agency fcr Fiscal Year 1969/90 and direct staff to forward necessary ccpies of both the Agency's Annual Report and Audit to the State of California, Department of Housing and Community Development. 40pir o c/ cc/ 7 —a E-l4. (City Counc11)_ MEAD�WIiARK AIRPOR1 DEVELOPMENT AGREEMENT- gEVI FOROR COMPLIANCE - Accept the annual verbal report on -600.10 the Meadowlark Airport Development Agreement and schedule and notice a public hearing to determine compliance with the Development Agreement. pro v ccl 7 -o Ap,pro a id s-chedu lin5 C0pu.6/,G �Ca runs /�7�9/ (o '! OIteAll; E-15. S,City Council/RedeveloT)mep!_Agency) 511PPLEMENIAL 2 - LEGAL SE:2VICES - _51RADLING YSC'J�CARN R- Approve -600.30 and authorize execution of Supplemental Agreement No. 2 with Stradling, Yocca, Carlson & Rauth in an amount not to exceed $200,000 which will make account current and allow for future anticipated legal services not to exceed $B0,000, appropriate $110,000 to the Main -Pier Project Area Legal Services Account and appropriate $15,000 to the Talbert -Beach Redevelopment Project Area Legal Services Account. I�P,ero a cal 7 — O (Rec evelopment Agency} PIERSIDE PAVILION - HUNTINCTQNN PIER COLONYRTIFICATE OF CS?*iPLETION -- FULL RECONVEYANCE -600. 30 SUBORDINATED -DEED OF TRUST - MAIN -PIER REDMLOPMENT PROS T �RF�A - RESOLVIION NO. 2 Adopt Agency Resolution No. 210 - "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUEST FOR FULL RECONVEYANCE OF THE SUBORDINATED DEED OF TRUST IN CONNECTION WITH THE CALIFORNIA RESORTS MAIN -PIER PHASE I PROJECT." AHD Authorize the Agency's Executive Director to execute and havf recorded the Certificate of Completion for the Main -Pier Phas I Project. c%ussc 7-a E-17. ( v Coun d}) JOINT POWERS AGREEMNT -- PUBLIC CADLE TELEMISION AUTHOR - Approve and authorize execution of thf -600.45 revised Public Cable Television Authority Joint Powers Agreement of which the City is a member. (Section 6 - paymer 'to•nir-ectors, Section 10 = Liability, Section 12 - Membershii Section 5.4 - Board Powers). Xne.rove,-1 -7-0 (6) (12/17/9� �! #4 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTiNGTON MACH To Barbara •Kaiser. FromConnieBrockway Subject 12/11/9'0 Agenda Item -Pierside Date 3/8/91 Will you please provide a date that this office can expect to receive the original documents on the Pierside Pavilion/Huntington Pier Colony Certificate of Completion etc; Thanks, Connie REQUEST F. REDEVELOPMENT%.oGENCY ACTION . APPROVED BY CITY 'UL tiCIi- l - /�ai�•r' � aIy --IM 9D-37 02 •- / ._ 1S��..Q �� Date December rY r,srxx 17, 1990 Submitted to: Honorable Chairman and Redevelopment Agency hers ,) Submitted by: rime' T. Ubexvaga, motive Prepared by: Barbara A. Kaiser, Deputy City Administrator/Econmic Develop ►ent 1M. 1• PAVnZCff/fKUMUT0N • 1M •• • TTCXIIE OF •• N al • F a -� y Consistent with • . Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: gI•ATFIrtFNr OF :ISSUE: With the exception of tenant improvements within the ccrmercial portion and minor cleanup, the Pierside Pavilf n Pier Colony (N.ain-Pier Phase I) project has been oapleted and is in satisfactory carpl with conditions imposed under the Disposition and Development Agreement with the Redevelopment Agency. tl.?_w•�WIy.i1� M • 1) Authorize the Agency Clerk and Chairman to execute the attached ` Redevelopment Agency Resolution No. -7-1 0 , authorizing the Agency's Executive Director to execute full reoonveyanoe of the Subordinated Deed of Trust; and 2) Authorize the Agency's Executive Director to execute and have recorded the Certificate of Completion for the Main --Pier rhase I project. On August 25, 1988, the Radevelop wnt Agency of the City of Huntington Beach entered into a Second Amended and Restated Disposition and Development iz;sent (DDA) with California Resorts for the disposition of certain property and the develcpment of c mrercial, residential, and related itrpraven. ents. :section 415 of the DDiA*ates that once the developer has ceopleted all oonstructi.on and develcpment required within the agreement, excluding normal and customary tenant iirpravenent items, the Agency shall furnish the developer with a Certificate of Ccx�letion upon writt�-i request therefore by the developer, and record.the full reconveyarre subordinated Deed of Trust of city property being conveyed to the project. E' PIOl1185 Briefly stated, the developer's responsibilities included the construction of: 130 residential eondcminium units, approximately 90,000 square feet of gross Wilding area in a multi -story retail/commercial venter aver two levels of rUbterranean Pa'k1ng, and all onsite improvements, as required. As illustrated on the attached M tificate of Coppletion, the developer has completed the above -described obligations, as required by the W. �ilrrrra�c saw: None req ired as a result of this action. 1) Certificate of Completion. 2) Resolution. 3) California Resorts letter dated November 2, 1990. JgDjA %KAtms:ip RESOLUTION 210 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUEST FOR FULL RECONVEYANCE OF THE SUBORDINATED DEED OF TRUST IN CONNECTION WITH THE CALIFORNIA RESORTS MAIN PIER PHASE I PROJECT WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Agency") and California Resorts, a California general partnership ("Developer") have entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 ("Agreement"); and Such Agreement required the Developer to secure performance by executing a Subordinated Deed of Trust, a copy of which is attached hereto as Exhibit "A", and based upon the Certificate of Completion attached hereto as Exhibit "B", the Agency now wishes to release such Deed of Trust, NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach hereby authorizes the Executive Director to execute the Request for Full Reconveyance on such Deed of Trust and any other document which is necessary to carry out the intent of this resolution so long as the same has been approved as to form by the Agency's counsel and further so long as the final completion of all improvements is guaranteed by bond satisfactory to the Executive Director and the Developer agrees to hold Agency and City harmless for such Full Reconveyance prior to said final completion. - 1 - PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on 17th day of December , 1990. - Chairman ATTEST: Agency Clerk INITIATED, REVIEWED AND APPROVED: Executive Director APPROVED AS TO FORM: Agency Coun e l �oCzd� - 2 - 210 Res. No. 210 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 17tb day of December 19_gL_, and that it was so adopted by the following vote: AYES: Members: MacAllister, Winchell. Silva, Green,_ KP11y., Robitaille, Moul on - Patterson NOES: Members: None ABSENT: Members: None. Clerk of the Redpvelopmewft Agency of the City of Huntington Beach, Ca. CERTIFICATE OF COMPLETION PIERSIDE PAVILION/HUNTINGTON PIER COLONY (MAIN PIER PHASE I PROJECT) WHEREAS, the developer, CALIFORNIA RESORTS, a California partnership, has requested a Certificate of Completion for the above captioned project, more particularly described in Exhibit "A" hereto; and We the undersigned have reviewed the attached Scope of Development, the Final Tract Map, Final Building Plans and the Development Agreement within our respective jurisdictions relating to such project; and All of the developer's responsibilities have been completed, including but not limited to all construction and development together with all of the improvements off of the site which are required to be completed by the developer prior to the commencement of business on said site; and We know of no reason to withhold the release of the developer's subordinated deed of trust in the sum of $1,500,000. NOW, THEREFORE, we the undersigned do hereby recommend approval of the within Certificate of Completion and further recommend that the Redevelopment Agency authorize release and reconveyance of the Deed of Trust securing such performance by the developer as set forth in that certain Second Amended and - 1 - Restated Disposition and Development Agreement dated August 26, 1988. DATED: DATED: DATED: DATED: DATED: DATED: DATED: LOUIS J. SANDOVAL Director of Public Works ROSS CRANMER Assistant Building Official HOWARD ZELEFSKY Planning Director MIKE ADAMS Director of Community Development RAY PICARD Fire Chief ROBERT FRANZ Director of Administrative Services BARBARA KAISER Director of Economic Development The within Certificate of Completion is hereby approved this day of November', 1990. APPROVED AS TO FORM: GAIL HUTTON Agency Attorney - 2 - Executive Director ATTACHMENT NO. 7 SCOPE OF DEVELOPMENT I. ARCHITECTURAL AND DESIGN: Each Separate Development Parcel within the Site shall be designed and developed as an integrated complex in which the buildings will have architectural excellence, both individually, as well as in the context of a total complex. The improvements to be constructed on the Site shall be of high architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed. The shape, scale of volume, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancemenl_ to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within the Project Area. The open spaces between buildings where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity with the Redevelopment Plan for the Project Area. II. DEVELOPER'S RESPONSIBILITIES: A. The Project. The Project to be constructed by the Developer on the Site shall be consistent with the Approvals referenced in Section 203, the final tract map(s) and final building plans yet to be approved by the City, and the Development Agreement between the City and Developer, as the same may be amended from time to time. As of the Effective Date of this Agreement, the Project consists of the following: 1. On the Residential Portion of the Site, approximately one hundred thirty (130) residential condominium units in a four-story building over two (2) levels of subterranean parking in conformance with Division 9 of the Municipal Code of the City of Huntington Beach. Amenities will include a swimming pool, jacuzzi, gym, clubhouse, security, and four (4) elevators. The Developer shall naintain an on -site sales office and shall exercise reasonable diligence to market the condominium units for sale. The Developer agrees that in no event shall the Developer lease or rent or ATTACHMENT NO. 7 Page 1 of 6 06/10/88 CY,IAIa tr agree to lease or rent any of the condominium units during the six (6) month period conmencing after .the later of the following two (2) dates: (i) the date on which the Developer obtains its final public report for the condominium portion of the Project from the California Department of Real Estate, and (ii) the date that the Developer opens its on -site sales office and commences its marketing program to sell condominium units to the public. 2. On the Commercial Portion of the Site, approximately ninety thousand (90,000) square feet of gross building area (79,500 square feet of gross leaseable area) in a three-story retail/commercial center over two (2) levels of subterranean parking. A six-plex movie theatre will be included in the Project. The theatres will have a maximum of one thousand seven hundred fifty (1,750) seats and shall contain approximately twenty-seven thousand (27,000) square feet of building area. Retail space will be on two levels with approximately thirty-six thousand six hundred (36,600) square feet plus approximately fifteen thousand nine hundred (15,900) square feet of office space on the third floor and mezzanine. The retail space will include a maximum of ten thousand (10,000) square feet of restaurants and a maximum of three thousand (3,000) square feet of nightclub -type uses. 3. Two hundred ninety-seven (297) parking spaces located in the two -level subterranean parking structure. 4. All landscaping, driveways, open areas, and other incidental on -Site improvements required in accordance with the Approvals, and the following off - Site improvements, to be constructed in accordance with the City'a s Downtown Design Guidelines nd Public Works standards: (i) curbs, gutters, landscaping, sidewalks, and street lights (but not signals) around the perimeter of the Site, and (i i) a ten -foot widening of the western side of Walnut Avenue adjacent to the Site. B. Building Setbacks. Minimum building and parking setbacks shall.. be in conformance with the Huntington Beach Municipal Code. C. Building Construction. Buildings shall be constructed in conformance with the Huntington Beach ATTACHMENT NO. 7 Page 2 of 6 06/10/88 Municipal Code and in accordance with the approved final building plans. D. Signs. Signs shall be in conformance with the Huntington Beach Municipal Code and more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the exterior of the improvements unless such signs .and signing have been submitted to and approved by the City/Agency staff. Developer shall submit and implement a Planned Signing Program with respect to all signage on the Site. E. Screening. All outdoor storage of materials or equipment shall be enclosed or screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by the City/Agency staff and the provisions of the Huntington Peach Municipal Code. F. Landscaping. The Developer shall provide and maintain all landscaping on the site, including the public rights -of -way within the Site and the setback areas, in accordance with the approved landscape plans. G. Utilities. The Developer shall extend all utilities required for the development, use, and maintenance of the improvements on the Site (water, sewer, gas, electrical, and telephone) from their nearest available locations in the public rights -of -way at the boundary of the Site. The Developer shall be responsible for all costs relating to such utility work, including the costs relating to (i) extending utilities frog• the perimeter of the Site to the improvements to be constructed thereon by the Developer, (ii) the tie --in of said utilities into the lines in the public rights -of -way on or immediately adjacent to the Site, and (iii) the utility meters. To the extent that utilities are located in the public rights -of -way on or adjacent to the Site, including without limitation any of the public alleys within the Site which are to be •vacated and abandoned by the City in accordance with Section 202 of this Agreement, and said utilities are required to be undergrounded and/or relocated in order to accommodate the development of the Site, the Developer agrees to underground and/or relocate such utilities, or cause them to be undergrounded and/or relocated. The Agency shall be responsible for all costs related to such utility undergrounding and/or relocation. The Agency shall reimburse the Developer for the costs for which the Agency is responsible in accordance with the following provisions. ATTACHMENT NO. 7 Page 3 of 6 06/10/86 Prior to entering into any contracts for the planning, design, engineering, or construction of any of the work required to be reimbursed by the Agency as set forth above, the Developer shall first submit a copy of each proposed contract to the Agency for approval. Prior to entering into any construction contract for any such work., the Developer shall first obtain a minimum of three (3) bids from qualified and responsible contractors, and shall submit such bids to the Agency for approval. The Developer's overhead or management fee for such work shall not exceed six percent (6%) of the balance of its costs for the reimbursable items and Developer shall not be paid any amount for profit on said portion of the work. It is understood and agreed that the Developer may enter into contracts with respect to all or any portion of the work required to be paid or reimbursed by the Agency pursuant to this Paragraph II.G which contracts include work beyond the scope of the Agency's reimbursement obligation. In such event, the Developer shall, to the extent practicable, require each proposed contractor to separately bid the portion of its work required to be paid by the Agency from the portion of the work required to be! paid by the Developer. If it is not practical to separately bid the work on this basis, the Agency and Developer shall agree upon a fair and reasonable allocation of costs between that portion of the work required to be paid or reimbursed by the Agency and that portion of the work required to be paid by the Developer. It is further understood and agreed that the Developer shall comply with applicable requirements of la-; relating to such contracts, including without limitation non --discrimination and prevailing wage requirements, but the Developer shall not be required to comply with requirements applicable to the Agency but not to the Developer (including without limitation public competitive bidding procedures). After the Agency has approved a contract, the Developer shall not authorize any extra work or change orders which would increase the amount of the Agency's payment or reimbursement obligation pursuant to this Paragraph II.G without first obtaining the Agency's approval; provided, however, that in the event of emergency work or if the Developer reasonably determines that the delays in obtaining Agency approval would result in additional costs being incurred, the Developer shall be entitled to approve such change orders or extra work as long as the overall scope of work is not thereby increased and Developer promptly notifies Agency of the action taken. In all circumstances, the Developer agrees to act reasonably to have the work required to be paid or reimbursed by the Agency pursuant to this Paragraph II.G completed at a reasonable cost, consistent with the parties' mutual objective of having such work performed by contractors with a reputation for high quality, experience, and reliability. The Agency shall have the authority on behalf of the Agency to approve or ATTACHMENT NO. 7 Page 4 of 6 06/10/88 disapprove the Developer's proposed contracts (and change orders and extra work) required to be paid for or reimbursed by the Agency. Approval shall not be unreasonably delayed, conditioned, or denied, and provided that the Developer shall have provided full information to the Agency, the Agency shall exercise reasonable diligence to take final action on a request for approval of a contract no later than forty-five (45) days after request for approval is received and on a request for a change order or extra work no later than fifteen (15) days after request for approval is received. Any disapproval shall be in writing and shall state the reasons therefor. Upon receipt of a disapproval, the Developer shall exercise reasonable diligence to pronptly remedy the problem (assuming the disapproval was reasonable) and resubmit the matter for approval within a reasonable time; provided, however, that notwithstanding any other provision of this Agreement to the contrary, the Developer's times for performance shall be extended for a reasonable period of time to accomplish such tasks. During the course of development of the Site, but not more frequently than monthly, the Developer shall submit to the Agency's Executive Director an itemized statement, with such supporting information as the Executive Director ray reasonably require, documenting all of the Developer's costs eligible for reimbursement from the Agency pursuant to this Paragraph II.G. Each such itemized statement shall separately identify the costs incurred with respect to each separate contract approved by the Agency and, if applicable, the allocation of costs between those costs required to be paid or reimbursed by the Agency and those costs required to be paid by the Developer. The Agency shall promptly reiriburse the Developer for all costs eligible for reimbursement within thirty (30) days after receipt of each itemized statement. H. Vehicular Access. The number and location of vehicular driveways and curb breaks shall be in accordance with the approved plans. 1. Off -site Parking Facilities. The Developer shall have no responsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph II.A.3 above. To the extent that either the City or Agency determine, at any time before or after the issuance of Certificates of Completion for the Residential Portion and Commercial Portion, that the parking on the Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. ATTACHMENT NO. 7 Page 5 of 6 06/10/88 . ' - �J �Id In the event of any inconsistency between the Approvals and the narrative description of the Project in this Agreement, the Approvals shall govern. I1I. AGENCY'S RESPONSIBILITIES: A. Off -Site Parking Facilities. The Developer shall have no responsibility to construct or maintain parking for the uses to be conducted on the Site beyond the 297 parking spaces required pursuant to the Approvals and referenced in Paragraph I1.A.3 above. To the extent that either the City or Agency determine, at any time before or after the: issuance of certificates of Completion for the Residential Portion and Commercial Portion, that the parking on the "Site is deficient, the Agency shall have the sole responsibility of remedying such deficiency off of the Site. B. Utilities. The Agency agrees to provide, or cause to be provided, at no expense to the Developer, and within the time required in the Schedule of Performance, all utilities (water, sewer, gas, electrical, and telephone) required for the development, use, and maintenance of the Project on the Site, with sufficient capacities to adequately service the Site, with such utilities to be located in the public streets or rights -of -way adjacent to the Site. The Developer shall be responsible for extending utilities fron said location(s) to the improvements located on the Site in accordance with Paragraph 1I.G above. C. Easements and Permits. The Agency agrees to cooperate with the Developer in connection with the filing and processing of any and all applications for permits and other approvals which may be required by the City in accordance with the Development Agreement or which may be required by any other governmental agency in connection with the development of the Site. 6/122/012304-0001/004 ATTACHMENT NO. 7 Page 6 of 6 06/10/88 L49 alifomia Resorts lntemabonal, Inc November 2, 1990 Redevelopment Agency City of Huntington Beach 215 1/2 Main Street Huntington Beach, CA 92648 Subject: Tract 13478 To Whom It May Concern: California Resorts/Haseko Associates is requesting that the Redevelopment Agency issue a Certificate of Completion for the Pierside Pavilion project. All work on the Pierside Pavilion has been completed with the exception of tenant Improvements on several spaces. Sincerely, CALIFORNIA RESORTS/11ASEK0 ASSOCIATES By: California esorts International, Inc. l r I Hery Pens Project Manager pv 90-358 R't C"f t't 1990NOV 0 4'zNr °CPr. 222 5th. Street, Huntington Beach, CA 92648 (714) 960-3307 FAX (714) 960.2637 H. ,, CITY OF HUNTINGTON BEACH J INTER -DEPARTMENT COMMUNICATION HIMTINGTON NACH To Barbara i:aiser From Gail Hutton Director of Economic City Attorney Development Subject Date Pierside Pavilion/ November 14, 1990 Huntington Pier Colony Certificate of Completion and Reconveyance and Release of Deed of Trust The above captioned Certificate of Completion is completed and attached hereto per your request. To date however, we have not yet received the original Deed of Trust which we were told was sent to the developer's counsel after recording. Keith Bohr is to secure a certified copy from the County Recorder's office. After we have received and examined such copy we will be in a position to seek Agency authorization to execute the release at the next Agency meeting. A resolution to accomplish such objective is transmitted herewith. -14�1 fdccz�_ GAIL HUTTON City Attorney cc: Arthur DeLaLoza, Deputy City Attorney Connie Brockway, City Clerk 1 I ?-- c-< /o RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUEST FOR FULL RECONVEYANCE OF THE SUBORDINATED DEED OF TRUST IN CONNECTION WITH THE CALIFORNIA RESORTS MAIN PIER PRASE I PROJECT WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Agency") and California Resorts, a California general partnership ("Developer") have entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 ("Agreement"); and Such Agreement required the Developer to secure performance by executing a Subordinated Deed of Trust, a copy of which is attached hereto as Exhibit "A", and based upon the Certificate of Completion attached hereto as Exhibit "B", the Agency now wishes to release such Deed of Trust, NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach hereby authorizes the Executive Director to execute the Request for Full Reconveyance on such Deed of Trust and any other document which is necessary to carry out the intent of this resolution so long as the same has been approved as to form by the Agency's counsel. - 1 - ME PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on day of 1990. ATTEST: Agency Clerk INITIATED, REVIEWED AND APPROVED: rxec:utive Director Chairman APPROVED AS TO FORM: Agency Counsel t 4-1 o r. • iy ..E/, , �'! Z-- a `5 5 w 2 � 1 } r ': V Page 6 - 12/17/90 -- Counc4il/Agency Agenda (6) E-13. (Red vtlopment Ag PP V F ANNUAL RF. R ITUNTINGTON BEACH REDLOPMENT AGENCY FOR FISCAI YEAR 1-289/9QI 400.20 - Approve the Annual Report of the Huntington Beach Redevelopment Agency for Fiscal Year 1989/90 and direct staff to forward necessary copies of both the Agency's Annual Report and Audit to the State of California, Department of Housing and Community Development. 801_2 7 --o E-19 . ( Ci tY Counc i 11_ MEADOWLARK AI R RT DEVELQPMENT AGRF.EMNT - REVIF:w_FOROR COMPLIANCE Accept the annual verbal report on -600.10 the Meadowlark Airport Development Agreement and schedule and notice a public hearing to determine compliance with the Development Agreement. fin° a cd 7 -o �pproa �d SChed:�l�r5 o:0e" �� fCAriri5 117191 G -! </h�rrAl/isr E-15. (City Coungil/Redevelo Mr n_L_ Aaencyl SUPPLEMENTAL R N iQ_,_ 2 - LEQAL 2ERVICES - 5 ADLING YOCCA CARItEQN_ y,_kU_T i - Approve -600.30 and authorize execution of Supplemental Agreement No. 2 with Stradling, Yocca, Carlson L Rauth in an amount not to exceed $200,000 which will make account current and allow for future anticipated legal services not to exceed $80,000, appropriate $110,000 to the Main -Pier Project Area Legal Services Account, and appropriate $15,000 to the Talbert -Beach Redevelopment Project Area Legal Services Account. �ppro v c-d 7 — o CE-16. (Redevelopment Agency) -PIERS DE PAVILIQN -- HUNTIKQ_TQ PIER COLD ERTIFICATE OF ---COMPLETION _- _FULL RE_QO=, ANCE -600.30 ZUBORDINATED DEED OF TRUST - MAIN -PIER R DEVEL PMEN PRWEgT AREA -- RESOLUTION NO, 219 Adopt Agency Resolution No-, 210 - "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUEST FOR. FULL RECONVEYANCE OF THE SUBORDINATED DEED OF TRUST IN CONNECTION WITH THE CALIFORNIA RESORTS MAIN -PIER PHASE I PROJECT." AND Authorize the Agency's Executive Director to execute and have recorded the Certificate of Completion for the Main -Pier Phase I Project. �! t,;N. e,7 o&,:;f 6Y Llir`ij ,6 `ram r� i.rcfuc� �io lc� /¢tirrn /rs3 el"s-_ 7 -a E-17. _(Ci m_CQu_nci l )_JOINT-POWERS_AGREEMENT, - PUBLIC LADLE TELITIISION_AUTHORITY - Approve and authorize execution of the -600.45 revised Public Cable Television Authority Joint Powers Agreement of which the City is a member. (Section 6 - payment :to.Dir-ectors, Section 10 = Liability, Section 12 -- Membership, Section 5.4 - Board Powers). Aee,r-ove,�l 7­0 (6) (12/17/90. REQJ-ST FOR CITY COW*OIL/ . REDEVELOPMENT AGENCY XtT1ON,:D9,-36 Date November 5, 1990 Submitted to: Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Michael T. Uberua;a, City Adminlstrator/Chief Executive Officer it Submitted by: &Allv__- Barbara A. Kaiser, -Deputy City Administrator/Economic Development Prepared by: EXCLUSIVE NEGOTIATION - AGREEMENT; CALIFORNIA RESORTS Subje-.t: INTERNATIONAL, INC.; BLOCK 101; MAIN -PIER REDEVELOPMENT PROJECT AREA t� x Consistent with Council Policy? t4 Yes [ ] New Policy or Exception 4 t•a � n Statement of Issue, Recornmeidation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: r At its meeting of October 1, 1990, the Agency directed the preparation of an ExcIuC=tsive Negotiation Agreement with California Resorts International, Inc. (CRI) for the proposed development of 94 condominiums and 10,000 square feet of commercial/retail space on Block 101. The site is bounded by Pacific Coast Highway, Lake Street, Second Street and both sides of Walnut Avenue. RE MM D Staff recommends continuance of this item for City •Council consideration until December 17, 1990 due to the necessity to consider possible eminent domain actions to Implement the project as proposed. ANALYST : California Resorts International, Inc. proposes the development of 94 condominiums and 10,000 square feet of commercial space on Block 101. Block 101 is bounded by Walnut Avenue, Lake Street, Pacific Coast Highway, and Second Street (see map attached). CRI currently owns 3 parcels along Pacific Coast Highway. Attached is a land use map Indicating existing residential, commercial and oil uses.' The Exclusive Negotiation Agreement would provide a 180 day period in which to assess the feasibility of the proposed use. The issues which would need to be addressed include the following: 1. EMINENT DOMAIN: The assemblage of the site would require the acquisition of ten privately held parcels (8 owners) not currently owned by the developer or City. Should the developer or Agency be unable to affect willing -seller purchases of any of these parcels, it would be necessary for the Agency to consider the use of eminent domain to complete the consolidation of the site. The Agency's power to invoke eminent domain is limited by the requirements of Agency Resolution No. 48. The estimate of the costs for these acquisitions is approximately $8.5 million. RCA/RAA ED 90-36 November 5, 1990 Page two Approximately twenty-one households would be displaced by the acquisitions and clearance of the site and the necessary realignment of Walnut Avenue. While the exact financial status of these households can not be determined without Interviews, the Agency's consultant, Pacific Relocation, Inc. has prepared an estimate of relocation costs of approximately $400,000 assuming that all these households are of lower income. This does not include an estimate of benefits to those owning the oil facilities. 3. WALNUT AVENUE REALIGNMENT: Walnut Avenue currently runs diagonally through the site. To consolidate this site and realign Walnut Avenue to its ultimate location requires acquisition of three of the parcels discussed in item 1 above and will also result in the cost of construction of the new alignment. The utilities located in the current public right-of-way will need to be relocated to the new alignment. In addition to the usual utilities, a 54 inch county sewer trunk line must be relocated. 4. CONFORMANCE WITH SPECIFIC PLAN: The Downtown Specific Plan District Five requires that one-half of a project's square footage be devoted to commercial uses and the other to residential uses. If examined on a one block basis, the proposed project does not conform to this requirement with I0,000 square feet of commercial versus 144,312 square feet of residential (94 condominium units). If examined on a three block basis, the proposed project also does not conform to this requirement with 137,792 square feet of commercial versus 288,612 square feet of residential. S. HOUSING OBLIGATIONS: State law requires that any time a Iow income housing unit is lost through redevelopment, it is the Agency's obligation to replace this unit within four years after its demolition (Replacement Housing obligation). Such replacement unit may be on -site or elsewhere in the community. The size of each replacement unit (bedrooms) must match those demolished. The Agency does not have a program to implement this requirement and therefore must pass on this responsibility to the developer. Section 33413 of the Health and Safety Code requires that fifteen percent of the privately developed housing in a project area be affordable to low income households and forty percent of these be affordable to very low income households. These units may be provided on -site or elsewhere, but MUST be within the project area. If these affordable units are not provided on site, the cost to provide them elsewhere becomes an additional project cost. Staff recommends deferral of this item until December 17, 1990. The project may require a rescission or modification of Resolution 48 and the necessity of eminent domain to implement. RCA/RAA ED 90-36 November 5, 1990 Page three FUNDING SOURCE: No funds are required for this action. ALTERNATI 1. Defer action to the next regularly scheduled City Council meeting. ATTACHMENTS: Site Map Existing Land Use Map MTU/BK:jar 7953r R'iDMAN DE LAPP OLVVER NELSON z � A Q .o V) Ln ORANGE COAST SPECIALTIES PROJECT NO. 2 BLOCK 101 OWNERSHIP LIST A.P.N. OWNER 024-162-19 Gordon De Lapp None - Vacant (oil) 320 Joliet Street Huntington Beach, CA 92648 024-162-23 John Parnakian 205, 207 & 209 205 First Street Lake Street Huntington Beach, CA 92648 024-162-24 Genevieve Vanian 201 Lake Street 2405 Kenilworth Avenue c/o Dorcas Tokes Los Angeles, CA 90039 024-162-25 Georgia Hunnicutt None - Vacant (oil) 4924 Marlborough Way Crane & Barbara Carmichael, CA Firey Hunnicutt 95608 024--163-01 City of H. B. 101 Walnut Avenue 2000 Alain St.. H.B. 024-163-02 Thomas Holwerda 117 & 121 Walnut 6736 Hillpark Drive Los Angeles, CA 90068 024-163-03,09 Otis Wesley Peck (03) - None - Vacant (oil) 8404 Lexington Road (09) - 114 PCH Downey, California 90241 024-163-09,10,11 Beach Resorts, Inc. (08) - 110 PCH 222 -- 5th Street (10,11) - 120 PCH Huntington Beach, CA 92648 024-163-12.13 Allen L. Nelson (12) - 112 2nd Street 8404 Lexington Road c/o Otis Wesley Peck (13) - 114 & 116 2nd Street Downey, CA 90241 024-163-14 Harvey D. Pease 102 PCH 314 Carnation Avenue Corona Del Mar, CA 92625 0430R - List 0429R - Variables to 2 N 0c CL �"Lcj d C,0 v if FRGI F-tCr coAS + VA%G^%-�wrW� REGIST FOR CITY COUP AIL/ RH 89-88 R NCY ACMON 19� Date October 2, 1989 Submitted to: Honor hlP h� c ncil/Redevelopment Agency Members Submitted by: Paul E. Cook, City Administrator/Executive Direct ., Prepered by: Paul E. Cook, City Administrator/Executive Director FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED Subject: DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE H.B. REDEVELOPMENT AGENCY AND CALIFORNIA RESORTS �I Cons;stent with Council Policy? [) Yes [ ] New Policy or Exception Statement of Issue, Recommondation, Analysis, Funding Source, Alternative Actions, Attachments: STATEM I OF ISSiFF: Transmitted for the City Council/Redevelopment Agency's consideration is the First Amendment to the Second Amended and Restated Disposition and Development Agreement with California Resorts. Additionally, there are resolutions that, when adopted and implemented, will lead to the development of improvements in a portion of the Main -Pier subarea of the Main -Pier Redevelopment Project Area. ao(eg armagallicel Staff recommends that the following separate actions be taken: I) Conduct a joint public hearing on the First Amendment to the Second Amended and Restated Disposition and Development Agreement; 2) Adopt appropriate resolutions of the City Council/Redevelopment Agency approving the First Amendment; 3) Approve Chase Manhattan Bank as lender of record; 4) Approve Subordination Agreement; 5) . Approve Estoppel Certificate; and 6) Approve Guaranty. ANALYSIS: On August 26, 1988, the Agency and City Council approved the Second Amended and Restated Agreement with California Resorts (formerly Huntington Pacifica 1) to develop at least Twenty Five Million Dollars ($25,000,000) in improvements, exclusive of land value. The project consists of a mixed -use project with an entertainment/commercial center consisting of a 1,750-seat, six -plea movie theatre, 23,575 sq.ft. of commercial, 15,925 sq.ft. of office space, a 10,000 sq.ft. restaurant, and a maximum of 3,000 sq.ft. night club. PI 0 434 The described development is proposed over an approximate 5-acre area bounded by Walnut Avenue on the north; Second Street on the east; Pacific Coast Highway on the south; and Main Street and the alley between Main & Third Streets on the west. On December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all its rights, title, and interest in and to the DDA to California Resorts/Haseko Associates, a California general partnership doing business as a joint venture. The DDA provides that in the event that the developer fails to complete construction of the project, the developer must either reconvey the site to the Agency or pay liquidated damages to the Agency in the amount of One Million, Five Hundred Thousand Dollars ($1,500,000). The developer's contingent obligation to pay liquidated damages is secured by a Subordinated Deed of Trust. The DDA further provides that the Agency shall execute such documents as may be reasonably requested by the Developer and by any approved lender to effectuate the subordination of the developer's contingent obligation to the lien of such lender's mortgage or Deed of Trust. In accordance with these provisions, the developer has requested that the Redevelopment Agency approved Chase Manhattan Bank as the lender of record and approve the Estoppel Certificate and a Subordination Agreement in connection with the proposed Forty -One Million Dollar construction loan. The Estoppel Certificate generally confirms that the Disposition and Development Agreement by and between the Redevelopment Agency and the developer is in full force and effect. The Subordination Agreement effectuates the subordination of the Iien of the Agency's Deed of Trust to the construction loan as contemplated in the DDA. The standard terms and conditions of the Estoppel Certificate and Subordination Agreement require certain waivers, representations, and acknowledgments by the Agency In connection with its Deed of Trust and the provisions of the DDA. In two instances, this requires an amendment to the DDA, as discussed below. In exchange for the Agency's approval of the Subordination Agreement and Estoppel Certificate and its amendment to the DDA, and in order to strengthen the security of the Agency's interest, Agency Special Counsel requested a corporate Guaranty from Haseko (California) Inc., the parent corporation of Haseko Pier Colony, a general partner of the developer, to protect the Agency's One Million, Five Hundred Thousand Dollar interest. By securing the corporate Guaranty, the Agency's interest is better protected than it otherwise would have been in second position to the Forty -One Million Dollar construction loan from Chase Manhattan. In the event the developer defaults in the construction of the Project, the Guaranty provides the Agency with additional security for the developer's obligation and is enforceable against the Guarantor. Keyser Marston Associates, Inc., has reviewed the financial statements and interviewed a financial officer of the proposed guarantor and has confirmed that the assets and net worth of Haseko (California) Inc., are sufficient to support the Guaranty. nvir nm n 1 Status -- The proposed Amendment and related documents deal exclusively with financial concerns regarding the Project that was subject to previous environmental review. These documents are exempt from CEQA under the general rule that CEQA applies only to activities which have potential significant effect on the environment. !"Am, mlYil" I.ToW None as a result of this action. r -i ALTERNATIVEA_CILQN: 1) Continue action on the First Amendment to the Second Amended and Restated DDA and related documents to allow for additional review time. 2) Direct staff to further negotiate specific points of the Amendment, the Subordination Agreement, and/or the Estoppel Certificate with the developer. 3) Deny the approval of the Amendment and/or related documents, and continue with the provisions of the existing Second Amended and Restated Disposition and Development Agreement. ATTACHMENTS: 1) Redevelopment Agency Resolution. 2) City Council Resolution. 3) First Amendment to the Second Amended DDA. 4) Subordination Agreement. 5) Estoppel Certificate. 6) Guaranty. 7) Keyser Marston Economic Analysis. PEC/KBB:lp 5174h REQUEST F011--v EDEVELOPMENT �r&ENCY ACTION RH 89-87 Date September 18, 1989 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Paul E. Cook, Executive Director L Prepared by: Paul E. Cook, Executive Director Subject: FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE H.B. Consistent with CoMRi49PMENT f 9JSNCY MRJCA Icy OR r Ex ep �o RTS Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: r' 1 S,TATEMENT_OF.ISST jE: For the developer to obtain construction financing for the Main -Pier Phase I project, the Redevelopment Agency must subordinate their Deed of Trust to the new party, California Resorts/Haseko Associates. RECOMMENDATION: Continue this Item to the Agency's meeting of October 2, 1989. ANALYSIS: The Second Amended and Restated DDA provides for the Agency to subordinate its Deed of Trust for purposes of allowing the developer to obtain construction financing. Since the public hearing for this amendment had been previously advertised and finalization of documents were not completed by the September 6 agenda deadline, staff is requesting a continuance until your meeting of October 2. FUNDING SOURCE• 7! None required as a result of this action. ATT¢_CHMENI�' m -<r� n u5 Ln C1 rn :0 0 None. x F PEC/KBB:lp w 5158h Plo/1 /85 HUNTINGTON BEACH REDEVELOPMENT AGENCY RULES GOVERNING PARTICIPATION AND REENTRY PREFERENCES FOR OWNERS, BUSINESSES, AND TENANTS IN ANY REDEVELOPMENT PROJECT AREA TABLE OF CONTENTS SecUlon Page 1.0 Purpose and Intent 1 2.0 Definitions 1 3.0 General Procedures 2 4.0 Participation by Owners of Real Property 3 4.1 Participation In the Same Location 3 4.2 participation in a Different Location 3 5.0 Participation by Tenants 4 5.1 Participating as Owners 4 5.2 Business Tenants Participating as Tenants 4 6.0 Conforming Owners 4 7.0 Procedure for Becoming a Participant 5 7.1 Submittal of a Statement of Interest 5 7.2 Submittal of a Proposal for Owner/Tenant Participation 6 7.3 Completion of a Participation Agreement 6 6.0 Limitations on Acquisition of Property by the Agency 6 9.0 Procedure for Amending Participation Rules 7 Appendix FORMAT FOR STATEMENT OF INTEREST TO PARTICIPATE r 1.0 Purpose and Intent These rules are promulgated to implement the provisions of the California Community Redevelopment Law, and any Redevelopment Plan carried out within the City of Huntington Beach regarding participation by owners and tenants in said Redevelopment Project. These rules set forth the procedures governing such participation in accordance with the adopted Redevelopment Plan for any Project Area. It is the intention of the Huntington Beach Redevelopment Agency ("Agency") to encourage and permit participation In the redevelopment of any Project Area by owners of real property, persons engaged In business and tenants residing within the boundaries of any Project Area, to the maximum extent feasible and consistent with the adopted Redevelopment PIan for any Project Area. Participation by individual persons and firms is permitted; In addition, to the extent feasible, two or more persons, firms,- or institutions are also urged to participate by joining together in partnerships, corporations, or other joint entities. 2.0 Definitions "Agency" means the Huntington Beach Redevelopment Agency. "City Council" means the City Council of the City of Huntington Beach. "Participation Agreement" means an agreement entered Into tetween the Agency and an owner of real property, persons engaged in business, or tenants living within the Project Area in accordance with the provisions of the Redevelopment Plan and the rules as designated herein. "Project Area" means the Project Area described in the Redevelopment Plan. "Redevelopment Plan" means any Redevelopment Plan adopted by the City Council of the City of Huntington Beach. "Tenant" means any person, persons, corporation, association, partnership or other entity that rents or leases real property on the date of, or subsequent to, adoption of the Redevelopment Plan by the City Council. -1- i 3.0 General Procedures These rules have been adopted by the Agency specifically to implement the provisions of any Redevelopment Plan adopted by the Huntington Beach City Council regarding participation and the exercise of reentry preferences for owners, tenants, and businesses within Project Areas. Persons -and businesses which are desirous of exercising their participation rights and preferences should abide by these rules In exercising their preferences and participation opportunities. The Agency desires and urges participation in the 'growth and development of the Project Area by as many property owners, businesses and tenants as possible. In view of the pattern of land usage and development envisioned by the Redevelopment Plan, persons owning real property and firms doing business In the Project Area will be encouraged, whenever feasible, to take advantage of their' participation and preference opportunities as described herein. Participation opportunities, however, are necessarily subject to and limited by factors such as the following: -- The elimination and/or modification of some existing land uses. -- The realignment and/or alteration of some streets. The ability of participants to finance proposed development. -- The capability and/or experience necessary to implement proposed development. -- The proposed land uses for redevelcpment of the Project Area. The Redevelopment Plans for the Project Area authorizes the Agency to establish reasonable priorities and preferences among participants; accordingly, the following order of priorities is established: -- Property owners participating in the same location in compliance with the Redevelopment Plan desiring to build or rehabilitate. -- Owner -occupants relocating within the Project Area In accordance with and as a result of the Redevelopment Plan. -- Existing tenants relocating within the Project Area in accordance with and as a result of the Redevelopment Plan. Conflicting proposals submitted for particular sites or land uses will be resolved by the Agency after considration of the following factors: Type of occupancy in the Project Area. -- Participants' length of occupancy In the Project Area. -- Size and configuration of participants' existing property. -- Accommodation of as many participants as possible. -2- -- Participants' abilities -to implement projects as determined by financial capability, prior experience with similar developments, etc. Conformity of participants' proposal with the Intent and objectives of the Redevelopment Plan. -- Similar land use to similar land use. -- Service to the community In achieving their goals and objectives. 4.0 Participation by Owners of Real Property 4.1 Participation in the Same Location In appropriate circumstances where such action would foster the unified development contemplated by the Redevelopment Plan, an owner may participate in substantially the same location either by retaining all or portions of his property, or by retaining all or portions of his property and purchasing adjacent property If needed and available, for development in accordance with the Redevelopment Plan. An owner who participates in the same locaticn may be required to rehabilitate or demolish all or part of his existing buildings, or the Agency may acquire only the buildings and remove or demolish such buildings. Where a proposal to participate in the same location involves a building in good condition, but with an existing use which does not conform to the provisions of the Redevelopment Plan, the Agency may allow such use to continue provided that such use is generally compatible with the permitted uses In the area in which the building is located. In order to remain in the Project Area with a nonconforming use, the owner must agree to the Imposition of such reasonable restrictions as are necessary to protect the permitted uses in the remainder of the Project Area. The final decision concerning acquisition of real property by the Agency will be based upon the conditions existing at the time the Agency purchases property or enters into participation agreements. 4.2 Participation in a Different Location When necessary to accomplish the objectives of the Redevelopment Plan, the Agency will purchase from existing owners real property within the Project Area at fair market value. The Agency will, thereafter, offer for sale cleared or cleared and reassembled properties, unless a public use is contemplated for the property acquired. The Agency will offer properties which are available for private development to eligible participants at fair market value: for the uses designated in the Redevelopment Plan; or, if a lesser amount, the offer shall be in accordance with Section 33433 of the California Health and Safety Code, prior to offering such properties for sale to the general public. The following participant priorities shall apply to such offerings: -3 - -- Displaced owners of similar use properties. -- Displaced tenants of similar use properties. -- All other displaced owners and tenants. All other owners and tenants. .5.0 Participation by Tenants Pursuant to these rules, nonproperty owners who are tenants engaged in business In the Project Area will be given opportunities to remain or preferences to reenter within the Project Area If they otherwise meet the requirements prescribed by the Redevelopment Plan. In the case of reentry, preferences will be given if suitable facilities become available with Implementation of the Redevelopment Plan. 5.1 Participating as Owners In appropriate circumstances, business tenants will be given the opportunity to purchase and develop real property in the Project Area prior to the Agency offering such property for sale to the general public. Property sold to such tenants will be made available at fair market value for the uses designated In the Redevelopment Plan, or if sold at a lesser amount, such sale shall be in compliance with Section 33433 of the California Health and Safety Code. 5.2 Business Tenants Participating as Tenants Business tenants who desire to reenter the Project Area as tenants will receive preferences to locate in the Project Area in accordance with the uses designated In the Redevelopment Plan. 6.0 Conforming Owners The Agency may determine that certain real property within the Project Area meets the requirements of the Redevelopment Plan. The owners of such properties will be permitted to remain as conforming owners without a Participation Agreement with the Agency, provided such owners continue to operate and use the real property within the requirements of the Redevelopment Plan. The Agency shall not through use of eminent domain acquire property owned by conforming owners. In the event any of the conforming owners desire to construct additional improvements or substantially alter or modify existing structures on any of the real property described as conforming, or acquire additional real property within the Project Area, then such conforming owner may be required to enter into a Participation Agreement with the Agency In the same manner as required for other owners. The Agency shall, upon the request of any conforming owner, issue to such owner within the first twelve (12) months after the adoption of the Redevelopment Plan a -4 - . .10 A Wi "certificate of conformity" County Recorder's Office. after a duly noticed public such otherwise conforming Agreement with the Agency, An the form suitable for recordation with the Orange In the event that the Redevelopment Plan Is amended hearing to change the requirements for the property, owners may be required to enter into a Participation 7.0 Procedure for Becoming a Participant 7.1 Submittal of a Statement of Interest The Agency shall contact and work with each owner, business and tenant in the Project Area In good faith attempts to determine the desires of each owner, business and tenant. The Agency will notify by certified mail, return receipt requested, every last known secured property assessee in the Project Area of the date for the public hearing for adoption of the Redevelopment Plan. Such notification will Include a statement that these participation rules are available for review at City Hall. The notification will also advise all such persons of the date by which interested owners, businesses and tenants should submit the completed "Statement of Interest to Participate" to the Agency. Every property owner, business or tenant Interested In becoming a participant should submit to the Agency a completed "Statement of Interest to Participate" within thirty (30) days from the date of • adoption of the Redevelopment Plan by the Agency. All "Statements of Interest to Participate" received after the established date for submission may be given consideration by the Agency, at their discretion, but in a priority secondary to those Statements received within the established date as defined above. The Agency shall proceed to negotiate with the owners, businesses or tenants returning the "Statement of Interest to Participate" as appropriate to each owner's, business's or tenant's response. If such owners, businesses or tenants do not respond to the Agency within sixty (60) days after adoption of the Redevelopment Plan, then the Agency may disregard any "Statements of Interest to Participate". Participation opportunities knowledgeable:' (1) waiver (3) by other conduct clearly shall not be forfeited In writing, (2) nonresponses evidencing disinterest. without a clear and as set forth above, or Subject to the provisions of these rules, the Agency will endeavor in good faith to accommodate any owner, business or tenant desiring to develop or improve property In the Project Area by expediting the negotiation of Participation Agreements upon request. If the Agency does not enter into a Participation Agreement with an owner, business, or tenant after negotiations, then within thirty (30) days of notification in writing from either party that negotiations are terminated, the owner, business or tenant may appeal in writing to the City Ccuncil of the City of Huntington Beach. -5- 7.2 Submittal of a Proposal for Owner, Business or Tenant Participation The Agency will notify each owner, business or tenant which submits a valid "Statement of interest to Participate" of the time within which they must submit a proposal for participation, if the desired participation is such that a proposal for such participation is necessary. Ample opportunity will be given to discuss proposals with the Agency's staff and to make necessary adjustments conducive to the parties involved. The Agency will make every effort to meet the desires of every owner_, business, or tenant desiring to participate in the project. In addition, if the Agency determines that an owner, business, or tenant of real property within the Project Area will be required to enter into a Participation Agreement, the Agency shall notify the property owner, business or tenant in writing of Its intention to require a Participation Agreement, and shall provide the owner, business or tenant with a copy of the proposed Participation Agreement. 7.3 Completion. of a Participation Agreement Each owner, business or tenant who has submitted an acceptable proposal for participation shall enter into a Participation Agreement with the Agency. Each Agreement will contain provisions necessary to ensure that the participation. proposal will be carried out, and that the subject property will be developed and used In accordance with the conditions, restrictions, rules and regulations of the Redevelopment Plan and the Participation Agreement. Each Participation Agreement will require the participant to join in the recordation of such documents as the Agency may require in order to ensure conformance with applicable conditions, restrictions, rules and regulations. The Participation Agreement will also provide that a successor in interest of the original participant may become a participant with the written approval of the Agency. A Participation Agreement shall provide that if the owner, business or tenant does not comply with the terms of the agreement, the Agency, in addition to other remedies, may acquire their property or any interest therein by any lawful meann, Including eminent domain, for its fair market value as of the date of the Participation Agreement, and the Agency may thereafter dispose of the property or interest so acquired in accordance with the Redevelopment Plan. 'All Participation Agreements will become effective only when approved by the Agency and/or City Council. 8.0 Limitations on Accuisition of Property by the Agency The Agency shall not acquire real property to be retained by an owner, business or tenant pursuant to a Participation Agreement if the owner, business or tenant fully performs under the agreement. -6- a I The Agency shall not acquire real property on which an existing building Is to be continued in its present site and in its present form and use without the consent of the owner, unless: Such building required, under applicable housing, building, electrical, plumbing or other codes or standards, structural alteration, Improvement, modernization or rehabilitation, to assure that such structures are decent, safe and sanitary for people and businesses to occupy; The site or lot on which the building is situated requires modification in size, configuration or use; or, It is necessary to impose upon such property any of the standards, restrictions and controls of the Redevelopment Plan and the owner, business or tenant fails or refuses to participate in the Redevelopment Plan by executing a Participation Agreement. 9.0 Procedure for Amending Participation Rules The Agency may amend these rules at any meeting held after their adoption provided the persons who have filed "Statements of Interest to Participate" and the participants who have entered into Participation Agreements are notified in writing at least fourteen (14) days before the date of the meeting at which the proposed amendment will be considered. The text of the proposed change will be furnished along with the notice of the meeting. Individuals will be notified either in person or by certified mail. Such notice will be mailed or delivered to the address shown on the "Statement of Interest to Participate" or In the Participation Agreement. Businesses and tenants in any Project Area who have an interest in Implementing the Redevelopment Plan may Initiate changes in these rules and propose such changes to the Agency. Persons affected by these proposed amendments may appear individually or as a body to voice their opinion for consideration by the Agency. -7 - FORMAT FOR STATEMENT OF INTEREST TO PARTICIPATE � � 1 STATEMENT OF INTEREST TO PARTICIPATE HUNTINGTON BEACH REDEVELOPMENT AGENCY Huntington Beach Redevelopment Agency 2000 Main Huntington Beach, California 92648 Gentlemen: I hereby express my Interest in participating in the Redevelopment Project Area and submit the following Information: 1. Name of (owner), (business), (tenant) Home Address 3. Name of Business Phone 4. Business Address 5. I own (); am a tenant { ); and wish to rehabilitate (); rebuild {) on my present property. If tenant, indicate: month -to -month ; or lease { ). b. My present type of business is 7. Remarks I understand that submission of this Statement of Interest to Participate does not in any way obligate me to participate in the Project Area. Signed Title Date December 21. 1959 ` Claire Dedrick, Executive Director State Lands Commission 180713th Street Sacramento, CA 95814 JUJ r rr CITY CCUNC:- We the undersigned residents and visitors of Huntington Beach are opposed to the commercialization of the city property on the beach side of PCH, south of the pier known as Pierside Village for the following reasons: 1. it will diminish public views of the sandy beach and ocean 2. it will reduce the number of parking spaces to the beach goer 3. it will interfere with the public recreational use of the land d. it will create an attraction in and of itself. 5. it will constrict and curtail beach access We urge the Attorney General's office and the State Lands Commission to act in our behalf to stop the construction of non beach related projects on lands c�tpressly dedicated to the People of the State of California. Signature /,r,Q - I � Address 1 714') A.,�I - r .,..� PrintNan4 Allen C bule' City/Stain , r. or n a o r; 7 Signature �`,q tt l.� /�,T,I- Address 17362 Avalon Lane Signature Address Print Name Citylstmp Signature Address Print Name Citvlst/zip ' cc: City Council City of Huntington Beach • tic r""„ : c t:�t �./,G:.• fa� 60, R 90 8 . `l 3-0 'J11C3'i{ :7� ' r:;;17`t.110M j Jli.7 UV313 A113 93A1333V M • CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION MVNTIKGtOK PACH To Susan Hunt From Arthur DeLaLoza Redevelopment Deputy City Attorney Subiect California Resorts Date November 16, 1989 International Negotiating Agreement The above contract requires two signatures by California Resorts International or a corporate resolution which authorizes Mr. Gati to sign alone. The resolution you provided, which was received on 11/16/89, contains limitations which allow Mr. Gati to sign was managing joint venturer" and only "in connection with any filings paid _ioint venture is required to make with the California Department of Real Estate for the . . . Pierside Colony." Accordingly, please secure a new resolution in connection with the-.. above contract. Thanks for your help. A (Dictated but not r ARTHUR DELALOZA Deputy City Attorney cc: Gail Hutton, City Attorney Connie Brockway, City Clerk City of Huntington Beach 2151A MAIN STREET CALIFORNIA 92648 HUNTINGTON BEACH REDEVELOPMENT AGENCY OFFICE OF THE EXECUTIVE DIRECTOR September 29, 1989 Dear As a property owner within the one block area bounded by Pacific Coast Highway, 2nd Street, Walnut Avenue, and Lake Street ("Proposed Development Site"), we wish to inform you that the Huntington Beach Redevelopment Agency has entered into a Negotiating Agreement with California Resorts International, Inc., (copy attached) for development of the Proposed Development Site. The Proposed Development Site for the new development is designated as District 3 of the City's Downtown Specific Plan (visitor —serving commercial). The Negotiating Agreement does not commit the Agency to final approval of California Resorts as the ultimate developer, nor does it exclude current property owners from participation. Accordingly, this letter will serve as the formal notification by the Agency to you, as a property owner, of your opportunity to submit a proposal regarding the development of the Proposed Development Site. A copy of the Agency's adopted Rules for Owner Participation are attached for your review. In addition, a Statement of Interest to Participate has been provided with this letter for your convenience. After final review of the Development Proposal of California Resorts, as well as the property owners expressing interest in the development of the Proposed Development Site, the Agency will determine the scope of development and the appropriate development entity. Please feel free to direct any questions to Susan Hunt of my staff at (714) 969-2185 or me at (714) 536-5575. Sincerely, Paul E. Cook Executive Director PEC:lp Attachment Telephone (711J 969.2185 STATEMENT OF INTEREST TO PARTICIPATE HUNTINGTON BEACH REDEVELOPMENT AGENCY f;untLngton Beach Redevelopment Agency 2000 Main Street Huntington Beach, California 92648 HE: PCIi/Walnut/2nd St. /Lake ("Proposed Development: Gentlemen: I hereby express my interest in participating in the Proposed beveloprient ;site and submit the following information: 1. Name of lowner),(business) 2. Home Address 3. Name of Business Phone 4. Business Address 5. I own [ ] ; am a tenant [ ] ; and wish to rehabilitate []; rebuild 11 on ray present property. If tenant, indicate: month-to-nonth Il; or lease 11. Participate in the development of the entire Proposed Development Site [] 6. My present type of business is 7. RE -narks I understand that submission of this Statement of Interest to Participate does not in any way obligate me to participate in the Proposed Development Site. Signed Title Date WI CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK November 15, 1989 Barbara Zeid Stradling, Yocca, Carlson & Routh 660 Newport Center Drive, #1600 Newport Beach, CA 92660 - 6441 CALIFORNIA 92648 Enclosed are documents relative to the First Amendment to Second Amended and Restated Disposition and Development Agreement by and between the Huntington Beach Redevelopment Agency and California Resorts which was approved on October 2, 1989. Connie Brockway City Clerk CB:bt � �-,() 4 /1 It -7;1, Enc: First Amendment to Second Amended DDA Subordination Agreement Estopple Certificate Guaranty & Agreement of Haseko Inc. Resolution 187 Resolution 6077 ITelephone: 714-536-5227 ) M "",W1 CITY OF HUNTINGTON BEACH I1� 2000 MAIN STREET CALIFORNIA 9264$ OFFICE OF THE CITY CLERK November 15, 1989 Loeb & Loeb 1000 Wilshire Blvd. 16th Floor Loa Angeles, CA 90017 Attn: Nancy Leighton Enclosed are documents relative to the First Amendment to Second Amended and Restated Disposition and Development Agreement by and between the Huntington Beach Redevelopment Agency and California Resorts which was approved on October 2 , 1989. ,.L�j"4'cC. Connie Brockway City Clerk CB:bt Enc: First Amendment to Seconded Amended DDA Subordination Agreement Estopple Certificate Guaranty & Agreement of Haseko Resolution No. 187 Resolution No 6077 (Telephone: 714•S36-5227) r CITY OF HUNTINGT0N BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK November 1, 1989 California Resorts 222 - 5th Street Huntington Beach, CA 92648 CALIFORNIA 92648 The Redevelopment Agency of the City of Huntington Beach at the regular meeting geld October 2, 1989, approved the First Amendment to Second Amended and Restated Disposition and Development Agreement by and between the Huntington Beach Fedevelopment Agency and Calif- ornia Resorts. Enclosed is a copy of the Agreement and related documents for your files. ' 4 G Connie Brockway City Clerk CB:bt Enc: First Amendment to Amended & Restated DDA Subordination Agreement Estoppel -Certificate Guaranty and Agreement of Haseko Inc. Second Amended & Restated DDA (Te le phon c. 714-53"227 ) CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK October 4, 1989 Chicago Title Company 825 N. Broadway Santa Ana, CA 92701 Attention: George Bull RE: Policy #641340 �MR ; us i U ' )%*H-11 Attached is the Original Subordination Agreement between the Agency and California Resorts/Haseko to be recorded and returned to trey office. Also attached is a'COPY of same to be'conformed by the recorder. The recorder will return the conformed copy to Nancy Leighton - Loeb & Loeb in the attached stamped self-addressed envelope. Your assurance that the recording is completed as re- quested by this office is very much appreciated. Sincerely, /� 4/' �I '4Z'lr Connie Brockway, C19C City Clerk CB: pin Enclosure C4;� T1,1 CJ , Ml*phone: 714.5 3b-52271 from the desk of: CONNIE BROCKWAY, CMC CITY CLERK (714) 536-5404 Doug, ° 45 I found this in the vault and we have been unable to find any file it should go in. Would you please, please help us find a home for it? RECEIVED OCT 11 1989 QEPA,,RTMENT OF P.O. BOX 190 HUNTINGTON BEACH, CA 92648 P.2 Kevserl\iarstonA,Associaicslnc. Richard L., Both 500 South Grand Avenue, Suite 1480 Calvin E. Hollis,II Los'Angeles, California 90071 — — — 213i622-809 Fax 213.'622-5204 SAN DIEGO 619;'942-0380 Heinz A. Schilling SAN FRANCISCO 415l398-3050 Timothy C. Kelly A. Jerry Keyser Kate Earle Funk Robert J. Wetmore Michael Conlon Denise E. Conley October 2, 1989 r Mr. Keith Bohr Redevelopment Specialist City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Dear Keith: In a letter dated September 15, 1989, Keyser Marston Associates, Inc. (KMA) presented the results of our review of the Haseko (California), Inc. and subsidiaries consolidated financial state- ments. In that letter we recommended that the loan guarantee agreement should specifically state that no assets of Haseko (California), Inc. shall be excluded from the Haseko (California), Inc. financial statements. This provision is meant to require Haseko (California), Inc. to continue using the same methodology in preparing consolidated balance sheets as is currently employed. This would require them to include the value of all assets that are owned by Haseko (California), Inc., as well as the pro rata value of the assets in which they own a percentage interest. We are available to answer any additional questions that may arise. Yours very truly, KEYSER MARSTON ASSOCIATES, INC. Kathleen H. Head -*,D Z3 R: alEstatePredevelopment&EvaluationServices 2. Guarantor hereby unconditionally and irrevocably guarantees to Agency the full, timely and faithful performance by Developer of all of its obligations, duties, promises, covenants and agreements as set forth in the DDA and the Amendment, collectively referred to herein as the "Mended DDA." 3. This is a continuing guaranty. No extensions, modifications or charges to the Amended DDA shall release the undersigned or affect this Guaranty in any way, and the undersigned hereby waives any notification thereof. 4. (a) The Guarantor shall promptly advise the Agency in writing of any material adverse charge in the business or financial condition of the Guarantor. (b) The Guarantor will maintain full and complete books of account and other records reflecting the results of its operations, and will furnish or cause to be furnished to the Agency such information about the financial'conditior. and operations of the Guarantor as the Agency shall reasonably request, including, without limitation, the following information which shall be furnished without request: (i) immediately upon availability, but no layer than one hundred twenty (120) days after the close of each fiscal year of the Guaranto r, (A) A etof the Guaranto as o the close of such fiscal yea and (B) Statements of income and expenses an change in financial condition of Guarantor for such fiscal ye Each of the foregoing shall set forth in comparable form the corresponding figures for the previous fiscal year, shall be reasonable detail, shall be prepared in accordance with good accounting principles and provided in the form prepared by and/or for the Guarantor in the regular course of business. shall be certified to be true and correct by a responsible financial officer of the Guarantor and/or by a firm of Certified Public Accountants reasonably acceptable to the Agency. r f W �' a an The Agency shall have the right, at all reasonable times and upon reasonable notice, to audit the Guarantor's books and records, all of which shall be made available on a confidential basis to the Agency and the Agency's representatives for such purpose, from time to time, upon the Agency's request. If any such audit by the Agency shall disclose that either current assets of the Guarantor are overstated by more than two percent (2%) or that current liabilities of the Guarantor are understated by at.least two percent (2%), the cost of such audit shall'be payable by the Guarantor to the Agency promptly upon demand. ATTACI MEMN'T NO. 10 Page 2 of 5 09--15-89 6109n/2460/004 JJJ 1 4 . ©t . k3 IIf � 1 BF jc i� p _ .••i 5•lCt. Ft *f p . r t .'¢. Q c F 09/06/89 BF4476.0%02.0.0 C. Borrower and Subordina4.4 Party have hereto- fore entered into that certain Second Herded and Restated Disposition and Development Agreement (the "DDA") dared as of huguet 26, 1988, relatinq to, among other things, the future development of the Property. In accordance With the terms and conditions of Sections 611 and 612 of the DDA, Subor- dinating Party has the right, upon the occurrence o: certain events, to require Borrower to transfer to Subordinatinq Party all or portions of the Property. Xn addition, in iEa6=4ance o+L+.h ilie terms and conditions of Section 612 of the DDA, Borrower has heretofore executed for.the benefit of Subordinating Party a Dead of Trust with AssigTLuent of Rents dated May 12, 19A9, and recorded January 7, 1989, as Instrui-tent No. 89-299277 in the Official Records of Orange County, Califorr:ia (the "Underlying Mortgage"), which Under- ly:nj lignislo ertunbern a portion of the Froperty And seela'es certain obligations of Borrower under the DDA.- Subordinating Party's rights under Sections 611 and 612 of • DDA are hereinafter collectively referred to as the "DDA Rights", D. As a condition precedent to Lender making any advances of Loan funds to Borrower and as a condition to Lender allowing the lien of the Underlying Mortgage to - encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents 1AM4:1:9nelly De and remain it all tines liens of chaross upon the Property that art prior and superior to the lien or charge of the Urderlyinq Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or mono of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreement, whether by reason of the occurrence of an event of default under the Loan Agreement or otherwise, and (ii) any mortgaje or deed of trust eover4n5 tine Property or any portion thereof hereafter executed by Borrower in favor of Lender an security for any additional loan(s) made to Borrower by Lender in the future shall t^conditionally be and remain at all tines a lion or charge u;on the Property that is prior and superior to the lion or charge cf the Underlying Mortgage and the burden or effect of the DDA Rights, E. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a condition, of Lender allowing the lien of the Underlying Mortgage to encumber the Property and allowing the DDA Rights to burden or effect the Property, Lender requires that Subordinating Party speci- fically and unconditionally aubordirate the lier. or charge of �0" 2. Guarantor hereby unconditionally and irrevocably guarantees to Agency the full, timely and faithful performance by Poveloper of all of Its obligations, dutieo, premiaal, covenants and agreements as set forth in the DDA and the Amendment, collectively referred to herein as the "Amended DDA." 3. This is a continuing guaranty. No extensions, modifications or changos to the Amended DDA shall'release the undersigned or affect this Guaranty in any way, and the undersigned hereby waives any notification thereof. 4. (a) The Guarantor shall promptly advise the Agency in writing of any material adverse change in the business or financial condition of the Guarantor. (b) The Guarantor will maintain full and complete books of account and other records reflecting the results of its operations, and will fMigh 9; QAUPQ tQ be furnished to the•Agency such information about the financial condition and operations of the Guarantor as the Agency shall reasonably request, including, without limitation, the following information which shall be furnished without request: (i) Immediately upon availability, but no later than one hundred twenty (120) days after the close of each fiscal year of the Guarantor: JA? A t�aIancv jh f ft Q thR Mantor n of the close of such fiscal yea stating all assets of the Guarantor and prepared in accordan a with the methodology of the Financial Statement dated March 31, 1989, reviewed by Agency's financial consultants and (H) Statements of income and expenses and change in financial condition of Guarantor for such fiscal year. Each of the foregoing shall set forth in cam arable form Vh$ corresponding figures for the previous fiscal year, shall be in reasonable detail, shall be prepared in accordance with good accounting principles and provided in the form prepared by and/or for the Guarantor in the regular course of business, and shall be certified to be true and correct by a responsible financial officer of the Guarantor and/or by a firm of COU1110d PUME AelauhtAfitfi .Hii6hibly acceptable io the Agency. The Agency shall have the right, at all reasonable times and upon reasonable notice, to audit the Guarantor's books and records, all of which shall be made available on a confidential basis to the Agency and the Agency's representatives for such purpose, from time to time, upon the Agency's request. If jq gVgh Audit by tho AgenCy shall disclose that either current assets of the Guarantor are overstated by more than two percent (2%) or that current ATTACHMENT NO. 10 Page 2 of 5 fe CITY OF HUNTINGTON BEACH •� JL INTER -DEPARTMENT COMMUNICATION Mlle nZoH stAc" To Gait Hutton, City Attorney From Connie Stoekway, City Cte tk Subject Legat. 'Documents Jot Ca.ti,6oxnia Date 10/3/89 Resoxt4 ft4eko Attached axe the o,c igin t. documenu given to this o 66.i.ce jot the. Coun(-' a meeting 06 1012189. I am xetuxning then because Henry Pento tep renting Chace Alanhatten has given me new oni.g-i.mU 4igned by ffasetc/CaUjoxnia Reso.ats without the new Page. 2 auWhoti,zed by .the City Council. Ba Lbaxa Zei.d gave him this page but somehow he did no". bring it to me when deti.ventng .the "new" ort ig.inat. The City has been given a "new" otigina a.igned by .the other paxti,es who have nevu seen the new page 02. I wa.s in the pptocus o6 adding my 4 gnatuxe tine to the document and txyiiig to make a good -otiginat agreement out o6 the two when .in tatk ng to Ah„ t ae La Loza I neaeLzed this. =4 _aometh,ing,that needed to be domed out by your o56.ice. They ate hajid cavying ove)L a "new" Utoppet." and Guaranty & Agreement. They want thin W. to be given to .the T.c tte Company by 11:00 A.M. tomottow. Alayot Bannister wilt not sign it unlit your o66.i.c.e assutez .that att .is in , o,tdeA. He .stated that Ala yot Pro Ter Mays can .6 i,.gn. I - am not tune o 6 Alaytr aeheduEe but I alit ytAy and reach him .i6 you detenmc:ne art .i,s .in order. Zel ., .Q Co►w i.e 4 corl zuM za s rn t� C%, KeyseNarstonAssociateslnc. Richard L. Botti 500 South Grand Avenue. Suite 1480 Calvin E. Hollis,]] Los Angelt�s,California90071 2131622-8095 Fax 213f622.5204 SAN DIEGO 619/942-0380 Heinz A. Schilling SAN FRANCISCO 4151398-3050 Timothy C. Kelly A. Jerry Keyser Kate Earle Funk Robert I Wetmore Michael Conlon Denise E. Conley September 15, 1989 Mr. Keith Bohr Redevelopment Specialist City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Dear Keith: f 1 r SF p �G4g DEPARTt4:_ {T t In accordance with your request, Keyser Marston Associates, Inc. (KRA) reviewed the consolidated financial statements submitted by Haseko (California), Inc. and subsidiaries, dated March 31, 1988 and March 31, 1989. These financial reviews were performed by Peat Marwick Main and Company, in accordance with standards established by the American Institute of Certified Public Accountants. KMA reviewed these consolidated financial statements to assess the risk associated with accepting the Haseko (California) guarantee for repayment of the $1.5 million subordinated deed of trust held by the Agency. The Peat Marwick main and Company financial reviews do not repre- sent an audit of the Haseko (California), Inc. financial position. Rather, a review is based primarily on interviews with company per- sonnel and analytical procedures applied to financial data provided by Haseko (California), Inc. management. The Peat Marwick Main and Company review indicates that there are no material modifications that should be made to the consolidated financial statements in or- der for them to be in conformity with generally accepted accounting principals. Based on our analysis of the balance sheets and income statements, with a particular emphasis on the liquid assets, short-term liabilities and working capital expenditures, it is our opinion that Haseko (California), Inc. was financially capable of funding a $1.5 million loan guarantee on the date of each of the financial statements analyzed. However, this analysis only applies to the strength of Haseko (California), Inc. at specific points in time. Significant changes in financial position could occur over time. Real Estate Predevelopment &Evaluation Services a Mr. Keith Bohr September 15, 1989 Page 2 The Haseko (California), Inc. financial statements include numerous assets and liabilities related to their holdings in Haseko (California), Inc. subsidiary companies and joint -venture partner- ships. However, these entries are limited to the assets/liabili- ties directly owned and controlled by Haseko (California), Inc. To eliminate any potential ambiguity related to the holdings used to support the $1.5 million guarantee, it is our opinion that the loan guarantee agreement should specifically state that no assets of Haseko (California), Inc. shall be excluded from the Haseko (California), Inc. financial statements. Additionally, KMA recom- mends that the loan guarantee agreement require that Haseko (California), Inc. include the $1.5 million guarantee in the firm's financial records, and that this information be provided to the CPA firm performing Haseko (California), Inc. future audits/reviews of financial position. In this manner, future creditors will be made aware of the contingent liability, and will consider this obliga- tion in determining Haseko (California), Inc. credit worthiness. We are available to answer any questions that may arise. Yours very truly, KEYSER MARSTON ASSOCIATES, INC. A/- , J Kathleen H. Head KHH:lp 89516.HTB 14066.0002 KqsecMarst_OnASsociateslnc. REQUEST FO'i�..REDEVELOPMENT;". ,aENCY ACTION RH 89-92 Submitted to: Honorable Chairman and Redevelopment Agency I Submitted by: Paul E. Cook, Executive Director Prepared by: Paul E. Cook, Executive Director Date October 2, 1989 APPROVED By CITY COUNCIL IV& 19&.-- Negotiating Agreement Between the Redevelopme t mr Subject- of Huntington Beach and California Resorts International, Inc. Consistent with Council Policy? I ] Yes i ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: Statement of Issup. -- Authorization is requested from the Agency to enter into a Negotiating Agreement with California Resorts for the development of one block within the Main —Pier Project Area. The target site is bounded by Pacific Coast Highway, Lake Street, realigned Walnut Avenue, and 2nd Street. Also transmitted for Agency approval is a letter to property owners within the subject area inviting interest to participate. Recommendation 1) Direct staff to enter Into a Negotiating Agreement for a term of 180 days between the Redevelopment Agency and California Resorts. 2) Approve attached letter to property owners. Analysis — California Resorts International, Inc. is proposing development of one block within the Main —Pier Project Area. The Lake/PCH Project (the subject area) is currently within District 3 of the city's Downtown Specific PIan (visitor serving commercial). California Resorts is currently developing the adjacent property which is bounded by Pacific Coast Highway, 2nd Street, Walnut Avenue, and Main Street. The Negotiating Agreement will not commit the Agency to final approval of California Resorts as the ultimate developer, nor does it exclude current property owners from participation. Property owners will be informed of their right to participate. Funding Source — None Alternativc Action — Direct staff to issue Requests for Proposal. Attachments 1) Negotiating Agreement between California Resorts International Inc., and the Huntington Beach Redevelopment Agency. 2) Letter to property owners, inviting participation and Owner Participation Rules. PEC:SH/pf P4o11185 ACACIA +-; PECAN ORANGE WALNUT t r TH STREET DEV. LTD. S i IrH BRIGGS O u �G W p LVLLIAMS, 0 ► pwig CITY/HUNTINGTON BEACH gim AGENCY OWNED AGREEMENT REACHED -ESCROW OPENED FOR CITY/AGENCY TO PURCHASE. M% IRO ,CITY OF H.B. ORANGE COAST SPECIALTIES P . Cj . H . PROJECT NO. 2 b CL m 2 Q J•MM•OIE BLOCK 10'. NEGOTIATING AGREEMENT (CALIFORNIA RESORTS INTERNATIONAL, INC.) This Negotiating Agreement ("Agreement") is entered into by and between the REDEVELOPMENT AGENCY CITY OF HUNTINGTON BEACH, a public body, ("Agency") CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation (herein the "Developer"). The business mailing address of the Developer is 222 5th Street, Beach, CA 92648, Attention: Uri Gati, President. RECITALS made and OF THE and office and Huntington The following recitals are a substantive part of this Agreement. A. On or about August 26, 1988, the Agency and Developer entered into a Disposition and Development Agreement ("Original DDA") for the development of two (2) blocks within the Huntington Beach Redevelopment Project Area ("Projecf Area") generally bounded by Pacific Coast Highway, Main Street, Walnut Avenue, and 2nd Street as shown on the attached and incorporated Site Map (Exhibit "A") and referred to herein as the Original Development Site. B. In furtherance of the objectives of the Community Redevelopment Law of the State of California, Health and Safety Code Section 33000, et seq., the Agency desires to redevelop certain additional parcels of land within the Project Area as shown on the attached and incorporated Site Map (Exhibit "A") and referred to herein as the Proposed Development Site. C. The Proposed Development Site is currently within District 3 of the City of Huntington Beach Downtown Specific Plan ( isitor Serving Commercial), and is composed of one (1) block enerally bounded by Pacific Coast Highway, Lake Street, Walnut Avenue and 2nd Street. It is anticipated that Walnut Street will be realigned, thereby creating a rectangular block. D. The Developer is the owner of the Original Development Site and that certain parcel within the Proposed Development Site as shown on the Site Map. E. Prior to the execution of the Original DDA, the Agency and Developer's predecessor -in -interest had entered into a negotiating agreement covering both the Original Development Site and the Proposed Development Site, the inte t the time Developer Initial being that all three (3) blocks would be part of a single integrated master planned development with the Original Development Site as Phase I and the Proposed Development Site as Phase II. F. The Developer desires to negotiate a Disposition and Development Agreement ("DDA") with the Agency (or an amendment to the Original DDA) to assemble the Proposed Development Site for the purpose of developing thereon in accordance with the District 3 Regulations (herein the "Project"). G. The parties recognize and acknowledge that the purpose of this Agreement is to establish a period during which the Developer shall have the right to negotiate with the Agency the terms of the DDA which will include, without limitation, the economics of the development, the site plan and specific uses of the development, and any other terms relevant to the disposition and redevelopment of the Proposed Development Site. H. The parties intend that during the Negotiating Period (as the term is hereinafter defined) each will perform certain actions and responsibilities under this Agreement. AGREEMENT The parties mutually agree as follows: 1. The Agency agrees to negotiate with the Developer and the Developer agrees to negotiate with the Agency from the date hereof until and including April 3, 1990 ("Negotiating Period"). Agency and Developer shall negotiate diligently and in good faith to carry out the obligations of this Agreement on or before the times established in this Agreement, to establish development plans and concepts, to determine the economic feasibility of the development, and to establish a value of the Proposed Development Site. The Agency and the Developer agree, for the Negotiating Period, to negotiate in good faith the scope and economics of the proposed development and, subject to the approval of the parties with respect to such scope and economics, negotiate and prepare a Disposition and Development Agreement ("DDA") to be considered by the Agency, in its discretion, at a duly noticed public hearing. The Agency agrees that, for the duration of the Negotiating Period, and provided that this Agreement remains in effect, the Agency will not negotiate with or enter into a disposition and development agreement with any other person or entity other than an owner or owners of property within the Proposed Development Site 10/02/89 6596n/2460/004 -2- Developer Initial ("Property Owners") regarding the Proposed Development Site without the consent of Developer, provided that the foregoing shall not be deemed to prevent the Agency from furnishing to anyone public records pertaining to the Redevelopment Plan for the Project Area or the Proposed Development Site. The Developer further acknowledges that its rights hereunder are subject to the state law requirements and Agency's rules for owner participation. The Agency further reserves full discretion with respect to the conduct or disposition of any proceedings which require notice and a public hearing. The obligation to negotiate in good faith requires that Developer communicate with Agency with respect to those issues for which agreement has not been reached, and in such communication follow reasonable negotiation procedures including meetings, telephone conversations and correspondence. Unless extended in writing, by the parties, if on the last day of the Negotiating Period the Developer has not signed and submitted a mutually acceptable DDA to the Agency for its consideration, then this Agreement shall automatically terminate and both parties knowingly agree that neither party shall have any further rights or obligations to the other, except for the return of any unexpended portion of the Deposit or Additional Deposit, as described below. If a DDA is signed and submitted by the Developer within the Negotiating Period, then this Agreement shall be automatically extended until the Agency's first regularly scheduled meeting in May, 1990 to enable the Agency to (i) determine whether it desires to enter into such DDA, and (ii) take the actions necessary to bring such DDA before the Agency and the City Council for consideration, action and authorization to sign, if such is approved. This Agreement shall automatically terminate at the end of such period or periods, unless extended, in writing, by the parties, and upon such termination neither party shall have any further rights or obligations to the other, except for the return of any unexpended portion of the Deposit or Additional Deposit, as described below. 2. The Developer is required to make full disclosure to the Agency of all pertinent information concerning the Developer and its associates and partners. The Developer represents to the Agency that within thirty (30) days of the approval of this Agreement by the Agency it shall submit to the Agency Executive Director an original or a true copy of the executed Articles of Incorporation evidencing the formation of the Developer. The Developer warrants said copy of the Articles of Incorporation shall be true and correct. In the 10/02/89 6596n/2460/004 -3- Developer Initial MA M event, during the term of this Agreement, the information concerning the parties, principals, officers, partners, joint venturers, employees and other associates changes, Developer shall submit written evidence of such information immediately to the Agency Executive Director for his review and consideration. The parties acknowledge that this requirement is necessary so that the Agency may verify the persons and entities which comprise the Developer. 3. The Developer represents to the Agency that Uri Gati is the person with whom the Agency staff shall work with on a day-to-day basis concerning the negotiations toward the development of the Proposed Development Site. If the Developer desires to designate another individual as the lead negotiator on this Project, then it shall notify the Agency Executive Director immediately. 4. The Developer shall deposit Fifty Thousand Dollars ($50,000) ("Deposit") into an interest bearing account which may be drawn upon by the Agency to pay for all costs, expenses, and fees associated with the following: (a) The retention by Agency of an economic consultant to prepare a reuse analysis of the Proposed Development Site and assist in negotiations. (b) The retention by Agency of special legal counsel to assist in negotiation in the preparation of appropriate documents. (c) The retention by Agency of an appraiser who is a Member of the Appraisal Institute (MAI) to prepare an appraisal of the individual parcels within the Proposed Development Site. (d) The retention by Agency of relocation consultants and such other consultants as may be necessary in connection herewith. (e) Agency staff time and expenses which is hereby agreed to be of Two Thousand Dollars ($2,OOD) per month during the term of this Agreement which amount may first be drawn on October 15, 1989 and the 15th day of each month thereafter. Without Developer's prior written consent, Agency shall not expend any portion of the Deposit for the purposes referenced in subparagraphs (a), (c), and (d) until after Agency has (i) :elected Developer as the exclusive developer or owner with whom to negotiate the DDA, and (ii) made a favorable determination on the block consolidation issues referenced in 10/02/89 6596n/2460/004 -4- Developer Initial paragraph 14 herein. Otherwise, Agency shall not require the approval of Developer for expenditure of any portion of the Deposit; provided, however, that: (aa) Agency agrees to consult with Developer prior to entering into consultant agreements and otherwise obligating itself to expend funds from the Deposit and to act reasonably in conserving funds consistent with Agency's rights to obtain full information from competent professionals and otherwise perform its obligations hereunder; (bb) after completion of M and (ii) above, Developer's consent shall not be required with respect to the expenditure of any poriton of the Deposit; and (cc) Agency shall not be obligated to expend Agency funds or staff time unless and until the earlier of the Developer approval of use of the Deposit or (i) and (ii) have been completed. In the event that the Agency has utilized the entire Deposit, then, in such event the Developer shall be required to make an additional deposit of Fifty Thousand Dollars ($50,000) ("Additional Deposit") in the same interest bearing account for the uses described hereinabove. Upon termination of this Agreement by expiration or because of the execution by the parties of a DDA, any remaining balance shall be returned to the Developer. In no event shall the Developer be entitled to reimbursement of the expended portion of the Deposit or Additional Deposit. 5. Developer agrees that within ninety (90) days of this Agreement it shall submit documents, reports and information (collectively the "Development Concept Package") concerning the proposed development that will provide the Agency with the following information: a. A preliminary site plan and architectural/design concept for the development showing access roads, amount and location of parking, location and size of all buildings, including height and perimeter dimensions, pedestrian and vehicular circulation system, landscaping, elevations, perspective renderings and the architectural character of the project. b. A schedule for the development of all structures and improvements proposed and an estimate of development costs including construction and non -construction costs. 10/02/89 6596n/2460/004 -5- Developer Initial WM C. An estimate of project income and a pro forma statement of project return adequate to enable the Agency to evaluate the economic feasibility of the proposed development. The economic pro forma shall be in a form typically submitted to a construction lender. d. A description of the proposed method of construction and permanent financing and amount and sources of capital. e. Biographical and background description of the Developer (and all principals in the proposed development entity), including such matters as (i) prior record with respect to the completion of projects, particularly those of a scale comparable to that proposed herein; (ii) record of timely performance reflecting minimal litigation and/or disputes concerning the payment of joint venturers, contractors, suppliers or taxing authorities and (iii) record of satisfactory operation of mixed use complexes (including evidence of tenant and customer satisfaction). It is understood that the Agency may take appropriate steps to verify such matters, and the Developer agrees to cooperate in furnishing such information to the Agency. Promptly upon receipt of the Development Concept Package, the Agency shall review the development concept proposed by the Developer, together with the remainder of the Development Concept Package, and may either approve it, request modifications or reject it. If any such items are rejected, the Agency shall provide a list of deficiencies to the Developer, and if these deficiencies are not corrected to the satisfaction of the Agency within thirty (30) days of such rejection, this Agreement shall automatically terminate unless it is extended by the mutual agreement of the Agency and Developer. If the Agency approves the Development Concept Package then the Agency and Developer shall continue to negotiate toward the execution of a Disposition and Development Agreement with respect to the development. During the period of negotiating the DDA, Developer shall prepare and submit an architectural concept of the proposed development. In the event the Developer fails for any reason to furnish submittals or otherwise to satisfy any of the requirements set forth in this Agreement by the applicable times, unless such time is expressly extended in writing by the Agency (at its sole and absolute discretion), the Developer shall have no further rights with respect to the Proposed Development Site pursuant to this Agreement without necessity of notice or any other act by the Agency. 10/02/89 6596n/2460/004 -6- Developer Initial t„1 6. In addition to the information required above, at thirty (30) day intervals from the date of this Agreement (including all extended periods), Developer shall provide to the Agency written progress reports regarding its progress in meeting the terms and obligations of this Agreement. 7. In the event that the Developer or the Agency fails to fulfill the obligations described in this Agreement within the times specified, the nonperforming party shall have thirty (30) days following written notice from the other to cure such failure to perform as may be identified in the written notice. If, in the objective judgment of the other party, the nonperforming party has failed to cure within such thirty (30) day period, the other party may terminate this Agreement and, thereafter, neither party shall have any further rights or obligations to the other except as hereafter provided. In such event, the Agency may negotiate with any other person for development of the Proposed Development Site. The Developer, by execution hereof, knowingly agrees, notwithstanding anything herein to the contrary, that it shall have no right to specific performance of this Agreement, nor to specific performance for conveyance of, nor to claim any right of title or interest in the Proposed Development Site or any part thereof. Each party by execution hereof, knowingly agrees, notwithstanding anything to the contrary, that it shall have no right to money damages, nor any other legal remedies or equitable remedies under the law. 8. The parties recognize that the rights and obligations of the parties hereunder are subject to the Agency's rules for owner participation. In this regard, the Agency has concurrently herewith transmitted a letter to each of the Property Owners advising of the existence of this Agreement and informing each of their opportunity to participate in the development of the Proposed Development Site under the Agency's rules for owner participation by submitting a Statement of Interest in connection therewith. The Developer acknowledges that the Agency will consider any and all submittals by Property Owners for the development of the Proposed Development Site. Developer further agrees that it will cooperate with the Property Owners to insure that the rights of the Property owners will be protected and that development of the Proposed Development Site will be integrated. Agency agrees that Property Owners shall be given thirty (30) days from the date of this Agreement to submit Statements of Interest to Agency and ninety (90) days from the date of this Agreement to submit formal proposals containing the type of information required from Developer pursuant to paragraph 5 herein. Agency further agrees to review and evaluate any proposals from the Property owners within one hundred fifty (150) days from the date of 10/02/89 6596n/2460/009 -7- Developer Initial lo this Agreement. If Agency selects the proposal of one of the Property Owners within the One Hundred Fifty (150) day review period, this Agreement shall be deemed to have terminated automatically at the time of such selection. If Agency selects Developer's proposal, this Negotiating Agreement shall become exclusive and thereafter, during the remaining term of this Agreement, Agency shall not negotiate with any of the Property Owners for redevelopment of the Proposed Development Site. 9. Developer shall not discriminate against nor segregate any person, or group of persons on account of sex, race, color, age, marital status, religion, handicap, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Proposed Development Site, nor shall the Developer establish or permit any such practice or practices of discrimination or segregation in the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 10. Certain state and local environmental requirements may be applicable to the proposed development. Pursuant to such requirements certain environmental documents may be required to be prepared and certified for the proposed Project. The Developer agrees to supply information to determine the environmental impact of the proposed development and, at its sole cost and expense, to prepare or cause to be prepared such environmental impact documents, if any, as may need to be completed for the development of the Project. 11. The Agency shall not be liable for any real estate commission or brokerage fees which may arise herefrom. The Agency represents that it has engaged no broker, agent or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless from any claim by any broker, agent or finder retained by the Developer. 12. The Developer acknowledges and agrees that to the extent that its activities hereunder give rise to a legal obligation on the part of Agency or the City of Huntington Beach to provide assistance or payments under all applicable federal, state and local laws and regulations concerning the displacement and relocation, if such occurs, of eligible persons and/or businesses on and from the portion of the Proposed Development Site including, without limitation, compliance with the Relocation Assistance Law, Government Code Section 7260, et seq., Developer shall be responsible for any and all such costs and shall indemnify, defend and hold harmless the Agency and the City of Huntington Beach, and their officers, employees and agents, from any and all claims, liabilities and actions arising out of such activities by or on behalf of Developer. 10/02/89 1 2 5596n/2960/009 -8- Developer Initial s 13. This Agreement shall not be assigned by the Developer without prior written approval of the Agency, which the Agency shall grant or refuse at its sole discretion. 14. The Agency shall cooperate fully in providing Developer with appropriate information and assistance, provided that the Agency shall not be obligated to incur costs therefor. In addition, Agency agrees that within one hundred twenty (120) days from the date of this Agreement, it shall consider and make determinations regarding the following matters (reserving to its sole and absolute discretion the final decision with respect thereto): (i) whether the Original Development Site should be aggregated with the Proposed Development Site for purposes of determining compliance with the requirements of Section 4.5.01 of the Downtown Specific Plan, and (ii) whether (a) the Original Development Site should be aggregated with the Proposed Development Site for purposes of determining satisfaction of the ownership and lot area consolidation prerequisites to Agency's action concerning development approvals and to Agency's exercise of its eminent domain power, pursuant to Agency Resolution No. 48 or, if not, (b) Agency is willing to waive the requirements of Resolution No. 48 for Developer's development of the Proposed Development Site (with the understanding that such a waiver would not constitute a commitment to use eminent domain or a prejudgment of any of the matters required to be considered in adopting a resolution of necessity). 15. Any DDA entered into hereunder shall be subject to the requirement that any proposed disposition and sale of land shall not be authorized until it has been considered and approved by the Agency and City Council after public hearing as required by law. 16. The Developer agrees to discuss any press releases with a designated Agency representative prior to disclosure in order to assure accuracy and consistency of the information. 17. All notices given or required to be given hereunder shall be in writing and addressed to the parties as set out below, or to such other address as may be noticed under and pursuant to this paragraph. Any such notice shall be considered served when actually received by the party intended, whether personally served or sent postage prepaid by registered or certified mail, return receipt requested. Agency: Executive Director HUNTINGTON BEACH REDEVELOPMENT AGENCY 215 1/2 Main Street Huntington Beach, CA 92648 10/02/89 /1,/E 6596n/2460/004 -9- Developer Initial With copy to: Gail Hutton, City Attorney CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Developer: California Resorts International, Inc. 222 5th Street Huntington Beach, CA 92648 Attn: Uri Gati, President With copy to: Jeff Oderman, Esq. RUTAN & TUCKER 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92628 18. This Agreement supersedes any previous agreement entered into between the Developer and the Agency with respect to the Proposed Development Site. 19. The signatories to this Agreement represent and warrant that they have the authority to execute this Agreement on behalf of the principals they purport to represent. 20. The parties hereto have executed this Agreement the date and year appearing below. Dated: /__ / 7 - /0 ATTEST: 45�M Agency Secretary APPROVED AS TO FORM: - d4�2 Agency Special Counsel HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corporate and polit' By: -� Chairman "AGENCY" INITIATED AND APPROVED AS TO CONTENT: Deputy City Administrator/ Redevelopment w REVIEWED AND APPROVED AS TO FORM: Agency General Counsel -/G-90 Z989 APPROVED: --� ;�-- 4::� Executive Director A,, CALIFORNIA RESORTS, INC., a California co oration By: Uri E. Gati, r sident Gary Lubliner, Secretary ORANGE OLIVE WALNUT 77 ENE _J s r CITY/HUNTINGTON BEACH AGENCY OWNED AGREEMENT REACHED -ESCROW OPENED FOR CITY/AGENCY TO PURCHASE. /dJp MANDIC ORENS CKSTRO OGDEN o� V V Z. AVE. LONAVA• I C. < m MAURI JOHNSON .` PAMAKIAN DUBOV GONZALES °1 BRAY MORROW rAHR.ENXR P..LLE. NICKS FAMAKIAN �C' TATER r. _ ^' DELLANO DELI, PERRY wZ OPO — -CADE. N SO. LEE W ji- WOOD S v� n POST z V� WHITE UFNTHER -ter` Z O710< OFFICE MUO G CCALLE G.F. BUILUL NTcxPRISES NC. CHILCUTT NICCOLE FIFTH STREET F• �+A DEV. LTD. W =O CITY OF H.B. CHILCUTTJ �G NIC RI DRICH BEAL EICY SCIIWARTE His _ ALLEN RICHONHE TAYLOR _ prlp KOURY NYMAN BRICOS <�p TRAINER-pC WEISER SCOTT LOj t _ - o DERIGO JOII_NSON —.—... WG' 6URRIS __.. _.._.. _ ZV LANGEVIN S x. CATHER TATER < ' WURZL LLO O _ CITY O SUSAETA FELLI _ W)LLIADI ORa. Ac&NCY _COOP y t IATEANO TEBER{. HA_RLOW K_OURY _ HICKMAN RINALOI LU ALLE FURMAN CITY U _._ OAVIDE U.S. MASON WA7KIN5 HILLER WOOD -H.R. ? DECKER Q AVERLY Cli s0 �� F'J AVE ZEIDAN i u S ARRAHE — RANDALL RANDALL :J x, FOODS, RxND.LLL Ai'Lbk jO C.ous O -MC- FDOU. WC. Z TUBACH TUBACH - - Sa L TUBACH I co HUNTINGTON H N 1 ummoln . 1 P.C.H. V rhRNA KIAN 1 PP DEUND N s 'IVP DART �+ 'ALLADIN P� KENNEOY .` pALLA NU I AVE. ` _INDBORG - SMITH WALLACE TOMKIN GALKIN N ESENDEZ DONLEY LING 'ALMER CATIICN REDMAN 4AR. __ VAN N IOLwER BLOCK I a � NELSON _ _ _ H.B. W _ u i•MM.AiK 89-536788 BF:bfs 10/02/89 BF4476.0001.0.0 RECORDING REQUESTED BY AND WNFN RECORDED MAIL TO: Office of the City Clerk S3)•o'a City of Huntington Beach 2000 Main Street, P. 0. Box 190 Huntington Beach, CA 92648 Attention: Connie Brockway, City_ Clerk (;413YO-(r ORIGINAL RECORDING REQUESTED BY 0`11CAGO 117LE INS. CO. RECORDED IN OFFICIAL RECORDS OF ORANGE COUKTY. CALWORNIA -11IQ AM OCT -5'89 Q- 7 R,CQAOER ----------SPACE ABOVE THIS LINE FOR RECORDER'S USE----- --- SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT (the "Agreement"), made and entered into as of this 31st day of July, 1989, by and between the CITY OF HUNTItiGTON BEACH REDEVELOPMENT AGENCY (the "Subordinating Party"), and CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture ("Borrower"), is made and entered into with reference to the following: A. Concurrently herewith, Borrower and The Chase Manhattan Bank, N.A., a national banking association ("Lender"), are entering into that certain Building Loan Agreement (the "Loan Agreement") of even date herewith, pur- suant to the terms of which Lender shall make a Forty -One Million Dollar ($41,000,000) loan (the "Loan") to Borrower for the construction of improvements on certain real property (the "Property") located in Orange County, California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. B. The Loan shall be (i) evidenced by a $41,000,000 Note of even date herewith, made by Borrower to the order of Lender, and (ii) secured by, among other things, a Deed of Trust, Assignment of Rents and Security Agreement of even date herewith, executed by Borrower for the benefit of Lender, encumbering the Property, and an Assignment of Leases of even date herewith, executed by Borrower, as debtor, for the benefit of Lender, as secured party, encumbering the Property. The deed of trust and assignment of leases referred to above in this recital paragraph B are hereinafter collectively referred to as��th 15Lecurity Documents". BF:bfs 10% 2/89 BF4476.0002.0.0 89-536` 88 C. Borrower and Subordinating Party have hereto- fore entered into that certain Second Amended and Restated Disposition and Development Agreement, as amended by the First Amendment thereto (the "DDA") dated as of August 26, 1988, relating to, among other things, the future development of the Property. In accordance with the terms and conditions of Sections 611 and 612 of the DDA, Subordinating Party has the right, upon the occurrence of certain events, to require Borrower to transfer to Subordinating Party all or portions of the Property. In addition, in accordance with the terms and conditions of Section 612 of the DDA, Borrower has here- tofore executed for the benefit of Subordinating Party a Deed of Trust with Assignment of Rents dated May 12, 1989, and recorded January 7, 1989, as Instrument No. 89-299277 in the Official Records of Orange County, California (the "Underlying Mortgage"), which Underlying Mortgage encumbers a portion of the Property and secures certain obligations of Borrower under the DDA. Subordinating Party's rights under Sections 611 and 612 of the DDA are hereinafter collectively referred to as the "DDA Rights". D. As a condition precedent to Lender making any advances of Loan funds to Borrower and as a condition to Lender allowing the lien of the Underlying Mortgage to encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or more of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreement, whether by reason of the occurrence of an event of default under the -Loan Agreement or otherwise, and (ii) any mortgage or deed of trust (Addi- tional Deed(s) of Trust") covering the Property or any por- tion thereof hereafter executed by Borrower in favor of Lender as security for any additional loan(s) not exceeding $4,000,000 in the aggregate made to Borrower by Lender in the future to cover costs incurred or to be incurred in connec- tion with the development of the Property shall uncondition- ally be and remain at all times a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. E. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a condition of 2- v t� BF:bfs 10/Q /89 BF4476.0003.0.0 89-536788 Lender allowing the lien of the Underlying Mortgage to encumber the Property and allowing the DDA Rights to burden or effect the Property, Lender requires that Subordinating Party speci- fically and unconditionally subordinate the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights to (i) the lien(s) or charges of the Security Docu- ments and any and all advances made by Lender thereunder, and (ii) the lien or charge of any Additional Deeds of Trust. F. It is to the mutual benefit of the parties hereto that Lender make advances of Loan funds to Borrower and that the lien of the Underlying Mortgage encumber the Property and the DDA Rights continue to burden and effect the Property and Subordinating Party is willing to agree that the Security Documents and any Additional Deeds of Trust shall constitute liens or charges upon the Property that are unconditionally prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. NOW, THEREFORE, in consideration of Lender's agree- ment to make advances of Loan funds to Borrower and to allow the lien of the Underlying Mortgage to encumber the Property and the DDA Rights to continue to burden or effect the Property, and in consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. The Security Documents and any and all renewals or extensions thereof, and any and all disbursements made by Lender to or for the account or benefit of Borrower there- under, shall unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, to the same extent and purpose as though the Underlying Mortgage and DDA (as to the DDA Rights) had been executed and recorded subsequent to the recording of.the Security Documents and the making of each disbursement or advance made by Lender to Borrower under the Security Documents, regardless of whether Borrower may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan at the time of any such disbursement or advance. 2. Each and every Additional Deed of Trust and renewal or extension thereof and all disbursements under the 3 BF: bfs lO 02/89 BF4476.0004.0.0 �.d 89~5j6788 loan secured thereby made by Lender to or for the account or benefit of Borrower for the development of the Property, shall unconditionally be and remain at all times a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights, to the same extent and purpose as though the Underlying Mortgage and the DDA (as to the DDA Rights) had been executed and recorded subsequent to the making of each disbursement or advance made by Lender to Borrower under the Additional Deed of Trust regardless of whether Borrower may have been in default under any agreement regarding said future loan, such mortgage or deed of trust or any of the other documents and instruments evidencing, securing or pertaining to such future loan at the time of any such dis- bursement or advance. 3. Lender would not make advances of Loan funds to Borrower or allow the lien of the Underlying Mortgage to continue to encumber the Property but for the execution of this Agreement by Borrower and Subordinating Party. 4. If Lender (or its successors or assigns) acquires title to the Property or any portion thereof pur- suant to foreclosure proceedings, exercise of a power of sale, deed in lieu of foreclosure, or otherwise, the Under- lying Mortgage and the provisions of Sections 611 and 612 of the DDA shall be null and void and shall not in any way whatsoever constitute liens against the Property nor shall they be banding upon Lender or its successors or assigns nor shall Lender or its successors or assigns be obligated to perform any of the covenants and agreements contained therein. 5. Notwithstanding anything to the contrary set forth in the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of all or any portion of the proceeds of the Loan, any and all dis- bursements made by Lender to or for the account or benefit of Borrower or the Property or any improvements on the Property in connection with: (a) any cost overruns incurred by Borrower in connection with the construction and completion of the improvements contemplated by the Loan Agreement, (b) any costs or expenses incurred in comply- ing with any laws, rules, regulations or statutes or any 4 BF:bfs 10 0 /89 BF4476.0005.0.0 536788 directives of any governmental agencies having or exercising jurisdiction over the construction or completion of said improvements or the operation of the same upon completion thereof, (c) any sums due or owing to Lender by Borrower or its successors and assigns as a result of advances made by Lender in connection with the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of the proceeds of the Loan, including without limitation interest thereon, or (d) any sums advanced by Lender for the pay- ment of real estate taxes and assessments, insurance premiums or any other sums advanced or obligations incurred by Lender in connection with the protection or preservation of all security given to Lender with respect to the Loan, shall be deemed to be, and shall in all events be, secured by the Security Documents and, as so secured and regardless of whether Borrower at the time of any such disbursements may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan, shall be and remain liens or charges upon the Property that are uncon- ditionally prior and superior to the lien or charge of the Underlying Mortgage and the effect or burden of the DDA Rights. 6. Subordinating Party shall execute any further documents or instruments required by Lender to effect the subordination of the Underlying Mortgage and the DDA Rights to the lien or charge of any and all Additional Deeds of Trust. 7. This Agreement shall be the whole and only agreement with respect to the subordination of the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights to the lien or charge of the Security Documents and the lien or charge of any Additional Deed of Trust and all disbursements and advances made thereunder, and shall supersede and cancel any prior agreements as to such subordination, including without limitation any provi- sions contained in the Underlying Mortgage or the DDA that provide for the subordination of the lien or charge and/or burden or effect thereof to another deed or deeds of trust or to another mortgage or mortgages. 5 BF:bfs 00/89 BF4476.0006.0.0 89-536788 8. Subordinating Party hereby declares, agrees and acknowledges as follows: (a) Subordinating Party has examined the Security Documents, the Loan Agreement and the Note, and Subordinating Party consents to (i) all provisions of the Security Documents, the Loan Agreement and the Note, and (ii) all agreements between Lender and Borrower for the disbursement of the proceeds of the Loan, including without limitation the Loan Agreement; (b) Subordinating Party intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights in favor of the lien or charge upon the Property of the Security Documents and any Additional Deed of Trust and Subordinating Party understands that, in reliance upon and in consideration of this waiver, relin- quishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into that would not be made or entered into but for said reliance upon this waiver, relinquishment and sub- ordination; (c) Lender has not made any warranty or representation of any kind or nature whatsoever to Subor- dinating Party with respect to (i) the application of the proceeds of the Loan being made by Lender to Borrower upon the security of the Security ❑ocuments, (ii) the value of the Property or of the improvements to be constructed thereon pursuant to the Loan Agreement.or the marketability or value thereof upon completion of such construction, or (iii) the ability of Borrower to honor its covenants and agreements with Lender; and (d) Subordinating Party has made such inde- pendent legal and factual inquiries and examinations as Subordinating Party deems necessary or desirable, and Sub- ordinating Party has relied solely on said independent , inquires and examinations in entering into this Agreement. 9. Subordinating Party hereby waives and agrees not to assert or take advantage of, to the fullest extent permitted by law, (a) any right to require Lender to proceed against Borrower or any other person or to proceed against or exhaust any security held by Lender at any time or to 6 �� � BF:bfs 10/02/89 BF4476.0007.0.0 89-535788 pursue any other remedy in Lender's power before exercising any right or remedy under the Security Documents; (b) any defense that may arise by reason of lack of authority of, or attempted revocation hereof by, Sub- ordinating Party; (c) demand, protest and notice (other than any notice required by law to be given by Lender to Subor- dinating Party or that Lender has agreed in writing in Para- graph 14 hereof to give Subordinating Party with respect to the exercise by Lender of its rights under the Security Documents) of any kind, including, without limiting the generality of the foregoing, or any action or non -action on the part of, Subordinating Party or Lender in connection with any obligation or evidence of indebtedness held by Lender as collateral or in connection with any indebtedness evidenced by the Loan to be made by Lender to Borrower and contemplated hereby; (d) any defense based upon an election of remedies by Lender including, without limitation, an election by Lender to proceed by non -judicial rather than judicial foreclosure, which destroys or otherwise impairs the subroga- tion or other rights, if any, of Subordinating Party or the right of Subordinating Party to proceed against Borrower or both; and (e) any duty on the part of Lender to dis- close to Subordinating Party any facts that it may now know or hereafter know about Borrower or the partners or successors of Borrower in connection with the ownership of the Property regardless of whether Lender has reason to believe that any such facts may materially increase the risk beyond that which Subordinating Party intends to assume or Lender may have reason to believe that such facts are unknown to Subordinat- ing Party or has a reasonable opportunity to comanunicate such facts to Subordinating Party, it being understood and agreed that Subordinating Party is fully responsible for being and. keeping informed of the financial condition of Borrower or any successor owner of the Property and of all circumstances bearing on the risk of non-payment of any indebtedness evidenced by the Loan to be made by Lender to Borrower contemplated hereby. 10. In the event of a breach, by Borrower under the Underlying Mortgage comply with each and every provision and Underlying Mortgage, Subordinating Party failure or refusal to perform and condition of the shall (and does 7. 89-535188 BF:bfs 10Y2I89 BF4476.0008.0.0 hereby expressly represent, warrant, covenant and agree with Lender that it shall), prior to exercising any other right or remedy thereunder (including, without limitation, instituting any foreclosure proceedings), (i) promptly notify Lender in writing at 1 Chase Manhattan Plaza, New York, New York 10081, with a copy of such notice to Lender's counsel, Loeb and Loeb, 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California 90017, Attention: Joseph P. Heffernan, Esq., of any such breach, failure or refusal under the Underlying Mortgage, (ii) permit Lender the right and option (with no obligation to do so) to cure or correct any such breach, failure or refusal within thirty (30) calendar days after recei=t of such notice with respect to a non -monetary default and within ten (10) business days after receipt of such notice with respect to a monetary default and (iii) accept all payments and all acts done by Lender on behalf of Borrower under the Underlying Mortgage as though the same had been timely done and performed by Borrower, so that such acts and payment shall fully and totally cure and correct all such defaults, breaches, failure or refusals for all purposes. 11. Notwithstanding anything stated to the contrary in the Underlying Mortgage, so long as the Security Documents or an Additional Deed of Trust encumber the Property, or any portion thereof, Subordinating Party shall, concurrently with the release by Lender of the lien of the Security Documents from any portion of the Property, release the lien of the Underlying !Mortgage from such portion of the Property regard- less whether all of the conditions precedent to Subordinating Party's obligation to effectuate such release have been satis- fied (including, without limitation, the receipt by Subordi- nating Party of its release price or any condition that Borrower not be in default under the Underlying Mortgage or any of the documents evidencing, securing or pertaining to the indebtedness secured by the Underlying Mortgage). 12. If either Subordinating Party or Lender shall bring an action against the other by reason of the breach of any covenant, provision or condition hereof, or otherwise arising out of this Agreement, the unsuccessful party shall pay to the prevailing party reasonable attorneys' fees, which shall be payable whether or not any action is prosecuted to judgment. The term "prevailing party" shall include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substan- tially the relief sought, whether by compromise, settlement or judgment. 8 BF:bfs 10/02/89 BF4476.0009.0.0 89-536788 13. It is understood by the parties hereto that in no event shall the granting by Lender of its consent to the lien of the Underlying Mortgage on the Property be con- strued as a waiver of Lender's right to prohibit the creation of any further liens on the Property, nor shall the granting of such consent be construed as a waiver of Borrower's obli- gation to obtain Lender's consent as a condition to creating any additional liens on the Property in the future. 14. In the event Lender shall notify Borrower in writing of the existence of a default under the Loan, then Lender shall promptly deliver to Subordinating "arty a c-.Yy of such notice at City Hall, 2000 Main Street, Huntington Beach, California 92648. Lender further agrees to notify Subordinating Party at the address set forth above of any additional encuinbrances placed on the Property by Borrower to secure Borrower's obligations to Lender. 15. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same instrument. CALIFORNIA RESORTS/HASEKO CITY OF HUNTINGTON BEACH ASSOCIATES, a California REDE LOPMENT AGENCY general partnership doing business as a joint venture By " , t s Vice Chairman By: HASEKO PIER COLONY, INC., a California corporation, i partner ^^ By its By: CALIFORNIA RESORTS ATTEST: INTERNATIONAL, INC., a California corporation, B partner Y - Its Clerk By 9 Its r 111"n • set. F1 BF:bfs 10/02/89 BF4476.0010.0.0 � 89-536T88 STATE OF CALJFO��'Q ) SS. COUNTY OF IOj ie�9 G On _ G'TD 1'' -3 Mnbefore me, the under- signed, a Notary. Public in and or said State, personally appeared ,q64D11!re&fs - - -- , personally known to me or prcved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the �'S Aw l'PeO.sc1r6P on behalf of HASEKO PIER COLONY, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors exe- cuted the within instrument cn behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. ',.... - OFFICIAL SEAL KATHLEEN Y. WATANABE Baia. � 7 Pabtic-C�li4om4a LOS ANGELES COUNTY MY UM. 6V. Uv. M IM 10 v �1 89-536T88 BF:bfs 10/02/89 BF4476.0011.0.0 STATE OF e (o S SS. COUNTRY OF On QSLkneS 9 19, before me, the under- signed, a Notary Public in and for said State, personally appeared _ CG-ar_�:( Lkkh,% # ,_ known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the Secrtlaf� on behalf CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. [jb. =NW0TARy"BUC-CAUF0A?NM1A IAL SEAL C. DAVIS Notary Public LES COUNTY*ns ftb.4.1991 /1 R BF:bfs 10/02/89 BF4476.0012.0.0 STATE OF OohF'orz a'; tq l j SS. COUNTY OF 0?-AAx e $9-5JST$$ On OQ40 <- a __ , 1989, before rye, the under- signed, a Notary Public in and for, said�tate, personally appeared cw'vlapMst;n' ly known to me -er to be the persoMwho executed the within instrument as the vice Chairman ans,d., on behalf. of CITY OF HUNTINGTON BEP.CH P.EOE%,rELO_ w:iT AGEtiCY, the agency therein named, and acknowledged to me that such agency executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. OFFICIAL SEAL [SEAL] BETTE SARUA Naary Pun c-Caooreia * ORMYGE COUNTY L'Y Caen. EXP. Jan. E. MD Notary Public 12. v k.) 8g-536T88 LEGAL DESMIPTION That certain Real Property in the City of Huntington Beach, County of Orange, State of California, described as follows: Lot 1 of Tract No. 13722, in the City of Huntington Beach, as per Hap filed in Book 636 Pages 38 to 41 Inclusive of Miscellaneous Maps, records of orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located within or under, as reserved in the Deed from Betty Holt weaver and others, recorded August 15, 1985 as Instrument No. 85-305251, in Official Records, records of Orange County. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 feet, but without the right of surface entry, as reserved in the deed from Elsie H. Bakre Smith, a married woman, recorded March 14, 1961 in Book 5655, Page 693 of Official Records. PARCEL 2: Lot 1 of Tract No. 13478, in the City of Huntington Beach as per map filed in Book 636 Pages 42 to 44 Inclusive of Miscellaneous Maps, records of Orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lying below a depth of 500 feet from the surface of said lard, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances, as granted to Paul H. haler and Helen Crawford and Cecelia Hoofer and Ana Castig and Effie Nation and Laura Mullens by Deed recorded September 17, 1971 in Book 9702, Page 438 of Official Records and as granted to Robert J. Dunn and Jane G. Dunn in Deed recorded August 23, 1973 in Book 10867, Page 60 of Official Records. Also excepting from a portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain community oil and gas lease, known as "original East Huntington Beach V Community Oil and Gas Lease", dated August 21, 1954, executed by Ann Thomas as to said land and another as to other land, as lessors, and Jack B. Crawford, as lessee, recorded December 15, 1954 in Book 2897, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and interest now EMIBIT "A" Page 1 of 2 89-536T88 belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain two community oil and gas leases, known as "East Huntington Beach V Community Oil and Gas Lease, counterpart A", each dated August 21, iS54, executed by Ann Thomas as to said land and others as to other land, as lessors' and Jack B. Crawford, as lessee, recorded March 21, 1955 in Book 3003 , Page 251 of Official Records and April 1, 1955 in Book 3018, Page 40 of Official Records. Excepting from a portion therefrom all all, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface thereof, but without the right of surface entry at any tire upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances. Excepting also from portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors, or their successors or assignees, and to the lessees, or their successors or assignees, in that certain two community oil and qas leases, known as "East Huntington Beach V Community Oil and Gas Lease, Counterpart A', each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by others as to other land, as lessors, and by Jack B. Crawford, as lessee, recorded March 21, 1955 in Book 3003, Page 251 of Official Records of said County, and April 1, 1955 in Book 3018, Page 40 of Official Records of said County, as modified by an instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors" and Jack B. Crawford, as "lessee", recorded larch 21, 1955 in Book 3CO3, Page 255 of official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights,.natural gas rights, and other hydrocarbons by Whatsoever name known, located wihtin or under, as reserved in the teed from Betty Holt Weaver and others, recorded August 15, 1985 as Instrument Ho. 85-305251 in Official Records, records of Orange county. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and other related substances in and under said real property, together with and any and all royalties that may accrue from the same, as granted to Mabel Florence Graham and Edna Myrth Hopson ir. document recorded Jars 17, 1975 in 11432, .tga 1742 of official Records. Also Excepting from a portion thereof all crude all, petroleum, gas, and all kindred substances and other minerals under and in said land, Bank of America in the Deed recorded June 11, 1959 in Book 4752, Page Records. EXHIBIT "A" Page 2 of 2 brea, asphaltum as reserved by 467 of Official ESTOPPEL CERTIFICATE The Chase Manhattan Bank, N.A. 101 Park Avenue New York, New York 10178 Attention: Mr. Edward Shevlin Re: THE CHASE MANHATTAN BANK, N.A. Pier Colony Second Amended and Restated Disposition and Development Agreement between Huntington Beach Redevelopment Agency and California Resorts/Haseko Associates Gentlemen: ORIGINAL The undersigned, Huntington Beach Redevelopment Agency (the "Agency"), and California Resorts have heretofore entered into that certain Second Amended and Restated Disposition and Development Agreement (the "DDA") dated as of August 26, 1988, relating to the development of certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. California Resorts has heretofore assigned to California Resorts/Haseko Associates ("Borrower"), and Borrower has heretofore assumed, all of California Resorts' rights and obligations under the DDA with Agency's consent. Agency has been advised by Borrower that you, The Chase Manhattan Bank, N.A. ("Lender"), have agreed, subject to the satisfaction of certain conditions, to make a $41,000,000 loan (the "Loan") to Borrower for the construction of a one hundred thirty (130) condominium unit complex and a retail, office and theatre complex containing approximately 83,285 rentable square feet provided that Agency makes certain representations to Lender regarding the terms and conditions of the DDA. .1 The Chase Manhattan Bank, N.A. . 1/ , 1989 Page 2 In order to induce Lender to make the Loan to Borrower, the Agency hereby makes the following representations to Lender (and Lender's successors and assigns) and/or agrees with Lender (and Lender's successors and assigns) as follows: 1. Attached hereto as Exhibit "B" and made a part hereof is a true, correct and complete copy of the DDA, as amended, and the same has not been amended or modified except as reflected therein. The DDA is in full force and effect, and, to the best of Agency's knowledge, the DDA is valid, binding and enforceable against the Agency and Borrower. 2. To the best of Agency's knowledge, Borrower is not in default under the DDA and the Agency knows of no event that has occurred or is continuing which with the passage of time or the giving of notice, or both, would constitute a default under the DDA. 3. So long as any amount remains outstanding under the Loan, the Agency will not amend or modify the DDA without Lender's prior written consent. 4. The DDA supersedes all prior agreements (including, without limitation, that certain Disposition and Development Agreement dated as of August 19, 1985, entered into by and among the Agency, Huntington Pacifica I and the City of Huntington Beach, as modified by agreement dated February 18, 1986, and that certain First Amended Disposition and Development Agreement dated November 20, 1986, entered into by and between the Agency and Huntington Pacifica I) entered into by the Agency and/or the City and Borrower's predecessors with respect to the acquisition and development of the Site. 5. Borrower is a "permitted assignee of or successor to" (as such phrase is used in Section 106 of the DDA) California Resorts. 6. The term "holder" and "approved lender" (as such terms are used in the DDA) shall include Lender and any assignee or transferee of Lender's interest under any mortgage or deed of trust encumbering the Site or any Separate Development Parcel in which Lender is named as the original beneficiary. 7. Lender is entitled to all the benefits, protections and remedies of a "holder" and an "approved lender" set forth in the DDA including, without limitation, those set forth in Sections 107, 410, 411, 412 and 612 of the DDA; and Lender shall be entitled to receive, at the address set forth above, copies of all notices or demands delivered by the Agency to Borrower with respect to any W" The Chase Manhattan Bank, N.A. ¢rvf. t It 1989 Page breach or default by Borrower under the DDA or the granting or withholding by the Agency of any consent or approval requested by Borrower. 8. Agency hereby approves and grants its consent to the encumbering of the Site with a deed of trust or deeds of trust and an assignment of leases which name Lender as beneficiary and secure the payment of the Loan or any additional loans made by Lender for the development of the Site. Agency further grants its consent to the collateral assignment by Borrower to Lender of Borrower's rights under the DDA as collateral security for the Loan and agrees that Lender may exercise all the rights, privi- leges and benefits of Borrower under the DDA upon Borrower's default under such collateral assignment, subject to the terms and conditions of the DDA. 9. For purposes of clarifying the provisions of clauses (iv) and (v) of Section 107 appearing on page 5 of the DDA, Agency's approval of an assignment of the DDA or Borrower's interest therein shall not be required in connection with either of the following: (a) a transfer (including, without limitation, a transfer to Lender or Lenders' successors or assigns) of the Site or any Separate Development Parcel (as such term is defined in the DDA) resulting from a foreclosure sale under any mortgage or deed of trust encumbering the Site, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, or (b) a transfer by a,holder (as such term is used in the DDA) of any mortgage or deed of trust (including, without limitation, a transfer by Lender or Lender's successors or assigns), or its nominee or designee, if such holder, or such nominee or designee, is the purchaser at a foreclosure sale or the transferee following a deed in lieu of foreclosure. 10. Notwithstanding anything stated to the contrary in the DDA, including, without limitation, the provisions of Section 201, Borrower has no obligation to deliver to the Agency the irrevocable direct -pay letter of credit referred to therein and the Agency has forever waived its right to require the delivery of such letter of credit. 11. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 201), the Agency has not, and will not, except for the acquisition of certain oil rights relating to The Chase Manhattan Bank, N.A. nnf• 3/ 1989 Page 4 the Site, undertake to acquire the Agency Sales Parcels (as such term is defined in the DDA) and the Agency has not, and will not, incur any "Acquisition Costs" (as such term is defined in Section 201 of the DDA) . 12. Each and every covenant, condition and obligation contained in the DDA and required to be performed or satisfied by Borrower as of the date hereof has been satisfied including, without limitation, the covenants and conditions appearing in Section 203 (the submission to the City of Huntington Beach of a final tract map or maps for the Site, grading utility relocation plans and final building plans with respect to the Project (as such term is defined in the DDA)), Section 204 (evidence of the existence of financing for the development of the Project), Section 205 (evidence of a theatre lease), Section 404 (Agency's approval of Borrower's liability insurance and any contractor's worker's compensation insurance), Borrower's performance of the matters set forth in the Schedule of Performance attached to the DDA as Attachment No. 3, and Agency's approval of Keller Construc- tion and J. A. Hill as the contractors for the construction of the improvements on the Site and Agency's approval of the construction contracts relating thereto. 13. Agency has heretofore conveyed to Borrower the City Parcel and, therefore, Section 608 of the DDA shall no longer have any force or effect. 14. In addition to the rights set forth in Section 411 of the DDA granted to a "holder", each "holder" (including, without limitation, Lender and its successors and assigns) shall have the following rights: With respect to any default under the DDA that can only be remedied or cured by a holder upon obtaining possession of the Site or any Separate Development Parcel, such holder shall have the right to remedy or cure such default within ninety (90) days after obtaining possession, provided such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise; provided, however, in the case of a default which cannot with diligence be remedied or cured within such ninety (90) day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default. 15. Following the transfer of all or any portion of the Site to a holder, any and all obligations set forth under the DDA to commence and complete construction of the improvements contem- plated under the DDA shall be suspended until the earlier of (a) one hundred twenty (120) days from the date of such transfer The Chase Manhattan Bank, N.A. 1989 Page 5 and (b) the date such holder actually undertakes (if at all) the continuation of said construction obligations as evidenced by its written notice to Agency. Notwithstanding the foregoing, in the event of a transfer of all or any portion of the Site to a holder, such holder shall have no right to undertake Borrower's construc- tion obligations under the DDA until and unless such holder has assumed (with no obligation to do so) all of Borrower's construc- tion obligations under the DDA. The failure or refusal of any holder that has taken title to the Site or a Separate Development Parcel to discharge any of the construction obligations set forth under the DDA shall not, during the period of time that such con- struction obligations are suspended in accordance with the provi- sions of this paragraph, constitute a default under the DDA. 16. Agency's right to acquire the Site or any Separate Development Parcel pursuant to the provisions of Sections 412, 611 and/or 612 of the DDA shall be subject to and be limited by, and shall not defeat, render invalid or limit, (a) any mortgage, deed of trust or other financing instrument permitted by the DDA including, without limitation, all deeds of trust and other financing instruments encumbering all or portions of the Site and naming Lender as beneficiary, or (b) any right or interest pro- vided in the DDA for the protection of the holder of any mortgage, deed of trust or other financing instrument, so that if Agency acquires title to the Site or any portion thereof pursuant to the provisions of any of said sections, said mortgages, deeds of trust and other financing instruments shall remain valid liens on such portions of the Site so acquired by the Agency. 17. Unless the Agency is notified by Lender to the contrary, all amounts that Borrower is entitled to receive from the Agency subsequent to the date of this estoppel certificate for Project costs pursuant to the provisions of the DDA including, without limitation, the provisions of Attachment No. 8 to the DDA, shall be remitted directly to Lender. Lender shall disburse such sums to such parties and for the purposes for which they were funded in accordance with Lender's Loan disbursement procedures. 18. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 401), no Development Agreement (as such term is defined in the DDA) exists; and the development of the Site is governed by the DDA and the permits and approvals referred to therein. This Estoppel Certificate may be relied upon by you and your successors and assigns including, without limitation, anyone acquiring title to the Site or any Separate Development Parcel The Chase Manhattan Bank, N.A. 10 . q - , 1989 Page 6 resulting from a foreclosure sale under any mortgage or deed of trust encumbering_ the Site or any Separate Development Parcel, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, and the successors and assigns of any such party. HUNTINGTON BEACH REDEVELOPMENT AGENCY By I VVice Chairmen CONSENTED TO THIS y ATTEST: DAY OF OGT" 1989. By r /D-yip Its Clerk dv - CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its�'�SRRy By: CALIFORNIA INC., a Ca partner By Its / BF4449 RESORTS INTERNATIONAL, i.-ftrnia.corporation, 1,y: L<<.:r4s. City Attorno q•�3 � 6 -R „,.,..► 'r” G 2, L, LE= DF—SMIPTION That certain Real Property in the City of Huntington Beach, Cbenty of orange, State of California, described as follows: Lot 1 of Tract No. 13722, in the City of Huntington Beach, as per Map filed Ln Book 636 pages 38 to 41 inclusive of Miscellaneous Maps, records of orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known., located within or under, as reserved in the Deed from Betty Holt Weaver and others, recorded August 15, 1983 as Instrument No. 85-305251, in Official Records, records of Orange county. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 feet, but without the right of surface entry, as reserved in the deed from Elsie M. Bakre Smith, a married woman, recorded March 14, 1961 in Book 5655, Page 693 of Official Records. - PARCEL 2s Lot 1 of Tract No. 13478, in the City of Huntington Beach as per Map filed in Book 636 Pages 42 to 44 Inclusive of Miscellaneous Maps, records of Orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for; developing, producing, removing and marketing said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hoefer and Ana Castig and Effie Nation and Laura Mullen* by Deed recorded September 17, 1971 in Book 9702, Page 438 of official Records and as granted to Robert J. Dunn and Jane G. Dunn in Deed recorded August 23, 1973 in Book 10867, Page 60 of Official Records. Also excepting from a portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain community oil and gas lease, known as "Original Last Huntington Beach V Community Oil and Gas Lease', dated August 21, 1954, executed by Ann Thomas as to said land and another as to other land, as lessors, and Jack E. Crawford, as lessee, recorded December 15, 1954 in Book 2897, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and interest now EXHIBIT "A" Page 1 of 2 belonging to or hereinafter inuring to the lessors or their successors or assigneas and to the lessees or their successors or assignees in that certain two corzounity all and gas leases, known as REast Huntington Beach V Community Oil and Ca: Lease, counterpart A each dated August 21, 1954, executed by Ann Thomas as to said land and others as to other land, an lessors and Jack e. Crawford, as Lessee, recorded Harch 21, 1955 in Book 3003 , Page 251 of Official Records and April 1, 193S in Book 3018, Page 40 of Official Records. Excepting from a portion therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of S00 feet from the surface thereof, but without the right of surface entry at any time upon said land or within the top $00 feet thereof, for.the purpose of exploiting for, developing, producing, removing and marketing said substances. Excepting also from portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors, or their successors or assignees, and to the lessees, or their successors or assignees, in that certain two community oil and gas leases, known as •East Huntington Beach v Community Oil and Gas Lease, Counterpart A% each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by others an to other land, as lessors, and by Jack B. Crawford, as lessee, recorded March 21, 19SS in Book 3003, page 251 of Official Records of said County, and April 1, 1955 in Book 3018, Page 40 of Official Records of said County, as modified by an instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors- and Jack B._Crawford, as "lessee", recorded March 21, 1955 in Book 3003, Page 255 of Official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located wihtin or under, as reserved in the Deed from Betty Holt Weaver and others, recorded August 15, 1985 as Instrument No. 85-305251 in Official Records, records of Orange County. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and other related substances in and under said real property, together with and any and all royalties that may accrue from the same, as granted to Mabel Florence Graham and Edna Myrth Hopson in document recorded June 17, 1975 in Book 11432, Page 1742 of Official Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, brea, asphaltu.'a and all kindred substances and other minerals under and in said land, as reserved by Bank of America in the Deed recorded June 11, 1959 in Book 4752, Page 467 of Official Records. EXHIBIT "A" Page 2 of 2 BF:jc 08/29/89 BF4449.0008.0.0 DDA (To be attached) EXHIBIT "B" ORIGINAL ESTOPPEL CERTIFICATE , 1989 The Chase Manhattan Bank, N.A. 101 Park Avenue New York, New York 10178 Attention: -Mr. Edward Shevlin Re: THE CHASE MANHATTAN BANK, N.A. Pier Colony Second Amended and Restated Disposition and Development Agreement between Huntington Beach Redevelopment Agency and California Resorts/Haseko Associates Gentlemen: The undersigned, Huntington Beach Redevelopment Agency (the "Agency"), and California Resorts have heretofore entered into that certain Second Amended and Restated Disposition and Development Agreement (the "DDA") dated as of August 26, 1988, relating to the development of certain real property (the "Site") located in the City of Huntington Beach, County of orange, State of California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. California Resorts has heretofore assigned to California Resorts/Haseko Associates ("Borrower"), and Borrower has heretofore assumed, all of California Resorts' rights and obligations under the DDA with Agency's consent. Agency has been advised by Borrower that you, The Chase Manhattan Bank, N.A. ("Lender"), have agreed, subject to the satisfaction of certain conditions, to make a $41,000,000 loan (the "Loan") to Borrower for the construction of a one hundred thirty (130) condominium unit complex and a retail, office and theatre complex containing approximately 83,285 rentable square feet provided that Agency makes certain representations to Lender regarding the terms and conditions of the DDA. The Chase Manhattan Bank, N.A. 1989 Page 2 In order to induce Lender to the Agency hereby makes the following (and Lender's successors and assigns) (and Lender's successors and assigns) make the Loan to Borrower, representations to Lender and/or agrees with Lender as follows: 1. Attached hereto as Exhibit "B" and made a part hereof is a true, correct and complete copy of the DDA, as amended, and the same has not been amended or modified except as reflected therein. The DDA is in full force and effect, and, to the best of Agency's knowledge, the DDA is valid, binding and enforceable against the Agency and Borrower. 2. To the best of Agency's knowledge, Borrower is not in default under the DDA and the Agency knows of no event that has occurred or is continuing which with the passage of time or the giving of notice, or both, would constitute a default under the DDA. 3. So long as any amount remains outstanding under the Loan, the Agency will not amend or modify the DDA without Lender's prior written consent. 4. The DDA supersedes all prior agreements (including, without limitation, that certain Disposition and Development Agreement dated as of August 19, 1985, entered into by and among the Agency, Huntington Pacifica I and the City of Huntington Beach, as modified by agreement dated February 18, 1986, and that certain First Amended Disposition and Development Agreement dated November 20, 1986, entered into by and between the Agency and Huntington Pacifica I) entered into by the Agency and/or the City and Borrower's predecessors with respect to the acquisition and development of the Site. 5. Borrower is a "permitted assignee of or successor to" (as such phrase is used in Section 106 of the DDA) California Resorts. 6. The term "holder" and "approved lender" (as such terms are used in the DDA) shall include Lender and any assignee or transferee of Lender's interest under any mortgage or deed of trust encumbering the Site or any Separate Development Parcel in which Lender is named as the original beneficiary. 7. Lender is entitled to all the benefits, protections and remedies of a "holder" and an "approved lender" set forth in the DDA including, without limitation, those set forth in Sections 107, 410, 411, 412 and 612 of the DDA; and Lender shall be entitled to receive, at the address set forth above, copies of all notices or demands delivered by the Agency to Borrower with respect to any The Chase Manhattan Bank, N.A. 1989 Page breach or default by Borrower under the DDA or the granting or withholding by the Agency of any consent or approval requested by Borrower. 8. Agency hereby apprcves and grants its consent to the encumbering of the Site with a deed of trust or deeds of trust and an assignment of leases which name Lender as beneficiary and secure the payment of the Loan or any additional loans made by Lender for the development of the Site. Agency further grants its consent to the collateral assignment by Borrower to Lender of Borrower's rights under the DDA as collateral security for the Loan and agrees that Lender may exercise all the rights, privi- leges and benefits of Borrower under the DDA upon Borrower's default under such collateral assignment, subject to the terms and conditions of the DDA. 9. For purposes of clarifying the provisions of clauses (iv) and (v) of Section 107 appearing on page 5 of the DDA, Agency's approval of an assignment of the DDA or Borrower's interest therein shall not be required in connection with either of the following: (a) a transfer (including, without limitation, a transfer to Lender or Lenders' successors or assigns) of the Site or any Separate Development Parcel (as such term is defined in the DDA) resulting from a foreclosure sale under any mortgage or deed of trust encumbering the Site, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, or (b) a transfer by a holder (as such term is used in the DDA) of any mortgage or deed of trust (including, without limitation, a transfer by Lender or Lender's successors or assigns), or its nominee or designee, if such holder, or such nominee or designee, is the purchaser at a foreclosure sale or the transferee following a deed in lieu of foreclosure. 10. Notwithstanding anything stated to the contrary in the DDA, including, without limitation, the provisions of Section 201, Borrower has no obligation to deliver to the Agency the irrevocable direst -pay letter of credit referred to therein and the Agency has forever waived its right to require the delivery of such letter of credit. 11. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 201)0 the Agency has not, and will not, except for the acquisition of certain oil rights relating to The Chase Manhattan Bank, N.A. 1989 Page the Site, undertake to acquire the Agency Sales Parcels (as such term is defined in the DDA) and the Agency has not, and will not, incur any "Acquisition Costs" (as such term is defined in Section 201 of the DDA). 12. Each and every covenant, condition and obligation contained in the DDA and required to be performed or satisfied by Borrower as of the date hereof has been satisfied including, without limitation, the covenants and conditions appearing in Section 203 (the submission to the City of Huntington Beach of a final tract map or maps for the Site, grading utility relocation plans and final building plans with respect to the Project (as such term is defined in the DDA)), Section 204 (evidence of the existence of financing for the development of the Project), Section 205 (evidence of a theatre lease), Section 404 (Agency's approval of Borrower's liability insurance and any contractor's worker's compensation insurance), Borrower's performance of the matters set forth in the Schedule of Performance attached to the DDA as Attachment No. 3, and Agency's approval of Keller Construc- tion and J. A. Hill as the contractors for the construction of the improvements on the Site and Agency's approval of the construction contracts relating thereto. 13. Agency has heretofore conveyed to Borrower the City Parcel and, therefore, Section 608 of the DDA shall no longer have any force or effect. 14. In addition to the rights set forth in Section 411 of the DDA granted to a "holder", each "holder" (including, without limitation, Lender and its successors and assigns) shall have the following rights: With respect to any default under the DDA that can only be remedied or cured by a holder upon obtaining possession of the Site or any Separate Development Parcel, such holder shall have the right to remedy or cure such default within ninety (90) days after obtaining possession, provided such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise; provided, however, in the case of a default which cannot with diligence be remedied or cured within such ninety (90) day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default. 15. Following the transfer of all or any portion of the Site to a holder, any and all obligations set forth under the DDA to commence and complete construction of the improvements contem- plated under the DDA shall be suspended until the earlier of (a) one hundred twenty (120) days from the date of such transfer The Chase Manhattan Bank, N.A. 1989 Page 5 and (b) the date such holder actually undertakes (if at all) the continuation of said construction obligations as evidenced by its written notice to Agency. Notwithstanding the foregoing, in the event of a transfer of all or any portion of the Site to a holder, such holder shall have no right to undertake Borrower's construc- tion obligations under the DDA until and unless such holder has assumed (with no obligation to do so) all of Borrower's construc- tion obligations under the DDA. The failure or refusal of any holder that has taken title to the Site or a Separate -Development Parcel to discharge any of the construction obligations set forth under the DDA shall•not, during the period of time that such con- struction obligations are suspended in accordance with the provi- sions of this paragraph, constitute a default under the DDA. 16. Agency's right to acquire the Site or any Separate Development Parcel pursuant to the provisions of Sections 412, 611 and/or 612 of the DDA shall be subject to and be limited by, and shall not defeat, render invalid or limit, (a) any mortgage, deed of trust or other financing instrument permitted by the DDA including, without limitation, all deeds of trust and other financing instruments encumbering all or portions of the Site and naming Lender as beneficiary, or (b) any right or interest pro- vided in the DDA for the protection of the holder of any mortgage, deed of trust or other financing instrument, so that if Agency acquires title to the Site or any portion thereof pursuant to the provisions of any of said sections, said mortgages, deeds of trust and other financing instruments shall remain valid liens on such portions of the Site so acquired by the Agency. 17. Unless the Agency is notified by Lender to the contrary, all amounts that Borrower is entitled to receive from the Agency subsequent to the date of this estoppel certificate for Project costs pursuant to the provisions of the DDA including, without limitation, the provisions of Attachment No. 8 to the DDA, shall be remitted directly to Lender. Lender shall disburse such sums to such parties and for the purposes for which they were funded in accordance with Lender's Loan disbursement procedures. 18. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 401), no Development Agreement (as such term is defined in the DDA) exists; and the development of the Site is governed by the DDA and the permits and approvals referred to therein. This Estoppel Certificate may be relied upon by you and your successors and assigns including, without limitation, anyone acquiring title to the Site or any Separate Development Parcel The Chase Manhattan Bank, N.A. 1989 Page 6 resulting from a foreclosure sale under any mortgage or deed of trust encumbering the Site or any Separate Development Parcel, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, and the successors and assigns of any such party. HUNTINGTON BEACH REDEVELOPMENT AGENCY By Its CONSENTED TO THIS DAY OF , 1989. CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its BF4449 l'i�ji J�• L� ( �!'ttorna 9 • LEGAL DESCRIPTION That certain Real Proverty in the City of Huntington Beach, County of Orange, State of California, described as follows: Lot 1 of Tract No. 13722, in the City of Huntington Beach, as per Hap filed in Book 636 pages 38 to 41 Inclusive of Miscellaneous ;taps, records of Orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located within or under, as reserved in the Deed from Betty Holt weaver and others, recorded August 15, 1985 as Instrument No. 85-305251, in Official Records, records of Orange. County. Also Excepting !rom a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of $00 feet, but without the right of surface entry, as reserved in the deed from Elsie M. Bakre. Smith, a Married woman, recorded March 14, 1961 in Book 5655, Page 693 of Official Records.. PARCEL 2: Lot 1 of Tract No. 13478, in the City of Huntington Beach as per Map filed in Book 636 Pages 42 to 44 inclusive of Miscellaneous Maps, records of Orange County, California Excepting from a portion thereof all all, gas and other hydrocarbon substances and mineral lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for-, developing, producing, rsmovinq and marketing said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hoofer and Ana Castig and Effie Nation and Laura Mullens by Deed recorded September 17, 1971 in Book 9702, Page 438 of official Records and as granted to Robert J. Dunn and ,lane. G. Dunn in Deed recorded August 23, 1973 in Book 10867, Page 60 of Official Records. Also excepting from a portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors or their successor■ or assignees and to the lessees or their successors or assignees in that certain community oil and gas lease, known as "Original East Huntington Beach V Community Oil and Gas Lease-, dated August 21, 1954, executed by Ann Thomas as to said land and another as to other land, as lessors, and Jack B. Crawford, as lessee, recorded December 1S, 1954 in Hook 2697, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and Interest new EXHIBIT "A" Page 1 of 2 belonging to or hereinafter inuring to the lessor■ or their successors or assignees and to the lessees or their successors or assignees in that certain two community 011 and gas leases, known as "East Huntington Beach V Community Oil and Gas Lease, counterpart A", each dated August 21, 1954, executed by Ann Thomas as to said lard and other■ as to other land, a■ lessors, and Jack B. Crawford, as lessee, recorded lurch 11, 1955 in Book 3003 , Page 251 of Official Records and April I, 1955 in Book 3018, Page 40 of official Records. Excepting from a portion therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface thereof, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances. Excepting also from portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors, or their successors or assigness, and to the lessees, or their successors or assignees, in that certain two community all and gas leases, known as "East Huntington Beach V Cocamunity Oil and Gas Lease, Counterpart A% each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by others as to other land, as lessors, and by Jack S. Crawford, as lessee, recorded March 21, 1955 in Book 3003, Page 251 of Official Records of said County, and April 1, 1953 in Book 3018, Page 40 of Official Record■ of said County, as modified by an instrument dated Fetruary 21, 1955, executed by Samuel L. Hancock and another, as "lessors" and Jack E. Crawford, as 'lessee", recorded lurch 21, 1955 in Book 3003, Page 255 of Official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located wihtin or under, as reserved in the Ceed from Betty Holt Weaver and others, recorded August 25, 1985 as instrument No. 85-305251 in Official Records, records of Orange county. Also Exceptinq from a portion thereof all oil, gas, minerals, hydrocarbon and other related substances in and under said real property, together.with and any and all royalties that may accrue from the same, as granted to !Sabel Florence Graham and Edna Hyrth Hopson in document recorded June 11, 1975 in Book 11432, Page 1742 of Official Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, brea, asphaltum and all kindred subetances and other minerals under and in said land, as reserved by Bank of America in the need recorded June 11, 1959 in Book 4752, Page 467 of Official Records. EXHIBIT "A" Page 2 of 2 IN �.d ORIGINAL ESTOPPEL CERTIFICATE The Chase Manhattan Bank, N.A. 101 Park Avenue New York, New York 10178 Attention: Mr. Edward Shevlin Gentlemen: , 1989 Re: THE CHASE MANHATTAN' BANK, N.A. Pier Colony Second Amended and Restated Disposition and Development Agreement between Huntington Beach Redevelopment Agency and California Resorts/Haseko Associates The undersigned, Huntington Beach Redevelopment Agency (the "Agency"), and California Resorts have heretofore entered into that certain Second Amended and Restated Disposition and Development Agreement (the ,"DDA") dated as of August 26, 1988, relating to the development of certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. California Resorts has heretofore assigned to California Resorts/Haseko Associates ("Borrower"), and Borrower has heretofore assumed, all of California Resorts' rights and obligations under the DDA with Agency's consent. Agency has been advised by Borrower that you, The Chase Manhattan Bank, N.A. ("Lender"), have agreed, subject to the satisfaction of certain conditions, to make a $41,000,000 loan (the "Loan") to Borrower for the construction of a one hundred thirty (130) condominium unit complex and a retail, office and theatre complex containing approximately 83,285 rentable.square feet provided that Agency makes certain representations to Lender regarding the terms and conditions of the DDA. 'The Chase Manhattan Bank, N.A. 1989 Page In order to induce Lender to the Agency hereby makes the following land Lender's successors and assigns) (and Lender's successors and assigns) make the Loan to Borrower, representations to Lender and/or agrees with Lender as follows: 1. Attached hereto as Exhibit "B" and made a part hereof is a true, correct and complete copy of the DDA, as amended, and the same has not been amended or modified except as reflected therein. The DDA is in full force and effect, and, to the best of Agency's knowledge, the DDA is valid, binding and enforceable against the Agency and Borrower. 2. To the best of Agency's knowledge, Borrower is not in default under the DDA and the Agency knows of no event that has occurred or is continuing which with the passage of time or the giving of notice, or both, would constitute a default under the DDA. 3. So long as any amount remains outstanding under the Loan, the Agency will not amend or modify the DDA without Lender's prior written consent. 4. The DDA supersedes all prior agreements (including, without limitation, that certain Disposition and Development Agreement dated as of August 19, 1985, entered into by and among the Agency, Huntington Pacifica I and the City of Huntington Beach, as modified by agreement dated February 18, 1986, and that certain First Amended Disposition and Development Agreement dated November 20, 1986, entered into by and between the Agency and Huntington Pacifica I) entered into by the Agency and/or the City and Borrower's predecessors with respect to the acquisition and development of the Site. 5. Borrower is a "permitted assignee of or successor to" (as such phrase is used in Section. 106 of the DDA) California Resorts. 6. The term "holder" and "approved lender" (as such terms are used in the DDA) shall include Lender and any assignee or transferee of Lender's interest under any mortgage or deed of trust encumbering the Site or any Separate Development Parcel in which Lender is named as the original beneficiary. 7. Lender is entitled to all the benefits, protections and remedies of a "holder" and an "approved lender" set forth in the DDA including, without limitation, those set forth in Sections 1070 410, 411, 412 and 612 of the DDA; and Lender shall be entitled to receive, at the address set forth above, copies of all notices or demands delivered by the Agency to Borrower with respect to any L• The Chase Manhattan Bank, N.A. 1989 Page breach or default by Borrower under the DDA or the granting or withholding by the Agency of any consent or approval requested by Borrower. 8. Agency hereby approves and grants its consent to the encumbering of the Site with a deed of trust or deeds of trust and an assignment of leases which name Lender as beneficiary and secure the payment of the Loan or any additional loans made by Lender for the development of the Site. Agency further grants its consent to the collateral assignment by Borrower to Lender of Borrower's rights under the DDA as collateral security for the Loan and agrees that Lender may exercise all the rights, privi- leges and benefits of Borrower under the DDA upon Borrower's default under such collateral assignment, subject to the terms and conditions of the DDA. 9. For purposes of clarifying the provisions of clauses (iv) and (v) of Section 107 appearing on page 5 of the DDA, Agency's approval of an assignment of the DDA or Borrower's interest therein shall not be required in connection with either of the following: (a) a transfer (including, without limitation, a transfer to Lender or Lenders' successors or assigns) of the Site or any Separate Development Parcel (as such term is defined in the DDA) resulting from a foreclosure sale under any mortgage or deed of trust encumbering the Site, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, or (b) a transfer by a holder (as such term is used in the DDA) of any mortgage or deed of trust (including, without limitation, a transfer by Lender or Lender's successors or assigns), or its nominee or designee, if such holder, or such nominee or designee, is the purchaser at a foreclosure sale or the transferee following a deed in lieu of foreclosure. 10. Notwithstanding anything stated to the contrary in the DDA, including, without limitation, the provisions of Section 201, Borrower has no obligation to deliver to the Agency the irrevocable direct -pay letter of credit referred to therein and the Agency has forever waived its right to require the delivery of such letter of credit. _ 11. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 201), the Agency has not, and will not, except for the acquisition of certain oil rights relating to a ' V The Chase Manhattan Bank, N.A. 1989 Page 4 the Site, undertake to acquire the Agency Sales Parcels (as such term is defined in the DDA) and the Agency has not, and will not, incur any "Acquisition Costs" (as such term is defined in Section 201 of the DDA). 12. Each and every covenant, condition and obligation contained in the DDA and required to be performed or satisfied by Borrower as of the date hereof has been satisfied including, without limitation, the covenants and conditions appearing in Section 203 (the submission to the City of Huntington Beach of a final tract map or maps for the Site, grading utility relocation plans and final building plans with respect to the Project .(as such term is defined in the DDA)), Section 204 (evidence of the existence of financing for the development of the Project), Section 205 (evidence of a theatre lease), Section 404 (Agency's approval of Borrower's liability insurance and any contractor's worker's compensation insurance), Borrower's performance of the matters set forth in the Schedule of Performance attached to the DDA as Attachment No. 3, and Agency's approval of Keller Construc- tion and J. A. Hill as the contractors for the construction of the improvements on the Site and Agency's approval of the construction contracts relating thereto. 13. Agency has heretofore conveyed to Borrower the City Parcel and, therefore, Section 608 of the DDA shall no longer have any force or effect. 14. In addition to the rights set forth in Section 411 of the DDA granted to a "holder", each "holder" (including, without limitation, Lender and its successors and assigns) shall have -the following rights: With respect to any default under the DDA that can only be remedied or cured by a holder upon obtaining possession of the Site or any Separate Development Parcel, such holder shall have the right to remedy or cure such default within ninety (90) days after obtaining possession, provided such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise; provided, however, in the case of a default which cannot with diligence be remedied or cured within such ninety (90) day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default. 15. Following the transfer of all or any portion of the Site to a holder, any and all obligations set forth under the DDA to commence and complete construction of the improvements contem- plated under the DDA shall be suspended until the earlier of (a) one hundred twenty (120) days from the date of such transfer �,r The Chase Manhattan Bank, N.A. 1989 Page 5 and (b) the date such holder actually undertakes (if at all) the continuation of said construction obligations as evidenced by its written notice to Agency. Notwithstanding the foregoing, in the event of a transfer of all or any portion of the Site to a holder, such holder shall have no right to undertake Borrower's construc- tion obligations under the DDA until and unless such holder has assumed (with no obligation to do so) all of Borrower's construc- tion obligations under the DDA. The failure or refusal of any holder that has taken title to the Site or a Separate Development Parcel to discharge any of the construction obligations -set forth under the DDA shall not, during the period of time that such con- struction obligations are suspended in accordance with the provi- sions of this paragraph, constitute a default under the DDA. 16. Agency's right to acquire the Site or any Separate Development Parcel pursuant to the provisions of Sections 412, 611 and/or 612 of the DDA shall be subject to and be limited by, and shall not defeat, render invalid or limit, (a) any mortgage, deed of trust or other financing instrument permitted by the DDA including, without limitation, all deeds of trust and other financing instruments encumbering all or portions of the Site and - naming Lender as beneficiary, or (b) any right or interest pro- vided in the DDA for the protection of the holder of any mortgage, deed of trust or other financing instrument, so that if Agency acquires title to the Site or any portion thereof pursuant to the provisions of any of said sections, said mortgages, deeds of trust and other financing instruments shall remain valid liens on such portions of the Site so acquired by the Agency. 17. Unless the Agency is notified by Lender to the contrary, all amounts that Borrower is entitled to receive from the Agency subsequent to the date of this estoppel certificate for Project costs pursuant to the provisions of the DDA including, without limitation, the provisions of Attachment No. 8 to the DDA, shall be remitted directly to Lender. Lender shall disburse such sums to such parties and for the purposes for which they were funded in accordance with Lender's Loan disbursement procedures. 18. Agency hereby acknowledges that, notwithstanding the terms and conditions of the DDA (including, without limita- tion, the provisions of Section 401), no Development Agreement (as such term is defined in the DDA) exists; and the development of the Site is governed by the DDA and the permits and approvals referred to therein. This Estoppel Certificate may be relied upon by you and your successors and assigns including, without limitation, anyone acquiring title to the Site or any Separate Development Parcel L , The Chase Manhattan Bank, N.A. i` 1989 Page 6 resulting from a foreclosure sale under any mortgage or deed of trust encumbering the Site or any Separate Development Parcel, whether pursuant to the power of sale contained therein or a judicial decree, or by a deed in lieu of foreclosure, and the successors and assigns of any such party. HUNTINGTON BEACH REDEVELOPMENT AGENCY By Its CONSENTED TO THIS DAY OF , 1989. CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATICNAL, •INC., a California corporation, partner By Its BF4449 r BF:jc 08/29/89 BF4449.0007.0.0 LEGAL ❑ESCRIPTION [To be prepared and attached) EXHIBIT "A" a4a1� i • L449 BF:jC 08/29/89 BF4449.0008.0.0 DDA (To be attached] EXHIBIT "B" STRADLING, YOCCA, CULSON & RAUTH ATTORNEYS AT LAW bE0 Newport Center Drive, suite 1600 146wPort Beach, California 57660-6401 (714) 640-7035 1 . _ * * s * OPY-MR - =3 5-4._. *. -- -. EASE ELIYER THE F.QLLMlbg,MATERIAL AS SOON AS POSSIBLE T0: C0''z"r%'TS : I TZLECOPY NUMBER: = � 1�j 5 _ CLIENTA-ATTER NO.: e-ia) DATE SENT: TIME SENT': 1140. PAGES: '-, OPERATOR: (inc4, Govor) PLEASE NOTIFY OPERATOR IMMEDIATELY IF TRANSMISSION IS VOT RECEIVED PROPERLY (714) 725-4014 • BFsbfa 10/02/89 BF4476.0002.0.0 C. Borrower and Subordinating Party have hereto- fore entered into that certain Second Amended and Restated Disposition and Development Agreementg as amended by the Firlt Amendment thereto (the "DDA") dated as of August 26, 1988, relating to, among other things, the future development of the Property. In accordance with the terms and Conditions of Sections 611 and 612 of the DDA, Subordinating Party has the right, upon the occurrence of certain events, to require Borrower to transfer to Subordinating Party all or portions of the Property. In addition, in accordance with the terms and conditions of Section 612 of the DDA, Borrower has here- tofore executed for the benefit of Subordinating Party a Deed of Trust with Assignment of Rents dated May 12, 1989, and recorded January 7, 1989, as instrument No. 89-299277 in the Official Records of Orange County, California (the "Underlying Mortgage"),. which Underlying Mortgage encumbers a portion of the Property and secures certain obligations of Borrower under the DDA. Subordinating Party's rights under Sections 611 and 612 of the DDA are hereinafter collectively referred to as the "DDA Rights". D. As a condition precedent to Lender making'any advances of Loan funds to Borrower and as a condition to Lender allowing the lien of the Underlying Mortgage to encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or pore of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreement, whether by reason of the occurrence of an event of default under the Loan Agreement or otherwise, and (ii) any mortgage or deed of trust ("Addi- tional Deed(s) of Trust") covering the Property or any por- tion thereof hereafter executed by Borrower in favor of Lender an security for any additional loan(s) not exceeding $4,000,000 in the aggregate made to Borrower by Lender in the future to cover costs incurred or'to be incurred in connec- tion with the development of the Property shall uncondition- ally be and remain at all times a lien or charge upon the Property that is prior and superior -to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. E. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a Condition of 2 SF:bfa 10/02/89 BF4476.0002.0.0 C. Borrower and Subordinating Party have hereto- fore entered into that certain Second Amended and Restated Disposition and Development Agreement, as amended by the First Amendment thereto( (the "DDA") dated as of August 26, 1988, relating to, among other -things, the future development of the Property. In accordance with the terms and conditions of Sections 611 and 612 of the DDA, Subordinating Party has the right, upon the occurrence of certain events, to require Borrower to transfer to Subordinating Party all or portions of the Property. In addition, in accordance with the terms and conditions -of Section 622 of the DDA, Borrower has here- tofore executed for the benefit of Subordinating Party a Deed of Trust with Assignment of Rents dated May 12, 1989, and recorded January 7, 1989, as Instrument No. 89-299277 in the Official Records of Orange County, California (the "Underlying Mortgage"), which Underlying Mortgage encumbers a portion of the Property and secures certain obligations of Borrower under the DDA. Subordinating Party's rights under Sections 611 and 612 of the DDA are hereinafter collectively referred to as the "DDA Rights". D. As a condition precedent to Lender making any advances of Loan funds to Borrower and as a condition to Lander allowing the lien of the Underlying Mortgage to encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the Lien or charge Of the Underlying Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or more of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreements whether by reason of the occurrence of an event of default under. the Loan Agreement or otherwise, and (ii) any mortgage or deed of trust ("Addi- tional Deed(s) of Trust") covering the Property or any por- tion thereof hereafter executed by Borrower in favor of Lender as security for any additional loan(s) not exceeding $4,000,000 in the aggregate made to Borrower by Lender in the future to cover costa incurred or to be incurred -in connec- tion with the development of the Property shall uncondition- ally be and remain at all times a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. E. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a condition of 2.. � -�ENCY ACTION REQUEST F(]lEDEVELOPMENT h RECEIVED CITY CI.ERx CITY C., H!lyT1HCTLk VU.cil. CALIF. SAP �8 Date September 28, 1989 Submitted to: Mayor and City Council Submitted by: Paul E. Cook, Executive Director *--.0— Prepared by: Paul E. Cook, Executive Director Subject: Negotiating Agreement Between the Redevelopment Agency of the City of Huntington Beach and California Resorts International, Inc. Consistent with Council Policy? [ } Yes [ ] New Policy or Exception Statement of Issue, Statement QUlssue , Analysis, Funding Source, Alternative Actions, Attachments: Authorization is requested from he Agency to enter into a negotiating agreement with California Resorts for the development of one block within the Main —Pier Project Area. The target site is bounded by Pacifi�Coast Highway, Lake Street, realigned Walnut Avenue, and 2nd Street. Direct staff to draft a negotiating agreement or a term of 180 days between the Redevelopment Agency and California Resorts. Analy5is California Resorts International, Inc. is proposing develo ent of one block within the Main —Pier Project Area. The Lake/PCH Project (the subje area) is currently within District 3 of the city's Downtown Specific Plan (visitor servin ommercial). California Resorts is currently developing the adjacent property which is ded by Pacific Coast Highway, 2nd Street, Walnut Avenue, and Main Street. The negotiating agreement will not commit the Agency to final approval,,ef California Resorts as the ultimate developer, nor does it exclude current property ow ers from participation. Property owners will be informed of their right to participat Funding Source None Alternative Action Direct staff to issue Request for Proposals. .Attachments (—P None 01 PEC:SH/pf PI ohl85 7 � M NEGOTIATING AGREEMENT (CALIFORNIA RESORTS INTERNATIONAL, INC.) This Dlegotiating Agreement ("Agreement") is made and entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, ("Agency") and CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation (herein the "Developer"). The business office and. mailing addresF of the Developer is 305 Walnut Avenue, Huntington Beach, CA 92648, Attention: Uri Gati, President. RECITALS The following recitals are a substantive part of this Agreement. A. In furtherance of the objectives of the Corrmunity Redevelopment Law of the State of California, Health and Safety Code Section 330000 et seq., the Agency desires to redevelop certain parcels of land within the Huntington Beach Redevelopment Project Area ("Project Area"), as shown on the attached and incorporated Site Map (Exhibit "A") and referred to herein as the Proposed Development Site. B. The Proposed Development Site is currently within District 3 of the City of Huntington Beach Downtown Specific Plan (Visitor Eerving_Commercial), and is composed of one (1) block generally bounded by Pacific Coast Highway, Lake Street, Walnut Avenue and 2nd Street. It is anticipated that Walnut Street will be realigned, thereby creating a rectangular block. C. The Developer is the owner of that certain parcel within the Proposed Development Site as shown on the Site Map. D. The Developer desires to negotiate a Disposition and; Development Agreement ("DDA") with the Agency to assemble the Proposed Development Site for the purpose of developing thereon in accordance with the District 3 Regulations (herein the "Project"). E. The parties recognize and acknowledge that the purpose of this Agreement is to e8tablish a period during which the Developer shall have the right to negotiate with the Agency the terms of the DDA which will include, without limitation, the economics of the development, the site plan and specific uses of the development, and any other terms relevant to the disposition and redevelopment of the Proposed Development Site. Developer initial E. The parties intend that during the Negotiating Period (as the term is hereinafter defined) each will perform certain - actions and responsibilities under this Agreement. AGREEMENT The parties mutually agree as follows; 1. The Agency agrees to negotiate with the Developer and the Developer agrees to negotiate with the Agency from the date hereof until and including April 3, 1990 ("Negotiating Period"). Agency and Developer shall negotiate diligently and in good faith to carry out the obligations of this Agreement on or before the times established in this Agreement, to establish development plans and concepts, to determine the economic feasibility of the development, and to establish a value of the Proposed Development Site. ' The Agency and the Developer agree, for the Negotiating Period, to negotiate in good faith the scope and economics of the proposed development and, subject to the approval of the parties with respect to such scope and economics, negotiate and prepare a Disposition and Development Agreement ("DDA") to be considered by the Agency, in its discretion, at a duly noticed public hearing. The Agency agrees that, for the duration of the Negotiating Period, and provided that this Agreement remains in effect, the Agency will not negotiate with or enter into a disposition and development agreement with any other person or entity other than an owner or owners of property within the proposed Development Site ("Property owners") regarding the Proposed Development Site without the consent of Developer, provided that the foregoing shall not be deemed to prevent the Agency from furnishing to anyone public records pertaining to the Redevelopment Plan for the Project Area or the Proposed Development Site. The Developer further acknowledges that its rights hereunder are subject to the state law requirements and Agency's rules for owner participation. The Agency further reserves full discretion with respect to the conduct or disposition of any proceedings which require notice and a public hearing. The obligation to negotiate in good faith requires that Developer communicate with Agency with respect to those issues for which agreement has not been reached, end in such communication follow reasonable negotiation procedures including meetings, telephone conversations and correspondence. Unless extended in writing, by the parties, if on the last day of the Negotiating Period the Developer has not signed and submitted a mutually acceptable DDA to the Agency for its 09/29/89 6596n/2460/004 Developer Initial consideration, then this Agreement shall automatically terminate and both parties knowingly agree that neither party shall have any further rights or obligations to the other, except for the return of any unexpended portion of the Deposit or Additional Deposit, as described below. If a DDA is signed and submitted by the Developer within the Negotiating Period, then this Agreement shall be automatically extended until the Agency's first regularly scheduled meeting in May, 1990 to enable the Agency to M determine whether it desires to enter into such DDA, and (ii) take the actions necessary to bring such DDA before the Agency and the City Council for consideration, action and authorization to sign, if such is approved. This Agreement shall automatically terminate at the end of such period or periods, unless extended, in writing, by the parties, and upon such termination neither party shall have any further rights or obligations to the other, except for the return of any unexpended portion of the Deposit or Additional Deposit, as described below. 2. The Developer is required to make full disclosure to the Agency of all pertinent information concerning the Developer and its associates and partners. The Developer represents to the Agency that within thirty (30) days of the approval of this Agreement by the Agency it shall submit to the Agency Executive Director an original or a true copy of the executed Articles of Incorporation evidencing the Formation of the Developer. The Developer warrants said copy of the Articles of Incorporation shall be true and correct. In the event, during the term of this Agreement, the information concerning the parties, principals, officers, partners, joint venturers, employees and other associates changes, Developer shall submit written evidence of such information irx..:ediately to the Agency Executive Director for his review and consideration. The parties acknowledge that this requirement is necessary so that the Agency may verify the persons and entities which comprise the Developer. 3. The Developer represents to the Agency that Uri Gati is the person with whom the Agency staff shall work with on a day-to-day basis concerning the negotiations toward the development of the Proposed Development Site. If the Developer desires to designate another individual as the lead negotiator on this Project, then it shall notify the Agency Executive Director immediately. 4. The Developer shall deposit Fifty Thousand Dollars ($50,000) ("Deposit") into•an interest bearing account which 09/29/89 6596n/2460/004 -3- Developer Initial M- may be drawn upon by Developer to pay for with the following: the Agency without further approval of the all costs, expenses, and fees associated (a) The retention by Agency of an economic consultant to prepare a reuse analysis of the Proposed Development Site and assist in negotiations. (b) The retention by Agency of special legal counsel to assist in negotiation in the preparation of appropriate documents. (c) The retention by Agency of an appraiser who is a Member of the Appraisal Institute (MAI) to prepare an appraisal of the individual parcels within the Proposed Development Site. (d) The retention by Agency of land -use planning consultants, relocation consultants, and such other consultants as may be necessary in connection herewith. (e) Agency staff time and expenses which is hereby agreed to be of Two Thousand Dollars ($2,000) per month during the term of this Agreement which amount may first be drawn on April 15, 1989 and the 15th day of each month thereafter. In the event that the Agency has utilized the entire Deposit, then, in such event the Developer shall be required to make an additional deposit of Fifty Thousand Dollars ($50,000) ("Additional Deposit") in the =arse interest bearing account for the uses described hereinabove. Upon termination of this Agreement by expiration or because of the execution by the parties of a DDA, any remaining balance shall be returned to the Developer. In no event shall the Developer be entitled to reimbursement of the expended portion of the Deposit or Additional Deposit. 5. Developer agrees that within sixty (60) days of this Agreement it shall submit documents, reports and information (collectively the "Development Concept Package") concerning the proposed development that will provide the Agency with the ' following information: 8. A preliminary site plan and architectural/design concept for the development showing access roads, amount and location of parking, location and size of all buildings, including height and perimeter dimensions, pedestrian and vehicular circulation system, landscaping, elevations, perspective renderings and the architectural character of the project. 09/29/89 6596n/2460/004 -4- Developer Initial b. A schedule for the development of all structures and improvements proposed and an estimate of development costs including construction and non -construction costs. c. An estimate of project income and a pro forma statement of project return adequate to enable the Agency to evaluate the economic feasibility of the proposed development. The economic pro forma shall be in a form typically submitted to a construction lender. d. A description of the proposed method of construction and permanent financing and amount and sources of capital. e. Biographical and background description of the Developer (and all principals in the proposed development entity), including such matters as (i) prior record with respect to the completion of projects, particularly those of a scale comparable to that proposed herein; (ii) record of timely performance reflecting minimal litigation and/or disputes concerning the payment of joint venturers, contractors, suppliers or taxing authorities and (iii) record of satisfactory operation of mixed use complexes (including evidence of tenant and customer satisfaction). It is understood that the Agency may take appropriate steps to verify such matters, and the Developer agrees to cooperate in furnishing such information to the Agency. Promptly upon receipt of the Development Concept Package, the Agency shall review the development concept proposed by the Developer, together with the remainder of the Development Concept package, and may either approve it, request modifications or reject it. If any such items are rejected, the Agency shall provide a list of deficiencies to the Developer, and if these deficiencies are not corrected to the satisfaction of the Agency within thirty (30) days of such rejection, this Agreement shall automatically terminate unless it is extended by the mutual agreement of the Agency and Developer. If the Agency approves the Development Concept Package then the Agency and Developer shall continue to negotiate toward the execution of a Disposition and Development Agreement with respect to the development. During the period of negotiating the! DDA, Developer shall prepare and submit an architectural concept of the proposed Development. In the! event furnish submittals or requirements set forth 09/29/89 6596n/2460/004 the Developer fails for any reason to otherwise to satisfy any of the in this Agreement by the applicable _5_ Developer Initial times, unless such time is expressly extended in writing by the Agency (at its sole and absolute discretion), the Developer shall have no further rights with respect to the Proposed Development Site pursuant to this Agreement without necessity of notice or any other act by the Agency. 6. In addition to the information required above, at thirty (30) day intervals from the date of this Agreement (including all extended periods), Developer shall provide to the Agency written progress reports regarding its progress in meeting the terns and obligations of this Agreement. If the proposed development includes retail or office uses, the Developer agrees that on or before the ninetieth (90th) day of this Agreement it•shall submit a locationel site map and a list of major tenants who are then in conceptual agreement with the Developer to occupy apace in the Project. The list of proposed tenants shall include evidence of their intent including, for example, an executed lease or a letter of interest from the tenant. In addition, on or before the ninetieth (90th) day of this Agreement, the Developer shall submit a list of all existing tenants on the Proposed Development Site and the proposed location of said existing tenants under the proposed development, including a list of tenants who may re-enter the Project and those who may be displaced from the Proposed Development Site. The locationel site map shall indicate the proposed location of all then known tenants in the Project. 7. In the event that the Developer or the Agency fails to fulfill the obligations described in this Agreement within the times specified, the nonperforming party shall have fifteen (15) days following written notice from the other to cure such failure to perform as may be identified in the written notice. If, in the objective judgment of the other party, the nonperforming party has failed to cure within such fifteen (15) day period, the other party may terminate this Agreement and, thereafter, neither party shall have any further rights or obligations to the other except as hereafter provided. In such event, the Agency may negotiate with any other person for development of the Proposed Development Site. The Developer, by execution hereof, knowingly agrees, notwithstanding anything herein to the contrary, that it shall have no right to specific performance of this Agreement, nor to specific performance for conveyance of, nor to claim any right of title or interest in the Proposed Development Site or any part thereof. Each party by execution hereof, knowingly agrees, notwithstanding anything to the contrary, that it shall have no right to coney damages, nor any other legal remedies or equitable remedies under the law. 09/29/89 6596n/2960/009 -6- Developer Initial B. The parties recognize that the rights and obligations of the parties hereunder are subject to the Agency's rules for owner participation. In this regard, the Agency has concurrently herewith transmitted a letter to each of the Property Owners advising of the existence of this Agreement and informing each of their opportunity to participate in the development of the Proposed.Development Site under the Agency's rules for owner participation by submitting a Statement of Interest in connection therewith. The Developer acknowledges that the Agency will consider any and all submittals by Property Owners for the development of the Proposed Development Site. Developer further agrees that it will cooperate with the Property Owners to. insure that the rights of the Property Owners will be protected and that development of the Proposed Development Site will be integrated. 9. Developer shall not discriminate against nor segregate any person, or group of persons -on account of sex, race, color, age, marital status, religion, handicap, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Proposed Development Site, nor shell the Developer establish or permit any such practice or practices of discrimination or segregation in the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 10. Certain state and local environmental requirements may be applicable to the proposed development. Pursuant to such requirements certain environmental documents may be required to be prepared and certified for the proposed Project. The Developer agrees to supply information to determine the environmental impact of the proposed development and, at its sole cost and expense, to prepare or cause to be prepared such environmental impact documents, if any, as may.need to be completed for the development of the Project. 11. The Agency shall not be liable for any reel estate commission or brokerage fees which may arise herefrom. The Agency represents that it has enraged no broker, agent or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless from any claim by any broker, agent or finder retained by the Developer. 12. The Developer acknowledges and agrees that it shall be required to comply with all applicable federal, state and local laws and regulations concerning the displacement and relocation, if such occurs, of eligible persons and/or businesses on and from the portion of the Proposed Development Site including, without limitation, compliance with the Relocation Assintance Law, Government Code Section 7260, et 09/29/89 6596n/2460/004 -7- Developer Initial M �I s_eg. The Developer is be responsible for any and all costs related to relocation, if any, and the Agency or its designated consultant shall carry out the relocation, if any. The Developer hereby agrees to indemnify, defend and hold harmless the Agency and the City of Huntington Beach, and their officers, employees and agents, from any and all claims, liabilities and actions arising out of or in any manner related to the provision of relocation assistance or benefits to such post Agreement tenants. 13.- This Agreement shall not be assigned by the Developer. without prior written approval of the Agency, which the Agency shall grant or refuse at its sole discretion. 14. The Agency shall cooperate fully in providing Developer with appropriate infornation and assistance, provided that the Agency shall not be obligated to incur costs therefor. 15. Any DDA entered into hereunder shall be subject to the requirement that any proposed disposition and sale of land shall not be authorized until it has been considered and approved by the Agency and City Council after public hearing as required by law. 16. The Developer agrees to discuss any press releases with a designated Agency representative prior to disclosure in order to assure accuracy and consistency of the information. 17. All notices given or required to be given hereunder shall be in writing and addressed to the parties as set out below, or to such other address as may be noticed under and pursuant to this paragraph. Any such notice shall be considered•served when actually received by the party intended, whether personally served or sent postage prepaid by registered or certified mail, return receipt requested. Agency: Executive Director HUNTINGTON BEACH REDEVELOPMENT AGENCY 215 1/2 Main Street Huntington Beach, CA 92646 With copy to: Gail Hutton, City Attorney CITY Or HUNTINGTON BEACH 2000 Mair. Street Huntington Beach, CA 92646 Developer: California Resorts International, Inc. 305 Walnut Avenue Huntington. Beach, CA 92648 Attn: Uri Gati, President 09/29/89 6596n/2460/004 _8_ Developer Initial With copy to: Jeff Oderman, Esq. RUTAN & TUCKER 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92628 18. This Agreement supersedes any previous agreement entered into between the Developer and the Agency with respect to the Proposed Development Site. 19. The signatories to this Agreement represent and warrant that they have the authority to execute this Agreement on behalf of the principals they purport to represent. 20. The parties hereto have executed this Agreement the date and year Appearing below. Dated: ATTEST: Agency Secretary APPROVED AS TO FORM: Agency Special Counsel REVIEWED AND APPROVED AS TO FORM: Agency General Counsel HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corporate and politic By: Chairman "AGENCY" INITIATED AND APPROVED AS TO CONTENT: Deputy City Administrator/ Redevelopment APPROVED: Executive Director 09/29/89 6596n/2460/004 -9- Developer Initial T .—.. L. - rc + J s— Z' y r T. t7 c Al . % K r 1 1 1989 CALIFORNIA RESORTS, INC., a California corporation By: Uri E. Gati, President 09/29/89 6596n/2460/004 -10- Developer Initial EXHIBIT "A" SITE MAP OF PROPOSED DEVELOPMENT SITE (To Be Inserted by Susan Hunt) 09/29/89 6596n/2460/004 Developer Initial r � r J. HUNTiNG10N Im" To Subject CITY OF HUNTINGTON BEACH CA $9-91 COUNCIL - ADMINISTRATOR COMMUNICATION Mayor and City Council From Development of Block 101, Lake Street Date and Pacific Coast Highway Paul E. Coo City Administrator September 25, 1989 Attached for your information is a copy of Tom Clark's opinion on how you should approach redevelopment of the subject block. PEC:pf xc: Gail Hutton Attachment STRADLING, YOCCA, CARLSON & RAUTH A PROrESSIONAL CORPORATION rwlrj R. SrRAOLdwo N[eLA R. SCRNST[IN ATTORNEYS AT LAw JOMN S. SRCCACNINOG[ �. RICK E. TOCCA C. CRKKs CARLSON CCLKSTR STAHL S tADT CMRISTOPNCR J. KILOW RICK RCKA C. STOKE 060 NEw PORT CENTER DRIVE, SUITE 1600 w1LLIAM R. RAUTM be WILLIAM A. MAROVIS OF CgINy[L K.C. *CMAAI JOEL M.GUTH POST OrrICE Sox 7680 RICHARD C. GOODMAN JULIC M. WCOT NEWPORT SEACHI CALIRORNIA 92660- JOMN J. MURPMY DAMP C. ucON[YrCLL TMOYAS III,CLARtI, .IR. OWCH S. LUSOW TELEPHONE (714) 640-7035 SCM A. rRTDMAM LAWR[NCC S. COHN DAVID R. M.CWEN PAUL L. GALE STEPMEN T, rRECMAN PERRY J. TARNOISKr rA[ NUMBER ` ^�.jA PUDO_PM C. BM[PARD RGB[RT A. WILSON 17141 7SS•4100 [RIB DIRECT DIAL: RQeCgr J. KANE CHERYL A. DOW M. D. TALSOT NICHOLAS J. YOCCA SRVCE C. STUART DOUGLAS I. MIGHAM LISA M. KITSUTA JVLI[ M. PORTCR ./ CITY Or 11ur.I MTOir BLAB C. riUwt TtAGiw ROs[RT W-ALK" JDMN D. ST EINIEPG ROS[RTa rVNST[N OFF „L ROSERT E. RtCN ALCTA LOUISC SRYANT �,.11FI�1M:�jP1'��11 TI*OMA8 A. PeSTON[ RONALD A. VAN SLARCOM SCOT [. 146CONNELL STEPHEN M. M.NAMARA PANDALL J. SMCRMAN J. MICHAEL VAUGHN SRUCE W. r(UCKT[• CINOY R. MUGN[S MARK J. MUMSSCN OCHISC C. MARSAUGM KIRK r MALDONADO sARBARA L. =CtO KARCN A. ELLIS ERIC T. &ALT[MAN ELliA7CTN C. GRCCN MICNACL J. wYstNO ERNEBT C. SROWN MICMACL J. LALIS[RTE SNUCK D. MAY GARY P. DOWNS PCGI A. GROUNOWATCR JOHN D. tRELAND DONA LD J. 11A1.1MAN MICMACL J. P[NOCROAST JONN J. SWIGARTI JR. MICMAEL A. SASLOCKI ANDREW Pt RlrlctM September 11, 1989 Mr. Paul Cook HUNTINGTON BEACH 2000 Main Street Huntington Beach, REDEVELOPMENT AGENCY CA 92648 Re: Main Pier Redevelopment Project Area - Block 101 Dear Paul: You have advised that the Agency is considering the possibility of awarding an exclusive negotiating agreement with respect to Block 101 to California Resorts, Inc. and have asked whether there are any legal constraints. In this regard, an Agency may sell property without public bidding pursuant to Health and Safety Code Section 33431 but only after a public hearing; however, prior to any such sale, or even a commitment to consider such sale pursuant to an exclusive negotiating agreement, the Agency should offer each property owner within the proposed site a reasonable opportunity to participate in the project pursuant to Health and Safety Code Sections 33380 et seq. and the Main pier Redevelopment Plan. M Mr. Paul Cook September 11, 1989 Page 2 The Agency had originally proposed to distribute requests for proposals to all prcperty owners within Block 101, 201 and, perhaps, 301 seeking to solicit proposals from qualified developers and property owners for the development of the site. This process would offer each owner a reasonable opportunity to participate and afford the Agency the opportunity to determine whether any individual property owner, together with any developer they may select, is qualified and whether the property owner's proposal is consistent with the Agency's plans for the site. Accordingly, prior to entering into any exclusive negotiating agreement with an individual developer each owner must be afforded the opportunity to participate. This obligation can be fulfilled either by sending letters to each property owner offering such an opportunity or, as the Agency has previously proposed, through requests for proposal. We would recommend that the Agency fulfill its owner participation obligations by use of the request for proposal process similar to that employed for Phase II. If you have any questions or comments, please feel free to call. Very truly yours, STRADLING, YOCCA, CARLSON & RAUTH Thomas P. Clark, Jr. TPC:ts 0136m r_ D1 � fir/ �I�! � �% �I ^F c f-F'� �X-�� f-i ✓-e ,v, .^ e c % r [� �4a"e ft $-t'•a r /'nee^fs1 -Acr ��'�'�+, �U �f .��•ce•r��� �l 4' CITY OF HUNTINGTON BEACH CITY COUNCIL COMMUNICATION HuWrificToN e(ACH To From cliseo s sSidN HONORABLE MAYOR WES BANNISTER Don Ma A Council a. Subject pate Block 101 -- California Resorts August 24, 1989 Wes, I think this item should be placed on the next agenda for September Sth, subject is the exclusive right to negotiate on Block 101 by California Resorts, their letter of August 18th (copy attached). It should be placed on the agenda probably under redevelopment items or, if you prefer, under my name for discussion and decision by the City Council. Thank you for taking care of this. DMA:bb cc: City Council City Administrator I r '/ e% /r"•S' e-, If• -41 glifornia Resorts Intematonal, Inc. August 18, 1989 Mr. Paul Cook City Administrator City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Dear Mr. Cook: California Resorts is writing this letter to request an "Exclusive Right to Negotiate* for the acquisition and development of Block 101 located at Lake Street and Pacific Coast Highway. California Resorts originally requested permission to proceed with this block several months ago but were advised that the Agency would be soliciting proposals for development after Halcyon completed a study of the property. We understand the Agency's position; however because of our financial and manpower commitment to develop Phase I (Pier Colony and Pierside Pavilion) and the realization that timing is a critical factor to success, we feel it is important for California Resorts to renew its effort to pursue development of the "First Block" which is the front door to our project. When we (California Resorts) originally submitted our proposal, we had not broken ground on our project and there were some skepticism over our ability to move forward. Since then we believe we have demonstrated our ability, we have performed in every respect with what we have been asked to do by the City/Agency. In fact, in order to expedite our project, we assumed some of the Agency's responsibilities and costs. We have worked closely with Staff, Design Review Board and the community to produce a project of the highest quality. We have also responded by enhanying the exterior of our buildings beyond the original requirements to make this project a landmark and to help get the downtown off to the right start. We have hired outside marketing experts to develop a tenant mix in Pierside Pavilion that will serve as an anchor to downtown. California Resorts will pursue development of the "First Block" with the same enthusiasm we have in our existing project. Our team is fully assembled and we can move directly into the new project without delay. 222 5th. Street, Huntington Beach, CA 92648 (714) 96&3307 FAX (714) 960-2637 ~ . Mr. Paul Cook August 18, 1989 Page Two We have created the setting for the "First block" (Block 101) to be a success, and because of this, we feel it is reasonable to request the opportunity to develop the property and complete the frontage from Lake Street to Main Street as one project. The original proposal for development of the property along Pacific Coast Highway included more that the property in our project, but because of the 2/3 ownership requirement and for economic reasons, the project was scaled down to what it is today. California Resorts currently owns property in this block and is In the process of acquiring additional property. We realize we will not be successful in consolidating the entire block and therefore are willing to provide the Agency with the funds needed to acquire the remainder of the property to be developed as needed. We will work with the Agency to develop a plan that is sensitive to the community and integrated with Phase I. We believe we have demonstrated that we are team players which is necessary in a development such as this. We also would provide a degree of certainty and stability to assure completion of the project. We look forward to hearing from you at your earliest convenience. Sincerely, OFORK ati Presiders UG:ps S INTERNATIONAL, INC. from the desk of: CHRISTINE SKEEN DEPUTY CITY CLERK (714) 536-5260 ,y. IT, % 1 .�2----- BF:jc 09/06/89 BF4476.0001.0.0 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Loeb and Loeb 1000 Wilshire Boulevard Suite 1600 Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. ORIGINAL ----------SPACE ABOVE THIS LINE FOR RECORDER'S USE---------- SUBORDINATIONAGREEMENT THIS SUBORDINATION AGREEMENT (the "Agreement"), made and entered into as of this 31st day of July, 1989, by and between the CITY OF H=INGTON BEACH REDEVELOPMENT ACENCY (the "Subordinating Party"), and CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture ("Borrower"), is made and entered into with reference to the following: A. Concurrently herewith, Borrower and The Chase Manhattan Bank, N.A., a national banking association ("Lender"), are entering into that certain Building Loan Agreement (the "Loan Agreement") of even date herewith, pur- suant to the terms of which Lender shall make a Forty -One Million Dollar ($41,000,000) loan (the "Loan") to Borrower for the construction of improvements on certain real property (the "Property") Located in orange County, California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. B. The Loan shall be (i) evidenced by a $41,000,000 Note of even date herewith, made by Borrower to the order of Lender, and (ii) secured by, among other things, a Deed of Trust, Assignment of Rents and Security Agreement of even date herewith, executed by Borrower for the benefit of Lender, encumbering the Property, and an Assignment of Leases of even date herewith, executed by Borrower, as debtor, for the benefit of Lender, as secured party, encumbering the Property. The deed of trust and assignment of leases referred to above in this recital paragraph B are hereinafter collectively referred to as the "Security Documents". W BF:jc 09/06/89 BF4476.0002.0.0 C. Borrower and Subordinating Party have hereto- fore entered into that certain Second Amended and Restated Disposition and Development Agreement (the "DDA") dated as of August 26, 1988, relating to, among other things, the future development of the Property. In accordance with the terms and conditions of Sections 611 and 612 of the DDA, Subor- dinating Party has the right, upon the occurrence of certain events, to require Borrower to transfer to Subordinating Party all or portions of the Property, In addition, in accordance with the terms and conditions of Section 612 of the DDA, Borrower has heretofore executed for the benefit of Subordinating Party a Deed of Trust with Assignment of Rents dated May 12, 1989, and recorded January 7, 1989, as Instrument No. 89-299277 in the Official Records of Orange County, California (the "Underlying Mortgage"), which Under- lying Mortgage encumbers a portion of the Property and secures certain obligations of Borrower under the DDA. Subordinating Party's rights under Sections 611 and 612 of the DDA are hereinafter collectively referred to as the "DDA Rights". D. As a condition precedent to Lender making any advances of Loan funds to Borrower and as a condition to Lender allowing the lien of the Underlying Mortgage to encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or more of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreement, whether by reason of the occurrence of an event of default under the Loan Agreement or otherwise, and (ii) any mortgage or deed of trust covering the Property or any portion thereof hereafter executed by Borrower in favor of Lender as security for any additional loan(s) made to Borrower by Lender in the future shall unconditionally be and remain at all times a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. E. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a condition of Lender allowing the lien of the Underlying Mortgage to encumber the Property and allowing the DDA Rights to burden or effect the Property, Lender requires that Subordinating Party speci- fically and unconditionally subordinate the lien or charge of FA ' BF:jc 09/06/89 BF4476.0003.0.0 the Underlying Mortgage and the burden or effect of the DDA. Rights to (i) the lien(s) or charges of the Security Documents and any and all advances made by Lender thereunder, and (ii) the lien or charge of any and all mortgages or deeds of trust securing future loans. F. It is to the mutual benefit of the parties hereto that Lender make advances of Loan funds to Borrower and that the lien of the Underlying Mortgage encumber the Property and the DDA Rights continue to burden and effect the Property and Subordinating Party is willing to agree that the Security Documents and any mortgages or deeds of trust cover- ing the Property executed by Borrower in the future in favor of Lender shall constitute liens or charges upon the Property that are unconditionally prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. NOW, THEREFORE, in consideration of Lender's agree- ment to make advances of Loan funds to Borrower and to allow the lien of the Underlying Mortgage to encumber the Property and the DDA Rights to continue to burden or effect the Property, and in consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree.as follows: 1. The Security Documents and any and all renewals or extensions thereof, and any and all disbursements riade by Lender to or for the account or benefit of Borrower there- under, shall unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, to the same extent and purpose as though the Underlying Mortgage and DDA (as to the DDA Rights) had been executed and recorded subsegjent to the recording of the Security Documents and the making of each disbursement or advance made by Lender to Borrower under the Security Documents, regardless of whether Borrower may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan at the time of any such disbursement or advance. _ 2. Each and every mortgage or renewal or extension thereof covering the executed by Borrower in favor of Lender, ments under the loan secured thereby made deed of trust and Property hereafter and all disburse - by Lender to or for 3 BF:jc 09/06/89 BF4476.0004.0.0 the account or benefit of Borrower, shall unconditionally be and remain at all times a lien or charge upon the Property that is prior and superior tc the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights, to the same extent and purpose as though the Under- lying Mortgage and the DDA (as to the DDA Rights) had been executed and recorded subsequent to the making of each dis- bursement or advance made by Lender to Borrower under the mortgage or deed of trust securing said future loan regard- less of whether Borrower may have been in default under any agreement regarding said future loan, such mortgage or deed of trust or any of the other documents and instruments evidencing, securing or pertaining to such future loan at the time of any such disbursement or advance. 3. Lender would not make advances of Loan funds to Borrower or allow the lien of the Underlying Mortgage to continue to encumber the Property but for the execution of this Agreement by Borrower and Subordinating Party. 4. If Lender (or its successors or assigns) acquires title to the Property or any portion thereof pur- suant to foreclosure proceedings, exercise of a power of sale, deed in lieu of foreclosure, or otherwise, the Under- lying Mortgage and the provisions of Sections 611 and 612 of the DDA shall be null and void and shall not in any way whatsoever constitute liens against the Property nor shall they be binding upon Lender or its successors or assigns nor shall Lender or its successors or assigns be obligated to perform any of the covenants and agreements contained therein. S. Notwithstanding anything to the contrary set forth in the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of all or any portion of the proceeds of the Loan, any and all dis- bursements made by Lender to or for the account or benefit of Borrower or the Property or any improvements on the Property in connection with: (a) any cost overruns incurred by Borrower in connection with the construction and completion of the improvements contemplated by the Loan Agreement, (b) any costs or expenses incurred in comply- ing with any laws, rules, regulations or statutes or any directives of any governmental agencies having or exercising 4 I k1d B.r:jc 09/06/89 BF4476.0005.0.0 jurisdiction over the construction or completion of said improvements or the operation of the same upon completion thereof, (c) any sums due or owing to Lender by Borrower or its successors and assigns as a result of advances made by Lender in connection with the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of the proceeds of the Loan, including without limitation interest thereon, or (d) any sums advanced by Lender for the pay- ment of real estate taxes and assessments, insurance premiums or any other sums advanced or obligations incurred by Lender in connection with the protection or preservation of all security given to Lender with respect to the Loan, shall be deemed to be, and shall in all events be, secured by the Security Documents and, as so secured and regardless of whether Borrower at the time of any such disbursements may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan, shall be and remain liens or charges upon the Property that are uncondi- tionally prior and superior to the lien or charge of the Underlying Mortgage and the effect or burden of the DDA Rights. E. Subordinating Party shall execute any further documents or instruments required by Lender to effect the subordination of the Underlying Mortgage and the DDA Rights to the lien or charge of any and all mortgages or deeds of trust covering the Property or any portion thereof executed by Borrower in favor of Lender as security for future loans made by Lender to Borrower. 7. This Agreement shall be the whole and only agreement with respect to the subordination of the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights to the lien or charge of the Security Documents and the lien or charge of any other mortgage or deed of trust on the Property securing any future loan made by Lender to Borrower and all disbursements and advances made thereunder, and shall supersede and cancel any prior agree- ments as to such subordination, including without limitation any provisions contained in the Underlying Mortgage or the DDA that provide for the subordination of the lien or charge and/or burden or effect thereof to another deed or deeds of trust or to another mortgage or mortgages. 5 BF:jc 09/06/89 BF4476.0006.0.0 8. Subordinating Party hereby declares, agrees and acknowledges as follows: (a) Subordinating Party has examined the Security Documents, the Loan Agreement and the Note, and Subordinating Party consents to (i) all provisions of the Security Documents, the Loan Agreement and the Note, and (ii) all agreements between Lender and Borrower for the disbursement of the proceeds of the Loan, including without limitation the Loan Agreement; (b) Subordinating Party intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights in favor of the lien or charge upon the Property of the Security Documents and any other mortgage or deed of trust on the Property securing any future loan made by Lender to Borrower and Subordinating Party understands that, in reliance upon and in consideration of this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into that would not be made or entered into but for said reliance upon this waiver, relinquishment and subor- dination; (c) Lender has not made any warranty or representation of any kind or nature whatsoever to Subor- dinating Party with respect to (i) the application of the proceeds of the Loan being made by Lender to Borrower upon the security of the Security Documents, (ii) the value of the Property or of the improvements to be constructed thereon pursuant to the Loan Agreement or the marketability or value thereof upon completion of such construction, or (iii) the ability of Borrower to honor its covenants and agreements with Lender; and (d) Subordinating Party has made such inde- pendent legal and factual inquiries and examinations as Subordinating Party deems necessary or desirable, and Sub- ordinating Party has relied solely on said independent inquires and examinations in entering into this Agreement. 9. Subordinating Party hereby waives and agrees not to assert or take advantage of, to the fullest extent permitted by law, (a) any right to require Lender to proceed against Borrower or any other person or to proceed against BF:jc 09/06/89 BF4476.0007.0.0 or exhaust any security held by Lender at any time or to pursue any other remedy in Lender's power before exercising any right or remedy under the Security Documents; (b) any defense that may arise by reason of lack of authority of, or attempted revocation hereof by, Sub- ordinating Party or by any other or others; (c) demand, protest and notice (other than any notice required by law to be given by Lender to Subor- dinating Party,or that Lender has agreed in writing to give Subordinating Party with respect to the exercise by Lender of its rights under the Security Documents) of any kind, includ- ing, without limiting the generality of the foregoing, or any action or non -action on the part of, Subordinating Party or Lender in connection with any obligation or evidence of indebtedness held by Lender as collateral or in connection with any indebtedness evidenced by the Loan to be made by Lender to Borrower and contemplated hereby; (d) any defense based upon an election of remedies by Lender including, without limitation, an election by Lender to proceed by non -judicial rather than judicial foreclosure, which destroys or otherwise impairs the subroga- tion or other rights, if any, of Subordinating Party or the right of Subordinating Party to proceed against Borrower or both; and (e) any duty on the part of Lender to dis- close to Subordinating Party any facts that it may now know or hereafter know about Borrower or the partners or successors of Borrower in connection with the ownership of the Property regardless of whether Lender has reason to believe that any such facts may materially increase the risk beyond that which Subordinating Party intends to assume or Lender may have reason to believe that such facts are unknown to Subordinat- ing Party or has a reasonable opportunity to communicate such facts to Subordinating Party, it being understood and agreed that Subordinating Party is fully responsible for being and keeping informed of the financial condition of Borrower or any successor owner of the Property and of all circumstances bearing on the risk of non-payment of any indebtedness evidenced by the Loan to be made by Lender to Borrower contemplated hereby. 10. In the event of a breach, by Borrower under the Underlying Mortgage comply with each and every provision and Underlying Mortgage, Subordinating Party failure or refusal to perform and condition of the shall (and does 7 BF:jc 09/06/89 BF4476.0008.0.0 hereby expressly represent, warrant, covenant and agree with Lender that it shall), prior to exercising any other right or remedy thereunder (including, without limitation, instituting any foreclosure proceedings), (i) promptly notify Lender in writing at 1 Chase Manhattan Plaza, New York, New York 10081, with a copy of such notice to Lender's counsel, Loeb and Loeb, 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California 90017, Attention: Joseph P. Heffernan, Esq., of any such breach, failure or refusal under the Underlying Mortgage, (ii) permit Lender the right and option (with no obligation to do so) to cure or correct any such breach, failure or refusal within thirty (30) calendar days after receipt of such notice with respect to a non -monetary default and within ten (10) business days after receipt of such notice with respect to a Monetary default and (iii) accept all payments and all acts done by Lender on behalf of Borrower under the Underlying Mortgage as though the same had been timely done and performed by Borrower, so that such acts and payment shall fully and totally cure and correct all such defaults, breaches, failure or refusals for all purposes. 21. Notwithstanding anything stated to the con- trary in the Underlying Mortgage, so long as the Security Documents encumber the Property, or any portion thereof, Subordinating Party shall, concurrently with the release by Lender of the lien of the Security Documents from nny portion of the Property, release the lien of the Underlying Mortgage from such portion of the Property regardless whether all of the conditions precedent to Subordinating Party's obligation to effectuate such release have been satisfied (including, without limitation, the receipt by Subordinating Party of its release price or any condition that Borrower not be in default under -the Underlying Mortgage or any of the documents evidenc- ing, securing or pertaining to the indebtedness secured by the Underlying Mortgage). 12. If either Subordinating Party or Lender shall bring an action against the other by reason of the breach of any covenant, provision or condition hereof, or otherwise arising out of this Agreement, the unsuccessful party shall pay to the prevailing party reasonable attorneys' fees, which shall be payable whether or not any action is prosecuted to judgment. The term "prevailing party" shall include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substan- tially the relief sought, whether by compromise, settlement or judgment. pi • BF:jc 09/06/89 BF4476.0009.0.0 13. It is understood by the parties hereto that in no event shall the granting by Lender of its consent to the lien of the Underlying Mortgage on the Property be con- strued as a waiver of Lender's right to prohibit the creation of any further liens on the Property, nor shall the granting of such consent be construed as a waiver of Borrower's obli- gation to obtain Lender's consent as a condition to creating any additional liens on the Property in the future. 14. In the event Lender shall notify Borrower in writing of the existence of a default under the Loan, then Lender shall promptly deliver to Subordinating Party a copy of such notice at City Hall, 2000 Main Street, Huntington Beach, California 92648. Lender further agrees to notify Subordinating Party at the address set forth above of any additional encumbrances placed on the Property by Borrower to secure Borrower's obligations to Lender. 15. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same instrument. CALIFORNIA RESORTS/HASEKO CITY OF HUNTINGTON BEACH ASSOCIATES, a California REDEVELOPMENT AGENCY general partnership doing as a joint venture By Its By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its 9 BF:jc 09/06/89 BF4476.0010.0.0 STATE OF ) SS. COUNTY OF ) On before me, the under- signed, a Notary Public in and for said State, personally appeared , personally known to me or prcved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO PIER COLONY, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution cf its board of directors exe- cuted the within instrument cn behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public 10 v BF:jc 09/06/89 BF4476.0011.0.0 STATE OF ) SS. COUNTY OF ) On before me, the under- signed, a Notary Public in and for said State, personally appeared IVpersonally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public 11 BF:jc 09/06/89 BF4476.0012.0.0 STATE OF } } SS. COUNTY OF } On , 198_, before me, the under-. signed, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY, the agency therein named, and acknowledged to me that such agency executed the within instrument pursuant to its by-laws or a resolution of its board of directors. [SEAL; WITNESS my hand and official seal. Notary Public •1- 12 U LEGAL DESCRIPTION That certain Real Property in the City of Huntington Beach, County of Orange, State of California, described as follows: Lot 1 of Tract No. 13722, in the City of Huntington Beach, as per Hap filed in Book 636 Pages 38 to 41 . Inclusive of Miscellaneous !Saps, records of Orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located within or under, as reserved in the Deed from Betty Holt Weaver and others, recorded August 15, 1985 as Instrument No. 85-30S251, in official Records, records of Orange County. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 feet, but without the right of surface entry, as reserved in the deed from Elsie M. Bakre Smith, a married woman, recorded March 14, 1961 in Book 565S, Page 693 of Official Records. PARCEL 2: Lot 1 of Tract No. 13478, Book 636 Pages 42 to 44 inclusive of Miscellaneous in the City of Huntington Beach as per Map filed in !laps, records of Orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lying below a depth of $00 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hoofer and Ana Castig and Effie Nation and Laura Mullions by Heed recorded September 17, 1971 in Book 9702, Page 438 of Official Records and as granted to Robert J. Dunn and Jane G. Dunn in Deed recorded August 23, 1973 in Book 10867, Page 60 of Official Records. Also excepting from a portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees to that certain community oil and gas lease, known as "Original East Huntington Beach V Community Oil and Gas Lease", dated August 21, 1954, executed by Ann Thonas as to said land and another as to other land, as lessors, and Jack S. Crawford, as lessee, recorded Doesmber 15, 1954 in Book 2897, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and interest now DMIBIT "A" Page 1 of 2 belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain two co=unity oil and gas leases, known as "East Huntington Beach V Community Oil and Gas Lease, counterpart A", each dated August 21, 1954, executed by Ann Thomas as to said land and others as to other land, as lessors' and Jack B. Crawford, as losses, recorded March 21, 1955 in Book 3003 , Page 251 of official Records and April 1, 1955 in Book 3018. Page 40 of Official Records. Excepting from a portion therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface thereof, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances. Excepting also from portion thereof all rights, title and interest now belonging to cr hereinafter inuring to the lessors. or their successors or assignees, and to the lessees, or their successors or assignees, in that certain two community all and -gas leases, known as "East Huntington Beach V Connunity oil and Can Lease, Counterpart A', each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by others as to other land, as lessors, and by Jack S. Crawford, as lessee, recorded March 21, 1955 in Book 3003, Page 251 of Official Records of said County, and April 1, 1955 in Book 3018, Page 40 of Official Re=orris of said County, as modified by an instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors' and Jack B. Crawford, an "losses', recorded March 21, 1955 in Book 3003, Page 25S of Official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever nano known, located wihtin or under, as reserved in the peed from Betty Holt Weaver and others, recorded August 15, 1985 as Instrument No. 85-305251 in Official Records, re=ords of Orange County. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and other related substances in and under said real property, together with and any and all royalties that may accrue from the same, an granted to Isabel Florence Graham and Edna Myrth Hopson in documont recorded June 17, 1975 in Book 11432, Page 1742 of Official_ Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, Brea, asphaltum and all kindred substances and other minerals under and in said land, as reserved by Bank of America in the geed recorded June 11, 1959 in Book 4752, Page 467 of Official Records. EXHIBIT "A" Page 2 of 2 .'Q BF:bfs 09Y12/89 BF4476.0001.0.0 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Loeb and Loeb 1000 Wilshire Boulevard Suite 1800 Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. ORIGINAL f ----------SPACE ABOVE THIS LINE FOR RECORDER'S USE---------- SUBORDINATIONAGREEMENT THIS SUBORDINATION AGREEMENT (the "Agreement"), made and entered into as of this 31st day of July, 1989, by and between the CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Subordinating Party"), and CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture ("Borrower"), is made and entered into with reference to the following: A. Concurrently herewith, Borrower and The Chase Manhattan Bank, N.A., a national banking association ("Lender"), are entering into that certain Building Loan Agreement (the "Loan Agreement") of even date herewith, pur- suant to the terms of which Lender shall make a Forty -One Million Dollar ($41,000,000) loan (the "Loan") to Borrower for the construction of improvements on certain real property (the "Property") located in Orange County, California, as more particularly described in Exhibit "A" attached hereto and made a part hereof. B. The Loan shall be (i) evidenced by a $41,000,000 Note of even date herewith, made by Borrower to the order of Lender, and (ii) secured by, among other things, a Deed of Trust, Assignment of Rents and Security Agreement'of even date herewith, executed by Borrower for the benefit of Lender, encumbering the Property, and an Assignment of Leases of even date herewith, executed by Borrower, as debtor, for the benefit cf Lender, as secured party, encumbering the Property. The deed of trust and assignment of leases referred to above in this recital paragraph B are hereinafter collectively referred to as the "Security Documents". LEGAL DESCRIPTION That certain Real Property in the City of Huntington Beach, County of Orange, State of: California, described as follows: Lot 1 of Tract No. 13722, in the City of Huntington Basch, as per leap filed in Book 636 Pages 38 to 41 inclusive of Miscellaneous Maps, records of orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever narns know:, located within or under, as reserved In the Deed from Betty Holt Weaver and others, recorded Auqust 15, 1983 as rnstrument No. 85-305251, in Official Records, records of Orange County. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 fast, but without the right of surface entry, as reserved in the deed from Elsie M. Bakre Smith, a married woman, recorded March 14, 1961 in Book 565S, Pag• 693 of Official Records. PARCEL 2: Lot 1 of Tract No. 13478, in the City of Huntington Beach as per Map filed in Book 636 Pages 42 to 44 inclusive of Miscellaneous !Saps, records of Orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lying below a depth of 500 fast from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hoofer and Ana Castiq and Effie Nation and Laura Nuliens by Dead recorded September 17, 1971 in Book. 9702, Page 438 of Official Records and as granted to Robert J. Dunn and Jane C. Dunn in Deed recorded August 23, 1973 in Book 10867, Page 60 of Official Records. Also excepting from a portion thereof all rights, title and interest now belonging to or heroinafter inuring to the lessors or their successors or aselgnees and to the lessees or their successors or assignees in Chat certain community all and gas lease, known as "Original Last Huntington Reach V Community Oil and Can Lease", dated August 21, 1954, executed by Ann Thomas as to said land and another is to other land, as lessors, and Jack B. Crawford, as losses, recorded December 15, 1954 in Book 2897, Page 332 of official Records. Also excepting from a portion thereof all rights, title and Interest %new DOIBIT "A" Page 1 of 2 BF: bfs 09%22/89 BF4476.0002.0.0 C. Borrower and Subordinating Party have hereto- fore entered into that certain Second Amended and Restated Disposition and Development Agreement (the "DDA") dated as of August 26, 1988, relating to, among other things, the future development of the Property. In accordance with the terms and conditions of Sections 611 and 612 of the DDA, Subor- dinating Party has the right, upon the occurrence of certain events, to require Borrower to transfer to Subordinating Party all or portions of the Property. In addition, in accordance with the terms and conditions of Section 612 of the DDA, Borrower has heretofore executed for the benefit of Subordinating Party a Deed of Trust with Assignment of Rents dated May 12, 1989, and recorded January 7, 1989, as Instrument No. 89-299277 in the Official Records of Orange County, California (the "Underlying Mortgage"), which Under- lying Mortgage encumbers a portion of the Property and secures certain obligations of Borrower under the DDA. Subordinating Party's rights under Sections 611 and 612 of the DDA are hereinafter collectively referred to as the "DDA Rights". D. As a condition precedent to Lender making any advances of Loan funds to Borrower and as a condition to Lender allowing the lien of the Underlying Mortgage to encumber the Property and the DDA rights to burden or effect the Property, Lender requires that (i) the Security Documents unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, notwithstanding the fact that one or more of the disbursements made by Lender to Borrower under the Loan may constitute advances that Lender is not obligated to make under the Loan Agreement, whether by reason of the occurrence of an event of default under the Loan Agreement or otherwise, and (ii) any mortgage or deed of trust ("Addi- tional Deed(s) of Trust") covering the Property or any por- tion therecf hereafter executed by Borrower in favor of Lender as security for any additional loan(s) not exceeding $4,000,000 in the aggregate made to Borrower by Lender in the future to cover costs incurred or to be incurred in connec- tion with the development of the Property shall uncondition- ally be and remain at all tines a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. F. As a condition precedent to Lender making any advances of Loan funds to Borrower, and as a condition of '1 2 BF: bfs 09 2/89 BF4476.0003.0.0 Lender allowing the lien of the Underlying Mortgage to encumber the Property and allowing the DDA Rights to burden or effect the Property, Lender requires that Subordinating Party speci- fically and unconditionally subordinate the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights to (i) the lien(s) or charges of the Security Docu- ments and any and all advances made by Lender thereunder, and (ii) the lien or charge of any Additional Deeds of Trust. F. It is to the mutual benefit of the parties hereto that Lender make advances of Loan funds to Borrower and that the lien of the Underlying Mortgage encumber the Property and the DDA Rights continue to burden and effect the Property and Subordinating Party is willing to agree that the Security Documents and any Additional Deeds of Trust shall constitute liens or charges upon the Property that are unconditionally prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights. NOW, THEREFORE, in consideration of Lender's agree- ment to make advances of Loan funds to Borrower and to allow the lien of the Underlying Mortgage to encumber the Property and the DDA Rights to continue to burden or effect the Property, and in consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. The Security Documents and any and all renewals or extensions thereof, and any and all disbursements made by Lender to or for the account or benefit of Borrower there- under, shall unconditionally be and remain at all times liens or charges upon the Property that are prior and superior to the lien or charge of the Underlying Mortgage and the burden and effect of the DDA Rights, to the same extent and purpose as though the Underlying Mortgage and DDA (as to the DDA Rights) had been executed and recorded subsequent to the recording of the Security Documents and the making of each disbursement or advance made by Lender to Borrower under the Security Documents, regardless of whether Borrower may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan at the time of any such disbursement or advance. 2. Each and every Additional Deed of Trust and renewal or extension thereof and all disbursements under the K BF:b£s 09�Y2/89 BF4476.0004.0.0 loan secured thereby made by Lender to or for the account or benefit of Borrower for the development of the Property, shall unconditionally be and remain at all times a lien or charge upon the Property that is prior and superior to the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights, to the same extent and purpose as though the Underlying Mortgage and the DDA (as to the DDA Rights) had been executed and recorded subsequent to the making of each disbursement or advance made by Lender to Borrower under the Additional Deed of Trust regardless of whether Borrower may have been in default under any agreement regarding said future loan, such mortgage or deed of trust or any of the other documents and instruments evidencing, securing or pertaining to such future loan at the time of any such dis- bursement or advance. 3. Lender -would not make advances of Loan funds to Borrower or allow the lien of the Underlying Mortgage to continue to encumber the Prcperty but for the execution of this Agreement by Borrower and Subordinating Party. 4. if Lender (or its successors or assigns) acquires title to the Property or any portion thereof pur- suant to foreclosure proceedings, exercise of a power of sale, deed in lieu of foreclosure, or otherwise, the Under- lying Mortgage and the provisions of Sections 611 and 612 of the DDA shall be null and void and shall not in any way whatsoever constitute liens against the Property nor shall they be binding upon Lender or its successors or assigns nor shall Lender or its successors or assigns be obligated to perform any of the covenants and agreements contained therein. 5. Notwithstanding anything to the contrary set forth in the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of all or any portion of the proceeds of the Loan, any and all dis- bursements made by Lender to or for the account or benefit of Borrower or the Property or any improvements on the Property in connection with: (a) any cost overruns incurred by Borrower in connection with the construction and completion of the improvements contemplated by the Loan Agreement, (b) any costs or expenses incurred in comply- ing with any laws, rules, regulations or statutes or any 4 BF:bfs 0912/89 BF4476.0005.0.0 directives of any governmental agencies having or exercising jurisdiction over the construction or completion of said improvements or the operation of the same upon completion thereof, (c) any sums due or owing to Lender by Borrower or its successors and assigns as a result of advances made by Lender in connection with the Loan Agreement or any other agreement between Lender and Borrower with respect to the disbursement of the proceeds of the Loan, including without limitation interest thereon, or (d) any sums advanced by Lender for the pay- ment of real estate taxes and assessments, insurance premiums or any other sums advanced or obligations incurred by Lender in connection with the protection or preservation of all security given to Lender with respect to the Loan, shall be deemed to be, and shall in all events be, secured by the Security Documents and, as so secured and regardless of whether Borrower at the time of any such disbursements may have been in default under the Loan Agreement, the Security Documents or any of the other documents and instruments evidencing, securing or pertaining to the Loan, shall be and remain liens or charges upon the Property that are uncon- ditionally prior and superior to the lien or charge of the Underlying Mortgage and the effect or burden of the DDA Rights. 6. Subordinating Party shall execute any further documents or instruments required by Lender to effect the subordination of the Underlying Mortgage and the DDA Rights to the lien or charge of any and all Additional Deeds of Trust. 7. This Agreement shall be the whole and only agreement with respect to the subordination of the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights to the lie^ or charge of the Security Documents and the lien or charge of any Additional Deed of Trust and all disbursements and advances made thereunder, and shall supersede and cancel any prior agreements as to such subordination, including without limitation any provi- sions contained in the Underlying Mortgage or the DDA that provide for the subordination of the lien or charge and/or burden or effect thereof to another deed or deeds of trust or to another mortgage or mortgages. 5 BF: bfs 09 2/89 BF4476.0006.0.0 �.Wf 8. Subordinating Party hereby declares, agrees and acknowledges as follows: (a) Subordinating Party has examined the Security Documents, the Loan Agreement and the Note, and Subordinating Party consents to (i) all provisions of the Security Documents, the Loan Agreement and the Note, and (ii) all agreements between Lender and Borrower for the disbursement of the proceeds of the Loan, including without limitation the Loan Agreement; '(b) Subordinating Party intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the Underlying Mortgage and the burden or effect of the DDA Rights in favor of the lien or charge upon the Property of the Security Documents and any Additional Deed of Trust and Subordinating Party understands that, in reliance upon and in consideration of this waiver, relin- quishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into that would not be made or entered into but for said reliance upon this waiver, relinquishment and sub- ordination; (c) Lender has not made any warranty or representation of any kind or nature whatsoever to Subor- dinating Party with respect to (i) the application of the proceeds of the Loan being made by Lender to Borrower upon the security of the Security Documents, (ii) the value of the Property or of the improvements to be constructed thereon pursuant to the Loan Agreement or the marketability or value thereof upon completion of such construction, or (iii) the ability of Borrower to honor its covenants and agreements with Lender; and (d) Subordinating Party has made such inde- pendent legal and factual inquiries and examinations as Subordinating Party deems necessary or desirable, and Sub- ordinating Party has relied solely on said independent inquires and examinations in entering into this Agreement. 9. Subordinating Party hereby waives and agrees not to assert or take advantage of, to the fullest extent permitted by law, (a) any right to require Lender to proceed against Borrower or any other person or to proceed against or exhaust any security held by Lender at any time or to BF:bfs 09 2/89 BF4476.0007.0.0 r) pursue any other remedy in Lender's power before exercising any right or remedy under the Security Documents; (b) any defense that may arise by reason of lack of authority of, or attempted revocation hereof by, Sub- ordinating Party; (c) demand, protest and notice (other than any notice required by law to be given by Lender to Subor- dinating Party or that Lender has agreed in writing in Para- graph 14 hereof to give Subordinating Party with respect to the exercise by Lender of its rights under the Security Documents) of any kind, including, without limiting the generality of the foregoing, or any action or non -action on the part of, Subordinating Party or Lender in connection with any obligation or evidence of indebtedness held by Lender as collateral or in connection with any indebtedness evidenced by the Loan to be made by Lender to Borrower and contemplated hereby; (d) any defense based upon an election of remedies by Lender including, without limitation, an election by Lender to proceed by non -judicial rather than judicial foreclosure, which destroys or otherwise impairs the subroga- tion or other rights, if any, of Subordinating Party or the right of Subordinating Party to proceed against Borrower or both; and (e) any duty on the part of Lender to dis- close to Subordinating Party any facts that it may now know or hereafter know about Borrower or the partners or successors of Borrower in connection with the ownership of the Property regardless of whether Lender has reason to believe that any such facts may materially increase the risk beyond that which Subordinating Party intends to assume or Lender may have reason to believe that such facts are unknown to Subordinat- ing Party or has a reasonable opportunity to communicate such facts to Subordinating Party, it being understood and agreed that Subordinating Party is fully responsible for being and keeping informed of the financial condition of Borrower or any successor owner of the Property and of all circumstances bearing on the risk of non-payment of any indebtedness evidenced by the Loan to be made by Lender to Borrower contemplated hereby. 10. In the event of a breach, by Borrower under the Underlying Mortgage comply with each and every provision and Underlying Mortgage, Subordinating Party failure or refusal to perform and condition of the shall (and does .1 7 M BF: bfs 09 2/89 BF4476.000$.0.0 '%w' hereby expressly represent, warrant, covenant and agree with Lender that it shall), prior to exercising any other right or remedy thereunder (including, without limitation, instituting any foreclosure proceedings), (i) promptly notify Lender in writing at 1 Chase Manhattan Plaza, New York, New York 10081, with a copy of such notice to Lender's counsel, Loeb and Loeb, 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California 90017, Attention: Joseph P. Heffernan, Esq., of any such breach, failure or refusal under the Underlying Mortgage, (ii) permit Lender the right and option (with no obligation to do so) to cure or correct any such breach, failure or refusal within thirty (30) calendar days after receipt of such notice with respect to a non -monetary default and within ten (10) business days after receipt of such notice with respect to a monetary default and (iii) accept all payments and all acts done by Lender on behalf of Borrower under the Underlying Mortgage as though the same had been timely done and performed by Borrower, so that such acts and payment shall fully and totally cure and correct all such defaults, breaches, failure or refusals for all purposes. 11. Notwithstanding anything stated to the contrary in the Underlying Mortgage, so long as the Security Documents or an Additional Deed of Trust encumber the Property, or any portion thereof, Subordinating Party shall, concurrently with the release by Lender of the lien of the Security Documents from any portion of the Property, release the lien of the Underlying Mortgage from such portion of the Property regard- less whether all of the conditions precedent to Subordinating Party's obligation to effectuate such release have been satis- fied (including, without limitation, the receipt by Subordi- nating Party of its release price or any condition that Borrower not be in default under the Underlying Mortgage or any of the documents evidencing, securing or pertaining to the indebtedness secured by the Underlying Mortgage). 12. If either Subordinating Party or Lender shall bring an action against the cther by reason of the breach of any covenant, provision or ccndition hereof, or otherwise arising out of this Agreement, the unsuccessful party shall pay to the prevailing party reasonable attorneys' fees, which shall be payable whether or not any action is prosecuted to judgment. The term "prevailing party" shall include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substan- tially the relief sought, whether by compromise, settlement or judgment. E-* BF:bfs 6-_r/22/89 BF4476.0009.0.0 �10 13. It is understood by the parties hereto that in no even shall the granting by Lender of its consent to the lien of the Underlying Mortgage on the Property be con- strued as a waiver of Lender's right to prohibit the creation of any further liens on the Property, nor shall the granting of such consent be construed as a waiver of Borrower's obli- gation to obtain Lender's consent as a condition to creating any additional liens on the Property in the future. 1-1. In the event Lender shall notify Borrower in writing of the existence of a default under the Loan, then Lender shall promptly deliver to Subordinating Party a copy of such notice at City Hall, 2000 Main Street, Huntington Beach, California 92648. Lender further agrees to notify Subordinating Party at the address set forth above of any additional encumbrances placed on the Property by Borrower to secure Borrower's obligations to Lender. 15. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same instrument. CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY By Its J. ;=--,.rray 5 -Z�•�� P BF:bfs 09/Y2/89 BF4476.0010.0.0 STATE OF ) SS. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO PIER COLONY, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors exe- cuted the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public 10 BF:b£s D�22/89 BF4476.0011.0.0 STATE OF ) } SS. COUNTY OF } On , before me, the under- signed, a notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public 11 BF:bfs 09�?2/89 BF4476.0012.0.0 STATE OF ) SS. COUNTY OF ) On , 198 , before me, the under- signed, a Notary Public in anF1 for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY, the agency therein named, and acknowledged to me that such agency executed the within instrument pursuant to its by-laws or a resolution of its board of directors. ISEAL ] WITNESS my hand and official seal. Notary Public 12 belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain two =".-unity oil and gas leases, known as "East Huntington Beach V Community Oil and Gas Lease, counterpart A', each dated August 21, 1954, executed by Ann Thomas as to said lard and others as to other land, as lessors' and Jack B. Crawford, as lessee, recorded March 21, 1955 in Book 3003 , Page 251 of official Records and April 1, 1955 in Book 3018. Page 40 of Official Records. Excepting from a portion therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface therso;, but without ti:e right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketing said substances. Excepting also from portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors, or their successors or assignees, and to the lessees, or their successors or assignees, in that certain two community oil and gas lease*, known as "East Huntington Beach V Community Oil and Gas Lease, Counterpart A% each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by other■ as to other Land, as lessors, and by Jack S. Crawford, as lessee, recorded March 21, 19S5 in Book 3003, Page 251 of Official Records of said County, and April 1, 1955 in Book 3018, Page 40 of Official Records of said County, as modified by an instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors" and Jack B. Crawford, as "lessee", recorded March 21, 1955 in Book 3003, Page 255 of official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located within or under, as reserved in the Deed fre:a Betty Holt Weaver and others, recorded August 15, 1985 as Instrument No. 85-305251 in Official Records, records of Orange County. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and other related substances in and under said real property, together with and any and all royalties that may accrue from the same, as granted to Mabel Florence Graham and Edna Myrth Hopson in document recorded June 17, 1975 in Book 11432, Page 1742 of Official Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, brea, asphaltum and all kindred substances and other minerals under and in said land, as reserved by Bank of America in the need recorded June 11, 1959 in Book 4152, Page 467 of Official Records. .1 E MIBIT "A" Page 2 of 2 OR • BFrjc 08/29/89 BF4449.0008.0.0 DDA [To be attached] EXHIBIT "B" L `/y e z f ATTACHMENT NO. 10 GUARANTY AND AGREEMENT OF HASEKO (CALIFORNIA), INC. (A MAJORITY -OWNED CORPORATION OF HASEKO (HAWAII), INC. AND HASEKO URBAN, K.K., TWO RELATED CORPORATIONS) THE HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency"),' and CALIFORNIA RESORTS, a California general partnership, entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 for the Main -Pier Redevelopment Project Area (the "DDA") and on December 5, 1988 the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the DDA to CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Developer"). The Agency and the Developer have entered or will enter into the First Amendment to the DDA (the "Amendment") to which this Guaranty is attached as Attachment No. 10, which Amendment provides in part that Haseko (California), Inc. (A Majority -Owned Corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., Two Related Corporations), (the "Guarantor") shall make and deliver a guaranty as provided in said A.T.endment . R E C I T A L S A. Haseko (California), Inc. is a majority -owned corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., two related corporations, and is the parent corporation of Haseko Pier Colony, Inc., a general partner of the Developer, and will significantly benefit by the execution by the Agency of the Amendment. B. The execution by the Guarantor of this Guaranty is a condition but for which the Agency would not execute the Amendment. C. The Amendment, which is on file with the Agency as a public record, is incorporated herein by reference. Unless otherwise expressly set forth herein, all -terms shall have the same meaning as in the Amendment. In consideration of the Agency's approval of the Amendment and other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantor unconditionally and irrevocably guarantees and promises to pay to Agency cn demand, in lawful money of the United States, any and all indebtedness of Developer to Agency under that certain Subordinated Deed of Trust with Assignment of Rents (Attachment No. 9 to the DDA). cap. v 2. Guarantor hereby unconditionally and irrevocably guarantees to Agency the full, timely and faithful performance by Developer of all of its obligations, duties, promises, covenants and agreements as set forth in the DDA and the Amendment, collectively referred to herein as the "Amended DDA." 3. This is a continuing guaranty. No extensions, modifications or changes to the Amended DDA shall release the undersigned or affect this Guaranty in any way, and the undersigned hereby waives any notification thereof. 4. (a) The Guarantor shall promptly advise the Agency in writing of any material adverse change in the business or financial condition of the Guarantor. (b) The Guarantor will maintain full and complete books of account and other records reflecting the results of its operations, and will furnish or cause to be furnished to the Agency such information about the financial condition and operations of the Guarantor as the Agency shall reasonably request, including, without limitation, the following information which shall be furnished without request: (i) Immediately upon availability, but no later than one hundred twenty (120) days after the close of each fiscal year of the Guarantor: (A) A balance sheet of the Guarantor as of the close of such fiscal year; and (B) Statements of income and expenses and change in financial condition of Guarantor for such fiscal year. Each of the foregoing shall set forth in comparable form the corresponding figures for the previous fiscal year, shall be in reasonable detail, shall be prepared in accordance with good accounting principles and provided in the form prepared by and/or for the Guarantor in the regular course of business, and shall be certified to be true and correct by a responsible financial officer of the Guarantor and/or by a firm of Certified Public Accountants reasonably acceptable to the Agency. The Agency shall have the right, at all reasonable times and upon reasonable notice, to audit the Guarantor's books and records, all of which shall be made available on a confidential basis to the Agency and the Agency's representatives for such purpose, from time to time, upon the Agency's request. If any such audit by the Agency shall disclose that either current assets of the Guarantor are overstated by more than two percent (2%) or that current liabilities of the Guarantor are understated by at least two percent (2%), the cost of such audit shall be payable by the Guarantor to the Agency promptly upon demand. ATTACHMENT NO. 10 Page 2 of 5 09-15-89 6109n/2460/004 IN oe l (c) No material adverse change to Guarantor's financial condition or business shall occur from that which existed on March 31, 1989, being the date of certain financial statements of Guarantor delivered to the Agency on a confidential basis. (d) This Guaranty shall be included in the financial records of the Guarantor and made available to the Certified Public Accounting firm performing the Guarantor's audit/review of financial position. 5. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 6. Guarantor hereby waives and agrees not to assert or take advantage of (a).any right to require Agency to proceed against the Developer (or any guarantor other than the undersigned) or to pursue any other remedy in the Agency's power before proceeding against the Guarantor; (b) demand, protest and notice which the Agency may be required to provide to Developer under the Amended DDA; and (c) any duty on the part of Agency to disclose to Guarantor any facts Agency or City now or hereafter know about the Site, the Amended DDA or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantor intend to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Site, the Amended DDA, the obligations of the Developer, the financial condition of the Developer and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 7. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of and and right to participate in any security now or hereafter held by Agency. 8. The obligations of Guarantor hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not Developer is joined therein. or a separate action or actions are brought against Developer. 9. The Agency's right hereunder shall not be exhausted by its exercise of any one of its rights or remedies or by any ATTACHYMIT NO. 10 Page 3 of 5 09-15-89 61o9n/2460/004 Co�Y r ti such action or by any number of successive actions until and unless all indebtedness and obligations hereby guaranteed have been paid and fully performed. 10. No p:ovisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder except by a writing duly executed by each Agency. 11. Guarantor agrees -to Fay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 12. Any sum required to he paid by the Guarantor to the Agency pursuant to the terms hereof shall bear interest at the lesser of (i) the maximum rate permitted under Section 1(2) of Article XV of the California Constitution or (ii) twelve percent (12%) per annum, from the date said sums shall be due until paid. 13. Guarantor hereby waives notice of any demand by the Agency, as well as notice of any default by the Developer. 14. The Agency may assign. this Guaranty. when so assigned, Guarantor shall be bound as above to the assignees without in any manner affecting Guarantor's liability hereunder. 15. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 16. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization_ or insolvency of the Guarantor, and notwithstanding any default or failure of the Guarantor fully to perform any of its obligations set forth in this Guaranty. 17. The Guarantor hereby agrees that as long as this Guaranty is in effect, it will maintain its corporate existence, will not dispose of all or substantially all of its assets, and will not consolidate with or merge into another corporation. The obligations of the Guarantor under this Guaranty may not be assigned or transferred without the express written approval of the Agency. 18. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantor. 19. This -Guaranty shall terminate upon the issuance by the Agency of a Certificate of Completion for all construction and ATTACHMENT NO. 10 Page 4 of 5 09-15-89 6109n/2460/004 I development to be completed by the Developer upon the Site in accordance with Section 415 of the Amended DDA. 20. Each of the persons or entities executing this Guaranty shall be jointly and severally liable as Guarantor for the obligations and promises set forth herein, and the Agency may proceed hereunder against any one or more of said persons or entities without waiving its right to proceed against any of the others. 21. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to this Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon venue or forum non conveniens. 22. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 23. If any term,.provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof, and all applications thereof not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. IN WITNESS WHEREOF, the undersigned has executed this Guaranty this day of , 1989. HASEKO (CALIFORNIA), INC. By Name: Title: By Name: Title: "GUARANTOR" 09-15-89 6109n/2460/004 ATTACHMEIIT NO. 10 Page 5 of 5 STATE OF CALIFORNIA ) } COUNTY OF ORANGE ) ss. On before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO (CALIFORNIA), INC., the corporation therein named, and acknowledged to me that such corporation executed the same. WITNESS my hand and official seal. (SEAL) ATTACHMENT NO. 10 09-12-89 6109n/2460/004 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. On before me, the undersigned, a Notary Public in and for said State, personally appeared' - , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO (CALIFORNIA), INC., the corporation therein named, and acknowledged to me that such corporation executed the same. WITNESS my hand and official seal. (SEAL) ATTACI-D= NO. 10 09-12-89 6109n/2460/004 ATTACHMENT NO. 10 GUARANTY AND AGREEMENT OF HASEKO (CALIFORNIA), INC. (A MAJORITY -OWNED CORPORATION OF HASEKO (HAWAII), INC. AND HASEKO URBAN, K.K., TWO RELATED CORPORATIONS) THE HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency"), and CALIFORNIA RESORTS, a California general partnership entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988, for the Main -Pier Redevelopment Project Area (the "Agreement") and on December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the Agreement to CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Developer"). The Agency and the Developer have now entered or will enter into the First Amendment to the Agreement to which this Guaranty is attached as Attachment No. 10 (the "Amendment"), which Amendment provides in part that Haseko (California), Inc. (A Majority -Owned Corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., Two Related Corporations), (the "Guarantor") shall make and deliver a guaranty as provided in said Amendment. 1. Haseko (California), Inc. is a majority -owned corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., two related corporations, and is the parent corporation of Haseko Pier Colony, Inc., a general partner of the Developer, and will significantly benefit by the execution by the Agency of the Amendment. 2. The execution by the Guarantor of this Guaranty is a condition but for which the Agency would not execute the Amendment. 3. In consideration of the Agency's approval of the Amendment and other valuable consideration, receipt of which is hereby acknowledged, Guarantor unconditionally and irrevocably guarantees and promises to pay to Agency on demand, in lawful money of the United States, any and all indebtedness of Developer to Agency under that certain Subordinated Deed of Trust with Assignment of Rents (Attachment No. 9 to the Agreement). 4. Guarantor hereby unconditionally and irrevocably guarantees to Agency the full, timely and faithful performance by Developer of all of its obligations, duties, promises, r r 7 covenants and agreements as set forth in the Agreement and the Amendment. 5. This is a continuing guaranty. No extensions, modifications or changes to the Agreement shall release the undersigned o: affect this Guaranty in any way, and the undersigned hereby waives any notification thereof. 6. (a) The Guarantor shall promptly advise the Agency in writing of: (i) All actions, suits or proceedings against or involving the Guarantor pending or to its knowledge threatened, at law or in equity, or before any federal, state, municipal or other court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, involving the possibility of judgments, penalties or liabilities against the Guarantor which might in the aggregate exceed One Million Dollars ($1,000,000); and (ii) Any material adverse change in the business or financial condition of the Guarantor. (b) The Guarantor will maintain full and complete books of account and other records reflecting the results of its operations, and will furnish or cause to be furnished to the Agency such information about the financial condition and operations of the Guarantor as the Agency shall reasonably request, including, without limitation, the following information which shall be furnished without request: (i) Immediately upon availability, but no later than one hundred twenty (120) days after the close of each fiscal year of the Guarantor: (A) A balance sheet of the Guarantor as of the close of such fiscal year; and (B) Statements of income and expenses and change in financial condition of Guarantor for such fiscal year. Each of the foregoing shall set forth in comparable form the corresponding figures for the previous fiscal year, shall be in reasonable detail, shall be prepared in accordance with good accounting principles and provided in the form prepared by and/or for the Guarantor in the regular course of business, and shall be certified to be true and correct by a responsible financial officer of the Guarantor and/or by a firm of Certified Public Accountants reasonably acceptable to the Agency. The Agency shall have the right, at all reasonable times and upon reasonable notice, to audit the ATTACHMENT NO. 10 Page 2 of 5 09-11-89 6109n/2460/004 I r T Guarantor's books and records, all of which shall be made available on a confidential basis to the Agency and the Agency's representatives for such purpose, from time to time, upon the Agency's request. If any such audit by the Agency shall disclose that either current assets of the Guarantor are overstated by more than two percent (2%) or that current liabilities of the Guarantor are understated by at least two percent (2%), the cost of such audit shall be payable by the Guarantor to the Agency promptly upon demand. (c) No material adverse change to Guarantor's financial condition or business shall occur from that which existed on March 31, 1989, being the date of certain financial statements of Guarantor delivered to the Agency on a confidential basis. 7. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 8. Guarantor hereby waives and agrees not to assert or take 'advantage of (a) any right to require Agency to proceed against the Developer (or any guarantor other than the undersigned) or to pursue any other remedy in the Agency's power before proceeding against the Guarantor; (b) demand, protest and notice which the Agency may be required to provide to Developer under the Agreement; and (c) any duty on the part of Agency to disclose to Guarantor any facts Agency or City now or hereafter know about the Site, the Agreement or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantor intend to assure or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Site, the Agreement, the obligations of the Developer, the financial condition of the Developer and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 9. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of and and right to participate in any security now or hereafter held by Agency. 10. The obligations of Guarantor hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. ATTACHMENT NO. 10 Page 3 of 5 09-11-89 6109n/2460/00,1 P. 11. The Agency's right hereunder shall not be exhausted by its exercise of any one of its rights or remedies or by any such action or by any number of successive actions until and unless all indebtedness and obligations hereby guaranteed have been paid and fully performed. 12. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder except by a writing duly executed by each Agency. 13. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 14. Any sum required to be paid by the Guarantor to the Agency pursuant to the terms hereof shall bear interest at the lesser of (i) the maximum rate permitted under Section 1(2) of Article XV of the California Constitution or (ii) twelve percent (12%) per annum, from the date said sums shall be due until paid. 15. Guarantor hereby waives notice of any demand by the Agency, as well as notice of any default by the Developer. 16. The Agency may assign this Guaranty. when so assigned, Guarantor shall be bound as above to the assignees without in any manner affecting Guarantor's liability hereunder. 17. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 18. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Guarantor, and notwithstanding any default or failure of the Guarantor fully to perform any of its obligations set forth in this Guaranty. 19. The Guarantor hereby agrees that as long as this Guaranty is in effect, it will maintain its corporate existence, will not dispose of all or substantially all of its assets, and will not consolidate with or merge into another corporation. The obligations of the Guarantor under this Guaranty may not be assigned or transferred without the express written approval of the Agency. 20. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantor. 21. Each of the persons or entities executing this Guaranty shall be jointly and severally liable as Guarantor for ATTACHMENT NO. 10 Page 4 of 5 09-11-89 6109n/2460/004 r the obligations and promises set forth herein, and the Agency may proceed hereunder against any one or more of said persons or entities without waiving its right to proceed against any of the others. 22. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to this Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of .that county, or in the Federal District Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon venue or forum non conveniens. 23. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 24. If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof, and all applications thereof not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. IN WITNESS WHEREOF, the undersigned has executed this Guaranty this day of , 1989. HASEKO (CALIFORNIA), INC. By Name: Title: By Name: Title: "GUARANTOR" ATTACHMENT NO. 10 Page 5 of 5 09-11-89 6109n/2460/004 STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO (CALIFORNIA), INC., the corporation therein named, and acknowledged to me that such corporation executed the same. WITNESS my hand and official seal. (SEAL) ATTACHMF-NT NO. 10 49-11-89 6109n/2460/004 STATE OF CALIFORNIA } ss. COUNTY OF ORA11GE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO (CALIFORNIA), INC., the corporation therein named, and acknowledged to me that such corporation executed the same. WITNESS my hand and official seal. (SEAL) ATTACHMENT NO. 10 09-11--89 6109n/2460/004 ATTACF ENT "A" FIRST AMENDMENT TO SECOND AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND CALIFORNIA RESORTS THIS FIRST AMENDMENT ("First Amendment") is entered into this day of September 1989, by and between THE HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency") and CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Developer"). R E C I T A L S WHEREAS, the Agency and California Resorts entered into a certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 (the "DDA"), a copy of which is on file as a public record with the Secretary of the Agency and which is incorporated herein by reference; and WHEREAS, on December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the DDA to the Developer; and WHEREAS, the Developer and the Agency to the DDA are proceeding to implement the redevelopment activities provided for in the DDA,; and WHEREAS, the Agency has determined that it will facilitate the successful completion of the activities proposed in the DDA and the Redevelopment Plan for the ruin -Pier Redevelopment Project if certain provisions of the DDA are amended; and WHEREAS, the Agency has determined that the Guaranty and Agreement of Haseko (California), Inc. is adequate consideration in exchange for the amendments to the DDA provided for herein and that said Guaranty and Agreement provides adequate security to protect the Agency's interest in real property represented by that certain Subordinated Deed of Trust with Assignment of Rents (Attachment No. 9 to the DDA); and WHEREAS, the First Amendment now proposed enhances the viability of the activities proposed under the DDA and is economically beneficial to the Agency and the Developer; NOW, THEREFORE, the Agency and the Developer do hereby agree to amend the DDA as follows: 1, At Page 28, Section 412 shall be amended in its entirety as follows: If Developer is in default hereunder as a result of its failure or inability to complete the construction of the Project in accordance with the terms of this Agreement, including the time schedule set forth in the Schedule of Performance (Attachment No, 3) and if during the sixty (60) day period following such default the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction during such sixty (60) day period, the Agency shall have the right (exercisable by written notice to the holder of any mortgage or deed of trust), to purchase such mortgage or deed of trust and the note secured thereby for an amount equal to the sum of (i) the principal balance outstanding under such note and all accrued unpaid interest thereon plus, (ii) all other sums secured by such mortgage or deed of rust, plus, (iii) all other sums which are payable to such holder in connection with the loan evidenced by such note, which payment shall be made to such holder, if at all, no later than fifteen (15) days following such notice by the Agency to the holder. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall have the right (exercisable by written notice to such holder no later than sixty (60) days following the date title to the Site or part thereof vests in the holder), to be entitled to a conveyance from the holder of the Site or such part thereof that is vested in holder upon payment to the holder of an amount ecrial to the sum of the following: a. All principal and interest outstanding under such note immediately prior to such holder's taking title to the Site or such portion thereof, together with all other amounts secured by such mortgage or deed of trust and all other amounts payable in connection with the loan secured by such mortgage, or deed of trust; plus b. All costs and expenses incurred by such holder in connection with holder's obtaining title to the Site or such portion thereof to which it has obtained title, including, ATTACH: LENT "A" Page . 2 of 5 09/11/89 6065n/2460/004 without limitation, recording fees, title insurance premiums, trustees fees and reasonable attorneys fees; plus C. All costs and expenses incurred by such holder in connection with owning, operating, maintaininc, leasing, and repairing the Site or such part thereof to which such holder has obtained title; plus d. The cost of any capital improvements made to the Site or such portion to which such holder has taken title during the period in which such holder held title; plus e. Interest in an amount equal to the interest that would have been due an the outstanding principal balance of the note as of the date such holder obtained title to the Site or portion thereof, of for the period commencing cn that date and continuing to the date such holder conveys the Site or portion thereof to Agency. Such payment shall be made to such holder, if at all, no later than seventy-five (75) days following the date title to the Site, or part thereof, vests in the holder. 2. Page 2 of Attachment No. 8 ("Method of Financing") after Paragraph 3, insert as a new paragraph: 4. Upon the direction and consent of the Developer, Agency's obligation to pay the Project costs referenced in Paragraph 2 shall be satisfied by Agency's payment of such amounts directly to the Developer's Lender or other designee. 3. As a condition to the Agency approving and executing this First Amendment, the Developer shall cause to be delivered to the Agency the "Guaranty and Agreement of Haseko (California), Inc.," in the form attached hereto and to be incorporated into the DDA as Attachment No. 10, duly executed. 4. Except as expressly provided to the contrary herein, all provisions of the DDA shall remain in full force and effect. The DDA and this First Amendment collectively shall hereafter be referred to as the "Amended DDA". The Amended DDA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. ATTACHMENT "A" Page 3 of 5 09/11/89 6065n/2460/004 i Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. The effective date of this First Amendrent shall be the date of execution by the Agency. 1989 HMITINGTON BEACH REDEVELOPMENT AGENCY By: Chairman ATTEST: APPROVED AS TO CONTENT Agency Clerk Deputy City Administrator/ Redevelopment APPROVED AS TO FORM: Agency Special Counsel Stradling, Yocca, Carlson & Rauth, REVIEWED AND I&PROVED: AS TO FORM Agency Attorney APPROVED: Executive Director ATTACHMENT "A" Page 4 of 5 09/11/89 6065n/2460/004 Q CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture Date: 1989 CALIFORNIA RESORTS INTERNATIONAL, INC. a California corporation, partner By Its Date: 1989 HASEKO PIER COLONY, INC. a California corporation, partner By Its ATTACH?S-NT "A" Page 5 of 5 09/11/89 6065n/2460/004 RESOLUTION NO. A RESOLUTION OF THE HUNTINGTON BEACH REDEVELOPMENT AGENCY APPROVING A FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND CALIFORNIA RESORTS WHEREAS, the Huntington Beach Redevelopment Agency (the "Agency") and California Resorts, a California general partnership entered into a certain Second Amended and Restated Disposition and Development Agreement, dated as of August 26, 1988, (the "DDA") fo: the disposition and development of certain private and public improvements within the Main -Pier Redevelopment Project Area (the "Project Area"); and WHEREAS, on December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the DDA to California Resorts/Haseko Associates, a California general partnership. doing business as a joint venture (hereinafter referred to as the "Developer"); and WHEREAS, the Developer and the Agency are proceeding to perform their respective obligations pursuant to the DDA; and WHEREAS, the Developer and the Agency desire to approve an amendment to the DDA (in the form attached hereto as Attachment "A" incorporated herein, which constitutes the "Amendment") to supplement the terms of the DDA; and WHEREAS, the approval and execution of the Amendment will facilitate the orderly completion of improvements by the Developer as contemplated in the DDA and in furtherance of the Redevelopment Plan for the Main -Pier Redevelopment Project (the "Redevelopment Plan"); and WHEREAS, the Agency and the City Council of the City of Huntington Beach (the "City Council") have conducted a duly noticed joint public hearing regarding the proposed Amendment; and NOW, THEREFORE, the Huntington Beach Redevelopment Agency does resolve as follows: Section 1: The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment that the A.endment will significantly benefit the Agency and the community by providing additional security to protect the Agency's interest a in real property pursuant to the DDA and by facilitating the elimination of blighting conditions, the generation revenues, and the provision of high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the DDA. Section 2: The Agency finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Developer pursuant to the DDA. Section 3: The Huntington Beach Redevelopment Agency approves the Amendment in the form of Attachment "A" and authorizes and directs the Chairman and the Executive Director to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the DDA as now amended. PASSED, APPROVED, and ADOPTED this 1989 by the following vote: AYES: NOES: ABSENT: ABSTAIN: DATED: ATTEST: Agency Clerk day of HUNTINGTON BEACH REDEVELOPMENT AGENCY By Chairman 08/31/89 6063n/2460/004 -2- AS TO FORM; Age c'fir spec is l`-ebu e , St a ling, Yocca, son & Rauth REVIEWED AND APPROVED AS TO FOXM: Agency Attorney 08/31/89 6063n/2460/004 -3- RESOLUTION NO. 6077 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND CALIFORNIA RESORTS WHEREAS, the Huntington Beach Redevelopment Agency (the "Agency") and California Resorts, a California general partnership entered into a certain Second Amended and Restated Disposition and Development Agreement, dated as of August 26, 1988, (the "DDA") for the disposition and development of certain private and public improvements within the Main -Pier Redevelopment Project Area (the "Project Area"); and WHEREAS, on December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all of its right, title, and interest in and to the DDA to California Resorts/Haseko Associates, a California general partnership doing business as a joint venture (hereinafter referred to as the "Developer"); and WHEREAS, the Developer and the Agency are proceeding to perform their respective obligations pursuant to the DDA; and WHEREAS, the Developer and the Agency desire to approve an amendment to the DDA (in the form attached hereto as Attachment "A" incorporated herein, which constitutes the "Amendment") to supplement the terms of the DDA; and WHEREAS, the approval and execution of the Amendment will facilitate the orderly completion of improvements by the Developer as contemplated in the DDA and in furtherance of the Redevelopment Plan for the Main -Pier Redevelopment Project (the "Redevelopment Plan"); and WHEREAS, the Agency and the City Council of the City of Huntington Beach (the "City Council") have conducted a duly noticed joint public hearing regarding the proposed Amendment; and NOW, THEREFORE, the City Council of the City of Huntington Beach does resolve as follows: Section 1: The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment that the Amendment will significantly benefit the Agency and the community by providing additional security to protect the Agency's interest in real property pursuant to the DDA and by facilitating the elimination of blighting conditions, the generation revenues, and the provision of high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the DDA. Section 2: The City Council finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the knendment is consistent with the orderly development of the improvements to be provided by the Developer pursuant to the DDA. Section 3: The City Council approves the Amendment in the fora of Attachment "A" and authorizes and directs the Mayor and the City Manager to execute that Amendment and such other documents as nay be determined by the City Attorney to be necessary or appropriate to effectuate the DDA as now amended. PASSED, APPROVED, and ADOPTED this October , 1989 by the following vote: 2nd day of AYES: MacAllister, Green, Winchell, Bannister, Mays, Silva, Erskine NOES: None ABSENT: None ABSTAIN: None CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH By Mayor DATED: 10/ 3/ 89 ATTEST: exrr4� City Clerk -3- 08/31/89 6064n/2460/004 6077 APPROVED AS TO FORM •Agency Special Counsel, STRADLING, YOCCA, CARLSON 6 RAUTH REVIEWED AND APPROVED AS TO FORM: City Attorney I 6A9 -4 - 6077 08/31/89 6064n/2460/004 Q APPROVED AS TO FOR* r A cy Special Ctunpel, STRADLING, YOCSON & RAUTH REVIEWED AND APPROVED AS TO FORM: City Attorney of 00/3I/09 6064n/2460/004 --4- 6077 Res. No. 6077 STATE OF CALIFORNIA COUNTY OF ORANGE I ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby.certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the '2nd day Of October 19 89 , by the following vote: AYES: Councilmembers: MacAllister, Green, Winchell, Bannister, Mays, Silva, Erskine NOES: Councilmembers: None ABSENT: Councilmembers: None y Werk ana ex-o ici er of the.City Council of the City of Huntington Beach, California IL 06 0 ATTACHMENT "A" FIRST AMENDMENT TO SECOND AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREM% NT BY AND BETWEEN THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND CALIFORNIA RESORTS THIS FIRST AM=MW11989, first Amendment") is entered into this _ Jf'day of by and between THE HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency") and CALIFORNIA RESORTSIHASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Developer"). R E C I T A L S WHEREAS, the Agency and California Resorts entered into a certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 (the "DDA"), a copy of which is on file as a public record with the Secretary of the Agency and which is incorporated herein by reference; and WHEREAS, on December 5, 1988, the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the DDA to the Developer; and WHEREAS, the Developer and the Agency to the DDA are proceeding to implement the redevelopment activities provided for in the DDA; and WHEREAS, the Agency has determined that it will facilitate the successful completion of the activities proposed in the DDA and the Redevelopment Plan for the Drain -Pier Redevelopment Project if certain provisions of the DDA are amended; and WHEREAS, the Agency has determined that the Guaranty and Agreement of Haseko (California), Inc. is adequate consideration in exchange for the amendments to the DDA provided for herein and that said Guaranty and Agreement provides adequate security to protect the Agency's interest in real property represented by that certain Subordinated Deed of Trust with Assignment of Rents (Attachment No. 9 to the DDA); and WHEREAS, the First AmencLnent now proposed enhances the viability of the activities proposed under the DDA and is economically beneficial to the Agency and the Developer; NOW, THEREFORE, the Agency and the Developer do hereby agree to amend the DDA as follows: 1. At Page 28, Section 412 shall be amended in its entirety as follows: If Developer is in default hereunder as a result of its failure or inability to complete the construction of the Project in accordance with the terms of this Agreement, including the time schedule set forth in the Schedule of Performance (Attachment No. 3) and if during the sixty (60) day period following such default the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site cr any part thereof has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction during such sixty (60) day period, the Agency shall have the right (exercisable by written notice to the holder of any mortgage or deed of trust), to purchase such mortgage cr deed of trust and the note secured thereby for an amount equal to the sun of (i) the principal balance outstanding under such note and all accrued unpaid interest thereon, plus (ii) all other sums secured by such mortgage or deed of trust, plus (iii) all other sums which are payable to such holder in connection with the loan evidenced by such note, which payment shall be made to such holder, if at all, no later than fifteen (15) days after the date of such written notice of Agency's exercise of the option. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall have the right (exercisable by written notice to such holder no later than sixty (60) days following the date title vests in the holder) to be entitled to a conveyance from the holder of the Site or such part thereof that is vested in holder upon payment to the holder of an amount equal to the sum of the following: a. All principal and interest outstanding under such note immediately prior to such holder's taking title to the Site or such portion thereof, together with all other amounts secured by such mortgage or deed of trust and•all other amounts payable in connection with the loan secured by such mortgage or deed of trust; plus b. All costs and expenses incurred by such holder in connection with holder's obtaining title to the Site or such portion thereof to which it has obtained title, including, without limitation, recording fees, title ATTACHMENT "A" Page 2 of 5 09/12/89 6065n/2460/004 4k. �.✓ insurance premiums, trustees fees and reasonable attorneys fees; plus C. All costs and expenses incurred by such holder in connection with owning, operating, maintaining, leasing, and repairing the Site or such part thereof to which such holder has obtained title; plus d. The cost of any capital improvements made to the Site or such portion to which such holder has taken title during the period in which such holder held title; plus e. An amount equal to the interest that would have been due on the outstanding principal balance of the note as of the date such holder obtained title to the Site or portion thereof, of for the period commencing on that date and continuing to the date such holder conveys the Site or portion thereof to Agency; such payment :hall be made to such holder, if at all, no later than fifteen (15) days following the date of such written notice of Agency's exercise'of the option. 2. Page 2 of Attachment No. 8 ("Method of Financing") after Paragraph 3, insert as a new paragraph: 4. Upon the direction and consent of the Developer, Agency's obligation to pay the Project costs referenced in Paragraph 2 shall be satisfied by Agency's payment of such amounts directly to the Developer's Lender or other designee. 3. As a condition to the Agency approving and executing this First Amendment, the Developer shall cause to be delivered to the Agency the "Guaranty and Agreement of Haseko (California), Inc.," in the forn attached hereto and to be incorporated into the DDA as Attachment No. 10, duly executed. 4. Except as expressly provided to the contrary herein, all provisions of the DDA shall remain in full force and effect. The DDA and this First Amendment collectively shall hereafter be referred to as the "Amended DDA". The Amended DDA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. ATTACKMENT "A" Page 3 of 5 09/12/89 6065n/2460/004 Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. The effective date of this First Amendment shall be the date of execution by the Agency. G�f. .rj1 1989 HUNTINGTON BEACH REDEVELOPMENT AGENCY BY airman ATTEST: Agency Clerk APPROVED AS TO ericy Specia radling, Yo xinse Carlson & Rauth, REVIEWED AND APPROVED: AS TO FORM Agency �Att orney,, � A7t/,/� Executive Director ATTACHMENT "A" Page 4 of 5 09/12/89 6065n/2460/004 CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture Date: VGT' 7 1989 CALIFORNIA RESORTS INTERNATIONAL, INC. a Califo;P'y corporation, partner (�--> By I/ �--� Its i/CS/lenE Date:0CJ' 1989 HASEKO PIER COLONY, INC. a California corporation, partn B Its_SEChlf nyez - T�f ATTACHMENT "A" Page 5 of 5 09/12/89 6065n/2460/004 ORT6ZNAL ATTACHMENT NO. 10 GUARANTY AND AGREEMENT OF HASEKO (CALIFORNIA), INC. (A MAJORITY -OWNED CORPORATION OF HASEKO (HAWAII), INC. AND HASEKO URBAN, K.K., TWO RELATED CORPORATIONS) THE HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency"), and CALIFOR'3IA RESORTS, a California general partnership, entered into that certain Second Amended and Restated Disposition and Development Agreement dated August 26, 1988 for the Main -Pier Redevelopment Project Area (the "DDA") and on December 5. 1988 the Agency approved the assignment and transfer by California Resorts of all of its rights, title and interest in and to the DDA to CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Developer"). The Agency and the Developer have entered or will enter into the First Amendment to the DDA (the "Amenfent") to which this Guaranty is attached as Attachment No. 10, which Amendment provides in part that Haseko (California), Inc. (A Majority -Owned Corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., Two Related Corporations), (the "Guarantor") shall make and deliver a guaranty as provided in said Amendment. R E C I T A L S A. Haseko (California), Inc. is a majority -owned corporation of Haseko (Hawaii), Inc. and Haseko Urban, K.K., two related corporations, and is the parent corporation of Haseko Pier Colony, Inc., a general partner of the Developer, and will significantly benefit by the execution by the Agency of the Amendment. B. The execution by the Guarantor of this Guaranty is a condition but for which the Agency would not execute the Amendment. C. The Amendment, which is on file with the Agency as a public record, is incorporated herein by reference. Unless otherwise expressly set forth herein, all terms shall have the same meaning as in the Amendment. In consideration of the Agency's approval of the Amendment and other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantor unconditionally and irrevocably guarantees and promises to pay to Agency on demand, in lawful money of the United States, any and all indebtedness of Developer to Agency under that certain Subordinated Deed of Trust with Assignment of Rents (Attachment No. 9 to the DDA). Cx/i cif �i'/ A'e ��. Laz.c-,f��w 2. Guarantor hereby unconditionally and irrevocably guarantees to Agency the full, timely and faithful performance by Developer of all of its obligations, duties, promises, covenants and agreements as set forth in the DDA and the Amendment, collectively referred to herein as the "Amended DDA." 3. This is a continuing guaranty. No extensions, modifications or changes to the Amended DDA shall release the undersigned or affect this Guaranty in any way, and the undersigned hereby waives any notification thereof. 4. (a) The Guarantor shall promptly advise the Agency in writing of any material adverse change in the business or financial condition of the Guarantor. (b) The Guarantor will maintain full and complete books of account and other records reflecting the results of its operations, and will furnish or cause to be furnished to the Agency such information about the financial condition and operations of the Guarantor as the Agency shall reasonably request, including, without limitation, the following information which shall be furnished without request: (i) Izrmediately upon availability, but no later than one hundred twenty (120) days after the close of each fiscal year of the Guarantor: (A) A balance sheet of the Guarantor as of the close of such fiscal year; and (B) Statements of income and expenses and change in financial condition of Guarantor for such fiscal year. Each of the foregoing shall set forth in comparable form the corresponding figures for the previous fiscal year, shall be in reasonable detail, shall be prepared in accordance with good accounting principles and provided in the form prepared by and/or for the Guarantor in the regular course of business, and shall be certified to be true and correct by a responsible financial officer of the Guarantor and/or by a firm of Certified Public Accountants reasonably acceptable to the Agency. The Agency shall have the right, at all reasonable times and upon reasonable notice, to audit the Guarantor's books and records, all of which shall be made available on a confidential basis to the Agency and the Agency's representatives for such purpose, from time to time, upon the Agency's request. If any such audit by the Agency shall disclose that either current assets of the Guarantor are overstated by more than two percent (2%) or that current liabilities of the Guarantor are understated by at least two percent (2%), the cost of such audit shall be payable by the Guarantor to the Agency promptly upon demand. ATTACHMENT NO. 10 Page 2 of 5 09-15-89 6109n/2460/004 (c) No material adverse change to Guarantor's financial condition or business shall occur from that which existed on March 31, 1989, being the date of certain financial statements of Guarantor delivered to the Agency on a confidential basis. (d) This Guaranty shall be included in the financial records of the Guarantor and made available to the Certified Public Accounting firm performing the Guarantor's audit/review of financial position. 5. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 6. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require Agency to proceed against the Developer (or any guarantor other than the undersigned) or to pursue any other remedy in the Agency's power before proceeding against the Guarantor; (b) demand, protest and notice which the Agency may be required to provide to Developer tinder the Amended DDA; and (c) any duty on the part of Agency to disclose to Guarantor any facts Agency or City now or hereafter know about the Site, the Amended DDA or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantor intend to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Site, the Amended DDA, the obligations of the Developer, the financial condition of the Developer and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 7. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of and and right to participate in any security now or hereafter held by Agency. B. The obligations of Guarantor hereunder are independent of the obligations of Developer and, in the evert of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. 9. The Agency's right hereunder shall not be exhausted by its exercise of any one of its rights or remedies or by any ATTACHMENT NO. 10 Page 3 of 5 09-15-89 6109n/2460/004 such action or by any number of successive actions until and unless all indebtedness and obligations hereby guaranteed have been paid and fully performed. 10. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder except by a writing duly executed by each Agency. 11. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 12. Any sum required to be paid by the Guarantor to the Agency pursuant to the terms he:eof shall bear interest at the lesser of (i) the maximum rate permitted under Section 1(2) of Article XV of the California Constitution or (ii) twelve percent (12%) per annum, from the date said sums shall be due until paid. 13. Guarantor hereby waives notice of any demand by the Agency, as well as notice of any default by the Developer. 14. The Agency may assign this Guaranty. When so assigned, Guarantor shall be bound as above to the assignees without in any manner affecting Guarantor's liability hereunder. 15. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 16. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Guarantor, and notwithstanding any default or failure of the Guarantor fully to perform any of its obligations'set forth in this Guaranty.. 17. The Guarantor hereby agrees that as long as this Guaranty is in effect, it will maintain its corporate existence, will not dispose of all or substantially all of its assets, and will not consolidate with or merge into another corporation. The obligations of the Guarantor under this Guaranty may not be assigned or transferred without the express written approval of the Agency. 18. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantor. 19. This Guaranty shall terminate upon the issuance by the Agency of a Certificate of Completion for all construction and ATTACHME24T NO. 10 Page 4 of 5 09-15-89 6109n/2460/004 y development to be completed by the Developer upon the Site in accordance with Section 415 of the Amended DDA. 20. Each of the persons or entities executing this Guaranty shall be jointly and severally liable as Guarantor for the obligations and promises set forth herein, and the Agency may proceed hereunder against any one or more of said persons or entities without waiving its right to proceed against any of the others. 21. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to this Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon venue or forum non conveniens. 22. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 23. If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof, and all applications thereof not held invalid, void or unenforceable, shall continue in full force and effect and -shall in no way be affected, impaired or invalidated thereby. IN WITNESS W OF, the undersigned has executed this Guaranty this day of Q Gam_, 1989. HASEKO (CALIFORNIA), INC. Name -5crc�i/�� �c wcSe %7�`S Ct7rvl'�'%� •it 'fit Title: Vice Fre=,et s',a By Name: Title: "GUARANTOR" ATTACHMENT NO. 14 Page 5 of 5 09-15-89 6109n/2460/004 development to be completed by the Developer upon the Site in accordance with Section 415 of the Amended DDA. 20. Each of the persons or entities executing this Guaranty shall be jointly and severally liable as Guarantor for the obligations and promises set forth herein, and the Agency may proceed hereunder against any one or more of said persons or entities without waiving its right to proceed against any of the others. 21. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to this Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon venue or forum non conveniens. 22. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 23. If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof, and all applications thereof not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. IN WITNESS WHEREOF, the undersigned has executed this Guaranty this day of , 1989. HASEKO ( CALIF01MIA) , INC.177 h's Name, Title: Sy--�'-i.�'"l�!�ti+? gk;rA i��o[�. %r5 �'tlD�ri� Name: Title: Se-"1oR v\ce ?(zes%oer,) ,,GUARANTOR" ATTACHMENT NO. 10 Page 5 of 5 10-02-89 6109r./2460/004 U LMW STATE OF CALIFORNIA COUNTY OF LOS ANGELES } } ss. On this 4th day of October 1989, before me, a Notary Public in and for said State, duly commissioned and sworn, personally appeared AICM OKOCHI, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as the attorney - in -fact of Soichiro Kawase, in Soichiro Kawase's capacity as Senior Executive Vice President of HASEKO (CALIFORNIA), INC., a California corporation, and acknowledged to me that he subscribed his own name as attorney -in -fact and the name of Soichiro Kawase as Senior Executive Vice President of HASEKO (CALIFORNIA), INC., and also acknowledged to me that HASEKO (CALIFORNIA), INC. executed the within instrument pursuant to its bylaws or a resolution of its board of directors. OFFICIAL. SEAL ISABEL C. DAVIS NOTARY PUBLIC-CAUFORNIA LOS ANGELES COUNTY My Comm_ Expires Feb. A. 1991 HUNTINGTON BEACH JA CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION To CONNIE BROCKWAY CITY CLERK Subject CALIFORNIA RESORTS DDA AMENDMENT NOTICE From GAIL HUTTON CITY ATTORNEY Date August 25, 1989 Kindly publish the attached notice each week, beginning the week of August 29, 1989, regarding the above public hearing. GAIL HUTTON CITY ATTORNEY Enclosure cc: Art DeLaLoza, Deputy City Attorney 3 ALuthortzed to PublishAdvertrsernents al all kmf udinfl public notices- by Decree o! the SVP6"or Court oOrange County, C&MUra,a. Number A-6214, dated 29 September. 1961. and A-24831. dated 11 June. 1963- STATE OF CALIFORNIA County of Orange t * &&.WUwV Ca~sd by M s+t'dard 0 am = r I M 10 PCs caka- -Wo J 1 am a Citizen. of the uNted States and a resident of the County aforesaid: 1 am over the age of eighteen years. and not a party to or interested in the below entitled matter. I am a principal clerk of the Orange Coast DAILY PILOT. with which is combined the NEWS -PRESS. a newspaper of general circulation. printed and published in the City of Costa Mesa. County of Orange. State of California, and that a Notice of Public 'Hearing of which copy attached hereto is a true and complete copy, was printed and ptiblished in the Costa Mesa. _ Newport Beach. Huntington Beach. Fountain Valley. Irvine. the South Coast communities and Laguna Beach issues of said newspaper for 4 t i me s consecutive weeks to wit the issue(S) of A1114� 1 . 198 9 September 7 . 198 9 September 9 . 198 9 September 14 . 198 9 t declare, under penalty of perjury, that the foregoing is true and correct. Executed on - september 14 _, 198 9 at Costa Mesa, California. Signature ' 1 VYLIV nunu� NOTICE OF - PUBLiC HEARING CITY OF HUNTINGTON BEACH/ H.B. REDEVELOPMENT AGENCY AMENDMENT TO DiSPOSITtON & DEVELOPMENT AGREEMENT CALIFORNIA RESORTS On September 10, 1989 at 7:00 p.m.'or as soon there- after as the matter may be heard, in the City" Council 'Chambers, .Huntington' Beach City Hall, located at', 2000 Main Street, Hunt-, ington Beach, California. the, City Council of the City of Huntington Beach and the untington, Beach Re-1 evelopment Agency (the' t"'Agency") wilt Hold a joint {public hearing to consider. an amendment (the 1"Amendment") to a Disposi- tion and Development Agreement heretofore entered into'betwifen the Agency and California Re- sorts. The'project in ques- tion is .Within the M4in Pier lRedevelopment Prcriact Area as amended and has Previously been designated ,as the Main Pier Phase i Pro ;]act. The proposed Amend !ment and a staff report in rpluding a summary of the (Amendment is available for '.public inspection at the Of Tice of the City Clerk, at the above address, during office' (hours (&00am - 5:00pm, Monday- Friday). Further in - ,formation concerning this matter may also be obtained by pontacting Doug LaBelle,' Deputy City Adminis- trator/Dtfector of Economic Redevelopment, at (714) 586-5582. 11 Dated this 28th day of! August, 1989.. Connie drockwey City Ctdrk Pubffshed Orange' Coast Daily Pilot August 31; Sep- tember,7, 9, 14, 1988. -- Th-732 ' PUE aC I'9T: •.E NOTICE OF PUBLIC HEARING CITY OF HUNTINGTON . . BEACH/ H.B. REDEVELOPMENT AGENCY AMENDMENT TO DISPOSITION 6 CALIFORNIA RESORTS On September 18, 1989 at '7:00 p.m. or as soon there- after as the matter may be heard, In the City Council Chambers, Huntington Beach City Hall, located at 2000 Main Street, Hunt- Ington Beach, California, the City Council of the City of Huntington Beach and the ,Huntington Beach Re- development Agency (the "'Agency") will hold a joint public hearing to consider i'an amendment (the "Amendment") to a Disposi- tion and Development Agreement heretofore entered into between the Agency and California, Re sorts. The proposed Amend- ment and a staff report in- cluding a .summary of the Amendment Is available for public Inspection at the Of- fice -of the City'Clerk, at the above address, during office ,hours (8:00am - 5:00pm, Wonday - Friday). Further in- formation concerning this matter may also be obtained by contacting Doug LaBelle, Deputy City Adminis- 4rator/Director of Economic Redevelopment, at (714) 536-5582. Dated this 281h day of Augpust, 1989. 1Connie Brockway . City Clerk Published Orange Coast �Daily Pilot August 31. Sep- .tember 7, 14, 1989. Th-732 Orange Coast ' 04i 11Y • orange Coost DONv • Huntnng±on Beoch Irdependem • Fo„r+an Vo'ey Inde.endela � 330 West Bay Street • Costa Mesa, California 92627 0 714 642-4321 • FAX 714 631-5902 s Dear Advertiser: i Enclosed please find clipping of your ad from the first publication. If you need to make any changes or corrections, please call rie at your earliest convenience. The cost of this publication will be $ Thanks for your cooperation and patronage. Sincerely, qu d y etting Manager Legal Advertising Manager 1 ' PROOF OF PUBLICATION (20155 C.CZ STATE OF CALIFORNIA, COUNTY OF ORANGE, I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the above -entitled matter. I am the principal clerk of the printer of the I-WNTINGTON BEACH NEWS a newspaper of general circulation, printed and published in the City of County of Orange, and whi6i newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of Orange, State of California, under the date of Case Number �v that the notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the follow' dates, to -wit: 14 all in the year 19 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Dated at 406 Free copies of this blank form may be secured from California Newspaper Service Bureau, Inc. Advertising Clearing House P.O. Box 31 Los Angeles, CA 90053 (213) 625-2541 Please request GENERAL Prod o(Publicatlon when urdtnlag this form This space is for Lne County Clerk's Filing Stamp Proof of Publication of NOTICE OF JOINT PUBLIC HEARING Clry d Huntington Baa&Ae Reds vefaprom Agency hmendment to Disposhim i Dwel- opium Agrostrors CaNtamla Re- sorts On September 18. IWO. at 7W pan. or as soon thereafter as the nutter may be heard. in the City Council Chambero; Huntington Beach City Hap. batad at 2tx10 Main Street. Huntington Beach, Ceplomla. the City Council d the City of Huntington Beach an the Huntington Beach Redwelopned Agency (the *Agency) will hold a bird public hearing to consider an amsrtdmsm (tine •Arrandmerin to a Disposition and Developmeni Agresmem therstatore entered Into between the Agency and California Resorts. The proposed Arnor~ and a staff report hldUdi g a sung many of the Antendmam Is available for public InsWalon a( the Office of the City Clerk, at the above address, during ofgoe hours (8AOarM5XCp1. Monday • Friday). Fuller informs lion concerning this matter may also be obtained by contacting Doug la, Bells. Deputy City minlst►a. tor/Director of Economic Redevel- oprnenn. as (714) tLISM112. Dated this 211th day of August 1989. Connie Brockway City Clark Pubpshed In Sept. 8. low. NOTICE OF PUBLIC HEARING C 1� o�- to,,, -r�e.cT El B P-,e e �/o��►„ Qnf 9� e,.,r � (Jm�..�n,�T- TO TDi os.410-J �- �Pve/op,-A,]i- l��f+�8s►t :✓� GkI,V-rxti,a Res0"+s On September 18, 1989, at 7:00 p.m. or as soon thereafter as the matter may be heard, in the City Council Chambers, Huntington Beach City Hall, located at 2000 Main Street, Huntington Beach, California, the City Council of the City of Huntington Beach and the Huntington Beach Redevelopment Agency (the "Agency") will hold a joint public hearing to consider an amendment (the "Amendment") to a Disposition and Development Agreement heretofore entered into between the Agency and California Resorts. The proposed Amendment and a staff report including a summary of the Amendment is available for public inspection at the Office of the City Clerk, at the above address, during office hours (6:00am - 5:00pm, ASonday - Friday). Further information concerning this matter may also be obtained by contacting Doug LaBelle, Deputy City Administrator/Director of Economic Redevelopment, at (714) 536-5582. I Dated this ,2F day of August, 1989. CITY CLERK VP Publis -� / 1 , 08/24/89 6015n/2460/004 i PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA County of Orange I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the above -entitled matter. I are the principal clerk of the printer of the a newspaper of general circulation, printed in the City of Huntington Beach and published in the City of Huntington Beach, County of Orange, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of Orange, State of California, under the date of 0 , Case Number ; that the notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit: September __, and J. all in the year 1989. I certify (or declare) under penalty of perjury that the foregoing is true and correct. Dated at Huntington Beach, California this day of 61 1989. 08/24/89 6015n/2460/004 Signature i + RFC)RJING REOJESTED BY C THEN RECORDED MAIL TO i i I nAME STREET ADDRESS CITY SI CIE IIP L_ HASE.KO(CALIrORNIA) , INC. 350 So. Figueroa St #240 Los Angeles, CA 90071 ATTN: TOSHI NATSUI J (SPACE ABOVE THIS LINE FOR RECDRDER'S USE) P OWE R. OF ATTORNEY —GENERAL [includes; optional DURABLE POWER OF ATTORNEY) KNOW ALL PERSONS BY TPESE PRES�NTS: That I. SOICHIRO KAWASE, in m.• capacity as Senior rxe Vice President of Haseko California , Inc., (see Addendum, Paragraph 1) the undersigned (jointly or severally, i1 more than one) hereby make, constitute and appoint Akira nko-h i my true and lawtul Attorney lot me � Ko-"pay C=iixcs=yxzr:g?%Czrar k,Y,x ( see Addendur,,, paragrapr (a) To ask, demand, sue lor, recover, collect and receive each and every sum of money. oebl, account. kpacy. beouest. interest. dividend, annuity and demand (which now is or herearier shall become Cue, owing or payable) belonoing 10 or claimed try m!, and to use and take any lawtul means lot Inc recovery tn--re,31 by legal pfD=SS or otherwise• and to execute and deliver a satisfaction or release tnerelor, together with Inc right ano power to compromise o: compound any claim or oemand: (b) To exercise any or all o1 Inc lollowing powers as to real properly, any interest therein and/or any building thereon: To contract for, purchase. rG:eive and lake possession thereof and of evidence of ittle thereto: to lease Inc same to' any term or purpose, incluoino leases for business. residence. and oil ano/or mineral development: 10 sell, exchanoe. Cram or Convey the Same with or without warranty: and to monca0e, transfer in trust. or olnerwise encumber or hypotht:21c the same to secure payment o: a neootiabte or non-neootiabte note or penormance of any oblloallon or aoreement: (c) To exercise any or all of the following powers as Ic all kinds of personal property and cows. wares and nrrchandise, cnosls in action and oln!r propeny in poSS!SSiOn or in action: to conlra:f to,. buy• sell• exchanoe, transfer and in any IeC,al manner deal in and with the same; and 10 monoaoe, 1ransier in trust. or otherwise encumber or hypotn!cait the same to secure payment of a neooliable or non-neootiabte note or p--normanC! of any obhcation or aoreemem. (d) To borrow money and to execute and deliver neooliable or non-neootiabte notes Iherefo: will) Dr without security: and to Icon money and receive nepouzbte or non-neootiabte notes Inerefor will) such security as ne/she shall oe^_m prop--;: (e) to create• amend, supplement and terminate any trust and to instruct and advise Inc trusle_ of any trust wherein I am or may b! irUSiDr of btn!hciar)-: 1:, reoresen: and vol! S:D:k. exercise 51C_'k rionts. accept and out woo, any dividend. cisinbulion or bonus. join In any corpo.ale tinancin,-_, reo.oanitalion, mtrotr. IiQuidzlion, consolicalion o: other action and the extension, eDmpromtse. conversion, adlusiment. enlor:emerli or loreclosuie. sinoty or in cornunnion won others of 2n1• corporal! sio:K. Donc, note, oeDeniur► or otner security: to compound. compromise• aolusl. sentt ane saitsly any oDheauon. secured or unsecurec. owin: by Or 10 me an" to dive or a::ep: any propeny and/or money whether or not equal to or less in value than Inc amount owing in payment. settlement or saris:a:uon tnereo:: (i) To lransact business of any kind or class and as my act and deed to sion. execute, aCknowieCo! and oeliver any deed. lease. 2ssicnrTrn: of lease. covenant, inoeniure, inoemnny, aoreement, moncade, o►ed o: trust. 2SSionmeni o: rpDncao! o. of the Deneticial inler!sl un0er oe!d of Irus:. extension or renewal D: any CDlioallon. suDorot .alion or waiver 0' priority, hypolh!cation. Donomr)•, chant!-pany, Dill Of Lading. Dill 0: salt. Dill, pond, not!, wnein!r ntdoliaw, or nor.- n!ooti2blt, recppl, evie!n:e o: debt, lull 0r panial release or sates:action of m01`1020t. juoomtn: and olner C!D:. request to: p2m21 or lull re:onveyan:e Of deY^ of Irus: 2no such Omer insliumenis in writing o: any kind or class as may Ix net!ssary or proper in Inc prem:ses. �p-�'�•'.i'..Y:{:=»�".-rot�at�T6X>-%+I'.lr`-0W�'?'.';"_X �7'lP{7S^_.X'•1:T.^.:?".JL'?r'�iL�.".'�'.Y3C}�"."SCQtJ[TCX4C�i2�:P:)��..�^_:S.'= K'SSJ�YY��`tB�:Y.XT�ST.�'��..^"'.']S�:t,"A^,L (see Addendu=, Paragraph 3) ?'j , .. ._ . .,... g',;'D'r:.`:h:-.; .rifts-•-fl,rl�..t.Tn�drF•r7F.�>tv_—:a,'Fi�ht4b[7iJE��TF,d��2ti��i.,,.�v.-tGtj'xti-�''�+Y":,;�:�'S.-�.Ys^...e�^..x�^c+lr.tG:::=xx:..�: (i) it (g) and/or (a) are not stricken. In! ioliowino warninc 2oDh!s - WARNING TO PERSON EXECUTING THIS DOCUMENT: This is an imporant legal dOcUm!n1. It creates : durable power of attorney. Before executing this document, you should know these important facts: 1. This document may provide the person you desioriate as your 2norney in tad wfh broad powers to dispose, sell, convey, and encumber your real and personal property. 2. These powers will exist for an indefinite period o1 time unless you limit their duration in this document. These powers will continue to exist notwithstanding your subsequent disability or incapacity. 3. You have the hoht to revoke or terminate this durable power of attorney at any time. GIVING AND GRANTING unto my said Attorney lull power and autnohty 10 OD and Derlorm all and every act and thino whatsoever reouisile, rItzessary Dr appropriate to b-, done in and aboul in! premises as fully 10 all intents and purposes 2s 1 mioht a CDUld 00 it personally Dresen;, hereby ratiryinp a111n21 my SaIC Anorney shall lawfully do o• cause to p! done by vinu! of these presents. The powers and autnority n!reDy conterreo upon my said Anorney shall D-- applicable to al real and personal propent o: interests therein now owned or n!reaner acquired by me and wnerever small. My said Anorney is empowered hereby to determine in his/net sole discretion int time wn!n, purpos! lot and rranner in which any power herein content'. upon him shall be exerc:sed, and Inc conditions, provisions and covenams o: any msirumenl o• oocurntnl which may D! executed Dy nirn/ne: Dursuan: hlretd: an: in Inc 2:ouisition or disposition of real or personal progeny, my said Anorney shalt nave exclusive poA.er to fix Inc terms thereof for cash, credit and/or proge:'T)' and it on credit wiln or wilnov: secunl)•. Wnen the context so requires, the rruscvline penoer includes Inc feminine and/or neuter, and the singular number includes IM_ plural. 1YjNESS my hand this day of 2R9 STATE OF CALIFORNIA ss. COUNTY OF On INE day of , in 1fn yur 1°._-.__, t eim me, me unomiprlect, a N71ar)• Public In\and for said S1a personally appearer personalty known 10 me (or prove0 to m,- on the basis of satisfactory evidence) to be the persorL. whose name_- suDscnpe0 to the within Instrume and ackndwfeoge. 10 rti-- trial -_he_ exe:tned r. 1', iTNESS my hand and crliclal seal Ncrary Public In anC for cald Safe. t'OWTR Or eTIORNf ••GI NrR�I •i r.nroc eo1' 0 OUP46LI P'JWFR 01 0, IORNF Tj I.-% .v�e+i0 Mrw can+l �vsl rr W� Mir••. T1 r• rti I..N! .•.e•u 1K l�rw..w. „—,1 C0:11 PD..Irov—R.. 1.1? ..�•. r..r r, Nr ,n •n rti.•, .•.t �•.. . r.0 n,v, nerd.• a .tun rr.nuCion VIM, Woe Collt. IN:. twit . 3) 1—.." r u�,rr o 1+r e.,.ei w �'^� rrr.nr.r ti �►r.r+.r ADDENDUM TO POWER OF ATTORNEY EXECUTED BY SOICHIRO KAWASE IN FAVOR OF AKIRA OKOCHI 1. And as President of Haseko Townhomes, Inc., Haseko Realty (California), In., HASEKO Pier Colony, Inc., and Haseko Management, Inc. 2. Only in my capacity as Senior Executive Vice President of Haseko (California), Inc., and as President of Haseko Townhomes, Inc., Haseko Realty (California), Inc., Haseko Pier Colony, Inc., and Haseko Management, Inc. 3. (g) This power of Attorney shall terminate and be of no further effect on October 12, 1989. 4. HASEKO (CALIFORNIA), INC., a California corporation By Soichiro Ka ase, Senior Executive Vice President HASEKO TOWNHOMES, INC., a California corporation By -1, . L Ae Soichiro Kawase, President HASEKO REALTY (CALIFORNIA), INC., a California corporation By Soichiro Kawase, President HASEKO PIER COLONY, INC., a California corporation By /Soichiro Kawase, Presidnet Hr1IV) i— , a California corporation 17 By ,,-Soichiro Kawase President STATE OF CALIFORNIA ss. COUNTY OF LOS ANGELES On this 3rd day of October 1989, before me, a Notary Public in and for said State, duly commissioned and sworn, personally appeared SOICHIRO KAWASE, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as the Senior Executive Vice President of HASEKO (CALIFORNIA),INC., the President of HASEKO (TOWNHOMES), INC., the President of HASEKO REALTY (CALIFORNIA), INC., the President of HASEKO PIER COLONY, INC., the President of HASEKO MANAGEMENT, INC., and acknowledged to me that the corporations therein named executed the within instrument pursuant to its bylaws or a resolution of its board of directors. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal on the date in this certificate first above written. OFFICIAL SEAL KATHLEEN Y. WATANABE Notary Public-Unomla F� a LOS ANGELES COUNTY MY Comm. Ems. Mar. 22. 1991 BF: j c r�29/89 BF4326.0001.0. 0 `..� CMB Loan No. 56211 ( California) BUILDING LOAN AGREEMENT Dated as of July 31, 1989 BETWEEN THE CHASE VUIMTTAN BANK (NATIONAL ASSOCIATION), a national banking association having its principal office at 1 Chase Manhattan Plaza, New York, New York 10081 ("Lender") 0 -D] California Resorts/Haseko Associates, a California general partnership doing business as a joint venture ("Borrower") whose address is 222 5th Street Huntington Beach, California 92648 LOCATICN OF PREMISES: Huntington Beach, California "Lender's Counsel LOEB AND LOEB 1000 Wilshire Boulevard Suite 1800 Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. BF:jc 09YZ9/89 BF4326.0002.0.0 IV u VI VII Exhibit A B B-1 B-2 C D E F Schedule CONTENTS Particular Terms and Definitions . . . . . . LoanAdvances . . . . . . . . . . . . . . . . Conditions Precedent to Lender's Obligation to Make the Initial. Advance . . . . . . . . . . . . . . . . . . . Conditions Precedent to Lender's Obligations to Make Advances After the Initial Advance . . . . . . . . . . Borrower's Representations, Warranties and Covenants . . . . . . . . . . . . . . . . General Conditions and Provisions . . . . . . Particular Provisions . . . . . . . . . . . . Project Cost Statement Borrower's Requisition Contractor's Cost Certification Payment Receipts Borrower's Architect's Letter Contractor's Letter Lease Assignment Letter Release Price Schedule Direct Cost Statement Stored Materials Statement Indirect Cost Statement Page 1 6 10 19 21 29 34 t BF:jc 08�49/89 BF4326.0003.0.0 ARTICLE I Particular Terns and Definitions 1.01. As used in this Agreement, the following terms shall have the respective meanings indicated opposite each of them; where the meaning of any term is stated to be "None," provisions involving the application of that term shall be disregarded. "Aggregate Change Order Amount" - $750,000 "BLTA Number" - 910- "Borrower's Architects" - Solberg + Lowe Architects, Inc. with respect to construction of the retail, office and theatre complex and Togawa & Smith Architects Planners with respect the construction of the condominium units "Borrower's Interest in - Fee the Premises" "Change Order Amount" - $100,000 "Commitment Fee" - $205,000 "Completion Date" - October 31, 1990 "Construction Consultant" - Marx/Okubo & Associates "General Contractor" - Keller Construction with respect to the construction of the retail, office and theatre complex and J. A. Hill Corporation with respect to the construction of the condominium units W BF:jc QA7�9/89 BF4326.0004.0.0 "Guarantor of Completion" - Haseko (California), Inc. "Improvements" - certain improvements consisting of a 130 unit condominium complex and a 83,285 net rentable sq. ft. retail, office and theatre complex to- gether with all necessary on -site and off -site improve- ments, to be con- structed in accordance with the Plans. "Lease Percentage" - 7V% "Loan Amount" - $41,000,000 "Permanent Commitment Date" - None "Permanent Lender" - None "Retainage Percentage" - 10% "Stored Material Amount" - $500,000 "Subcontract Amount" - $500,000 1.02. The following terms, as used herein, shall have the following meanings: "Building Loan Trust Account" -- A separate non -interest bearing bank account with Lender having the BLTA Number which shall not be drawn upon except to pay Direct and Indirect Costs approved by Lender. "Change Orders" -- Any amendments or modifications to the Plans, General Contract or Major Subcontracts. "Direct Costs" -- The aggregate costs of all labor, materials, equipment, fixtures and furnishings necessary for completion of the Improvements. "Direct Costs Loan"; "Indirect Costs Loan" -- That portion Cal-2 BF:jc 08'7?9/89 BF4326.0005.0.0 of the Loan Amount applicable and equal to the sum of the Loan Budget Amounts for Direct Costs and Indirect Costs, respectively, shown on the Project Cost State- ment. "Direct Cost Statement" -- A statement in the form. of SCHED- ULE I hereto of Direct Costs incurred and to be incurred, trade by trade, to be prepared by the General Contractor (or Borrower's supervisor of construction if there is no General Contractor) and submitted to Lender with each Requisition. "Financial Statements" -- Statements of the assets, liabil- ities (direct or contingent), income, expenses and cash flow of Borrower and Guarantor, prepared in accordance with generally accepted accounting principles. "General Contract" -- Any contract (together with all rid- ers, addenda and other instruments referred to therein as "contract documents") between Borrower and the Gen- eral Contractor or any other person which requires the General Contractor or such other person to provide, or supervise or manage the procurement of, substantially all labor and materials needed for completion of the Improvements. "Governmental Authorities" -- The United States, the state in which the Premises are located and any political subdivision, agency, department, commission, board, bureau or instrumentality of either of them, including any local authorities, which exercises jurisdiction over the Premises or the Improvements. "Guaranty" -- The guaranty(ies) of the performance of all or part of Borrower's obligations, as indicated in Section 1.01 hereof, to be executed by Guarantor. "Hazardous Materials" -- Asbestos, polychlorinated biphenyls and petroleum products and any other hazardous or toxic materials, wastes and substances. "Indemnity Agreement" -- An agreement from Borrower and Guarantor or, if there are no Guarantors, such other persons or entities as shall be satisfactory to Lender, whereby, among other things, Lender is indemnified against any Hazardous Materials. "Indirect Costs" -- All costs of acquisition of the Premises Cal-3 I BF:jc 08�f6/89 BF4326.0006.0.0 and completion of the Improvements other than Direct Costs, including but not limited to architects' and attorneys' fees, ground rents, interest, real estate taxes, survey costs and insurance premiums. "Indirect Cost Statement" -- A statement in the form of SCHEDULE II hereto of Indirect Costs incurred and to be incurred, to be prepared by Borrower and submitted to Lender with each Requisition. "Initial Advance" -- The first advance of Loan proceeds to be made hereunder. "Loan" -- The Direct Costs Loan and Indirect Costs Loan, collectively, and in an amount initially equal to the Loan Amount. "Loan Budget Amounts" -- The portion of the Loan Amount set ^forth in Column D on the Project Cost Statement to be advanced for each category of Direct and Indirect Costs. "Major Leases" -- Any leases for space in excess of the Lease Percentage of the rentable area of the Improve- ments. "Ma'or Subcontractor"; "Major Subcontract" -- Any subcon- tractor or supplier engaged by the General Contractor and any contractor or supplier engaged by Borrower, under one or more contracts or work orders aggregating the Subcontract Amount or more; any such contract or work order. "Mortgage" -- The mortgage(s) or deed(s) of trust to be made to Lender to secure the Note and any sums in addition to the Loan Amount advanced by Lender for completion of the Improvements. "Mortgaged Property" -- The Premises and other property con- stituting the "Mortgaged Property," as said quoted term is defined in the Mortgage. "Note" -- The note(s) for a principal sum equal to the Loan Amount to be made by Borrower to Lender to evidence the Loan. "Permanent Closing" -- Either (i) the sale of the Note and Mortgage to, and the purchase thereof by, the Permanent Lender, including the execution by Borrower of a Note Cal-4 BF:jc 04�F?9/89 BF4326.0007.0.0 modification and extension agreement satisfactory to the Permanent Lender, or (ii) the satisfaction of the Note and Mortgage in connection with the consummation of the loan (and/or the acquisition of the Premises by the Permanent Lender or an entity in which the Perma- nent Lender has an interest) contemplated by the Perma- nent Commitment, including the execution and delivery of a new note and mortgage satisfactory to the Perma- nent Lender; Lender to receive in either case in imme- diate New York funds the outstanding principal amount of the Note plus interest accrued thereon to the date of such receipt. "Permanent Commitment" -- The commitment of the Permanent Lender, if any, dated the Permanent Commitment Date and the commitment, if any, of any other person or entity to provide funds for the Permanent Closing, including any three -party agreement among Lender, Borrower and the Permanent Lender or such other person or entity sup- plemental thereto. "Plans" -- All final drawings, plans and specifications pre- pared by Borrower, Borrower's Architects, the General Contraztor or Major Subcontractors, and approved by Lender and the Construction Consultant, which describe and show the labor, materials, equipment, fixtures and furnishings necessary for the construction of the Improvements, including all amendments and modifica- tions thereof made by approved Change Orders (and also showing minimum grade of finishes and furnishings for all areas of the Improvements to be leased or sold in ready -for -occupancy conditions). "Premises" -- The real property described on Exhibit A to the Mortgage and located as indicated on the cover hereof, upon all or part of which the Improvements are to be constructed. "Project Cost Statement" -- A statement in the form of EXHIBIT A hereto setting forth, by category, the Direct and Indirect Costs of Completion of the Improvements and the Loan Budget Amounts in respect of the Direct Costs Loan and Indirect Costs Loan. "Requisition" -- A statement by or on behalf of Borrower in the form of EXHIBIT B hereto setting forth the amount of the Loan advance requested in each instance and including: (i) the Direct and Indirect Cost Statements; Cal-5 BF:jc 0§,V�9/89 BF4326.0008.0.0 `") (ii) the "Contractor's Cost Certification" in the form of EXHIBIT B-1 hereto; (iii) "Payment Receipts" from all con- tractors, subcontractors or suppliers in the form of EXHIBIT B-2 hereto; and (iv) proof of payment of all Indirect Costs covered by a previous Requisition. "Requisition Authorization Statement" -- A statement by Borrower in Lender's standard form setting forth the name and containing the signature of each person authorized to execute Requisitions under this Agreement on Borrower's behalf. "Stored Materials Statement" -- A statement in the forty. of SCHEDULE I -A hereto which, if advances are to be made for stored materials pursuant to Section 2.05 hereof, shall be submitted with, and made a part of, the Direct Cost Statement. "Title Insurer" -- The issuer(s), approved by Lender and the Permanent Lender, of the title insurance policy or pol- icies insuring the Mortgage. ARTICLE II Loan Advances 2.01 Subject to the provisions of this Agreement Lender will advance and Borrower will accept the Loan Amount in installments as follows: The Initial Advance will be made upon the satisfaction of the applicable conditions set forth in Article III hereof, and all subse- quent advances shall be made monthly there- after, upon the satisfaction of the applicable conditions set forth in Article IV hereof, in amounts which shall be equal to the aggregate of the Direct and Indirect Costs incurred by Borrower through the end of the period covered by the Requisition less: (a) The greater of the Retain - age Percentage of such Direct Costs or the actual "Retained Amounts" specified on the said Direct Cost Statement; and Cal-6 BF:jc 08'/�9/89 BE4326.0009.0.0 (b) The total of the Loan advances theretofore made; and, at the election of Fender, less any combination of the following further amounts: (c) all or a portion of the amount by which any Direct or Indirect Costs are or are estimated by Lender to be greater than the respective Loan Budget Amounts for such costs; and/or (d) any costs covered by the Requisition not approved, certified or verified as provided in Section 2.02 hereof, any Indirect Costs covered by a previous Requisition for which proof of payment has not been received by Lender, and or any Direct Costs covered by a p;evious Requisition for which Payment Receipts have not been received by Lender and the Construction Consultant. 2.02. Direct Costs are to be certified by the General Contractor or Borrower's supervisor of construction if there Is no General Contractor. Verification of the monthly progress and Direct Costs which have been incurred by Bor- rower from time to time, and the estimated total Direct Costs, shall be conclusively determined by the Construction Consultant, except that both Direct and Indirect Costs are also subject to approval and verification by Lender from time to time. 2.03. All advances to Borrower are to be made at Lender's principal office or at such other place as Lender may designate and shall be deposited in the Building Loan Trust Account. Requisitions shall be received by Lender at least five business days prior to the date of the requested advance. 2.04. Amounts not advanced pursuant to paragraph (a) of Section 2.01 hereof during the course of construction of the Improvements shall be advanced upon the satisfaction of the conditions set forth in Section 4.02 hereof. Loan Budget Amounts for Indirect Costs not advanced prior to com- pletion of construction of the Improvements shall be advanced until exhausted, not more frequently than once a month, for Indirect Costs as incurred after such completion. Cal-7 BF:jc 0 29/89 BF4326.0010.0.0 2.05. Lender shall not make Loan advances for building. materials or furnishings which are stored on the Premises but not yet affixed to or incorporated into the Improve- ments, except for the cost of major building materials approved by it and intended to be incorporated into the Improvements pursuant to the Plans, and not until Lender shall have received (a) bills of sale and other documenta- tion evidencing Payment in full of such materials, Bor- rower's ownership thereof and the release of any right, title or lien in respect thereof by any vendor, (b) evidence that such materials are covered by the insurance policies required by this Agreement and are identified and protected against loss, theft and damage in a manner acceptable to the Construction Consultant and (c) evidence that advances made by Lender for said materials do not, at any one time, exceed,.in the aggregate, the Stored Material Amount, inclu- sive of the amount requested. 2.06. Lender may, in its absolute discretion, acceler- ate all or any portion of the amounts to be advanced here- under without regard to Borrower's satisfaction of the conditions to its entitlement to Loan Proceeds and no person dealing with Borrower or the General Contractor or any other person shall have standing to demand any different perform- ance from Lender; provided, however, that if Borrower chooses to deposit with Lender the amount of any Loan advances in excess of the amount which Borrower would be entitled to pur- suant to Section 2.01 above, Lender shall give Borrower a credit against the interest due on the Note equal to the interest which would accrue on the amount so deposited as if it bore interest at the Interest Rate that would be applicable thereto under the Note. 2.07. If at any time the undisbursed balance of the Loan Budget Amount for any category of cost shown on the Project Cost Statement is, in Lender's judgment, excessive, the excess may be reallocated to any other Loan Budget Amount balance which Lender deems to be insufficient. 2.08. Borrower hereby irrevocably authorizes Lender to disburse proceeds of the Loan to pay interest accrued on the Note as it comes due, or to satisfy any of the conditions of this Agreement, including, without limitation, the payment of the fees and expenses of lender's counsel and the Construc- tion Consultant, notwithstanding that Borrower may not have requested disbursement of such amounts and whether or not Borrower may be in default hereunder or under the Deed of Trust. Such disbursements shall be added to the outstanding principal balance of the Note and shall be secured by the Cal-8 BF:jc 08','-2'9/89 BF4325.0011.0.0 1%.) Deed of Trust. The authorization hereby granted, however, shall not prevent Borrower from paying interest, or satisfy- ing said conditions, from its own funds and shall in no event be construed so as to relieve Borrower from its obligation to pay interest as and when due under the Note, or to satisfy said conditions, or to obligate Lender to disburse Loan proceeds for the payment of interest or the satisfaction of said conditions. 2.09. Upon the filing of a "Bonded Stop Notice" or "Stop Notice" as defined in California Civil Code Sections 3083 and 3103, by a mechanic, Borrower agrees that Lender shall "hold back" amounts from future advances sufficient to pay directly to such mechanic the amounts asserted in said Bonded Stop Notice. Further, at Lender's election, such sums need not be paid to the mechanic until appropriate judgment is irrevocably rendered in favor of the mechanic. The cost to Lender in defending or otherwise appearing in any lawsuit or arbitration (including legal fees, in-house expenses and out-of-pocket expenses incurred by Lender in connection with such lawsuit) relating to the Loan shall be deemed advances under this Agreement and the Mortgage and shall bear interest and shall be subject to repayment in the same manner as provided in the Note and Mortgage with respect to other obligations of Borrower. 2.10. Notwithstanding anything to the contrary contained in this Agreement, Lender shall have no obligation to advance any portion of the Loan Budget Amount, if any, for (a) "Tenant Work" unless Lender shall have received and approved copies, certified to be true and complete, of the leases for space in the Improvements to which such tenant work relates, or in respect of any lease at a rate per net rentable square foot in excess of said Loan Budget Amount divided by the aggregate number of net rentable square feet in the Improvements, irrespective of Borrower's agreement regarding tenant work with any tenant as set forth in any lease or otherwise and (b) "Interest on Loan" if, when and to the extent that Lender, in its sole judgment, determines that the Premises and/or Improvements (and/or any other phase in a phased -in type of development) are generating, on a cash basis, positive cash flow in excess of Borrower's usual, reasonable and customary expenses. ARTICLE III Conditions Precedent to Lender's Obligation to Make_ the Initial Advance Cal-9 BF:jc Oa79/89 BF4326.0012.0.0 3.01. Lender shall not be obligated to make the Ini- tial Advance until the following conditions shall have been satisfied. (a) Lender shall have received and approved the items specified in Section 3.02 below; (b) The Construction Consultant shall have received and approved the items specified in Section 3.03 below; (c) Lender's Counsel shall have received and approved the items specified in Section 3.04 below; (d) The Permanent Commitment shall have been received by and assigned to Lender, and the Permanent Lender shall have consented to such assignment; the Permanent Lender shall have approved the Plans, the state of title to the Premises reflected in the title policy insuring the Mortgage, the survey and such other documents required by the Permanent Con- mitment to be approved by the Permanent Lender as Lender's Counsel may specify; and the Perma- nent Lender shall have agreed to accept the certification of the Construction Consultant concerning satisfaction of all construction - related conditions of the Permanent Commitment; (e) The representations and war- ranties made in Article V hereof shall be true and correct on and as of the date of the Ini- tial Advance with the same effect as if made on such date; (f) The Improvements, if any, shall not have been materially injured or damaged by fire or other casualty unless Lender shall have received insurance proceeds sufficient in the judgment of the Construction Consultant to effect the satisfactory restoration of the Improvements and to permit completion of the Improvements prior to the Completion Date; and (g) There shall exist no default under the Mortgage, irrespective of whether or Cal-10 BF:jc 08'7�9/89 BF4325.0013.0.0 not the same shall constitute an Event of Default thereunder. 3.02. The items to be received and approved by Lender prior to the Initial Advance shall be: (a) The Commitment Fee, to be retained by Lender whether or not any advances are made under this Agreement; (b) Current Financial Statements and such other financial data as Lender shall require; (c) An appraisal of the Premises and Improvements and, if required by Lender, a mar- ket feasibility study; (d) If a Loan Budget Amount has been established for "acquisition costs," a copy, certified to be true and complete, of the pur- chase agreement and deed pursuant to which the Premises have been or will be acquired by Bor- rower; (e) Advice from the Construction Consultant to the effect that (i) the Plans have been approved by him and by Governmental Authorities, (ii) the Improvements as shown by the Plans will comply with applicable zoning ordinances and regulations, (iii) a General Contract and/or Major Subcontracts are in effect which satisfactorily provide for the construction of the Improvements, (iv) all roads and utilities necessary for the full utilization of the Improvements for their intended purposes have been completed or the presently installed and proposed roads and utilities will be sufficient for the full utilization of the Improvements for their intended purpose and (v) the construction of the Improvements theretofore Performed, if any, was performed in accordance with the Plans and will be finished along with all necessary roads and utilities on or before the Completion Date; (f) A copy of the General Contract, certified by Borrower to be true and complete, or if there is no General Contract, copies of Cal-11 BF:jc 08'7�9/89 BF4326.0014.0.0 the Major Subcontracts so certified, together with a copy of Borrower's agreement with Bor- rower's Architects so certified; (g) The policies of hazard insurance required by the Mortgage (together with evi- dence of the payment of the premiums therefor) which policies will contain an endorsement spe- cifically providing that, in the case of any damage, all insurance proceeds will be paid to Lender so long as it certifies to the insurer that the unpaid principal amount of the Mort- gage exceeds the proceeds of insurance; (h) Performance bonds naming Lender as co -obligee and labor and materials payment bonds, each in AIA Document No. A-311 (1970 Edition) form, for penal sums equal to the amounts of the General Contact and such of the Major Subcontracts as Lender shall have desig- nated; (i) A progress schedule or chart showing the interval of time over which each item of Direct Cost is projected to be incurred or paid; (j) The Project Cost Statement; (k) A Requisition for the Initial Advance, together with proof of payment of any Indirect Costs included therein; (1) Evidence that the Premises and the improvements thereon are not currently and have never been subject to Hazardous Mate- rials; such evidence shall include, without limitation, at Borrower's or Guarantor's expense, a detailed report and certification by a properly qualified engineer, which shall include inter alia, a certification that such engineer has obtained and examined the list of prior owners, tenants and other users required by paragraph (m) of Section 3.04 below, and has made an on -site physical examination of the Premises, and a visual observation of the surrounding area, and has found no evidence of past or present Hazardous Materials activities or the presence of Hazardous Materials; Cal-12 BF:jc Oa/Y9/89 BF4326.0015.0.0 (m) The Indemnity Agreement; and (n) Copies of the items required by Paragraphs (c), (g) and (h) of Section 3.04 hereof. 3.03. The items to be received and approved by the Construction Consultant prior to the Initial Advance shall be: (a) Copies of a soil -engineer's report, a site plan (showing all necessary approvals, utility connections and site improvements) and the Plans; (b) Copies of the items required by paragraphs.(f), (i), (j) and (1) of Section 3.02 hereof and by paragraphs (c), (d), (f), (h), and (i) of Section 3.04 hereof; (c) Copies of the Permanent Commit- ment and Major Leases which contain any requirements or specifications in respect of construction of the Improvements; (d) Copies of all inspection and test records and reports made by or for Bor- rower's Architects; (e) Copies of all documents listed as exceptions to title in the title policy required by Section 3.04 hereof; and (f) If the Initial Advance consists in whole or in part of advances for Direct Costs, a copy of the Requisition therefor. 3.04. The items to be received and approved, on Lender's behalf, by Lender's Counsel prior to the Initial Advance shall be: (a) the executed Note, Mortgage, Guaranty, this Agreement, the Indemnity Agree- ment, the Requisition Authorization Statement and 1JCC-1 Financing Statements relating to the Mortgaged Property and any other Property given as security for the Loan; Ca1-13 BF: jc 03�p,,9/89 BF4326.0016.0.0 �W) (b) A paid title insurance policy, or Commitment therefor, in the amount of the Note, in ALTA Extended Coverage or other form approved by Lender, issued by the Title Insurer which shall be assignable to a permanent mort- gagee without additional cost, shall insure the Mortgage to be a valid lien on Borrower's Interest in the Premises free and clear of all defects and encumbrances except those previously received and approved by Lender's Counsel, and shall contain: (i) full coverage against mechanics' liens (filed and inchoate), and (ii) a reference to the survey but no survey exceptions except those theretofore approved by Lender's Counsel; and (iii) such affirmative insur- ance and endorsements as Lender's Counsel may require; and shall be accompanied by such reinsurance agreements between the Title Insurer and title companies approved by Lender, in ALTA 1987 Facultative form and with direct access pro- visions, as Lender may require; (c) Copies of any and all authori- zations including plot plan and subdivision approvals, zoning variances, sewer, building and other permits required by Governmental Authorities for the construction, use, occu- pancy and operation of the Premises and/or Improvements for the purposes contemplated by the Plans in accordance with all applicable building, environmental, ecological, landmark, subdivision and zoning codes, laws and regula- tions; (d) Letters from Borrower's Archi- tects and the General Contractor in the forms of EXHIBITS C and D hereto, respectively, and letters also in the form of EXHIBIT D from all Major Subcontractors specified by Lender; Cal-14 BF: jc 08'�'6J89 BF4325.0017.0.0 (e) UCC searches against Borrower or other owner of the Premises and advice from the Title Insurer to the effect that searches of proper public records disclose no leases of personalty or financing statements filed or recorded against the Premises, Borrower or other owner of any Mortgaged Property; (f) A survey (current to within ten [10] days of the Initial Advance) of the Premises certified to Lender, the Title Insurer and the Permanent Lender showing: (i) the location of the perimeter of the Premises by courses and distances, (ii) all easements, rights -of - way, and utility lines referred to in the title policy required by this Agreement or which actually service or cross the Premises, (iii) the lines of the streets abutting the Premises and the width thereof, and any established building lines, (iv) encroachments and the extent thereof upon the Premises, (v) the Improvements to the extent constructed, and the relationship of the Improvements by distances to the perimeter of the Premises, established building lines and street lines, and (vi) if the Premises are described as being on a filed map, a legend relating the survey to said map; (g) Executed counterparts of all Major Leases, accompanied by executed notice - of -assignment letters in the form of EXHIBIT E hereto in respect thereof, together with the standard form of lease or contract of sale, as the case may be, Borrower intends to use in connection with the leasing of space in the Cal-15 BF:jc (A%',-_'9/89 BF4326.0018.0.0 %") Improvements or the sale of portions of the Premises; (h) Copies of the original permits for water and sanitary and storm sewer facili- ties, together with letters from local utility companies or Governmental Authorities stating that gas, electric power, sanitary and storm sewer and water facilities and other utilities will be available to and servicing the Premises upon completion of construction of the Improvements; (i) Copies of the applicable zoning ordinances and map (marked to show the location of the Premises), certified by an appropriate official to be complete and accurate; (j) An opinion of Borrower's counsel to the effects set forth in paragraphs (a), (d) and (e) of Section 5.01 hereof, and to the effects that: (i) there exist no violations of any statutes, rules, orders, ordi- nances, regulations or requirements of any Governmental Authorities with respect to the Improvements and that the antici- pated use thereof complies with all applicable statutes, ordinances, regula- tions (including, but not limited to, zoning, environmental, ecological, land- mark and all other applicable categories) and restrictions, covenants, leases and easements affecting the Premises, (ii) the necessary rights -of - way for all roads necessary for the full utilization of the Improvements for their intended purposes have been either acquired by Borrower or have been dedi- cated to public use and accepted by appropriate Governmental Authorities, and (iii) the Premises are not part of a larger tract of land owned by the Borrower, its affiliates or Guarantor, or otherwise considered as part of one zoning or tax lot, or, if they are, that any Cal-16 BF:jc 09/89 BF4325.0019.0.0 '"`' authorization or variance required for the subdivision of such larger tract which a sale of the Premises would entail has been obtained from all appropriate Governmental Authorities so that the Premises and Improvements constitute one zoning or tax lot (including parking and utility facilities and street access, if relevant) capable of being (1) conveyed as such and (2) developed in the manner contemplated by this Agreement; (k) An opinion of Borrower's counsel (and, if required by Lender, of local counsel of Lender's Counsel's selection) which shall state, in addition to such other matters inci- dent to the transactions contemplated hereby as Lender's Counsel may require, that this Agree- ment, the Note, Mortgage, Guaranty and Indemnity Agreement have each been duly authorized, exe- cuted and delivered by the parties thereto (other than Lender) and are valid and binding instruments enforceable against such parties in accordance with their respective terms, including without limitation any governing law designations made therein, subject, however, to the qualifications that (1) some of the rights and remedies set forth in the Note and Mortgage may be limited by bankruptcy, insol- vency, reorganization and other laws of general application to the enforcement of creditors' rights and (2) certain remedies and waivers contained in the Mortgage may be limited by applicable laws of said jurisdiction, none of which qualifications will materially interfere with the practical realization of the benefits and security provided by said documents except for the economic consequences of any procedural delay which may result therefrom; (1) If Borrower, Guarantor or any general partner of either is a corporation, copies of the following documents with respect to each (unless otherwise indicated): (i) a good -standing certifi- cate from the state of its incorporation and, as to Borrower only, from the state in which the Premises are located, Cal-17 B£:jc 0�9/89 B£4326.0020.0.0 �.l (ii) resolutions, certified by the corporate secretary, or the share- holders or directors of the corporation authorizing the consurrumation of the transactions contemplated hereby or by the Guaranty, and (iii) a certificate of the corporate secretary as to the incumbency of the officers executing this Agreement, the Guaranty or any of the other docu- ments required hereby, and, if Borrower, Guarantor or any general partner of either is a partner- ship or venture: (iv) the Partnership agreement and all amendments and attachments thereto, certified by a -general partner to be true and complete, (v) any certificates filed or required to be filed by the partnership in the state of its formation and the state where the Premises are located in order for it to do business in those states, and (vi) any consents by other partners required for the borrowing contemplated hereby, the consummation of this Agreement or the execution of the Guaranty, and an acknowledgement by each general partner of his continued member- ship in the partnership; (m) A list, certified by the Title Insurer, of the prior owners, tenants and other users, during the period from January 1, 1940, to the date of such certification, of all or any portion of the Premises or the improvements thereon; and (n) Copies of the items required by paragraphs (d) of Sections 3.01 and 3.02 hereof. Cal-18 BF:jc 09/89 BF4326.0021.0.0 ARTICLE IV Conditions Precedent to Lender's _Obligati_ons to Make Advances After the Initial Advance 4.01. Lender's obligation to make Loan advances after the Initial Advance shall be subject to the satisfaction of the following conditions: (a) All conditions of Article III shall have been and remain satisfied as of the date of such advances; (b) Lender and the Construction Con- sultant shall have received a Requisition for the advance, together with such other documen- tation and information as either of them may require; (c) Lender shall have received ver- ification from the Title Insurer that it shall deliver to Lender an endorsement in the form of CLTA Endorsement No. 122 or other equivalent endorsement, satisfactory to Lender, to the title policy referred to in paragraph (b) of Section 3.04 insuring the priority of the Deed of Trust for the full amount theretofore and then being advanced as a valid prior lien and charge on the Premises and Improvements as of the date of each such endorsement, and shall set forth no additional exceptions except those approved by Lender and its counsel. (d) If required by Lender, it shall have received a survey certified to it, the Title Insurer and the Permanent Lender, updated, with respect to all relevant require- ments and information, to within ten (10) days of the advance; (e) The representations and war- ranties made in Article V hereof shall be true and correct on and as of the date of the advance with the same effect as if made on such date; (f) Borrower shall have notified Lender and the Title Insurer at least one week before completion of the construction of the foundation forms for the Improvements; within Cal-19 BF:jc 0917�9/89 BF4326.0022.0.0 thirty days after completion of the foundations for the Improvements, the Title Insurer shall have delivered to Lender an endorsement in the form of CLTA Form 102.5 or other equivalent endorsement, satisfactory to Lender, insuring that the foundations for the Improvements under construction are within the boundary of the Premises and do not encroach on any easements or violate any covenants, conditions or restrictions applicable to the Premises; (g) There shall exist no default under the Mortgage irrespective of whether or not the same shall constitute an Event of Default thereunder. 4.02. In the case of the last Direct Costs Loan advance as provided in Section 2.04 hereof, Lender shall also have received: (a) Advice from the Construction Consultant to the effect that construction of the Improvements has been completed, and any necessary utilities and roads have been fin- ished and made available for use, in accordance with the Plans and that he has received satis- factory evidence of the approval by all Govern- mental Authorities of the Improvements in their entirety for permanent occupancy, and of the contemplated uses thereof, to the extent any such approval is a condition of the lawful use and occupancy thereof; (b) A current final survey of the Premises, certified to Lender, the Title Insurer and the Permanent Lender, showing the completed Improvements; (c) The applicable lien periods have expired or, in lieu thereof, Lender has received lien waivers or releases from all con- tractors, subcontractors, laborers and mate- rialmen employed or furnishing materials in connection with construction of the Improve- ments; all claims of lien and stop notices that may have been recorded or notice thereof served on Lender have either been paid in full and released or Borrower has posted an appropriate surety bond to discharge same; and Cal-20 BF:jc 0A�49/89 BF4326.0023.0.0 (d) Certificates by the Permanent Lender and any tenants under Major Leases to the effect that, for purposes of the Permanent Commitment and Major Leases, respectively, the Improvements have been satisfactorily com- pleted. ARTICLE V Borrower's Representations, Warranties and Covenants 5.01. Borrower represents and warrants that: (a) If it, Guarantor or any general partner of either is a corporation, each such entity is duly organized, validly existing and in good standing under the laws of the state of its incorporation, has stock outstanding which has been duly and validly issued, is qualified to do business and is in good standing in the state in which the Premises are located with full power and authority to consummate the transactions contemplated hereby; if it, Guar- antor or any general partner of either is a partnership or venture, each such entity is duly formed and validly existing, is fully qualified under the laws of the state in which the Premises are located to do business therein, and has full power and authority to consummate the transactions contemplated hereby; (b) The Plans are satisfactory to it, have been reviewed and approved by Guaran- tor, the General. Contractor, the Permanent Lender, the tenants under any Major Leases which require approval of the Plans, Borrower's Architects and, to the extent required by applicable law or any effective restrictive covenants, by all Governmental Authorities and the beneficiary of any such covenant; all con- struction, if any, already performed on the Improvements has been performed on the Premises in accordance with the Plans approved by the persons named above and with any restrictive covenants applicable thereto; there are no structural defects in the Improvements or vio- lations of any requirement of any Governmental Authorities with respect thereto; the planned Cal-21 BF:jc 08/_ 9/89 BF4326.0024.0.0 use of the Improvements complies with appli- cable zoning ordinances, regulations and restrictive covenants affecting the Premises as well as all environmental, ecological, land- mark, and other applicable laws and regula- tions; and all requirements for such use have been satisfied; (c) Financial Statements have been heretofore delivered to Lender which are true, correct and current in all respects and which fairly present the respective financial condi- tions of the subjects thereof as of the respec- tive dates thereof; no material adverse change has occurred in the financial conditions reflected therein since the respective dates thereof and no borrowings (other than the Loan) which might give rise to a lien or claim against the Mortgaged Property or Loan proceeds have been made by Borrower or others since the date thereof other than borrowings, if any, specifically permitted by Article VII of this Agreement; (d) There are no actions, suits or proceedings pending or to the knowledge of Borrower threatened against or affecting it, Guarantor, the Premises, the validity or enforceability of the Mortgage or the priority of the lien thereof at law, in equity or before or by any Governmental Authorities except actions, suits or proceedings which are iden- tified in Article VIII hereof and which are fully covered by insurance or would, if adversely determined, not substantially impair the ability of Borrower or Guarantor to pay when due any amounts which may become payable under the Note or Guaranty or to otherwise perform their respective obligations in con- nection with the Loan; to Borrower's knowledge, neither it nor Guarantor is in default with respect to any order, writ, injunction, decree or demand of any court or Governmental Authorities; (e) The consu:rmation of the trans- actions contemplated hereby and performance of this Agreement, the Note, Mortgage, Guaranty and Indemnity Agreement have not and will not Cal-22 BF:jc 081/0�9/89 BF4326.0325.0.0 result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, corporate charter, by-laws or other instrument to which Borrower or Guarantor is a party or by which either of them may be bound or affected; (f) All utility services necessary for the construction of the Improvements and the operation thereof for their intended pur- poses are available at the boundaries of the Premises, including water supply, storm and sanitary sewer, gas, electric power and tele- phone facilities; (g) Each Requisition presented to Lender, and the receipt of the funds requested thereby, shall constitute an affirmation that the representations and warranties contained in this Section 5.01 remain true and correct as of the respective dates thereof; (h),It has entered into no contract or arrangement of any kind the performance of which by the other party thereto would give rise to a lien on the Mortgaged Property prior to the Mortgage except for its arrangements with Borrower's Architects, the General Con- tractor, Major Subcontractors and contractors or subcontractors who have filed lien waivers or signed Payment Receipts in the form of EXHIBIT B-2 hereto for all payments due under said arrangements as of the end of the period covered by the last Requisition; (i) All roads necessary for the full utilization of the Improvements for their intended purposes have either been completed or the necessary rights or way therefor have been acquired by appropriate Governmental Author- ities -or dedicated to public use and accepted by said Governmental Authorities, and all nec- essary steps have been taken by Borrower and said Governmental Authorities to assure the complete construction and installation thereof no later than the Completion Date or any earlier date required by any law, order or regulation, Permanent Commitment or Major Lease; Cal-23 BF: jc 08179/89 BF4326.0026. 0.0 (j) The Permanent Commitment and Major Leases are unmodified and in full force and effect, there are no defaults under any thereof and all conditions to the effectiveness and continuing effectiveness thereof required to be satisfied as of the date hereof have been satisfied; (k) There exists no default under the Mortgage and no event has occurred and is continuing which after notice or the passage of time, or both, would give rise to a default thereunder; (1) The approved Plans referred to in paragraph (b) above are scheduled by sheet number, title, date and revised date in the letter from Borrower's Architects in the form of EXHIBIT C hereto, which schedule is hereby certified by Borrower to be true and correct, and are the same as the filed plans referred to in the building permits for the Improvements; (m) It advised the Title Insurer in writing prior to the issuance of the title pol- icy insuring the Mortgage whether any survey, soils -testing, site -development, excavation or other work related to construction of the Improvements was begun or done before the Mort- gage was recorded; (n) The Premises are not located in an area designated by the Secretary of Housing and Urban Development as having special flood -hazards, or, if it is, Borrower has obtained the flood -hazard insurance required by the NFIA of 1966, as amended (42 USC 4013, et sue_); (o) The Premises and the improve- ments thereon, and, to the best of Borrower's knowledge, the surrounding areas, are not currently and have never been subject to Hazardous Materials or their effects; and (p) There are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, regarding any Hazardous Materials relating in Cal-24 BF:jc 08�"�9/89 BF4326.0027.0.0 �-1 any way to the Premises or the improvements thereon. 5.02. Borrower covenants and agrees with Lender that it will: (a) Promptly comply with all laws, ordinances, orders, rules, statutes and regula- tions of Governmental Authorities and promptly furnish Lender with reports of any official searches made by Governmental. Authorities and any claims of violations thereof; (b) Permit Lender, its represen- tatives and the Construction Consultant to enter upon the Premises, inspect the Improve- ments and all materials to be used in the con- struction thereof and examine all detailed plans and shop drawings which are or may be kept at the construction site; it will cooper- ate and cause the General Contractor and Major Subcontractors to cooperate with the Construc- tion Consultant to enable him to perform his functions hereunder; at the time of each inspection by the Construction Consultant, Bor- rower will make available to said consultant, on demand, daily log sheets covering the period since the immediately preceding inspection showing the date, weather, subcontractors on the job, number of workers and status of con- struction; (c) Pay all Direct and Indirect Costs and expenses required for completion of the Improvements and the satisfaction of the conditions of this Agreement, including, with- out limitation: (i) all document and stamp taxes, recording and filing expenses and fees and commissions lawfully due to brokers in connection with the transac- tions contemplated hereby, (ii) the fees and expenses of the Construction Ccnsultant and Lender's Counsel and local counsel, if any, in connection with the preparation for and consummation of the transactions contem- Cal-25 BF:jc 08'7-?9/89 BF4326.0028.0.0 plated hereby, and for any services of such parties which may be required in addition to those normally and reasonably contemplated hereby, (iii) any taxes, insurance premiums, liens, security interests or other claims or charges against the Premises or Improvements, and (iv) all costs of completion of the work to be performed by Borrower in space to be occupied in the Improvements (including public space) to permit the lawful occupancy thereof for the purposes contemplated by actual or prospective lessees or owners of such space as set forth in the individual leases, subleases or purchase contracts thereof or in detailed work letters, the Permanent Com- mitment or other agreements or letters of intent with respect thereto, or, in cases where there are no such leases, sub- leases, contracts, work letters, or other documents as aforesaid, as set forth in Borrower's standard work letter or the standard form of lease or contract, if any, required by paragraph (g) of Section 3.04 hereof, or, in cases where none of the foregoing exist, to the level of building standard in accordance with industry practices, as conclusively determined by the Construction Consultant; (d) Commence construction of the Improvements no later than 60 days from the date hereof; submit a Requisition for the Ini- tial Advance within 30 days after such com- mencement and subsequent advances on a monthly basis thereafter; cause the construction thus begun to be prosecuted with diligence and con- tinuity in a good and workmanlike manner in accordance with the Plans except during the existence of delays (for not more than 30 days) caused by events beyond its control; use only materials, fixtures, furnishings and equipment in connection with construction of the Improve- ments that are not used or obsolete; and com- plete construction of the Improvements, and the Cal-26 BF:jc 08�.2,9/n BF4326.0029.0.0 installation of all necessary roads and utili- ties, in accordance with the Plans, on or before the Completion Date free and clear of defects and liens or claims for liens for mate- rial supplied or labor or services performed in connection with the construction of the Improvements, time is of the essence as to this provision; (e) Promptly following the execution of this Agreement, at its own expense, place a sign on the Premises at a location satisfactory to Lender indicating, among other things, that Lender is providing the "Construction Financ- ing," and containing Lender's address and otherwise conforming to Lender's sign specifi- cations. (f) Receive and deposit in tAe Building Loan Trust Account all advances made hereunder; hold the same and the right to receive the same as a trust fund for the pur- pose of paying only Direct and Indirect Costs; (g) Indemnify Lender against claims of brokers arising by reason of the execution hereof or the consummation of the transactions contemplated hereby; (h) Deliver to Lender or the Con- struction Consultant copies of all contracts, bills of sale, statements, receipted vouchers or agreements under which Borrower claims title to any materials, fixtures or articles incorporated in the Improvements or subject to the lien of the Mortgage, or under which it has incurred costs for which it is entitled to a Loan advance, and deliver to Lender such other data or documents in connection with the Improvements as Lender May from time to time request; (i) Upon demand of Lender or the Construction Consultant, correct any defects (including structural) in the Improvements or any departures from the Plans not approved by Lender; Cal-27 BF:jc 08W9/89 BF4326.0030.0.0 (j) Deliver to Lender an executed counterpart of all leases of the Premises whether executed before or after the date hereof together with, in the case of all Major Leases, a notice•of-assignment letter in the form of EXHIBIT E hereto, and keep all Major Leases in full force and effect; (k) Not permit the performance of any work pursuant to any General Contract, Major Subcontract, Change Order or Plans until Lender and the Construction Consultant (i) shall have received copies thereof and (ii) in the case of Plans or Change Orders which will result in (A) a change in the aggregate of the contract prices for the construction of the Improvements in excess of the Change Order Amount or which, together with the aggregate of Change Orders theretofore executed by Borrower (excluding those approved by Lender pursuant to this para- graph) will result in a change in such prices in excess of the Aggregate Change Order Amount or (B) a change in the character of the Improvements shall have given specific written approval thereof; it being understood that approval of any Plans or Change Order will not obligate Lender to increase or advance any Loan Budget Amount on account of any such Plans or Change Order; notwithstanding the existence of Change Order and Aggregate Change Order Amounts, Borrower shall not permit the perfornance of any work pursuant to any Change Order until it shall have procured the approval thereof from the Permanent Lender or furnished Lender with evidence that the Permanent Lender has agreed to such Change Order Amounts for all purposes of the Permanent Commitment; (1) Require covenants from the Gen- eral Contractor and Major Subcontractors who have contracts directly with Borrower to the same effect as the covenant made by Borrower in the immediately preceding paragraph; and it will provide in every General Contract that the General Contractor will deliver to Lender or the Construction Consultant copies of all Major Subcontracts, Change Orders and any other con- tract, purchase order or subcontract covering labor, Materials, equipment or furnishings to Cal-28 BF:jc 08�9/89 BE4326.0031.0.0 or for the Improvements, and the names of all persons with whom the General Contractor has contracted or intends to contract for the con- struction of the Improvements or for the fur- nishing of labor or materials therefor; (m) Employ suitable means to protect from theft or vandalism all portions of the Improvements and all tools and building materi- als stored on the Premises; (n) Comply with all restrictions, covenants and easements affecting the Premises or the Improvements and cause the satisfaction of all conditions of this Agreement; (o) Comply with all conditions of the Permanent Commitment and execute the docu- ments necessary for the Permanent Closing; the covenant contained in this paragraph also shall be for the benefit of and directly enforceable by the Permanent Lender; and (p) Within ten (10) days after "com- pletion" of all work, in accordance with the prevailing California Constitution and Civil Code Section 3086, file a "Notice of Comple- tion" with the Office of the County Recorder in which the Premises are located. Borrower recognizes that as used in the preceding sentence the term "completion" refers to such term as defined in accordance with California law pertaining to mechanics and not defined in this Agreement. 5.03. Borrower covenants that the representations and warranties made by it in Section 5.01 hereof, and by the Guarantor in the Guaranty, will be continuously true and correct. ARTICLE VI General Conditions and Provisions 6.O1. The following conditions and provisions shall be applicable at all times: (a) Any advance by Lender of Loan proceeds hereunder made prior to or without the Cal-29 BE-.jc 08�?9/89 BE4326.0032.0.0 fulfillment by Borrower of all of the condi- tions precedent thereto, whether or not known to Lender, shall not constitute a waiver by Lender of the requirement that all conditions, including the non -performed conditions, shall be required with respect to all future advances. (b) All documentation and proceed- ings deemed by Lender or Lender's Counsel to be necessary or required in connection with this Agreement and the documents relating hereto shall be subject to the prior approval of, and satisfactory to, both of them as to form and substance. In addition, the persons or parties responsible for the execution and delivery of, and signatories to, all of such documentation, shall be acceptable to, and subject to the approval of, Lender and Lender's Counsel. Lender or Lender's Counsel shall receive copies (certified by an appropriate person to be true, correct and complete if requested by either of them) of all documents which they may require in connection with the transaction contemplated hereby. (c) Lender shall, at all times, be free to independently establish to its satis- faction and in its absolute discretion the existence or nonexistence of any fact or facts the existence or nonexistence of which is a condition of this Agreement. (d) If at any time Lender notifies Borrower that, in Lender's sole judgment, the undisbursed balance of the Loan is insufficient to pay the remaining Direct and Indirect Costs, Borrower shall either (i) deposit with Lender an amount equal to such deficiency which Lender may from time to time apply, or allow Borrower to apply, to such Costs or (ii) pay for such Costs in the amount of such deficiency so that the amount of the Loan which remains to be dis- bursed shall be sufficient to complete the Improvements, and Borrower shall furnish Lender with such evidence thereof as Lender shall require. Borrower hereby agrees that Lender shall have a lien on and security interest in any sums deposited pursuant to clause (i) above Cal-30 BF:jc 0hr�9/89 BF4326.0033.0.0 and that Borrower shall have no right to with- draw any such sums except for the payment of the aforesaid Costs as approved by Lender. Any such sums not used as provided in said clause (i) shall be released to Borrower when and to the extent that Lender determines that the amount thereof is more than the excess, if any, of the total remaining costs of completion of the Improvements over the undisbursed balance of the Loan; ro�vid�ed, however, that should an Event of Default occur under the Mortgage, Lender may, at its option, apply such amounts to the costs of completion of the Improvements or to the immediate reduction of outstanding principal and/or interest under the Note. (e) Except to the extent provided in paragraph (o) of Section 5.02 hereof, this Agreement is solely for the benefit of Lender and Borrower. All conditions of the obliga- tions of Lender to make advances hereunder are imposed solely and exclusively for the benefit of Lender and may be freely waived in whole or in part by Lender at any time if in its sole discretion it deems it advisable to do so, and no person other than Borrower (provide _d, however, that all conditions have been satis- fied) shall have standing to require Lender to make any Loan advances or to be a beneficiary of this Agreement or any advances to be made hereunder. Any waiver or modification asserted by Borrower to have been agreed to by Lender must be in writing and comply with the provi- sions of paragraph (k) of this Section 6.01. (f) During the existence of any default under the Mortgage, Borrower hereby irrevocably authorizes Lender to advance any undisbursed Loan proceeds directly to the General Contractor, Major Subcontractors and other persons to pay for completion of the Improvements. All such direct advances shall satisfy pro tanto the obligations of Lender to Borrower hereunder regardless of the dis- position thereof by the General Contractor, any Major Subcontractor or other person. (g) Any letter of credit (herein- after an "L/C"), irrespective of the applicant Cal-31 . BF:jc 08"ry()/89 BF4326.0034.0.0 or account party thereunder, now or hereafter issued by Lender at Borrower's, Guarantor's or either of their affiliate's request, and rela- ting in any way to the Premises or Improvements, shall, at Lender's option, effect a reduction of Loan proceeds available to Borrower here- under. Such reduction shall be up to the amount of the L/C (together with the fees and costs payable thereunder), shall be in effect for the entire term of the L/C and shall be allocated, if necessary, by Lender to the Loan Budget Amounts which it deems most appropriate in its sole discretion. (h) Any and all advances made at any time by Lender pursuant to the irrevocable authorization granted by paragraph (f) of this Section 6.01 shall require no further direction, authorization or request for dis- bursement from Borrower. Any and all such disbursements shall be added to the outstand- ing principal balance evidenced by the Note and shall be secured by the Mortgage. The aforesaid authorizations shall (1) not prevent Borrower from paying the contractors and other persons out of its own funds, (2) in no event be construed so as to relieve Borrower or others from their obligations to pay such con- tractors or other persons, or to satisfy such conditions and obligations, and (3) in no event obligate Lender to disburse Loan proceeds for any such purposes. (i) Borrower agrees that, by its acceptance of any advance of Loan proceeds under this Agreement, it shall be bound in all respects by the Requisition submitted on its behalf in connection therewith with the same force and effect as if Borrower had itself executed and submitted the Requisition and whether or not the Requisition is executed and/or submitted by an authorized person. (j) All notices hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when sent by registered or certified mail, if to Borrower at its address stated on the cover Cal-32 BF:jc 08 9/89 BF4326.0035.0.0 page hereof, and if to Lender, to the attention of its Real Estate Finance office at 101 Park Avenue, New York, New York 10081, or at such other address of which a party shall have noti- fied the party giving such notice in writing in accordance with the foregoing requirements. (k) No provision of the Note, Mort- gage, Guaranty, Indemnity Agreement or this Agreement may be changed, waived, discharged or terminated orally, by telephone or by any other means except an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termina- tion is sought. (1) Except as herein provided, this Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective heirs, personal representatives, successors and assigns. Notwithstanding the foregoing, Borrower, without the prior written consent of Lender in each instance, may not assign, transfer or set over to another, in whole or in part, all or any part of its bene- fits, rights, duties and obligations hereunder, including, but not limited to, performance of and compliance with conditions hereof and the right to receive the proceeds of current or future advances. (m) Borrower recognizes that Lender may sell and transfer interests in the Loan, this Agreement, the Note, Mortgage, Guaranty and any other instrument evidencing or securing the Loan, to one or more participants and that all documentation, Financial Statements, appraisals and other data, or copies thereof, relevant to Borrower, Guarantor or the Loan, and to any advances hereunder, may be exhibited to and retained by any such participant or prospective participant for its files. 6.02. The cover pages and the Exhibits annexed hereto are incorporated as a part of this Agreement with the same effect as if set forth in the body hereof. Cal-33 BF: jc 0op?9/89 BF4326.0036.0.0 ARTICLE VII Particular Provisions The foregoing Articles of the Agreement are subject to the following further provisions: 7.01. Borrower shall disclose to Lender or the Construc- tion Consultant, upon request, the names of all persons with whom Borrower has contracted or intends to contract for the construction of the Improvements or for the furnishing of labor or materials therefor, and obtain the approval of such persons by Lender when required by this Agreement. 7.02. Borrower shall satisfy or bond any lien for the performance of work or the supply of materials filed against the Mortgaged Property before the earlier of (i) the date of any Loan advance or (ii) the date which is twenty (20) days after the filing thereof. 7.03. As to any encroachment affecting the Mortgaged Property or the Improvements which has occurred without the approval of Lender, Borrower shall remove or correct such encroachment within twenty (20) days after the earlier of (i) Lender's written notice to Borrower of the existence thereof, or (ii) Borrower's discovery thereof. 7.04. Subject to the provisions of the Mortgage, in the event any claim of lien is filed against the Mortgaged Property or any part thereof, or any interest or right made appurtenant thereto or in the event Borrower is served as a disburser with any notice to withhold funds, Borrower shall discharge or satisfy said claim of lien or notice to withhold or make provision therefor satisfactory to Lender in accordance with the terms hereof, including the posting of a bond or indemni- fication satisfactory to Lender. 7.05. Subject to the provisions of the Mortgage, the demolition, destruction, or substantial damage of the Mort- gaged Property and/or Improvements so that in Lender's judg- ment the Mortgaged Property and/or Improvements cannot be restored or rebuilt with available funds (including, without limitation, insurance proceeds) to its pre-existing condition within a reasonable time, shall constitute a default hereunder. 7.06. The reasonable determination by Lender of a material threat to its security by reason of a material Cal-34 BF:jc 08�9/89 BF4326.0037.0.0 �"1 adverse change in the financial condition or credit standing of either Borrower or any Guarantor, shall constitute a default hereunder. 7.07. If the zoning or land use entitlements for the Mortgaged Property are changed so as to materially impair the value of the Mortgaged Property or the Improvements as security for the Loan, such event(s) shall, at Lender's option, constitute a default hereunder. 7.08. In the event proceedings are commenced or threat- ened to be commenced by any public or quasi -public body of competent jurisdiction to acquire the Mortgaged Property or the Improvements, or any portion thereof or any interest therein (other than a portion which, in Lender's reasonable judgment, is immaterial) pursuant to eminent domain or con- demnation powers, Borrower shall cause such proceedings to be dismissed within thirty (30) days or the threat thereof to be eliminated within thirty (30) days from the date on which Borrower first had (or should have had in the exercise of reasonable diligence) knowledge thereof, as the case may be. 7.09. Time is of the essence of this Agreement and each provision of which time is an element, including without limitation, the provisions with respect to Completion of the Improvements on or before the Completion date. 7.10. To the extent permitted by law, any action by the Borrower or any Guarantor to prevent a court appointed receiver from entering the Premises, in accordance with the terms of the Mortgage, for the sole purpose of completing the Improvements will, if such action continues for a period of five (5) business days following written notice from Lender to Borrower, result in the waiver and termination of any exculpation or limitation of liability which may theretofore have been granted by the Lender to the Borrower or Guarantor herein or in the Note, Mortgage, Guaranty or other security document. Any such notice from Lender to Borrower shall conspicuously state that the continuation of such actions after such five (5) day period will result in the waiver and termination of such exculpation or limitation of liability. 7.11. Where disputes have arisen which, in the good faith opinion of Lender, may endanger the timely completion of the Improvements or the performance of any covenant con- tained herein, Lender may, upon the occurrence of an Event of Default (as such term is defined in the Mortgage), advance funds to parties demanding the same for the account of Borrower Cal-35 BF:jc CS 29/89 BF4326.0038.0.0 without prejudice to Borrower's rights, if any, to recover said funds from the party to whom paid, provided, however, that Lender shall deliver five (5) days' prior written notice to Borrower of Lender's intention to so advance. Lender may also enter into such agreements as it deems necessary and proper to insure the timely completion of the Improvements or the performance of any covenant of Borrower contained herein. Such agreement or agreements may take the form which Lender, in its discretion, deems proper, including without limitation agreements to indemnify a title insurer against possible assertion of lien claims and agreements to pay disputed amounts to contractors if Borrower is unable or unwilling to pay the same. All sums paid or agreed to be paid pursuant to any such undertaking shall be for the account of Borrower, and Borrower shall reimburse Lender for any such payments made upon demand therefor with interest at the default rate provided for in the Note until the date of reimbursement. Such advances and interest shall be secured by the Mortgage. 7.12. Where any material deviations from the Plans appear, or defective or unworkmanlike labor or materials are being used in the construction of the Improvements, or upon receipt of knowledge of encroachments to which there has been no consent, Lender shall have, in addition to any other reme- dies hereunder, the right to order the immediate stoppage of construction and demand that the condition be corrected. After issuance of such an order, no further work shall be done on the Improvements covered by such order without the prior written consent of Lender unless and until said condi- tion has been corrected to Lender's satisfaction. If correc- tive action satisfactory to Lender is not commenced within ten (10) days after written demand therefor by Lender, Lender shall have the right but not the obligation to undertake such action at Borrower's expense in the manner described in Sec- tion 6.01(f). 7.13. No remedy herein conferred upon or reserved to Lender is intended to be exclusive of any other remedy pro- vided herein, in any other security document or by law, but each shall be cumulative and shall be in addition to every other remedy given hereunder, under any other security docu- ment or now or hereafter existing at law or in equity or by statute. Lender, at its sole option and without limiting or affecting any rights or remedies hereunder, may exercise any of the rights and remedies to which it may be entitled here- under concurrently with whatever other rights it may have in connection with the other security documents or in such order as it may determine. The exercise of any rights of Lender Cal-36 BF:jc 08% 9/89 BF4326.0039.0.0 hereunder shall not in any way constitute a cure or waiver of default hereunder or elsewhere, or invalidate any act done pursuant to any notice of default, or prejudice Lender in the exercise of any of its other rights hereunder or elsewhere unless, in the exercise of said rights, Lender realizes all amounts owed to it hereunder and under the Note, the Mortgage, and any other security document. 7.14. Upon written notice to Lender, Borrower shall have the right to contest in good faith any claim, demand, levy, or assessment by a third party, the assertion of which would constitute a default hereunder. Any such contests shall be prosecuted diligently and in a manner not prejudicial to Lender or the rights of Lender hereunder, and, in any event, shall be settled and discharged not less than thirty (30) days prior to the earliest date when any portion of the Mortgaged Property may be sold or seized in satisfaction of such claim. Upon demand by Lender, Borrower shall deposit funds with Lender or obtain and record a bond satisfactory to Lender in an amount sufficient to cover any amounts which may be owing in the event the contest may be unsuccessful. Borrower shall make such deposit or obtain and record such bond, as the case may be, within five (5) days after demand therefor and, if made by payment of funds to Lender, the amount so deposited shall be disbursed in accordance with the resolution of the contest to Borrower or the adverse claimant. 7.15. Tenant Improvements (a) Lender shall be obligated to disburse for Direct or Indirect Costs attrib- utable to tenant improvements only for space in the Improvements subject to executed leases approved by Lender and the Permanent Mortgagee ("Leased Space"). (b) Any request for disbursements for tenant improvements shall be supported by a separate Requisition for each tenant space prepared and signed by the tenant improvement contractor. As a condition precedent to the disbursement for tenant improvements to a specific tenant space in addition to the applicable provisions of Article IV, Borrower shall deliver to Lender, for Lender's approval: Cal-37 BF:jc 08/29/89 BF4326.0040.0.0 (i) a copy of the executed lease therefor and a copy of an executed assignment of such lease to Lender; (ii) evidence satisfactory to Lender of Permanent Mortgagee's approval of the lease; (iii) evidence satisfactory to Lender that Permanent Mortgagee is obli- gated to advance the full amount of such disbursement upon funding of the Perma- nent Loan; (iv) evidence satisfactory to Lender that the lease has been assigned to Permanent Mortgagee if Permanent Mortgagee requires such assignment; (v) -a plan specifically approved by the tenant, if not an exhibit to the lease, showing the tenant improve- ments to be installed in the Leased Space; and (vi) a budget for the Direct Costs relating thereto. (c) In the case of a single or final disbursement for tenant improvements relating to any one tenant space, Lender shall receive a certificate of occupancy for such space as a condition precedent to such disbursement. (d) Disbursements for stored materials intended to be installed into tenant improvements, if allowed by Lender, shall be governed by Section 2.05. Lender shall not make any disbursements for stored materials intended to be incorporated into tenant improvements for space other than Leased Space. (e) (i) Any disbursement for tenant improvements shall not exceed, for all costs exclusive of leasing commission, $22.00 per square foot of the Leased Space covered by Cal-38 BF:jc O6/29/89 BF4326.0041.0.0' such disbursement nor is the aggregate of all tenant improvement disbursements to exceed more than $1,213,000; (ii) Any disbursement for leasing commissions shall not exceed $6.35 per square foot of the Leased Space covered by such disbursement, nor in the aggregate shall leasing commissions exceed $350,000. (f) Any disbursement pursuant to this Section 7.15 shall be a part of the Loan Amount, and the Loan Amount shall not be increased due to any such advance. 7.16. Within seven (7) days of Lender's receipt of Borrower's written request therefor, (a) from time to time, as to each completed condominium unit ("Unit") constructed on the Residential Property, the Lender will request the trustee under the Mortgage to execute and deliver partial reconveyances of the lien of the Mortgage with respect to each such completed Unit upon the satisfaction of all of the following terms and conditions: (i) Borrower shall not be in default (subject to Borrower's right to cure such default within the time period permitted, if any) under the terms of any of the Security Documents; (ii) a final subdivision map(s) or parcel map(s) covering the Residential Property has been approved by Lender and recorded in the Official Records of Orange County, California; (iii) a final condominium plan that sub- divides the Residential Property into one hundred thirty (130) individual Units has been approved by Lender and recorded in the Official Records of Orange County, California; and (iv) the Lender shall receive a release price with respect to each Unit to be released from the lien of the Mortgage in an amount equal to that set forth in the Release Price Schedule attached hereto as Exhibit "F" and made a part hereof, and Cal-39 BF:jc 08/29/89 BF4326.0042.0.0 (b) the Lender will request the trustee under the Mortgage to execute and deliver a partial reconveyance of the lien of the Mortgage with respect to the Commercial Property and the Improvements constructed thereon upon the satisfaction of all of the following terms and conditions: (i) Borrower shall not be in default under the terms of any of the Security Documents (as such term is defined in the Mortgage); (ii) a final subdivision map(s) or parcel map(s) covering the Commercial Property has been approved by Lender and recorded in the Official Records of Orange County, California; and (iii) the Lender shall receive a release price with respect to the Commercial Property in an amount equal to that portion of the Loan Amount theretofore dis- bursed by Lender to cover the commercial costs set forth in Column C, Page 1, of the Project Cost Statement. 7.17. Notwithstanding anything stated to the contrary herein, all references herein to "Permanent Closing", "Permanent Commitment", and/or "Permanent Lender" shall be inapplicable and all representations, covenants or conditions relating to a "Permanent Closing", "Permanent Lender" and/or "Permanent Commitment" shall be of no force or effect. 7.16. Borrower shall have the option to extend the term of the Loan for six (6) months upon the payment to the Lender of an extension fee equal to one quarter (4) of 1% of the sum of (a) the principal balance outstanding on the Note, and (b) the undisbursed portion of the Loan, as of the effective date of the extension. Borrower shall have a further option to extend the term of the Loan for an additional six (6) months upon the payment to Lender of an extension fee equal to 3% of-l% of the sum of (a) the principal balance outstand- ing on the Note and (b) the undisbursed portion of the Loan, as of the effective date of the extension. Each of the options to extend the term of the Loan shall be exercised by written notice to the Lender given not less than thirty (30) days prior to the effective date of the extension. Notwith- standing the foregoing, no extension shall be effective if on the effective date of such extension a default exists under the Security Documents. Cal-40 BF.jc 08/ 9/89 BE4326.0043.0.0 7.19. In the event Borrower requests Lender to disburse a portion of the proceeds of the Loan to the title insurer which is insuring the lien of the Mortgage prior to the recording of the Mortgage, Borrower agrees to pay interest to Lender at the rate specified in the Note from the date of such advance of Loan proceeds notwithstanding the fact that Borrower may not receive use of said Loan proceeds until a later date. 7.20. Lender agrees to cooperate with. Borrower in the recordation and filing of all necessary condominium and tract maps, plans, easements and covenants, conditions and restric- tions, each incident to the development of the Improvements, provided that all such documents are reasonably satisfactory to Lender and its counsel. 7.21 Notwithstanding anything to the contrary contained in this Agreement, the Note, the Deed of Trust or any other document evidencing, securing or pertaining to the Loan (hereinafter collectively referred to as the "Loan Documents"), Lender agrees that, for payment of the Note and payment and performance of all other obligations of Borrower under the Loan Documents, Lender will look solely to the Mortgaged Property and such other collateral as may now or hereafter be given to secure the payment of the Note and payment and performance of all other obligations of Borrower under the Loan Documents, and no other property or assets of Borrower or any partner in Borrower shall be subject to levy, execu- tion or other enforcement procedure for the satisfaction of the remedies of Lender, or for any payment required to be made hereunder or under the Note or any other Loan Documents or for the performance of any of the covenants or warranties contained herein or therein and neither Borrower nor any partner in Borrower shall have any personal liability for payment or performance of any such obligations; provided, however, that the foregoing provisions of this Section shall not (i) constitute a waiver of any obligation evidenced by the Note or secured by the Deed of Trust, (ii) limit the right of Lender to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Deed of Trust so long as no judgment in the nature of a deficiency judgment or any personal liability shall be sought or enforced against Borrower or any partner in Borrower except to the extent of the Mortgaged Property or such other collateral, (iii) affect in any way the validity or enforce- ability of any guaranty (whether of payment and/or perfor- mance) or indemnity agreement given to Lender in connection with the Loan, or (iv) constitute a waiver by Lender of any Cal-41 BF:jc 08 9/89 BF4326.0044.0.0 rights to reimbursement for actual, or out-of-pocket, losses, costs or expenses, or any other remedy at law or equity, against Borrower by reason or (1) gross negligence or frau- dulent acts or omissions, (2) willful misapplication of any insurance proceeds, condemnation awards or tenant security deposits, or of any rental or other income which was required by the Deed of Trust or other Loan documents to be paid or applied in a specified manner, arising, in any such case, with respect to the Mortgaged Property or (3) failure to deliver, promptly upon demand, tenant and other project files and original executed leases and other agreements relating to occupancy, construction or operation. 7.22. Section 1.02 is hereby amended by inserting the following definitions: " 'A enc ' -- City of Huntington Beach Redevelopment Agency. " 'Agency Estopeel Certificate' -- An estoppel certificate executed by the City of Huntington Beach Redevelopment Agency containing such representations relating to the DDA as Lender shall require and otherwise in form and substance acceptable to Lender." " 'Agency Subordination Agreement` --A subordination agreement executed by the Agency and notarized by a notary public subordinating the lien of a deed of trust in which the Agency is the beneficiary and subordinating certain rights of the Agency under the DDA to lien and effect of the Deed of Trust. " 'Assignment of Disposition and Develo :Went Agreement' -- The assignment of the DDA to be executed by Borrower, as assignor, in favor of Lender, as assignee, as additional security for the Note and any sums in addition to the Loan Amount advanced by Lender for completion for the Improvements." " 'Assignment of Leases' -- The assignment of all existing and future leases of portions of the Premises and the Improvements to be executed by Borrower, as assignor, in favor of Lender, as assignee, as additional security for the Note and any sums in addition to the Loan Amount advanced by Lender for completion of the improvements." Cal-42 BF:jc 08 29/89 BF4326.0045.0.0 " 'Cineamerica Theatre Lease' -- A space lease acceptable to Lender between Borrower and Cineamerica Theatres, L.P., pursuant to which Cineamerica Theatres, L.P. shall lease no less than twenty-six thousand (26,000) gross rent- able square feet of space in the Improvements constructed on the Commercial Property on terms and conditions acceptable to Lender." it 'Commercial Property' -- The portion of the Mortgaged Property upon which the retail, office and theatre complex are to be constructed." " 'DDA' -- That certain Second Amended and Restated Disposition and Development Agreement dated as of August 26, 1988, between the City of Huntington Beach Re- development Agency and Borrower." " 'Haseko Realty -Subordination Agreement' --A Subordination Agreement executed by Haseko Realty (California), Inc. ("Haseko Realty") and notarized by a notary public sub- ordinating the lien of that certain deed of trust being recorded concurrently with the Deed of Trust and Haseko Realty's aright to receive payments under the note secured thereby to the lien and effect of the Deed of Trust. " 'Residential Property' -- The portion of the Mortgaged Property upon which the condominium complex is to be constructed." " 'Tenant Estoppel' -- An estoppel certificate executed by a tenant leasing space in the Improvements to be constructed on the Commercial Property containing such repre- sentations as Lender shall require and otherwise in form and substance acceptable to Lender." " 'Tenant Subordination Agreement' -- A subor- dination agreement executed by Borrower and a tenant leasing space in the Improvements to be constructed on the Commercial Property pursuant to the terms of which such tenant shall subordinate its interest under the lease for such space to the lien of the Mortgage and agree to attorn to Lender and its successors and assigns." 7.23. The definition for "Major Leases" set forth in Section 1.02 hereof is hereby revised to read as follows: " 'Major Leases' -- The Cineamerica Theatre Lease and any other leases for space in excess of the Lease Per- centage of the rentable area of the Improvements." Cal-43 BF:jc 08/29/89 BF4326.0046.0.0 7.24. The definition for "Guaranty" set forth in Section 1.02 hereof is hereby revised to read as follows: it 'Guaranty' - The guaranty of the performance of Borrower's obligations to complete the Improvements, to be executed by Guarantor." 7,25. Section 2.08 hereof is hereby amended by adding the word "reasonable" immediately before the word "fees" and the word "expenses" appearing in line 5 thereof. 7.26. Section 2.09 hereof is hereby amended by (i) deleting the word "shall" appearing in line 4 thereof and substituting the word "may" in its place and stead, (ii) adding the clause "or Stop Notice" after the clause "Bonded Stop Notice" appearing in line 6 thereof, and (iii) deleting the words "in-house expenses" appearing in the second sentence of said section. 7.27. Section 2.10 hereof is hereby amended by deleting the clause "said Loan Budget Amount divided by the aggregate number of net rentable square feet in the Improvements" appearing in clause (a) thereof and substituting the follow- ing clause in its place and stead: "the portion of said Loan Budget Amount allocated for the construction of the retail, office and theatre complex (as reflected on page 1 of the Project Cost Statement) divided by the aggregate number of net rentable square feet contained in said retail, office and theatre complex." 7.28. Section 3.01(e) hereof is hereby amended by adding the clause "in all material respects" after the word "correct" appearing in line 3 thereof. 7.29. Section 3.01(f) hereof is hereby amended by adding the clause "or other funds (other than Loan funds)" after the word "proceeds" appearing in line 4 thereof. 7.30. Section 3.01 is hereby amended by adding the following additional subparagraphs thereunder: "(h) Borrower shall have submitted to Lender evidence satisfactory to Lender that Borrower expended from its own funds a sum not less than $10,952,325 towards the acquisition and development of the Mortgaged Property." Cal-44 BF:jc 03 29/89 BF4326.0047.0.0 "(i) Lender shall have entered into one or more participation agreements (in form and substance accept- able to Lender) with one or mare third party institutional lenders (acceptable to Lender) pursuant to which such third party lender(s) shall agree to participate in the Loan and fund not less than Thirty Million Dollars ($30,000,000) of the Loan Amount." 7.31. Section 3.02(e) is hereby amended by adding the following clause after the word "Subcontracts" appearing in line 6 thereof: "and all other Subcontracts." 7.32. Section 3.02(e) hereof is hereby amended by adding the word "substantial" immediately before the word "accordance" appearing in the third to the last line thereof. 7.33. Section 3.02(1) hereof is hereby amended by deleting the clause "and have never been" appearing in the second and third lines therein and by deleting the words "past or" appearing in the next to the last line therein. 7.34. Section 3.04(f) hereof is hereby amended by sub- stituting the clause "thirty (30) days" for the clause "ten (20) days" appearing in the first and second lines therein. 7.35. Section 3.04 is hereby amended by adding the following additional subparagraph thereunder: "(o) the executed Assignment of Leases, Assign- ment of Disposition and Development Agreement, Agency Estoppel Certificate, Agency Subordination Agreement, Haseko Realty Subordination Agreement and, if requested by Lender, an exe- cuted Tenant Estoppel and Tenant Subordination Agreement from each tenant with whom Borrower has entered into a lease with respect to space in the Improvements to be constructed on the Commercial Property". 7.36. Section 3.04(j) hereof is hereby amended by adding the clause ", if required by Lender," after the word "and" and before the word "to" appearing in the third line thereof. 7.37. Section 4.01(b) hereof is hereby amended by adding the Hord "reasonably" immediately after the word "may" and before the word "require" appearing in the fourth and fifth lines therein. Cal-45 BF:jc 08 29/89 BF4326.0048.0.0 7.38. Section 4.01(e) hereof is hereby amended by adding the clause "in all material respects" immediately after the word "correct" and before the word "on" appearing in the third line thereof. 7.39. Section 4.02(a) hereof is hereby amended by adding the word "substantial" immediately before the word "in" appearing in line 5 thereof. 7.40 Section 4.02(d) hereof is hereby deleted in its entirety and the following paragraph shall be substituted in its place and stead: "(d) Certificates by tenants under Major Leases to the effect that, for purposes of the Major Leases, the Improvements have been accepted for occupancy. Borrower shall use its best efforts to cause such certifi- cates to include the tenants statement to the effect that the Improvements have been satisfactorily completed." 7.41. Section 5.01(b) hereof is hereby amended by adding the word "substantial" inLnediately before the word "in" appearing in line 12 thereof. 7.42. Section 5.01(j) hereof is hereby amended by adding the clause "except as disclosed to Lender in writing" immediately before the word "there" appearing in line 3 thereof. 7.43. Section 5.01(o) hereof is hereby deleted in its entirety and the following paragraph shall be substituted in its place and stead: "(o) Except as disclosed in those certain site inspection reports delivered to Lender and prepared by Petroleum Industry Consultants, Inc., (i) the Premises and the improvements thereon are not currently subject to Hazar- dous Materials or their effects, and (ii) to Borrower's actual knowledge (with no duty of inquiry or investigation), other than the existence of oil wells and oil pipelines, the real property situated within a two (2) mile radius of the boundaries of the Premises, is not currently, and has never been, subject to Hazardous Materials or their effects". 7.44. Section 5.02(c) hereof is hereby amended by adding the word "reasonable" immediately before the word "fees" and before the word "expenses" appearing in the first line of clause (ii) thereof. Cal-46 BF:jc 08/29/89 BF4326.0049.0.0 7.45. Section 5.02(d) hereof is hereby amended by (i) adding the word "substantial" immediately before the word "accordance" appearing in line 9 thereof, (ii) substituting the clause "90 days" for the clause "30 days" appearing in line 10 thereof and (iii) adding the word "substantial" immediately after the word "in" appearing in line 2 thereof on page 27 hereof. 7.46. Section 5.02(g) hereof is hereby amended by adding the clause "any statements, representations or agree- ments Made by Borrower with any broker(s) relating to" immediately after the word "of" and before the word "the" appearing in line 2 thereof. 7.47. Section 5.02(1) hereof is hereby amended by adding the word "material" after the word "any" appearing in line 4 thereof. 7.48. Section 5.02(1) hereof is hereby amended by adding the clause ", within three (3) business days following Lender's written request therefor," immediately after the word "will" and before the word "deliver" appearing in line 7 thereof. 7.49. Section 6.01(d) hereof is hereby amended by adding the clause "in an interest bearing account" immediately after the word "deposit" and before the word "with" appearing in line 5 thereof. 7.50. Section 6.01(f) hereof is hereby amended by deleting the word "default" appearing in line 2 thereof and substituting the clause "Event of Default (as such term is defined in the Mortgage)" in its place and stead. 7.51. Section 6.01(j) hereof is hereby amended by (i) adding the following clause immediately before the word "if" appearing in line 4 thereof: ", by a national express courier (such as, for example, Federal Express) or a locally recognized messenger, which courier or messenger shall main- tain written verification of actual delivery, by telecopy or by delivering the same in person" and (ii) adding the follow- ing: "Notices so mailed shall be deemed delivered three (3) days following deposit into the United States mail". 7.52. Section 6.01(m) hereof is hereby amended by adding the following clause at the end of said section: provided, however, notwithstanding the foregoing, Borrower shall render performance hereunder solely to Lender and may rely solely on Lender for any consents, approvals or waivers required hereunder. Cal-47 BF:jc 08% 9/89 BF4326.0050.0.0 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written, the execution hereby by Borrower constituting (a) a certification by the party or parties executing on its behalf that the representations and warranties made in Article V are true and correct as of the date hereof and that each of them duly holds and is incumbent in the position indicated under his name, and (b) the undertaking of said party or parties that each Requisition, whether or not personally made by any or all of them, shall constitute the personal affirmation on the part of each of them that at the time thereof said repre- sentations and warranties are true and correct. THE CHASE MANHATTAN BARK (National Association) By Vice President CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its Cal-48 N7..L:bfs 08/04/89 BF4328.0001.0.0 01 DalIBIT A Project Cost Statesnent Borrower: California Resorts/fiaseko Associates Loan No.: 56211 Premises: Pier Colony, Huntington Beach Date: July 31, 1989 Orange County, California A R C D E Item Nos. Items of Total Cmmrcial loan Borrower's Cmnercial Cost Cccmiercial Costs Budget Amounts Equity (Estimates if no Firm Contracts) Direct Ctnuercial Costs 1. Construction $11,988,818 $ 9,606,205 $ 2,382,613 2. Tenant Improvements 10213,000 1,213,000 -0- Subtratals (Direct Ccnmrcial Costs) $ 13,201,818 $10,819,205 $ 2,382,613 Indirect Commercial Costs 1. Lid Acquisition $ 5,403,165 $ -0- $ 5,403,165 2. Interest fesetVe 3,346,418 3,346,418 -0- 3. Permits and Inspection 254,360 254,360 -0- 4. Borrower's Architects and Engineers Fees 669,500 669,500 -0- 5. Consulting and Legal Fees 202,000 2020000 -0- 6. Leasing Commissions 350,000 350,000 -0- 7. Selling Expenses 92,000 92,000 -0- 8. Administration 432,000 432,000 -0- 9. Operating Expenses 54,856 54,856 -0- 10. Loan Fee 84,525 84,525 -0- 11. Contingency 600,136 600,136 -0- Subtotals (Indirect Com;ercial Costs) $11,488,960 $ 6,085,795 Total (Direct and Indirect Camwercial Costs) $24,6901778 $16,905,000 $ 5,403,165 $ 7,785,778 Pdge 1 of 3 NLL:bfs 08/04/89 BF4328.0002.0.0 E}0IIBIT A Project Cost Statement Borrower: California Resorts/11aseko Associates Loan No.: 56211 Premises: Pier Colony, Huntington Beach Date: July 31, 1989 Orange County, California A B C D E Its Nos. Items of Total Residential Loan Borrower's Residential Cost Residential Costs Budget Amounts Equity (Estimates if no Firm Contracts) Direct Residential Costs Construction $14,682,117 $14,682,117 -0- Subtotals (Direct Residential Costs) $14,682,117 $14,G82,117 -0- Indirect Residential Costs 1. Land Acquisition $ 6,112,889 $ 2,946,342 $ 3*166,547 2. Interest on Loan 3,500,000 3,500,000 -0- 3. Permits and Inspection 779,190 779,190 -0- 4. Borrower's Architects and Engineers Fees 401,000 401,000 -0- 5. Consulting and Legal Fees 157,000 157,000 -0- 6. Selling EXpenses 653,000 653,000 -0- 7. Administration 354,856 354,856 -0- 8. Loan Fee 120,475 1200475 -0- 9. Haseko Development Fee 72,000 72,000 -0- 10. Contingency 429,020 429,020 -0- Subtotals (Indirect Residential Costs) $12,579,430 $ 9,412,883 $ 3,166,547 Total (Direct and Indirect Residential Costs) $27,261,547 $24,095,000 $ 3 166 547 rage 2 of 3 NLL:bfs 08/04/89 BF4328.0003.0.0 EJIBIT A Project Cost Statemnt Borrower: California Resorts/Haseko Associates Loan No.: 56211 Premises: Pier Colony, Huntington Beach Date: July 31, 1989 Orange County, California A B C D. E Item Nos. Items of Total Ccnmercial and Borrower's Cost Commercial and Residential Loan Equity _ Residential Costs Budget Amounts (Estimates if no Firm Contracts) Grand Total (Direct and Indirect Costs $51,952,325 $41r 000,000 $10,952L325 01 Pagv 3 of 3 BF:jc 08/49/89 BF4326.0051.0.0 EXHIBIT B Borrower's Requisition [See attached] EXH IS IT Soffvr me"t Rdgtliti m Ampim" k%L The Clew mm tea awk N.A. O Red Ida. 1211 Am%* of T1r Arewtae� C;oa r LOW QVr le;w oeowuwm New Ywk. New York lei Oast somrew ereet.m C1LI Lost Na •LTA Na Oavarary Iotett Peeled C&Ar" tame* In V o /-kWq Loan AVaawwne II W far hr 041na La On GWMW hw*v Withwim rW mmm ae aer.r to M OwN kv Lase Truer Aeaawre"tM iLTA wa. 0f go Oaoevary M* he elms smam of Wftmo It erwdwed Allae�e: 1— Okw,et taer ingnad a efr ore of hrbr ca wrw (f m Sair" 1) : 2— Lam Ow lw� of JAI Ilaralnafa atirw+asa of rod 00M 161 RamMal Aewaww to dw 04 of the twill Comae IflnOeee �alndeie I} ( } 3— Tow aWo No retw.". 1 4— lndkm Cam it irped to wed of Cte Pwied Couwrd (from DaNadute IIl I- Toed O In= rd Wiro 7 M+read: i Li- Law peg der of Low Affaumi /eweaeh adwead. } i a— taw wrwaw Orwio�oh► fa�M� . t01w1 One r1/t seemed p0o nt n erlta."MM 2-1 (61 Rico — M of tlr aLA { I a- Arse m RevAdde nl for tfr Pei" COMOL 11-204-441- _ le oenwwtioe whh all in ~ ` kw w IN trust ar dwr Via womm Renate, dwm on ON 1 r Awaby rw mwvtL wwrMR a ONPAW" a fottaM: 1_ The ktferarredet tend rArre all eft+ r.orw�ttere aed werrwrelw M LlaAiit / anetrr.d to tAa Its► ra true and 00n.et ae f w daa of Ow Reww iti in rd water flea Lady is wedrad to ter oaravy lala+a t!a diebwvwnmt of ow mowwt n jmt lftow so he a an the dw *West 2_ The MMWAV a and twareeor fat lerelt on ICNEX)LO I and 11 animd Pera.i h are Vue and owraet 1e tM Oars of ow 11 loom' 1<iwwltdIL 3- All a On k mWp rraW ief0r.d hwe bawe aooded a tlr r+ree ee of tlr Dle.et erd kdkaa Cane Aw0*1@4a leases, in olds► to Itlad in i tta- s m-t I L-02 N SOON IL A, ar oert eweo hw bra raa l in Llmrow.ri WW6M Loan TrUK AaM for apt p mp= and M afar. .4— Neena. adieara seed aartaaet dwat le+d aretneeea fM tfas aaevaeaM4 ribertaasr4 aka and eMarlaMrn rwttarrtilie orfaretti+y erdt lame of Dl+rs Crae 11aed on ldttDUia I fwsaa hetie bore Itaratokeo or an AerowitA r+brniesd >Q tf+e L� owl No Ca mumian CanrkwK aed aoiw of my awtoeal Caraaat ar WOW Sdeown not w va auli, dell.ard to ow Lae M Ma Caavuat*M Canwilr'K sea a16100d Awawtel� I— AN C mp Oodwe Imeo bmm ttIwdtad r tfea CawwvatlM Car ftm and M ChwW Ordws for weld+ an aelwm b mote** NwebW hm b� sopwp4d VV the Lwdw for flrdie& I-• AM t0tnwet 1Luaim due In 000erdata wftA um of Ow ILA a of tlr and of IM PwW Camid Aar two tuaertted va comauetfen CwtwAtv*- 3teeMbed and seen tb be104 - m *Ft. —Is 1DWV P40W Uk ww ON md 0 Feld ear sm schedsM ! aw+d to" sw.w«h A�MeI ' /w1M Gw"PrM lrct irww to �r Coat A • C D M : K t own ?rwN Ilew/ Qel��/ w�rue! Art�d 1Md cowrrwN/ pMl Crl rr1YM 11�t 1liwrirM Mir M Tod M+ Duaft+rw aW � w� ar*.04M c«r.w 17• &W 4l . boxio d fr• w.d We yet Do D"T� � r� M a rvart A posh .. ►OMO Lae aq IN The ►q "MrQ -rwM •r �wwrw COMMON,"OILt 1 few Y+a.wd b fgwi now"b I* Moto MiOrsM'► Solia�AM a. Pago—d_ Pro" OWTr.«• P-,~. Ad4*"s Gras Lmm No Itit dWe 6A Sim meowlMs sla "PIN f" PrrWdCwrrad AG Rra * To A i C D F O M J ww ONerr+run of NWO%% sore/ LrcEMrs Mw of OPP" AMMw�1 Ir Urw aT Con" MMwy/ Nww4 Vo - raaior� LhOVL rwrr eam & p-" "W" am*" 366rnrr wl sa*rr of Mww�M r Ma.+a•y �1 No Tel Orr Tridr w MA�rIrlr Cam++ NO. tl ,l». 1~bd Do" ... T. N° 1'! ?OfAt$ hww M hndiml a w _ Tinge Crw few 9" seek -Ow Low. svdv" A-Oswy 1 LSA) OPw I-1ty- d To W4 r1 Lrel ►C Col hIeo.d • in rr PC One i 0 ad Td ...1 rf "FC LSA Fw.dd To wM of Lae e PC LISA Ap.rw" /e«!turd 1w The /C Orr be 1, M W •eesfrf.hl ■ - e -- w •ww awA ROIr or w"m 14Hp Gem NM W" sFwOd elm* %0 Mr�wr.1. •wIYL rdA• *"* P- BF: jc 48 9/89 BF4326.0052.0.0 EXHIBIT B-1 Contractor's Cost Certification [See attached] eonv■r pfom& Ad&M CMG Low KR: Ca+weetr. CaMrsel�rrs C1nt Cattl�ew For IMqillbttr Na Detw ow" CswM pC1: herw Te tlweeweT r /releel Ceert ow eeow Caeend t. tar Cer tia.+.e fbe M W el er PC7 llet L Cd A !. 0rwwT Pe wn"ee rt P Q) flakµ COL M) & IOW Car braver • *owed flit 1 + Lax 7) a- DkW Car 14tebep t% ttx frd Of Ox P Rae► L COL K) L 0OW9 bkV 00 r Peewee DO Oe"r1 Ot Pp: flee► tit COL A l low lyerrr�e flit 4 + lie $1 T. Mr taws Dreg CON + I w.+err. (Llx ] a&" Lit 61 fl Lon No Tar Db+a CON + lwwrwI km RnOar tMfw flit t tbN fto) a No CON Itew NN" ter ON PC: 0.nb T mbeo lien a •M=of TOW r.NM1COON L TeW Cam iebb7 O ww Crft* f t a -.11... Ct"wye f7rerb f I PWAW TOW cON f The wmwvw o ow al wwo VAPWAr o1 ewummow tt tier D1www Nweste mow to ew Swww wrr TN CNar M4aweew Mt pk•) r+el Mvrae eee Mbie� ebeYe am w lrMa�M 1 e..1 L eKrsnrnwete w Yree wrCa+RL Hr G eora ecn.h ennner b tM eM M ttt Puwr Ce.wed rave ewp kerb er Mr.Mrb>n pMba1 fw ObwOrl PwN+1eer w woobr rt Oxerewece w+ ow. rw epeeMearea+a vAmwwam dwW ado and owk wdn oOverN by b bwrarw w4 ow M+. wM to of omm reouwekr+d an ore�w�1 C4rWlWAm ww np ynrt 1e.e e.n Pw In aw w by e1W NwWW WWOL fObm~ ww wrww to Irwwe M • a tf TUN 140 t Puaa W Cwrwserw+ b t ur wT+Or BF:jc 08�/89 BF4326.0053.0.0 EXHIBIT B-2 Payment Receipts [See attached] BF:jc 0A7�9/89 BF4325.0054.0.0 EXHIBIT B-2 UNCONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT The undersigned has been paid and has received a progress payment in the sum of $ for labor, services, equipment or material furnished to (Your Customer) on the job of located at (Owner) (Job Description) and does hereby release pro tanto any mechanic's lien, stop notice or bond right that the undersigned has on the above referenced job to the following extent. This release covers a progress payment for labor, services, equipment or materials furnished to through only and does (Your Customer) (Date) not cover any retention or items furnished after that date. Dated: (Company Name) By: (Title) NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FOR.'. (Page 1 of 4) BF:jc 08'7�9/89 BF4326.0055.0.0 �,Wj UNCONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT The undersigned has been paid in full for all labor, services, equipment or material furnished to on the job of located at (Your Customer) (Owner) and does hereby waive and release (Job Description) any right to a mechanic's lien, stop notice, or any right against a labor and material bond on the job, except for disputed claims for extra work in the amount of $ Dated: (Company Name) By: (Title) NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM. (Page 2 of 4) BF:jc 04749/89 BF4326.0056.0.0 CONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT Upon receipt by the undersigned of a check from in the sum of $ payable to and when the check has been properly endorsed and has been paid by the bank upon which it is drawn, this document shall become effective to release any mechanic's lien, stop notice, or bond right the undersigned has on the job of located at (Owner) (Job Description) This release covers the final payment to the undersigned for all labor, services, equipment or material furnished on the job, except for disputed claims for additional work in the amount of $ . Before any recipient of this document relies on it, the party should verify evidence of payment to the undersigned. Dated: (Company Name) By: (Title) (Page 3 of 4) BF:jc 0br29/89 BF4326.0057.0.0 CONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT Upon receipt by the undersigned of a check from in the sun of $ payable (Maker of Check) (Amount of Check) to and when the check has been (Payee or Payees of Check) properly endorsed and has been paid by the bank upon which it is drawn, this document shall become effective to release pe. tanto any mechanic's lien, stop notice or bond right the undersigned has on the job of located at (Owner) to the following extent. This (Job Description) release covers a progress payment for labor, services, equipment or material furnished to through (Your Customer) only and does not cover any retention or items (Date) furnished after said date. Before any recipient of this document relies on it, said party should verify evidence of payment to the undersigned. Dated: By: (Page 4 of 4) (Company Name) (Title) BF:jc 08�-Z9/89 BF4326.0058.0.0 E)CHIBIT C Borrower's Architect's Letter (On Architect's Letterhead) The Chase Manhattan Bank (N.A.), 101 Park Avenue New York, New York 10081 Attn: Real Estate Finance Re: Premises: Improvements: Borrower: Contract Date: Contract Work: CMB Loan No. Gentlemen: 198 We are the architectural or engineering firm responsible for performing the Contract Work described above for Borrower. In consideration of your making a loan to Borrower to finance construction of the Improvements, we agree that in the event of a default by Borrower under its contract with us or any of its loan documents with you we shall, at your request, continue performance on your behalf under our above -described contract with Borrower in accor- dance with the terms thereof provided we are reimbursed in accordance with said agreement for all services rendered on your behalf. We certify to you that the plans and specifica- tions scheduled below (collectively the "Plans") for the Improvements conform to and comply with all applicable building, environmental, ecological, landmark, subdivision and zoning codes, laws, ordinances and regulations, imposed by all governmental authorities having jurisdiction over the Improvements and the Premises. We further agree to certify to you, at the comple- tion of the Improvements, that the same have been completed in accordance with the Plans or to indicate any deviations therefrom. We agree to promptly notify you in writing of any deviations which may come to our attention during the course of construction. (Page 1 of 2) BF:jc 0&9/89 13F4326.0059.0.0 k.) You shall also be entitled to use all plans, spec- ifications, drawings and any modifications, additions, enlargements or extensions thereof prepared by us for the Improvements without cost to you. Sheet No. Very truly yours, By President (Seal) Schedule of "Plans" Title Date Latest Revised Date Comments (Page 2 of 2) BF:jc 08�9/89 BF4326.0060.0.0 "j EXHIBIT D General Contractor's and Major Subcontractors' Letter (On Contractor's Letterhead) The Chase Manhattan Bank, N.A. 101 Park Avenue New York, New York 10081 Attn: Real'Estate Finance Re: Premises: Improvements: Borrower: Contract Amount: Contract Date: Contract Work: General Contractor: CMB Loan No. Gentlemen: 198 We are the contractor engaged by Borrower or the General Contractor, if any, named above to perform the Con- tract Work described above as part of the construction of the Improvements on the Premises. In consideration of your making a loan to the Borrower to finance said construction, we agree that in the event of a default by Borrower under its contract with us (the "Contract") or any of its loan documents with you we shall, at your request, continue per- formance on your behalf under the Contract in accordance with the terms thereof Provided that we shall be reimbursed in accordance therewith for all work, labor and materials rendered on your behalf. We have examined the Schedule of Plans attached to the Letter dated , 198 from Borrower's Archi- tects, which is hereby certified by us as true and correct. We further agree that we shall not perform work pursuant to any change order to the Contract unless we shall have received your specific approval of such change order. In the event we fail to secure such approval, the Contract shall, for the purposes of our obligation aforesaid to con- tinue performance thereunder for your benefit, be deemed not to have been modified by such change order. (Page 1 of 2) BF:jc 08�9/89 BF4326.0061.0.0 We hereby covenant and agree that in the event any loan proceeds are disbursed directly to us, we will receive any such advances and will hold the right to receive the same as a trust fund for the purposes of paying the costs of constructing the Improvements owed to our subcontractors, suppliers, laborers and materialmen and we will apply the same first to such payment before using any part thereof for any other purpose. If Borrower fails to make any payments to us required by the Contract for more than 30 days, we will promptly notify you in writing of the amount and nature of such default. The officer executing this instrument on behalf of the undersigned hereby personally certifies that the under- signed contractor has full authority under all state or local laws and regulations to perform all of its obligations under the Contract in accordance with the terms thereof. Very truly yours, By. President (Seal) (Page 2 of 2) BF:jc �29/89 BF4326.CO62.0.0 %,.J EMIT I B I T E Notice -of -Assignment of Lease (On Letterhead yof Borrower) Re: Lease Dated: CMB Loan No.: Mortgage Dated: Gentlemen: 11 198 The undersigned has assigned by a mortgage or deed of trust (the "Mortgage") dated as shown above to The Chase Manhattan Bank (National Association) (hereinafter termed the "Bank") all its estate, right, title and interest in, to and under the Lease between you and the undersigned dated as set forth above, as said Lease may have been heretofore mod- ified or amended (the "Lease"), together with all right, title and interest of the undersigned as lessor thereunder, including, without limitation, the right upon the occurrence of an Event of Default (as defined in the Mortgage) to col- lect and receive all earnings, revenues, rents, issues, profits and income of the property subject to the Mortgage. Said assignment does not impair or diminish any of our obligations to you under the provisions of the Lease, nor are any such obligations imposed upon the Bank, its suc- cessors or assigns. Pursuant to said assignment you are hereby noti- fied that in the event of a denand on you by the Bank or its successors and assigns for the payment to it of the rents due under the Lease, you may, and are hereby authorized and directed to, pay said rent to the Bank and we hereby agree that the receipt by you of such a deMand shall be conclusive evidence of the right of the Bank to the receipt thereof and that the payment of the rents by you to the Bank pursuant to such demand shall constitute performance in full of your obligation under the Lease for the payment of rent to the undersigned. (Page 1 of 2) BF:jc 4�_9/89 BF4326.0063.0.0 Kindly indicate your receipt of this letter and your agreement to the effect set forth below by signing the enclosed copy thereof and mailing it to The Chase Manhattan Bank (National Association), 101 Park Avenue, New York, New York 10081, Attention: Real Estate Finance Office. By , Vice President The undersigned acknowledges receipt of the origi- nal of this letter and agrees for the benefit of the Bank that it shall notify the Bank of any default on the part of the landlord under the Lease which would entitle the under- signed to cancel the Lease or to abate the rent payable thereunder, and further agrees that, notwithstanding any provision of the Lease, no notice of cancellation thereof shall be effective unless the Bank has received the notice aforesaid and has failed within 30 days of the date hereof to cure or if the default cannot be cured within 30 days has failed to commence and to diligently prosecute the cure of landlord's default which gave rise to the right to cancel. By (Page 2 of 2) BF: jc /29/89 BF4326.0064.0.0 �•.�' PRELIMINARY RELEASE PRICES AND UNIT MIX Preliminary Preliminary Unit Plan* Type Mix S.F./Unit Release Price A Studio 42 878 $168,118 B 100/1BA 16 926 $177,309 C 200/2BA 33 1,262 $241,646 D 200/2.5BA 27 1,300 $248,922 E 1BD & Loft/ 1 or 2 BA 10 1,329 $254,475 F 2BD & Loft/ 2.5BA 2 1,492 $285,686 130 *As described in . EXHIBIT "F" •�L t NLL:bfs 077/89 AJ51547.0001.0,0 " ORIGINAL [LIBOR/PRIME] Note Amount: Maturity Date: $41,000,000 NOTE CMS Loan No. 56211 Date of Note: July 31, 1989 1991 FOR VALUE RECEIVED, the undersigned (hereinafter "Maker") does hereby covenant and promise to pay to THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), or its successors or assigns (hereinafter collectively "Payee"), on the Maturity Date, in immediately available funds, at 1 Chase Manhattan Plaza, New York, New York 10081 (and, so long as interest payable hereunder is being paid at the LIBO Based Rate as hereinafter provided, for the account of Payee's lending office at Cayman Islands, British West Indies, c/o The Chase Manhattan Bank (National Association), 1 Chase Manhattan Plaza, New York, New York 10061, Attention; Real Estate Division), or at such other place as Payee may designate to Maker in writing from time to time, in legal tender of the United States, the Note Amount or as much thereof as shall be advanced by Payee pursuant to the Loan Agreement and remain unpaid, together with interest at the: "LIBO Based Rate" -- i.e., with respect to any Euro- Dollar Amount, the rate per annum (expressed as a percen- tage) determined by Payee to be equal to the sum of (a) the quotient of the LIBO Rate for the Euro-Dollar Amount and Interest Period in question divided by (1 minus the Reserve Requirement) (rounded up to the nearest 1/100 of 1%) and (b) .0150; or "Prime Based Rate" -- i.e., 1/2% per annum in excess of the greater of (a) the prime commercial lending rate as announced from time to time by Payee at its principal office in New York City or (b) 1/4 of 1% in excess of the Federal Funds Rate, each change in said rates to be effective as of the date of such change; in each case to be computed on an actual/360-day basis (i.e., interest for each day during which any portion of the Note NLL;bfs 07�?4/89 AJS1547.0002.0.0 Amount bearing interest at said rate is outstanding shall be computed at said rate divided by 360) on so much of the Note Amount as is from time to time outstanding (the "Principal Amount"), all as hereinafter provided, and with a late pay- ment premium of 4% of any principal or interest payment made more than 10 days after the due date tr.ereof which shall be due with any such late payment. The following additional terms, as used in this Note, shall have the meanings indicated opposite then: "Additional Costs" -- Any costs, losses or expenses incurred by Payee which it determines are attributable to its making or maintaining the Loan, or its obligation to make any Loan advances, or any reduction in any amount receivable by Payee under the Loan or this Note. "Euro-Dollar A.z:ount" -- each portion of the Prin- cipal Amount bearing interest at the LISO Based Rate pursuant to a Euro-Dollar Rate Request. "Euro-Dollar Business Day" -- Any day on which commercial banks are open for domestic and international business (including dealings in U.S. Dollar deposits) in London and New York City. "Euro-Dollar Rate Request" -- Maker's telephonic notice (to be promptly confirmed in writing), to be received by Payee by 12 Noon (New York time) three (3) Eurorpollar Business Days prior to the date specified in the Euro-Dollar Rate Request for the commencement of the Interest Period, of (a) its intention to have (1) all or any portion of the Principal Amount, or, if permitted by Payee, of the outstanding principal amount under the other note(s), if any, made by Maker to Payee which evi- dence(s) the Loan, which is not then the subject of an Interest Period (other than an Interest Period which is terminating on such Euro-Dollar Business Day), and/ or (2) all or any portion of any advance of Loan pro- ceeds which is to be made on such Euro-Dollar Business Day and evidenced hereby or, if permitted by Payee, by the other note(s), if any, made by Maker to Payee which evidence(s) the Loan, bear interest at the LIBO Based Rate and�(b) the Interest Period desired by Maker in respect of the amount specified. "Euro-Dollar Rate Request Amount" -- The amount, to be specified by Maker in each Euro-Dollar Rate Request, which Maker desires bear interest'at the LIBO Based Rate E NLL:bfs 07'1"�4/89 AJS1547.0003.0.0 and which shall in no event be less than $1,000,000 and which, at Payee's option, shall be an integral multiple of $100,000. "Federal Funds Rate" -- For any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions as published by the Federal Reserve Bank of New York for such day or, for any day that is not a Business Day, for the immediately preceding Business Day. "Interest Period" -- The period during which in- terest at the LIBO Based Rate, determined as provided in this Note, shall be applicable to the Euro-Dollar Rate Request Amount in question, provided, however, that each such period shall be either one (1), two (2), three (3) (or, if available, six (6), nine (9) or twelve (12)) Months, which shall be treasured from the date specified by Maker in each Euro-Dcllar Rate Request for the commencement of the computation of interest at the LIBO Based Rate, to the numerically corresponding day in the calendar month in which such period terminates (or, if there be no numerical ccrrespondent in such month, or if the date selected by Maker for such commencement is the last Euro-Dollar Business Day of a calendar month, then the last Euro-Dollar Business Day'of the calendar month in which such period terminates, or if the numerically corresponding day is not a Euro-Dollar Business Day then the next succeeding Eurc-Dollar Business Day, unless such next succeeding Euro-Dollar Business Day enters a new calendar month, in which case such period shall end on the next preceding Euro-Dollar Business Day) and in no event shall any such period extend beyond the Maturity Date, as the same may have been extended pursuant to an exercise of Maker's right, if any, to extend the same as may be provided herein cr in the Loan Agreement. "LIBO Rate" -- The rate per annum (rounded up to the nearest 1/16 of 11) offered by the London branch of The Chase Manhattan Bank (National Association) to prime banks in the London interbank market at approximately 11 A.M. (London time) two (2) Euro-Dollar Business Days prior to the first day cf the applicable Interest Period, for deposits in immediately available funds, in lawful money of the -United States, of amounts comparable to the Euro-Dollar Rate Request Amount for the same period of time as the Interest Period selected by Maker in the Euro-Dollar Rate Request. K NLL:bfs C7/14/89 AJS1547.0004.0.0 "Loan" -- The loan in the Note Amount to be made to Maker by Payee pursuant to the Loan Agreement and evi- denced hereby. "Loan Agreement" -- The Building Loan Agree -lent or Loan Agreement of even date herewith between Payee and Maker pursuant to which the Loan is being made. "Regulation D" -- Regulation D of the Board of Covernors of the Federal Reserve System, as from time to time amended or supplemented, "Regulatory Change" -- With respect to the charg- ing and collecting of interest at the LIBO Based Rate, any change after the date hereof•in United States fed- eral, state or foreign laws or regulations (including Regulation D) or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks.ircluding Payee under any United States federal, state or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof, excluding any change the effect of which is reflected in a change in the LIBO Based Rate. "Reserve Requirement" -- The average maxinum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Re- serve System in New York City with deposits exceeding one billion U.S. Dollars against "Euro-Currency Liabil- ities", as such quoted term is used in Regulation D. Without limiting the effect of the foregoing, the Re- serve Requirement shall reflect any other reserves required to be maintained by such member banks by rea- son of any Regulatory Change against (a) any category of liabilities which includes deposits by reference to which the LIBO Rate is to be determined as•provided in this Note or (b) any category of extensions of credit or other assets which includes loans the interest rate on which is determined on the basis of rates referred to in the definition of "LIBO Rate" set forth above. a Maker shall have the option, subject to the terns and conditions hereinafter set forth, of paying interest on the Principal Amount or portions thereof at the Prime Based Rate or the LIBO Based Rate. If Maker desires the applica- tion of the LIBO Based Rate, it shall submit a Euro-Dollar 4 %.O� NLL:bfs 07/14/89 AJS1547.000S.0.0 Rate Request to Payee, which Euro-Dollar Rate Request shall be irrevocable, subject to Maker's right to convert the rate of interest payable hereunder with respect to any Euro-Dollar Amount frcm the LIBO Based Rate to the Prime Based Rate as hereinafter provided. In the event that Maker fails to sub- mit a Euro-Dollar Rate Request with respect to a Euro-Dollar Amount not later than 12 Noon (New York time) three (3) Euro- Dollar Business Days prior to the last day of the relevant Interest Period, the Euro-Dollar Amount in question shall bear interest, commencing at the end of such Interest Period, at the Prime Based Rate. Interest on the Principal Amount (whether computed at the Prime Based Rate or the LIBO Based Rate) shall be pay- able monthly on the first day of the first month following the first advance of Loan proceeds under the Loan Agreement which is evidenced hereby and on the first day of each month thereafter until this Note is repaid in full. Maker shall not have the right to have more than four (4) Interest Periods in respect of the Loan in effect at any one time -whether or not any portion of the Principal Amount is then bearing interest at the Prime Based Rate. Maker shall pay to Payee, promptly upon demand, such amounts as are necessary to compensate Payee for Addi- tional Costs resulting from any Regulatory Change which (i) subjects Payee to any tax, duty or other charge with respect to the Loan or this Note, or changes the basis of taxation of any amounts payable to Payee under the Loan or this Note (other than taxes imposed on the overall net income of Payee or of its applicable lending office by the jurisdiction in which Payee's principal office or such applicable lending office is located), (ii) imposes, modifies or deems appli- cable any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, Payee, (iii) imposes on Payee or, in the case of Euro-Dollar Amounts, on the London interbank market, any other condition affecting the Loan or this Note, or any of such extensions of credit or liabilities, or (iv) imposes any capital adequacy require- ments on Payee by virtue of the Loan or this Note. Payee will notify Maker of any event occurring after the date 0 5 NLL:bfs 07 I4/89 AJS1547.0005,0.0 hereof which would entitle it to compensation pursuant to this paragraph as promptly as practicable after it obtains knowledge thereof and determines to request such compensa- tion, and will designate a different lending office for those portions of the Loan affected by such event if such desig- nation will avoid the reed for, or reduce the amount of, such compensation and will not, in Payee's sole opinion, be dis- advantageous to it, provided that Payee shall have no obli- gation to so designate a lending office located in the United States. For purposes of this paragraph, of the definition of "Additional Costs" set forth above and of the next succeeding four paragraphs, the term "Payee" shall, at Payee's option, be deemed to include Payee's present and future participants in the Loan; provided, however, any "Additional Costs" incurred by Payee's present and future participants of the Loan shall only be included as an "Additional Cost" hereunder if, and to the extent, Payee is required to cover such costs. Without limiting the effect of the immediately pre- ceding paragraph, in the event that, by reason of any Regu- latory Change, (i) Payee incurs Additional Costs based on or measured by the excess above a specified level of the amount of (1) a category of deposits or other liabilities of Payee which includes deposits by reference to which the LIBO Rate is determined as provided in this Note and/or (2) a category of extensions of credit or other assets of Payee which includes loans the interest on which is determined on the basis of rates referred to in the definition of "LIBO Rate" set forth above, (ii) Payee becomes subject to restrictions on the amount of such a category of liabilities or assets which it may hold or (iii) it shall be unlawful or impossible for Payee to make or maintain the Loan (or any portion there- of) at the LIBO Based Rate, then Payee's obligation to make or maintain the Loan (or portions thereof) at the LIBO Based Rate (and Maker's right to request the same) stall be sus- pended and Payee shall give notice thereof to Maker and, upon the giving of such notice, interest payable hereunder shall be converted to the Prime Based Rate, unless Payee may law- fully continue to maintain the Loan (or any portion thereof) then bearing interest at the LIBO Based Rate to the end of the current Interest Period(s), at which time the interest rate shall convert to the Prime Based Rate. If subsequently Payee determines that such Regulatory Change has ceased to be in effect, Payee will so advise Maker and Maker may convert the rate of interest payable hereunder with respect to those portions of the Principal Amount bearing interest at the Prime Based Rate to the LIBO Based Rate by submitting a Euro- Dollar Rate Request in respect thereof and otherwise comply- ing with the provisions cf this Note with respect thereto. 6 %..) `. ) NLL:bfs 07/14/89 AJS1547.0007.0.0 Determinations by Payee of the existence or effect of any Regulatory Change on its costs of making or maintain- ing the Loan, or portions thereof, at the LIBO Based Rate, or on amounts receivable by it in respect thereof, and of the additional amounts required to com. ensate Payee in respect of Additional Costs, shall be conclusive, provided that such deter::tinations are made on a reasonable basis. Anything herein to the contrary notwithstanding, if, at the time of or prior to the determination of the LIBO Based Rate in respect of any Euro-Dollar Rate Request Amount as herein provided, Payee determines (which determination shall be conclusive) that (i) by reason of circumstances affecting the London interbank market generally, adequate and fair means do not or will not exist for determining the LIBO Based Rate applicable to an Interest Period or (ii) the LIBO Rate, as determined by Payee, will not accurately reflect the cost to Payee of caking or maintaining the Loan (or any portion thereof) at the LIBO Based Rate, then Payee shall give Maker prompt notice thereof, and the Euro-Dollar Rate Request Amount in question shall bear interest, or continue to bear interest, as the case may be, at the Prime Based Rate. If at any time subsequent to the giving of such notice, Payee determines that because of a change in circumstances the LIBO Based Rate is again available to Maker hereunder, Payee shall so advise Maker and Maker may convert the rate of inter- est payable hereunder from the Prime Based Rate to the LIBO Based Rate by submitting a Euro-Dollar Rate Request to Payee and otherwise complying with the provisions of this Note with respect thereto. Maker shall pay to Payee, immediately upon request and notwithstanding contrary provisions contained in the Deed of Trust (as hereinafter defined) or other Loan docu- ments, such amounts as shall, in the conclusive judgment of Payee, compensate Payee for any loss, cost or expense ,incurred by it as a result of (i) any payment or prepayment, under any circumstances whatsoever, whether voluntary or involuntary, of any portion of the Principal Amount bearing interest at the LIBO Based Rate on a date other than the last day of an applicable Interest Period, (ii) the conversion, for any reason whatsoever, whether voluntary or involuntary, of the rate of interest payable hereunder from the LIBO Based Rate to the Prime Based Rate with respect to any portion of the Principal Amount then bearing interest at the LIBO Based Rate on a date other than the last day of an applicable Interest Period, (III) the failure of all or a portion of an advance which was to have borne interest at the LIBO Based Rate pursuant to a Euro-Dollar Rate Request to be made under 7 NLL:bfs 07/14/89 AJS1547.0008.0.0 the Loan Agreement or (iv) the failure of Maker to borrow in accordance with a Euro-Dollar Rate Request submitted by it to Payee, which amounts shall include, without limitation, an amount equal to the excess, if any, of (x) the amount of interest that would have accrued at the LIBO Based Rate on the amount so prepaid, converted, not advanced or not bor- rowed, as the case may be, for the period frcm the date of occurrence to the last day of the applicable Interest Period over (y) the amount of interest (as determined in good faith by Payee) that Payee would have paid to Maker (and other customers) on a Euro-Dollar deposit placed by Payee with leading banks in the London interbank market for an amount comparable to the amount so prepaid, converted, not advanced or not borrowed, as the case may be, for the period from the date of occurrence to the last day of the applicable Interest Period. THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES THAT THE PAYEE WOULD NOT MAKE AVAILABLE TO THE UNDER- SIGNED THE LIBO BASED RATE WITHOUT THE UNDERSIGNED'S AGREE- MENT, AS SET FORTH ABOVE IN THIS PARAGRAPH, TO PAY THE PAYEE COMPENSATION UPON THE PAYMENT OF ANY PORTION OF THE PRINCIPAL SEARING INTEREST AT THE LIBO BASED RATE FOLLOWING THE ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT HEREUNDER OR UNDER THE DEED OF TRUST, INCLUDING WITHOUT LIMITATION, A DEFAULT ARISING FROM THE CONVEYANCE OF ANY RIGHT, TITLE OR INTEREST IN THE PROPERTY ENCUMBERED BY SAID DEED OF TRUST, AND THE UNDERSIGNED HAS CAUSED THOSE PERSONS SIGNING THIS NOTE ON THE UNDERSIGNED'S BEHALF SEPARATELY TO INITIAL THE AGREEMENT CONTAINED IN THIS PARA- GRAPH, IN COMPLIANCE WITH SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, BY PLACING THEIR INITIALS BELOW: INITIALS: Maker shall have the right to convert, from time to time, the rate of interest payable hereunder with respect to any portion of the Principal Amount to the LIBO Based Rate or the Prime Based Rate, subject to the terms of this Note (including, without limitation, the payment of all amounts due in connection with any such conversion from the LIBO Based Rate on a date other than the last day of an applicable Interest Period) and provided that, in the case of a conver- sion from the LIBO Based Rate, the entire Euro-Dollar Amount is the subject of the conversion. This Note, prior to maturity, may be prepaid in whole or in part, plus accrued interest on the amount to be prepaid, and all late charges payable hereunder, so long as Payee has received fifteen (15) days' prior written notice of an intention to make such prepayment, and, with respect 8 NLL:bfs O 14/89 AJS1547.0009.0.0 to any portion of the Principal Amount which, pursuant to the terms hereof, is bearing interest at the LIBO Based Rate, the amount to be prepaid is not less than $1,000,000 and in multiples of $100,000, and Maker pays to Payee the compensation required to be paid as specified above. Any portion of the Principal Amount to which the LIBO Based Rate is not or cannot pursuant to the terms hereof be applicable shall bear interest at the Prime Based.Rate. This Note is secured by, among other things, a deed of trust (the "Deed of Trust") encumbering the pre- mises situated as indicated below, which Deed of Trust spe- cifies various defaults upon the happening of which all sums owing on this Note may be declared immediately due and pay- able. If a default shall occur hereunder or under the Deed of Trust and such default shall continue after the expiration of any applicable grace period, interest on the Principal Amount shall, at the option of Payee, immediately and without notice to Maker, be converted to the Prime Based Rate. The foregoing provision shall not be construed as a waiver by Payee of its right to pursue any other remedies available to it under the Deed of Trust or any other instru- ment evidencing or securing the Loan, nor shall it be construed to limit in any way the application of the "Default Rate" as provided in the Deed of Trust. --Maker hereby agrees that it shall be bound by any agreement extending the time or modifying the above terms of payment, made by Payee and the owner or owners of the prop- erty affected by the Deed of Trust or any additional collateral documents delivered to Payee in connection with the Loan, whether with or without notice to Maker, and Maker shall con- tinue liable to pay the amount due hereunder, but with inter- est at a rate no greater than the LIBO Based Rate or the Prise Based Rate, as the case may be, according to the terms of any such agreement of extension or modification. This Note may not be changed orally but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. Written notices required to be given hereunder shall be given as -provided in the Deed of Trust. Should the indebtedness represented by this Note or any part thereof be collected at law or in equity, or in bank- ruptcy, receivership or any other court proceeding (whether E NLL:bfs 07/14/89 AJS1547.0010.0.0 at the trial or appellate level), or should this Note be placed in the hands of attorneys for collection upon default, Maker agrees to pay, in addition to the principal, interest and otter sums due and payable hereon, all costs of collect- ing or attempting to collect this Note, incl.:ding reasonable attorneys' fees and expenses. All parties to this Note, whether Maker, principal, surety, guarantor or endorser, hereby waive demand, notice and protest. If the Maker consists of more than one person or entity, their obligation hereunder shall be joint and several. If the Maker is a partnership or joint -venture, each general partner or joint venturer of the Maker shall be jointly and severally liable for this Note and hereby waives any require- ment of law that in the event of a default hereunder the Payee hereof exhaust any assets of the partnership or joint venture before proceeding against such general partner's or Joint venturer's assets or against such general partner or joint venturer. Upon the occurrence of an event of default here- under, and until such default shall be cured, all amounts then unpaid under this Note shall bear interest for the period beginning with the date of occurrence of such event of default at the rate of two percent (2%) per annum above the otherwise applicable Interest Rate. Without limiting the generality of the foregoing, the default rate of interest on that portion of the Principal Amount which is bearing interest at the LIBO Based Rate on the date of occurrence of an event of default hereunder (provided Payee has not elected to convert the interest rate to the Prime Based Rate) shall be, for the period commencing on said date of occurrence of such event of default and continuing through the last day of the applicable Interest Period, the rate of two percent (2%) per annum above the LIBO Based Rate and, thereafter, the rate of two percent (2%) per annum above the Prime Based Rate. Should Payee elect to convert the interest rate hereunder to the Prime Based Rate on account of a default hereunder, the Interest Rate shall be immediately increased to two percent (2%) per annum above the Prime Based Rate. Maker hereby expressly and unconditionally waives, in connection with any suit, action or proceeding brought by Payee on this Note, any and every right it may have to .(i) injunctive relief, (ii) a trial by jury, (iii) interpose any counterclaim therein (other than a counterclaim which can M01 NLL:bfs 07%%14/89 AJ51547.0011.0.0 only be asserted in such suit, action or proceeding brought by you and cannot be maintained in a separate action) and (iv) have the same consolidated with any other or separate suit, action or proceeding. Nothing herein contained shall prevent or prohibit Maker from instituting or maintaining a separate action against Payee with respect to any asserted claim. P.nything herein to the contrary notwithstanding, the obligations of Maker under this Note shall be subject to the limitation that payments of interest shall not be required to the extent that receipt of any such payment by Payee would be contrary to provisions of law applicable to Payee limiting the traximus. rate of interest which may be charged or collected by Payee. Notwithstanding anything to the contrary contained herein, the Deed of Trust or any of the other documents secur- ing or pertaining to this Note (hereinafter collectively referred to as the "Loan Documents") Payee agrees that, for payment of this Note, it will look solely to the Mortgaged Property (as defined in the Deed of Trust) and such other collateral, if any, as may now or hereafter be given to secure the payment of this Dote and payment and performance of all other obligations of Maker under the Loan Documents, and no other property or assets of Maker or any partner in Maker shall be subject to levy, execution or other enforce- ment procedure for the satisfaction of the renedies of Payee, or for any payment required to be made under this Note, under the Deed of Trust or under any of the other Loan Documents or for the performance of any of the covenants or warranties contained herein or therein; provided, however, that the foregoing provisions of this paragraph shall not (i) con- stitute a waiver of any obligation evidenced by this Note or secured by the Deed of Trust, (ii) limit the right of Payee to name Maker as a party defendant in any action or suit for judicial foreclosure and sale under the Deed of Trust so long as no judgment in the nature of a deficiency judgment or any other personal liability shall be sought or enforced against Maker or any partner in Maker except to the extent of the Mortgaged Property or such other collateral, (iii) affect in any way the validity or enforceability of any guaranty (whether of payment and/or performance) or indemnity agree- ment given toyPayee in connection with the loan evidenced hereby or (iv) constitute a waiver by Payee of any rights to reimbursement for actual, or out-of-pocket, losses, costs or expenses, or any other remedy at law or equity, against Maker by reason of (1) gross negligence or fraudulent acts or 11 NLL:bfs 07�4/89 AJS1547.0012.0.0 omissions, (2) willful misapplication of any insurance pro- ceeds, condemnation awards or tenant security deposits, or of any rental or other income w::ich was required by the Deed of Trust or other Loan Document- to be paid or applied in a specified manner, arising, in any such case, with respect to the Mortgaged Property or (; ) failure to deliver, promptly upon demand, tenant and other project files and original executed leases and other agreements relating to occupancy, construction or operation. This Note shall be construed and enforced in accor- dance with the laws of the State of California. IN WITNESS WHEREOF, Maker has executed and deliv- ered this Note on the day and year first above written. CALIFOPUNIA RESORTS/HASEKO ASSOCIATES, a California► general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its 12 NLL:bfs Cir?4/89 AJS1547.0013.0.0 Location of Premises: Address of Maker: Huntington Beach, CA 222 5th Street Huntington Beach, CA 92648 13 NLL:bfs 0V14/89 AJS1547.0014.0.0 STATE OF ) SS. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEK0 PIER COLONY, INC., the corporat=on therein named, and acknowledged to rye that such corporation pursuant to its by-laws or a resolution of its board of directors exe- cuted the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. 'Notary Public C. NLL:bfs O',4 4/83 AJS1547.0015.0.0 STATE OF ) Ss. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEX0 ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public co NLL:bfs 07/17/89 LRE2603.0001.0.0 ORIGINAL RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Loeb and Loeb Suite 1800 1000 Wilshire Boulevard Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. SPACE ABOVE THIS LINE FOR RECORDER'S USE Date: July 31, 1989 CMB Loan No. 56211 Construction Trust Deed DEED OF TRUST ASSIGNMENT OF RENTS AND SECURITY AGREEMENT MADE BY CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture (the "Trustor") Address: 222 Sth Street Huntington Beach, California 92648 W& Chicago Title Insurance Company 825 North Broadway Santa Ana, California 92701 (the "Trustee") FOR THE BENEFIT OF THE CHASE MANHATTAN BANK (National Association) 101 Park Avenue New York, New York 10178 Attention: R.E.F.B. iet.h r i.00r - Counsel (the "Beneficiary") Note Amount: $41,000,000 NLL:bfs 07/17/89 LRE2603.0002.0.0 Trustor hereby irrevocably grants, transfers, and assigns to Trustee, its successors and assigns, in trust, with power of sale and right of entry and possession, all of Trustor's estate, right, title and interest in, to and under and grants to Beneficiary a security interest in the follow- ing described property which is (except where the context otherwise requires) herein collectively called the "Mortgaged Property," whether now owned or held or hereafter acquired: (A) That certain real property, more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference, together with all of the easements, rights, privileges, franchises and appurtenances thereunto belonging or in any way appertaining (the "Premises"), and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either at law or in equity, in possession or in expectancy, now or hereafter acquired; (B) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the Premises (the "Improvements"), including, without limitation, all equipment, apparatus, machinery, fixtures, fittings, and appliances and any additions to, sub- stitutions for, changes in or replacements of the whole or any part thereof, including such of the foregoing as may be used in connection with the generating or distributing of air, water, heat, electricity, light, fuel or refrigeration or for ventilating or sanitary purposes or for the exclusion of vermin or insects or for the removal of dust, refuse or garbage, now or at any time hereafter affixed to, attached to, placed upon or used in any way in connection with the use, enjoyment, occupancy, construction or operation of the Premises or any portion thereof; (C) All articles of personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof (the "Personal Property"), including without limitation all wall -beds, wall -safes, built-in furniture and installations, shelving, partitions, door -stops, vaults, elevators, dumb -waiters, awnings, window shades, Venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, dral5ery rods and brackets, screens, linoleum, car- pets, plumbing, laundry tubs and trays, iceboxes, refrigera- tors, heating units, stoves, ovens, water heaters, incinera- tors, furniture and furnishings, communication systems, all specifically designed installations and furnishings and all of said articles of property, the specific enumerations herein not excluding the general, now or at any time here- after affixed to, attached to, placed upon, used or useful in any way in connection with the use, enjoyment, occupancy or operation of the Premises or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the Premises and intended to be installed or placed in or about the Improve- ments; 2 NLL:bfs 07/17/89 LRE2603.0003.0.0 (D) All right, title and interest of Trustor in and to all streets, roads and public places open or proposed, water and water rights and shares of stock evidencing the same and all easements and rights of way, public or private, tenements, hereditaments, rights and appurtenances -.ow or hereafter used in connection with or belonging or appertain- ing to the Premises; (E) All of the rents, royalties, issues, profits, revenue, income and other benefits of the Mortgaged Property, or arising from the use or enjoyment of all or any portion thereof or from any lease or agreement pertaining thereto (the "Rents and Profits"), and all right, title and interest of Trustor in and to all leases of the Mortgaged Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due prior to the expiration of said terms; subject to, however, the provisions contained in Section 1.09 hereof; (F) All proceeds (including claims and demands therefor) of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards; (G) Any and all funds of Trustor on deposit with Beneficiary or any branch of Beneficiary; (H) All deposits made with or other security given to utility companies or governmental branches or agencies by Trustor with respect to the Premises and Improvements and all advance payments of insurance premiums made by Trustor with respect thereto; (I) Insofar as permitted by applicable law, all licenses (including, but not limited to, any operating licenses or similar matters), contracts, management agree- ments or contracts, franchise agreements, permits, author- ities or certificates required, used or useful in connection with the ownership, use, enjoyment, occupancy, management or operation of the Mortgaged Property; FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect: (1) Due, prompt and complete observance and discharge of each and every obligation, covenant and agreement contained in that certain promissory note (the "Note") of even date herewith in the face amount as set forth on page 1 hereof, executed by Trustor to the order of Beneficiary and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Note or other- wise; 3 NLL:bfs 07`/17/89 LRE2603.0004.0.0 V...) (2) Payment of all sums, with interest thereon at the rate of interest provided in the Note, becoming due or payable under the provisions hereof or under the building loan agreement of even date herewith by and between Trustor and Benefi- ciary (the "Loan Agreement"); provided, however, that with respect to the payment of all sums becoming due or payable as a result of a breach of the provisions hereof or under the Loan Agreement, payment of all such sums, with interest thereon at the rate of interest provided in the Note in the event of a default thereon (the "Default Rate"); (3) Payment of such additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, by Benefi- ciary, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust; and (4) Due, prompt and complete observance, performance and discharge of each and every obli- gation, covenant and agreement of Trustor contained herein or in the Loan Agreement or in any other instrument heretofore or hereafter executed by Trustor having reference to or arising out of the indebtedness represented by the Note, which other instruments, the Loan Agreement, the Note and this Deed of Trust are hereafter collectively referred 'to as the "Security Documents." ARTICLE I COVENANTS OF TRUSTOR Trustor covenants, warrants, and agrees to and with Beneficiary and Trustee as follows: 1.01. Trustor will pay the principal and interest and all other sums becoming due with respect to the Note at the time and a place and in the manner specified in the Note. 1.02. Trustor has good and marketable title to the Mortgaged Property subject to no lien, charge or encumbrance except as disclosed to Beneficiary in writing and except such as are listed as exceptions to title in the title policy or policies, wf any, insuring the lien of this Deed of Trust issued by a title company or companies acceptable to Benefi- ciary; Trustor owns or, upon acquisition thereof, will own the Personal Property free and clear of liens, security inter- ests and claims; and this Deed of Trust is and will remain a valid and enforceable lien on the Mortgaged Property subject only to the exceptions referred to above. Trustor has full power and lawful authority to grant, assign, transfer and mortgage its interest in the Mortgaged Property in the manner and form hereby done or intended. Trustor will preserve its interest in and title to the Mortgaged Property and will forever warrant and defend the same to Trustee and will forever -warrant and defend the validity and priority of 4 ___��-�-•-. - --_ _.ram_ ____ � ...'__ -- � _� _�. ..� --� r� - _011/ I NLL:bfs 07Y17/89 LRE2603.0005.0.0 the lien hereof against the claims of all persons and parties whomsoever. Trustor shall pay all reasonable costs, fees and expenses, including costs of evidence of title and trustee's fees and attorney's fees, paid or incurred by Beneficiary and/or Trustee in connection with the enforcement of their rights hereunder or in any action or proceeding threatened or commenced in which Beneficiary and/or Trustee may appear or be made a party, whether or not pursued to final judgment, and in any exercise of the power of sale contained herein, whether or not such sale is actually consummated. Trustor shall promptly and completely observe, perform, and discharge each and every obligation, covenant and agreement affecting the Mortgaged Property whether the same is prior and superior or subject and subordinate hereto including, if the security hereunder is or will be a condominium, community apartment, stock cooperative, or part of a planned development, each and every provision under any declaration of covenants, condi- tions and restrictions pertaining thereto. I.03.(a) Trustor will, at its own cost and without expense to Trustee or Beneficiary, do, execute, acknowledge and deliver all and every such further acts, deeds, convey- ances, mortgages, assignments, notices of assignments, trans- fers and assurances as Trustee or Beneficiary shall from time to time require, for the better assuring, conveying, assign- ing, transferring and confirming unto Trustee and Beneficiary the property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Trustor may be or may hereafter become bound to convey or assign to Trustee or Beneficiary, or for carrying out the intention or facili- tating the performance of the terms of this Deed of Trust, or for filing, registering or recording this Deed of Trust. (b) Trustor forthwith upon the execution and delivery of this Deed of Trust, and thereafter from time to time, will cause this Deed of Trust and any security instru- ment creating a lien or evidencing the lien hereof upon the Personal Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, the title of Trustee to, and the security interest of Beneficiary in the Mortgaged Property. 4 (c) Trustor will pay all filing, registration and recording fees, and all reasonable expenses incident to the preparation, execution and acknowledgement of this Deed of Trust and any other Security Document, and all federal, state, county and municipal stamp taxes and other taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Deed of Trust, and any other Security Document. 1.04. Trustor will keep the Mortgaged Property insured against loss or damage by fire with extended coverage and against any other risks or hazards (excluding earthquake insurance) which, in the opinion of Beneficiary, should be insured against to the amount of the full insurable value 5 r% V NLL:bfs 07/17/89 LRE2603.0006.0.0 thereof on a replacement cost basis (or less in the discre- tion of Beneficiary) with a company or companies and in such form and with such endorsements as may be approved or required by Beneficiary. Loss under said insurance shall be payable to Beneficiary and shall be applied in the same manner as provided in Section 1.05 hereof, and said insurance policies shall be endorsed with a standard non-contributory mortgagee clause, and may only be cancelled or modified upon not less than thirty (30) days' prior written notice to Beneficiary. Trustor will also carry public liability insurance, in such fora, amounts and with such companies as Beneficiary may from time to time require, with Beneficiary included thereon as a named insured under a standard mortgagee endorsement of the character above described. The policy or policies evidencing all insurance referred to ir. this paragraph or certificates of such insurance satisfactory to Beneficiary, together with receipts fcr the payment of premiums thereon, shall be delivered to and held by Beneficiary. Beneficiary shall not by the fact of approving, disapproving, accepting, obtaining or failing to obtain any insurance, incur any liability for -the form or legal sufficiency of insurance contracts, solvency of insurance companies or payment of judgments or expenses of litigation, and Trustor hereby expressly assumes full respon- sibility therefor and liability, if any, thereunder. 1.05. Trustor, upon obtaining knowledge of the institution of any proceedings for the condemnation of the Premises and Improvements or any portion thereof or knowledge of any casualty damage to the Mortgaged Property or damage of any other kind, will immediately notify Beneficiary. Bene- ficiary may participate in any proceedings and join Trustor in adjusting any loss covered by insurance which exceeds $500,000. All compensation, awards, proceeds, damages, claims, rights of action and payments (including those that are equal to, or less than, $500,000) to which Trustor may become entitled ("Insurance and Condemnation Proceeds") shall be paid over to Beneficiary. Until condemnation proceeds are actually received by Beneficiary and applied to the reduction or satisfaction of any obligations of Trustor secured hereby, said obligations shall continue to earn interest at the rate provided herein and/or in the Note, regardless of the fact that the Mortgaged Property may have been taken at an earlier date and the interest accruing on the condemnation award from the date of the taking to the date of the payment may be at a lower rate than provided herein or in the Note. Should Insurance and Condemnation Proceeds be paid by draft or check and made jointly payable to Trustor and Beneficiary, Benefi- ciary may endorse, cash and/or negotiate any such draft or check in the name of Trustor. Beneficiary may commingle Insurance and Condemnation Proceeds with other funds of Beneficiary and interest shall be earned thereon. Benefi- ciary shall not be deemed a trustee of said funds or be obligated to advance any amounts in excess of the amount received by Beneficiary pursuant to this Section 1.05. Beneficiary shall (i) to the extent that obligations secured by the lien of this Deed of Trust are due and payable, apply any Insurance and Condemnation Proceeds received by it to the discharge of said matured obligations, (ii) in the case of a i'-ft NLL:bfs 07/17/89 LRE2603.0007.0.0 casualty, make available to Trustor the remaining insurance proceeds to pay for the cost of rebuilding or restoring the Premises and Improvements and (iii) in the case of a partial condemnation, apply the remaining condemnation proceeds first to the reduction of the principal balance of any obligation secured by this Deed of Trust then outstanding even though said obligation is not otherwise due and payable but only to the extent necessary to prevent an impairment of the security with the balance of the condemnation proceeds to be made available to Trustor to reconstruct or restore the Premises and Improvements not taken in condemnation so that they will constitute an architectural unit or units of the same general character and condition (as nearly as may be possible in the circumstances) as existed prior to the condemnation. All Insurance and Condemnation Proceeds which are made available to Trustor for reconstructicn or restoration of the Premises and Improvements as provided herein, shall be disbursed by Beneficiary to Trustor or, at the option of Beneficiary, directly to the persons or companies supplying labor or materials in connection with said reconstruction or restora- tion, subject to and in accordance with the following terms and conditions: (a) Trustor shall not be in default hereunder and no event shall have occurred and no fact shall exist which.with notice and/or the passage of time would constitute an Event of Default hereunder; (b) There shall be disbursed by Beneficiary from Insurance and Condemnation Proceeds such part thereof as shall equal the cost to Trustor of doing such temporary work as may be necessary in order to protect the Premises and Improvements pending adjustment of the insurance loss or the rebuilding or restoration of the Premises and Improvements; (c) Trustor shall have delivered to Bene- ficiary a construction contract for the work of recon- struction in form and content acceptable to Beneficiary with a contractor acceptable to Beneficiary; (d) There shall be disbursed by Beneficiary from Insurance and Condemnation Proceeds such part thereoV'as shall equal the cost of restoring the Prem- ises and the Improvements. If at any time, and from time to time, Beneficiary shall determine that the Insurance and Condemnation Proceeds, or the undisbursed balance thereof, are insufficient to cover the remaining costs of completion of restoration of the Premises and the Improvements, Beneficiary may require Trustor to furnish a completion deposit which shall consist of cash, letters of credit or marketable securities accept- able to Beneficiary in an amount satisfactory to Bene- ficiary which Beneficiary may from time to time apply, or allow Trustor to apply, to the satisfaction and payment of the cost of completion of restoration. Portions of any completion deposit shall be released to 7 tI NLL:bfs 07/17/89 LRE2603.0008.0.0 Trustor when and to the extent that Beneficiary deter- mines that the value or amount thereof is more than the excess, if any, of the total remaining costs of com- pleting the restoration of the Premises and the Improvements over the undisbursed balance of the Insurance and Condemnation Proceeds; (e) Payments pursuant to paragraphs (b) or (d) of this Section 1.05 from such Insurance and Con- demnation Proceeds shall be made from time to time as the work progresses, but not more frequently than once in any calendar month, in amounts equal to the cost of labor and material incorporated into and used in such work plus builders', architects' and engineers' fees and other charges in connection with such work, upon deliv- ery to Beneficiary of a certificate of the managing general partner of Trustor certifying that the amounts so to be paid are payable in accordance with the provi- sions of this Section 1.05 and that such amounts are then due and payable by Trustor or have theretofore been paid by Trustor. Beneficiary shall be entitled to impose such other reasonable terms and conditions to the disbursement of Insurance and Condemnation Proceeds as Beneficiary shall determine in order to insure that the Premises and Improvements are properly and expeditiously being restored, including, but not Limited to, requiring at Trustor's expense title policy endorsements and certificates of a construction consultant which Bene- ficiary shall be entitled to engage at the expense of Trustor to inspect the Premises and Improvements during and subsequent to completion of restoration thereof; and (f) In the event that any of the Insurance and Condemnation Proceeds shall remain after completion of such restoration, the excess shall be applied by Beneficiary to the reduction of the principal balance of any obligation secured by this Deed of Trust then out- standing even though said obligation is not otherwise due and payable. The application of Insurance and Condemnation Proceeds in accordance with this Section 1.05 shall not cure or waive any Event of Default or notice of default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action or payments, and may accept the same in the amount in which the same shall, be paid. 1.06.(a) Trustor, from time to time when the same shall become due, will pay and discharge all taxes of every kind and nature, including real and personal property taxes and income, franchise, withholding, profits and gross receipts taxes, all general and special assessments, includ- ing assessments on appurtenant water stock, levies, permits, inspectior. and license fees, all water and sewer rents and charges, and all other public charges whether of a like or different nature, imposed upon or assessed against Trustor or the Mortgaged Property or any part thereof or upon the revenues, rents, issues, income and profits of the Mortgaged 11 t' NLL:bfs O'�7/89 LRE2603.0009.0.0 Property, or arising in respect of the occupancy, use or possession thereof. Trustor will, upon the request of Bene- ficiary, deliver to Beneficiary receipts evidencing the payment of all such taxes, assessments, levies, fees, rents and other public charges imposed upon or assessed against Trustor or the Mortgaged Property or the revenues, rents, issues, income or profits thereof. If at any time after the date hereof there shall be assessed or imposed (i) a tax or assessment on the Mortgaged Property in lieu of or in addi- tion to the taxes and assessments payable by Trustor here- under, or (ii) a license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding obligations secured hereby (but excluding any state or federal income or franchise tax), then Trustor shall pay and discharge the same or, in the event it shall be unlawful for Trustor to do so, at the option of Beneficiary, all obligations secured hereby, together with all accrued interest thereon, shall immediately become due and payable. Anything to the contrary herein notwithstand- ing, Trustor shall have no obligation to pay any franchise, estate, inheritance, income, excess profits or similar tax levied on Beneficiary or on the obligations secured hereby. (b) Beneficiary may, at its option to be exercised by thirty (30) days' written notice to Trustor, require the deposit by Trustor, at the time of each payment of an installment of interest or principal under the Note, of (i) an additional amount sufficient to discharge the obli- gations under Sections 1.04 and 1.06(a) hereof when they become due and (ii) so long as this Deed of Trust and the Note are insured by private mortgage insurance, an amount sufficient to accumulate with Beneficiary the full amount of such premium. The determination of the amounts so payable and of the fractional parts thereof to be deposited with Beneficiary, so that the aggregate of such deposits shall be sufficient for this purpose, shall be made by Beneficiary in its sole discretion. Said amounts may be commingled with other funds of Beneficiary and no interest shall be earned thereon nor shall Beneficiary be deemed a trustee of said funds or be obligated to pay any amounts in excess of the amount deposited with Beneficiary pursuant to this Section 1.06(b). So long as Trustor shall not be in default under this Deed of Trust, said amounts shall be applied to the payment of the obligations in respect of which said amounts were deposited in such order or priority as Beneficiary shall determine, on or before the respective dates on which the same or any of them would become delinquent. If one (1) month prior to the due date of any of the aforementioned obligations the amount then on deposit therefor shall be insufficient for the payment of such obligation in full, Trustor within ten (10) days after demand shall deposit the amount of the deficiency with Beneficiary. Nothing herein contained shall be deemed to affect any right or remedy of Beneficiary under any other provision of this Deed of Trust or under any statute or rule of law to pay any such amount and to add the amount so paid together with interest at the Default Rate to the indebtedness hereby secured. If requested by Beneficiary, Trustor shall at its sole cost and expense cause to be furnished to Beneficiary a tax reporting•scrVice 9. f NLL:bfs 07kf�7/89 LRE2603.0010.0.0 to be designated by Beneficiary covering the Mortgaged Prop- erty. (c) Trustor will pay, from time to time when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in or permit the creation of a lien on the Mortgaged Property or any part thereof, or on the revenues, rents, issues, income and profits arising therefrom, and in general will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the sole cost of Trustor, without expense to Trustee or Beneficiary; provided, however, Trustor shall have the right to contest in good faith any such claim or defend against the same subject to the following conditions: (a) any such contests shall be prosecuted diligently and in a manner not prejudi- cial to Beneficiary or the rights of Beneficiary hereunder, and, in any event, shall be settled and discharged not less than thirty (30) days prior to the earliest date when any portion of the Mortgaged Property may be sold or seized in satisfaction of such claim, (b) upon demand by Beneficiary, Trustor shall deposit funds with Beneficiary in an amount sufficient to cover any amounts which may be owing in the event the contest may be unsuccessful, and (c) Trustor shall make any such deposit or obtain and record such bond, as the case may be, within five (5) days after demand therefor and, if made by payment of funds -to Beneficiary, the amount so deposited shall be disbursed in accordance with the resolu- tion of the contest to Trustor or the adverse claimant. 1.07. All right, title and interest of Trustor in and to all extensions, improvements, betterments, renewals, substitute: and replacements of, and all additions and appur- tenances to the Mortgaged Property, hereafter acquired by, or released to, Trustor or constructed, assembled or placed by Trustor on the Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, ccnstruction, assembling, placement or conversion, as the case may be, and in each such case, without any further deed of trust, conveyance, assignment or other act by Trustor, shall become subject to the lien of this Deed of Trust as fully and completely, and with the same effect, as though now owned by Trustor and specifically described in the granting clau3e hereof, but at any and all tines Trustor will execute and deliver to Trustee any and all such further assurances, deeds of trust, conveyances or assignments thereof as Trustee or Beneficiary may reasonably require for the purpose of expressly and specifically subjecting the same to the lien of this Deed of Trust. 1.08. This Deed of Trust shall constitute a Security Agreement with respect to the Personal Property and a fixture filing with respect to goods which are or are to become fixtures; provided, however, Trustor hereby agrees to execute and deliver on demand and hereby irrevocably consti- tutes and appoints Trustee and Beneficiary (either of whom_ _ may act alone or together) the attorney -in -fact of Trustor, to execute, deliver and, if appropriate, to file with the 10 JJ `NLL:bfs 07k%'17/$9 LRE2603.0011.0.0 appropriate filing officer or office such security agree- ments, chattel mortgages, financing statements or other instruments as Beneficiary may request or require in order to impose or perfect the lien or security interest hereof upon the Personal Property. The foregoing power of attorney is coupled with an interest and cannot be revoked. 1.09.(a) The Rents and Profits are hereby abso- lutely and unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by Beneficiary in payment of the principal and interest and all other suns payable on the Note, all other sums payable under this Deed of Trust and all sums payable under any other Security Docu- ment. Prior to the happening of any Event of Default, Trustor shall collect and receive all Rents and Profits as trustee for the benefit of Beneficiary and shall apply the amount so collected first to the payment of the principal and interest and all other sums due and payable on the Note, to the payment of all other sums payable under this Deed of Trust and to the payment of all sums due and payable under any other Security Document. Thereafter, so long as no Event of Default has occurred and is continuing, the balance shall be distributed to the account of Trustor. Nothing contained in this Section 1.09(a) or elsewhere in this Deed of Trust shall be construed to make Beneficiary a mortgagee in possession unless and until Beneficiary actually takes possession of the Mortgaged Prop- erty either in person or through an agent or receiver nor shall Beneficiary have any responsibilities or duties to third parties including tenants or occupants to use or apply any Rents or -Profits for any purpose. Effective upon the occur- rence of an Event of Default (as such term is defined in Article II hereof), Beneficiary shall have the right, at the option of Beneficiary at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in the name of Trus- tor or Beneficiary, for all the Rents and Profits and to apply the same to the indebtedness and other obligations secured hereby; provided, however, that Trustor shall have the right and license to collect the Rents and Profits (but not more than two (2) months in advance plus the security deposit required under each applicable lease) so long as no Event of Default exists hereunder. The assignment of the Rents and Profits in this Section is, and is intended to be, an absolute assignment ff-0m Trustor to Beneficiary and not merely the granting of a security interest. Upon demand of Beneficiary, Trustor shall assign to Beneficiary, in addition to the assignment of the Rents and Profits provided herein and any other grant, transfer or assignment effected under this Deed of Trust, a specific assignment of Trustor's interest in any or all leases, subleases, contracts, licenses and permits affecting the Mortgaged Property, such assig-.ments to be made by instruments in form satisfactory to Beneficiary; provided, however, that no such assignment shall be construed as impos- ing upon Beneficiary any obligations with respect thereto. A default by Trustor in the performance of any covenant under any lease or leases aggregating in excess of 5,000 square feet of space in the Mortgaged Property or other instrument so assigned to Beneficiary, by -reason of which default the lessee(s) or other party(ies) thereunder has (have) the right 001 NLL:bfs 07/17/89 LRE2603.0012.0.0 to cancel such lease(s) or other instruments) or to claim any diminution or offset against future Rents or Profits shall, at the option of Beneficiary, constitute an Event of Default hereunder. Beneficiary may, at its option, exercise its rights hereunder or under such specific assignment, and such exercise shall not constitute a waiver of any rights hereunder or under such specific assignment. The rights and powers of Beneficiary under this assignment of the Rents and Profits and the application of same hereunder shall continue until expiration of the redemption period from any foreclosure sale, whether or not any deficiency remains after a foreclo- sure sale. Neither the collection of the Rents and Profits and the application thereof provided for herein nor the entry upon and taking possession of the Mortgaged Property by Bene- ficiary shall be deemed to cure or waive any default or waive, modify or affect any notice of default given by Beneficiary or Trustee or invalidate any act done pursuant to any such notice. The enforcement of any such right or remedy by Beneficiary, once exercised, shall continue for so long as Beneficiary shall elect, notwithstanding that the collection and application of the Rents and Profits may have cured the original default. If Beneficiary shall thereafter elect to discontinue the exercise of any such right or remedy, the same or any other right or remedy hereunder may be reasserted• at any time and from time to time following any subsequent default. (b) Trustor will not, except with the prior written consent of Beneficiary, (i) execute an assignment of any of its right, -title or interest in the Rents and Profits, or (ii) terminate or consent to the cancellation or surrender of any lease or leases having an unexpired term of two (2) years or more and aggregating in excess of 5,000 square feet of space in the Mortgaged Property, or (iii) modify any lease or leases aggregating in excess of 6,000 square feet of space in the Mortgaged Property so as to shorten or permit the shortening of the unexpired term thereof or so as to decrease the amount of the rent payable thereunder, or (iv) accept prepayments of any installments of rent to become due under any of said leases in excess of two (2) month's rental or prepayments in the nature of security for the performance of the lessee's obligations thereunder in excess of the amount set forth for the security deposit in said leases, or (v) in any other marker impair the value of the Mortgaged Property or the security of this Deed of Trust. (c) Trustor will not execute any lease of all or a substantial portion of the Mortgaged Property, except for actual occupancy by the lessee thereunder, and will at all times promptly and faithfully perform, or cause to be performed, all of the covenants, conditions and agreements contained in all leases of t::e Mortgaged Property now or hereafter existing, on the part of the lessor thereunder to be kept and performed and will give prompt notice to Bene- ficiary of any claim made by any lessee of any such failure by Trustor; provided, however,.Trustor's failure to perform or cause to be performed all covenants, conditions and agree- ments contained in all of such leases shall not constitute an Event of Default hereunder unless such failure of performance relates'to Trustor's obligations under a lease or leases aggregating in excess of 5,000 square feet. 12 NLL:bfs 07`%�7/89 LRE2603.0013.0.0 (d) Trustor shall enforce, short of termin- ation of any lease, in the name of Trustor or Beneficiary, the performance of each and every material obligation, term, covenant, condition and agreement in any lease to be performed by any lessee thereunder or any guarantor thereof, and Trustor shall appear in and defend any action or proceeding arising under, occurring out of, Cr in any manner connected with, any lease or the obligations, duties or liabilities of Trustor and any lessee thereunder, and upon request by Beneficiary, Trustor will do so in the name and on behalf of Beneficiary but at the expense of Trustor. Trustor shall pay all costs and expenses of Beneficiary, including, without limitation, attorneys' fees, in any acticn or proceeding in which Bene- ficiary may appear. (e) Trustor shall furnish to Beneficiary, within thirty (30) days after a request by Beneficiary to do so, a written statement containing the names of all known lessees and sublessees of the Mortgaged Property, the terms of their respective leases, the spaces occupied and the rentals payable thereunder and a copy of each such lease. 1.10. To the extent not provided by applicable law, each lease of the Mortgaged Property or any part thereof shall provide that, in the event of the enforcement by Trustee or Beneficiary of the remedies provided for by law or by this Deed of Trust, the lessee thereunder will, if requested by Beneficiary or by any person succeeding to the interest of Trustor as the result of said enforcement, automatically become the lessee of any such successor in interest, without any change in the terms or other provisions of the respective lease; provided, however, that said successor in interest shall not be bound by (i) any payment of rent or additional rent for more than two (2) months in advance, or (ii) any amendment or modification in the lease made without the con- sent of Beneficiary or any successor in interest. Each lease shall also provide that, upon request by said successor in interest, the lessee shall execute and deliver an instrument or instruments confirming its attornment. In connection with the execution and delivery of such instrument containing such lessee's attornment, Beneficiary shall execute and deliver to such lessee an instrument confirming that Beneficiary shall not disturb such lessee's right of possession under its lease so long as lessee is not in default thereunder provided that the terms and conditions of such lease are acceptable to Beneficiary and provided further that such lessee subordinates (pursuant to its executing a subordination agreement accept- able to Beneficiary) its interest under its lease to the lien and effect of this Deed of Trust. 1.11. Except as to that certain Deed of Trust dated , executed by Trustor for the benefit of Haseko (California), Inc., recorded as Instrument No. in the Official Records of Orange County, California and that certain Deed of Trust dated , 1989, executed by Trustor for the benefit of the Huntington Beach Redevelopment Agency, without the prior written consent of Beneficiary being first had and obtained, Trustor will not execute or deliver any pledge, security agreement, mortgage 13 NLL:bfs 07/17/89 LRE2503.0014.0.0 or deed of trust covering all or any portion of the Mortgaged Property ("Subordinate Mortgage"). If Beneficiary consents to the foregoing or in the event the foregoing prohibition is determined by a court of competent jurisdiction to be unen- forceable under the provisions of any applicable law, Trustor will not execute or deliver any Subordinate Mortgage unless there shall have been delivered to Beneficiary not less than ten (10) days prior to the date thereof a copy thereof which shall contain express covenants to the effect that: . (a) the Subordinate Mortgage is in all respects subject and subordinate to this Deed of Trust; (b) if any action or proceeding shall be brought to foreclose the Subordinate Mortgage (regard- less of whether the sane is a judicial proceeding or pursuant to a power of sale contained therein), no tenant of any portion of the Mortgaged Property will be named as a party defendant, nor will any action be taken with respect to the Mortgaged Property which would terminate any occupancy or tenancy of the Mortgaged Property, or any portion thereof, without the consent of Beneficiary; (c) the Rents and Profits, if collected through a receiver or by the holder of the Subordinate Mortgage, shall be applied first to the obligations secured by this Deed of Trust, including principal and interest due and owing on or to become due and owing on the Note, and then to the payment of maintenance expenses, operating charges, taxes, assessments and disbursements incurred in connection with the ownership, operation and maintenance of the Mortgaged Property; (d) if any action or proceeding shall be brought to foreclose the Subordinate Mortgage, prompt notice of the commencement thereof will be given to Beneficiary by the beneficiary of the Subordinate Mortgage. 1.12. Trustor shall faithfully and fully observe and perform each and every term, covenant and condition of any deed of trust or deeds of trust affecting the Mortgaged Property, whether superior or junior to this Deed of Trust, and never permit the same to go into default. A default or delinquency under any such deed of trust shall automatically and immediately constitute a default under this Deed of Trust. Beneficiary is hereby expressly authorized to advance at its option all sums necessary to keep any deed of trust in good standing, and all sums so advanced, together with interest thereon at the Default Rate, shall be repayable to Beneficiary as in the case of other advances made by Bene- ficiary hereunder. Trustor agrees that Trustor shall not make any agreement with the holder of any deed of trust affecting the Mortgaged Property which shall in any way modify, change, alter or extend any of the terms or condi- tions of such deed of trust, nor shall Trustor request or accept any future advances under such deed of trust, without the express written consent of Beneficiary. OU :. NLL:bfs 077/89 LRE2603.0015.0.0 1.13. Trustor shall cause the Improvements to be constructed and completed in accordance with the terms of the Loan Agreement, shall prosecute construction with due dili- gence, and shall comply with the terms, conditions and cov- enants agreed to or made by Trustor in the Loan Agreement, all of which terms, conditicns and covenants are incorporated hereby by reference as though fully set forth herein. Such provisions shall remain in effect during the entire term of this Deed of Trust notwithstanding the prior completion of the Improvements. 1.14. Trustor will not commit any waste on the Premises or make any change in the use of the Mortgaged Property which will in any way increase any ordinary fire or other hazard arising out of construction of the Improvements or operation of the Mortgaged Property, nor will Trustor make any application to any federal, state or local governmental authority ("Governmental Authority") for a change in zoning or a change in any other law, ordinance, statute, rule, order, decree, directive or regulation ("Laws") affecting the Mortgaged Property nor will Trustor consent to any such change without the written consent of Beneficiary. Trustor will at all times comply with all Laws of any Governmental Authority having or exercising jurisdiction over construction of the Improvements or otherwise affecting the Mortgaged Property or any portion thereof and maintain and keep the Improvements in good operating order and condition and will promptly make, from time to time, all repairs, renewals, replacements, additions and improvements in connection therewith which are needful or desirable to that end. After completion of the Improvements they shall not be removed, demolished or substantially altered, nor shall the use for which they were designed be changed, nor shall any of the Personal Property be removed without the prior written con- sent of Beneficiary, except where appropriate replacements free of superior title, liens and claims are immediately made having a value at least equal to the value of the Personal Property so removed. 1.15. Trustor, if a corporation or a partnership, shall, so long as it is the owner of the Mortgaged Property, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as a businesd-or stock corporation or a partnership under the laws of the state of its incorporation or organization, qualify to do business in any state in which Trustor is required to do so, including but not limited to the state where the Mortgaged Property is located, and comply with all Laws of any Governmental Authority or court applicable to Trustor or the Mortgaged Property or any part thereof. 1.16.(a) Trustor will keep adequate records and books of account in accordance with generally accepted accounting principles and will permit Trustee and Benefi- ciary, or their agents, accountants and attorneys, to visit and inspect the Mortgaged Property and examine Trustor's records and books of account and to discuss Trustor's affairs, finances and accounts with the officers, agents or 15 NLL:bfs 0V17/89 LRE2603.0016.0.0 `) principals of Trustor at such reasonable times as may be requested by Trustee or Beneficiary. (b) Trustor and the guarantors of any of Trustor's obligations under the Security Documents, if any, will deliver to Beneficiary within one hundred twenty (120) days from the end of their respective fiscal years reasonably detailed statements of their assets, liabilities (direct or contingent), income and expenses, and consolidated cash flow prepared in accordance with generally accepted accounting principles applied on a consistent basis and fairly present- ing the respective financial condition of the subjects thereof as of the respective dates thereof. All said state- ments shall be certified without material exception to be accurate by a principal financial or accounting officer of Trustor and the guarantors, as applicable. If required by Beneficiary, such statements shall also be certified without material exception to be accurate by an independent certified accountant selected by Trustor and satisfactory to Benefi- ciary. Such statements shall be for such yearly, quarterly or other interim periods as Beneficiary may require and shall include such additional financial information as Beneficiary may reasonably require. Within twenty (20) days of the end of each month, Beneficiary shall receive from Trustor a report, certified as true and correct by Trustor, showing the status of the leasing of space in the Improvements, if there be such leasing. Such report shall include information on the amount of space covered by letters of intent, leases out for execution, and fully executed leases, the rental under each lease agreement, the term of each lease agreement, and an abstract of rights and obligations which vary from the standard form of lease which shall have been delivered to and approved by Beneficiary. Commencing in the fiscal quarter immediately succeeding the quarter in which the first tenant in the Improvements begins paying rent under an executed lease, Beneficiary shall have received from Trustor cash flow statements showing actual sources and uses of cash during the preceding fiscal quarter and an updated projected cash flow statement for the Improvements through the date of antici- pated breakeven operations of the Improvements. Beneficiary shall receive said report from Trustor within thirty (30) days of the end of each fiscal quarter of Trustor and each report shall be duly certified by Trustor to be true and complete. Throughout the term of this Deed of Trust, Trustor and the guarantors of any of Trustor's obligations under the Security Documents, if any, will deliver to Beneficiary with reasonable promptness such other information with respect to Trustor or said guarantors, if any, as Beneficiary may reasonably request from time to time. (c) Trustor, within three (3) days upon request in person or within five (5) days upon request by mail, will furnish a written statement duly executed and acknowledged of the amount due on the Note, whether for principal or interest, and whether any offsets or defenses exist against the indebtedness or other obligations secured hereby. 16 NLL:bfs 07/17/89 LRE2603.0017.0.0 1.17. Trustor shall pay all costs, fees and expenses of Trustee, its agents and counsel in connection with the performance of its duties hereunder; and Trustor shall pay all taxes (except federal and state income taxes) and any other governmental charges or impositions imposed by any Governmental Authority on Trustee or Beneficiary by reason of their interests in the Note or this Deed of Trust. 1.18. Beneficiary shall be subrogated, notwith- standing their release of record, to any mechanic's or vendor's lien or liens, superior titles, mortgages, deeds of trust, liens, encumbrances, rights, equities and charges of all kinds heretofore or hereafter existing on the Mortgaged Property to the extent that the same are paid or discharged from the proceeds of the loan evidenced by the Note. 1.19. Trustor will, if the Note is mutilated, destroyed, lost or stolen, deliver to Beneficiary, in sub- stitution therefor, a new promissory note containing the same terms and conditions as the Note with a notation thereon of the unpaid principal and -accrued but unpaid interest. Trustor shall be furnished with satisfactory evidence of the mutilation, destruction, loss or theft of the Note, and also such security or indemnity as may be reasonably requested by Trustor; provided, however, that if the original beneficiary named herein is the then beneficiary under this Deed of Trust, an unqualified indemnity from the original beneficiary named herein shall be deemed to be satisfactory security or indemnification. 1.20. If the Note provides any charge for prepay- ment, Trustor agrees to pay said charge even if and notwith- standing the fact that Trustor shall have defaulted in pay- ments due under the Note or in the performance of any agree- ment hereunder or under any other Security Document and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 1.21. Without affecting the liability of Trustor or of any other person who is or shall become bound by the terms of this Deed of Trust or who is or shall become liable for the performance of any obligation secured hereby, Bene- ficiary may, in such manner, upon such terms and at such times as i- deems best and without notice or demand, release any party now or hereafter liable for the performance of any such obligation, extend the time for such performance, accept additional security therefor, and alter, substitute or release any property securing such performance. No exercise or non -exercise by Beneficiary of any of its rights under this Deed of Trust, no dealing by Beneficiary with any per- son, firm or corporation and no change, impairment, loss or suspension of any right or remedy of Beneficiary shall in any way affect any of the obligations of Trustor hereunder or any security furnished by Trustor, or give Trustor any recourse against Beneficiary. 1.22. Trustor shall pay or cause to be paid when due all utility and governmental charges which are incurred for the benefit of the Mortgaged Property or which may become 17 & NLL:bfs 0Y17/89 LRE2503.0018.0.0 �—) a charge or lien against the Mortgaged Property, including, without limitation, all charges for gas, electricity, water or -sewer services furnished to the Mortgaged Property and all other assessments or charges of a similar nature, whether public or private, affecting the Mortgaged Property or any portion thereof, whether or not such taxes, assessments or charges are liens thereon. 1.23. Trustor acknowledges that: (i) the finan- cial stability and managerial and operational ability of Trustor and/or its principals were and are a substantial and material consideration to Beneficiary and, in reliance thereon, Beneficiary has agreed to make the loan to Trustor evidenced by the Note; and (ii) the transfer of possession of the Mortgaged Property or a change in the person or entity constructing, operating and managing the Mortgaged Property will significantly and materially alter or reduce Benefi- ciary's consideration for the transaction out of which this Deed of Trust arises and Beneficiary's security for the Note. Accordingly, as a material inducement to Beneficiary to enter into the loan transaction Trustor shall not transfer the Mortgaged Property or any portion thereof or interest therein without the prior written consent of Beneficiary, except as may be specifically permitted elsewhere herein. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to the Security Documents, and any such transferee shall assume all of Trustor's obligations hereunder and agree to be bound by all provisions and perform all obligations contained herein and therein. In the event of any such transfer with- out the written consent of Beneficiary, Beneficiary may, at its option, without demand or notice, declare all sums secured hereby immediately due and payable. Consent to one such transfer shall not be deemed to be a waiver of the right to require consent to future or successive transfers. As used herein, "transfer" shall mean the sale, agreement to sell, transfer or conveyance of the Mortgaged Property, or any portion thereof or interest therein, including, without limitation, air rights and development rights, whether vol- untary, involuntary, by operation of law or otherwise or the lease of all or substantially all of the Mortgaged Property but shall not include the conveyance of easements, licenses or leases reasonably necessary for the operation of the Improvements or the repair or replacement of any Personal Property in the ordinary course of business. Transfer shall also Mean any transfer by way of security, including the placing or permitting the placing on the Mortgaged Property of any mortgage, deed of trust, assignment of rents or other security device or, in the event Trustor is a partnership, joint venture, trust, or cicsely-held corporation, the sale, conveyance, transfer, disposition or encumbering of more than ten (10%) percent of any class of the issued and outstanding capital stock of Trustor or of the beneficial interest of such partnership, venture or trust, or a change of any gen- eral partner or any joint venturer, either voluntarily, involuntarily, or otherwise; provided, however, notwithstand- ing anything stated to the contrary herein, (i) Haseko Pier Colony, Inc. shall have the right to transfer its interest in Trustor to any corporation which is wholly owned by Haseko 18 • NLL ifs 6*,�17/89 LRE2603.0019.0.0 (California), Inc. upon ter, (10) days prior written notice to Beneficiary and provided that Haseko (California) Inc. guaran- tees the obligations of such transferee under Trustor's joint venture agreement, and (ii) Uri Cati and Cary Lubliner shall have the right to transfer portions of their interests in California Resorts International, Inc. to family members or a family trust provided that after any such transfer, the aggregate ownership interests of Uri Cati and Cary Lubliner in California Resorts International, Inc., shall not be less than fifty (5001) percent. In the event Trustor is a publicly - held corporation, "transfer" shall mean the sale, conveyance, transfer, disposition or encumbrance of more than ten (10;,) percent of the stockholdings of any of the major shareholders. For purposes of this secticn, "major shareholders" shall mean those five individuals or entities that own the greatest number of shares of each class of stock issued and outstand- ing of the corporation. In the event Trustor is a limited partnership, so long as a limited partner has contributed or remains personally liable to contribute to the partnership all capital contributions then or thereafter required of such limited partner by the limited partnership agreement, such limited partner may sell, convey, devise, transfer or dispose of all, or a part of his limited partnership interest to his spouse, children, grandchildren or a family trust in which his spouse, children or grandchildren are sole beneficiaries. ARTICLE II EVENTS OF DEFAULT The following shall constitute events of default ("Events of Default") hereunder: 2.01. The failure to make any payment of interest on the Note, or to make any payment of an installment of principal, when and as the same shall become due and payable, or the failure to make any other payments required under the Note, wher, and as the same shall become due and payable, whether at maturity or by acceleration or as part of any prepayment or otherwise, in each case, as is provided in the Note and in this Deed of Trust or the failure to make the deposits required by Section 1.06(b) or a default by Trustor in the due, prompt and complete observance and performance of any obligation, representation, covenant or agreement con- tained in Sections 1.04, 1.06(a), 1.11, 1.23 or in Article V1, if there be an Article VI, or the failure to make any payment required pursuant to any other Security Document, when and as the same shall become due and payable. 2.02. A default by Trustor in the due, prompt and complete observance and performance of any obligation, repre- sentation, covenant and agreement contained in Sections 1.02, 1.03, 1.05 or 1.06(c) or in the Loan Agreement and the con- tinuation of the default for a period of thirty (30) days after written notice thereof from Beneficiary to Trustor. 19 v � NLL:bfs 07/17/89 LRE2603.0020.0.0 2.03. A default by Trustor in the due, prompt and complete observance and performance of any obligation, cov- enant and agreement contained in the Note, this Deed of Trust (but not specified in Sections 2.01 or 2.02) or in any other Security Document, and the continuation of the default for a period of thirty (30) days after written notice thereof from Beneficiary to Trustor; provided, however, that if such default is curable but is not capable of being cured within said thirty (30) day period, then Trustor shall have such further titre as is reasonably necessary to cure such default provided Trustor commences curing such default within said thirty (30) day period and thereafter prosecutes such cure diligently to its completion. 2.04. The appointment pursuant to an order of a court of competent jurisdiction of a trustee, receiver or liquidator of Trustor or of the Mortgaged Property or any part thereof. 2.05. The filing of a petition or the commencement of any case or proceeding by Trustor under any provision or chapter of the Federal Bankruptcy Code or any similar law, federal or state, or the adjudication of Trustor as a bank- rupt or as insolvent by a decree of a court of competent jurisdiction, or the making or an assignment for the benefit of creditors, or the admission by Trustor in writing of its inability to pay its debts generally as they become due, or the giving of consent by Trustor to the appointment of a receiver or receivers of all or any part of its property. 2.06. The filing of a petition or the commencement of any case or proceeding by any of the creditors of Trustor under any provision or chapter of the Federal Bankruptcy Code or any similar law, federal or state, and the same is not discharged within sixty (60) days after the date of filing or commencement thereof. 2.07. The occurrence of any of the events enu- merated in Sections 2.04 through 2.06 with regard to any guarantor of any of Trustor's obligations under the Security Documents, or the property of any such guarantor, or the revocation, limitation or termination of the obligations of any such guarantor, except in accordance with the express written termf of the instrtttent of guaranty; or, if Trustor or any such guarantor is a partnership, joint venture or trust or trustee of a trust, the occurrence of any of the events enumerated in Sections 2.04 through 2.06 with regard to any general partner, venturer, trust or trustee or any owner, or general partner of any owner, of more than ten percent (10%) of the beneficial interests of such partner- ship, joint venture or trust. 2.08. The imposition of a tax, other than a state or federal income tax, on or payable by Trustee or Benefi- ciary by reason of their ownership of the Note or this Deed of Trust, and Trustor has not paid said tax, or it would be illegal for Trustor to pay said tax, or if the payment of said tax by Trustor would result in the violation of the K61 NLL:bfs 07�17/89 LRE2603.0021.0.0 usury laws of the State of California (the "Governing Juris- diction"). 2.09. If any warranty or representation made by Trustor herein or in any other Security Document shall prove to have been false or materially misleading when made. 2.10. Any default hereunder shall, at the option of Beneficiary, constitute a default on all other deeds of trust, notes, obligations and liabilities of Trustor to Beneficiary, whether now existing or thereafter arising, and any default on any such other deed of trust, note, obligation or liability, whether now existing or hereafter arising, shall, at the option of Beneficiary, constitute a default under the Note and Deed of Trust. ARTICLE III REMEDIES Upon the occurrence of any Event of Default, Trustee and Beneficiary shall have the following rights and remedies: 3.01. Beneficiary may declare the entire principal of the Note then outstanding (if not then due and payable), and accrued but unpaid interest thereon, to be due and pay- able immediately, and, notwithstanding the stated maturity in the Note.or any other term or provision of the Note or this Deed of Trust to the contrary, the outstanding principal amount of the Note and the accrued but unpaid interest there- on shall become and be immediately due and payable. 3.02. Irrespective of whether Beneficiary exer- cises the option provided in Section 3.01 above, Beneficiary in person or by agent may, without any obligation so to do and without notice or demand upon Trustor and without releas- ing Trustor from any obligation hereunder: (i) make any payment or do any act which Trustor has failed to make or do; (ii) enter upon, take possession of, manage and operate the Mortgaged Property or any part thereof; (iii) make or enforce, or, if the same be subject to modification or can- cellation, modify or cancel any leases of the Mortgaged Property or any part thereof upon such terms or conditions as Beneficiary deems proper; (iv) obtain and evict tenants, and fix or modify rents, make repairs and alterations and do any acts which Beneficiary deems proper to protect the security hereof; and (v) with or without taking possession, in its own name or in the name of Trustor, sue for or otherwise collect and receive rents, royalties, issues, profits, revenue, income and other benefits, including those past due and unpaid paid, and apply the same less costs and expenses of operation and collection, including reasonable attorneys' fees, upon any indebtedness secured hereby, and in such order as Bene- ficiary may determine. Upon request of Beneficiary, Trustor shall assemble and make available to Beneficiary at the Premises any of the Mortgaged Property which has been removed therefrom. The entering upon and taking possession of the W NLL:bfs O"f17/89 LRE2603.0022.0.0 Lr Mortgaged Property, the collection of any rents, royalties, issues, profits, revenue, income or other benefits and the application thereof as aforesaid shall not cure or waive any default theretofore or thereafter occurring or affect any notice of default hereunder or insi lidate any act done pur- suant to any such notice; and, not.:ithstanding continuance in possession of the Mortgaged Property, or any part thereof, by Beneficiary, Trustee or a receiver, and the collection, receipt and application of rents, royalties, issues, profits, revenue, income or other benefits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust or by law upon or after the occurrence of an Event of Default, including the right to exercise the power of sale. Any of the actions referred to in this Section 3.02 may be taken by Beneficiary, either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and any such action may also be taken irrespective of whether any notice of default or election to sell has been given hereunder and without regard to the adequacy of the security for the indebtedness hereby secured. Further, Beneficiary, at the expense of Trustor, either by purchase, repair or construction, may from time to time maintain and restore the Mortgaged Property or any part thereof and complete construction of the Improvements uncompleted as of the date thereof and in the course of such completion may make such changes in the contemplated Improvements as Beneficiary may deem desirable and may insure the same. 3.03. Beneficiary shall be entitled, without notice and to the full extent provided by law, to the appointment by a court having jurisdiction of a receiver to take possession of and protect the Mortgaged Property or any part thereof, and operate the same and collect the Rents and Profits. 3.04. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust or enforce any of the terms, covenants and conditions hereof or contained in any other Security Document. 3.05. Beneficiary may elect to cause the Mortgaged Property or any part thereof to be sold as follows: (a) Beneficiary may proceed as if all of the Mortgaged Property were real property in accordance with subparagraph (d) below, or Beneficiary may elect to treat any of the Mortgaged Property which consists of a right in action or which is property that can be severed from the Premises or the Improvements without causing structural damage thereto as if the same were personal property, and dispose of the same in accordance with subparagraph (c) below, separate and apart from the sale of real property, the remainder of the Mortgaged Prop- erty being treated as real property. (b) Beneficiary may cause any such sale or other disposition to be conducted immediately following the expiration of any grace period herein provided (or 22 IN NLL:bfs 07/17/89 LRE2503.0023.0.0 immediately upon the expiration of any redemption or reinstatement period required by law) or Beneficiary may delay any such sale or other disposition for such period of time as Beneficiary deems to be in its best interest. Should Beneficiary desire that more than one (1) such sale or other disposition be conducted, Beneficiary may, at its option, cause the same to be conducted simulta- neously, or successively, on the same day, or at such different days or times and in such order as Beneficiary may deem to be in its best interest. (c) Should Beneficiary elect to cause any of the Mortgaged Property to be disposed of as personal property as permitted by subparagraph (a) above, it may dispose of any part thereof in any manner now or here- after permitted by the Uniform Commercial Code of the Governing Jurisdiction or in accordance with any other remedy provided by law. Any such disposition may be conducted by an employee or agent of Beneficiary or Trustee. Both Trustor and Beneficiary shall be eligible to purchase any part or all of such property at any such disposition. Any such disposition may be either public or private as Beneficiary may elect, subject to the provisions of the Uniform Commercial Code of the Governing Jurisdiction. Beneficiary shall have all of the rights and remedies of a Secured Party under the Uniform Commercial Code of the Governing Jurisdiction. Expenses of retaking, holding, preparing for sale, selling or the like shall include Beneficiary's reason- able attorneys' fees and legal expenses, and upon such default, Trustor, upon demand of Beneficiary, shall assemble such personal property and make it -available to Beneficiary at the Premises, a place which is hereby deemed reasonably convenient to Beneficiary and Trustor. Beneficiary shall give Trustor at least five (5) days' prior written notice of the time and place of any public sale or other disposition of such property or of the time at or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Trustor, in the manner provided for the mailing of notices herein, it shall constitute reason- able notice to Trustor. V (d) Should Beneficiary elect to sell the Mortgaged Property or any part thereof which is real property or which Beneficiary has elected to treat as real property, upon such election, Beneficiary or Trustee shall give such notice of default and election to sell as may then be required by law. Thereafter, upon the expiration of such time and the giving of such notice of sale as may then be required by law, and without the necessity of any demand on Trustor, Trustee, at the time and place specified in the notice of sale, shall sell the Mortgaged Property, or any portion thereof specified by Beneficiary, at public auction to the highest bidder for cash in lawful money of the United States, subject, however, to the provisions of Section 3.07. Trustee nay, and upon request of Bene- ficiary shall, from tine to time postpone the sale of 23 NLL:bfs 07`717/89 LRE2603.0024.0.0 all or any portion of the Mortgaged Property by public announcement at the time and place of such sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. If the Mortgaged Property consists of several lots or parcels, Beneficiary may direct that the same be sold as a unit or be sold separately and, if to be sold separately, Beneficiary may designate the order in which such lots or parcels shall be offered for sale or sold. Any person, including Trustor,-Trustee or Beneficiary, may purchase at the sale. Upon any sale, Trustee shall execute and deliver to the purchaser or purchasers a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or pur- chasers shall be let into immediate possession. (e) Beneficiary, from time to time before any Trustee's sale as provided herein, may rescind any notice of default and election to sell or notice of sale by executing and delivering to Trustee a written notice of such rescission, which such notice, when recorded, shall constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Bene- ficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Benefi- ciary to execute and deliver to Trustee, as above pro- vided, other declarations or notices of default and demand for sale of the Mortgaged Property to satisfy the obligations hereof, -nor otherwise affect any provision, covenant or condition of any Security Document. (f) In the event of a sale or other disposi- tion of the Mortgaged Property, or any part thereof, and the execution of a deed or other conveyance pursuant thereto, the recitals therein of facts, such as default, the giving of notice of default and notice of sale, demand that such sale should be made, postponement of sale, terms of sale, sale, purchase, payment of purchase money and other facts affecting the regslarity or validity of such sale or disposition, shall be conclu- sive proof of the truth of such facts and any such deed or conveyance shall be conclusive against all persons as to such facts recited therein. (g) The acknowledgment of the receipt of the purchase money, contained in any deed or conveyance executed as aforesaid, shall be sufficient discharge to the grantee of all obligations to see to the proper application of the consideration therefor as hereinafter provided. The purchaser at any trustee's or foreclosure sale hereunder may disaffirm any easement granted or rental or lease contract made in violation of any pro- vision of this Deed of Trust and may take immediate possession of the Mortgaged Property free from, and 24 NLL : bf s k." 07/17/89 LRE2603.0025.0.0 despite the terms of, such grant of easement and rental or lease contract. (h) Upon the completion of any sale or sales made by Trustee or Beneficiary, as the case may be, under or by virtue of this Article III, Trustee or any officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument, or good and sufficient instruments, conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Trustee is hereby irrevocably appointed the true and lawful attorney -in -fact of Trustor in its name and stead to make all necessary conveyances, assignments, transfers and deliveries of the Mortgaged Property or any part thereof and the rights so sold and for that purpose Trustee may execute all necessary instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power, Trustor hereby ratifying and confirming all that its said attorney or any substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Trustor, if so requested by Trustee or Beneficiary, shall ratify and confirm any such sale or sales by executing and delivering to Trustee or to such purchaser or purchasers all such instruments as may be advisable in the judgment of Trustee or Beneficiary, for the purpose as may be designated in such request. The foregoing power of attorney is coupled with an interest and cannot be revoked. Any such sale or sales made under or by virtue of this Article III, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Trustor in and to the properties and rights so sold, and shall be a perpetual bar, both at law and in equity, against Trustor and any and all persons claiming or who may claim the same, or any part thereof, from, through or under Trustor. :j (i) Trustor hereby expressly waives any right which it may have to direct the order in which any of the Mortgaged Property shall be sold in the event of any sale or sales pursuant hereto. 3.06. The purchase money, proceeds or avails of any sale made under or by virtue of this Article III, together with all other sums which may then be held by Trustee or Beneficiary under this Deed of Trust, whether under the provisions of this Article III, or otherwise, shall be applied as follows: FIRST: To the payment of the costs and expenses of the sale, including reasonable compen- sation to Trustee and Beneficiary, their agents and counsel, and of any judicial proceedings wherein 25 NLL: bfs 07/17/89 LRE2603.CO26.0.0 the same may be made and to the payment of all expenses, liabilities and advances made or incurred by Trustee under this Deed of Trust, together with interest at the Default Rate on all advances made by Trustee and all taxes or assessments, except for any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold, and further including all costs of publishing, recording, mailing and posting notice, the .cost of any search and/or other evidence of title procured In connection therewith and the cost of any revenue stamps on any deed of conveyance. SECOND: To the payment of any and all sums expended under the terms hereof, not then repaid, with accrued interest at the Default Rate and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust or of the Note or of any.,other Security Document, including all expenses, liabilities and advances made or incurred by Beneficiary under this Deed of Trust or in connection with the enforcement hereof, together with interest at the Default Rate on all advances. THIRD; To the payment of the principal and interest then due, owing and unpaid upon the Note, with interest on the unpaid principal at the Default Rate from the due date of any such payment of principal until the same is paid. FOURTH: The remainder, if any, to the person or persons legally entitled thereto. 3.07. Upon any sale or sales made under or by virtue of this Article III, whether made under the power of sale herein granted or under or by virtue of judicial pro- ceedings or of a judgment or decree of foreclosure and sale, Beneficiary may bid for and acquire the Mortgaged Property or any part thereof and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting upon the indebtedness or other sums secured by this Deed of Trust the net sales price after deducting therefrom the expenses of sale and the costs of the judicial proceedings, if any, and any other surfs which Trustee or Beneficiary is authorized to deduct under the Deed of Trust, and, in such event, this Deed of Trust, the Note and documents evidencing expenditures secured hereby shall be presented to the person or persons conducting the sale in order that the amount so used or applied may be credited upon said indebtedness as having been paid. 3.08.{a} Upon the occurrence of any Event of Default and upon written demand by Beneficiary, Trustor will pay to Beneficiary the entire principal of the Note then outstanding, and all accrued but unpaid interest thereon, and, after the happening of said Event of Default, will also pay to Beneficiary interest at the Default Rate on the then unpaid principal of the Note, and the sums required to be paid by.Trustor pursuant to any provision of this Deed of W NL-L:bfs 07}17/89 LRE2603.0027.0.0 Trust, or any other Security Document and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to Trustee and Beneficiary hereunder. In the event Trustor shall fail forthwith to pay such amounts upon such demand, Beneficiary shall be entitled and empowered to institute such action or proceedings at law or in equity as may be advised by its counsel for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against Trustor and collect, out of the property of Trustor wherever situated, as well as out of the Mortgaged Property, in any manner provided by law, moneys adjudged or decreed to be payable. (b) Beneficiary shall be entitled to recover judgment as aforesaid either before or after or during the pendency of any proceedings for the enforcement of the pro- visions of this Deed of Trust, and the right of Beneficiary to recover such judgment shall not be affected by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions of this Deed of Trust, or the foreclosure of the lien hereof; and in the event of a sale of the Mortgaged Property, and of the application of the proceeds of sale, as in this Deed of Trust provided, to the payment of the debt hereby secured,' Bene- ficiary shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, the Note, and to enforce payment of all other charges, payments and costs due under this Deed of Trust, and shall be entitled to recover judgment for any portion of the debt remaining unpaid, with interest. In case of proceedings against Trustor in insolvency or bankruptcy or any proceedings for the reorganization of Trustor or involving the liquidation of its assets, Beneficiary shall be entitled to prove the whole amount of principal and interest due upon the Note to the full amount thereof, and all other payments, charges and costs due under this Deed of Trust or any other Security Document. (e) No recovery of any judgment by Benefi- ciary and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Trustor shall affect; in any manner or to any extent, the lien of this Deed of Trust upon the Mortgaged Property or any part thereof, or any liens, rights, powers, or remedies of Trustee or Beneficiary hereunder, but such liens, rights, powers and remedies of Trustee and Beneficiary shall continue unimpaired as before, (d) Any moneys thus collected by Beneficiary under this Section 3.08 shall be applied by Beneficiary in accordance with the provisions of Section 3.06. 3.09. Upon the commencement of any action, suit or other legal proceedings by Beneficiary to obtain judgment for the principal of, or interest on, the Note and other sums required to be paid by Trustor pursuant to any provision of 27 NLL:bfs 07/17/89 LRE2603.0028.0.0 this Deed of Trust, or of any other nature in aid of the enforcement of the Note or of this Deed of Trust, Trustor, to the fullest extent permitted by law, will and does hereby (a) waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceedings, and (b) if rewired by Beneficiary, consent to the appointment of a receiver or receivers of the Mortgaged Property and of all the Rents and Profits. After the happening of any Event of Default, or upon the commencement of any proceedings to foreclose this Deed of Trust or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceedings to enforce any right of Trustee or Beneficiary, Trustee or Beneficiary shall be entitled forthwith, as a matter of right, if either shall so elect, without the giving of notice to any other party and without regard to the adequacy of the security of the Mort- gaged Property, either before or after declaring the unpaid principal of the Note to be due and payable, to the appoint- ment of such a receiver or receivers. 3.10. Nothwithstanding the appointment of any receiver, liquidator or trustee of Trustor, or of any of its property, or of the Mortgaged Property or any part thereof, Trustee and Beneficiary shall.be entitled to retain posses- sion and control of all property now or hereafter held under this Deed of Trust, including, but not limited to, the Rents and Profits. 3.11. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or Beneficiary in exercising any right or power accruing upon any Event of Default shall impair any right or power or shall be construed to be a waiver of any Event of Default or any acquiescence therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If there exists additional security for the performance of the obligations secured hereby, the holder of the Note, at its sole option, and without limiting or affecting mny of the rights or remedies hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder either concurrently with whatever rights it may have in connection with such other security or in such order as it may determine. Nothing in this Deed of Trust, the Note or any other Security Documents shall affect the obligation of Trustor to pay the principal of, and interest on, the Note in the manner and at the time and place therein respectively expressed. 3.12. To the fullest extent permitted by appli- cable law, Trustor will not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law or law pertaining to the marshaling of assets, the administration of estates of decedents, any exemption from execution or sale of 28 NLL:bfs 0 T/17/89 LRE2603.0029.0.0 the Mortgaged Property or any part thereof, including exemp- tion of homestead, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance of this Deed of Trust, nor claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mort- gaged Property, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction; nor after any such sale or sales, claim or exercise any right under any statute hereto- fore or hereafter enacted to redeem the property so sold or any part thereof, and Trustor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay or impede the execution of any power herein granted or delegated to Trustee or Beneficiary, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Trustor, for itself and all who claim under it, hereby waives, to the extent that it lawfully may, all right to have the Mortgaged Property marshaled upon any sale or foreclosure hereunder. . 3.13. Upon the occurrence of any Event of Default and pending the exercise by Trustee or Beneficiary or their agents or attorneys of their right to exclude Trustor from all or any part of the Mortgaged Property, Trustor agrees to vacate and surrender possession of the Mortgaged Property to Trustee or Beneficiary, as the case may be, or to a receiver, if any, and in default thereof may be evicted by any summary action or'proceeding for the recovery of possession of leased premises for non-payment of rent, however designated. 3.14. In the event ownership of the Mortgaged Property or any portion thereof becomes vested in a person other than the Trustor herein named, Beneficiary may, without notice to the Trustor herein named, whether or not Benefi- ciary has given written consent to such change in ownership, deal with such successor or successors in interest with reference to this Deed of Trust and the indebtedness secured hereby, and in the same manner as with the Trustor herein named, without in any way vitiating or discharging Trustor's liability hereunder or for the indebtedness or obligations hereby secured. ' y 3.15. In the event that there be a Trustee's sale hereunder and if at the time of such sale Trustor, or its heir, executor, administrator or assign, be occupying the Premises and Improvements or any part thereof so sold, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either tenant or landlord, at a reasonable rental per day based upon the value of the Premises and Improvements, such rental to be due daily to the purchaser. An action of unlawful detainer shall lie if the tenant holds over after a demand in writing for possession of said Premises and Improvements; and this agreement and the Trustee's deed shall constitute a lease and agreement under which any such tenant's possession arose and continued. 29 V NLL:bfs 07/17/89 LRE2603.0030.0.0 3.16. Trustor shall pay immediately, without notice or demand, all reasonable costs and reasonable expenses in connection with the enforcement of Beneficiary's rights under any of the Security Documents, including without limita- tion reasonable attorneys' fees, whether or not any suit is filed in connection with such enforcement; such costs and expenses shall include without limitation all costs, attorneys' fees and expenses incurred by the holder of the Note in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceedings involving Trustor, any endorsor or guarantor of the Note or Trustor's obliga- tions under any Security Document, which in any way affects the exercise by Beneficiary of its rights and remedies under the Note, this Deed of Trust or any other Security Document. ARTICLE IV CONCERNING TRUSTEE 4.01. Trustee, by its acceptance hereof, covenants faithfully to perform and fulfill the trusts herein created, being liable, however, only for willful negligence or mis- conduct, and hereby waives any statutory fee and agrees to accept reasonable compensation, in lieu thereof, for any services rendered by it in accordance with the terms hereof. 4.02. Trustee, upon presentation to it of an affidavit signed by or on behalf of Beneficiary, setting forth any fact or facts showing a default by Trustor under any of the terms or conditions of this Deed of Trust, is authorized to accept as true and conclusive all facts and statements in such affidavit and to act hereunder in complete reliance thereon. 4.03. Trustee may resign at any time upon giving thirty (30) days' notice in writing to Trustor and to Bene- ficiary. 4.04. In the event of Trustee's death, removal, resignation, refusal to act, or inability to act or, in the sole discretion of Beneficiary for any reason whatsoever, Beneficiary may, at any time or from time to time without notice and without specifying any reason therefor and without applying to any court, select and appoint a successor trust- ee, and all powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon become vested in such successor without conveyance from the predecessor trustee. Such sub- stitute trustee shall not be required to give bond for the faithful performance of its duties unless required by Bene- ficiary. Such substitute trustee shall be appointed by written instrument duly recorded in the county where the Premises are located, which appointment may be executed by any authorized agent of Beneficiary and if Beneficiary is a business trust or corporation and such appointment be exe- cuted on its behalf by any officer of such business trust or corporation, such appointment shall be conclusively presumed to have been executed with authority and shall be valid and Rill NLL:bfs 07/17/89 LRE2603.0031.0.0 sufficient without proof of any action by the Board of Trustees or Board of Directors or any superior officer of the business trust or corporation. Trustor hereby ratifies and confirms any and all acts which the herein -named Trustee, or its successor or successors in this trust, shall do lawfully by virtue hereof. Trustor hereby agrees, on behalf of itself and of its heirs, executors, administrators and assigns, that the recitals contained in any deed or deeds executed in due form by Trustee or any substitute trustee, acting under the provisions of this Deed of Trust, shall be prima facie evi- dence of the facts recited, and that it shall not be neces- sary to prove in any court, otherwise than by such recitals, the existence of the facts essential to authorize the exe- cution and delivery of such deed or deeds and the passing of title thereby. 4.05. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary, Trustee shall (i) consent in writing to the making of any map or plat of the Mortgaged Property, (ii) join in granting any easement thereon, (iii) join in any extension agreement or any agreement subordinating the lien or charge hereof, or (iv) upon presentation of this Deed of Trust and the Note or notes secured hereby for endorsement, and without affecting the personal liability of any person for the payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of the Mort- gaged Property, reconvey any part of the Mortgaged Property. 4.06. Upon written request of Beneficiary stating that all sums and obligations secured hereby have been paid and performed and upon surrender to Trustee of this Deed of Trust and the Note or notes secured hereby for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Mortgaged Property then held hereunder. The recitals in such reconveyance of any matters of facts shall be conclusive proof of the truth hereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." ARTICLE V MISCELLANEOUS 5.01. In the event any one or more of the provi- sions contained in this Deed of Trust, the Note, the Loan Agreement or any other Security Document shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Deed of Trust, but this Deed of Trust shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein. Trustor shall fully and faithfully sat- isfy and perform the obligations of Trustor contained in the Security Documents and'each agreement of Trustor incorporated by reference therein or herein, and any modification or amendment thereof. All representations, warranties and covenants of Trustor contained therein or so incorporated by 04 NLL:bfs 07/17/89 LRE2603.0032.0.0 reference shall survive the execution and delivery of this Deed of Trust and shall remain continuing obligations, war- ranties and representations of Trustor during any time when any portion of the obligations secured by this Deed of Trust remain outstanding. 5.02. Trustor agrees to pay Beneficiary or its authorized loan servicing agent for each and any Beneficiary Statement furnished at Trustor's request the maximum fee allowed by the law of the Governing Jurisdiction, or, if there be nc maximum fee, then the sum of $25.00. Such fee shall be ccmputed as of the time said statement is furnished. 5.03. All agreements between Trustor and Bene- ficiary are expressly limited so that in no contingency or event whatsoever, whether by reason of error of fact or law, payment, prepayment or advancement of the principal amount of the Note, acceleration of maturity of the unpaid principal balance thereof, or otherwise, or advancement of any sums under the provisions of this Deed of Trust, shall the amount paid or agreed to be paid to the holder of the Note for the use, forbearance or retention of the money to be advanced thereunder or hereunder, including any and all fees or charges collected or paid in connection with the loan secured hereby which may be treated as interest under applicable law, exceed the maximum legal limit (if any such limit is appli- cable) under United States federal law or state law (to the extent not preempted by federal law, if any), now or here- after governing the interest payable in connection with such agreements. If,,from any circumstances whatsoever, fulfill- ment of any provision of this Deed of Trust or the Note or any other agreement referred to herein, at the time perfor- mance of such provision shall be due, shall involve tran- scending the limit of validity (if any) prescribed by law which a court of competent jurisdiction may deem applicable thereto or hereto, then, ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity, and -if from any circumstance the holder of the Note or Benefi- ciary shall ever receive as interest an amount which would exceed the maximum legal limit (if any such limit is appli- cable), such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest or, if such excessive interest exceeds the unpaid principal balance due hereunder, the excess shall be refunded to Trustor or its successors or assigns. This Section 5.03 shall control every other provision of all agreements between Trustor and Bene- ficiary. 5.04. All notices or other communications required or permitted hereunder shall be in writing and shall, except as otherwise provided by law, be sufficiently given for all purposes when sent by first class United States nail, postage prepaid, registered or certified, by a national express air courier (such as, for example, Federal Express) or locally recognized messenger, which courier shall maintain written verification of actual delivery, by telecopy or by delivering the same in person to any party hereto at its address on the cover page or at such other address of which it.shall have 32 NLL:bfs 07/17/89 LRE2603.0033.0.0 notified the party giving such notice in writing in accor- dance with the foregoing requirements. Notice so mailed shall be effective three (3) days following deposit. Notice given in any other manner permitted herein shall be effective only if and when received by the addressee. 5.05. Trustor hereby requests that a copy of any Notice of Default and Notice of Sale as may be required by law be mailed to it at its address herein contained. 5.06. The granting of consent by Beneficiary to any transaction as required by the terms hereunder shall not be deemed a waiver of the right to require consent to future or successive transactions. 5.07. All of the grants, obligations, covenants, agreements, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of the successors and assigns of Trustor and the successors in trust of Trustee, and the endorsees, trans- ferees, successors and assigns of Beneficiary. In the event Trustor is composed of more than one party, the obligations, covenants, agreements, and warranties contained herein as well as the obligations arising therefrom are and shall be joint and several as to each such party. 5.08. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 5.09. This Deed of Trust may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same deed. 5.10. This Deed of Trust is to be construed and enforced according to the laws of the Governing Jurisdiction except that, with respect to any portion of the Mortgaged Property located outside of the Governing Jurisdiction, the laws of the state iri which such portion of the Mortgaged Property is located shall be applicable thereto but only to the extent required for Beneficiary to exercise its rights and remedies -in order to realize upon its interests in the Mortgaged Property. 5.11. Except insofar as now or hereafter prohib- ited by law, the right to plead, use or assert any statute of limitations as a plea or defense or bar of any kind, or for any purpose, to any debt, demand or obligation secured or to be secured hereby, or to any complaint or other pleading or proceeding filed, instituted or maintained for the purpose of enforcing this Deed of Trust or any rights hereunder, is hereby waived by Trustor. 5.12. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any such waiver, change, discharge or termination is sought. 33 NLL:bfs 07/17/89 LRE2603.0034.0.0 5.13. Trustor reccgnizes that Beneficiary may sell and transfer interests in the Security Documents to one or more participants and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Trustor or any guarantor of any of Trustor's obligations under the Security Documents, may be exhibited to and retained by any such participant or prospective partic- ipant for its files. 5.14. Trustor hereby expressly and unconditionally waives, in connection with any foreclosure or similar action or procedure brought by Beneficiary asserting the failure to make any payment of interest on the Note, or to make any payment of an installment of principal, or the failure to make any other payments required under the Note, or the failure to make the deposits required by Section 1.06(b) of this Deed, any and every right it nay have to (i) injunctive relief, (ii) a trial by jury, (iii) interpose any counter- claim therein (other than a counterclaim which can only be asserted in such suit, action or proceeding brought by Beneficiary and cannot be maintained in a separate action) and (iv) have the same consolidated with any other or separate suit, action or proceeding. Nothing herein contained shall prevent or prohibit Trustor from instituting or maintaining a separate action against Beneficiary with respect to any asserted claim. 5.15. Except as disclosed in the Loan Agreement, Trustor represents and warrants to Beneficiary that (i) the Premises.and the Improvements thereon, and, to Trustor's actual knowledge (with no duty of inquiry or investigation), the surrounding areas (as defined below in this Section 5.15), are not currently subject to hazardous materials as defined in the Loan Agreement, or their effects and (ii) to the best of Trustor's knowledge there are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, relating to any hazardous or toxic substances or wastes, discharges, emissions or other forms of pollution relating in any way to the Premises or the improvements thereto. For purposes of this Section 5.15, "surrounding areas" shall mean areas within a two (2) mile radius of any of the boundaries of the Mortgaged Property. S.U. Trustor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such acts, information reports, returns and withholding of monies as shall be necessary or appropriate to comply fully, or to cause full compliance, with all applicable information report- ing and back-up withholding requirements of the Internal Revenue Code of 1986, as amended (including all regulations promulgated thereunder) in respect of the Premises and all transactions related to the Premises, and will at all tires provide Beneficiary with satisfactory evidence of such com- pliance and notify Beneficiary of the information reported in connection with such compliance. 5.17. Trustor will, at its sole cost and expense, promptly remove, or cause the removal of, any and all hazard- ous or toxic substances or wastes or the effects thereof at 34 • .R NLL:bfs OT/17/89 LRE2603.0035.0.0 �Ia any time identified as being on, in, under or affecting the Premises. 5.18 From time to time until all sums due and payable under the Note have been paid in full and this Deed of Trust has been discharged and fully reconveyed, Trustor, if not in default hereunder or under the Note, may request the release of one or more individual parcels of property covered by this Deed of Trust. Beneficiary, upon receipt from Trustor of payment of a release price to be determined as provided in the Loan Agreement to be applied against unpaid principal and accrued interest under the Note, shall release such parcel(s), subject to the provisions of the Loan Agreement. 5.19 Notwithstanding anything to the contrary contained herein, the Note, the Loan Agreement or in any of the other Security Documents, Beneficiary agrees that, for payment of the Note and payment and performance of all other obligations of Trustor under the Security Documents, it will look solely to the Mortgaged Property and such other colla- teral, if any, as may now or hereafter be given to secure the payment of the Note and payment and performance of all other obligations of Trustor under the Security Documents, and no otter property or assets of Trustor or any partner of Trustor shall be subject to levy, execution or other enforcement procedure for the satisfaction of the remedies of Beneficiary, or for any payment required to be made under the Note, under this Deed of Trust or under any of the other Security Docu- ments or.for the performance of any of the covenants or warranties contained therein or herein and neither Trustor nor any partner in Trustor shall have any personal liability for payment or performance of any of such obligations; pro- vided, however, that the foregoing provision of this Section 5.19 shall not (i) constitute a waiver of any obligation evidenced by the Note or secured by this Deed of Trust; (ii) limit the right of Beneficiary to name Trustor as a party defendant in any action or suit for judicial foreclosure and the sale under this Deed of Trust so long as no judgment in the nature of a deficiency judgment or any other personal liability shall be sought or enforced against Trustor or any partner in Trustor except to the extent of the Mortgaged Property or such other collateral; (iii) affect in any way the validity mr enforceability of any guaranty (whether of payment and/or performance) or indemnity agreement given to Beneficiary in connection with the loan secured hereby; (iv) constitute a waiver by Beneficiary of any rights to reimbursement for actual, or out-of-pocket, losses, costs or expenses, or any other remedy at law or in equity, against Trustor by reason of (1) gross negligence or fraudulent acts or omissions, (2) willful misapplication of any insurance proceeds, condemnation awards or tenant security deposits, or of any rental or other income which was required by this Deed of Trust or other Security Documents to be paid or applied in a specified manner, arising, in any such case, with respect to the Mortgaged Property, or (3) failure to deliver promptly upon demand, tenant and other project files and original executed leases and other agreements relating to occupancy, construction or operation of the Mortgaged Property. 35 NLL:bfs 07'f�7/89 LRE2603.0036.0.0 The undersigned has executed this Deed of Trust, Assignment of Rents and Security Agreement the day and year first hereinabove written. C. CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its 36 NLL:bfs 07/17/89 LRE2603.0037.0.0 STATE OF ) SS. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO PIER COLONY, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors exe- cuted the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public c NLL:bfs 07/17/89 LRE2603.0038.0.0 STATE OF ) SS. COUNTY OF ) On , before rye, the under- signed, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal. Notary Public 11 r �.W' LEGAL DESCRIPTION That certain Real Property in tie City of Huntington Beach, County of Orange, State of California, described as follows: Lot 1 of Tract No. :3722, In the City of Huntington Beach, as per Hap filed in Book 636 Pages 38 to 41 inclusive of Hiscellaneous Maps, records of Orange County, California Excepting from a portion _hereof, an undivided one-half Interest in and to all oil, oil rights. minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name kncwr, located within or under, as reserved in the Ceed from Betty Holt Weaver and others, recorded August 15, 1985 as Instrument No. 85-305251, in Official Records, records of Orange County. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 feet, but without the right of surface entry, as reserved in the deed from [lsie H. Bakre Smith, a married woman, recorded March la, 1961 in Book 5655, Page 693 of Official Records. PARCEL 2z Lot 1 of Tract No. 13470, in the city of Huntington Beach as per Hap filed Ln Book 636 Pages 42 to 44 inclusive of Miscellaneous Maps, records of Orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lying below a depth of 500 feet from the surface of said lard, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting for, developing, producing, removing and marketinq said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hoofer and Ana Castiq and tffie Nation and Laura Mullions by Dead recorded Sopt*mber 17, 1971 in Book 9702, Page 438 of Official Records and as granted to Robert J. Dunn and .lane G. Dunn in Oeed recorded August 23, 1973 In Book 10867, Page 60 of Official Records Also excepting from a portion hereof all rights, title and interest new belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain community oil and gas lease, known as 00riginal East Huntington Beach v Community Oil and Gas Leaeeo, dated August 21, 1954, executed by Ann Thomas as to said land and another as to other land, as leeeare, and Jack S. Crawford, as lessee, recorded December 15, 1954 in Book 2697, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and interest now EXHIBIT "An Page 1 of 2 �d halangirq to or husinafter inuring to the lessors or their successors or assignses and to the lessees or their successors or assigrees in that certain two ccrn:ur.ity o:: and gas leases, k.'lown as "East Huntington Beach V Community oil and Gas Leas@, counterpart A", each dated August 21, 1954, executed by Ann :hemas as to said land and others as to other land, as lessors' and Jack B. Crawford, as lessee, recorded March 21, 1955 in Hook 3003 , Page 231 of Official Records and April 1, 1955 in Beck 3C-8. Page 40 of Official Records. Excepting from a portion therefrcn all oil, gas and other hydrocarbon substances and minerals lying below a depth of $00 feet from the surface thereof, but wit`out the right of surface entry at any time upon said land or within the top 500 feet therec!. for the purpose o: exploiting for, developing, producing, removing and earketirg said substances. Excepting also from portion thereof all rights, title and interest now belonging to ox hereinafter inuring to the lessors, or th@ir successors or assignee*, and to the lessees, or their successors or assignees, in that.certain two community oil and gas leases, known as *East Huntington Beach V Community Oil and Gas Lease, Counterpart A", each dated August 21, 1954, executed by Samuel L. Hancock as to said land. and by others as to other land, as lessors, and by Jack B. Crawford, as loss@*, recorded March 21, 1955 in Book 3003, Page 251 of Official Records of said County, and April 1. 1955 in Back 3018, Page 40 of Official Records of said County, as modified by an Instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors" and Jack B. Crawford, as "lessee", recorded March 21, 1955 in Beck 3%10103, Page 255 of official Records. Also Excepting f em a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural qas rights, and other hydreca eons by whatsoever name known, located wittin or under, as reserved in the Coed :rent Behr Holt W*aver and others, recorded August 13, 1985 as instrument No. 85-305251 in official Records, records of Orange County. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and ether related substances in and under said real property, together with and any and all royalties that may &ecru• from the same, as granted to Mabel Florence Graham and Edna Mytth Hopson in document recorded June 17, 1975 in Book 11432, Page 1142 of Official Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, Brea, asphaLtu.1.1 and all kindred substances and other minerals under and in said land, as reserved ty Bank of America in the Deed recorded June 11, 1959 in Book 47S2, Page 467 of Official Records. EXHIBIT NAN Page 2 of 2 a f "• NLL:b£s 07/�_-)71/89 AJS1546.0001.0.0 " ORIGINAL RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Loeb and Loeb Suite 1800 1000 Wilshire Boulevard Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. ----------SPACE ABOVE THIS LINE FOR RECORDER'S USE ---------- THIS ASSIGNMENT OF LEASES IS ADDITIONAL SECURITY FOR A DEED OF TRUST RECORDING CONCURRENTLY HEREWITH. California CMB Loan No. 56211 ASSIGNMENT OF LEASES Assignor: California Resorts/Haseko Associates, a California general partnership doing business as a joint venture Construction Mortgage Loan: $41,000,000 THIS ASSIGNMENT OF LEASES, made and entered into by Assignor to The Chase Manhattan Bank, N.A., a national bank- ing association having its principal office at One Chase Manhattan plaza, New York, New York 10081 ("Assignee" herein), is made and entered into with reference to the following: A. Assignor has executed a promissory note (the "Note") of even date herewith payable to the order of Assignee in the amount of the Construction Mortgage Loan, which Note is secured by, among other things, a Deed of Trust, Assign.^:ert of Rents and Security Agreement (the "Deed of Trust") of even date therewith in favor of Assignee as beneficiary encumber- ing the real property described in Exhibit "A" attached hereto. The Note, Deed of Trust, this Assignment and all other documents and instruments securing or relating thereto are hereinafter collectively referred to as the "Security Documents." B. Assignor, as landlord, has heretofore entered into certain leases of portions of the property described in Exhibit "A" attached hereto. Said leases, and any other lease or leases of all or any portion(s) of said property hereafter_.entered.into by Assignor, together with any -and all guarantees, modifications, extensions and renewals thereof, NLL:bfs 07/12�/89 AJS1546.0002.0.0 I..) are hereinafter referred to as the "Leases" and the property described in Exhibit "A" attached hereto covered by such Leases is sometimes hereinafter referred to as the "Demised Premises". C. Assignee has required, as a condition precedent to making the loan evidenced by the Note, this absolute assign- nent of the Leases. NOW, THEREFORE, in consideration of the premises, for the purposes aforesaid, and otter valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby agrees as follows: 1. Assignor hereby absolutely and unconditionally grants, bargains, sells, transfers, assigns and conveys to Assignee: (a) All of the right, title and interest of Assignor in and to the Leases, and each of them. (b) The right to the use and possession of and the right to rent, let and lease any or all of the per- sonal property, which word shall be construed as including all of the furniture, furnishings, fittings, attachments, appliances, machinery, equipment, devices and appurtenances of every kind and description now or hereafter affixed to, attached to, located in or on the Demised Premises and avail- able for the use of the tenants under the Leases or the oper- ation of.the Demised Premises and in or to which the Assignor has any right, title or interest. (c) The right to the use and possession of the Demised Premises and all the rents, which word shall be construed as including any and all of the rents, issues, profits and avails now due and which may hereafter become due under and by virtue of any leases, whether written or oral, or letting of or any agreement for the use or occupancy of any part of the Demised Premises and/or personal property which may have heretofore been Made or may hereafter be made or agreed to between Assignor or any other owner of the Demised Premises or any other owner of the personal property and any tenant or occupant of any part of the Demised Prem- ises and/or personal property, or which may be made or agreed to by Assignee under the power herein granted. 2. Assignor hereby covenants and agrees: (a) Faithfully to abide by, perform and dis- charge each and every mate-rial obligation, covenant and agreement of the Leases hereby assigned, which is to be performed by the lessor thereunder; to give prompt notice to Assignee of any notice of default on the part of Assignor with respect to any of the Leases which is received by Assignor from the lessee thereunder or from any guarantor thereof, together with an accurate and complete copy of any such notice: and,..at-the sole cost and expense of Assignor, 2 NLL:bfs 07/27/89 AJ51546.0003.0.0 %I,.) to enforce or secure the performance of each and every material obligation, covenant, condition and agreement of the Leases to be performed by the lessees thereunder. (b) That Assignor will not, without the prior written consent of Assignee: (i) modify any Lease or Leases aggregating in excess of 6,000 square feet of space in the Devised Premises or any extensions or renewals provided for therein in such a way as to reduce the rent, accelerate rent payments, shorten the original term of any such Lease(s), or change any rights of extension or renewal; (ii) terminate any Lease or Leases aggregating in excess of 5,000 square feet of space in the Demised Premises except as expressly provided by the terms thereof; or (iii) tender or accept a surrender of any Lease or Leases aggregating in excess of 5,000 square feet of space in the Demised Premises or accept any prepay- ment in excess of two (2) months rent due thereunder and the amount of the security deposit required thereunder. Any attempt to exercise any such right without the written authority and consent of Assignee thereto being first had and obtained shall be void and ineffective as against Assignee and shall constitute a breach of the terms hereof entitling Assignee to declare all sums secured hereby to be immediately due and payable. (c) At Assignor's sole cost and expense, to appear in and defend any action or proceeding arising under, growing out of or in any manner connected with any of the Leases hereby assigned, or the obligations, duties or liabil- ities of the lessor or lessee thereunder or any guarantor thereof, and to pay all costs and expenses of Assignee, including attorneys' fees in a reasonable sum, in any such action or proceeding in which Assignee may appear. (d) That if Assignor should fail to make any payment or to do any act as herein provided, then Assignee, but without obligation so to do and without notice to or demand on Assignor, and without releasing Assignor from any obligation hereunder, may make or do the same in such manner and to such extent as Assignee may deem necessary to protect Assignee's rights and interests under this Assignment, includ- ing specifically without limiting Assignee's general powers the right to appear in and defend any action or proceeding purporting tm affect any of the Leases or Assignee's interest therein under this Assignment or the rights or powers of Assignee hereunder, and also the right to perform and dis- charge each and every obligation, covenant and agreement of the lessor contained in any of the Leases; and in exercising any such powers, to pay necessary costs and expenses, employ counsel and incur and pay reasonable attorneys' fees. (e) To pay no later than three (3) calendar days after demand therefor all sums expended by Assignee under the authority hereof, together with interest thereon at the per annum rate then in effect under the Note and, if not paid, the same shall be added to the said indebtedness and shall be secured hereby. _ 3 NLL:bfs 07/Y/89 AJS1546.0004.0.0 U 3. Assignor hereby covenants and warrants to Assignee that (a) Assignor has not executed any prior assign- ment of lease(s) with respect to the Demised Premises and that Assignor is entitled to receive rents from the Demised Premises and to enjoy all other rights mentioned herein, and that Assignor has free right to transfer to Assignee such rights, interests, powers and authorities as are herein granted or conferred; (b) Assignor has not performed any act or executed any instrument which might prevent Assignee from operating under any of the terms and conditions hereof, or which would limit Assignee in such operation; (c) except as otherwise agreed to by Assignee in writing, Assignor has not accepted rent under any of the Leases for any part of the Demised Premises for any period subsequent to the current period for which rent has already become due and payable; (d) there is no default now existing under any of the Leases; and (e) Assignor has not executed or granted any modification or amendment whatever of any of the Leases hereby assigned, either orally or in writing. 4. To further protect Assignee's interest in the Leases under this Assignment, Assignor further agrees, with respect to the Demised Premises, as follows: (a) Assignee shall have the right, effective upon the occurrence of any Event of Default, as defined in the Deed of Trust, in Assignor's name and stead (i) to collect any and all rents, issues and profits derived from the Demised Premises; (ii) to use such measures, legal or equitable, as in Assignee's discretion may be deemed necessary or appro- priate to enforce the payment of said rents or any security given in connection therewith; (iii) to secure and maintain the use and possession of the Demised Premises and personal property or any part of either; and (iv) to fill any and all vacancies and to rent, lease or let the Demised Premises and personal property or any part thereof at Assignee's discre- tion, hereby granting full power and authority to Assignee to use and apply said rents for the following purposes in such order of priority as Assignee deems proper: (A) for the pur- poses of the payment of any taxes, assessments and charges of any nature whatsoever that may be levied or assessed in con- nection with the Demised Premises; (B) to the payment of pre- miums on policies of insurance on or in connection with the whole or any mart of the Demised Premises and the personal property as may be required by the Security Documents; (C) to the payment of any and all indebtedness, liability or inter- est of Assignor evidenced cr secured by the Security Docu- ments, whether now existing or hereafter to exist; (D) to the purchase of and/or the payment for such personal property as may be deemed necessary or advisable by Assignee for the Demised Premises; (E) to the payment of all expenses incurred in the care and management of the Demised Premises, including such repairs, alterations, additions and improvements to the Demised Premises and the personal property or any part of either as may be deemed necessary or advisable by Assignee; (F) to the payment of reasonable attorneys' fees, court 4 NLL:bfs 07%?7/89 AJS1546.0005.0.0 %..) costs, labor, charges and expenses incurred in connection with any and all things which Assignee may do or cause to be done by virtue hereof; and (G) to the payment of such interest and principal on the indebtedness evidenced or secured by the Security Documents, as may be deemed neces- sary or advisable by Assignee. (b) In furtherance of these provisions, Assignor hereby grants to Assignee full power and authority to Make contracts for the care and management of the whole or any part of the Demised Premises and/or personal property, in such form and providing for such compensation as may be deemed reasonably advisable by Assignee. Assignor hereby agrees that whatever Assignee or Assignee's attorney -in -fact or its said substitute attorney or attorneys -in -fact shall do or cause to be done in, about or concerning these presents is hereby ratified and confirmed. (c) Subject to the terms and conditions con- tained herein, Assignor hereby grants to Assignee full power and authority to exercise at any and all times, and without notice to Assignor, each and every right, privilege and power herein granted. 5. It is understood that so long as there shall exist no Event of Default, as defined in the Deed of Trust, Assignor shall have the right to collect, but not in excess of two (2) months prior to accrual, all rents, issues, profits and security deposits from the Demised Premises and to exer- cise all.other rights under the Leases, but only as trustee for the benefit of Assignee; and Assignor shall apply the amounts so collected except security deposits first to the payment of interest and principal and all other sums payable under the Security Documents, and thereafter, so long as no default as hereinabove provided remains uncured (taking into account Assignor's right to cure such default within the express time period (if any) therein provided), the balance of such rents, issues and profits shall be retained by Assignor for its own account. Nothing contained in this Section 5 or elsewhere in this Assignment shall be construed to make Assignee a mortgagee in possession unless and until Assignee actually takes possession of the Demised Premises either in person or through an agent or receiver. V 6. Upon or at any time after default (and the failure of Assignor to cure such default within the express time period (if any) therein provided) in the payment of any indebtedness evidenced or secured by the'Security Documents or in the performance of any obligation, covenant or agree- ment contained therein, Assignee may declare all sums evidenced thereby to be immediately due and payable, and may, at its option, without notice and irrespective of whether a declara- tion of default under any of the Security Documents has been delivered to the appropriate party thereunder, or remedies under the Security Documents have been exercised, exercise all rights and remedies contained herein or.in the Security 5 NLL:bfs 0V27/89 AJS1546.0006.0.0 Documents, and, in addition, without regard to the adequacy of the security for the indebtedness evidenced or secured by the Security Documents, with or without notice, bring any action or proceeding or, either in person or by agent or by a receiver to be appointed by a court, enter upon, take posses- sion of, manage and operate the Demised Premises or any part thereof, make, enforce, modify and accept the surrender of any of the Leases, obtain and evict tenants, fix or modify rents, and do any acts which Assignee deems proper to protect Assignee's rights and interests under this Assignment, and either with or without taking possession of said Demised Premises, in Assignee's own name, sue for or otherwise collect and receive all rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses cf operation and collection, including reasonable attorneys' fees, upon any indebtedness evidenced by the Note and in such order as Assignee may determine. The entering upon and taking possession of the Demised Premises, the collection of such rents, issues and profits, and the applica- tion thereof as aforesaid, shall not cure or waive any default or waive, modify or affect any notice of default under the Security Documents, or invalidate any act done pursuant to such notice. 7. Assignee shall not be obligated to perform or discharge, nor does Assignee hereby undertake to perform or discharge, any obligation, duty or liability under any of the Leases assigned hereunder or under or by reason of this Assign- ment. No failure or delay in exercising any of said rights, remedies.or powers of Assignee shall constitute a waiver thereof or a waiver of any default of Assignor. Assignor shall and does hereby agree to indemnify Assignee against and hold it harmless from any and all liability, loss, damage, cost or expense which Assignee may or might incur under any of the Leases or under or by reason of this Assignment, and against and from any and all claims and demands (other than claims or demands arising out of Assignee's own wrongful acts) whatsoever which may be asserted against Assignee by reason of any alleged obligation or undertaking on Assignee's part to perform or discharge any of the terms, covenants or agreements contained in any of the Leases. Should Assignee incur any such liability, less, damage, cost or expense under any of the Leases or under cr by reason of this Assignment, or in the defense against any such claims or demands, the amount thereof, including ccsts, expenses (other than those that may arise out of Assignee's own wrongful acts) and reasonable attorneys' fees, together with interest at the maximum rate permitted by law, shall be secured by the Security Documents, and Assignor shall reimburse Assignee therefor immediately upon demand, and upon the failure of Assignor so to do, Assignee may declare all sums evidenced by the Security Documents to be immediately due and payable. 8. Until the indebtedness evidenced or secured by the Security Documents shall have been paid in full, Assignor covenants and agrees to use due diligence to attempt to rent all of the Demised Premises and keep the same leased at a good and sufficient rental, and upon demand to execute a written instrument confirming the transfer and assign.^ent 2 PlLL:bfs 0 � /89 AJS1546.0007.0.0 hereunder to Assignee of any and all leases upon all or any part of the Demised Premises entered into after the date hereof and to make, execute and deliver to Assignee upon demand any and all further instruments that may be necessary or desirable therefor. 9. Upon the payment in full of all indebtedness evidenced or secured by the Security Documents, this Assign- ment shall become null and void and shall be of no further force or effect and Assignee shall reassign the Leases to Assignor. 10. In this Assignment, whenever the context so requires, the neuter gender includes the masculine or femi- nine, and the singular number includes the plural, and vice versa. 11. All notices, demands or documents that are required or permitted to be given or served hereunder shall be in writing and shall -be served by certified or registered mail, postage prepaid, by a national express air courier (such as, for example, Federal Express) or locally recognized messenger, which courier or messenger shall maintain written verification of actual delivery, by telecopy or by delivery of same in person to Assignor at its address appearing in the Security Documents, and to Assignee at the address appearing above. A copy of all notices, demands or documents given to or served upon Assignee hereunder shall be served concurrently therewith and in the same manner upon Messrs. Loeb and Loeb, counsel to Assignee, at the following address: Loeb and Loeb Suite 1600 1000 Wilshire Boulevard Los Angeles, California 90017 Attention: Joseph P. Heffernan, Esq. Such addresses may be changed from time to time by either party by serving notice as above provided. Service of any such notice or demand shall be deemed complete on the date of actual delivery as shown by the addressee's registry or cer- tification receipt or at the expiration of the second (2nd) day after the date of mailing, whichever is earlier in time. 12. Assignor will execute upon request of Assignee any and all instruments requested by Assignee to carry these presents into effect. 13. Assignor hereby additionally covenants and agrees: (a) During the term of these presents and also during any proceedings brought to enforce Assignee's rights under the Security Documents, Assignor will not remove or cause to be removed from the Demised Premises any of the personal property, unless the personal property is promptly replaced with personal property of at least equal quality. 7 NLL:b£s 07�ri/89 AJS1546.0008.0.0 (b) Assignee shall not be required to seek the appointment of a receiver or to institute any proceedings of any kind, possessory or otherwise, to secure or enjoy the full benefits of this Assignment. (c) This Assignment shall in no way operate or prevent Assignee from pursuing any remedy which Assignee now or hereafter may have because of any present or future breach of the terms or conditions of the Security Documents. (d) Assignor hereby specifically authorizes and instructs each and every present and future lessee or tenant of the whole or any part of the Demised Premises to pay to Assignee all unpaid rental agreed in each tenancy upon receipt of demand from said Assignee so to pay the same. Assignor agrees that such lessees and tenants shall have the right to rely on such demand without obligation to inquire as to whether default exists notwithstanding any contrary claim of Assignor. (e) Assignor shall not make or execute any other assignment of leases, rents, issues, income or profits from the Demised Premises or any part thereof during the term of this Assignment, without the prior written consent of Assignee. (f) Assignee's omission or failure to give any notice of or under this Assignment to Assignor or any lessee, tenant or other occupant of the Demised Premises or any part thereof, or to collect any such rents, issues, income or profits therefrom, or any part thereof, shall not constitute or be deemed a waiver of any of Assignee's rights hereunder. 14. In the event any provisions of this Assignment or the application thereof to Assignor or any other persons or circumstances shall, to any extent, be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Assignment or the application of such pro- vision or provisions to Assignor or such other persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby and each and every provision of this Assignment shall be valid and enforceab_le to the fullest extent permitted by law. This Assignment shall be governed, by and construed in accordance with the laws of the State of California. 15. This Assignment and all of the terms, cove- nants and conditions hereof shall be binding upon Assignor and its successors and assigns and shall inure to the benefit of Assignee and its successors and assigns. 16. In the event of any litigation between Assignor and Assignee which may arise after the date hereof in connec- tion with the enforcement or interpretation of this Assign- ment, the party prevailing in such litigation shall be enti- tled to be reimbursed by the other party for its reasonable attorneys' fees and court costs. E? NLL:bfs 07y-7/89 AJS1546.0009.0.0 17. This Assignment is subject to the "non -recourse" provisions of the Note, which provisions are incorporated herein. IN WITNESS WHEREOF, Assignor has executed this Assignment of Leases as of this 31st day of July, _989. CALIFORNIA RESORTS/HASEKO ASSOCIATES, a California general partnership doing business as a joint venture By: HASEKO PIER COLONY, INC., a California corporation, partner By Its By: CALIFORNIA RESORTS INTERNATIONAL, INC., a California corporation, partner By Its 0 NLL:bfs &i-/�27/89 AJS1546.0010.0.0 STATE OF ) SS. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of HASEKO PIER COLONY, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors exe- cuted the within instrument on behalf of CALIFORITIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within instrument. WITNESS my hand and official seal.. L 10 Notary Public NLL:bfs 07} /89 AJS1545.0011.0.0 STATE OF ) SS. COUNTY OF ) On , before me, the under- signed, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as the on behalf of CALIFORNIA RESORTS INTERNATIONAL, INC., the corporation therein named, and acknowledged to me that such corporation pursuant to its by-laws or a resolution of its board of directors executed the within instrument on behalf of CALIFORNIA RESORTS/HASEKO ASSOCIATES, the general partnership therein named, and that such general partnership executed the within ins=ru.ent. WITNESS my hand and official seal. Notary Public 11 LEGAL DESCRIPTION That certain Peal Property in the City of Huntirgton Beach, County of Orange, State of California, described as follows; Lot 1 of Tract No. 13722. in the City of Huntington Beach, as par Map filed in Book 636 Pages 38 to 41 inclusive of miscellaneous Maps, records of Orange County, California Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, located within or under, as reserved in the Dead from Betty Holt heaver and others, r*corded August 15, 1985 as instrument No. 83-305251, in official Records; records of Orange County. Also Excepting from a portion thereof, all oil, gas, minerals and other hydrocarbon substances lying below a depth of 500 feet, but without the right of surface entry, as reserved in the dead from alste M. Bakre Smith, a married woman, recorded March 14, 1961 in Book 5635, Page 693 of Official Records. PARCEL 2: Lot 1 of Tract No. 13478, in the City of Huntington Beach as per Map filed in Book 636 Pages 42 to 44 Inclusive of Miscellaneous Maps, records of orange County, California Excepting from a portion thereof all oil, gas and other hydrocarbon substances and mineral lyLnq belong a depth of 500 feet from the outface of said lard, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpos* of exploiting for, developing, producing, removing and marketing said substances, as granted to Paul H. Maier and Helen Crawford and Cecelia Hosier and Ana Castiq and Effie Nation and Laura Mullen& by Deed recorded September 17, 1971 in Book 9702, Page 438 of Official Records and as granted to Robert J. Dunn and Jane G. Dunn in Dead recorded August 23, 1973 in Book 10867, Page 60 of Official Records Also excepting from a portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lessees or their successors or assignees in that certain community oil and gas lease, known as 'Original last Huntington Batch v Co=unity 011 and Gas Lease", dated August 21, 19S4, executed by Ann Thom -as as to said land and another as to other land, as lessors, and Jack S. Crawford, as lessee, recorded Decefter 13, 1954 in Book 2897, Page 332 of Official Records. Also excepting from a portion thereof all rights, title and interest now EXHIBIT "A" Page 1 of 2 belonging to or hereinafter inuring to the lessors or their successors or assignees and to the lease*s or their successors cr assignses in that certain two ce :~unity o:l and gas leases, known as "East Huntington Beach V Community Oil and Gas Lease, counterpart A", *ach dated August 21, 1954, executed by Ann Thomas as to said lard and others as to other lard, as lessors' and Jack B. Crawford, as losses, recorded Marc: 21, 1955 in Book 3003 , Page 251 of Official Records and April 1, 1953 in Scok 30:8. Page 40 of Official Records. Excepting from a portion therefrom all cil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface thereof, but wit.-cuz the right of surface entry at any time upon said land or within the top 500 feat thereof, for the purpose of exploiting for, developing, producing, removing and marketing sae: substances. Excepting also fron portion thereof all rights, title and interest now belonging to or hereinafter inuring to the lessors, or their successors or assignees, and to the lassoes, or their successors or assigness, in that certain two community oil and gas leases, known a■ "East Huntington Beach V Community oil and Gas Lease, Counterpart A", each dated August 21, 1954, executed by Samuel L. Hancock as to said land, and by others as to other land, as lessors, and by Jack B. Crawford, as lessee, recorded March 21, 1955 in Cook 3003, page 251 of Official Records of said County, and April 1, 1955 in Book 3018, Page 40 of Official Records of said County, as modified by an instrument dated February 21, 1955, executed by Samuel L. Hancock and another, as "lessors" and Jack B. Crawford, as "lessee", recorded March 21, 1953 in Beck 3003, Page 255 of Official Records. Also Excepting from a portion thereof, an undivided one-half interest in and to all oil, oil rights, minerals, mineral rights, natural gas rights, and other hydrecartcns by whatsoever name known, located wihtin or under, as reserved in the Coed frc:n Betty Bolt weaver and others, recorded August 15, 1985 as Instrument No. 85-30525i in Official Records, records of Orange County. Also Excepting from a portion thereof all oil, gas, minerals, hydrocarbon and otter related substances in and under said real property, together with and any and all royalties that may accrue from the same, as granted to Mabel Florence Graham and Edna Myrth Hopson in document recorded June 17, 1973 in Book 11432, Page 1742 of Official Records. Also Excepting from a portion thereof all crude oil, petroleum, gas, and all kindred substances and other minerals under and in said land, Bank of America in the Deed recorded June 11, 1959 in Book 4732, Page Records. brea. asphaltum as reserved by 467 006 Official E XRIBIT "A" Page 2 of 2 J. IeLv HvNnNGTon RACH To Subject CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Connie Brockway City Clerk PURCHASE OF MAIN —PIER PHASE I OIL INTERESTS From Douglas N. La Be] Deputy City Admi ator Date July 24, 1999 Connie, with regard to the contract that was approved by the Redevelopment Agency on February 6, 1989, regarding the purchase of certain oil interests from CAPRO Oil Company, please be advised that this acquisition will not take place and the file may be closed on this matter. Subsequent to the Agency's action, California Resorts, Inc., (the developer) acquired those interests, and now the contract with CAPRO Oil does not need to be executed. Please feel free to contact me if you have any questions. DLB:lp xc: Pat Spencer, Housing & Redevelopment Director 4964h -,REQUEST FOF',,,rIEDEVELOPMENT A:NCY ACTfON AP �+ptAY CITY COUNCIL RH 99-07 r 194 D e cnY C1.EM- . Submitted to: Honorable Chairman and Redevelopment Agency Members Subr-iitted by: Paul Cook, Executive Director Prepared by: Douglas La Belle, Deputy City Administrator/Economic Developme Subject. PURCHASE OF MAIN -PIER PHASE I OIL INTERESTS Consistent with Council Policy? K Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: To enable the Main -Pier Phase I project to move forward in a timely fashion, staff has been seeking to acquire certain oil interests that encumber properties owned by the developer California Resorts, Inc. This matter was considered by the Agency and continued on January 17, to allow several pending issues to be resolved and this matter is now ready for Agency consideration. RECOMMENDATION: 1) Approve the attached contract that provides for the acquisition of certain oil interests, and authorize the Agency Clerk and Chairman to execute said documents. ANALYSIS: It was your action of November 7, to adopt Agency Resolution of Necessity No. 161 to acquire certain oil interests within the Main -Pier Project site. Agreement has now been reached with Capro Oil Company which has resulted in the completion of a purchase agreement between the Agency and Capro 011. The agreement provides that the Agency will purchase the rights of surface entry and ' service facilities, including tanks, pumping units, and other appurtenance related to the Ulrich 1 and Wallace 1 oil wells for the sum of $106,000 which is the negotiated purchase price. The indemnity provision has been removed, based upon a completed soils analysis, the risks and cost to the project are minimal. The seller has also requested the right to purchase back from the Agency the equipment designated on Exhibit "A" to the agreement for the salvage value of $7,402. This has also been provided for in the revised agreement. N DIN SOURCE: Main -Pier Phase I Acquisition and Relocation Accounts. P1011A15 i i t �j ALTER NATIVE A CTLQN: 1) Modify the terms of the Purchase Contract. 2) Defer acquisition of the Phase I oil interests. ATTACHMENTS: 1) Purchase Contract. PEC/DLB:Ip 4329h AGREEMENT FOR SALE OF PROPERTY BETWEEN CHARLES E. CATHER, AND THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH This Agreement made this _ day of February _, 1989, by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, California, public body ("BUYER"), and CHARLES E. CATHER dba CAPRO OIL COMPANY, operating agent, ("SELLER"), for the purchase by BUYER of certain property interests. WHEREAS, BUYER has entered into an agreement with SELLER to acquire all rights of surface entry and service facilities, including without limitation all pumping units and other appurtenances attendant to the Ulrich 1 and Wallace 1 oil wells located on private property, beneath an alley, beneath Second Street and on lot 18 in Block 102 of Huntington Beach, as shown on a map recorded in Book 3, Page 36 of Miscellaneous Naps, records of Orange County, California and lot 19 and 15 feet of Lot 17, Block 102, City of Huntington Beach all more particularly described in Exhibit "A" ("Equipment") and Exhibit "C" (The leasehold) attached hereto and ,incorporated herein by this reference, (collectively referred to as "the PROPERTY") and SELLER desires to sell the PROPERTY to BUYER and, in turn, BUYER desires to buy the PROPERTY from SELLER: NOW THEREFORE, the parties agree as follows: 1. PURCHASE PRICE. The purchase price for the PROPERTY as between SELLER and BUYER is One Hundred Six Thousand and no/100 dollars ($106,000.00). 2. ESCROW. BUYER and SELLER agree to execute the escrow instructions and do all things necessary to complete said escrow in conformance with this contract and standard escrow provisions. 11 -1- 3. CONDITIONS OF CLOSING. The close of escrow is conditioned upon: a. Conveyance to the BUYER of good and marketable title subject to the approval of BUYER'S Attorney. b. Delivery of California Land Title Association (CTLA) title insurance policy on the leasehold interest in the amount of One Hundred Six Thousand Dollars subject only to such liens, encumbrances, clouds or conditions as may be expressly approved in writing only by the City Attorney, the cost of which is to be borne by BUYER. No such approval shall be by waiver or the passage of time and such approval is a condition precedent to any obligation herein by BUYER. c. Delivery of possession of said PROPERTY to BUYER or its nominee, immediately on close of escrow. 4. PRORATIONS. Insurance, Insurance Premiums, and Possessory Interest Tax. There shall be prorated between SELLER and BUYER on the basis of thirty (30) day months as of 12:00 midnight on the date of the close of escrow pursuant to this contract: a. Real property taxes levied or assessed against said PROPERTY (including any water tax or water rate levied against said PROPERTY for the furnishing of water thereto) as shown on the latest available tax bills. The County of Orange, by law, will refund all tax paid by SELLER covering periods subsequent to title vesting in BUYER. b. Premiums on insurance policies acceptable to BUYER insuring the improvements and buildings, if any, on said PROPERTY against damage or destruction by fire, theft, or the elements. -2- 5. BOVDS AND ASSESSMENTS. Any bonds or improvements assessments which are a lien on said PROPERTY shall, on close of escrow, be paid by SELLER, except those liens imposed by the City of Huntington Beach, 6. BROKER'S COMMISSIONS - ATTORNEY'S FEES. Any and all finder's fees or commissions due to real estate or other brokers retained by SELLER and all ATTORNEY'S fees to ATTORNEYS retained by SELLER as a result of this date of said PROPERTY shall be paid by SELLER. 7. EXPENSES OF ESCROW. The following expenses of the escrow described in this Article shall be paid by BUYER: a. The full cost of securing the title insurance policy described in this Agreement, b. The cost of preparing, executing, and acknowledging any deeds or other instruments required to convey title to BUYER or his nominees in the manner described in this Agreement. c. The cost of recording a grant deed required to convey title to said PROPERTY to BUYER or his nominee as described in this Agreement. d. Any escrow fee charged by the escrow holder in addition to the cost of the title insurance policy. 8. SELLER'S REPRESENTATIONS, COVENANTS AND WARRANTIES. As an express condition precedent to the Close of Escrow for BUYER'S benefit, and in addition to any other representations, covenants and warranties contained in this Agreement, SELLER makes the following representations and warranties, each of which is true in all respects as of the date of this Agreement, and shall be, true in all respects as of the closing date (as defined in the Escrow Instructions): -3- a. Authority to Sicn. This Agreement and all the documents executed by the SELLER that are to be delivered to the BUYER at closing are, and at the closing will be, duly authorized, executed and delivered to the BUYER; are, and at the closing will be, sufficient to convey title if they purport to do so; or do not, and at the closing will not violate any provisions of any agreement to which the SELLER is a party or to which SELLER is subject, including without limitations any prior options, purchase agreements and/or escrow instructions. b. Existing_ Contracts. At the closing, there will be no outstanding contracts made by the SELLER for any improvements to the PROPERTY that have not been fully paid, and the SELLER shall cause to be discharged (in such a manner that the Title Company will not show the liens(s) as an exception(s) to title under the Title Policy), all mechanics' or materialmen's liens arising from any labor or materials furnished to the PROPERTY prior to the closing. C. Title. SELLER will convey his leasehold interest in the PROPERTY to the BUYER on or before February 10, 1989, in accordance with the above escrow. SELLER will convey to BUYER, its leasehold interest in the PROPERTY free and clear of all liens, encumbrances, claims, rights, demands, easements, licenses, agreements, covenants, conditions, and restrictions of any kind or character (including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts or other title retention agreements, deeds of trust, security agreements and pledges). SELLER shall not encumber, modify or diminish title to all, or any portion of or interest in, the PROPERTY without BUYER'S written consent. -4- d. Litigation. SELLER is not involved in, nor does SELLER have knowledge of, any claim, proceeding or threatened litigation, administrative or governmental proceeding or investigation, relating to or otherwise affecting the PROPERTY or the ability of SELLER to deliver his leasehold interest in the property to BUYER. e. Tenants. There are no tenants on the PROPERTY. f. Compliance with Environmental Laws. The SELLER has no knowledge that the PROPERTY and its intended use does not comply with all applicable laws and governmental regulations including, without limitations, all applicable federal, state and local laws pertaining to air and water quality, hazardous waste, waste disposal and other environmental matters, including, but not limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation Recovery and comprehensive Environmental Response Compensation and Liability Acts, and the California Environmental Quality Act, and the rules, regulations and ordinances of the City of Huntington Beach, the California Department of Health Services, the Regional Water Quality Control Board, the State Waste Resources Control Board, the Environmental Protection Agency and all applicable federal, state and local agencies and bureaus. 9. BUYER'S OBLIGATIONS. BUYER is acquiring the physical property interest as is. BUYER has made its own inspection of the PROPERTY and accepts it in its present condition. The SELLER is hereby granted the option to purchase the equipment identified in Exhibit "A" attached hereto and incorporated herein by this reference at the salvage value reflected on Exhibit "A" according to the terms and conditions provided in Exhibit "B". -5- 4 10. ATTORNEY'S FEES. In the event of any controversy, claim or dispute arising out of or relating to this Agreement or the escrow or any breach of either, the prevailing party shall be entitled to ATTORNEY'S fees. 11. THREAT OF CONDEMNATION. The parties agree that the PROPERTY being conveyed is under threat of condemnation by the BUYER. 12. NOTICES. Any and all notices or other communications required or permitted by this Contract or by law to be served on or given to either party hereto, BUYER or SELLER, by the other party hereto, or by the escrow holder shall be in writing and shall be deemed duly served and given when personally delivered to any of the parties, BUYER or SELLER, to whom it is directed or in lieu of such personal service when deposited in the United States mail, first-class postage prepaid, addressed to the parties at the addresses shown below. SELLER may change his address for the purpose of this section by giving written notice of such change to the BUYER in the manner provided in this section. SELLER: BUYER: CHARLES E. CATHER THE REDEVELOPMENT AGENCY OF THE dba CAPRO OIL COMPANY CITY OF H UNTINGTON BEACH 2292 Long Beach Boulevard 2000 Main Street Long Beach, CA 90806 Huntington Beach, CA 92648 PACE END -6- 13. ENTIRE AGREEMENT. This instrument contains the entire agreement between BUYER and SELLER respecting said PROPERTY, and any agreement or representation respecting said PROPERTY or the duties of either BUYER or SELLER in relation thereto not expressly set forth in this instrument is null and void. EXECUTED on , 19^, at Orange County, California. SELLER: BUYER: Charles E. Cather, The Redevelopment Agency of the dba CAPRO OIL COMPANY, City of Huntington Beach, operating agent a public body By: ATTEST: . Agency Clerk REVIEWED AND APPROVED: City Administrator Chairman APPROVED A5 TO FORM: Ag n C unsel Special Agency Counsel INITIATED AND APPROVED: Deputy City Administrator -7- T A 8 L E 12 EXHIBIT "A" ' WELL AND LEASE EQUIPMENT AREA I - CAPRO DRILLSITE Location and Description Lots 19 and 15 feet of Lot 17, block 102, faces 2nd Street between Pacific Coast Highway and Walnut. The surface area is 4,700 square feet. The drillsite is enclosed by a 6 foot chain link fence in fair condition with gates facing the street and alley. There are no tanks on this drillsite and the wells are located on a common 34' x 22' pad. There is a 6x6 IR gas compressor belt driven from the motor on Wallace #1. It is believed that production from this lease is processed at a central facility located on Lot 15 of block 201. Lease _Equipment Estimated Replacement Estimated Salvage Item Description Cost Value Gas Compressor I-R 6x6 belt driven from pumping unit; fair $ 2,000 $ 200 condition Lease Equipment Totals $ 2,000 - $ 200 Well E ui�rrent - Estimated Estimated Replacement Salvage Well # Description Cost Value Ulrich #1 Lufkin TC44DPR unit; $ 4,000 $2.000 clean, good ccr.dition. 3650'-2 7/8" EU8R Tubing 3,650 1,168 3650'-3/4" Sucker Rods 1,650 183 Wellhead - Misc. Valves 800 150 and Fittings 15hp Electric Motor 400 100 Well Total $10,500 $3,601 .Wallace kl Lufkin TC5D unit; clean; $ 3,500 $2,000 good condition. 3650'-2 7/8" EU8R Tubing 3,650 1,168 3,650'-3/4" Sucker Rods 1,650 183 Wellhead - Misc. Valves 800 150 and Fittings 15hp Electric Motor 400 100 Well Total $10,000 $3,601 Capro Drillsite Totals $22,500 $7,402 Lease and Well Equipment Page Two of two pages WELL # Ulrich #1 Wallace #1 DESCRIPZION 3" flow line from well site to said central facility, noted above. Corrected Well Total 3" flow Iine from well EXHIBIT "A" ESTIMATED ESTIMATED REPLACEMENT SALVAGE COST_ - .,YALLIE 120 —0- 120 EQUIPMENT Buyer agrees to sell to Charles E. Cather such of the equipment and fencing (only the fabric and the gates) as Charles E. Cather desires, for the salvage prices mentioned in Exhibit "A" of said Agreement, and there shall be no charge for the fabric on the gates. Charles E. Cather shall coordinate the removal of any equipment he agrees to take with the capping of the wells by California Resorts International, Inc. Any equipment so purchased shall be paid by a cashiers check to the Agency and shall be removed from the drill site (production site) prior to the clean-up procedures following the well abandonment procedures on the property. Charles E. Cather shall receive notice of the completion of said abandonment procedures and within 10 days thereof shall commence removing the property he has selected. EXHIBIT "B" -9- 06 FIRST RMERICAN TOW"..— �3, �..:-.• sees ,,.,;*� Y. •..ij•.',tipti- .g-r • +. - :�: •, � sees ...�._ . JJaa • • Od An save! N�...r� i098 1W/ r" OIL j LND, GAS -LEASE THM AC113fIL4lrhT, made and entereltata W, 22 _day by and betiviei rh1� .� of tine first part, bereio etpled'S.uietx, aa►d_._. -- r�,,,..lr�+ r �P.,tl,r� ..I..I `r1�: .. h,a free •yam :.,� . party of the second part, herein styled'Lesaeo" y • . V913NESUTHr'J hat for and In eatd'.daradon cf."'lam_.. _.._...__DoL'ara faw:ul manor of the United State of America, to the L.assor paid, and of other valuable sonaldorstions, the torelpt of all of which Is hereby &ckwwledged, and In eorutdention of the rovtnanta and asreements Nv*tnefter contained by the Leeaet to be kept am pariormod, chi Lessor has grassed, leased, let aid demieod, and by slits+ preunta does grant, karts, let and dMW unto the [torsos lap pgroeravos, sumaurs and sulgns, the land and promtan hertinsfur described, with the sale ausd exalusM t so. Uwe to drill for produce, ex tact take and remove oil, sass �altum and oth mer hydrttearbona (also orator Dort for tti epsratloQ from, and to store the acme upon, said U during the tarsn hereinafter provided, 1U of entry tt,ereon at a:I times for said pp e, and to axestru t6va 1F, polo a= pipe neslitep-air d�rlegrsDMinaa, tanks ma o ebrvsturae e4hliiLuelnsy�iarErf on Its Duo sai7iid tt¢aldtlona on , oe adjotniag air w4 tbolltsg Operated by Lws, with the or right to the Lowe or easy of Its subeldiaries to erest�trWuMtsls; apeea4: a plant with ue all etm"ary appurtonaneu, fa* the attraction of gasoline from gaspprodu am Bald land and or. prerntui In the viclnity of said land, tnclud:r; all rights ne*veaary or eonvenlent thereto, togtti:er with tiota•o{wraT passage over, upon and serves, and lor"a and mot. to and from, sold land, for any or all of the above asattttoe�ad pores. ?hit poesesslon by the losses bf'Ultiland & a]i be sole and aaelusivo, excepu g; only that the 2,WoW right to wupy said land or to leass the sane for egrieultursl, hortleul:uml, or pyuing uses, whleh was eha11 be subject to, W with no Interference with, the rights or +per U*u of the Lwseet bereunder. Zhe land which is the sub of this lease is altuaNd in the County of._...._....arinp shale of and is dwaibe3 as foL'ows, to -wit: lot Ei=ht ,aa (l8) ffiock I�2,' C1tr.ef .lCuutiii�ton Boo h# County of C`rartge; 5tato`of. CoIlfernla, die rssordad in lieok j, at Fags Ms Gffltlal Words of Crang! Ccunty, and eontatr►s_t,.� TO RAVE ANQ TO HOLD the same hr a terns oftiar'e from and char the date he. eef�RaiLikI long thereafter as all a pat, or easlrahead gas, or other hydrocarbons eubatanees, or either or sa r1± tt:n Is corulderstion of the promises it 4 hereby mutually Wood u follows, I. IA&wo shall pay Lessor is royalty on oil silo uaL:L:.Lr el 'tits proceeds of all ell produced, moved and said from the imsod p4mises, alter slaking the tuatomary dedueWns fan t>.teper• slurs, water and b. a. at the portod availalt:e maket pesos In the district tit whleh the premises are heated for oil et life avity the day the all Is run Into purchaser's pipe Une se storage Unk, and Wtlentert shall be.ahede by Lit"" en or fore the SM day of each month for accrued royalttea for the preceding oalendu month. At Loesoe's optiea exispdied e not oftener titan snot In any one calendar yelp upor, ^' "�__ :(?1) days' pnvto u rrtttt*Q Della, Liwo shall deliver into Lwssor`& tanks on the leased promises, or at mouth of well to ldpa line dtalguW by Lessor free of ewer. Ussor's royalty oil, provided that Lestet r ity al any silos purchase and take Ussor's royalty oil at acid posted available market prier, No royalty shall be due to the Lower for or on account of oil lost through evaporation, kalt o or o*4r -* prior to the markating of tl•.a same or delivery to L"Wr If royalty ail It being Weer 6't ktnd. 1. Tor all gas produced, saved and fold from said land W Use", the Lesm shaU pay a royalty part of the net proceeds from the use of ouch as, but nothing hmin cantstned shall tw deemed to otitgate the Leon be produce, save, uA or atherwlsa dlspose of gas from sold land. Iror The purpose of having gasoline extracted from gas" duced t: om said land, the lresaee may truuport, or cause W be trassspotted, to a jLWbr:e extraction ant faceted either on acid land or en other lands, all or any portion of such gee where It may be commtng'.ed with gas other Properties. Lessee shall miter such gn moo transported and sueh meter "AdIM together with the resells of oontonl Cats by 590 methods made at approximately regular Intervals, It leapt am everymonth, shall furnish the basis for eomputsf aamounts of RRstaline and residue gas to be credited to this Itaaa, Quwed orconsumed.or lost In the operallow o pplant, shall bt free of charge, and L.esaet s9;eti not behold seeountfiWo to the Lessor for the some or foranyroyt th�he�me� Irewt shall not be required to pay royalty for or on account of any gas used for repretsurtng any ell baarins totmatida which is being produced from by a weU or wel'a on the lewd promisee even though such ropremuru+g Is done ty Issjeetlsg such gee Into wills not situated on the leased prexrtisas. R hs Low sh3V be entitled to gas free of charge from say gas w4i on the listed premixes for all stoves and Ins[de lights in the principal dwelling hourea on said land by making 1:t& own con- nectiont at s point dominated by Loatee, the taktnt and use of said pas to be at the La"op' a sole risk and expense at all timer. 1. Anycnsinghud gasoline entreated from gas produced from said Innd shall, at the option of the lessee, ate returned to the o:l produced thewrorn and &hall be treated so a part th*rooh otherwise the Lost" shall pay to the Lessor to royalty. for much oxtrnctad guallne ths7ogttil of the net proceeds of the sale thereat after deducting transportstion and extraction costs, or of the l.esseo'e portion thereat If oxtrnctad on is royalty basis. If there shall be no avatlaWe market and/or no public or oper. market price for the gssollno at the place of extraction, then the Lessee &hall be enittiod to sell and/or dispose of all the Gstallne for the beat price and on the best terms obtainable. but in s►o ease shall settlement of royalty be at a less price than that obtained by th Lessee for Its portion of the gasoline. 4. The Lessee aholI not be required to account to the Lessor for, or pay royalty on. all. sae or water produced by the ' Lesat@ from said land and used by It in Its Operations htrcundor. Out it may uac such oil, ens and water free of charge. :..C.'Oxlrte *,%-�rdththr. w :•f • • .sea • of the torn hews If%ee�-'Nstee.has.taoi.we rntDfare soca- e �,'r Jtii:oasan.sl a ssO _lt.'�ttftiited t >* *k++�l►sti+r►.j►rsvid-I e J yB9,12t�107 FIRST A"=RICAY TO 3� - «-.......«.. __....... ' Via•. yeeMMlliaaYta/ ` fl The L*stes agrees to Commode drill [nd o retlotta on, aid land wlthln hom the data here- `` of wwi.ea tl� and to prosecute the some with reseeaable dill once until all or gas is d In paying guartllies. or to ■ da at whkh further drtllint ' would, In the judgment of thee, be unproAtable; or It may at in time within raid period IermLuu this lase and surrender said land as har,tinsltcr provided. No lrea.lad covenant AZ be, To Into this I" reQuttittg the Iwataa to &M or to sondriue drilling on said land, or fixing the rreanue of diligaaea therefor. The Lowe may elect motto oosturienoe or prosecute the drilling of a will on sold land as !lava provided, and thereupon this loose shall terminsto. tide �b well drilled! the .! rai In ..,..«.»..._,,,,,,,,.,,, („-_) months after t+ti��e►' r a dotunart of t well, eommanca an said land drat lot; a aeeatta welLiad-Jaai♦ j asotute the same with rsaronabla d e until ail ar gat Is found in paying quontitiea or illcd to a depth at Which further drUtin would. udgmcnt rt the Ustee, be un rgjilal>k i`ili estes shall In ]into ma Its Operations until Z or gas rag gttanlltles Is ,-b�rY> lot slwayt to the terms And eorlditlons horlof and wl vtleps w t • ;•eeodMq-tt• IYxcept as be41n otherwise provided, it is agreed that the Lease shall doll such wolfs and operate each eoarpleted *I well with reasonable d14.nco and In swrdwee wtth good all field practice so long as such wall; shall produce all In paying quantities white this lease Is In farce as to the portlan of said land on wtiich such well or wells are oltusted; but its conformity with any reasonable conservation, or curtailment pro• =run Affeeting the dcfllint aE walla ar the produe![an of all 0!1 and/or ps *ram as'.d land, which the Lessee may either voluntarily or by order a any aulhorlted governmental &gene subocr►bo to or be subject to. Vrl1WtR and yroduting operstions hereunder may also be suspended whits the price offered geneWly_to produeers In tote '-e vlef ty for oli of the ,qvanity pvoducid Iran slid land la :�;^. - t • • , j.�,) tents or" per •barrel at the we'd, of whta there h Inc Avi llable market for the same at the well. •9. If the'Lassee shall complete a well or wells cis alit land which shall fail to produce all In paying quantities but which produces as In ess paying quantities, the Lee, Lhall either sell so muds of sold gas as It may be able to Aod a nwket for, and pay, the r the royall�yy provided herein on the volume of gas me sold, at u Laee may, if it so elects, surpend the operation at such its wall at wails from time to niche :nit daring the period of such suspsrWon pay or tender to the Lessor as rental».........,.....:.;:s_::_....... j.. » .............-.In advance. a:tov�.�taitaj *:�,:=: � �.�::.i:.:_�..L's �'.�' :•') pamon for so much of the acreage them held under this lean, such rental to continue until prodtte operations are re- sumed and royalties Are paid to the Lwssar for gas sold As above provided. It Is further undernad ood ssgrW that if the L.aaeaae shall complete a well which shall fall to prudues oil in paying quantities, but which produces g*e in ppoeybig a�tan- Ittles. It shall net be obllr:ed to conduct any further drilling operations on sold land (except the drltlins of oifeet weds u hereinafter prcvldod) unless end until. In its judgment, the drilling of such addltlanal wells under the provialon of this lease Is warranted ir. view of existing or anticipated ntcrket tt:qulremonu. 10. If it shmutd hereafter appear that the Lesser at the tlino of making this leas# owns a last Interest In the Wised land than the fco &triple oslatc or the vnilre Interest In the all and got under said land, then the rentals and royalties accruing hereunder shalt ba gstd to tht Uswr In the peoportionvInkh his lntierat bears to chi entlm fee simple mats or to the *nitro estate In Bald oll and gas. S IL There is hereby exprouly reserved. to the Leuair. and as well to Ilse Letsee, tha rlgglst and pprivilege to convey,trans- cr or +sly In whale or In part Its Interest itLtilti tier Ira the leased premises &-in the oll•lltdj"asVih stir tea, ucr thc!re ta- butlltlic i.essar i`1+nlliall or lrnh'(cr any �nrl oryyaaru of the lemed prom tilts or any Intemu In tl�� r" and/or as under any part or parts thereof the Lessee's drilling obliotlons shall not thereby be altered. Incrcated or en- larged, gut the L ouce may continuo to operate the loosed promises and pay and settle rants and royalttes at an entirety. J ' O .. , -- - _..---:thA"1U3"M*4" land at tl+c Itnao braeeJ • lerisa and oft or t;ata is pr aced tharalrom In poytnf quantltle .. I�ly eortplewit, end l we shall opersttand market the oil or wtiq produced therelram. en V n oet such wall lay tho commenct+nent ngoperatinnq w•itl;tn ninety ye after It ass a+tp tat a product an , ran rush will is to pAyiti•tic-t rand tluat tharntxr tin pprt-ttucing and trtarkcting oil or Sae therefrom. or Zyoaz sli- atTtct wCII or wells shall W cortptdored as other w lls rcaired to heri lcl a.t 11. 77te otillxaUuns of the Lespet- horoundpr AWI be suspended whllo the Lapsee is prevented from comp! InR there. with. In whole ar in pnet. by glrikrp. lockouts, actions of this el -meet t. necidents. rules anti r�uiptlnne at any irvdorsl, 8tata. h1tinleipal or otht•r xatvernmental sagenry, or othar maitcri or c,aaklitione hcyand the ennt ral of the Lrgecl, whether siml:ar s to flip metiers or conditions herein spt•driicnlly eruincrated or not. s la. The Lcvur A.-Illpty rill tnrpA an IN Itnprn%%-meats and all taxes ran Ito oil ptnred on tht based premiers en the Aritt 3k•ndny of March In ench re.1r, and of thu tnxem leciod and amss d ahninst the petroleum .mineral rights. Lr•por ngreem la pny.111 taxes levied and arecsw-d ncninpt the land us such And +i;' of the loge$ levied and ipp mod ngntrt%t Vic potrolt•um mineral rights. In the event the State, tr'niicd States or any munl. elpnlity levlea a license•, leversnco, production or other tax on tho oil prudund hereunder. or on the Lesstc s rl;ht to apex - ate, then trod Its that event the Lepsco shall pay of Amid tar and Lessor shall a • ; . p 3 : of enld Ina. , #-'11s�Lt�pccrrtgrct'tTt+rrttrzi�tt1-L—)%-calm-trr lmdw-tin )••fee..1timiow e!4rfinglw"14r4.•r0 *4%, 4it-VCIt 1 ens*.-+.t.1 M.tw.}>~Lim •wti+ldrud. 10.'Tho Leila- it way as all rpa,nnniale llme-t cxa-nino Auld land, the wt.rk 6-no and 1n pregrrta lhvrwtn, and the pn-duc- ' lion iharrt•frutu. and nut} in+pect the li--t-ks kept by the l evv.• In r.lal'.0n to lltr producti-an It++ati wild Innd. to n%mrtntat the productlan and thu nanuunl rare•d an-1 told 0wrefrvtm 7l,c L.a•&ryo aitreem, ran written realueat. to furnlrh to the L e wr topics of lot q of till wi-IN dril'.cd by the Lcs-ims nn paid land. 1 j. All the litiar ilperft+rntpd and n,nterial 14 be furnished its the n`.•rtlit+r.q „f t ;j.•c hereunder shalt bo at thv colt and ex eisto.v. ��,;+,• l+.•e. Ind the L.cp--•tr ttaall not he ahnngenWe with. a-r li:abla way part t> crr�f, and the L#wwo rlu,ll pnF,•rt parart5iid a;;,tinst hime of ueery character arl.init from itg np,•ratinns thereon. 2'09 FIRST AMERICAN i0 ' � .�=�iioaerdleee of an,TLhina to ti:e'eca�,rarr or ott�erwiee heroin con — At �• :�'t•£�� 'Lamed, it a a;reed tt,eL n r or Cr, u a e f tl:e lands he c �.,e3 e1:s21 be aeC by the Lessee for Rnr aee *..steatver. - .i M= r•ij� fir-�'4% ..?+ • -' , " . w� • ... • 1 ar - p a :1 A. ' P. 5 B 03 12:09 FIRST POCRIMO TO Ituitror 7the nOas; szor:doi4 jrant'to' t 41�LO54ei. right after one 'to well Jr-ss.baon -bottome , urder.-Lesior's property drift'through L:7- Sande .hereby demised -in order Ao produea oils' gas, .and/or other hydrocarbon substances from lands other than the lands hereby demised, and the L4&846 shall P47 unto Lessor, as royalty o such olipgas, or casinghoad &;asolins respectively , so produced from said other lands, two per cent (2%1 of the proceeds thereof, which royalty shall to .payable In the same rAnnor end subject to - the same pro4isiona as are made for Payment of royalty an oil, gas; or aaeinghead gasollnes,' respectively, whlch may be produced from the herein demised promises, and Lassor'shall pay her proportionate part of the Petrolount mineral rights taxes'and other taxes an such production at such substances, as are prodlical from the herein demised pr#mloss. fA t i2: 0 FITRST f�h1E tt±AN Tprt of the l.Gawr theLetsce sgnes to 1my ail Flpo l per which it coriatruefa ��� cult!- - kateu 71v,e>✓e, oeiow W2 aspen, and upon atmo l-lar ttquert agates to !once • , Gamy holes or other nruvatloru to safe$-jsrd livestock on sal' d. I 19. elite Leil�tr 11 have lh r1 t at tiny titres to ?Howe shoe!! r.ld 11fii all machinery, flee. Plpi+. ea+ingo p+rmpir stations and athGryropor 3 m ro�cm`enb�elartll ng ar uroislted rile Lrsxs,-pro�r bd that such rernoval shah 1—be-comahl4wlthln a aaensblG ti�nR glt �termErutkan o! thy jsr�eh�,euee atrves after terniirutl`«►�fF+fa�ias+ is All 11 lief" i—r tl ^- a. rump es m o excava ant net c FY t� —20. ray—,Tly ell q yabr#Tn ea., e may deduct therefrom a proportionau port of the a tt of treating urn:arch. snlablo oil produced from enid prentises to tinder same marrhantaVe. In the event such oil is not treated an the leased prsmLme!i, Ussur's cash royalty shall also bears 6-3rreRpundLag roportionate part fit the cote of transporting the oil to the treating plant. hooting heroin contained shaft be construed as obligating Lessca to treal oil produced from the harem des- cribod premises:. If Iw•swir shall elect to receive royalty oil In kind. such royalty oil s.'tall b@ of the same quality L dent removed1rum the leasod premises for Lessee's own account. and if Leswe's own oil shall ba treated before such removal. Los,wt a oil will be treated therewith before delivery to Lessor and Lessor in such @vent will say a proportfanata pan of the told of iTealment. 21. Upon the violation of any of the terns or conditions of this !case by the Leave@ and the Isl:ure to begin to rcm- ady the soma within .:.. after wrltcon notice from the Lemor so to do, then+ at the option of the Lesson thls leaso &hall forthwith tvata and terminate, and all rights of the Losaa In and to Geld land be at an end, save and excepting ( ) ee:es suiisund!nx each well producing or bulnq drilled and In respect to which Lesser shall not be In default, and Rnv ing and excepting rights -of -way rlvcc=7 for URscv's apernliuns, provided, however, that the Lessas may at any time after such default, and upon payinant of the sum of .. , .4 ....- _() Dalian to the Lemor am nrd for fixeJ and liquidated damages quitclaim to the Lessor all of the right, tltlo and interest of Leant: in and to the leasod lands In respect to which It has mmdr dafautt, and thereupon all rights and oblljalions of the parties hereto one to the otter %hall (hereupon cease and terminate as to the prem.1som quitclaimed. 22. All royalties and rents peyabla In money horaund.-r $stay be paid to the Lessor by mailing or daliverinr a check therefor to lesscr.or. dasignatad . ., - .•.Hank �-4;c to= -Beach...- ita sucecfsora And Assigns, herein dcelgnaied by the Lessor as ftosum7. the Lessor hereby granting to amid deposltary full power and authority on hehxlf of the Ls swr, his liriri, executors, admI.-gstratora, succoisors and assfriu, to collect and recalpt for all sums of money dun and payable from the Uwe to the Lessor hereunder. No change In tits ownership of the land or Minerals cover -id by this Icaxe, and no assignment of rents or royahles shall be binding on the Leueu untJ It has Non furnished with antivtlictury �vrttten evidence cioroof. U Lessor here hyy M'arrants and agrees to d: fund title to the land herein descrlbod, and agrees that the Lraee, at Its opliun. may p•iy and discharge any taxes, mortxmilec or other Bores existing, levied or act: wd on or against the alcove des- cribed innd; and. In tllr avent It excrcimei such oplion. It shall ba subrognird to the rights of any holder or holders thertof and may reimburse Itaoll by spplying to LSo dachargc of any such mortgage, tax, or other Jiro, any royalty or rental areruing herotinduh 1.1.-If and whannny all 4roduccd from the drmised premi+cA shall for any reason be unmarketabl@'st the well at the Prlev ment ion;•d in paranrap t 8 hems. the Lessor, a 'rocs in much vivo to take and rmvivo his royalty In kind, and iihould . he foil or rofvw to to do, than ilia Lctima may scli the sane at.thc bast price ohtalrublo, but not less than the price which 1110 Lessee may be receiving for Its own oil of the ammo quality. 23. Tlso unrds ".drlllinit operavomot as towd herein stroll Ito held to neon any work or oslual ,tperstlan,t undertaken or commenevel in Ilbt►d filth hir the+ plirpow of enrrying out any of the right?, pncil"ev or.dutic•R sit the f.es■n• under this h•are•, f.dhnV.'(l ditilgt•nll?• allot In slur cuuritu by the conxtruction of a derrick and nihor neit-mviry structures fvr tt:o drilling of an Al or gni well, and by the: actual orwrlttiun of drilling in the ground. 20. On tho expiration ur srnnner lcnninnilvn of thixloaso. Lexace shall quietly and reaceibly surn-rider purrxAtin of thu preml cim to I cx+ir and dulitt•r Id him a tined and sunieient quitelaltil derd. and tv fnr n. praclicnhtp toe••r all surtp h•dv!t Sind exca aliom, made by UP -Ave. Defure rt-moving the raxlint !rein on}' ohandorm-d well Lcfgw ?hall mrtify Le an- of the Intentlitll an to del, and If >'.rn++lr within ' ..: (... 1 day%thrn,nftrr ?hall Inform Xo•txee In wrltinx of L," latr'A dvxire too coonvotl Ruch well Inlu a water wvl', ant; for that purpl•ao to retnln And ptirchn.ow- eits:ini. t1wrein, Lessee ?rill lonyv thytt iti ouch n111uun1 of rasinsl ax LrsR,Ir may rt•quiry for said pur;ww. hrnvidkA ru.ls rroetvlure it bit-f ul and will not violate tiny rule or oreler of au}' tiEiielid. cionimiNsi•111 eir authority then harm; jtlrixdicoun In ouch niallum And provided further that Lo:•xirr'p iv to, Lowtt•u (--) per cent of file orlulnnl cost of the e1++ink tin rite KreunJ. 27. Li-tsoc way 1 + lady tisite gttileluim 01L+ In 11.4 untirely ur aA Its purl rd the Acreage +;trrt'red thereby, with the prh•11egoof reialning acresxurroundingeachpn4sclugnrdriTlhs4wAl,and themuronL*wv shall IN- reh•irwd front :ell further uhlluatloltx 11111� d1Ji,vr Ito to the+ urea ski quitclalmed. and nil renialy and drilling rMtl1 %- mt•nl+,hall!x+nalu,ti•tlp1't+rirta. All Inurlxryuhvlai,r•er1?hallrcnsaht I+tllsirct to Ihr• en-•ene•nl+and righe,r.l,f-way hcrt•In• alwvv linividvtt L.r. Exrrpt 11.+w1 hre.viderl. (Lill ri; lit lu the iatxl Phi rult6iinied O.Al n•veirt In Lex•ttr. frtr and efear of all chihnx tot IA -A. tr, vxwrt [lint I.1•a+t5r. !tie want xw+rx or ft4%l;nP:. 01111111 nul drill oil}' well nn the lawl rlultelainitA within { ) foot of ally ¢rncluvintt sir drilling Av!t n'lalncni by lAwm e. US. 1,Lietx hafnw• shall I.• t r al i,e t,+ is porlvular Ixirl Or�Ile 1., �rlimAir Nirt++,f Ihr IvA!r:tj prs•nti+e•t. surh division or ►vveranr.• et 111t• :,W-o!•1t1,11 o4i Brill.- 111111 Cn-:110 H•+l�7.lr�.lp It Yftl { Il1Ct N7.elttl611 Pr 1 /e Mir I,f ltrnralti N911n:•, tri lht' wvvral pirlicowe of lho Tram-d 1r%4:%W%•A ax lhus dtyl.le•d, and tlty hitlder or uwnrr of r1eh rnrh r11r1n ref 4ht Iea�S•dlsw Irl.,e tltlir1•t1.Ia.yu111j1�j31'iliS11t1[� IIQTir�'nrn lt+l! �d���l�� I,1S1t,ItlutSxynri, r llu■ r�.c—lir. Ant aEN 1-i i —o rwcnt uf• hl+jTrNtir$st+t la.•L•a.,-if on•rt,pna•tell -dlhetri,aTi igToerr•--Srhalllot•toneirut•di'tRuT .'sir uiullTdy•11;driEnig or rental tdsli_1p .en+, :vuE Itr•vle4+! further Ih:,t 11hS t++tonic net u:rni of thv Jrlllitt- ,gwrmiona and the (trie* culinn rI!rrt+.f, na pros. I .'IrL•rl III I+eM1lU+a1•l1 rix I•• re+•f. vidwr by Ill,• 1. -w-vo e,r nn. fir-h.-m L+lirre!lifel, r, 011i111 lift-11M1 1114• 15,11". I,a:1 wh.•ie•, i I. 11- t.:Pl :,It ltA fi•nt:•. L+•11d Il I•+Ii+ atNl titteli;lli+ell■ 3/111111 cxl••ntl 1.. $still Ix• blitilin t ujum 11w hvirA, r%ccuwtA, mI.t,io-.Wral..Ir. urns:ter y rlitll•f4.N noel a1•.iwi.•i lot the Irartiv., llrrL'$t. ,In. My l:e•tive fr.nn tit.• l t•►.nr 1•e dw I..vm-i• Irlsft Is,• !lived by rvildirig too. Sr:ru,• by rt ri5lrn+) wail ndtlr%.m d w the } .. .. ... .. sees.. sees.. arse! a1:}' 11e•1ieV fr••n Ihr+ lAt+yell 1.1 Ihr 1..••.nr 11tt1•t 1n• ti;:L•1•11 1+)' 1r•31iliny; • Ihr?;:ae• 6}' It'111xtere•d tnidl. adoln•e!.1+1 t•, the l.t•rx.,r M A.'. : ' , . {• : 1 r. r ?sees 3 �� '•' �� 1\ WITNUSS 11 (CHIMP, If;-- le-r:i, 1wrt•I.e h:1yr• La.1+•+! tlt: Ift:V01117011 ire 1•L• Jul}• 4*.1tt•1•u!1+E .1.41f ihr dale lint here-lawk t'e• wrlifen. . Will.%K14S 1, f.E �tJ • ��.-Licit/.. f' . ���-- tti_ ACIt o.r•. t� '— Ar'i�RICAI`I T .'} -•'•• _— ;. '::i =•�� r. r jFcS7 ;� ':ia.I•, : ,,;. ,•:= 1:11r30 31 tail Mn �'Li��• r' !!a; �' 1�4t' ': r-•:r, �Y���. ,' Jbt1411.1.11 :,'. NOTICE OF LEASE ,..r KNOW ALL MEN MY THESE PAESS M.- R04M. P.MyXI, AND CPM AO. a •A LIMITED FAATM4.1aPr 1"YA based, let and demutd, and by th,fe presant, de !ease• let and demist untu SIGNAL OIL AND -GAS COMPANY, ae+rordia5 tv ih■ terme and eendldone-af chat certain !rifted lnauun,ear, made and catered into on the -,ifarQh .., 1955 . by and beturers cAT=j ZOtOM% BAA.hWo AND CRM Co,a A LIMITED PA.RT.NWEIP theaain sad herein desioneted L,awr. add uid SIGNAL. OIL AND GAS WhIPANY, therei„ end hrrein dedanated Les,e,, wherrla and trhar,by Letwr Itasca, la and demiurd fair the teneldet,tien and for the Itrtn add upon %i f tonne and ecndLiehi Harlin ,pae16e1'a11 of At folla+elnS drstrbtd prnpeety tifuee,. lyinb and being In tte Cu,tnfy a{�_._ -. _. �' e • ..5uu of Ca1lfomia, and more p+rrieulerly dtateibed at folio". w-Wit; Y-�_•i'�'..4:�i.:a�.i•Y`�x'aj�:.'4.':!i' "•r.. .`.Naar•. r-•.l.•. •t�-.ar •.• - .:...: .• . "'`�Iibt''•SB,`.�IaaY'3,C2�rEritintaa.�eti�ti.Toratii;:'ils the .City of 11lmt1>Agt6rs;8eaettis -aa-De>» map .reaordidU>s '-Book ,3, Page .'36., ;. ::;,• `.�.:,Y kSAof3fAaiena iterE]teaotda�ia�tl>�Mattla_a'.�os' iLt�e:~C6=ty-:Recorder �` a '' ;±~;rfpt"Oi`Iwge":Cotast ,�F0 lterala:'�;'(T e`ittrlAbi Abt tttion -of-the, -to bi drilled .and batta ed=def said •hot •18 trill be an Lot 1901 . r µ./ I t Refer Into to Hid inatruntent h WiliIt asadr, and of rs by refereute made a pail },•reef. 11 WITNESS VI WREOF• ehe Partin hereto have eeetuted tiva Notice of 1.e.ue AI lath March ,to55 der of �[ lt, Ct":: jI•I 'I{'ylrt.'k trtti![•:r ntz- :art.• Cr . CmAut Co. Ptneyahip C i � r.Ca isr M,+f�Mneral Partr 8]/1 r !<'a 11 all al Pertaer 7S';' o er f oeararal Parr. 7 11r a r r ¢'�,? lu ii+rteral Parer. Molitor �. Baraaye,�rt A. 1i(iVAi, l�l . iAti f11 RECORDED ArAEQVISTOr ' tr�a+r t rit µ,.srwe:t re •• ' R,• GV ` IL APR 1.1 195: a1T.....•..... MMe fAit i.It,.M r ' • Aw,sanf iwa..n OefrCfAL tettbfs0� �e • d dPIr►,GFCOUNTY CA61FORN1a p n•e.r 4 r IFi h VY A i{YID., • + yam► �1�+ r y �IMR. F11Z$'f .th1EIIC TO P.8 %{{ i'ti ;in`i L:Lh.{F. i. •'l j•. _�.1•'rr -�'.: �. LjS•r),_(tia „4,w•r ..1 ..• :� not A U-hMx ,SY •"us n ashen . • � + � /� � �•.y� /� � �El� � �wl� /�r� . -w�1 �•ryr!'� �Y7 1 • /�/�� � dry /y � yow6rA.i X';CA•� • Ma.n. for O ii N MW ='K•r ANTS' A COVIM TICF; That C==# NOWMI, BARM b Citis, A tATi'7iL WW1 CATHMj BARM & C ,p Al PAlilyVtsi ZP, An JAM OIL OW01a A lAl3•IlWK P se tint Party , mad aYAKOARO O:L CAIFAKY Cr CAUPMIA. VZATEua CKPAZIONG, 11eC., a eorpontlea, al ameosd party, did ester late a eeatraat doted the day _ of Ootobsr • 19 aAI , mderels and *haroby the said first party , 414 8e11. Pad spit to da=leer to the Geld second party the quaatity of ell to wil eantnat "taifled. Of tit Had and eualit•r therein met forth. booA tat terwa and cooditlorts tneraln A•% rcrth, wW darlas the period thsrela proelced, and for the prtas therela flzod, from the property IlUmte In the "UnAep BMeh CH rial4. Gimp County, California, C f Aired io in Block 116 or Arrttinstan 80e4ht Also Vj�\ �YiIM R Iwo o t 1 "'QErti�QUrdr*OawLAA]ry`?ilf tC`."'¢t�. i• Alrlua lesal�m ea WA 9 and 10 in 9zoolc 216 of Kaatirgtaa lzt Vlr"ieh*.,L�.u:t 'IAt is SA4 Block = of R=Unrtsa 8aaoh• 1s w�wwt!.ww..�n i• 1 . em* Leaoet• TWO X ,,,t At]1 iSt at Lab 17 and at sMoakot 19 La Moak of ���"���"�+•;,�`, h«•a.aww+',...,.,.e•}r►•wr+•�++.ww.o.�.+a�,w•„rs,.ar.a • a :Ir6t 20 in X44 ZQl of ilmuncta:q B4a0,`lt % t : •.: ftt3'".�ILtL :V3 XAS -37 .and .19 , .-*f . txititsttca •EG+iolza c✓ , rNr•-•" : f ;: and the:Ortlt•st'br .. , ...:..+:• ii�d>s1'"'�Iia"�11''I•aia�t�d'�a >•!: -'•~''�+�r+�r"yi'!.�\�-il��4•'��ti'i'•'I"'l.�•'r�i �:;;'a.Ei 7j•w`•:cf'f�R!:L�-.++,rt�. <'1+�:i.!!�.i-r•.�. 61 7 roe+ :Csta o�•jl tl.iyta7 ; Coaaf7,+bf.t�s3lfer A 1"otded in,3cisk -3i 'lade �6 of ItiadaLtaaapy pia ,tls4'.Z`!!S o� "bL fro Gatirity -• ' Xad•7rd.r � laid'Oaaatr. ' • • ;',: 1 ! ' Leasat-Th/"laitOr 5 Para of the Wester Ij Ur" 'or thi doun1h.of :.Co�atey,�+ Caliiayt� is.�►.:,Y+� �.." s*,�'` t.., IN' M14M "=Or, as of th• t`} r der of t�°c'�dr'� , •10 stint . party to Maid moetratt heretaasore referred to has berm -%to Pat k hand AM deal and the aeaon4 party to seed contract W eausid its eorporatt tau to be hereunto s1swd sAd Its smonts Gael to be lortunto affixed by its proper offiaers, mhe are thareunto duly suthorlsed. M • ITAADARO OIL COWARY or CAt,IruxtA. . 1241111 OFIRA R, ImC. • b s IF • Assistant asantary, ' aa•x+OtlkeitCo,t•17i . •r •+r+.,w•r.w�+i•wr/•••��.wi•.V w•r.�•r+.• w...� M.a.N 4Mwwr.WMM. M•wrV .r.• � i���a�_ _r•/• {i F Et '89 12:1 �Fn %S� AMERI�AN 70 r?= Qy C,X.MCI Pa9 •� • FL ItZl1 .y .' ter. +r• •'� r'., i•• ••J: •r•',F�.,2�8i��iai, • �'. •3 •yr, ,' ••'_r'�+•'R .•'�•' w ` m >tKA Aby ?M9 PAC>1CM:,. i. ;' s:. -. r'.'r+s••••' a_ +•. r +� s t. �%d i 1 X.' CAM w AM-2 for 0=1 FM 01L OC1ffr A CaUOUT10f * ,• `��� 1�� ar, �".-�F�.•{�'w��. , vows &q7iL! a 0=, A PAirMLRaMP} CA.Fmi, bARt13! i CRis {�• • "'��` r 'r = A PAR W "D SAAlta GLL CWAXT, A PgC:li�71sHLP W flat party / and rtiAf�OAJtD Gil. CCWMY Or CALIPY111r1A -ta , iHC., �;?'..Sin .•� +ter; I i , . YL1W atclu=:t�lla ��•; t�.•. ,� ; Oamaistlon, 44 seoacd patty, d14 liter Into ■:nontratt�dated Us do of i:Q:'Obo!' .:d 60 / rASnIA And •YarrbY the aa11 firm' t aartr * 4t4 ieit •s �•L s'S :�'��'`�._ "##11 lad -a4na to deltrAr to the said smcend 14rty the quantity Of 1111 1i said contract apfcaled, of the !ill's and auallt7 therein mat forth, Upon.Ue toras aid eoadltloe• **+• 066 •—•34 .• irJ• .�. ".: r. F.::I �•�ati Irt ��' r .•! - t •.:.:+,L•. 4%+. r a •. r Y� �' S{ °.. �i . tiY_ '+�i �,i�+�.} „5�w����.i1�jhti � • ' r : :ti'. �i',�:'='73'' .�•• y!� � �'i: si: '.r'ta .•• ifir• � •� '1. .•�.. y:_1 t4 J�yy,��'L9 �'':'r - � � .. w rrs .:r!'•'s . 'a.4 , ' .,,•r:. -. ';,s•` �..::,-,'r�-� iJ-A �..yr� p Z ti* r r.r �• . a=' •y �;'�'s�y� :� .: . � �-'', j-�• + �.:+.� r': cs. �;%y. �i'';:,:F� i.r.�ap� G � : F r F:' •3 �: ?;' .•+� 4. •1E of a�, ,yA:r4}r`•' - 1 , ��t�.= xi:, �"1'!?� ti:�?'• } .. r.'".•` ti'.,L'. . �' par•' S - . ��' ;r�7� •� ¢Y' ('J:�"� �}! • . ' . �, � • .,.� 1. ...i. , � , � +fir • • .. .. � ! ..,,j •x ', %y.� era: .!.J S' T`"✓.'u f`�/-~I `j ;x�;�•`:,e. _ `' L► :3 x ITAti a c�owta, .�..lmmofnx365� �' M ^ •on OCTOMM K r�� r`!?`• Z^} xli`� �•. •1 btu+rs Ow v"&Pd1,►r4 A Yon FaTla in Info fw Saki FZ)v and Side.PM+o^'Y f ' �L•�. •.ice : 1e=1 . s�r4•-r� i. , J�' i..�um _ - so r �Y t J�%}y r'•,'.�� a �� �,]� k {; •' 'y' f Y �..� M N " Perm- "M al m- IR/�WM1Wi td Lke withim • , . rasm+Jted i11t rams. E. •��� Sri. 1'.�..i �, lN�•t i Y:.aj.: r�fL"v W # �W ����� kL Aiwr. tir�a �'C*+.,.� f � �sn�wr►maeMa+n �m11 1•+`L /Nm a/i••RJM. a•e/ Mara a4 e.wMuwm Sari•.. 1M,.Ov 3. 1 Sd 3 1 3f �• + 'i!� a�rf7� •tom: J•!.� � `�l' i•;-.S.d � � 12:15 FMT'F;CRY&i;—Tb 1970G5 P. 10 'City and County of On ri On'thim'-fak.9k day or'. LA 14 -the 'rear of our -Lord'Ou* Thou4sad Nine 2u;drera;l 6W4 be cot Wacni Lee Kelly, a potarr Pwbllo is and for said City Lad County and State, r*j1d1qjth4jji comi4siczed and knov'A to MA to be 2's!3.'* Airf"11 14 %S.Mt-w irr'71, P'10.97i. W of 'W�; the C,Fq. dear ':wiigi Faw-ted -rwm%%the withir. 1j3GtrUX44tp 644 ILX40 KUVU to W U to the joraga(s) who ax4aut#d It 0.'% behalf of U4 mild Corimrstion therein armed, and sekwvlqW to we that suc*i Coryontlen mixecutol the $&NO is VITMB WWZCr, I have here -,alto mot my hind and affixed by CM4181 SCSI# in the Cj1;Y &a& County and &%IL%@ Lforepald the day and year in U.Js certificate above Vrittan. lotary PatLtz An and C-.r &&&I City 4LMd*. County of Snit nwicimcap State of CA11fornia. 31 Resint"n AT M FRANCISCO. U-IFUU. UJMOND SF( KFUY '43561 FW384. R "ORO' FP AT MROL ft19QU9*T.0F -VALIP61vii 6 CRAJ4 at ccUN ry,. cAu C� FA M7%; Liz; Alf., 39 12:16 FIRST AMERI�{ TO.' - :r !",,;:y ',; .i ... • ' '. y • •� P.11 • ,i.. , •ti''••;�! LI �.�•:'� .!•••w•/}• .�,,\y;'��r'.ft�'•' pti:�.,t.�\ttt�.�l.r• . t•'••.'•''a. •. ••• ':. •J•r'rrti.P r�•t•lM•�•frj�4 i,'•i,YyS+. f.'.'.y�'•.. ''•••'• •. ..1 •• • •` •,\..�.r-wr�w� r�w.rri..r+�wwa�Lti+�•ri.w•.•51.��-.w....w.wi��-`- - wr.ryr:�� .Ri , • •5 .4..25VQ ,L+• ' ,• • •' ,exacs679 E�LL�10 1? dated Me W of,rab:oa+719L br am4 tisi ► 3. Win m kaat ter OClm mit Onf Caa=• a aerparatianj A Cil + IV=p Ut= t C=$ a parinarahl*) CllTWs SO= li Cam• a puAnt"Up) mi BUM Mt, Cfl: XT, Rrtne parships as Ss11sr, mA84Jp AIM . i W. OwAa or cj=0Fglis VEMM areal lemss Wel a aorpariUaas as bgsrs Tw, Ids CUT148 t. Calhar idoat for 0@4AA moat ca Qospaaxs a • . mi4alatiaaj CAW, Ugems aamoswi'Crras a p xUarsull Cathari 8•rdie � C.mp • partaar%h1p j .aad aabrr Cdi Camp a parWorsbips antsrad Cato a • rorWA srndi oil parohwa aontrsat cedar Us data qt Cbtabar �� t460i a ::. sotias at Wah troll r.sord.4 yoY her fa I.9W In book 'f$U at We •3Us 16 �' t!!`io3a..ltsberda;`,4ras'Ca�iittr C�7itsrnia ti`iteia'fa tiiS;pr+sprrt� attsatad "• : thmr r tree lasaribad salollow " i,i. ••ti.: •'.dvt:'•�N Y't.•`•1+::4.,•vt" r' "a•: •i It, f•.'YR.�.t�.:t.'.ti' s �.7'.`.i- vJ� 7`-''.:••t•.q?K-{.f'•r+t•.i .. '1 'AT.aa Si+ldlliad tirail•~8ia3r Cil -a QGNasa �7.41 .' • r act i ssl.lOta p.aAd'ZO la alsak I" at ' - •�-:�.�at:r• 00 �MYA♦ ;:.; .' ,:: ` ty�. : •�• '"•'..T.' .i•i . •". •• ,Ir` �y��.�� • .� '„ _ lC� of �m4:r,1''laet faa�b• • . ' • '�' • . , • �. •7{• � � ' • ', �~ ..�.. _ �i` ae---� � —ram+ ' ari of .Lab 13 � � at Lat•I9 in D3•seSc SG� at . r.•e...,.r-.r.r'T+tat�!.wr\t..r/e+rs�rw Oak ;*l of ltaat4f'.4a tsashe ' IA the Citr if RMUl �sr up rsoordsd Lt kok ! Comtr 344ordar 4f • 1 I .i r' s .. ` hodastim fray a'Qlr elm NvAUm*!l on4labso aft"sr Al eat "or n0 Lash to ba la3STsrd tra.a oeaeim shSpp pUtt4 iesitad eet the RYaA r+a' Uss4• Prodnat7isn trill : sat be saaadaadad• separals Ua a v to ba ad Y the suresstiod of the prodaat3on.frm fob Yaua• / �: M a3Aofc tit ,ER Sa �(�4 tta�Z a assahs Cosh of Ormlop 8tats of CaUforaia Is page 31 at Mass3laaaow Xapa# In 06 offi.ss •` T H 03 '89 }2:17 FIRST AMERICAN T ... III l. ,,•• .: �' -� � J '�''.::•• •, ��,J� .� lundomt to Oantrut 1 •' ' ♦ s. ijsat VKF=s it is the desire of the puttee ku*w to aasad 44" aantrtet ; "!� "+ter': rdih twpoit to said prepsrtr dseasdptias, r• fr.' r}' : Ls .'i¢ 4•��T+�d �O~�Q I`^'+ Tiit vciz, it ia•asrsid that the real R'ayrr47 dstorigtlaa U l T- �T "• •3't'r'��sti' said *made oil purohise untraet of Ooteber'3, IW is hereby uaeeded to x•..•, :z•. y� .:f:. ii: real as f4u"It :�.►:T�;:'' �,;,"-���ti,�' t e 9 and 10 Stt plonk U6 of Huntladtm settle.. lUo Tideland itsUp ststs ',:�� :•�'�, �,�: .; MI & Ou Lease tJ.O. 987a3a burfsie leas as lets 9 and 10 is ri,esk ll6 �.�;Vol ��r dt il�oitajioa Ssuh. L'�.'�•.'-,ri��,"� �.' • ' M t ' /•.1 gam+' , `. • • •. . � �i-y!: yy. �f•i'��+ rl"' i * ... S+Op ef• [ni34ii�t aaha '.. _ • j .s v. 42 • a i l at sat 1 s:1 of lot 19 l � ck 3M of nmtlutton Imhe 1 MIX of Ehntsastaa paseisa { • � �: � .. i'4• _'�,:� ,•rj •:.t• • 'tom r 3: :,5 . • � �l � � . 'h.a ertfi•3� !et.s:et'•13 !A`9Lea'�c i �Ox_,i�l�_ ILj�Cl_:BMO�I..a �0 rt3,I, . ,,;�•�.� vvv At ed.an`this yl F='epirtr. �Gted as taa±c nits . a.�r.,, { u; 4 . . . 1 `~ , : y�i + %,il 3a tha0itf of muctinitan 2446i:OoimtT,R .. ems•, dtaea -Oaxif a ti ,�. �' �'f ;` z as per W rtooidtd U Jook 31 last 36 of inspj73daoaa �` !.a tins ' - '`'��;,,�' of ihttT lteaerdp' b! eai4 Cetmir.7.4 . • .. ,. TWO "Itepir 3 &area of the Wolter ?s pro d9 the k*t% %A of the )M VJ , s` J lxat the n W4 ez 604tioa Us Sfd+ ,.6Ahixj Ozaals O mtra Uufaraia. . E, G.. e / i MAlA M ,�,* ;• '; ri{4 ' Trodaotiea fray sOlriske, ale i ltiehou i hale' Nl sad rrasar 14 I Lanes is be dilirirsd a gamut slope plat toasted, an the Kan uWans hadwetten net'be sooiayLr¢. its tankage %o be pr+rid.d for c ? �• ' `ot� ' : the eetreptica of a probstioa free sal$ As horda waded, said eaotraat of baaabor 3, 11�0 i• berobi ratified -0 t►.,;•• ! ?s Iffsoti1e tatet pebrwrr 1, 19dt ' ���~ !I•. 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'ar• •,-M :'1r1 !'.f;: •sL If N: .'5,.:�'!, •�=.f� +i_ irr_ f• �f ,�1 •y,' r• �� I• �R ".wry �i..'. .� •t ��� `ia if'l. a, Opt rrria M•C.-PlIVI .a f • N1'.'�Olt, ���•'•`.:'t'I� A�d1t>�ri't, pnade teed ilata�ad Iola t31.1QtlidAT at��Lenl;ar_..r..._i 1p...5�_� tiT aed Ir. 1}ff '` r. • �'• MIN .•rr `IAL fJIC\: •' 'Ai : 11w+•�wM r. ��•M••.�wrwwMY•••M�.M•r. y�.�� - rr�Y�•k•M.+_.wry-•�.r.__r••wrwww�.�w�.+--.��.•w+.�w.1r.M•F_•..�+wwM wr�w.l�w^. .� .•_...r___ ,.. _..... _ • �._--.___.�....._...._ _ ........... •..patty of tltt fleet part, Meta styled 47A Party at the arawlel part. fharatn styled "Laease" Wn7Milt*U:'ll,et for AW In ewusL&rSUoel Kra lswfitl of tite United of Alasnica, to iM L.ww pLK mA of other vialuaW madd1cratioaa• the rrrelpt el all of txblaif roaflmwr+rl aed is eonaWetrtiaa of the eoYefianle e;nd eveonsa is beretndwr aonialned by the Lease! to be kept and perfN" ;. „ I.ereor has gad 1vowd, fee ud deerlLed, load by theca 1we" +ee does grant. Ica+e. Ira Ae+d dwnLW unse the Tait SUMMart and aaalm, use UM and Ples pee hereinafter dcairribcd, with the sole tied tlltwdvt e to drM f r produts. extra9t, take turd minave oil, altum and other hydrocarbons (W tracer 4 bw% Aed fo an the saute, vrok vald�durL4 the teem hervinaftol Prortded, ow eot>rtr therewt it ail rleetes for, said astrod Lo ttaftatneet, tsse: rMAlritaltl, ero,ct, p a�ad r • . me+'w lkrtrtflwn all pipe lilies, p=�ird Eelepeplt lines. tanks, Mmuchinery. iadiiirtp sihe -tht t*" eiiay 4WM_ffr set fv ltttal" sad opefillorts•oa said IM4,40 :i. •5 *%w. upon laid aervM. and ktSvs and etrrtll to �rtd (ro-M saidland, for. a be pogi fly by pie free. o(wld t.nd ahaq bs sole W1 exclusive. ex"ptim seed &md or So keen the name for adrlenitwal hortiwltwrl, or grxxlnt + kl >se`iaterfee ogee with, the tgdtw er spetstlona et the Litma hereu ti b-i[ehttete! Ifi'16 County o[...�_..._:M...; fatalula.r�:_.. ._ _._. .. uertir4 air follows, "t. fly or all of Liu abaft anirft Daly dMt the Leaaot•tt uses,ia+hfelt'tfaea shall 1tt rider Tbt }apd ehle,> 'If,a i;Omit IT Coat a: Lot' It" sod al l of Lac clock 102 of Vuntin-1.on tivaeh Truct, vi per ulap t1114-woof tveor.ud lit •.00k •n•. po-14, :ie of Liscallah- actia ;.ails, rvcnrds of Uron+,ie l;ounty, t:liiitotlllo •i J, J� +(� a�1:<>V.Y:t.'L�.rC.1XlLi.:LY7LtYY1C3�1a0aRVaat«>1M�Jri:t .� TO fIMT AND TO RGIED the sartie for a term of. ._..... (+• . I yvara fnrrn and Afar the data hcreoi and w �gi after Ae oil or gas. or erslrlgheiFd 1as, ur it5er Itydrr visNona rulxtanvv% cr either of any of diem. b prodea f - In consldtretta++ of the premised it Is llntby Itsutually altrolid ss fulluwR- • '?;� `s 1. Ussave shall pay L.essar As �ayalty on all the .•%t• he "Ulf ..._. .! 11jivll:lrr .... .•_ pert of Oils proceeds of all oil produced, rovod and raid from We kaaed prrmf.ca, after m4ting the ten+ slur., water and b, a. at the polted avallable market peke In the district th which the promises arc lomltd for oat of Iksi uvily the coy tlto Pull Id run Into purchasers pipet line at stairaga tank, u!d Actilement shall be made tryLAM" an or } ��t1rClore the 15tlr day of carat month for asrrtitd royalties for tits prmilins col"Jair month. At Lessors option excraind ,:• not ofiener than once in arty one ealendnr year upon .... «...'.iJ.. We?j) deyi previous wrttwn note, Leserr `•t atwll drllwtr Ititu I.eFRn!'s tanks nil the Ivved pr. mitap, er of mnutb of w•vll to Ipa Ilnu dtsl;nattd by Le+/ar (r+ee el Beat, I.olt+aor'a royalty oil.l,tr,v 1 ` pulw.11o royalty shall be due to tM r far or on Account of oll lost tbrouylll everration,Ieaki=e OrGiberwtooW {( }trier to Clio marketing of the mme or dollvery to Lcloar If royalty oil Is being taken in kind. +: L For all grip produced, rnvvid and sold from sold land by L euve, the Lorsee l6all fill a.1 royalty the Jua ,,itUanda'�•� Part of the net prae.tid+ from file file sale of aur}t Knit. but notlilnft herein encd ntainph-III ba deemed to obligate the Lesare to prutltace, save, nt•11 or utherw•irtu dlsrsim td gna Imm said land. For the purmow of h+tt•Ina galr,!!na extraetN from gas pre dated (rsim rntd lend, thu 4,jt-%a mu), tranr•1r,rt. ar (auRe In by irnnslxirted. [is d ga-lino uxt.'setlon rllinl Is•eatrd Cuter get 3 paid Innd or tin other hand.. all or A!lv ptrt6un Of etleh SU where It may Ittit atmmltttllcd With gas (ram ethrr progenies• L emee shall Ir.vier such gap air trallatm•rtvd and Sur'S flirter remlinv^ together with the- MAUltp of fp+n1e1+1 te•?% by rerafiniaed 11will.+d,r r+iad•r at alrptr,xUnntcly IVIfular interva'ii. at bast itnty emery hienth. drill furnlph the ba+,le ft+r erm+lwtallon of the anuninta of gritollne end r•eRldue ay its he ert•davrt In thlo kov. Cap tlerd air vnnutnt•d, or In■1 fn the operallorm at any such' pplant. shall lx• f rtr of cllartts. And I.rRRvc Sh MI not be bet.l are• tuntribly to the l w i wr (tor the panto, at for any rtryaltyy thervor:.''? 4-iIA.' shall tad In- ru•ltdrwi tit Itay ro alai• fllr or on account + f any wi. ti-vil (,.r rt-proomirfnL any call+liranng formation . w}t!••It Is Iwing pn•th-vvil fr,lnt by a well or stvl:i ur. the Ivised rra nrl+c+, evi-n tk-ov;h pus'll rnprviouftit bs dunInt e by ectl is rush r::rR Intro wrtl.r not silti.ltt•tl ionthe leaked premisys.'I The IA-t:.otr .bill 1•t rn' 444 fro %.0 fro- "f ch-irxe front an} tar witilit un Ilk- 11 uFt it gs1:11ieK r (ter till ntoveitand Inpide lights. In the rnicilml dtt•t:!I ln^, h+eft+cri ten paid larul 11) Innking his uwn tote., l•..•ttial:s n: a 1• still 6ftivult. A 1•}• l.a r.•e. *v t11kIrg aril u>K• t• Pahl -.vl, I., la+ nl Ow Is'+rtr s rni•+ rbk on•t r•xiiende at ell 11!rfty. ,'f :1. r1:i}• r•--Ia:hv:ul rta..•ilr.1•ex, rarl.•tl (-,-its -.As praduecrl fn+m mitt teal rla.tl. at 6v r•1•t!.•n 1111tr 1A'--\t•t•. ba rt•turnt� t.l ll:q.+ll pri%hl:i-d il-wridr•nn an.I --hall lm Immit,l ae n Mil th.-rt. ?: e•r4:••rtvi•, Iho I+.•+v pl.a'.I 1.1,y fit flat Uixir on rvya'•ty { (i 7 ►111 Is vurN•Ir I! i'•7.a1e11111• IN. A -mill e•• .••••:•• t• part .if 1!:•• n••t li,v»•.•1.11r 4 the ra!o 11:er•••( afar dt+liwing 4+ tr'7rilryr':!:iti•1r1 1nil t:S ns lit•n rm-io,+,r.•( the Gt'•►.r v pirtaen iher'"-( of ••1l:f;u ;r11 u:l .l N.}•la:}' 1:.Uit If IhcR• thlill be no .� dcnil,ti•!r• ttmr,k •l an,l or ti•i midi/le tip ••1r•n tn•rr (et priry far t1:e [rt�.� is ++ r,1 '!:•• t.l !,i trf ••xtrneilt•h. llsrn th'. L. P" thall be t'nlrlt.%l tit n 11 and 'sir \Ilr1 -;e Nf 13 +.0 !:nFaII11Q (.•r VI l.cH prlet- it.=1i .-it Ow l'r•t tt•i mt r•t::ain3�tit, liul irk no ei%-e shall S Jirl(I.::ivn1 a.i hrt•Atl}• i><' ;rt 1 ;a-/r firiat! fl::e.'f 1!:n! ebNllrrd h;• !l.t• 1.t..-r f.•r !;r !r,rdtrn ref tl.r rn.a!3n4t. •1.•Tl:.• 1 w.lti•e %4 l 1!e pr/11iir••,l t•t t4.1+:t?t fn t o la•p.nr fig- ire 1 ip +`.••1�::' ten. �. ~ t nr w•1!rr nri,dtls�•d by thY �(.e..ett frt•nl i:lill 11 ? if o d lit, P in Its i,T roil:onla rreur !••p. 1 .It It !.:•y tt..'v ."Wh rH : 1, nd watcr free Pf ehJrcc. — ------------- Lhervirwo w. •r. •.ta• �... c w.. �., t,-.. ° .~TriI.�L: :Y4.t++4•,4 w. t •` 'r•'4S:1G••A T'� L.ix'�w„�-:a'_�^`,w,.�.-. .' ,''"e-� , r. • r ,yf g 03 ' b9 1 : 2 l `I Rs r t RI CR � Ar4z •4iy`r4�}: yjt;� :err a' , - _r • •`•� 'r��•! l .••?•••�•Ti ':l.l ,` -' a.'Me loaves agrees to commencedr1111nR opt rtt3t►t►e as told land within t data ors • ' �' �` nail;: ~'' of f un!cu the Loss.e ftTu woner Commenced the dr.11ia el an afisae welj an aid land as herelr+ Frovlded) and to ptosecuM r' r"'� :. ' `- "':�c•A tho anme with rtmortabler dlltpancn until oil or gas is lotmd In PnIns quentidox. or to a depth at which further drdliog ':":• "'` :`` d, j rTncnt of rho Lessm be unpr*AtabL-. or It may at any Unit wlt.�ln said period tarminate this loam and ..-.• ._.• would, irttha lid :t ; -: , �iri �� •1�X•:'Five rtrrender said land as herelnatter provided. No bzfe;ied covenant shall be read Into tits loan requlrtng the Levee to drtli or to cnntinlw drilling on said land, or filing the nie;tura of &Ugence therelor. The Leartre may elect not to eomn,enea or arusvriilo the drilling of a awls un said land as above prtTvldtd,and thereupon thEA leasa allall terminate. ; 7. If the Low" +!hall elect to drill on sold land• to aforessid, and oil or ran shall olit be obtained In poyw qusadtles In first W oli dri4d.•tlie Lefuto ahnll, within_ ... (C' ) timpithil after ilto oomptetlon or abandonment of the first w'tdl. centlnvnce ton sold land drilling operations for a second wall, and rhell prtJspcuto the soma with rvasanab!r dtii- Ccnev mail uil ttrgru i>f found In paylult quanthlor" or until tha tl•e111a drilled to a depth at which further drilling would, to ~ the f udl:Inent oil duo L c toev. be unprofitable: and the Lcsnw ahall tit like mnnnrr continue its uperattuns until oll or :as in •;, paying tjigintillus to found, but suhluct n1ways to the umu ind c;mdulan t herml! and with the rights and privileges IQ the t Lei-&m her. -in given. , in-payirtg•gasntiliee•in artty.Iteii oo drilled by the La•.ee on mW land; the Llr.aeo, s J60howipurand "thesu•oerision privileges her•Nn■[tr* ■et forth. shall ounttnue W dr111 addltfoatl was end j • • , i : r "' ; 's 1a liJ►niiti.11tl-rail t•tttdpien of t[w(srrtx&ing whit reftmable dlitgetlee ten evnipiliew the same, until their cull Itave r , :fir t� ' �t+ rxrletl.lrkdzrrrxatt�}.md trrmnttpsrolla Isrri+all !^tlieiutnI wir"p thotth■!.f under this Iftm diridtd by .Wier~• r t. - •.aa�Jt.�9w4welowip-4imiWoo ld rii•of-thrinnd free el�isrth+rdrillit� ebi,glrt;enrproNdrd:'that the Lrwa m+7 arkr t� " or'- ` , aleaoatawltat driililt� wrwlw+►,r tvt�4l+r «re4ni iota petiod riot to taCeed -..t ......, t4,ant}►II fn• ri Ob"4e1 1111a1 +tit• i+w*tl-os is++tn o iaap.o ewdid, it Is Trued Ihst the ' l•t'Iist•C aliall drill rush vvclls andaporate sash rnmplclod rail Irrlt Ta !Ili arcaronab'.a diAYan:a and in arCYrttanco with Rood oil flvld nwilce sit tiring as ouch wells altell pwd•4co all in paYin-1 !)Tiantities ubile this lease is in force as to thepr+nlon of ,• M.:.t.- r. land on which s1J�t well or wells an ailunled; bYt In eenforrnlly with Any reasonable ettit•ervstlon or svrtal4nent pro - paid }train nlTt rtlt> ; the rir!11in� at wet or thv ptwluctittn of itlt aPit and -or pi Iran "Id !aril. vthich the Laws■ may elthat •`+•' • ` :� �` wtluutrlrily ttr In• iorder of any nuthl.rbrrd viectnin:ntnl dg airy ,nib.cribe tot ar b•: subject tn. Drilling atilt gtsrluC1 611t r1IWf,; Ilvrv,;l:der tnnv n!m Iris su--jortmiled whilC the nrih' nlTerrd Itcnlirmlly to nivducern ill the Zaino aiehilty Gar ol! of the �A.illy pn111u1tid Innn sit1d fultd in : Ya 1::; (i.. ) emitter less per barrel at the well. or when there is • ' %°'k +ram �`F %' not avilT01te ntnp:la I ft,r-the rain,; Al %ha Weil. iota~'•i•; '?•-etas:-•••1 A, If Ili.• L1•r«•r r.}t:tll rut»pluly Await or volts r•n raid trend wisleh .lull fall to prudueo oil in raying gilantltlaa bat : ` ••• : +; } •:.rt.,4 , , r►i vh I+x• r1u, i •lion F.I ff:t�'ims qt:anstt!ue, tit• L u+Ices +all Cithvr sr!! w nttich of iratil uas as it ins}' bC Able to find It market i' ..._ t fur. nod pity tit• I.t�s,.I :it[• rltpatty I•roevided herv!n sn ilia volume of ens so itdd. or l+axaee may. if it fib electo. ruaprnd the • • , . s *let r.tli•,n rtf : ut•}i c. 1 well ter tvt•llr in,1n time Ut tlRw and dssTittg Ilia period of such Napenrlon pay or tender tit Ilia Lt soor ; 't . ti':t f '"•;'`' ti ' .'•t Alrental !n advance a sum _.. . ... ..». } egos! to ... i:�_.:Sl "',--:IIa- i•.i. ` eMnaety .'tortot w..t.ch tat•th. neraaim then held undo this IYs,ie, *urn rvniol IocontR+utr until pruducinq o}ttrollutu art rr- • •:+ r' +. surnut.1 and r1}'u1rlS•s are pltid t•, the Lt•sir,or f.,r gna rnld as ab„ va pruL'iduti. I: Is further undaralll.d ;and aRrl'ed that If the I.t•,IYae J.s111I1n ,:t!vh• I, volt Which shall fail t., produce MI in l•ayin%, quamid-vot. hilt Which pr.•tduem Iran in paytne, quan. : ,r ;' ~'.:`• uVe". it Ahnll n•oI Ia• nhiint 11 iue..rtriurt iltiv furdivrtrillinK eKierttti,•n1i on ,cM !and (axeept the drillinu of oiflo t wails so LI it f S. d .• � • • " � r r: • � brttdl:ufn-r pr, • , d t u::!t'•r 1:n,f also!. In it rai•'au•nl. thv' drdlln • 1 •t sash i�itlitiona} Wr9ls under the : •,rlsr►n of tlifs lento �• l .. 1 t%K:Irrall:t'1 In �Et•tt•a,(rx!•IEc'••.rilail•Ilxliadnlark.a F.YIYirtni.:n1A. ;• J; s>• I fl. flit r111allld ! vivufivr olry nr that the L.t•r•ur At the tints of ina:tlnx shix Icase owns A l.-it interest In tliotterw•d land •.. �-a;. '4_;;'� than slit, dlo.:uii G•1•Si:.ivt'r the-6 aura ln4'nst to rho uit nnd;fiu tinrh•r r:,irl land. then the rct:talc and ntyaltivs accruing ;- :. ••-. +•.�if�, .� har,•unrb•rslul:l ! � I]mid 11, flit- L'rnp, ,r In due Im•.rliwi which his Inwr•JaWon on to the cntih• A;* st:r.pte estale or to the ';, t: f.•�,'�.!'t t 1• {•nllre t'11n1alh ie i[11 ;I n•Ul �;1�. a =!:'. ;,�•� f;- 11. 11.t re IV lit•rt•Lr vxror r...ly n•+. rvtrtl to the L•rtiour• and are xt•11 (to the I.•+•e.•. Ilia rl Alit anot prlvIlv90 to sun. ap.tnns- ` r•r i,••:r: •d r tl argil 'tie x thervin ar r� •� f. !,•t::j`.,�'r�,'� 4';� 1 :at N:11+II•,.r t1 Iti.Tl 11,I ht1.•r�sl in Lr.trl I.•n7a nr In 1};Y I.•a-. pr••Tr.y. 1t in the t' 111+ p R t •'S• ... , �' duri it Ilwr; Tr• lie. !•tr, I.'slit I-•'is,.r shalt *ail tip Inimfer any p rrt ur tlarv, t•f lht• iv.,owd prcriii-mi or any Ir:tvMt In iht 0:1 �.`,•?�.r, }'+r. i'• •� t'_r 0.111 'Inp V..tr 1:fi:!,•C nt1%. iCl" ( III I+•1't! thrn••,I thet.t'trttre`a dr111:Rr tail 1"ntif,11,1 li1,Il rat t111'rt't1y I'C n1t•71Y1. ltu•n•aat'd tip en+ 1 e •.>'.- y.l.=� : , +also � 1ilr:.t'd. !lilt t:la• lI•FAtM• 1: •tl} 1•.,R:tnrtl• U. t•It•rlt� t�•a 1: :>'t:1 l7rV:SSIIt'K Irll'1 t41}' nod sCltlo rrnt,r tsar! n•yaiitl's lur Ott entirely. ji < r'';; �i'�r• 1_. hl IL•r t•L't•nt n •a', .I it tlril!t',I t'n sdjt.tnlha p"^P•rty.c:tl,t•1 ..1 (.- :l r(l•t r•f r}4 ex:erl•tr hm11a of any inn'l ill :! •. t;:::.• 1•:itl•r14't•d in this h:u•• and ttil ur U31 Is prtrl i• -d ihi n•from III rari inR qunntiti.•. an.l the drilllri rt'ryulra- :): o:'_t 7r'; a na•r.t a. r:a•rlTIA its I'ar:n:r:,1 h 9 !sett•, f art• n,•t fu:!v e•1rnp -J W!at. tmel Ve, owner 44 nuli w-11 shr.11 Sith-nite lit-, otnns ar..l tn:uai t!.t• ,•Il cep t:na 1`11INet•d 11:1•rrfn,ni, t!Ien the ia'aaW. •,-'T.,'s !., I-1wi ourh w.•11 by thl- vorrini-i t•rintnit 1,141nllln a y, 'ti t' ? k?' ' ; .: at tat t r::T!'.i:• wirl.tl Girt IV ,!sys of:r•r It it a.r•r.ainrtl that the rr,nl::t^•Ir•n td r'I nr tart fr•m much wAl It In Iri oyint kunntl lit•+ rr: ! I'.>: ti ••.ya•r:r.,•r r!..•ru f !A Il •'n;,r•"11::!n r a1:11 rat —Ian T , :i •.r ::.• 1-rt•;r, n. t',•r iho l+I:-1i1,•a oaf 1L•fy tn; null. e r'r .. • • t �..r, i rp,.;, I':Its• i:+ Ilrh•1:T!,l•'r •T:•ti4 t• 7 •,•t w•• 11 iw W 1+ •ilia!! i•t. P•nsith-r.A :1! . 1=rr t .-N r.•gil:rS•.l Itl li,; dri'.'.. 11 liemi-oler. ..•�; v;*4't•'_;..; 11. Ill- 0-14 r•utl.•IIArftheIw'rst•t lit r.itnd••rriln:lb•'norritr..11•SI Whlltl ihv U-4sov i4 frt•t•1•numl frml t'Innitiv!n'a 16-MI. %• � :"s,i ,:�S ?At r � wldi. In %0.4.• 1•r in f•::'S. by ►Irt:ty/. I0Ck4!Jtl. hr' 1' 11IV 1•f t4n t t Wry:t•n •�. :.Cr:1at•nt+. Tll:r� 6!Irt n•41aA•.Laft of 11"y I''t t�'.•ryrl. �I:.TP. fir..-'•: �•�•�.-T••'• ; � a1:111:a•iI•iFl rr 1•:.. T �'1l'^rtaRrnL'1l It:•tn1')'. Pr. 1..'r : !'1:/•rA Nrrrhllil. ti• 11••y'.'Lrl t114 t•.,ntr••l-it I•.M IA•r+t+•,1L'gt•I}Il'rrilnleir ;. ` 1j :: L III f by Irr:,t:S•r . I •t t,.eal.N• •ns I:vn-in six t :al'aay tmurtt•r l Vd .,r n•.t. k' E, • ;--tt �gi*A t S •I. I •+.+..• .Iu!l pay $I% I:IxvA i-n h i Impno:ti•ir.,ai:i -%n1 :.:1 :tux••• rn it:. t it 4:t•r.41 wj ilir 1••a-wif rr••nil,ex on the flat :i••::a!::y Id a;:Irrh In 4•a.4. oar, ar.[I •'t i IL .:•x,•7 :t•cI••,l I,c$ a+ C.-rl wval.-4 61. r'irt.h.11rn � ' Mlrt•rai rlad�. lw•tw.f n�h•'¢ It. pa}' .h:. tl:ias laY'-,tl rr.'1 :+��1'• • i . • .:..• •i ✓ :'list! a• �aa'il And a+f :'t• • .•Ir. ', l I•• 1 r::.l I:.•• .., .1 :I:.i:n-I a)•., •,.•r ; r.r n •ri.:: �.'• •. I:. -ho: ; 1:: t':,t ~:soli. L•nN4I .Sr:.t.•. t•r an% munlc- I;.k:::f :vt•rt - 1 ':t, . .. natev. ur1 ti'.• .• n • P, 'I..•r :..%•a !1 ...•' . } r .. .••:::. 1"17. 1 r.-ft Ii+• i.I• w»•'r ra:hi w t-pwr- lit••..1 vlt ill::::t '' .. . 1:• .!-.. I1 ••t-• . h... I9t;.' f ...l I:.x :.n.I IA'!•.4r t•:.y . • I rt.:11 r..�. ' LI !:, I4W I•••w•l•. ISO^—n••I i..•Ifr:i Sillyvt••i1 nn 14.:•1 •+tYl waste!'. 4 r 1--t .4 titer hrrow etas"I.a.,1 i.111�ain..I 4•..1—•tr wets -soar a;- yn..rRP•1!M!t ••f Ire tY�'r. '! �+ it-..... n- --* I- rOr- sii •in-•n'•.rr, -im .rrir +Ksf-L: •'r,r.•aawii.yll+..I..r..:r.1,-1.. Ns,�.w.wF�+»♦•:+nM . r :...; :.t 1:. r :t.- T•..t :t• : . t suss i ^..• .:,:•{ :.r •t. u ! r, • t :^. r^.art 4t : .. t1 :In.l t%it r.n.du:. t! • ,:r" :.I..:t..i :s its It ! ;..; . t:....• !.. r •. i� . , rl '• r'l. !'t , i1:+'»z the f•r' tl.: :•i • a::3... i•p•.: . : .,':'•':` :: 'i.. I1•. .... •. .. .........ri';t•t:� . •••.. ,.:. t1:V L.:•:. T e•.pIP! F ... j }rued 644 bti,o+r pla"' depth, aidsad pcn�i�'i# q` s to �cnre aft suirp holes, it,am is oibm vXXv2t !�►ie�i , ,Uvestoak on said land. �� 7 13, "1,1AMa sfsall have rho v1sht at arw time to t2move tram still lead twl ttlachlt:ery, rlf t iAm �+L• � _441101V Arad oaer g�aa'rrty aed Impra omms Inlongisii to or #tutllt}tcd bt Use Lcar, F."vWed that tarots ro hL# at ' be tompitiod 141thE�tt a reasmablo tis'rta atttr the tn°rsiaatlsn of Wit NUL f IrMit sort term of tots INW10 611 I%mp holes soil vthrr titcivwm* thralls it. to a'.tyati Upayebte la testacy deduct lttesstrtratt s proper tloritte Partof tttt t9sat of tr+ta tene�Rs* t itiablle al ytod�t sd north said PVWAM W rmwor thane m+rahitaablt, la tree alnat such oti is shot trlattsd . - t_ MW; +si f iotw r's;s+tt teya3tlr saettti also beer a earretgdtrtilitl;E ptaponlor.*te part of tht rvi:t of s at t1Sr� treitunt plant. t~isthing keres eointsiriod shell t o eatstr,ted a o !hating Loaw to test atf grr d [tart! the , setibed retnfsea, If lado ' s#uli stoat to such, royally otl to !hind. such ro} slty oil short be of the gttslit3r #2 htmovo Iona the totssad "tnlsee for U�'r "A siac ur, And It Less;:`s own all hots isc treatrd b+fotr atctx *. Ltrmet ail will W treated thoritwith bolmv dallvtty to Lasser and %ti.or In euth overt wi:i Pay o yrstpar ~lor►atr p+rt sf th+! , 'i` coat of tt•a mieat. 'fliu cant of trastitng Lessor's Al gall thus excaotl fire cants per bdtrel, L IL Upeft the violation of trig of tree tunas of e4bWons of aria tense by thie Uwe sad the fshiure to vvW edy b`ie wilt Wyltlon trues #ram the Laser to to do, thm At ilia! option of the T,crsor, "141 lease shall IneJ,with testa and urmlttato, and all rl*htsi of lire seam In s:id to said lsrd �e at an and, .A - d+ifsui lent; provt+:cd, ttvwtvlr,Elu; *A Ui * may, f i1ist tiy tlitte after each tfsfattlt. end Upon firyrritst tt# taf►s sine of w - Too , .�._�., . __.._r .^.,.C1D) tlotlote to fish "'ar as aml fat• flxtd R+td pqul&tad dmrjgjar, quHataim to"i.estor sal of the ri;ht, title and irttersttt of Imm In and it i the ksaed Isnei in H t to Which it hog modo tfsfatsit. Add theroupan ills rights and obUtstiam of liar porttsa hrrttla „, aet� tatltoiasstl+e sh It isp s U#t tit t al t !,} oisettr . otsilttti! rt0 lassp Attlialxr6�i:Li��t�Z}+ �• 'aui}a v t�otYxLa Q LittivliLt. } etcttittr peyo>ate to author a sr assay pet to thr Lafsar q` sratnY or stir,; a sr�t tho"for la .,.. �+>iZOi ..M�+a...l .R4{tr•,�+C34.QY,.,,..._................................_..............,...,..».. ilttt•it.......+...- �.-� �1 fie Change tit il~Q eiirttueb#paf tbr.r`' fsssd er ntlnate it eswrted 1b ` tad t a.t Ot cento or royal141 si~ sll 6 blzi4ny out tt w Ulm heart! it hm' bale} fsttsstahttl with attisboil aty Written !s'idsnm i�• . •.4 sir 23. Lassa; hae eay rirwatmu and ivmm to dofeftd aria to thif land Airmen dtectibed. end egt'tea that tho' S.tttianss, apik� s,�eiay py WA d*hap may Umm taare;f gig or outer hens wtis ng, ##vial! or s ff"ed on tvr tiEai:aet rile above `- ssitfiud Sand; sad, in owerttitsat it wrath, tm COCK $Puna.It 4WI bt subro*aod to this flrhu of any harder of bolam Weave/ "+ and wky nttmburre Ilfsif by tpplyft to the dissharIt el omy such tmttpRr. tax, or o0hfr had, at+x royally if t,taaalg r am-ming fttrntti5tfar. t:. attd wltta ov istl prodoved trDm the dtmrlx d prMius 34111 for Any ream tee ummuketaWat at IAA welt at pri,•ir ms•ntlant�# #n pare rsplt 8 hseeot, the Lcasf strew lrt turn Ras: to take and tanei5'a his royalty in kstd. and should ; # fit nr rt•;ire ae !St s. L4ca stir 1.es ca tray fell 3#ts saseto at &A bait =rocs abtairabla, but $tot leas ihvt od prier .' 4whlrh ties+ tAv co mny bt teseiviq for Its own all of the same quality. :1 'rite ts'ordx "drlltitli empcallonsa` as hard hervtrl shall l+e field to sn"?k oily wiirk or . clvsl operstlatsis ttiscttfUltes or, o mnmited In t-W faith for the fturptsse of tsfryitlg out any of the rlw ts; p:lS'lIms or dutirt at the Lew* st #t ' tllfs lea rs, G+lit,tvC$ dilig�ilj rtt•.il In due goatee by the tvnsirtrON:n of Pmeosary simetareE for 6,1 drill#nR, of an c,11 rw gais will, grad by the actual eper7it'tm of drikltag in the ground. :'G. An tho expiralton or annttvr tatmisiatioti of ihii ltaxe, utt er a'utll quietly and peat r ible trurmader poxteWan of ; Oft$ lirotriW d t't ..c: mtir iml e4vtr W .Mtn It Mae$ and sultlelait tjUI1. ;:a`et dvv4, rani PU fir rr praalICAMii m-er el! M-Tp ( Nstem Imil tht:iSitti.iiil 111,30 by Lxp:Ki`e. lautostt romovinf tho cutna (mhs arty ar.ir iivnA well Lef+ct alt..0 autlfy teaaor t of the lntrttilwt so to die, vrA it Ltuar whhk 4 f i:,At1"_ t L. j dt.i s thcrr:itttrr #!salt li%fprm Letso in writing of lee. mWo &PAi u tat ranvvrt mutts wvlt Into g w liter well. and for Lhm gat;#; a to r.tain m i lrurrha4e cuainr that':n, irkw" Will lea+.• slty rt'lit AUS-11 arlitturtt of ca:dnq nil TA --tor rmay rettutra for told purNvo. pretvid- l stash proevdura is hivful and will net violisw stay ru'r up aottlor of arty a{llalaf, commiss:ats or sue} f ity t.4rn hh^cls5g )tt6fd1Ctivn in such mmilrt. six# grovidrd fttrttirr tttkt t:r+siit pay to #.cheer il.ti t} -" ,, (F; ,j per earl of the isriririst cuss of the cs.itsN or the xetsuna. r} :7. fr+,�� it:a} at any Ii1t,e i;srlttl.iim tltts icyeci Ire trtlircip , { ww+.tr�,t.tw.tws► - wa-ni)t a+w + v e ff+iti�+,La -Pt It dA, 1, :u,. Anil Ik arxi.;; a ra in o prtt-,u'.ar tairt ar mt its m5ratstrlar p:er:i1 of tit: t.a•r•d pmrti+m Stich divistun r itr ta'S't';;,Ai t tl:t• t•tit+•t' *l::�Et i+t:t+ti:iitt• rtr:tl a ti�ittr t5'tl,l�jtilt hittl <l4-t is Ct ,t'tklSttkY tllltl,•r L:iC 1►'7i�a` t+t ai!.# RY1�trdin't t•� ilS{ lia'Sy i:il It.,rt it•:tt of •l,•• i,•:tw•it t'riwni-.ut aY Ili:1i i#i5-t:lr�, risk! th_i• ltt,lilrr t•! ii'a;t•+t Nd t';t'•h rttxh vartl„rs of flirt lcaei'd ]!tarn• ! tt•t•ii iltult liv rvgoir,d t,i r,tmnli'•4 w0h and ixrf.w n t'tte i.tr1•sttt! i•hlat;;lii„hs klltli•1.' tl16 is.;,te •,natter only ty rite exterit i t i hill 14t1 t;un tit t!:u f+•nin4l tt O, girt-t-hL.4t ilutt nothim: i•'r'ut altall he 4- ittrurd It, i>rilur.lt• Ur mulii;tlg Ike drillihn hr n'aial aliti�171:ititl, mill enw,1441 fort iv? lltiit tfitt of 1ho t•rk r.1titif:tt ESrttt the pr3wimillmn therwi f, k# Irt'a- vidtd In t-mi 4raph V. N—rrvi. ciihvr by hiss• lx+atk+,:r may avii; my lit-rvursfi•r.s4mll pritivet tilt leve at a insole. 'rtt- 'i•HA li :i•e m a ;t#. Its t••7ii14 t.•Mtl:ti„r.. ttflil ttttititpturttt rA,ttl rtt,'rd t•t @nil; ho biniiittq arises the helm emworsi, ail:ivitti+ir:i1'•rt. titan'!-vo. itt:rv, !12r? rt::'t A t.l_'rti,! tl:L• !"'ti:uW t:.Prt'r.i. aR, Ati1 bi fleo- f r,ini Siva LeP.'•r t,t t31P 1AVIve 1*16 .t f^4• r,i5'i•:i;>5' :• ;":.!i.t fir• 1"wIP!, LS m7t•tt'r,ttt stroll v0jtt Vtt•tl to tit! ' . i • .. ! :. i „a r . , .:it:,t .'i`1Y it•t':`' trt':. 't.r• :.t •,.y..,t ,l:'• T.tt4lrr riuX! l� i',t5'CA'it' enldta; tit. +smite, i , It. tv., a :F '. ,'••+.i'it tx tt"i'r'• t.%N ti'1IEHIAIt.% •I,• t t !: I'•• i#;t:� t•x C.M. it ;,t • t !1..v elver•' first fa3 '89 12�24 .;T AMERICPiN ..,., r.• �,- • •• � � ,r{' ���`yY ;i��i�¢u�K,, w��1 ���•, - 1, Wit. , ' .•; �'';''.~. ,� A, .��•'�I'R'--+Y•"lY,1•'i• /4:. �Y��/VN �'•�. 1.',r�:i':� i'+�i,.••ati �'X• �!t• ��,,N'T .4_:i� ,4�a`•�.;. 1.�+�.h`�: �v�T r�.f - _.�•.�,•,• .,. .�'..'•i�'.vy�j:�r.' F*fr ':-. ' �.'•"' ... 4, f zed* a"at�r9'h`{'tgnd iseda'e, psrL o! tllet aertiin'Q.earsNn� die ,i: -• if::_:`� ;a: s) Ll',t�� 4' ,j' NIs11- +%" ' •. 1• '. t . •• I!1 �•. .:.'/:� ' :F �' at, .11A, 3 �• •••i L;r... j • �.'� t y, 1 1 Y • �...�.3 . f ` .. • ,'..::. . • • •- .•..1J��}.i ��tA►'- _ ��'=Y;�'•:� . t 1yVLvi at a'bWilrig"i a .toot 'of Wt -_a941t:,of:; } •_. �'} :'� �. i. • T:-1?..r:!+ 1;:�...1,.. 1tt' , :s ,h:,-r • ft .: !.•:L:i.{ . _ • ;,. •..�, ,•�fTFi'tflit� @Fd1�;'i3e�gh Treai, ''f••l• 4.I._}'�'C!';;�i:•:: Pori or.the procaods of all oil produeed, :evod ind sold raa"t >tffd;p#s!giias peyaula monthly as royalty provided is Paregr»pl+ 1 horevf` isti�►;y` tfiiflt'•`;o•,monchr end 0011 i,v t:oupuLod Lipari ttla ■v.lrlUe producLion for theA jr �s ti�o,speaific royalty is hoino palJ of tollowst" K • -�� # is ,�lt`�� is'lC/1G0 ports over 100 barrols hu!'.r'a�'i�ioio't `- Iris dyer; Z50•bari1l"I bnL noL Mora thlin t'00 blirrallS v0/10Q �p5it aY4'r2r�2Gp,r_ �grej 0 J)OY oil ;taus 0golnft UL..lArld and �i ♦' ry�' 7'-':1 �•_'�� fJ:r .' r ,-y Y�� 1 ,\' :li•1 Y' Ai Y L r ... fie' S•t�.. b'4+ i.' ,' - y f gdat� i E.•t[i=.P�`•iFoleiirr�gridyl' ajlitg =111ai vor q-a' ' r i s j fr - yr, 5y; �,,, . 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