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HomeMy WebLinkAboutDJM Capital Partners, LLC - Bella Terra Associates, LLC - 2015-03-16Dept. ID ED 15-07 Page 1 of 3 Meeting Date: 3/16/2015 yp�ije✓d� CITY OF HUNTINGTON BEACH REQUEST FOR. COUNCIL AND SUCCESSOR AGENCY ACTION MEETING DATE: 3/16/2015 SUBMITTED TO: Honorable Mayor and City Council Members and Honorable Chair and Board Members SUBMITTED BY: Fred A. Wilson, City Manager/Executive Director PREPARED BY: Ken Domer, Assistant City Manager/Deputy Executive Director Kellee Fritzal, Deputy Director, Office of Business Development SUBJECT: Request Successor Agency approval of Estoppels and Consent to Transfer of Interest of the Owner Participation Agreement (OPA) of Bella Terra I and City Council approval of Estoppel Certificate (Parking Garage Agreement) Statement of Issue: The Successor Agency and City Council is asked to approve the acquisition of interest in the Bella Terra I Site by PR Bella Terra, LLC c/o Prudential Real Estate Investors (Prudential). Bella Terra Group Retail, LLC (DJM) will continue to be responsible for all day-to-day operations as Bella Terra's property manager. Financial Impact: There is no fiscal impact to the City/Agency. DJM is required through the OPA to pay for all costs associated with the review of the Estoppels and Consent Agreements. Successor Agency Recommended Action: A) Approve the "Estoppel and Consent to Transfer of Interest (OPA) Agreement;" and, B) Approve the "Estoppel Certificate and Request for Notice;" and, C) Approve the Executive Director and Board Clerk to sign all necessary documents to effectuate this transfer and make non -substantive modifications of the forms, if necessary. City Council Recommended Action: A) Approve the Estoppel Certificate (Parking Garage Agreements); and, B) Authorize the Mayor, City Manager and City Clerk to sign all necessary documents to effectuate this transfer. Alternative Action(s): Do not approve the Estoppels and direct staff as necessary. Analysis: In 2000, the Redevelopment Agency of the City of Huntington Beach (Agency) executed an Owner Participation Agreement (OPA) with Huntington Center Associates, LLC. This OPA was subsequently amended to extend the Schedule of Performance. The OPA and the First xB -189- Item 14. - 1 Dept. ID ED 15-07 Page 2 of 3 Meeting Date: 3/16/2015 Implementation Agreement to the OPA (collectively known as the OPA) required Huntington Center Associates to redevelop the Huntington Center property with a mixed -use commercial project. Through the Second Implementation Agreement, the property was conveyed to Bella Terra Associates, LLC (DJM/Participant), who became responsible for completing the scope of development required by the OPA. The terms of the OPA required the Agency to provide financial assistance to fill the $15 million feasibility gap associated with the scope of development identified in the OPA. The assistance was directly tied to demolition, clearance, site preparation, public improvements, utilities, facilities, acquisition of land and easements, and all other legally permissible items. The assistance was in the form of a loan from the Participant to the Agency. The Second Implementation Agreement set forth certain requirements of the Agency's Participation, such as establishing the date on which interest began accruing on the loan and interest rate, and changed the pledge of sales tax revenues that were for the repayment of the loan to property tax increment project/site generated for a 20 year period. A Third Implementation Agreement was approved in June 2014, redefining the properties between Bella Terra I and Bella Terra II. The Participant/DJM originally contracted to sell the Bella Terra Shopping Center to PRISA LHC, LLC, a subsidiary of Prudential Financial, Inc., a billion dollar company traded on the NYSE ("Prudential"). However, Prudential was provided the option to purchase the interest of the passive investor in Bella Terra I, as opposed to purchasing the property. The proposed Estoppels and Consent is providing for just the purchase of the interest in the property. The Agreements do not allow for the possibility of a transfer of the property; the transfer of the property would require the Successor Agency/City approve new Agreements. Currently, the owner of the Bella Terra Shopping Center and the Participant under the OPA is Bella Terra Associates, LLC ("BTA"). BTA is wholly owned by Bella Terra Borrower, LLC. Bella Terra Borrower, LLC is wholly owned by BTDJM Associates, LLC. Currently, Bella Terra Holding LLC owns an 87.75% interest in BTDJM Associates, LLC. Bella Terra Holding LLC is a special purpose entity managed by Sarofim Realty Advisors for the benefit of the Ohio Public Employee's Retirement System. The other 12.25% interest in BTDJM Associates, LLC is owned by Bella Terra Group Retail, LLC, which is a DJM affiliate. DJM, controlled by John Miller, Eric Sahn and Lindsay Parton, is the entity known to the City which completed construction of the shopping center, handled the development of the neighboring Costco site and the Bella Terra Villages and has operated the shopping center for the last 10 years. If approved, after the closing of the pending transaction, the Bella Terra Shopping Center will continue to be owned by BTA. BTA will continue to be a wholly -owned subsidiary of Bella Terra Borrower, LLC. Bella Terra Borrower will continue to be a wholly owned subsidiary of BTDJM Associates, LLC. Bella Terra Holding LLC is selling its membership interest in BTDJM Associates, LLC to PR Bella Terra, LLC, a new single -purpose entity formed by Prudential to acquire the membership interest. The Operating Agreement of BTDJM Associates, LLC will be amended and restated in connection with the transaction. The membership interest of Bella Terra Group Retail, LLC (the DJM Entity) will actually increase from 12.25% to 23.5%. The property will continue to be managed by DJM Capital Partners, LLC, of which Lindsay Parton is the President. All of the day to day operations at the property, the leasing, the management and the operations will continue to be handled by DJM. Item 14. - 2 HB -190- Dept. ID ED 15-07 Page 3 of 3 Meeting Date: 3/16/2015 In summary, although the proposed transaction is technically a transfer of a controlling interest in the indirect owner of the Participant, the practical effect is that DJM will have an increased ownership interest in BTA and will continue to handle all aspects of the leasing, management and operation of the Bella Terra Shopping Center and all dealings with the City. The Agreements the Successor Agency and City are asked to review and approve are as follows: o Estoppel and Consent to Transfer of Interest Owner Participant Agreement (DJM/Prudential) ® Estoppel Certificate and Request for Notice with Metropolitan Life Insurance Company (Prudential is receiving a Loan for the purchase) ® Estoppel and Certificate (Parking Garage Agreement) — The Bella Terra Parking Garage was constructed through a Community Facilities Bond (CFD) and is technically owned by the City, with a Parking Garage Agreement between BTA, Costco and the City for management and maintenance. No general funds or City funds are used to maintain the structure. Environmental Status: Not Applicable. Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): 1) Estoppel and Consent to Transfer of Interest (OPA) Agreement 2) Estoppel Certificate and Request for Notice 3) Estoppel Certificate (Parking Garage Agreements) HB -191- Item 14. - 3 MOM A-f-TACHMENT .� I ESTOPPEL. AND CONSENT TO TRANSFER OF INTEREST (OPA) THIS ESTOPPEL AND CONSENT TO TRANSFER OF INTEREST dated as of f%2jMTee!e 2015, is entered into by the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") in favor of BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company ("BTA") and PR BELLA TERRA, LLC, a Delaware limited liability company ("Buyer") with reference to the following facts: A. Agency's predecessor -in -interest, the Redevelopment Agency of the City of Huntington Beach ("Redevelopment Agency") and BTA's predecessor -in -interest, Huntington Center Associates, LLC ("HCA") entered into that certain Owner Participation Agreement dated October 2, 2000 as implemented by the First Implementation Agreement to Owner Participation Agreement dated August 4, 2005 between the Redevelopment Agency and HCA, the Second Implementation Agreement to Owner Participation Agreement dated September 17, 2007 between the Redevelopment Agency and BTA and the Third Implementation Agreement dated June 17, 2014 between the Agency and BTA (the "Third Implementation Agreement") (collectively the "OPA"). In furtherance of the OPA, Redevelopment Agency and HCA entered into that certain Agreement Containing Covenants Affecting Real Property dated August 10, 2005 and recorded August 16, 2005 as Instrument No. 2005000643199 of the Official Records of the County Recorder for Orange County. In accordance with the OPA, a Release of Construction Covenants executed by the Redevelopment Agency on December 18, 2006 was recorded January 22, 2008 as Instrument No. 2008000029890 of the Official Records of the County Recorder for Orange County. All initially capitalized terms used in this Estoppel and Consent to Transfer of Interest without definition shall have the meaning ascribed to such terms in the OPA. B. The OPA pertains to the construction, development, operation and management of the property generally comprised of a retail shopping center currently known as Bella Terra. C. Buyer intends to acquire an interest in the Bella Terra I Site (as defined in the Third Implementation Agreement) by acquiring an indirect membership interest in BTA (the "Membership Interest Acquisition"). BTA is currently indirectly owned by Bella Terra Group Retail, LLC, as the managing member ("DJM") and Bella Terra Holding, LLC, as the investor. As part of the Membership Interest Acquisition, Bella Terra Holding, LLC will transfer its entire indirect membership interest in BTA to Buyer, and DJM will continue to be a member of BTA and be responsible for all day-to-day operations as BTA's property manager. Article 100, Section 105.3 of the OPA provides that the Agency must consent to a change in "...the identity, ownership and control of the Participant." As such, BTA and Buyer desire to obtain the consent of the Agency to the Membership Interest Acquisition. NOW, THEREFORE, the Agency hereby agrees as follows: I Estoppel Consent to Transfer of Interest in OPA - Bella Terra Final (2).docx The OPA, a true, correct and complete copy of which is attached as Exhibit A, is and remains in full force and effect and has not been amended or modified. 2. The Agency hereby consents to and approves the Membership Interest Acquisition as described above in Recital C. 3. The Agency certifies that to the actual knowledge of the Agency BTA is not in default under the terms of the OPA and no event has occurred which, with notice or the passage of time, would constitute an event of default. 4. Following the date of the Membership Interest Acquisition, all notices to the Participant under the OPA shall be sent to the following: PR Bella Terra, LLC c/o Prudential Real Estate Investors 180 N. Stetson Street Suite 3275 Chicago, IL 60601 Attn- PRISA Asset Manager and: The Prudential Insurance Company of America c/o Prudential Real Estate Investors 7 Giralda Farms 2nd Floor Madison, New Jersey 07940 Attn: Law Department and: c/o DJM Capital Partners, Inc. 60 S. Market Street, Suite 1120 San Jose, California 95113 Attention: Eric Sahn The undersigned is duly authorized to execute this Estoppel and Consent to Transfer of Interest. The undersigned acknowledges and agrees that BTA, Buyer and their respective permitted successors, assigns, and lenders will rely on this Estoppel and Consent to Transfer of Interest in Buyer's decision to acquire an indirect interest in the Bella Terra I Site (provided that this Estoppel and Consent to Transfer of Interest speaks to factual matters only as of the date hereof). 4 Dated: P)M dhL pZJ , 2015 ATTEST: "AGENCY" SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ;p v "/,/, Gates, Agency Counsel �/Exec&ive Director EXHIBIT A Copy of ®PA [behind this page] HB -193- Item 14. - 7 OWNER.. PARTICIPATION AGREEMENT By and Betwcen REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, Agency, and HUNTINGTON CENTER ASSOCIATES, LLC, Participant. Item 14. - 8 - - -- HB -194- - Page ARTICLE 100, SUBJECT OF AGREEMENT ........ . ... . ... . .. I - 1... , . - .... l § 101. RuMosic-of Agreement .................. . ...................... 1 § 102. IheReAcyelopment ?Jan ..... . .............. ................. i § 103. Thee-wjW-A= .... ... .......................... i -§ 104. Description of the Sitc ............ ..... . ........... . ........... I § 105. Parties to the Arc .M=...................................... 2 §105,1. IhorAgeney.........................................I......2 § 105.2. Ihti-Patticipani ........ ...................................... 2 § 105.3. Change in Ownership, ManagemmLand-Control of Participant ........ 2 § 105.4. No Third Party Beneficiary .............................. . ... 3 ARTICLE 200. METHOD OF FINANCING ..................................... 3 § 201. feasibility-.ag Payments ....................................... § 202. Submission ofEyidcnss_QLEitiaaeing ............................ 4 ARTICLE 300. ADDITIONAL PARCELS ................................... 9 § 301. Acquisition of Additional Parcels Withm-Site ..................... 9 § 302. Term fQxAgsncy Conycy angst AdditionaI Prar�e ies ....... :..... 9. § 302.1 Escrow ............................... ........ I ........ 9 § 302.2 Conveyance of Title and Delivery of Possession ................. 12 § 302.3 Eom of-Deod . ................. ............ 13 § 302.4 r-otiditinn-QfTitle ....... • ........................... I ....... 13 § 302.5 Tie an Place for Delivery of Deed ............ 13 § 302.6 -Conditions-Ereeedeut is Clost-Qf-Escim. .... .................... 13 § 302.7 Tit% os ranee .......... ...................I............. .15 § 302.8 0-=nantssrfthe Additional-Emp nies .......................... 15 § 302.9 Condition of the Additional Propnies ........................... 15 § 302.10 indemni3y....:............................................ 15 § 303. Intentionally Omitted .......................................... 16 § 304. Participant to Advance Acquisition and Relooati4mCotsts ........... 16 § 305. Letter of Credit_to- Agency .... • ............................ - 17 ARTICLE 400. REDEVELOPMENT OF THE SITE ............. . .............. 18 § 401. Scopo. ofRedu lQpn= ................I...........I.......l8 § 402. Specific Plans and Conditional Use Permits ...................... I8 § 403. Cost of Redevelopment ...................... .... 19 § 404, Recip aLEasement Agreement ..................... .19 § 405. Schedule of Pcrfoimaneg ...........:........ . .... 19 § 406. Indemnification and Insurancr .................. ... 19 § 406.1. Indemnification_ Bodily.lnjury-andPron ny T7amage InsuranCt ...... 19 § 406.2. .Enyiromental indemuit:t .......................22 § 407. Nondiscrimination during Constructipn ......................... 23 § 408. Local. State. and Federal Laws ... ............................ 23 § 409. City and Other Gpyyerrnmental Agency Permits .................... 23 § 410. Pr hibition Against Transfer .................................. 24 - -HB -195-- - - - Item 14. - 9 § 41 I . Lio-Eneumbn=e-ssuf4lLM.artgages-aeds,, OLTntst. C_onvevanCes and Lewes_-BZd-aL lher-C.ons:cyanc�for financing for RedexslQjment .. .................... . 27 § 412. doldec NQLoj ligated_tQL=auctlmnrve=nn i t tour ... 28 § 413. Release of_Gonstrustion �o�enants ....... . ..................... 28 ARTICLE 500. USE OF THE SITE ....... . .. . . . ...... . ' ' ' .................. 29 §501. Uses ...... ................................... ........... ..29 § 502. Intentionally Omitted ............ . ...... - . _ _ ....... - .......... 31 § 503. Maintmu-ce of the -Site .... ..... . ...... . . . ..... . .. ..... . . . 31 § 504_ Obligation to.Refiaiu.fr'omDiscrimination .... ........ 32 § 505, 6 Form of Nondiscrimination andlNansegregation Clauses - _ ... - . _ ... _ . 32 § 506. Agrecinent Containiag CQNenants-Affecting_RcaI Property ......... , 33 § 507. Effect and 12umtion of axeiiants .... . . . ............:.. ...... 33 ARTICLE 600. SPECIAL PROVISIONS ..... _ ............................. . ... 33 § 601. Ageltey�'a_rt_ icipation Favment .......:........ . ...... _ . ... 33 § 602, Bay -au t$oY slops .........................................34 ARTICLE 700. DEFAULTS, REMEDIES AND TERMINATION ...:................. 35 § 701. Defaults -General .:.....:......... ............ ..:...... 35 § 702, 8emedics and Ri,ghLufTermination :........... 36 § 702:1 lenmirimtim by Agency ... .............. 36 § 702.2 . Tert i�nation hy-participant ................... . .. . ..... 37 § 103. Effect of Violation of the Terms and Provisions oft is Afire me ne t Aftez CQmPleiion of Redevelopment ............. 38 § 704. Institution of LegaLActims ............. I ..................... 38 § 705 A ntance of Service of31Qces .... I ..................... 38 ARTICLE 800. § 801. § 802. § 803. § 804. § 805. § 806. § 807. § 808. § 809. § 810. § 811. § 812. § 813. § 914- § 815. § 816. PROVISIONSGENERAL NonliabjUty Remedies ►. . t 1 40.- Lftigadm and • • 11 t 1 art ..1 ..•._t 40 U •• •1 • a '"it"1 �Fnfprced DelU •ti of IMr lnapecti6n of B!2oks t • Record Relation hip of t •.r FurtherAssum= Binding :.. • ARTICLE 900. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ........... _ . 43 tt Item 14. - 10 HB -196- - ARTICLE 1000. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY .......... 44 ARTICLE I 100. EFFECTIVE DATE OF THIS AGREEMENT .......:.............. i[I - HB -197- . _ Item 14. - 11 ATTACHMENTS Attachment No. 1 - Site Map Attachment No. 2 - Legal Descriptiod of the Site Attachment No. 3 - Schedule of Performance Attachment -No. 4 - Scope of Development Attachment No. S - Form of Agreement Containing Covenants Affecting Real Property Attachment No. 6 - Form of Release of Construction Covenants Attachment No. 7 - Schedule of Feasibility Gap Payments Attachment.No. 8. - Form of Grant Deed Attachment No. 9 - Form of Guaranty Agreement Attachment No. 10 - Cooperation Agreement iv Item 14. - 12 HB -198- - OWNER PARTICIPATION AGREEMENT' THIS OWNER PARTICIPATION AGREEMENT (the "Agreement") is entered into this 2nd day of October 12000 by and bemwecn the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Agency") and HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware Iimited liability company ("Participant"). The Agency and the Participant agree as follows: ARTICLE 100. SUBJECT OF AGREEMENT § 101. P_urpose.of_Agr=mcnt : The purpose of this Agreement is to implement the. Redevelopment Plan for the Merged Redevelopment Project Areas (the "Project") in the City of Huntington Beach by providing for the rehabilitation and construction of improvements on certain real property in the Project Area (the "Site," as described in Section 104) by Participant pursuant to this Agreement. This Agreement is made in accordance*with and subject to the redevelopment plan for the Huntington Beach Redevelopment Project, which was approved and adopted by Ordinance No. 2743 of the City Council of the.City of Huntington Beach on November 26, 1984, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment - Project (the "Merged Redevelopment Project"): The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. This Agreement shall be subject to. the Redevelopment Plan. Any amendment to the Redevelopment Plan which materially. affects the redevelopment of the Site under the terms of this Agreement shall require the written consent of Participant. - The "Project Area" is located in the City of Huntington Beach, California. The exact boundaries of the Project.Area are specifically and legally described in the Redevelopment Plan and Ordinance No. 3343. The "Site" is that certain real property illustrated and designated as such on the "Map of the Site" (which is attached hereto and incorporated herein as Attachment No. 1) and having the legal description set forth in the "Legal Description of the Site" (which is attached hereto and incorporated herein as Attachment No. 2). The Site is generally- comprised of a shopping center commonly known as the "Huntington Center" and includes the Montgomery Ward, LLC property which is designated as the "Ward Parcel" on the Map of the Site ("Ward Parcel"). -In the event Agency or Participant -terminates this Agreement as to the Ward Parcel pursuant to Section 702.1 (b) or 702.2 (c), respectively, then the Ward Parcel shall be removed from the legal description of the Site. HB _199_ Item 14. - 13 § 105. RaifiPs to ffi �emettt .... § 105.1. The_Agerlu The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, Health and Safety Code Section 33000, eLseq. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency" as used in this Agreement, includes any legally permissible assignee of or successor to the Agency or its rights, powers and responsibilities. § 105.2. . The Participant a. Identity. The Participant is HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company. The principal office of the Participant for purposes of this Agreement is 23622 Calabasas Road, Suite 100, Calabasas, California 91302. Participant represents and warrants that it is the sole owner of the Site, except for those portions identified on the Map of the Site (Attachment No: 1) as the Ward Parcel. Notwithstanding any other provisions hereof, all of the terms, covenants and conditions of this Agreement shall be binding on Participant and all of its successors and assigns, jointly and severally, and shall inure to the benefit of Participant and any .of its permitted successors and assigns, b. iivamnty. As a condition precedent to Agency's execution of this Agreement, Participant shall provide Agency with a guaranty by Participant's manager, Huntington Management Ent., LLC, a Delaware limited liability company, guaranteeing Participant's performance of certain of its obligations hereunder as more fully described in a Guaranty Agreement (substantially in the form appended hereto as Attachment No.. 9 and incorporated herein by this reference). The Participant represents and agrees that Participant's undertakings pursuant to this Agreement are, and will be used for, the purpose of redevelopment of the Site and not for speculation in landholding. The Participant further recognizes that, in view of- (1) the importance of the redevelopment of the Site to the general welfare of the community; (2) the public aids set forth in this Agreement that have been made available by law and by the Agency and.the City on the conditions stated herein, for the purpose of making such redevelopment possible; and 2 Item 14. - 14 - HB -200- (3) the fact that a change in the identity, ownership and control of the Participant is, for practical purposes, a transfer or disposition of the Site or portion thereof then owned by the Participant; the qualifications and identity of the Participant are of particular concern to the community and the Agency. The Participant -further recognizes that it is because of such qualifications and identity that the Agency is entering into this Agreement with the Participant. Accordingly, no voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein. The Participant shall not, prior to twenty (20) years after the Operating Commencement Date (defined in Section 601), assign all or any part of this Agreement or any interest therein, or any portion of the Site without the prior written approval of the Agency, except to a Controlled Affiliate, and further provided that such transferee (including a Controlled Affiliate) shall assume all of the obligations of Participant with regard to the Siteor the relevant portion thereof, and shall deliver written evidence of such assumption in a form reasonably satisfactory to the Agency. No such approval by the Agency of an assignment shall Telease Participant from any of its obligations hereunder. As used herein, "Controlled Affiliate" shall mean an entity which is controlling or is controlled. by (by virtue of having the ability to direct, or by being - a managing partner of such entity) by Participant and/or the Guarantors and/or any entity owned, managed and controlled by the Guarantors. No person or entity shall acquire any rights or benefits as a third party beneficiary under this Agreement. Without limiting the foregoing, and notwithstanding the provisions of Article 200 of this Agreement, the Mortgagee (hereinafter defined) is merely an incidental beneficiary and shall have no rights or benefits hereunder. ARTICLE 200. METHOD OF FINANCING (a) Participant and the Agency acknowledge and agree that due to substantial project costs in the areas of demolition, clearance, site preparation, public improvements_, utilities and facilities, and acquisition of land and easements, the redevelopment of the Site as contemplated under this Agreement would not be feasible in the absence of Participant's agreement to initially pay such costs and the Agency's agreement to reimburse a portion of such costs. (b) Therefore, subject to all of the terms and conditions of this Agreement, the Agency shall reimburse Participant, during the Reimbursement Term, for a portion of the costs of the. demolition, clearance, site preparation, public improvements, utilities and facilities, and acquisition of land and easements required to redevelop the Site under this Agreement, in accordance with the Schedule of Feasibility Gap Payments appended to this Agreement as Attachment No. 7 and incorporated herein by this reference. Agency shall have no obligation to reimburse Participant for any costs paid by Participant pursuant to this Agreement except as specified in the Schedule of Feasibility Gap Payments. "Reimbursement Term" as used herein shall mean the period beginning on the Operating Commencement Date and ending twenty (20) years after the Operating Commencement Date, during which Agency is obligated to make reimbursement payments to Participant pursuant to the Schedule of Feasibility Gap Payments. 3 HB -201- Item 14. - 15 § 202. Submission-of..Ev.idencc-f Financing Within the times established therefor in the Schedule of Performance (attached hereto as Attachment No. 3 and incorporated herein by this reference), the Participant shall submit to the Agency evidence reasonably satisfactory to the Agency that the Participant has obtained sufficient equity capital.and commitments for the financing necessary for the rehabilitation and renovation of the improvements with respect to the redevelopment of the Site in accordance with this Agreement (the "Evidence of Financing"). The purpose of Agency review of the Evidence of Financing is to provide assurance that sufficient funds will be available to complete the redevelopment of the Site in accordance with this Agreement. Such Evidence of Financing shall include the following: 1. . Project— udgel. A current budget of all anticipated costs for the development and construction of the improvements in connection with the redevelopment of the.Site as set forth in the Scope of Development and provided for in this Agreement; with a sources and uses statement (the "Project Budget"). The. Project Budget.shall have a reasonable relationship with the pro forma previously provided to Agency for the redevelopment' of the Site, and shall state the estimated anticipated amount of Project Costs (hereinafter defined) and shall include a separate dollar amount for each category (1) through (I7) in the definition of Project Costs in Section 202 (1) (a) below and a reasonable description or itemization of -the costs in each such category. A cost.or expense which is not included in the Project Budget approved by the Agency shall not be a Project Cost for purposes of this Agreement (including the Agency Participation Payments, defined in Section 601) unless Participant submits evidence satisfactory to the Agency, at the earliest possible date,and, if feasible, before the cost is incurred, demonstrating that such cost or expense (i) will be actually incurred or paid for by or on behalf of Participant for or in connection with the development of the improvements on or with respect to the applicable Parcel in connection with the initial construction; and (ii) cannot reasonably be or have been avoided.or reduced; and (iii) was not foreseeable on the date of this Agreement. a. "Project Costs" as used herein means the following actual costs and expenses of the development work to be performed by or on behalf of Participant for or in connectioni with the development of the improvements required or contemplated by this Agreement and plans approved therefor by the City on or with respect to the Site, to the extent that such costs and expenses are incurred and paid for by Participant to third parties (other than imputed interest amounts under item (6) below, the developer's fee under item (17) below, and any items approved under paragraph (b) below not paid to third -parties) in connection with the initial construction and are either included in the Agency -approved Project Budget or approved in writing by the Agency pursuant to this Section 202 (1): (i} Land development work, including site preparation, demolition and . excavation, grading, asbestos abatement, soils compaction and remediation, hazardous materials mitigation or removal, utility relocation and abandonment'and off -site improvements. (2) Construction of the improvements and installation of the required infrastructure, fixtures, furniture, machinery and equipment, and 4 Item 14. - 16 _ _ HB -202- — — repair of any damage caused and arising during construction from a .casualty not covered by insurance proceeds. (3) Building permits, public entity approvals and authorizations, and entitlement fees not paid for or reimbursed by Agency. (4) - Premiums for casualty, public liability and property damage and other similar insurance during construction and on bonds securing work against liens for labor and materials. (5) Real estate taxes and assessments upon the Site or the improvements during the period of construction. (6) Actual interest on. acquisition and construction loans and an imputed cost of equity funds at. 10% per annum prior to the issuance by Agency of the Release of Construction Covenants (Attachment No. 6). (7) Fees for (i) architects, engineers, accountants and CEQA consultants; and (ii) real estate and financial advisors and attorncys previously identified to Agency or subsequently. approved by Agency. Saybrook Capital, LLC, Holland and Knight, LLP, Mt. Holly Partners, and Sullivan, Workman and Dee have previously been so identified to Agency- (8) Purchasing fees paid to third parties not affiliated with Participant in connection with the purchase of furniture, fixtures and equipment. (9) Development fees paid to government agencies, including traffic mitigation costs and fees and other governmental exactions, (10) Charges and premiums. for searching and insuring title; including related surveys and endorsements. (11) Out-of-pocket -costs incurred by Participant in connection with construction financing, including, without limitation, commitment fees, mortgage broker fees, standby fees and fees of a Iike nature, printing and duplicating expenses, documentary transfer tax stamps, mortgage taxes, recording charges. (12) Customary and reasonable pre -opening expenses. (13) - Costs of required studies, reports, inspections and surveys. (14) Costs for construction management and costs for Site.security prior to and during the construction period. (15) Broker's commissions or finders fees for land assembly and leasing. E - .— -� HB -203- Item 14. - 17 (16) The initial acquisition casts for the Site and the Acquisition and Relocation Costs for the Additional Properties, if any (defined in Sections 301 and 304)_ (17) A developer's fee of three percent (3%) of Project Costs (excluding improvements installed or constructed *by tenants and items (6), (1 1) and (16) of this Section 202 (1) (a)), but not in any event to exceed a developer's fee of Two Million Two Hundred Thousand Dollars (S 2,200,000). In the event this Agreement is terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 702.2 (c), then " such developers fee shall not exceed One Million Eight Hundred Fifty Thousand Dollars ($1,850,000). . b. The parties acknowledge that additional significant capital expenditures involving items included as Project Costs under Section 202 (1) (a) l,, 2, 3, 7, 9, and 13 above may be matte by Participant after -the recordation of the Release of Construction Covenants, which expenditures are not a• normal re -tenanting expense, are not a maintenance or operational expenditure typical for the normal maintenance or operation of development similar to the subject development, and are not made in connection with the initial tenanting of commercial space within the improvements developed on the Site, but are instead made in order to materially augment Gross Revenues (defined in Section 601). Such expenditures exceeding One Hundred Thousand Dollars ($1MOOD) meeting the description of the immediately preceding sentence (referred to in this. Agreement as "Proposed Post -Construction Capital Expenditures"), however, shall not be included in Project Costs for any purpose under this Agreement, unless submitted to the Agency's Executive Director prior to such expenditure and approved as a Project Cost (referred to in this Agreement, as "Approved Post -Construction Capital Expenditures"). Such submittal shall be made prior_to the capital expenditure if feasible. The Agency's Executive Director shall reasonably consider each submitted Proposed Post -Construction Capital .Expenditure for approval or disapproval, provided such expenditure is not a normal re -tenanting experrse, is not made in connection: with the initial tenanting of commercial space within the improvements developed on the Site, is not a -maintenance or operational expenditure typical for the normal maintenance or operation of a development similar to the subject development, and pravided.such approval will in the aggregate not have a material adverse economic impact on. the Agency's economic interests, .including without limitation the Agency Participation Payments (defined in Section 601). c. Within true-handred and twenty (120) days after the recording of the Release of Construction Covenants to be issued by the Agency pursuant to this Agreement, Participant shall submit to Agency, for the review and written approval or disapproval of the Agency's Executive Director, a statement (the "Certified Project Cost Statement") setting forth the total amount of Project Costs, a separate amount for each category ((1) through (17)) in the definition of Project Costs in Section 202 (1) (a) above, and a reasonable description or iternizatiott of the costs incurred in each such category, together with a certificate at an independent certified public accountant reasonably acceptable to Agency (the "Accoutztartt"). The Accountant's certificate shall be addressed to Agency, and shall state that the Accountant is familiar with the definition of Project Costs in this Agreement and attest to the accuracy of the Certified Project Cost Statement, subject to usual and customary qualifications. The Accountant shall -be selected by Participant, but shall be one of the following: 0 Item 14. - 18 HB -204- - - - - - i) Arthur Andersen & Co., LLP; ii) Deioitte & Touche, LLP;" iii) Ernst & Young, LLP; iv) Price Waterhouse Coopers, LLP; v) KMPG Peat Marwick, LLP; vi) Any national or.other qualified accounting. firm, first approved in writing by the Agency Executive Director, having at the time of delivery of the Certified Project Cost Statement reputation and stature in the accounting community comparable to the foregoing firms as of the date of this Agreement. 2. Gsncral_CQntrac2. A copy of the contract between Participant and the general contractor for the construction of the improvements in connection with the redevelopment of the Site, consistent with the Project Budget and certified by Participant to be a true and correct copy thereof. , 3. Conktruction Loan. If Participant intends to obtain some or all of the financing from a construction lender, a copy of all principle construction loan documents (e.g., notes, trust deeds, indentures, loan agreements, etc.) and permanent loan documents (if a condition of the construction loan), necessary to complete funding for the development and construction of the improvements in connection with the redevelopment of the Site (as set forth in the Scope of Development and provided for in this Agreement). 4. Full Equity 'nan in . If Participant intends to finance the full cost of construction of the improvements itself without a construction loan, evidence satisfactory to Agency that Participant has, at the time such Evidence of Financing is required to be demonstrated, sufficient equity capital in sufficiently liquid form (and which is not otherwise encumbered by any pledge or grant of a security interest to a third party), to assure complete funding for the redevelopment and construction of the. improvements (as set forth in the Scope of Development and provided for in this Agreement). Participant shall have the tight to use.any funds or assets available to Participant for actual payment of costs, notwithstanding that said funds orassets may be different from the sources of equity capital utilized to demonstrate the evidence of equity financing required by this Agreement. Participant`s evidence of equity financing shall be 'satisfied by evidence of any combination of the following: a.. Cash, on deposit in a construction account, checking account, money market account, escrow or other immediately available form of deposit, held in the name of Participant, over which Participant retains the right to direct investments; 7 HB -205- Item 14. - 19 b. An irrevocable direct pay letter of credit, in favor of Participant, drawn on a . bank or other financial institution first approved in writing by Agency, with a terra that is consistent with the anticipated need for funds during the construction period, the terms of which are consistent with this Agreement; C. An available line of credit with a bank or other financial institution first approved in writing by Agency's Executive Director or designee, the terms of which are consistent with this Agreement, provided that the collateral or assets pledged by Participant for such line of credit shall not otherwise be utiliied to demonstrate the evidence of equity financing required by this Agreement, unless Participant has the right to substitute such collateral or assets with other collateral or assets which are not otherwise utilized to demonstrate the evidence of equity financing required by this Agreement and which may or may not be liquid; or d. Evidence of any other comparable form of assets that the Agency's Executive Director or designee reasonably determines is sufficiently liquid to assure that such assets will be available to Participant when needed to pay project expenses. 5. - Eartial.Equity_Einaacing If construction financing, as described in Section 202 (3), is insufficient to pay all construction costs with respect to the redevelopment of the Site, evidence satisfactory to Agency of sources of capital sufficient to demonstrate that Participant has, at the time such Evidence of Financing is required to be demonstrated, sufficient equity capital in sufficiently liquid form which is not otherwise encumbered by any pledge or grant of a security interest to a third party (as described in Section .202 (4)), to cover the excess; if any, of the cost of construction over the financing authorized by mortgage loans (as described. in Section 202 (3) or otherwise readily available to Participant). a. • i :.•n • � MM • Agency's Executive Director or designee shall approve or disapprove the submission of Evidence of Financing for redevelopment of the Site within the time established therefor in the Schedule of Performance (Attachment No. 3).* The sole criteria for approval or disapproval. of the Evidence of Financing shall be whether such Evidence of Financing demonstrates that there are sufficient funds to complete the redevelopment of the Site pursuant to this Agreement. TheAgency. shall not unreasonably withhold its approval or disapproval of the Evidence of Financing. If Agency's Executive Director br designee shall disapprove any such Evidence of Financing, Agency's Executive Director or designee shall do so by written notice to Participant stating the reasons for such disapproval. The Participant shall promptly obtain and submit to the Agency new Evidence of Financing. The Agency shall approve or disapprove such new Evidence of Financing in the same manner and within the same times established in this Section 202 for the approval or disapproval of the Evidence of Financing as initially submitted to the Agency: At anytime prior to the times provided in this Agreement for submission of Evidence of Financing, Participant may submit to Agency's Executive Director or designee. for review, comment and, if deemed appropriate by Agency's Executive Director or designee, approval, any loan applications to be made by Participant or pro forma loan documentation provided by the proposed lender, provided that review, comments and approval, if any, by Agency's Executive Director or designee shall be for the sole purpose of determining and advising Participant_ whether such loan applications or pro forma loan Item 14. - 20 — HB -206- documents are consistent with the requirements of this Agreement. All comments and approvals, if any, shall be in writing. Any items so submitted and approved by Agency's Executive Director or designee shall not be subject to subsequent disapproval. u•.ti u • • :•`� • Agency shall provide appropriate assistance to Participant as reasonably necessary, up to the amount referred.to below, to close Participant's construction and permanent loan(s), such as providing estoppel certificates, legal opinions, etc., provided however that all costs incurred by Agency to provide such assistance shall be paid by Participant. With respect to each loan closing, Participant shall deliver a retainer to Agency in the maximum sum of Ten Thousand Dollars ($10,000), concurrently with the submission of Evidence of Financing, to be applied to the payment of Agency's costs. The administrative costs of Agency shall be charged at the actual and reasonable cost thereof not to exceed an hourly rate of Fifty Dollars ($50). The costs of Agency for consultants or legal services required for providing such assistance shall be the actual sums billed to Agency for such consulting or legal services., If such costs incurred by Agency for a loan closing equal less than Ten Thousand Dollars ($10,000), the balance shall be refunded promptly following the closing. Notwithstanding any other provision in this Agreement, Participant's obligation to pay such Agency costs shall survive the termination of this. Agreement. ARTICLE 300. ADDITIONAL PARCELS a. In accordance with and conditioned on all the terms, covenants, and conditions of this Agreement and subject to specific Agency determinations and authorizations made on a case -by -case basis, and in consideration of the performance by each party of all of its obligations under this Agreement, the Agency hereby agrees to use good faith efforts in acquiring title to properties within or around the Site, or interest therein, in order to further the purposes of the Redevelopment Plan and this Agreement and to facilitate the redevelopment of the project approved by the Agency pursuant to the Redevelopment Plan and this Agreement, including without limitation the creation of unified ownership and control of the redeveloped Site in Participant (the "Additional Properties"), and to sell such Additional Properties, if any, to the Participant pursuant to the terms of this Agreement. Upon Agency's acquisition of title to such Additional Properties, if any, (and/or upon obtaining orders ofprejudgment possession meeting the requirements for conveyance of such Additional Properties), the Participant agrees to purchase the Additional Properties from the Agency, for the consideration and subject to the terms, conditions and provisions set forth herein. The Agency may, in its sole discretion, decide either to limit its attempts to acquire any Additional Properties to voluntary negotiation with property owners or to consider exercising the power of eminent domain. The Agency expressly'reserves the right to comply with all applicable laws in connection with any exercise or potential exercise of the power of eminent domain. 1 - ,,I • • • • • 1 . • • - r@ § 302.1 Escrow a. Agency agrees to open an escrow for conveyance of the Additional Properties with Commonwealth Land Title or any other escrow agent mutually acceptable to -Agency and 9 xB -207- Item 14. - 21 Participant ("Escrow Agent") within thirty (30) days (or earlier, if feasible) after Agency acquisition of fee title to the Additional Properties. This Section 302 constitutes the joini escrow instructions of Agency and Participant, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of theescrow. Agency and Participant shall provide such additional escrow instructions consistent with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to Agency and- to Participant within five (5) days after opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder.' b.' Upon delivery to the Escrow Agent of the Grant Deed (hereinafter defined), duly executed by Agency and Participant, the Escrow Agent shall .record the Grant Deed in accordance with these escrow instructions, provided that title to the Additional Properties can be vested in Participant in accordance.with the terms and provisions of this Agreement. The Escrow Agent shail'buy, affix,. and cancel any transfer stamps. required by law. Any insurance policies governing the Additional Properties are not to be transferred. "Grant Deed" shall mean the instrument by which Agency shall convey fee title to the Additional Properties to Participant, substantially in the form of the instrument appended hereto as Attachment No 8 and incorporated herein by this reference. C. Participant shall pay into escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified Participant of the amount of such fees, charges, and costs, but not earlier than ten (10) days prior to the scheduled date for the conveyance of the Additional Properties: (1,) One half of the escrow fee; (2) The premium for the Owner's Title Policy (hereinafter defined); and (3) Recording fees. d_ Agency shall pay into escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified Agency of the amount of such fees, charges, and costs, but not earlier than ten (10) days prior to the scheduled date for the conveyance of the Additional Properties: (1) . One half of the escrow fee; (2) From funds derived from Participant pursuant to Section 304, costs necessary to place the title to the Additional Properties in the condition for conveyance required by the provisions of this Agreement; (3) Ad valorem taxes, if any, upon the Additional Properties or upon.this Agreement or any rights hereunder, prior to the conveyance of title or possession, and (4) Any State, County, or City documentary stamps or transfer tax. l0 Item 14. - 22 - xB -208- = — e. Agency and Participant shall timely and properly execute, acknowledge and deliver the Grant Deed conveying to Participant title to the Additional Properties in accordance with the requirements of this Agreement. f The Escrow Agent is authorized to. (1) Pay, and charge Agency and Participant, respectively, for any fees, charges and costs payable under this Section 302. Before such payments are made, the Escrow Agent shall notify Agency and Participant of the fees, charges and costs necessary to clear title and close the escrow. (2) Disburse funds and deliver the Grant Deed and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by Agency and Participant. (3) Record any other. instruments delivered through this escrow ifnecessary or proper to vest title in Participant in accordance with the terms and provisions of this Agreement or as directed by Agency. g. '.All funds received in this escrow shall be deposited by the Escrow Agent in a general escrow account with any state or national bank doing business in the State of California and reasonably approved by Participant.and Agency,.and may be combined in such with other escrow funds of the Escrow Agent. h. If this escrow is not in condition to close on or before one -hundred and twenty (120) days after escrow opens, either party who -then shall have fully performed the acts to be performed before the conveyance of title may, in writing, demand the return of its money, papers, or documents from the Escrow Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent (or the party making such demand) shall have mailed copies of such demand to the either party or parties at the address of its principal place of business. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the l0-day period, in which event the Escrow Agent is authorized to hold all money, papers, and documents with respect to the Additional Properties until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no -such demands are made, the escrow shall be closed as soon as possible. i. If objections are raised as above provided for; the Escrow Agent shall not be obligated to return any such money, papers, orAoeuments except upon the written instructions of both Agency and Participant, or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. If no such objections are made within said 10-day period the Escrow Agent shall immediately return the demanded money, papers; or documents. - - HB -209- — —. —Item 14. - 23 j.. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agent ("General Instructions"). In the event of a conflict bctwcen this Agreement and any such General Instructions, this Agreement shall control. She parties agree, however, that they will refuse to sign General Instructions which (1) purport to relieve the Escrow Agent of liability for negligence or intentional wrong -doing; (2) excuse the Escrow Agent from strict compliance with each and all of the provisions of this Agreement and the General Instructions; or (3) purport to -authorize the Escrow Agent to follow the instructions or directive of any person not a direct signatory party to this Agreement_ Any amendment to the escrow instructions shall be in writing and.signed by both Agency and Participant. At the time of any amendment the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. k. All communications from the Escrow Agent. to Agency or Participant shall -be directed to the addresses set forth in Sections 105, and in the manner set forth in Section 801 for notices between the parties hereto- (1) mineral. Rentals, revenues, and other income, if any, from the Additional Properties, and operating expenses, if any, affecting the Additional Properties shall be prorated as of 11:59 P.M. on the day preceding the close of escrow. (2) Tages_andAssemenLs. Allnon-delinquent real estate taxes on the Additional Properties shall be prorated as of the close of escrow. . (3)- Qpegtin jynses. Any other expenses incurred in operating, securing and maintaining the Additional Properties, and any other costs incurred in the ordinary course of business or the maintenance of the Additional Properties shall be prorated on an accrual basis, Agency shall pay all such expenses that accrue prior to the close of escrow and Participant - shall pay al I such expenses accruing on the close of escrow and thereafter. (4) lActl d olr ramtion. All proration shall be made in accordance with customary practice in Orange County, except as expressly provided herein. Such prorations, if and to the extent known and agreed upon as of the close of escrow, shall be paid into escrow by the respective parties. a. Subject to any mutually agreed upon extension of time, Agency shall convey title to the Additional Properties to Participant_on or before the close of escrow (so long as all conditions precedent have been satisfied), or such later date mutually agreed to in writing by Agency and Participant and communicated in writing to the Escrow Agent. b. Except as otherwise provided herein, the purchase price shall be delivered to Agency and possession of the Additional Properties shall be delivered to Participant at the close of escrow. Participant. shall accepttitleand possession to the Additional Properties upon the close of escrow, 12 Item 14. - 24 _ _ _ —. xB -210- — - § 302.3 dorm QMced .Agency shall convey to Participant title to the Additional Properties in the condition provided in Section 302.4 by Grant Deed in a forth to be mutually agreed upon by Agency and Participant consistent with this Agreement and substantially in the form attached hereto and incorporated herein as Attachment No. 8• The Grant Deed shall contain covenants necessary or desirable to carry out this Agreement. § 302.4 Condition of Titte Subject to the terms and conditions of this Agreement, Agency shall convey to Participant fee simple merchantable title to the Additional Properties free and clear of all liens, encumbrances, assessments, easements, leases and taxes; except those which are set forth in the Grant Deed, and those which are otherwise consistent with this Agreement and which are acceptable to Participant. Subject to any mutually agreed upon extension of time, Agency and Participant shall deposit the Grant Deed with the Escrow Agent on or before the close of escrow. 1 . ••: •i K� , • • • • • . The close of escrow and the obligations of Agency and Participant under this Section 302 are subject to the satisfaction prior to the close of escrow (unless otherwise provided), of the following conditions, and the obligations of the parties with respect to such conditions are as follows: (1) Participant shall have duly performed each and every agreement to be performed by Participant hereunder and Participant"s representations, warranties and covenants set forth in this Agreement shall be true and correct as of the date of the close of escrow. (2) Agency shall have duly performed each and every agreement to be performed by Agency hereunder and Agency's representations, warranties and covenants set forth in this Agreement shalt be true and correct as of the date of the close of escrow. - (1) Participant shall have delivered the items to be delivered by Participant, when and as required in this Agreement. (2) Agency shall have delivered the items to be delivered by Agency, when and as required by this Agreement. 13 xB -211- - Item 14. - 25 C. C ditions-Prudent. As of the close of escrow, all of the conditions precedent to conveyance of title as set forth in this Agreement shall have been satisfied. d. Tj kIttsttran=. At or prior to the close of escrow, Commonwealth Land Title or any other title company mutually agreed upon by Agcncy and Participant (the "Title Company") shall be committed to issue the Owner's Title Policy. c. Failure of Coaditio s to_Closc-Q row. In the event any of the conditions precedent to the close of escrow are not timely satisfied 'or waived, for a reason other than the default of Agency.or Participant, the following shall apply:. (1) With regard to conditions precedent to the close of escrow which are for the benefit of Agency, Agency shall have the right to terminate the escrow and the righis and obligations of Agency and Participant thereunder, except as otherwise provided herein; and (2) With regard to conditions precedent to the close of escrow which are for the benefit of Participant, Participant shall have the right to terminate the escrow and the rights and obligations of Agency and Participant thereunder, except as otherwise provided herein; and (3) With regard to conditions precedent to the close of escrow which are for the benefit of both Agency and Participant, either party shall have the right to terminate the escrow and the rights and obligations of Agency and Participant thereunder, except as otherwise provided herein; and (4) Escrow Agent is hereby instructed to promptly return to Participant and Agency all funds, if any, and documents deppsited by them, respectively, into escrow which are held by Escrow Agent on the date of said termination (less, in the case of the party otherwise entitled to such funds, the amount of any cancellation charges required to be paid by such parry under Section 302.6 (f)); and (5) Neither party shall have any further rights or obligations hereunder except as otherwise provided herein. f. Cancellation Fees and Expo. In the event this escrow terminates because of the rronsatisfaction of any condition for a reason other than the default of Agency or Participant under this Agreement, the cancellation charges, if any, required to be paid by and to Escrow Agent and the Title Company shall be borne by Participant and ail other charges shall be borne by the party incurring same. g. DisbLrsem�l�t,5sind O her Actonc to be taken by the .scrow Agent. At the close of escrow, Escrow Agent shall promptly undertake all of the following in the manner hereinbelow indicated: 14 Item 14. - 26 xB -212- .(1)* Cause the Grant Deed and any other documents which the parties hereto may mutually direct, to be recorded in the Official Records of the County Recorder of Orange County, and obtain conformed copies thereof for distribution to Agency and Participant. (2) Direct the Title Company to issue the Owner's Title Policy to Participant. (3) Prepare and distribute to Participant and Agency each, copies of both parties' escrow closing statements and a complete copy of all documents handled by escrow_ Escrow Agent agrees that release of funds to Agency shall irrevocably commit Escrow Agent, on behalf of Title Company, to issue the Owner's Title Policy in accordance with this Agreement. § 302.7 • ]'itIe tn�utance Concurrent with recordation of the Grant Deed, the Title Company shall provide and deliver an owner's title policy.to the Participant ("Owner's.Title Policy"). Participant shall be responsible. for paying the premium for a title insurance policy in the amount of the purchase price, including any extended coverage or special endorsements which it 'requests. Agency shall have no responsibilityfor paying the cost of the premium for any title insurance policy. § 302.8 Qccupants of the Additional Properties Agency agrees that title to the Additional Properties shall be conveyed free of any possession or right of possession except that of Participant, unless waived by Participant in writing. The Additional Properties and all existing improvements thereon shall be conveyed in an "as is" condition, with no warranty, express or implied by Agency as to the existence or non-existence of Hazardous Substances (hereinafter defined); the condition of the soil (or water), its geology, or the presence of known or unknown faults or the condition of the existing improvements. It shall be the sole responsibility of Participant, at Participant's expense, to investigate and determine the condition of the Additional Properties and its suitability for the development and use required by this Agreement if condition of the Additional Properties, or any part thereof, is not in all respects entirely suitable for the use or uses to which the Additional Properties will be put, then it is the sole responsibility and obligation of Participant to take such action as may be necessary to place the Additional Properties in a condition that is entirely suitable for the development and use provided in this Agreement. § 302.14 Indemnity Participant hereby agrees to indemnify, defend and hold harmless Agency and City and their respective members, officers, agents, employees, contractors and consultants from any claims, actions, suits, legal and administrative proceedings, liability, injury, deficiency, damages, fines, penalties, punitive damages, costs and expenses (including, without limitation, the cost of any cleanup, remediation, removal, mitigation, monitoring or testing of Hazardous Substances, and reasonable attorneys' fees) resulting from, arising out of, or based upon (i) the presence, release, use, ELI HB -213- _ - Item 14. - 27 generation, discharge, storage or disposal of any Hazardous Substances on, under, in or about; or the transportation of any Hazardous Substances to or from, the Additional Properties; or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Substances on, under, in or about, to or from, the Additional.Propertics. This indemnity shall:include, without limitation, any damage, liability, fine or penalty arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse affect on the environment. Participant shall not be responsible for (and such indemnity shall not apply to) property damage or bodily injury to the extent caused by the intentional misconduct or gross negligence of the Agency or City or their designated employees or agents, or for any legal obligations of the Agency and -City, if any, which are independent of this Agreement and existing as of the date of this Agreement. § 303. intendomlly_QmAMd § 304. Fmlic.igant_to. Advance Ac Uisition-ausi$ccation.C-OqS a. In accordance with this Section 304 and within the times required by Section 305; Participant shall advance to Agency all actual Acquisition and Relocation Costs incurred or to be incurred by Agency in relation to the acquisition of Additional Properties, if any, that may be authorized for acquisition by the Agency. Acquisition and relocation obligations, if any, shall be administered and reviewed by the Agency (or its designated relocation consultant) in conformity with all Relocation laws (hereinafter defined). As used in this Agreement, "Acquisition and Relocation Costs" shall mean all costs arising out of the acquisition of Additional Properties, including, but not limited to, purchase price payments to third party owners (including all interests of the owners, tenants, vendors, suppliers, and any and all other claimants as to the purchase price) and related closing costs (including brokers' fees); costs incurred by the Agency by negotiation or eminent domain including, but not limited to, thepurchase price, just compensation for the taking or threatened taking of property interests'in the Additional Properties (land; leasehold interest, building, fixtures, equipment, loss of goodwill and improvements, if any); costs for payment of goodwill as provided under California law.in eminent domain actions; fees and actual expenses of acquisition agents; appraisal fees; costs of environmental studies performed on the Additional Properties (including, but not limited to, all investigations and reports done on Hazardous Materials); escrow fees; costs of drawing the deeds for each property acquired; recording fees; notary fees and premiums for title insurance policies; any state, county or city documentary stamps or transfer tax; court costs; witness fees; expert witness Pecs; prorated taxes; reasonable attorney fees; deposits to obtain an order of prejudgment possession, if incurred; amounts to satisfy judgments of condemnation; costs necessary to permit early acquisition of property interests where delays would create a hardship for the owner; abandonment costs and/or damages. which the Agency may be ordered to pay in any eminent domain proceeding; and any additional costs incurred to settle or pay claims of inverse condemnation, or judgments in inverse condemnation; costs for relocation assistance and benefits pursuant to the Relocation Laws (i.e., all applicable state and local relocation laws, including without limitation, the California Relocation Assistance Law (Government Code § 7260 et seq.) and the implementing regulations thereto (California Code of Regulations, Title 24 § 6000 et seq.) and local implementing regulations thereto, and all applicable federal relocation laws, including, without limitation, the Uniform Relocation Assistance and Real Property Acquisition 16 Item 14. - 28 • - - - HB -214- Policies Act of 1970 (42 U.S.C. § 4201-4655, and 49 C.F.R. part 24), . acquisitions and eminent domain laws (Govemment Code § 7267 et seq. and Code of Civil Procedure § 1240.000 et seq.) and any other applicable federal, state or local enactment. regulation or practice providing for relocation assistance and benefits, acquisition and/or compensation for property interests (including without limitation goodwill and furnishings, fixtures and equipment, leasehold bonus value, and moving expenses)); and any and all related claims. b. All Acquisition and Relocation Costs shall be the sole financial responsibility of Participant_ The Agency shall have no obligation to repay or reimburse Participant for any Acquisition and Relocation Costs. c: Participant hereby forever waives, disclaims and releases Agency and the. City and their respective officers and employees from all claims for Acquisition and Relocation Costs, and covenants and agrees- to and shall defend, release, indemnify and hold harmless the Agency and the City and their respective officers and employees (collectively, the "Indemnitees") from and against any and all claims, actions, liability, penalties, charges, loss, damage, costs, expenses whatsoever (including reasonable attorneys' fees and court costs) for Acquisition and Relocation Costs which may now or in the future be incurred or suffered by Indemnitees by reason of, or resulting from, in full or in part, or in any respect whatsoever from the acquisition of Additional Properties or redevelopment of the Site pursuant to this Agreement. § 305. Utter of Credit t+o AgMCY a. In the event Agency determines to acquire any Additional Properties (or portions thereof) by authorizing Agency staff to initiate negotiations to acquire such properties, then, within thirty (30) days after the date of Agency's determination, Participant shall deliver to the Agency an irrevocable tenet of credit, cash deposit or other. satisfactory security, first approved in', writing by the Agency Executive Director and legal counsel as to form, content and issuer, in an amount determined pursuant to Section 305 (b) below, and otherwise complying with the requirements of this Agreement (the "Original Letter of Credit"). b. - The. amount of the Original Letter of Credit shall be established by the Agency's Executive Director based on Agency appraisals of the Additional Properties and Agency estimates of all other contemplated Acquisition and Relocation Costs. The Agency shall consult with the Participant in making such determination and shall provide written notice to Participant of the amount of the Original Letter of Credit no later than thirty (30) days prior to the date Participant is required to deliver the Original Letter of Credit to Agency. The term of the Original Letter of Credit shall be not less than one (1) year, and such. term shall be subject to extension if Acquisition and Relocation Costs will or might be incurred following the scheduled expiration of the Letter of Credit; provided, however, in the event the Original Letter of Credit is not extended as required herein within thirty (30) days prior to its scheduled expiration, the Agency shall have the right to draw from the Original Letter of Credit an amount deemed sufficient by Agency to pay for any Acquisition and Relocation Costs which will or might be incurred following such scheduled expiration. C. Within thirty (30) days after the Agency provides written notice to Participant that Acquisition and Relocation- Costs are likely to exceed the amount of the Original Letter of Credit, Participant shall deliver to the Agency additional letter(s) of credit and/or amendment(s) to 17 _ _ —_ xB -215 -- - Item 14. - 29 the Original Letter of Credit, first approved in writing by the Agency as to form,. content and issuer (each referred to herein as an "Additional Letter of Credit"), in such amounts as are requested by the Agency to cover Acquisition and Relocation Costs not covered by the existing Original Letter of Credit. The Agency may provide such notice at any time -and from time to time. The Original Letter. of Credit, together with all Additional Letters of Credit, are referred to collectively herein as . the "Letter of Credit." d. Participant shall be responsible to pay to the issuer of the Letter of Credit all interest, costs and fees incurred with respect to the issuance of the Letter of Credit and each draw on the Letter of Credit. C. The Agency shall have the right.to draw on the Letter of Credit from time to time -to pay any and all Acquisition and Relocation Costs as such costs become due. The only condition for any draw on the Letter of Credit shall be a certification by the Agency Executive Director or designee that. the draw is permitted under the terms of this Agreement. A copy of such certification by the Agency Executive Director or designee, along with a breakdown of the draw amount, shall be provided to Participant. Participant and Agency -shall consult so as to attempt to schedule relocating and business closures sous to lawfully minimize Acquisition and Relocation Costs without delaying completion of the Project. Within ten (10) days following each draw on the Letter of Credit, the Agency shall provide the Participant with a written report showing the specific nature and amount of each such draw. ARTICLE 400. REDEVELOPMENT OF THE SITE The improvements on the Site shall be rehabilitated and renovated or caused to be rehabilitated and renovated by Participant in accordance with and within the limitations established in the Scope of Development (Attachment No. 4), the Redevelopment Plan, and plans approved by the Agency pursuant to this .Agreement. Participant shall use its best efforts to cause the replacement of the exterior of the Ward Parcel building and renovation: of the Ward Parcel parking lot in accordance with City approved plans; in order to ensure that such- Ward Parcel building and parking lot conform with the redevelopment of the Site, regardless. of whether or not this Agreement is terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 7.02.2 (c). § 402. ecific Plan ndC413d1tional Use Permit5 Participant shall prepare and submit to the City applications for building, grading and excavation permits and any other permits which maybe required for redevelopment of the Site. All such applications shall comply with City requirements for the applicable permit and shall be submitted for review and written approval or disapproval by the City within the times established therefor in the Schedule of Performance (Attachment No. 3). The Site shall be redeveloped as generally established in City -approved entitlements and permits, including Specific Plans and Conditional Use Permits, if applicable, except for such changes as may be mutually agreed upon between Participant and the City. E Item 14. - 30 HB -216- SEP-29-DO I7:I2 Frw:HOLLAHD & KNIGHT LLP 12338962450 T-727 P.11/19 ,lob-944 aC by: KANE, SALLI�H a atnh�+�u � �.,, „�„ ,,.,... , The Participant shall bear till costs of constructing, reWilitatting and teuovatiog the improve mints = tho Site and cotastructine end installing all public and private ort- and off -site improvements thereon or therefor, except as set forth in the Scitodtule of Feasibility Gap Payments (AttacbnaentNo. 7). The Schedule of Feasibility Gap Payments consists of Fart i and Part 2, with part 2 only becou ttg applicable ha the event this Agreement is terminawd as to tt Ward Parcel pursuant to Section 702.1 (b) or 702.2 (e), Participant herehy.uarrants and represents thatParticip0t is party to a reciprocal easement agreement ,with other property owners within the Site. Partieipartt shall not ametud the reciprocal eument agreement without the prior written approval of Agency as to both consistency with this Aft sad Participant's authoi~dty overthe entire Site to acogsttptish, the redcvolopm= purposes camcmplawd under Otis Agreement. Participant covettertes to use its best efforts to obtain the. consent of other property owners vvitit u the Site to redevelop the parking lots azui building exteriors on rile Site pall 1=t tv this Agraameot... The Participant shall obtain, or calm m bti obtained, all approvals required for the redevelopment of the Site, including those. specified herein, Wit1 k the tinges- specified in the . Schedule of Performance (Attacluncal No. 3). The Participant shall be& and complete all- cgslWacdon and tehabiliiadon wid4n tho tunes specified is the Sobadule of Pmfommae. The Schedule of Forformaaee is subject to revision from time to tune as approved in Valting by the Agency Executive Director or designee and the Partiaipant. During pcdods of construction an&or whab4hation, the Participant, shall subrnet to the Agcnay a wrl= report of the progress of thc eorab=tion Mhari and as rwasonably requested by the Agency. The, report shall he in such form and detail as may be ecasonably required by the Agency and shall include a number of construction photogr&phs (it'rcquested) taken since the.last report by the Panidpm •1. , c.a, •. :gas , ., . •r.. ra 3:,,: ,y_c}► The Participant agrM to and shall deftd, release, indemtufy and hold harriiew the Agency and the City and their respective officers and emploYces from and against any 4ad all claims, actions, liability, penalties, charges, loss, damage, costs, or expenses whatsoever ('including reasouutbfe attorneys' fecs acid tenet costs) asiairg from or as a result of the death of any person or any accident. injury. Iasi, or damage whatsoever caused to any parson or to the property of any person wblob s'ball occur directly or indirectly = a ro4ult of or in canaeation with the acts of or on behalf of the Pattic4 ant in connection with the redevelopment of the Site, this Agreement, or -the implement ion ti erco& whether such activities or performance thcrecf be by the Partcipant or by anyone directly orindiremdy m1ploycd or aontracted'by Participant, or whether such damage shall occur or be discova'red before or after termination of this Agreatneut: Thus indemtuty and a smement R xB -217- Item 14. - 31 5EP-29-DO Mil Fra2_H4LLAND d KNIGHT LLP i213B96245Ei T-72T A.iZl18 Job-Sdd to defend. release "hold harmlais die Aaeacy end City "I include but shad mat be. limited to =y and an pending and faturo claims, actim, liability, judgments, orders, penalties, chaos, tars, d=W, its, or oq=ses whatsoever (inclu ft rssonabic rout rq6' fCCo and ocurt coca) stWill item or as a =suit of a claim, administrative procerdiug orFadicisl action filed by or againg the Isarticipant or Agersi;y or City.or any of thou respective officers and employees retating to the subject of this Agre=b m or tha decisions udfor actions taken by the Agency or City Mazing to or is impla=tadon of this Agreement, inclCding, but not limited to the following lawsuits currently under fitigatiari: a. Burlington Coat Factory urarolwuse of Huntington fkxch, lnc., a Califomin corporation v. City of Iiundamton loch Redevelopment Agency, a Cal 0mia munacipat corporZdan, City of HUntington Beach, a CalitbMia munii ipat corporatioa, Ray Silver, individually end is his capacity as an Adrnlnistratar for the City ofHunungton Beach Radevelopment Agowy, Howard 2c1cfsky, individually and in bis capstity as file Duecwr of Pl$uuing of the City of Huntington Beach, United States District Conit, Central District of Carlifbmia, Case No. CY00- 06683NNgAUX). b. In the Matter of the Petition of the RtticyclopmM Agency.of the City Of HundngtotLBeach, Superior COW OfCaliforitia, Connty-Of Qraoge, Civil Ca"NO. CC09'r.93. c. Burlinvon. Coat Factory Warehouse of Huntington Desch, Inc., .tt Cali =ia ca Wrsdon v. Huntington Center Associates, it >3 = limited liability company, Zstnlow Retail Ptgperti%.a Dolaware limited liability compaatY. 'MO. SWIM company, a V�elawam limited liability company, Superkr Court of Cati&znla. County of Orange, CM No. 00CCQ63w d. Montgm=zy, Ward, LLC, a Dclawm limited MbIlityemnpany Y. City of Huntitiston Deaa' a Cglifmia tauttk-ipal corpoeat# m as l trdan% and Huncinjton Ccntar Assoiatas, a Deiiwaee limited .liability Cntnpany, and ttedevt loptncut Agsacy of t>ra City *?Uuntia&n BLaeh, a public body, curate and politic, as 14W Pardea in Interest, .Superior Caurr of Califdmia, County of Grange, Case No. ODCD9M. 7J,s Participants Al not be responsible for, and Bch in►iesnnity shall not apply to the extent lust v.mt items rmults flora the gross negl}setue or vt mr&Ul intcridaWl AM or Qmims *ns of the Agency. City, or their respective oifteers; agents or =ploy=, ptgvided, howover, tbu Participant shall rmWa obligated to pax for clsiMs, actions, liability, judgrtseats, orders, penaltleg, charges, lass, damage, r.sts, or cxpeps}es wbass4evor (1r4ud'tag reasonable attomeyle fees =d court costs) for all pr=t and ft= litigation arising out of or related to the subject of this Agreement (including, but not limjw ta, those described fi Section 406.1(a) tluough (d)) regress Of the. outcome of any such litigation). Participant's obliptions set forth above regarding the payment of re O mblc st3orttey3' lees il)=rrcd by Asenzy aisttill be subject to the following: (1) Participant shall only be obligated to pay for those costs itxuied 4tw the date of this Agreccnant; (2) paymieLl s of SM=Ys' � f- Ferns and coda =cler tins 4 t to defend Bel ba paid by-PArlicipard to A9=QY as immrred and wham dine for payment by Agency: (3) Agency $hall have the right to select rscnay's legal comual, but x6U periodically consult with Participant including without timitatiats, ptiswr I to hiring o'ut3idc �'c 20 Item 14. - 32 — HB -21 s- SEP-29-O0 17:13 From:HOLLAND & KNIGHT LLV 12138982450 T-727 P.13I19 Job-944 Agency shall rovltic Particl OAt with monthly Boat legal coattsel; (� F►g y p p y reports; Sad Agency agrees to admi=;SUx Such costa in a cost effective mmner. i3t drz the -period camtat wing with aay preliminary work by Participant an or with regard to the Site or arty portion ftnot until twenty (20) years after the t)pem ttg Commencement Date, P the participant shall take out, maintain and furnistr ar cause to be fumisW to the Agency, duplicate originals or appropriate. certificaxes (countersigned by an authorized agent of the insurer) of iusurarzre ss f 116ws: s : A. Cornpreliendve geau ra.! liability (bodily injury and -property damage), amamobile iiabilit3, Oncluft owned, hired, and non -owned vehicles), blanket eorractztal liability, and personal Oury liability, all with limits not leas than $5,O00.000 combi=d sin& limit per occurrence. All such poliaea shall contain a: waiver of sabmgation for the benefit of the Ager3oy nd the City. B. All Such iusumat policies Small cow the following duce endors==t pmriisi4sis: 1. 'Tile City of R ►tington Beach and the Redmiopment Ageaay of the City of Runtington Beacab (the "Agency"); their clective anti appointive boards, officers, and employees asp added ss additional insureds with respect to this subiect.prajeot ;'and contract with the Agency" �'z "Said policy &hall not terminate; be canceled, nor the coverago -reduced until after d try (30) clays writ= notice is Siv= to the kedevelopment Agancy of Me City ofI�;uitingtonl3eaoia-" "Saul policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Ages y of the City of Huntington Beach, their eleclivc =d appointed boards, off1ccrs sud entgloym ll be primary insurance and uac contribudsig with, any other imumee , sinteined by tbo City of Hun:Ongron.Beach or the Rcdev elkument .Agency of the City of 1-4ntangton $$ b2' C. All Such itsura= policies shall be provided by insmvs admitted awl.authorized to do business in the Star. of Cali OM11 with g mil lmum rating of A:VM, Participant mu9t deliver proofof the insurance rat cd un&rthis Sanction 406.1 toAgenq prior to Agency execution of this Agreement, D. The insurance coverage sod limits required herein shall notbc cons=d as a Iimit of Participant's UabiliW. Pardoipa* agww to respond for any iowee with respect to this AS=zueu; and 4mpi em madon thercof, incurred by the .A.gericy or City and 21 HB -219- . Item 14. - 3 3 not covered by Participant's insurance, whether by reason of coverage being inapplicable or by Participant's failure to obtain coverage. Participant agrees to provide immediate notice to Agency and City of any claim or loss against Participant that includes Agency or City as a defendant. Agency and City assume no obligation by the receipt of such notice, but have the right (but not the duty) to monitor the handling of any such claim or claims if they are IikeIy to involve the Agency or City. (a) "Hazardous Substance," as used in this Agreement means any substance, material or waste which is or becomes regulated by the United States government, the State of California, or any local or other governmental authority, including, without limitation, any material, substance or waste which is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely hazardous waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code; (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code; (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code; (iv) defined as a `.`hazardous substance" under Section 25281 of the California Health and Safety Code; (v) petroleum; (vi) asbestos;. (vii) a polychlorinated biphenyl; (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as a "hazardous - substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery.Act (42 U.S.C. Section 6903); (xi) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601); or (xii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, treatment or disposal, or is defined as "hazardous" or is harmful to the environment or capable of posing a risk of injury to public health and safety. (b) Participant hereby represents and warrants that the development, construction and uses of the Site permitted under this Agreement (i) will comply with all applicable environmental laws; and (ii) do not require the presence of any Hazardous Substance on the Site, except for those customarily used in the ordinary course of business for such development, construction and use. (c) By this Agreement, Participant provides to the Agency, effective 'immediately, an indemnification of the Agency and City and their respective members,. officers, employees, agents, contractors and consultants relating to the environmental condition of the Site and the presence of Hazardous Substances thereon. Therefore, Participant hereby agrees to indemnify, defend and hold harmless Agency and City and their respective members, officers, agents, employees, contractors and consultants from any claims, actions, suits, legal and administrative proceedings, liability, injury, deficiency, damages, fines, penalties, punitive damages, costs and expenses (including, without limitation, the cost of any cleanup, remediation, removal, mitigation, monitoring or testing of Hazardous Substances, and reasonable attorneys' fees) resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Substances on, under, in or about, or the transportation of any Hazardous Substances to or from, the Site; or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or 22 Item 14. - 34 HB -220- transportation of Hazardous Substances on, under, in or about, to or from, the Site. This indemnity shall include, without limitation, any damage, liability, fine or penalty arising from or out bf any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse affect on the environment. Participant shall not be responsible for (and such indemnity shall not apply to) property damage or bodily injury to the extent caused by the intentional misconduct or gross negligence of the Agency or City or their designated employees or agents, or for any legal obligations of the. -Agency and City, if any, which are independent of this Agreement and existing as of the date of this Agreement. (d) From the date of this Agreement, Participant hereby waives, releases and discharges the Agency, the City and their respective members, officers, employees, agents, contractors and consultants, from any and all present and future claims, demands, suits, legal and administrative proceedings, and from all liability for damages, losses, costs, liabilities, fees and expenses (including, without limitation, attorneys' fees) arising out of or in any way connected with the Agency's or Participant's use, maintenance, ownership or operation of the Site, any Hazardous Substances on the Site, or the existence of Hazardous Substances contamination in any state on the Site, however the Hazardous Substances came to be placed there, except to the extent arising out of the gross negligence or intentional misconduct of the Agency or City or their employees, officers or agents. Participant acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." To the extent of the release set forth in this Section 406.2, Participant hereby waives and relinquishes.ail rights and benefits which it may have under Section 1542 of the California Civil Code. 407. Nondiscrimination during Cons The Participant agrees for itself and its successors and assigns that in the rehabilitation and construction of the improvements pursuant to this Agreement, Participant will not discriminate against any employee or applicant for employment because of sex, marital status, race,, color, religion, creed, ancestry, or national origin, and that the Participant will comply with all applicable local, state and federal fair employment laws and regulations. •i: • .F• ..r. The construction of all improvements on the Site shall be in conformity with all applicable laws, including all applicable Federal and State labor standards. '1' �� ! • rtn • •"� ''Ns Before commencement of construction or development of any buildings, structures or other . works of improvement upon the Site or any portion thereof, and within the times prescribed therefor 23 - - - - — - — -1413 -221- - Item 14. - 35 in the Schedule of Pcrformance (Attachment No. 3), the Participant shall. at its own expense, secure or cause to be secured any and all land use and other entitlements, approvals and permits which may be required by the City .br any other governmental agency affected by such construction, development or work, including but not limited to conditional use permit(s), grading, building and sign permits. It is understood that the Participant's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections to obtain a building permit. The Agency shall provide all proper assistance to the Participant in securing these permits. The Participant shall be responsible for paying all environmental'mitigation fees and permits, and all fees and charges of any kind charged by City pursuant to law. . § 410. Prohibition Against Transfer (a) No voluntary or involuntary successor in interest of the Participant shal I acquire any rights or powers under this Agreement except as expressly set forth herein. (b) Prior to twenty (20) years after the Operating Commencement Date, the Participant shall not make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the S ite or any improvements thereon or any interest therein ("Transfer") without the prior written approval of the Agency, except to a Controlled Affiliate. This prohibition shall not be deemed to . prevent the granting of easements, leasehold interests, licences, concessions, subleases or permits necessary for the redevelopment of the Site pursuant to the Scope of Development (Attachment No. 4), nor shall it prohibit the granting of any security interests permitted under this Agreement for financing the redevelopment of the Site consistent this Agreement. (c) Subject to Section 410 (d) below, Participant may make a Transfer with the prior written approval of the Agency subject to the rights of any permitted Mortgagee, which approval shall not be unreasonably withheld in the event that all conditions of this Section are met. Such approval shall be given by Agency if. (1) At the time of such Transfer, this Agreement shall be in full force and effect and either no default then exists or.no default will exist upon -consummation of the Transfer; (2) -- Agency determines in its sole discretion that the following Transfer requirements are met; (i) the Transfer is made to a responsible third party who will undertake Participant's responsibilities under this Agreement to develop, use and maintain the Site in accordance. with this Agreement; (ii) if, the Transfer occurs prior to the issuance of a Release of Construction Covenants, that such third party shall demonstrate qualifications and experience with respect to the type of development proposed herein and in the Agreement to assure the development and operation of the Site are equal to or greater than the qualifications and experience of Participant; and (iii) such third party shall demonstrate sufficient financial resources or commitments to assure operation (and, if the Transfer occurs prior to the recordation of a Release of Construction Covenants, development) of the Site in accordance with this Agreement; (3):::>. The transferee shall have executed an express assumption, .in form and substance first approved in writing by Agency, of the obligations. and liabilities of Participant under this Agreement arising on and after the effective date of the Transfer, 24 Item 14. - 36 - - - - - - - xB -222- - . (4) The Transferee shall have a net worth equal to or greater than that of Participant, subject to increase on the fifth (5th) anniversary of the effective date of this Agreement and every five (5) years thereafter in accordance with the escalation of the Consumer Price Index during each such five (5) year period, or, for any Transfer proposed after the recordation of the Release of Construction Covenants, such other evidence as may be reasonably satisfactory to Agency documenting the financial wherewithal of the transferee to successfully operate the improvements and the Site; and (5) The transferee shall have experience in the operation and management of a retail shopping center of the type and character located on the Site, or shall agree and covenant as an additional obligation under this Agreement to at all times cause the Site to be operated and managed by a person, first approved in writing by Agency's Executive Director, who has substantial experience in managing and operating a retail shopping center of similar type and character. The Agency shall not unreasonably withhold approval of the release of Participant upon the approved Transfer, based upon the evidence provided above. If Agency approves any Transfer pursuant to this Section, such approval shall not .be effective unless and until Participant gives Agency notice of the Transfer and a copy of any documents effecting and/or evidencing such Transfer, and unless and until any such transferee assumes all of the obligations and liabilities of Participant under this Agreement. (d) Notwithstanding any other provision of this Agreement to the contrary. Agency approval of.a Transfer shall not be required in connection with any of the following: (1) Any Transfer to a Controlled Affiliate. (2) . Transfers. resulting from the death or mental or physical incapacity of an individual. (3) Transfers or assignments in trust for the. benefits of spouse, children, grandchildren, or other family members. (4) The conveyance or dedication of any portion of Participant's interest in the Site to the City or other appropriate governmental agency, or the granting of easements or permits in accordance with the Agreement where required to facilitate the development or operation of the -Site or the development or operation of any of the other portions of the Site. (5) The leasing or sub -leasing of a building pad or of any part or parts of a building or structure for occupancy, or entering into of any concession agreements, licenses, or other contracts in the normal course of owning and operating the improvements on the Site, provided that all applicable requirements of this Agreement have been met. (6) The sale of portions of the Site as pads for individual users not exceeding a building area of ten thousand (10,000) gross square feet: (e) In the event that Participant requests Agency's written approval of a proposed Transfer pursuant to this Section, Participant agrees to provide Agency with such information, including financial statements as Agency may reasonably require in order to evaluate the solvency, 25 xB -223 - - — Item 14. - 3 7 financial responsibility and.relevant business acumen and experience of any proposed transferee. Such information shall include, without limitation, a balance sheet of the proposed transferee as of a date within ninety (90) days of the request for Agency's approval and statements of income or profit and loss for the two-year period preceding the request for Agency's approval, if the same be available (or such other similar information as shall be available at the time the request for approval of the Transfer is made), and a written statement in reasonable detail as to the business and experience of the proposed transferee during the five (5.) years preceding the request for Agency's approval. Within thirty (30) days after the receipt of Participant's written notice requesting Agency approval of an Transfer, Agency shall respond in writing by stating what further information, if any, Agency reasonably requires. in order to determine whether or not to approve the requested Transfer. Upon receipt of such a timely response, Participant shall promptly furnish to Agency such further .information as may be reasonably requested - Participant's request for approval of a Transfer and delivery of necessary information for financing purposes shall be deemed complete twenty (20) days after. Agency's receiptthereof and Participant's request for approval of a Transfer and delivery of necessary information for all other types of Transfer shall be deemed complete thirty (30) days after Agency's receipt thereof if Agency does not deny approval or if no timely response requesting further information regarding the proposed Transferee is delivered to Participant, or, if such a timely response requesting further information is received, on the date which is fifteen (15) days after the date that Participant delivers such additional information to Agency. None of the foregoing shall restrict Agency's rights to deny approval of any Transfer not. found acceptable by Agency pursuant to this Agreement. Any Transfer requiring Agency's approval shall only be effective upon Agency's written approval of such Transfer. Agency shall approve or disapprove any requested Transfer for financing purposes requiring Agency approval within thirty (30) days after Participant's request. therefor is accepted as complete or is deemed complete, and Agency shall approve or disapprove any other type of requested Transfer requiring Agency approval within forty-five (45) days after Participant's request therefor is accepted as complete or is deemed complete. Any disapproval shall be in writing an shall specify the reasons for the disapproval and,, if.appiicable, the conditions required_ to be satisfied by Participant in order to obtain approval. Participant agrees to reimburse Agency for Agency's reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested Transfer which requires Agency's -approval hereunder. (f) During the existence of this Agreement, Participant shall promptly notify Agency of any and all changes whatsoever in the identity of the parties in control of Participant (including transfers to a Controlled Affiliate), of which it or any of its officers have been notified or otherwise have knowledge or information. (g) In the event that the Participant does make a Transfer in violation of this Agreement prior to twenty (20) years after the Operating Commencement Date, or purports to do so, the Agency shall be entitled to any right or remedy authorized herein or in law or equity. 26 Item 14. - 3 8 xB -224- - - (h) In the absence of specific written agreement by the Agency as provided in this Agreement, no Transfer or approval by the Agency of any Transfer, shall be deemed to relieve the Participant or any other party from any obligations under this Agreement. Approval by Agency of one or more Transfers shall not operate as a waiver or estoppel to the future enforcement by Agency of its rights pursuant to this Agreement. . 411. No .n mmbrancmciLccpt Mortgages. Deeds of Ims -Conveyances and—i..eases=Back_or—Other. Con.yoYance --for-Financing-for RedeYjdQpment Notwithstanding Section 410, mortgages, deeds of trust, conveyances and leases -back, or any other form of conveyance required for any reasonable method of financing are permitted prior to twenty (20) years after the Operating Commencement Date, but prior to the recordation of the Release of Construction Covenants such financing shall only be for the purpose of securing loans of funds to be used only for financing, re -financing, or obtaining permanent financing- for the acquisition of the Site or any portion thereof and the rehabilitation, renovation and construction of improvements on "the Site or any portion thereof, and any other expenditures necessary and appropriate to redevelop the Site in accordance with this Agreement . Prior to the recordation of the Release of Construction Covenants, the Participant shall not enter into any such mortgage or deed of trust without the prior written approval of. the Agency, which the Agency shall not unreasonably withhold or delay if the Participant submits evidence satisfactory.to the Agency demonstrating that (a) the mortgage, deed of trust or other security instrument is consistent with the provisions of this Agreement; (b) the mortgage, deed of trust or other security instrument expressly acknowledges that the rights of any holder or person acquiring title through or following foreclosure are subordinate and subject to the provisions of the Agreement Containing Covenants Affecting Real Property (the "Covenant Agreement"), which is to be executed and recorded pursuant to Section 506 of this Agreement; (c) the proceeds thereof are to be used only for redevelopment of the Site in accordance with this Agreement; and (d) a minimum equity of Twenty -Two Million Dollars ($22,000,000) shall be retained. The Agency shall not withhold its approval of any mortgage or deed of trust used to "secure a loan satisfying the criteria set forth in the. immediately preceding sentence by the following third party institutional lenders or financial institutions: City National Bank, Far East National Bank, Wells Fargo National Bank, and Bank of America (collectively, "Approved Lenders")..After the recordation of the Release of Construction Covenants, the Participant shall provide notice and a copy of any such mortgage or deed of trust demonstrating that (a) the mortgage, deed of trust or other security instrument is consistent with the provisions of this Agreement; and (b) the mortgage, deed of trust or. other security instrument expressly acknowledges that the rights of any holder or person acquiring title through or following foreclosure are subordinate and subject to.the provisions of the Covenant Agreement. The words "mortgage" and "deed of trust" as used herein includes all other modes of financing real estate acquisition, construction, and land development. Prior to twenty (20) years after the Operating Commencement Date, the Participant shall not place or allow to be placed on the Site or any part.thereof or the improvements thereon, any mortgage, deed of trust, encumbrance or lien other than as provided in this Section 411. The Participant shall remove or cause to be removed any levy or attachment made on the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. 27 - xB -225- - - Item 14. - 39 Prior to the recordation of the Release ofConstruction.Covenants, the Participant shall notify . the Agency in advance of any mortgage, deed of trust or sale and lease -back financing which Participant proposes to enter into. § 412. Holda-&LQbligated t0_ConstnacLk=-o_Y_mentsLRt t to Cuze The holder of any mortgage, deed of trust or other security interest authorized by this Agreement (the "Mortgagee") shall in no way be obligated by the provisions of this Agreement to construct or complete the construction of improvements, or to guarantee such construction or completion. Upon the writien request of a Mortgagee, Agency shall copy to such Mortgagee any notices of default which are sent to Participant by Agency. Each such holder shall (insofar as the rights of the Agency are concerned) have the right at its option to cure or remedy or commence to cure or remedy any Participant default consistent with the terms and conditions of this Agreement. Nothing contained in this Agreement shall be deemed to oblige, permit or authorize such holder to undertake or continue the construction or completion of the improvements without first having expressly assumed the Participant's obligations to the Agency by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates, and submit. evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing such improvements shall be entitled, upon request made to the Agency, to a Release of Construction Covenants from the Agency with respect to such improvements. Agency agrees to cooperate with Mortgagees or potential Mortgagees to reasonably consider requested revisions or additions to.this Agreement which would not materially impair Agency's rights hereunder or which would not materially increase Agency's obligations hereunder. § 413. Release iQn Covenants Promptly after completion of all construction and rehabilitation to be completed pursuant to the Scope of Development and Sections 401 and 501 (a) and (b) of this Agreement in connection with the redevelopment of the Site, as,reasonably determined by the Agency, the Agency shall furnish the Participant with a Release of Construction Covenants upon written request therefor by the Participant. Such Release of Construction Covenants shall be substantially in the form appended hereto as Attachment No. 6 and incorporated herein by this reference. The Agency shall not unreasonably withhold or delay the Release of Construction Covenants. Such Release of Construction Covenants shall be, and shall state that it is, a conclusive determination of satisfactory completion of the construction, rehabilitation and renovation required by the Scope. of Development and Sections 401 and 501 (a) and (b) of this Agreement with respect to the redevelopment of the Site. The Release of Construction Covenants shall not constitute a determination of satisfactory compliance with any other provision of this Agreement. A Release of Construction Covenants shall be in such form as to permit it to be recorded in the Office of the Recorder of ©range County. If the Agency refuses or fails to furnish a Release of Construction Covenants after written request from the Participant, the Agency shall, within thirty (30) days of the written request, provide the Participant with•a written statement which explains in reasonable detail the reason(s) the Agency, refused or failed to furnish a Release of Construction Covenants. The statement shall also contain 28 Item 14. - 40 _ _ -- . _ — 1413 -226- . — — — -- — — -- --- — the Agency's specific recommendation of the action the Participant must take to obtain a Release of Construction Covenants; provided, however, that the statement need not include technical information or instructions. - If the reason. for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Agency will issue its Release of Construction Covenants upon the posting of a bond, first approved by the Agency as to form and substance, by the Participant with the Agency in an amount representing a fair value of the work not yet completed: The Release of Construction Covenants shall not constitute evidence of compliance with, or satisfaction of, any obligation of the Participant toward any holder of mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, nor any part thereof. No such Release of Construction Covenants is a notice of completion as referred to in Section 3093 Of the California Civil Code. ARTICLE 500. USE OF -THE SITE § 501. LL-&s (a) Participant hereby covenants and agrees on behalf of itself and any successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein that Participant, such successors and assigns shall: a. Develop, construct, renovate and rehabilitate improvements on the Site solely in accordance with the Redevelopment Plan, this Agreement (including but not limited to the Scope of Development, Attachment No. 4), the Covenant Agreement and plans approved by the City. b. Devote the. Site, or cause the Site to be devoted, solely to use as a first - quality regional shopping center in accordance with the Redevelopment Plan, this Agreement, -the Covenant Agreement, and plans approved by the City, until November 26, 2034. C. Beginning no later than- the Operating Commencement Date, cause to be Operated (hereinafter defined) on the Site until November 26, 2034, a first - quality regional shopping center meeting the design and architectural standards of that certain Specific Plan initially adopted by Resolution No. 2000-68 on July 5, 2000. All floor area shall be Operated by retail stores of a type customarily located at first -quality regional shopping centers in Southern California, If any tenant over fifty thousand square feet (50,000) of gross leaseable area {"Major") ceases to Operate within the effective period of the operating covenants, Participant shallrequest the written approval of the Agency for the replacement of the Major with one or more proposed, new tenants of comparable first -quality and trade name at the earliest practicable date, but in,no event more than ninety (90) days after the Major to be replaced provides. written notice to Participant of its intent to cease to Operate on the Site. Within thirty (30) days after receipt of Participant's request for approval, Agency shall respond in writing by stating 9 - - HB -227- Item 14. - 41 what further information, if any, Agency reasonably requires in order to determine whether or not to approve the replacement tenant. Participant shall promptly furnish to Agency such further information as may be reasonably requested. Participant's requcst for approval shall be deemed complete thirty (30) days after Agency's receipt thereof, if no timely response requesting further information is given to Participant, or, if such a timely response requesting further information is received by Participant, on the date that Participant delivers such additional information to Agency, provided that such additional information is responsive to Agency's request. Agency shall approve or disapprove the proposed replacement tenant in the Agency's reasonable discretion, and shall provide Participant with written notice of its decision within thirty (30) days after Participant's request for such approval is accepted as complete or deemed complete. In deciding whether to approve a proposed replacement tenant, the Agency may consider, among other factors, the level of quality and the sales generation ability of the proposed replacement tenant and trade name. If Agency shall disapprove a proposed replacement tenant. Agency shall do so by written notice to Participant stating the reasons for such approval. "Operate," as used in this Agreement, means open to the general public for business during commercially reasonable business hours, except when temporarily not open for business by reason.of such reasonable interruptions as may be customary and incidental to the conduct of business at first -quality regional shopping centers in Southern California. d. Maintain the Site, or. cause the Site to be maintained, in accordanee:with Section 503 of this Agreement. e. Pay when due all real estate taxes and assessments assessed and levied on the Site and any improvements thereon and refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Site; provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of an erroneous initial assessment for property tax purposes of the Site in the fiscal year of the completion of the improvements to be constructed and/or renovated pursuant to this Agreement. f Not discriminate upon the basis of race, color, creed, religion, sex, age, marital status, handicap, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any improvements erected or to be erected thereon, or any part thereof. g. Include in all leases and subleases appropriate provisions requiring all lessees and sublessees to comply with and be bound by the Sections 501-505 of this Agreement and the Covenant Agreement. h. Pay when due the Agency Participation Payment in accordance with Section 601 of this Agreement.. 30 Item 14. - 42 - xB -228- i. Continue to perform all ongoing obligations of Participant under this Agreement, including but not limited to those under Sections 304,305 and 406 herein. § 502. InLetLtiQnaily QmittP_d § 503. Mai=..n=c_Qf.the_Site a. Participant shall maintain, repair and operate the Site and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Site and all such improvements to be maintained, in a first quality condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, the City of Huntington Beach Municipal Code, and the following: (1) All improvements on the Site shall be maintained in good condition in accordance with the -custom and practice generally applicable to comparable. first quality shopping centers in Orange County, and in conformance and compliance with all plans, drawings and related - documents approved by the Agency pursuant to this Agreement, all conditions of approval of land use entitlements adopted by the City or the Planning Commission, including painting and.cleaning of all exterior surfaces of all private improvements and public improvements to the curbline. (2) Landscape maintenance shall include, without Iimitation, wateririg/inigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, _ lawns, ground covers, or other planted areas; and staking for support of trees: (3) Clean-up maintenance shall include, without limitation, maintenance of all - sidewalks, paths and other paved areas in a clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping; clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. b. . If the Agency gives written notice to Participant that the maintenance or condition of the Site or any portion thereof or any improvements thereon does not comply with this Agreement and such notice describes the deficiencies, Participant shall correct, remedy or cure the deficiency within thirty (30) days following the submission of such notice, unless the notice states that the deficiency is an urgent matter relating to public health and safety in which case Participant shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time but in no even more than forty-eight (48) hours following the submission of the notice. In the event Participant fails to maintain the Site or any portion thereof or any improvements thereon in accordance with this Agreement and fails to cure any deficiencies within the applicable period described above, the Agency shall have, in addition toany other rights and remedies hereunder, the right to maintain the Site and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Participant shall be responsible for payment of all- such costs reasonably incurred by the Agency. 3.1 HB -229- - Item 14. - 43 C. The Participant shall not use or permit the use of the Site in violation of (a) the Specific Plan and applicable zoning laws as they now exist or as they may hereafter be amended from time to time; or (b) the Redevelopment Plan for the Project, as. it now exists or, subject to Section 102 of this Agreement, as it may hereafter be amended from time to time. § 50.4. ObligatiQaioRefrain flom.DiscziaiinaliQn Participant hereby covenants and agrees on behalf of itself and any successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed. national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, and the Participant (itself or any person claiming under or through it) shall not establish or permit any such practice or practices of discrimination, or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site, or any portion thereof. The Participant shall refrain from restricting the rental, sale or lease of the Site, or any portion thereof, on the basis of sex, marital status, race, color; religion, creed, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonscgregation clauses: 1. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of. persons on account of sex, marital status, race, color, religion, creed, national origin, or ancestry in the sale, Iease, sublease, transfer, use, occupancy, tenure or enjoyment of the- land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees i n :the land herein conveyed. The foregoing covenants shall run with the land." . -2. In leases: - "The lessee herein covenants by and for himself; his heirs, executors, . administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be. no, discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin or. ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased nor shall the lessee himself, or -any person claiming under or through him establish or perrnit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or venders in the land herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of sex, marital.status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, 32 Item 14. - 44 - - - - - xB -230- tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." § 506. Agreem=_Cmilaining Coy_cnants_►ffcc.tit9Rea1 ronertx Concurrently with the execution of this Agreement, the Agency and Participant shall execute and cause to be recorded the Agreement Containing Covenants Affecting Real Property in substantially the form appended to this Agreement as Attachment No. 5 and incorporated herein by - this reference (sometimes referred to as the "Covenant Agreement"). § 507_ Effect and Duration of GYena= The covenants established in this Agreement, shall, without regard to technical classification and designation, be binding on the Participant and .any successor in interest to the Site, or any portion thereof, or any interest therein, or any improvements thereon, for the benefit and in favor of the Agency, City and their successors and assigns. The covenants contained in Sections 501 and 503 of this Agreement shall remain in effect until November 26, 2034, The covenants against discrimination shall remain in perpetuity. All other covenants shall cease and terminate on the dates specified in the Covenant Agreement. ARTICLE 600. SPECIAL PROVISIONS § 601. Agency.PatYicipAtion Payment As additional consideration for the performance by Agency of its obligations under this Agreement, Participant shall pay to Agency an Agency Participation Payment (hereinafter defined) each Operating Year (hereinafter defined)- commencing with the Operating Commencement Date (hereinafter defined). Subject to the Buyout Provisions (hereinafter defined) of Section 602 below, the obligation of the Participant to make the Agency Participation Payments shall continue for a period of twenty. (20) Operating Years 'after the Operating Commencement Date, and shall, during such 20 year term, survive the sale, transfer or refinance of the Site and the improvements or any portion thereof, and not be affected or reduced in any way by reason of any such sale, transfer or refinance. The Agency Participation Payment shall be paid to Agency by Participant for each Operating Year within ninety (90) days of the end of such Operating Year, together with a certified statement submitted for Agency's approval or disapproval documenting'in detail the basis for the calculation of the Agency Participation Payment due Agency. Each Agency Participation Payment shall be made in -an amount consistent with the Agency. approved certified statement for the subject Operating Year. For purposes of calculation and payment of the Agency Participation Payment, the following terms shall have the following respective meanings: "Agency Participation Payment" .means an amount equal to twenty percent (20%) of the Adjusted Gross Revenues for each Operating -Year. 33 - — — HB -231- Item 14. - 45 "Gross Revenues" means all revenue of any kind or nature paid to Participant or. Participant's agents each Operating Year from the rental, lease, licensing, operation, use or ownership of retail, restaurant, entertainment and other commercial spaces on the Site, and includes Agency reimbursement payments to Participant pursuant to the Schedule of Feasibility Gap Payments (Attachment No. 7); provided, however, that Gross Revenues shall not include insurance, pass - through taxes or assessments, common area maintenance charges, or any proceeds from the sale or refinancing of the Site or its improvements. 1. "Adjusted Gross Revenues" means the excess of eighty-five percent (85%) of the Gross Revenues for each Operating Year after Participant's Annual Return. "Adjusted Project Costs" means Project Costs as approved by the Agency pursuant to Section 202, plus the total of all Annual Return Shortfalls, if any. "Annual Return Shortfall" means the amount in any Operating Year by which Participant's Annual Return exceeds eighty-five percent (85%) of Gross Revenues for that Operating Year. "Operating Commencement Date" means the last to occur of either the date of issuance by the City of the Certificate of Occupancy for, the redevelopment of the Site, or the opening for business to the general public of the first -quality shopping center required by this Agreement to be redeveloped on the Site by Participant: "Operating Year" means each twelve month period that commences on the. Operating Commencement Date and each anniversary of the Operating Commencement Date, provided that Participant may convert Operating Years to calendar years, provided appropriate and equitable adjustments are made for any partial year to the reasonable satisfaction of the Agency's Executive Director, and provided that there is no reduction in the required 20 year term of the Agency Participation Payments. "Participant's Annual Return" means an amount equal to twelve percent (12%) of Adjusted Project Costs (including, without limitation, Anmual Return Shortfalls, if any).. .. ty�=3Rrllii' , For the first five (5) years after the Operating Commencement Date, there shall be no Buyout of the Agency Participation Payments. Commencing with the sixth (6th) anniversary of the Operating Commencement Date, until twenty (20) years after the Operating Commencement Date, Participant may at any time Buyout the Agency Participation Payments and terminate any obligation to continue paying any further Agency Participation Payments by paying the Buyout Amount to the Agency within sixty (60) days of the Effective Date, provided Participant shall have given Agency written notice of its intent to effect such Buyout, and shall have identified in such written notice the Effective Date of such Buyout, and further provided such identified Effective Date shall be a date which is on or after the date the Agency receives. such written notice. . For purposes of this Agreement, the following terms shall have the following respective meanings; 34 Item 14. - 46 - xB -232-- "Buyout Amount" means the following: (a) for a Buyout with an Effective Date commencing on the sixth (6th) anniversary of the Operating Commencement Date and ending on the tenth (loth) anniversary of the Operating Commencement Date, the Buyout Amount shall be the greater of (i) the sum of Three Million Dollars ($3,000,000), or (ii) the sum obtained by multiplying the amount of actual Agency Participation Payments payable for the twelve month time period prior to the Effective Date by ten (10); or (b) for a Buyout with an Effective Date commencing on the first day following the tenth (loth) anniversary of the Operating Commencement Date and ending on the twentieth (20th) anniversary of the Operating Commencement Date, the Buyout Amount shall be the greater of (i) the sum of Three Million Dollars (S3,000,000), or the net present value of the remaining Agency Participation Payments until the twentieth anniversary of the Operating Commencement Date (the "End Date"), assuming Gross Revenues will be equal to Gross Revenues for the twelve month period preceding the Effective Date, and increasing such projected Gross Revenues by 9% on each fourth anniversary of the Effective Date. The discount rate used to calculate the net present value shall be equal to the annual rate equal to the sum of (i) the interest rate on ten-year U.S. Treasury bills or notes having a maturity date closest 'to and no later than the End Date as reported in the Wall Street Journal on the Effective Date (or if the Wall Street Joumal is not published on the. calculation date, the first publication date thereafter) and (ii) three hundred (300) basis points. If the Wall Street Journal is no longer published at least weekly, the calculation shall be made using a financial reporting service proposed by Participant and reasonably acceptable to Agency. In the event the Buyout Amount calculated pursuant to this'. Section 602 (b)(ii) equals or is greater than the sum of Three Million Dollars ($3,000,000), then, at such time and at all times thereafter until the End Date, the Buyout Amount payable to Agency shall be the sum calculated pursuant to Section 602 (b)(ii), and Section 602 (b)(i) shall not longer apply. "Buyout" means the termination of the Participant's obligation to continue paying any further Agency Participation Payments beyond the Effective Date by paying the Buyout Amount to the Agency. "Effective Date" means the date on which the Buyout, if any, shall occur. ARTICLE 700. DEFAULTS,' REMEDIESAND TERMINATION t r+ , _ r. l a. Subject to the extensions of time set forth in Section 808, failure or delay by either party to perform any term or provision of this Agreement, after written notice and opportunity to cure as provided in this Section or other relevant section of this Agreement, constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. 35 HB -233- Item 14. - 47 b. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect; assert or enforce any such rights or remedies. 'c. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default shall Have a period of ten (1-0) calendar days after such notice is received or deemed received within which to cure the default prior to exercise of remedies by the injured party. d. If a non -monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default notice of such default if the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, the party -in default shall have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the party in default (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party. In no event shall the injured party be precluded from exercising remedies if the non -monetary event of default is not cured within one hundred and twenty (120) days, or the injured party's rights under this Agreement becomes or is about to become materially jeopardized by any failure to cure a default. e. Any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. § 702.1 Termination bby A__„e gy a. Prior to the Agency's issuance of the Release of Construction Covenants, the Agency may, at its option, terminate this Agreement in the event that Participant violates this Agreement by doing any of the following. (1) The Participant (or any successor in interest) assigns or purports to assign thus Agreement or any right therein, or in the Site, or any portion thereof, or the . underlying real estate of the Site, or any of the improvements thereon in violation of this Agreement; or 36 Item 14. - 48 xB -234- (2). The Participant fails to submit the certificates of insurance, Evidence of Financing, Guaranty Agreement, plans, drawings, and related documents and any other documents required by this Agreement for any portion of the Site by the dates provided in this Agreement and the Schedule of Performance (Attachment No..3) therefor; or, (3) The Participant fails to advance funds to Agency for Acquisition and Relocation Costs pursuant to Section 304 within the times established in this Agreement and the Schedule of Performance (Attachment No. 3); or (4) The Participant breaches this Agreement in any material respect. If any default or failure referred to in this Section 702.1. (a) is not cured by Participant within the cure period specified in Section 701, then this Agreement and any rights of the Participant, or any assignee or transferee, in this Agreement, or arising therefrom, shall at the option of the Agency, be terminated by the Agency by five (5) days' prior written notice to the Participant, provided such default or failure is not cured prior to the effective date of such termination. In the event of such termination, neither the Agency nor the Participant shall have any further rights against or liability to the other.under this Agreement with respect to the Site, except that Participant shall continue to be responsible for and shall indemnify Agency against the items set forth in Section 304 and 406, including all Acquisition and Relocation Costs incurred by Agency if any. In the event the Agency does not terminate this Agreement pursuant to this Section 702.1, the Agency may pursue any legal and/or equitable rights andlor remedies it may have against Participant, including, but not limited to, damages, specific performance, declaratory relief, and any other legal and equitable remedies. b, Agency or Participant shall have the option to terminate this Agreement as to the Ward Parcel at any time within one(]) year after the effective date of this Agreement. In the event Agency terminates this Agreement as to the Ward Parcel, then the Ward Parcel shall be removed from the legal description of the Site and the Scope of Development, and Participant shall continue to be responsible for and shall indemnify Agency against the items set forth in Section 304 and 406, including all Acquisition and Relocation Costs incurred by Agency if any. Regardless of whether of not this Agreement is terminated as to the Ward Parcel, Participant shall use its best efforts to cause the replacement of the exterior of the Ward Parcel building and renovation of the Ward Parcel parking lot in accordance with City approved plans, in order to ensure that such Ward Parcel building and parking lot conform with the redevelopment of the Site. § 702.2 T.emtinatio i by Eazticip= a. _ In ihe.event (i) the Agency breaches this Agreement in any material respect, and such breach_ is not cured by Agency within the cure period specified in Section 701, or (ii) Participant submits evidence satisfactory to Agency that after and despite diligent efforts, Participant is unable to obtain sufficient financing to redevelop the Site as required by this Agreement, then this Agreement and any rights of the Agency in this Agreement, or arising therefrom, shall at the option of the Participant, be terminated by written notice thereof to the Agency; provided, however, that Participant's right to terminate due to its inability to obtain sufficient financing shall expire within one (1) year after the effective date of this Agreement. 37 - — -- xB -23 5- - _ - - - - - - _..- _ - Item 14. - 49 b. In the event Participant terminates this Agreement pursuantto this Section 702.2 (a) (i), Participant may pursue any legal and/or equitable rights and/or remedies it may have against Agency, including, but not limited to, damages, specific performance, declaratory relief, and any other legal and equitable remedies. In the event of termination pursuant to this Section 702.2 (a) (ii), neither the Agency nor the Participant shall have any further rights against or liability to the other under this Agreement or with respect to the Site, except that Participant shall continue to be responsible for and shall indemnify Agency against the items set forth.in Section 304 and 406, including all Acquisition and Relocation Costs incurred by Agency if any. c. Agcncy. or Participant shall have the option to terminate this Agreement as to. the Ward Parcel at anytime within one (1) year after the effective date of this Agreement. In the event Participant terminates this Agreement as to the Ward Parcel, then the Ward Parcel shall be removed from the legal description of the Site, and Participant shall continue to be responsible for and shall indemnify Agency against the items set forth in Section 304 and 406, including all Acquisition and Relocation Costs incurred by Agency if any. Regardless of whether or not this Agreement is terminated as to the Ward Parcel, Participant shall use its best efforts to cause the replacement of the exterior of the Ward Parcel building and renovation of the Ward Parcel ,parking lot in accordance with City approved plans, in order to ensure that such Ward Parcel building and parking lot conform with the redevelopment of the Site. § 703. FffkeL4fVlo1atia"fdhe_2crms and I'myisions-fthirs_AgLee of Redevelopment The Agency is deemed the beneficiary of the terms and provisions of this Agreement and the covenants running with the land, both for and in its own right and for the purpose of protecting the interests of the community. The Agreement and the covenants shall run in favor of the Agency without regard to.whether the Agency has been, remains or is an owner ofany interest in the Site or any portion thereof or other land in the Project Area. The Agency shall have the right if any covenants or other provisions of this Agreement are breached to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it is entitled:. § 704..10 itution of Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with -the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California. ..� a. In the event that any legal action is commenced. by Participant against Agency, service of process on Agency shall be made by personal service upon the Executive Director, or in such other manner as may be provided by law. b. In the event that any legal action is commenced by Agency against. Participant, service of process on Participant shall be made by personal service upon Participant (or 38 Item 14. - 50 - HB -236-' upon a member of Participant) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law'. ARTICLE 800. GENERAL PROVISIONS § 801. Iice�.Demands_ansiCotumutucatiQns�n_thc Parties Format notices, demands and communications between Agency and Participant shall be deemed sufficiently given if dispatched by first class mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of a "hard" copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S_ Postal Service), to the addresses of Agency and Participant as set forth below. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered. upon its receipt within regular business hours of regular business days; any notice that is personally delivered (including by means of professional. messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service); shall be deemed received on the documented date of receipt; and any notim that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. Copies of all notices, demands and communications shall be sent as follows: Participant: _ Huntington Center Associates, LLC C/o'The Ezralow Company, LLC 23622 Calabasas Road, Suite 100 Calabasas, California 91302 . Attention: Mr. Bryan Ezralow,,President Agency: Redevelopment Agency of the City of Huntington Beach City Hall 2000 Main Street Huntington Beach, California 92648. Attention: David Biggs, Economic Development Director , :i �.t .tt ut roW,61iWOt No member, official or employee of the Agency shall be personally liable to the Participant, or any successor in interest, in the event of any default or breach by the Agency, or for any amount which may become due to the Participant or any of its successors, or on any obligation under the terms of this Agreement. Except as set forth in the Guaranty Agreement and for derivative liability, no member, officer, manager, director, shareholder, or employee of Participant shall be -personally liable to the. Agency in the event of any default or breach by Participant, or for any amount which may become due to the Agency, or.>on any obligation under the terms of this Agreement. 39 HB -237- Item 14. - 51 § 803. R edies hLoLaclusive.andLNaixet No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in or by statute or otherwise, and the election of any one or more remedies shall not constitute a waiver of the right to pursue other available remedies. § 804. Tim: oath Sam Time is of the essence in this Agreement. § 805. 1 itigation and_Compliance The Participant warrants, to the best of its actual knowledge, that except for the lawsuits described in Section 406.1, there are no suits, other proceedings or investigations pending or, to the best of the Participant`s knowledge, threatened against the Participant, that would, if concluded adversely to the Participant, have a materialadverse effect on the financial condition of the Participant and Participant's ability to fully perform its obligations under this Agreement. "Actual knowledge" as used herein means what is actually known by Bryan Ezralow or Douglas Gray as of the date of this Agreement. § 806. Panic. nta�'s WarrantitbS The Participant hereby represents the following to Agency for the purpose of inducing Agency to enter into this Agreement and to consummate the transactions contemplated hereby, all of which shall be true as of the date hereof: (a) The Participant has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein to which the Participant is a party, to consummate the transactions contemplated hereby, to take any steps or actions contemplated hereby, and to perform its obligations hereunder. (b) ' All requisite action has been taken by the Participant and all requisite consents have been obtained in connection with the entering into this Agreement and the instruments and documents referenced herein to which the Participant is a party, and the same are authorized by the Redevelopment Plan and comply with all applicable Jaws, statutes, ordinances, rules and governmental regulations. (c) This Agreement is duly executed by the Participant, and all agreements, instruments and documents to be executed by the Participant pursuant to this Agreement shall, at such time as they are required to be executed hereunder, be duly executed by the Participant, and each such agreement is, or shall be at such time as it is required to be executed hereunder, valid and legally binding upon the Participant and enforceable in accordance with its terms and the execution and delivery thereof shall not, with due notice or the passage of time, constitute a default under or violate the terms of any indenture, agreement or other instrument to which the Participant is a Party. 40 Item 14. - 52 xB -238- (d) Except for litigation described in Section 406.1, there is no pending or threatened litigation which, in the reasonable opinion of the Participant, would, if decided adversely to the Participant, prevent the Participant from performing its duties and obligations hereunder. § 807. vldi'fisalion of Agreement No modification, waiver, amendment, discharge, or change of this Agreement shall be valid unless the same is in writing and signed by both the Agency and Participant. § 808- Enfoxced.D_ebY In addition to specific provisions of this Agreement, performance by either parry hereunder (including, without limitation, all Attachments and exhibits hereto) shall not be deemed to be in default where delays or defaults are 'due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions; freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or suppliers, acts of the other party or any third party not under the control of the acting party, acts or failure to act of the City or any other public or governmental agency or entity (except that an act or failure to act of the Agency shall not excuse performance by the Agency). Financial and economic problems/factors shall not constitute enforced delays under this Section 808 and shall not excuse performance by the Participant. An extension of time for any such cause shall be for the period of the enforced delay and shalt commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of knowledge of the commencement of the causc. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and the Participant. § 809. Conflict of Interests To the extent prohibited by law, no member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement. which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. Except as provided in this Agreement, the Participant warrants that it has not paid or given, and will not pay or give, any person any money or other consideration for obtaining this Agreement. [MUMIM-M-Mr... : -A .IT- .. Solely as pertinent to the purposes of this Agreement, the Agency or its accountant, auditor, or experienced, reputable consultant shall have the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the project which is 41 xB -239- Item 14. - 53 the subject of this Agreement. Agency shall keep the information obtained through -such inspections confidential to the extent permissible by law. § 812. Relatiombip-QLthc_Parties Nothing contained in this Agreement shall be deemed or construed as creating a partnership; joint venture, or any other relationship between the parties hcr.cto other than as specified in the provisions contained herein, or cause the Agency to be responsible in any way for the debts or obligations of Participant or any other party. The Participant agrees to indemnify, hold harmless and defend the Agency from any claim made against the Agency arising from a claimed relationship of partnership or joint venture between Agency and Participant with respect to the redevelopment, operation, maintenance or management of the Site or improvements thereon. § 813. interpretation of Agteem (a) The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against -any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's-length and careful negotiation.over a considerable period of time, that each party has been given the opportunity to independently review this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret, and agree to the. particular language. of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and- construction shall be utilized. (b) If any term or provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any party, hereunder, shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each other term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. It is the intention of the parties hereto that in lieu of each such clause or provision of this Agreement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement an enforceable clause'or provision as similar in terms to such . illegal, invalid, or.unenforceabl.e clause or.provision as may be possible. (c) The captions of the articles, sections, and subsections herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as. part of this instrument. (d) References in this instrument to this "Agreement" mean, refer to and include this instrument as well as any riders, exhibits, addenda and attachments hereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in this instrument. Any references to any covenant, condition, obligation, and/or undertaking "herein," "hereunder," or "pursuant hereto" (or language of like import) shall meant, refer to, and include the covenants, obligations, and undertakings existing pursuant to this instrument and any,- riders, exhibits, addenda, and attachments or other documents affixed to or expressly incorporated by reference in.this instrument. 42 Item 14. - 54 - -- xB -240- (e) As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and vice versa. (0 Except as otherwise expressly provided in this Agreement, approvals or consents required of Agency or Participant in this Agreement shall not be unreasonably withheld or delayed. All approvals or consents shall be in writing. Failure by either party to approve a matter within the time provided for approval of the matter shall not be deemed a disapproval, and failure by either party to disapprove a matter within the time provided for approval of the matter shall be deemed an approval. § 814. Further Aaauran=s Agency and Participant agree to reasonably cooperate with each other to accomplish the purposes of this Agreement, and hereby agree to execute such other documents and to take such other actions as may be reasonably necessary to further the purposes of this Agreement. § 815. Binding -Effect . This Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted heirs,.legal representatives, successors. and assigns. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. ARTICLE 900. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement is executed in six (6) duplicate originals each of which is deemed to be an original. This. Agreement includes forty-five (45) pages and the ten (10) attachments which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes.all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Agency or the Participant, and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Participant. This Agreement is- entered into by all parties with the recognition and anticipation that subsequent agreements implementing and carrying out the provisions of this Agreement may be necessary. 43 - - -- xB -241- - - -Item 14. - 55 ARTICLE 1000. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agcncy within forty-five (45) calendar days after execution and delivery to the Agency by the Participant, or this Agreement may be withdrawn by the Participant on written notice to the Agency. ARTICLE 1100. EFFECTIVE -DATE OF THIS AGREEMENT The date of this Agreement. shall be the date when this Agreement shall have been signed by the Agency. Dated: 0d, 2000 ATTEST: Agency Clerk REVIEWED AND APPROVED 1&y Ki lver. Executive Director APPROVED AS TO FORM: !� D Lc�. Kankallm&, Berkman Agency Special Counsel . REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Chairman Tem APPROVED AS TO FORM: Agency General Counsel. sue/ INITIATED AND APPROVED: Aw 4-a - * Director of Economic Development 44 Item 14. - 56 __ HB -242- Dated: f L J , 2006 k:Nt&b%cernrr'.opa1.7 HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, A Delaware limited liability company, Its Manager By. BMLF/Huntington; LLC; A Delaware limited liability company,. Its Manager A By: ryan 2rilow, Trustee of the Bryan Ezralow 1994 Trust Its Manager. 45 HB -243- Item 14. - 57 ATTACHMENT NO 1 SITE MAP [behind this page] Item 14. - 5 8 HB -244- ire A CD -P c!� SEE SPEC14L PAGE M21-079 FOR Fff T1TL£ ASS"SA/f W MOW St4W4C " M 40 30 31 rjbw AVOW y a �a "mom da m.r 4w Drr w RLI r c•�, rei _. `�4r i v_ I 1 ID qbtl )� f1 a IL sWtti In �J A N � I 13 AIARCk t9RF NOTE - ASSEiSOOrS AOCIf S P Af 4b-!t P44m Rf s�oar� ra c,R+r�Esmowgomywudftvd 1142.0/ 4c •Y PC 1 1 4SiESSOR'S MAP NOOn(mp4sEosCp COOSTY Of ORANGE ATTACHMENT NO.2 LEGAL DESCRIPTION OF SITE [behind this page] Item 14. - 60 - — HB -246- ORDER 40.: 9910472-4S PARCEL. A P-ircels 2 chrol:gh 9 inclusive of Parcel Map No. 96=200, in the City of Huntington Beach, County of Orange, State of california. as shown on a map recorded in Book 255, Pages 40 to 45 inclusive of Parcel Maps, in the office of the County Recorder of said County - Except those.porcions of Parcel A (being portions of said Parcel 4 and 6) conveyed to the City of Huntington Beach, a municipal corporation by deed recorded May 1. 1991 as Instrument No. 91-209426 of official Records._ Also except that portion of Parcel A lying below a depth of 500 feet, measured from.the surface of said land. Also except from a portion of Parcel A (being Parcels 4, S. 6., 7..6 and a portion of . Parcel 2).an undivided 55* interest in all the land lying more than S00 feet belpw the . surface, but none of the land lying above a depth of 500 feet below the surface of the lands with no .right of surface access or use of the .lands lying more than 500 feet below the surface, hereinafter referred to as "said land, for the purposes of exploring and prospecting for (by geological, geophysical and all other means whether now known or not), drilling for, producing, savings, taking and owning oil, gees, asphaltum and other minerals, whether similar or dissimilar to those herein specified and including fissionable materials collectively hereinafter referred to as °said substances" is, under or that may be produced from said land, together with all rights, privileges and easements useful or convenient for operations in said land, in adjacent or contiguous lands, and in ether lands in the sans vicinity, including, but twt limited to: (1) subsurface rights of way -for drilling. repairing, redsilling, deepening, maintaining; operation, abandoning, reworking and removing wells to, in, into and through said land. (2) The .right to conduct operations by methods now known or unknown which are reasonably designed to benefit or facilitate the drilling for, or production of said substances.fzom said land. (3) The unregtr3cted and exclusive eight, Power and authority to produce said substances benmath.or -recoverable from said land, and to exercise all other rights and privileges herein net forth by means of any well or mines which are slant drilled from surface drill sites located on such other lands and the producing intsrvals of which are bottomed in said land: and HB -247- . Item 14. - 61 CRIER :70.: 9910472-45 4Continusd) (4) The right to drill a well or wells or use any existing wells, to, in, into or through said portion of said land, for the purpose of injecting into said portiorr of said land, or into other lands, oil, gas, air, water or other liquid or gaseous substances, including the right, from time to time to ignite or otherwise activate any or all of such substances so injected or any or all of said minerals and materials described herein within said portion of said land or other lands, reserved in deed recorded April 4, 1986 as Instrument No. s6-136183 of Official Records and re -recorded August 13, 1986 as Instrument No. 86-360236 of Official Records, PARCEL B: Easements for ingress and -egress, automobile parking, pedestrian uses, installation, operation and maintenance of separate and common utility lines, structure auppott, signs. and other shopping center uses. all as more particularly defined and described in that certain Construction, operation and Reciprocal Easement Agreement recorded August 4, 1965 in Book 7617,­Page 539 together with amendments recorded in Book 11087, Page 1770- Book 11051, Page 983 and a8 Instrument No. 87-4o6989 all of Official Records, .a - Item 14. - 62 HB -248- r m Site �Z Site s�ttoon Beach Mail 7777 Mager Ave Hunhagtoa Beach, CA VARCS . X. IN TUR CM oil ttWiDaOTox eaa►cx, cvv9TY or. a , B' TE or CAUMMIA, og PAi[ L t" 00. st-200 rib 091 KXV UMMM 21 0=9 lag pROSS ao THR=At 45 xS<=s ivE .QF PAAcgt, M8i XX Txc OFFICE OP X IRCOMM OF SXZD sxccpTxm TRUS70M M Rt WING9, MUCTMs AM TMOVZIqSM (n;M Dxtto URAXM) ass rw A coats MM& PRC84 MMMOMT ww 3Q, 1472 IS MWX 10448 PAM 66S Of OFFICIAL PJMMI. FARM Cc Cx&.r:-$00-99020 ftsagApUca: 2000. DISS? .lag! 24 of 24 30 'd 'ON XV1 RV£��It I �QOZ-�a-dSS xB -249-. Item 14. - 63 ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE [behind this page] Item 14. - 64 - --HB -250- ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE Submission.= Guar=Y_Agrecmcnt. Participant shall submit Guaranty Agreement to Agency pursuant to Section 105.2 (b) of this Agreement. 2 Submission. - Qxigin. Letter of Credit. .Participant shall. submit Original Letter of Credit to Agency pursuant to Section 305 of this Agreement. Prior to Agency's execution of this Agreement. Not later than 30 days after the date of Agency's determination to Acquire Additional Properties by authorizing . Agency staff to initiate negotiations to acquire such properties, if any- 3 ,Submission - Evidencc of .—Fittancirtg. Not later than 180 days after the date of Participant shall submit to Agency for approval this Agreement. the evidence of financing referred to in Section 202 of this Agreement. 4 Ap.} yal._-Ey_idwce_oLF1nancing. Agency Within 30 days after receipt by Agency. shall approve or disapprove evidence of financing. 5 Slrbmission�Pxole.GtEudgeS. Participant shall Concurrently with submission of Evidence submit to Agency for approval or disapproval a of Financing. proposed Project Budget pursuant to Section 202 of this Agreement. 6 AppmYal _Prajest Cost- Budget. Agency shall Within 30 days after receipt of proposed approve or. disapprove the proposed Project Project Budget. Budget. 7 Submission - Applications .for Demolition. ('Trading and Fxgwatian Polmils. Participant shall submit to City for approval applications for demolition, grading and excavation permits and related documents. 8 Entititents and Ap rova s. Participant to obtain all entitlements and approvals necessary for the redevelopment of the Site. Not later than 180 days after the date of this Agreement. Not later than 180 days after the date of this Agreement. Schedule of Performance 1 -- —xB -251-- - — — = - — - - Item 14. - 65 9 CAmm=ccmenLof Construction. Participant Within 210 .days after the date of this shall commence the work and improvements Agreement for grading. Within 270 days required for redevelopment of the Site. after the. date of this Agreement for vertical improvements. 10 Comption_ f onstruction. Participant shall complete construction of all improvements. 11 (s'rtificate of Occupancy._ Participant shall obtain a certificate of occupancy from City for the redeveloped Site. Not later than 24 months after commencement of construction of vertical. improvements. Not later than 27 months after commencement of construction. 12 Release of Construction Covenants. Agency to Upon Participant's completion of execute Release of Construction Covenants redevelopment of the Site pursuant to this approving completion of redevelopment Agreement' and Participant's written pursuant to this Agreement and terminating request for- a Release of Construction Guaranty Agreement. Covenants. 13 Operating Commencement Datc. Participant's obligation to ,make Agency Participation Payments pursuant to Section 601 of this Agreement commences. Agency's obligation to make reimbursement payments to Participant pursuant to Attachment No. 7 commences. NOTES: The last to occur of either the bate of issuance of a Certificate of Occupancy by the City for the redeveloped Site, or the opening for business to the general public of. the . first -quality shopping center required to be redeveloped by this Agreement. 1. Deadlines set forth in this Schedule of Performance are subject to.the enforced delay provisions of Section 808 of the Agreement. 2. Extensions may be approved in writing by the Agency's Executive Director pursuant to the Agreement. I Descriptions of items of performance and deadlines in this Schedule of Performance are not intended to supersede more complete descriptions in the text of the Agreement; and in the event of any conflict between the text of the Agreement and this Schedule, the text of the Agreement shall govern. klcg1blantcr\sop1.4 Schedule of Performance 2 Item 14. - 66 — — — HB -252- ATTACHMENT NO.4 SCOPE OF DEVELOPMENT [behind this page] xB -253- Item 14. - 67 SC_QPESQE-Da1YEWEMENT The Site shall be developed into a first -quality regional shopping center pursuant to plans. approved by the City and meeting the design and architectural standards of that certain Specific Plan initially adopted by Resolution No_ 2000-68 on July 5, 2000. . k..ce,hb%=veftcope 1.3 Item 14. - 68 --- HB -254- ATTACHMENT NO. 5 FORIM OF AGREEMENT CONTAINING COVENANTS AFFECT[NG REAL.PROPERTY [behind this page] - — HB -255- Item 14. - 69 OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103 . Recording Requested By and When Recorded Mail to: Redevelopment Agency. of the City of Huntington Beach City Hall 2000 Main Street Huntington Beach, California 92648 SPACE ABOVETHIS LINE FOR RECORDING USE F.X#R4;1= 1K4KGXl1WA1J1QWIT:► .. f. kq This AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY (this "Covenant Agreement") is made and entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Agency") and HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ( the "Owner") with reference to the following: A. Owner hold_ s fee title to that certain real property shown on the Site Map attached hereto as Exhibit A and incorporated herein by this reference, and which -is more particularly described in the legal description attached hereto as Exhibit B and incorporated herein by this reference (the "Property''). B. The Property is subject to the redevelopment plan for the Huntington Beach Redevelopment Project, which was approved and adopted by Ordinance No. 2743 of the City Council of the City of Huntington Beach on November 26, 1984, and merged with. certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth, herein. C. This Covenant Agreement is made pursuant to that certain Owner Participation Agreement by and between the Agency and Owner dated , 2000 (the "OPA"), which is a public record on file at the offices of the Agency and is incorporated herein by this reference: The Property is the real property referred to in the OPA as the'.Site." D. All capitalized terms in this Covenant Agreement shall have the meanings ascribed to them in the OPA unless indicated to the contrary herein. Agreement Containing Covenants Affecting Real Property Item 14. - 70 — HB -256- — Agency and Owner agree as follows: § 100 - J Js.es_of.Propwy. Owner hereby covenants and agrees on behalf of itself and any successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein that Owner, such successors and assigns shall: a. Develop, construct, renovate and rehabilitate improvements on the Property solely in accordance with this Covenant Agreement, the OPA, the Redevelopment Plan, and plans approved by the City. b. Devote the Property, or cause the Property to be devoted, solely to use as a first - quality regional shopping center in accordance with this Covenant Agreement, the OPA, the Redevelopment Plan, and plans approved by the City, until November 26, 2034. C. Beginning no later than the Operating Commencement Date; cause to be Operated on the Property until November 26, 2034, a first -quality regional shopping center meeting the design and architectural standards of that certain Specific Plan initially adopted by Resolution No. 2000-69 on July 5,.2000. All floor area shall be Operated by retail stores of type customarily located at first -quality regional shopping centers in Southern California. if any tenant over fifty thousand square feet (50,000) of gross leaseable area ("Major") ceases to Operate within the effective period of the operating covenants, Owner shall request the written approval of the Agency for the replacement of the Major with one or more proposed new tenants of comparable first - quality and trade name at the earliest practicable date, but in no event more .than ninety (90) days after the Major to be replaced provides written notice to Owner of its intent to cease to Operate on the Property. Within thirty (30) days after receipt of Owner's request for approval, Agency shal I respond in writing by stating what further information, if any, Agency reasonably requires in order to determine whether or not to approve the replacement tenant. Owner shall promptly furnish to Agency such further information as may be reasonably requested. Owner's request for approval shall be deemed complete thirty (30) days after Agency's receipt thereof; if..no timely response requesting further information is given to Owner, or, if such a timely response requesting further information is received by Owner, on the date that Owner. delivers such additional information to Agency, provided that such additional information is responsive to Agency's request. Agency shall approve or disapprove the proposed replacement tenant in the Agency's reasonable discretion, and shall provide Owner with written notice of its decision within thirty, (30) days .after Owner's request for such approval is accepted as complete or deemed complete. In deciding whether to approve a proposed replacement tenant, the Agency may consider, among other factors, the level of quality and the sales ;generation ability- of the proposed replacement tenant and trade name. If Agency shall disapprove a proposed replacement tenant, Agency shall do so by written notice to Owner stating the reasons for such approval. "Operate;' as used in this Agreement, means open to Agreement Containing Covenants Affecting Real Property xB -257- — — —Item 14. - 71 § 101. the general public for business during commercially reasonable business hours, except when temporarily not open for business by reason of such- reasonable interruptions as may be customary and incidental to the conduct of business at first -quality regional shopping centers in Southern California. ' d. Maintain the Property, or cause the Property to be maintained, in accordance with Section 101 of this Covenant Agreement. e. Pay when due all real estate taxes and assessments assessed and levied on the Property and any improvements thereon and refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Property; provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of -an erroneous initial assessment for -property tax purposes of the Property in the fiscal yearof the completion of the improvements to be constructed and/or renovated pursuant to this Agreement. f. Not discriminate upon the basis of race, color, creed, religion, sex, age, marital status, handicap, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any improvements erected or to be erected thereon, or any part thereof. g. Include in all leases and subleases appropriate provisions requiring all lessees and sublessees to comply with and be bound by the applicable provisions of this Covenant Agreement h. Pay when due the Agency Participation Payment in accordance with Section 601 of the OPA. i.. Continue to perform. all ongoing obligations of Participant under the OPA, including but not limited to those under Sections 304,305 and 406 of the OPA. a. Owner shall maintain, repair and operate the Property and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Property and all such improvements to be maintained, in a first quality condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, the City of Huntington Beach Municipal Code, and the following: (1) All improvements on the Property shall be maintained in good condition in accordance with the custom and practice generally applicable to comparable first quality shopping centers in Orange County, and in conformance and compliance with all plans, drawings and related documents approved by the Agency pursuant to the OPA, all conditions. of approval of land use entitlements adopted by the City or the Planning Commission, including Agreement Containing Covenants Affecting Real Property Item 14. - 72 HB -258- painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline. (2) Landscape maintenance shall. include, without limitation, wateringlirrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, . trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (3) Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal. of all trash, litter and other debris from improvements and landscaping; clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other_ debris are properly disposed of by maintenance workers. b. If the Agency gives written notice to Owner that the maintenance or condition of the Property or any portion thereof or any improvements thereon does not comply with the OPA and this Covenant Agreement and such notice describes the deficiencies, Owner shall correct, remedy or cure the deficiency within thirty (30) days following. the submission of such notice, unless the notice states that the deficiency is an urgent matter relating to public health and safety in which case Owner shall cure the . deficiency with all due diligence and shall complete the cure at the earliest possible time but in no even more than forty-eight (48) hours following the submission of the: notice. In the event Owner fails to maintain the Property or any portion thereof or any improvements thereon in accordance with the OPA and this Covenant Agreement and fails to cure any deficiencies within the applicable period described above, the Agency shall have, in addition to any other rights and remedies hereunder, the right to maintain the Property and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Owner shall be responsible .for payment of all such costs reasonably incurred by the Agency. C. The Owner shall not use or permit the use, of the Property in violation of (i) the Specific Plan and applicable zoning laws as they now exist or as they may hereafter be amended from time to time; or (ii) the Redevelopment Plan for the Project, as it now exists or, subject to Section 102 of the OPA, as it may hereafter be amended from time to time. Agreement Containing Covenants Affecting Real Property xs -259- Item 14. - 73 Owner hereby covenants and agrees on behalf of itself and any successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, and the Owner (itself or any person claiming under or through it) shall not establish or permit any such practice or practices of . discrimination, or segregation with reference to the selection,.location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the -Property, or any portion thereof. 103. Form of Nondiscrimination and Nonsegregation Clauses The Owner shall refrain from. restricting the rental, sale or lease of the Property, or any portion thereof, -on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person.- All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:. a. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be nodiscrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the.land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee, herein covenantsby and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shah be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race; color, religion, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or, through him, establish or permit any such practice or practices of Agreement Containing Covenants Affecting Deal Property a Item 14. - 74 - - xB -260- discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vcndees of the land-" § 104. No T_ r S&ES No sale, conveyance, assignment, leasing or other transfer of any kind of any interest in the Property or any portion thereof or any improvements thereon, or any change in the ownership of Owner or its successors or'assigns shall be permitted prior to twenty (20) years after the Operating Commencement Date, except as authorized by the express terms of the OPA. 105. Binding,Effect All obligations of "Owner" under this Covenant Agreement (and Alt of the terms, covenants and conditions of this Covenant Agreement) shall be binding upon Owner, its successors and assigns and every successor in interest of the Property or any portion thereof or any interest therein, jointly and severally, for the benefit and in favor of the Agency; its successors and assigns, and the City of Huntington Beach. 'All rights of "Owner"under this Covenant Agreement shall inure to the benefit of Owner and its permitted successors and assigns. § 106. Wectand DurationofCovenants The covenants contained in Sections 100 and 101 of this Covenant Agreement shall remain in effect until November 26, 2034. -The covenants against discrimination shall remain in perpetuity. -Ail other covenants shall remain in effect unless and until they expire in accordance with the express terms thereof. § I07. &_Mcrga This Covenant Agreement shall not merge into any other agreement between Agency and Owner. 1: r • u••• .•• t:,_. • Breach of any of the covenants, conditions, restrictions, or reservations contained in this Covenant Agreement shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for.value as to the Property, whether or not said mortgage or deed of trust is subordinated to this Covenant Agreement, but unless otherwise herein .provided, the terms, conditions, covenants, restrictions and reservations of this Covenant Agreement shall be binding and effective against the holder of such mortgage or deed of trust and any owner of the Property, or any part thereof, whose title thereto is acquired by foreclosure, trustee's sale, or otherwise. § 109. Severance If any provision of this Covenant .Agreement is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will, be deemed to be severed and Agreement Containing Covenants Affecting Real Property 1.1 HB -261- Item 14. - 75 deleted from the Covenant Agreement as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Covenant Agreement_ rN WITNESS WHEREOF, the Agency and Owner have caused this instrument to be executed on their behalf by their respective 6fficers thereunto duly authorized. AAgency REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Dated: , 2000 By: Chairman ATTEST: APPROVED AS TO FORM: Agency Clerk Agency General Counsel REVIEWED AND APPROVED: INITIATED AND APPROVED: Ray Silver, .Executive Director APPROVED AS TO FORM: Kane, Ballmer & Berkman Agency Special Counsel Director of Economic Development Agreement Containing Covenants Affecting Real Property 7 Item 14. - 76 — HB -262- "Owner" HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, A Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, A Delaware limited liability company, Its Manager Dated: , 2000 By: Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust Its Manager &_kgl centeAcovt1S Agreement Containing Covenants Affecting Real Property 8 HB -263- - T Item 14. - 77 EXHIBIT A SITE MAP Item 14. - 78 HB -264- rB R. sF£ sAvcmL PAGE' w?-o g voR nT rlrt£ A9s£ssmcw &-Low AAFir'ACg' S 112. sfr M. r. 35. R I/W. %a2-Q7 . 40 30 31 s' B' ucrrorf0"•g' lamm fm6476 �, v.. sro•°� aI „fCK nm.0 ® n 34 -4m pz q \$ Y AL lfp Ip' , CWlfrf MO X Q dY.fa-tliM••M 9 , r,�• an& a „m j - i Qa.r o $ ep� a J .v Ar t to 071 4 �rw m rer aOP tl: P JJJ taV II J\JJ+C T • s r •' \ I � r 13 32 MOP(- ASS!'SSOwl ' AOCIr a A!SflsaR'S AIAP MARCH +.46! - PI+Pa;i A RCO/fF6F� A16F��'7 ( Nq . MR= ELM P lit 44-it $#WIN 1N CIPMIS COUNry Of ORANSf Moa EXHIBIT B LEGAL DESCRIPTION Item 14. - 80 HB -266- ORDER NO.: 9910472-45 PARCEL A: PiTcels 2 through 9 inclusive of Parcel Map No. 96-200, .in the City of Huntington Beach. County of Orange, State of California, 'as shown on a map recorded in Book 25S, Pages 40 to 45 inclusive of Parcel Maps, in the office of the County Recorder of said county. Except chose portions of Parcel A (being portions of said Parcel 4 and-9) conveyed to the City of Huntington Beach, a•municipal.corporation by deed recorded May 1, 1991 as instrument No. 91-209426 of official Records. Also except that.portion of Parcel A lying below a depth of 500 feet, measured from the surface of said land. Also except from s portion of Parcel R (being Parcels 4. S. 6. 7, ® and a portion of Parcel 2) an undivided SSW interest in all the land lying more than 500 feet below the surface, but none of the land lying above i depth of 500 feet below the surface of the lands with no right of surface access or use of the lands lying more than 500 feet below the surface, hereinafter referred to as ®said land° -for the purposes of exploring and prospecting for tby geological, geophysical and all other means whether now known or not), drilling for, producing, savings, taking and owning oil, gas, asphaltum and other minerals,: whether similar or dissimilar to those herein specified and including =• fissionable materials' collectively hereinafter•referred to as said substances* in, under •� or that may be produced from said land, together with all rights, privileges and easements useful or convenient for operations in said land, in adjacent or contiguous lands, and in other lands in the same vicinity, including, but not limited to: .fl) Subsurface rights of way for drilling, regaining, redrilling, deepening, maintaining. operation, abandoning, reworking and removing wells to, in, into and through said land.- (2) The right to conduct operations by methods now )mown or unknown which are reasonably designed to'bensfit or facilitate the drilling for, or production of said iubetances from said land. (3) The unrestricted and ewelusive right, power arA authority to produce said substances beneath or recoverable from said. land, and to exercise all other rights -and privileges - herein set forth by means of any well or mines which are slant drilled from surface drill sites located on such other lands and the producing intervals of which are bottomed in said land; and xs -267- - Item 14. - 81 ORDER No.: 9510e77-45 (Continued) (a) The right to drill a well or wells or use any existing wells, to, in, into or through said portion of said land, for the purpose of injecting into said portion of said land —or into other lands, oil, gas, air, water or other liquid or gaseous substances, including the right, from time to time to ignite or otherwise activate any or all of such substances so injected or any or all of said minerals and materials described herein within said portion of said land or other lands, reserved in deed recorded April @, 1986 as Instrument No. 86-136193 of Official Records and re -recorded August 13., 1986 as Instrument No. 86-360236 of official Records. PARCEL 8: Easements for ingress and egress, automobile parking, pedestrian uses, installation, operation and maintenance of separate and common utility lines, structure support, signs and other shopping center uses, all as more particularly defined and described in that certain Construction,' Operation and Reciprocal Easement Agreement recorded August a, 1965 in Book 7617,'Page 539 together with amendmenta recorded. in Book 11887, page 1770; Book 11091. Page 993 and as Instrument No. 87-406989 all of Official Records. Item 14. - 82 HB -268- -- Site #21 Huntington Beach Mail 7777 Bdiaser Ave Huatin&u Beach, CA 'mac vt 142-071-31 PARCEL 1. im THII ciTY OF MWTZNGTQX SEA= COUVN Or GRAM, STATC OF . CALIFORNYA, OF PARCEL MAP NO. 64-200 AS BEA KILP R2COiW2D IN BOOR 253 PAGES 40 THROUGii 45 XNCLUSIVI OF PARCEL MAPS IN THS OFFICS OF TRZ =U PY $ECOIDER- OF SAID COUNTY. SXCE$Tzm '17tS mum Tx$ $uILmms, mucTuns AND nmovE29xm tINCD+tiLiim StM-SiSRfACE MUCTM= AND FOM=T%O98 BUT NOT INCUMM STORM SEWM .AbrD AREA DRAMS AS f.M - M r Ea IN A CMWZYAXC! FROM NMTQOKERY WA" DBVESAVN=T COAPOPATICIR, A DELAWARR CORPORATION, DATID NOVtMM 14. 1972 RY=R= NoVFMSER 20, 1972 IN BOOR "448 PAGE 483 OP OFFICIAL P.ECO=Q . ALSO SXCSPT MT PORTjotj T3Di Mr Lyj= BEIDW A DEPTH OF 500.00 FEET MRMURED nox Tu St3R =x AF SAID um, AS RESERVED IN Tin! um FROK =IfTIMTON CEN'E'Sit, A PARTIBSi =P COMS80 OF utuff t =OK SEAL-9 COMPANY, R MLIFORM CORIORATION AND CORAL RBALTy CORD.. A NBVAM CORFORATTON, QUALIFIED TO DO Z=nWS = TES STATE Opr =LZj?=NZA, RSCOR=O ADS= 14, 1565 IN WAX 7617 PA= 534, OFFICIAL. RECORDS. PARCEL RI A&Tj 6LTIIaD?VS# STRUCTURZ8 AM TMBROVZM=T8 (19CLtiMS CUR-B WA= MUCT9M A= POWAMM wr wr IeBC,S,=ERM B'rOtiM 88iJ8u AM AM OP Off. STATE 8'Ota ,mmo s PAR+ I. IN To CXTY OP' RUST Bum, OP CAUTIORM, of TAVJM IBA? NO. 96-200 AC PEA My REM== w ROOK ass PA= 40 45 INS. W= or PAwim mug = TUB Omer or '!M C=wy =c0sw R QP SAID comm. pucgt+ C: 8A8EBQ03T8 WX VMM8, cCdSMAI AUTOMMXLZ PA81ZM' PIDiBSR:M UIn — ZMSTALtAnOat, 08ERATICat A= mx=TmW= or MARATS AM MWW VSZi,B'B'Y.LIKSB. BTAUL'i'UitC BUPR=T, 8%GWA Ato 0=0I AM as 4iC7R33 PAR=C Y OSFIN10 AND DBECRISSD = SEAT C=--- tt ��f.. OPBRA'!'TOi[ RI9ROC&Y+ U;W OZD AMMT 4, 1965 IN a= 1619, tIRt3E SS9 EC �g WITS p,BM== IN HOOK 110®7, PA08 1770, i18 ii00AC 11091, PASS 981 AND A8 VmTRm3' ma. 67-;Q6989 A" Or flFFICZAt RBL'ORDB. 1r q� " 0 CW1CW THE MURANCE CO. ATM, LOW"A KARP 171 M. CLARK 3T - MLC: OOP CHMAGO N. RPAW Oxdar: -000 9026 .DeAcrapttoa: 2000.216387 Bags 24 0f 24 C I;: 130 'd 'ON Kul did £Z: I i IM OOOZ-10-439 HB -269- Item 14. - 83 STATE OF CALIFORNIA ) COUNTY OF } On—* _, 2000 before me, , personally appeared, personally known to me (or proved to me on the basis of satisfactory -evidence) to be the persons) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/shc/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the. instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official sea]. . Signature STATE OF CALIFORNIA ) ) ss. COUNTY OF On 2000 before me, personally appeared _ ._ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose .name(5) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in' his/her/their authorized capacity(ics), and that by his/her/their signatures) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Item 14. - 84 xB -270- — ATTACHMENT NO.8 DORM OF GRANT DEED [behind this page] HB -271- Item 14. - 85 Recording Requested By and When Recorded Mail to: Iuntington Center Associates, LLC C/o The Ezralow Company, LLC 23622 Calabasas Road, Suite 100 Calabasas, California 91302 Attention: SPACE ABOVE THIS LINE FOR RECORDING USE . FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, herein called "Grantor," hereby grants to HUNTINGTON CENTER ASSOCIATES, LLC, herein called "Grantee," the real property shown on' the Property Map attached hereto as Exhibit A and incorporated herein by this reference and described in the legal description attached hereto as Exhibit B and incorporated herein by this reference (the "Property'), in -accordance with and subject to the covenants, conditions and restrictions set fortis in this Grant Deed. The Property is subject to the redevelopment plan for the Huntington Beach Redevelopment Project, which was approved and adopted by Ordinance No. 2743 of the City Council of the City of Huntington Beach on November 26, 1984, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment, Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. This Grant Deed is made pursuant to that certain Owner Participation Agreement by and between the Grantor and Grantee dated , 2000 (the "OPA"), which is a public record on file at the offices of the Grantor and is incorporated herein by this reference. The Property is the real property referred to in the OPA as the "Additional Properties': All capitalized terms in this Grant Deed shall have the meanings ascribed to them in the OPA unless indicated to the contrary herein.. Grantor and Grantee agree as follows: Grantee hercby'covenants and agrees on behalf of itself and any successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein that Grantee, such successors and assigns shall: Grant Deed Item 14. - 86 - 1113 -272- a. Develop; construct, renovate and rehabilitate improvements on the Property solely in accordance with this Grant Deed, the OPA, the Redevelopment Plan, and plans approved by the City. b. Devote the Property, or cause the Property to be devoted, solely to use as a first - quality regional shopping center in accordance with this Grant Deed, the OPA, the Redevelopment Plan, and plans approved by the City, until November 26, 2034. c. Beginning no later than the Operating Commencement Date, cause to be Operated on the Property until November 26, 2034, a first -quality regional shopping center meeting the design and architectural standards of that certain Specific Plan initially adopted by Resolution No. 2000-68 on July 5, 2000. All floor area shall be Operated by retail stores of a type customarily located at first -quality regional ' shopping centers in Southern California. If any tenant over fifty thousand square feet (50,000) of gross leaseable.area ("Major") ceases to Operate within the effective period of the operating covenants, Grantee shall request the written approval of the Grantor for the replacement of the Major with one or more proposed new tenants of comparable first -quality and trade name at the earliest practicable date, but in no event more than ninety (90) days after the Major, to be replaced provides written notice to Grantee of its intent to cease to Operate on the Property. Within thirty (30) days after receipt of Grantee's request for approval, Grantor shall respond in writing by stating what further information, if any., Grantor reasonably requires in order to determine whether or not to approve the replacement tenant. Grantee shall promptly furnish to Grantor such further information as may be reasonably requested. Grantee's request for approval shall be deemed complete thirty (30) days after Grantor's receipt thereof, if no timely response requesting further information is given to Grantee, or, if such a timely response requesting further.infotrnation is received by Grantee, on the date that Grantee. delivers such additional information to Grantor, provided that such additional information is responsive to Grantor's request. Grantor shall approve or disapprove the proposed replacement tenant in the Grantor's reasonable discretion, and shall provide Grantee with written notice of its decision within thirty (30) days after Grantee's request for such.approval is accepted as complete or deemed complete. In deciding whether to approve a proposed replacement tenant, the Grantor may consider, among other factors; the level of .quality, and the sales generation ability of the proposed replacement tenant and trade name. If Grantor shall disapprove a proposed replacement tenant, Grantor shall do so by written notice to Grantee stating the ' reasons for such approval. "Operate," as used in this Agreement, means open to the general public for business during commercially reasonable business hours, except when temporarily not open for business by reason of such reasonable interrt,tptions as may be customary and incidental to the conduct of business at first -quality regional shopping centers in Southern California. d. Maintain the Property, or cause the Property to be maintained, in accordance with Section 101 of this Grant Deed. Grant Deed — — HB -273- -- Item 14. - 87 C. Pay when due all real estate taxes and assessments assessed and levied on the Property and any improvements thereon and refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Property; provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of an erroneous initial assessment for property tax purposes of the Property in the fiscal year of the completion of the improvements to be constructed and/or renovated pursuant to this Agreement. f. Not discriminate upon the basis of race, color, creed, religion, sex, age, marital status, handicap, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any -improvements erected or to be erected thereon, or any part thereof. g. Include in all leases and subleases appropriate provisions requiring all lessees and sublessees to comply with and be bound by the applicable provisions of this Agreement. Pay when due the Agency Participation Payment in accordance with Section 601 of the OPA. Continue to perform all ongoing obligations of Grantee under the OPA, including but not limited to those under Sections 304, 305 and 406 of the OPA. a. Grantee shall maintain, repair and operate the Property and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Property and all such improvements to be maintained, in a first quality condition, free of debris, waste and graffiti, and in compliance with the. terms of the Redevelopment Plan; the City of Huntington Beach Municipal Code, and the following: (1) All improvements on.the Property shall be maintained in good condition in accordance with the custom and practice generally applicable to. comparable first quality shopping centers in Orange County, and in conformance and compliance with all plans, drawings and related documents approved by the Grantor pursuant to the OPA, all conditions of approval of land use entitlements adopted by the City. or the Planning Commission, including painting and cleaning of all exterior surfaces of all private improvements and Public improvements to the curbline. ' (2) Landscape maintenance shall include, without limitation, wateringfirrigation; fertilisation; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road visibility; and irrigation coverage; replacement, as needed, Grant Deed - Item 14. - 88 — HB -274- of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (3) Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping; clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. b_ If the Grantor gives written notice to Grantee that the maintenance or condition of the Property or any portion thereof or any improvements thereon does not comply with the OPA and this Grant Deed and such notice describes the deficiencies, Grantee shall correct, remedy or cure the deficiency within thirty (30) days following the submission of such notice, unless the notice states that the deficiency is an urgent matter relating to public health and safety in which. case Grantee shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time but in no even more than forty-eight .(48) hours following the submission of the notice. In the event Grantee fails to maintain the Property or any portion thereof or any improvements thereon in accordance with.the OPA and this Grant Deed and fails to cure any deficiencies within the applicable period described above, the Grantor shall have, in addition to any other rights and remedies hereunder, the right to maintain the Property and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Grantee shall be responsible for payment of all such costs reasonably incurred by the Grantor. C. The Grantee shall not use or permit the use of the Property in violation of (i) the Specific Plan and applicable zoning laws as they now exist or as they may hereafter be amended from time to time; or (ii) the Redevelopment Plan for the Project, as it now exists or, subject to Section 102 of the OPA, as it may hereafter be amended from time to time. 1 !1 14 • i' -F a 0 flult-1416311 Grantee hereby covenants and agrees on behalf of itself and any successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, and the Grantee (itself or any person claiming under or' through it) shall not establish or permit any such practice or practices of discrimination, or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vcndees of the Property, or any portion thereof. Grant Deed xB -275- Item 14. - 89 § 103. EornioLNarLdiscriminatiobandE=cgrc,gatifln_Claus€s The Grantee shall refrain from restricting the rental, sale or lease of the Property, or any portion thereof, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a.. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons -on account of sex, marital status, race, color, religion, creed, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the.land herein conveyed, not shall the grantee himself or any person claiming under or through him, establish or permit any such .practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land," b. In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this .lease is made and accepted upon and subject to the following conditions That there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin. or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." C. in contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on -account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establishor permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." § 104. No Transfers No sale, conveyance, assignment, leasing or other transfer of any kind of any interest in the Property or any portion thereof or any improvements thereon, or any change in the Granteeship of Grantee or its successors or assigns shall be permitted prior to twenty (20) years -after the Operating Commencement Date,.except as authorized by the express terms of the OPA. Grant Deed Item 14. - 90 ' HB -276- 105. Big t to Remit a. After conveyance of the Property to Grantee, Grantor shall have the right, at its option, to reenter and take possession of the Property (or portion thereof) conveyed by Grantor to Grantee with all improvements thereon, and revest in the Grantor the estate theretofore conveyed to Grantee, if after conveyance of title and prior recordation of the Release of Construction Covenants, Grantee or its successors or assigns, in violation of the OPA or this Grant Deed: (1) Subject to the provisions of Section 808 of the OPA, faits to proceed with the construction of the improvements on the Property as required by the OPA for a period of ninety (90) days after written notice thereof from Grantor-, (2) Subject to the provisions of Section 808 of the OPA, abandons or substantially suspends construction of the improvements on the. Property for a period of ninety (90) days after written notice thereof from Grantor, (3) Assigns or purport to assign the OPA (or any rights therein), or sells, transfers, conveys, assigns or leases the whole or any part of the Property, or any of the improvements to be constructed thereon, in, violation of the OPA or this Grant Deed. b. Such right to reenter and repossess the Property (or portion thereof) conveyed by Grantor to Grantee shall be subject to and limited by and shall not defeat, render invalid or limit: (1) Any bona fide mortgage, deed of trust or other security instrument of sale and leaseback or other conveyance for financing, provided that. such mortgage, deed of trust, security instrument, sate and leaseback . or conveyance for financing is permitted by the OPA; (2) Any rights or interest provided in the OPA for the protection of the holder of such bona fide, permitted mortgages, deeds of trust or other security instruments,, the lessor under such sale and leaseback, or the grantee under such other conveyance for financing; c. Upon the revesting in Grantor of title to the Property (or any portion Thereof) as provided in this Section 105, Grantor shall, pursuant to its responsibilities under the California Community Redevelopment Law (Health and Safety Code Sections 33000 et seq.), use its reasonable best efforts to resell the Property (or any such portion thereof) as soon as possible and in such manner as Grantor shall find feasible and consistent with the objectives of the law and of the Redevelopment Plan, to a qualified and responsible party. or Grant Deed — HB -277- — Item 14. - 91 parties (as determined by.Grantor), who will assume the obligation of making or completing the improvements, or such other improvements in their stead, as shall be reasonably satisfactory to'Grantor and in accordance with the uses specified for the Property (or such portion.thereof) in the Redevelopment Plan. Upon such resale of the Property (or any portion thereof), the proceeds thereof shall be applied as follows_ (1) First, to reimburse Grantor on its own behalf and/or on behalf of the. City of Huntington Beach, for all costs and expenses of Grantor incident to such sale and/or conveyance, for all costs and expenses incurred by Grantor (including, but not limited to, salaries to personnel in connection with the recapture, management and resale of the Property, or any portion thereof, but less any income derived by Grantor therefrom in connection with such management);. all taxes, assessments and water and sewer charges with respect thereto; any payments made, or necessary. to be made, to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Grantee, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property (or any such portion thereof); and any amounts otherwise owing to Grantor by Grantee or its successors or transferees; and (2) Second, to reimburse Grantee, its successors or transferees up to the amount equal to the sum of (A) the purchase price- (or allocated portion thereof) paid to Grantor by Grantee for the Property or any such portion thereof; and (B.) costs incurred for the development of the Property, or any such porfion thereof, and for the improvements . existing thereon and the time.of reentry and repossession;. less (C) gains or' income withdrawn or made by Grantee, its successors or assigns therefrom or from the improvements thereon. (3) Any balance remaining after such reimbursements shall be retained by Grantor as its'property. d. The rights established in this -Section 105 are to be interpreted in light of the fact that the purpose of the OPA is the redevelopment. of the Property and not land speculation. All obligations of "Grantee" under this Grant Deed.(and all of the terms, covenants and conditions of this Grant Deed) shall be binding upon Grantee, its successors and assigns and every successor in interest of the Property or aty portion thereof or any interest therein, jointly and severally, for the benefit and in favor of the Grantor, its successors and assigns, and the City of Grant Deed Item 14. - 92 -- HB-278---- — Huntington Beach. All rights of "Grantee" under this Grant Deed. shall inure to the benefit of Grantee and its permitted successors and assigns. § 107. Eff=UndDur tion_of.C.oanants The covenants contained in Sections 100 and 101 of this Grant Deed shall remain in effect until November 26, 2034. The covenants against discrimination shall remain in perpetuity. All other covenants shall remain in effect unless and until they expire in accordance with the express terms thereof § 108. sa-►igergcr This Grant Deed shall not merge into any other agreement between Grantor and Grantee. § 109. . Liens of lyiartgacs and Duds of Trust Breach of any ofthe covenants, conditions, restrictions, or reservations contained in this Grant Deed shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to the Property, whether or not said mortgage or deed of trust is subordinated to this Grant Deed, but unless otherwise herein provided, the terms, conditions, covenants, restrictions and reservations of this Grant Deed shall be binding and effective against the holder of such mortgage or deed of trust and any Grantee of the Property, or. any part thereof, whose title thereto is acquired by foreclosure, trustees sale, or otherwise: § 110. Severance If any provision of this Gratit Deed is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from the Grant Deed as a whole and neither such provision, nor its severance and -deletion shall in any way affect the validity of the remaining provisions of this Grant Deed. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized. - -Grantor" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 7 Dated: , 2000. By: Chairman Grant Deed g HB -279- Item 14. - 93 ATTEST: Agency Clerk REVIEWED AND APPROVED: Ray Silver, Executive. Director APPROVED AS TO FORM: Kane, Ballmer & Berkman Agency Special Counsel Dated: .2000 Ucg\hb\=icr1.dccd 1.5 APPROVED AS TO FORM: Agency General Counsel INITIATED AND APPROVED: Director of Economic Development AGrantec= HUNTINGTON CENTER ASSOCIATES,LLC, a Delaware limited liability company By: Huntington Management Erit., LLC, A.Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, A Delaware limited liability company, its Manager By: Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust Its Manager Grant Deed 0 Item 14. - 94 - HB -280- EXHIBIT A SITE MAP HB -281- Item 14. - 95 EXHIBIT B LEGAL DESCRIPTION OF PROPERTY Item 14. - 96 HB -282- STATE OF CALIFORNIA ) ) 55_ COUNTY OF _ ) On. _. , 2000 before rite, personally appeared _. personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose namc(s) is/are subscribed to the within instrument and acknowledged to me that he/shc/thcy executed the same in his/her/their authorized capacity(ies), and that by his/her/their signaturc(s) on the instrument the person(s), or the entity upon behalf of which the puson(s) acted, executed the instrument. WITNESS. my hand and official seal. Signature - STATE OF CALIFORNIA ss. COUNTY OF ) Ori , 2000 before me, personally appeared _, personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ics), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the persons) acted, executed the instrument. Signature WITNESS*my hand and official seal. xB -283- - Item 14. - 97 ATTACHMENT NO. 7 SCHEDULE OF FEASIBILITY GAP PAYMENTS [behind this page] Item 14. - 98 -- -- HB -284- SACRED-OF-EEASJlBIL111 GALEAYyIEINTS PART 1 (APPLICABLE ONLY IF `'YARD PARCEL. IS PART OF SITE) (a) Applicability of Part 1. This Part I of this Attachment No. 7 shall apply only if the Ward Parcel is included in the legal description of the Site and is redeveloped pursuant to the Owner Participation Agreement by and between Agency and Participant dated as of , 2000 ("OPA"). This Part 1 shall not apply in the event the O.PA is terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 702.2 (c) of the OPA. Regardless of whether or not the OPA is . terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 702.2 (e) of the OPA, Participant shall use its best efi'oris to cause the replacement of the exterior of the Ward Parcel building and renovation of the Ward Parcel parking lot in accordance with City approved plans, in order to ensure that such Ward Parcel building and parking lot conform with the redevelopment of the Site. Alternative provisions for feasibility gap payments, which exclude the Ward Parcel from the' legal description of the Site, are set forth in Part 2 of this Attachment No. 7. Any amounts paid by Agency pursuant to Part l shall be credited on a dollar -for -dollar basis against Agency's obligations under Part 2. (b) Reimbursement: Subject to all of the terms and conditions of the OPA (including, without limitation, the provisions of paragraph (d) below limiting the Agency's payment obligation, hereunder to particular sources of funds),the principal amount reimbursable by the Agency to Participant during the Reimbursement Term under this Part I shall be Si2steen Nliltion SeveII Hundmd-;and Fifty Thousand Dollars (S1bJ50 0001, to pay for the following: demolition; clearance; site preparation, public improvements, utilities and facilities, and acquisition of land and easements, and all other legally permissible items reimbursable to Participant. . (c) Interest Rate. The principal amount of this Part I shall bear interest at the rate of eight percent (81/0) per annum from the Operating Commencement Date (hereinafter defined) until paid, subject to the following: The eight percent (8°Jo) interest rate shall be adjusted in the event the City issues Community Facilities District bonds pursuant to paragraph (f) below in the following manner: to the extent the proceeds of such bonds are equal to or greater than the amount owed by Agency under this Part 1, the interest rate shall be eight percent (8%) minus one-half of the difference, if any, between eight pereent (8%) and theTrue Interest Cost of the Community Facilities District bonds ("Adjustment Formula"). For example, if the bonds are sold at six percent (6%) True Interest Cost, then the interest rate to be paid by Agency under this Part 1 shall be seven percent (7%) (calculated as 8% minus one-half of 2%, i.e., the difference between. 8°In and 6%). To the extent the net proceeds of such bonds are less than the amount owed by Agency under this Part 1, the Adjustment Formula Attachment No. 7 Schedule of Feasibility Gap Payments l — HB -285- -- Item 14. - 99 shall be prorated according to the amount of such bond proceeds. For example, if a total of $13,750,000 in bonds are sold at 6% True Interest Cost, then Agency shall be required.to pay 7% interest on S 13,750,000 of the amount owed, and 9% interest on the remaining $3,000,000 of the amount owed. "True Interest Cost" as used herein means the rate, compounded semi-annually, necessary to discount the amounts payable on the respective'principal and interest payment dates to an amount equal to the par amount of the bonds, less underwriter's discount (including original issue discount) and transaction costs. In no event shall the.principal amount of this Part 1 bear interest at a rate over eight percent (8%). (d) QhH . tion to Make Payments. The obligations of the Agency under this Part 1 shall be special and limited obligations payable to Participant solely from the sources'of funds expressly .identified in this Part 1. The Agency'shall have no obligation to pay any amounts to Participant pursuant to this Part 1 except as follows: (1) C nditions Precedenl. The following conditions precedent to each payment hereunder shall be satisfied: A. The Completion Date, as defined in paragraph (k) below, shall have occurred; B. The Operating Commencement Date, as defined in paragraph (k) below, shall have occurred; and C. Participant shall. be not be in default of any of its material obligations under the OPA. (2) Available Site -Gene tamed 1QPt y TaxIncrement. On of prior to September 30 of each year, beginning with the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1) above, and continuing until the principal' amount specified in paragraph (b) above (and any accrued interest thereon) has been paid in full or until the twentieth (20'") anniversary of. the Operating Commencement Date, whichever first occurs, the Agency shall calculate and pay to Participant an amount equal to the lesser of sevens nt (7.0%) of Available. Site -Generated Property Tax Increment received by the Agency during the prior Fiscal Year (July 1-June 30), or (ii) such'portion of such Available Site -Generated Property Tax Increment received by the Agency during the prior Fiscal Year that is sufficient, when added to the Available Site -Generated Sales Tax during the prior Fiscal Year, to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus 8% interest (adjusted pursuant to paragraph (c) above in the event the City issues Community Facilities District bonds), within a twenty (20) year amortization period. "Available Site -Generated Property Tax Increment" means the total ad valorem property tax Attachment No. 7 Schedule of Feasibility Gap Payments 2 Item 14. - 100 - — HB -286- increment revenue allocated to and received by Agency in any fiscal year pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount equal to any increase in the assessed value of the Site over and above an assessed value of Eifty Two Million-Onc-Hundmd andEifty:: reeMousand DoLlars_W.2,15LO-0), but specifically excluding therefrom all of the following: (A) a portion of such tax increment. revenues equal to the twenty percent (20%) of tax increment revenue from the redevelopment project area as a whole that is set aside pursuant to Sections 33334.2 et O.Q. of the California Health and Safety Code or any successor law for low- and moderate -income housing purposes; and (B) a portion of such tax increment revenues equal to the percentage of tax increment revenues from the redevelopment project area as a whole that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements entered into prior to the OPA by the Agency and such governmental entities implementing the tax sharingfpass-through agreements; and (C) a portion of such tax increment revenues equal to the percentage of tax- increment revenues in the redevelopment project area as a whole which the Agency may be required by the State of California to pay from time to time, .including, for example, and without limiting the generality of the foregoing, any payments.which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 et scq. of the California Health and Safety Code; and (D) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter -approved indebtedness; and (E) charges for County administrative charges, fees or costs equal to the percentage of such charges in the Project Area as a whole. (3) Available Se_Gencratrd Ss Taa<• On or prior to September .30 of each year, beginning with the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1) above; and continuing until the principal amount specified in paragraph (b) above (and any accrued interest thereon) has been paid in full or until the twentieth (20') anniversary of the Operating Commencement Date, whichever first occurs, the Agency shall calculate and pay to Participant an amount equal to the lesser of (i) seventy t=.snL of the Available Site -Generated Sales Tax received by Agency during the prior Fiscal Year (July I -June 30), or (ii) such portion of such Available Site -Generated Sales Tax received by the Agency during the prior Fiscal Year that is sufficient, when added to the Available Site -Generated Property Tax Increment during the prior Fiscal Year, to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus 8% interest (adjusted pursuant to paragraph (c) above in the event the City issues Community Facilities District bonds), within a twenty (20) year amortization period - "Available Site -Generated Sales Tax" as used herein shall mean not more than seventy percent (70%) of the sales tax revenue actually received by the City in any fiscal year as the City's share of sales tax revenue generated by the Site on or after the Operating Commencement Date in an amount in excess of Eight Hundred and+nP ` r m'�td D�11arc 0(�0.0001 in such fiscal year and paid to the Agency pursuant to the Cooperation Agreement by and between the City and Agency of even date herewith (Attachment No. 10 of OPA). Attachment No. 7 Schedule of Feasibility Gap Payments 3 HB -287- Item 14. - 101 (4) Recalculation of Available Site -Generated Property Tax Increment and Available Site -Generated Sales Tax. The annual sum of Available Site -Generated Property Tax Increment and Available Site -Generated Sales Tax that is sufficient to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus interest, within a twenty (20) year amortization period, as provided for in paragraphs (d)(2) and (d)(3) above, shall be recalculated prior to each September 30 during the 20-year amortization period to account for all of the following: (A) prepayments of Agency's obligations pursuant to paragraph (e) of this Attachment No. 7; (B) any annual payment by Agency Iess than the amount sufficient to fully amortize the payments due to Participant over a 20-year amortization period based upon the amortization schedule then in effect; and (C) any adjustments in the Project Costs after the date that the amortization schedule then in effect was prepared. (e) EmpaMeeni. Agency's obligations hereunder may be prepaid by Agency, in whole or in part, at any time and from time to time without penalty, from any Ifands lawfully available to Agency for such purposes, including, but not limited to, grants obtained for public improvements (such as, for example, a State of California. grant for freeway off -ramp construction). In the event Agency is prohibited by the terms of any such grants and/or funds from transferring the grants and/or other funds directly to Developer as prepayment hereunder, :Agency may use such grants and/or other funds directly to pay forall or a portion of the items listed in paragraph (b) above, and the amount expended by Agency by the use of such grants and/or other funds shall be counted toward the prepayment of Agency's obligations hereunder. (fl Tg,c ,ance of Bonds. Agency and Participant shall use their reasonable best efforts to cause City to consider the issuance of Community Facilities District bonds or similar instruments secured by a special tax on Participant's title to the Site and the improvements to be constructed thereon pursuant to the Agreement to fund eligible public improvements, if the Agency determines that such an issuance is feasible and would not adversely affect the financial objectives of the Agency or the City. Participant shall, separate from any other advance or payment from Participant to Agency pursuant -to the OPA and this Attachment No. 7, advance to Agency the amounts necessary for appraisals, consultants, bond counsel, and other costs of issuance related to any such Community Facilities District bonds or other similar instruments, with such costs being reimbursable to Participant from bond proceeds to the extent legally permissible. In the event of an issuance of Community. Facilities District bonds or similar instruments, Participant shall pay all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of its other obligations in connection with such bonds or other instruments. The Agency shall have no obligation to reimburse Participant for debt service, repayment of principal or interest, penalties or any other amounts due in connection with the bonds or similar instruments, including but not limited to any amounts which may become payable as a result ofParticipant's failure to pay special taxes and/or to timely perform Participant's. other obligations thereunder. The Agency's payment obligations under this Attachment No. 7 shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. Attachment No. 7 Schedule of Feasibility Gap Payments 4 Item 1.4. - 102 HB -288- (g) Subordination. The Agency's obligation to pay Available Site -Generated Property Tax Increment in accordance with this Part 1 shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith, provided that at the time of issuance of any such future bonds, (i) Agency provides to Participant a fiscal report prepared by a qualified independent fiscal consultant demonstrating that the gross annual Available Site -Generated Property Tax Increment, less the amount of such Available Site -Generated Property Tax Increment paid'to Participant,- is equal to or greater than one hundred and ten percent (1101/6) of the total bonded debt service for both the existing and proposed bonds, and (ii) the Agency reasonably determines that such issuance and indebtedness will not materially adversely affect the Agency's ability to perform its obligations under this Part 1. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Available Site -Generated Property Tax Increment to Participant under this Part 1 is not and shall not be'construed as a "pledge" of property tax"revenues for purposes of Section 33671.5 of the California Health and Safety Code. In the event Available Site -Generated Property Tax Increment is received by Agency and is not reimbursed to Participant during any Fiscal Year pursuant to this AttachmentNo. 7 by reason of the diversion of such Available Site -Generated Property Tax Increment to repay senior Agency bonded indebtedness to which such tax increments were pledged (the "Diverted Tax Increment"), then, in the following Fiscal Year, in addition to paying to Participant seventy percent (70%).of Available Site -Generated Property Tax Increment owed. to Participant for that Fiscal Year, Agency shall draw from the remaining thirty percent (30%) of Available Site -Generated Property Tax Increment such amount as necessary to compensate Participant for all Diverted Tax Increment. (h) . OPA_ This Part 1 of the Attachment No. 7 is part of the OPA and is subject to all of the terms and conditions thereof. W et-0ff The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts owed by Participant to the Agency under the OPA against amounts payable by the Agency under this Part 1. (j) ...vment Obligations For 'given. Except for any Diverted Tax Increment, any balance remaining in Agency's payment obligations under this Part 1 after the Reimbursement Term shall automatically.be deemed forgiven (lc) Definitions. The following definitions shall apply to this Part 1: (1) "City" as used herein shall mean the City of Huntington Beach. (2) "Completion Date" as used herein shall mean the date on which the Release of Construction Covenants to be issued by Agency pursuant to the Agreement with respect to the Attachment No. 7 Schedule of Feasibility Gap Payments 5 HB -289- Item 14. - 103 redeveloped Site and improvements is recorded in the Official Records of Orange County. (3) - "Fiscal Year," as used herein, means each twetve-month period beginning on July 1 and ending on June 30. (4) "Operating Commencement Date" as used herein means the last to occur of either the date of issuance by the City of the Certificate of Occupancy for the redevelopment of the Site, or the opening for business to the general public of the first -quality shopping center required by the OPA to be redeveloped on the Site by Participant. (5) "Reimbursement Term" as used herein means the period beginning on the Operating Commencement Date and ending twenty (20).years after the Operating Commencement Date, during which Agency is obligated to make reimbursement payments to Participant pursuant to this Attachment No. 7. (6) "Site' as used herein means that certain real property (including the Ward Parcel) in the City of Huntington Beach, more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference, and any improvements constructed or to be constricted thereon in accordance with the OPA. - .(I) Article 7 of OPA. Nothing contained in this Attachment No.7 shall alter or modify in any any of the provisions of Article 7 of the OPA. END OF PART 1 Attachment No. 7 Schedule of Feasibility Gap Payments 6 Item 14. - 104 HB -290- PART 2 (APPLICABLE ONLY IF YARD PARCEL NOT PART OF SITE) . . . (a) Applicabilityof Part 2. This Part 2 of this Attachment No. 7 shall apply only if the Owner Participation Agreement by and between Agency and Participant dated as of , 2000 ("OPA") is terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 702,2 (c) of the OPA. Regardless of whether or not the OPA is terminated as to the Ward Parcel pursuant to Section 702.1 (b) or 702.2 (c) of the OPA, Participant shall use its best efforts to cause the replacement of the exterior of the Ward Parcel building and renovation of the Ward Parcel parking lot in accordance with City approved plans, in order to ensure that such Ward Parcel building and parking lot conform with the redevelopment of the Site. Alternative provisions for feasibility gap payments, which include the Ward Parcel from the legal description of the Site, are set forth in Pan I of this Attachment No. 7. Any amounts paid by Agency pursuant to Part t shall be credited on a dollar -for -dollar basis against Agency's obligations under this Part 2. (b) Reimbursemeni. Subject to all of the terms and conditions of the OPA (including, without limitation, the provisions of paragraph (d) below limiting the Agency's payment obligation hereunder to particular sources of funds), the principal amount. reimbursable by the Agency to Participant during the Reimbursement Term under this Part 2 shall be Fifteen Million Dollars (111000.iM, to pay for the following: demolition, clearance, site preparation, public improvements, utilities and facilities, and acquisition of land and easements, and all other legally permissible items reimbursable to Participant. (c) Interes Rate. The principal amount of this Part 2 shall bear interest of the rate of eight percent (8%) per annum from the Operating Commencement Date (hereinafter defined) until paid, subject to the following: .The eight percent (8%) interest rate shall be adjusted in the event the City issues Community Facilities District bonds pursuant to paragraph (f) below in the following manner: to the extent the proceeds of such bonds are equal to or greater than the amount owed by Agency under this Part 2, the interest rate shalt be eight percent (8%) minus one-half of the difference, if any, between eight percent (8%} and the True Interest Cost of the Community Facilities District bonds ("Adjustment Formula"). For example, if the bonds are sold at six percent (6%) True Interest Cost, then the interest rate to be paid by Agency under this Part 1 shall be seven percent (70/0) (calculated as 8% minus one-half of 2%, i.e., the difference between 8% and 6%). To the extent the net proceeds of such bonds are less than the amount owed by Agency under this Pact 2, the Adjustment Formula shall be prorated according to the amount of such bond proceeds. For example, if a total of S 13,750,000 in bonds are sold at 6% True Interest Cost, then Agency shalt be required to pay 7% interest on S I3,750,000 of the amount owed, and 8% interest on the remaining $3,00.0,000 of the amount owed. "True Interest Cost" as used herein means the rate, compounded semi-annually, Attachment No. 7 Schedule of Feasibility Gap Payments 7 xB -291- Item 14. - 105 necessary to discount the amounts payable on the respective principal and interest payment dates to an amount equal to the par amount of the bonds, less underwriter's discount (including original issue discount) and transaction costs. in no event shall the principal amount of this Part 2 bear interest at a rate over eight percent (d) Obligaiion.laMakeEayments. The obligations of the Agency under this Part 2 shall be special and limited obligations payable to Participant solely from the sources of funds expressly identified in this Part 2. The Agency shall have no obligation to pay any amounts to Participant pursuant to this Part 2 except as follows: (1) Conditions Pt:C=&m. The following conditions precedent to each payment hereunder shall be satisfied: A.. The Completion Date, as defined in paragraph (k) below, shall have occurred; B. The Operating Commencement Date, as defined in paragraph (k) below, shall have occurred; and C. Participant shall be not be in default of any of its material obligations under the OPA. (2) AyAilabia $it t n rated rnneriy Tax IncreA=. On or prior to September 30 of each year, beginning with the first. September 30 which follows -the satisfaction of all conditions precedent specified in paragraph (d)(1) above, and continuing until the principal amount Specified in paragraph (b) above (and any accrued interest thereon) has been paid in full or until the twentieth (20'h) anniversary of the Operating Commencement Date, whichever first occurs, the Agency shall calculate and pay.to Participant an amount equal to the lesser of (i) sixMpercent f6¢la) of Available Site -Generated Property Tax Increment received by the Agency during the prior Fiscal Year (July 1-lune 30), or (ii) such portion of such Available Site -Generated Property Tax Increment received by the Agency during the prior Fiscal Year that is sufficient, when added to the Available Site -Generated Sales Tax during the prior Fiscal Year, to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus 8% interest (adjusted pursuant to paragraph (c) above in the event the City issues Community Facilities District bonds), within a twenty (20) year amortization period. "Available Site -Generated Property Tax Increment" means the total ad valorem property tax increment revenue allocated to and received by Agency in any Fiscal year pursuant to Section 33570(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an .amount equal to any increase in the assessed value of the Attachment No. 7 Schedule of Feasibility Gap Payments 8 Item 14. - 106 HB -292- Site over and above an assessed value of Eorty 1hrec MillisnL wa-Hundred and TLv Eigtlt 1h2usan DDIlars_(_$43.22 MO), but specifically excluding therefrom all of the following: (A) a portion of such tax increment revenues equal to the twenty percent (20%) of tax increment revenue from the redevelopment project area as a whole that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law for low- and moderate -income housing purposes; and (B) a portion of such tax increment revenues equal to the percentage of tax increment revenues from the redevelopment project area as a whale that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements entered into prior to the OPA by the Agency and such governmental entities implementing the tax sharing/pass-through agreements; and (C) a portion of such tax increment revenues equal to the percentage of tax increment revenues in the redevelopment project area as a whole which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 ci seq. of the California Health and Safety Code; and (D) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter -approved indebtedness; and (E) charges for County administrative charges, fees or costs equal to the percentage of such charges in the Project Area as a whole. (3) Available Site -Generated Sales Tom. On or prior to September 30 of each year, beginning with the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1) above, and continuing until the principal amount specified in paragraph (b) above (and any accrued interest thereon) has been paid in full or until the twentieth (2e) anniversary of the Operating Commencement Date, whichever first occurs, the Agency shall calculate and pay -to Participant an amount equal to the lesser of (i) six ercent-(6.0� of the Available Site -Generated Sales Tax received by Agency during the prior Fiscal Year (July 1-June 30), or (ii) such portion of such Available Site -Generated Sales Tax received by the Agency during the prior Fiscal Year that is sufficient, when added to the Available Site -Generated Property Tax Increment during the prior Fiscal Year, to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus 80,6 interest (adjusted pursuant to paragraph (c) above in the event the City issues Community Facilities District bonds), within a twenty (20) year amortization period, "Available Site -.Generated Sales Tax" as.used herein shall mean not more than sixty percent (60°l°) of the sales tax revenue actually received by the City in any fiscal -year as the City's share of sales tax revenue generated by the Site on or after the Operating Commencement Date in an amount in excess of ScychH►,n re an Fiftv Thousand Dollars ($250,0001 i n such fiscal year and paid to the Agency pursuant to the Cooperation Agreement by and between the City and Agency of even date herewith (Attachment No. 10 of OPA). (4) talc elation of Available Site-eIIerated PropeLTnCrPment and Available Site -Gen eratid-Sala Tax. The annual sum of Available Site -Generated Property Tax Increment and Available Site -Generated Sales Tax that is sufficient to repay all funds owed by Agency to Participant pursuant to this Attachment No. 7, plus interest, within a twenty (20) year Attachment. No. 7 Schedule of Feasibility Gap Payments 9 HB -293- — Item 14. - 107 amortization period, as provided for in paragraphs (d)(2) and (d)(3) above, shall be recalculated prior to each September 30 during the 20-year amortization. period to account for all of the following: (A) prepayments of Agency's obligations pursuant to paragraph (e) of this.Attachment No. 7; (i3) any annual payment by Agency less than the amount sufficient to fully amortize the payments due to Participant over a 20-year.amortization period based upon the amortization schedule then in effect; and (C) any adjustments in the Project Costs after the date that the amortization schedule then in effect was prepared {e} Pxcpaymeat. Agency's obligations hereunder may be prepaid by Agency, in whole or in part; at any time and from time'to time without penalty, from any funds lawfully available to Agency for such purposes, including, but not limited to, grants obtained for public improvements (such as, for example, a State of California grant for freeway off -ramp construction). In the event Agency is prohibited by the terms of any such grants and/or funds from transferring, the grants and/or other funds directly. to Developer as prepayment hereunder, -Agency may use such grants and/or other funds directly to pay for all or a portion of the items listed in paragraph (b) above, and the amount expended -by Agency by the use of such grants and/or other funds shall be counted - toward the prepayment of Agency's obligations hereunder. (f} Isguance.QLBmds. Agency and Participant shall use their reasonable best efforts to cause City to consider the issuance of Community Facilities District bonds or similar instruments secured by a special tax on Participant's title to the Site and the improvements to be constructed thereon pursuant to the Agreement to fund eligible public improvements, if the Agency determines that such an issuance is feasible and would not adversely affect the financial objectives of the Agency or the City. Participant shall, separate from any.. other advance or payment from Participant to Agency pursuant to the OPA and this Attachment No. 7, advance to Agency the amounts necessary for appraisals, consultants, bond counsel, and other costs of issuance related to any such Community Facilities District bonds or other similar instruments, with such costs being reimbursable to Participant from bond proceeds to the extent legally permissible. In the event of an issuance of Community Facilities District bonds or similar instruments, Participant shall pay all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of its other obligations in connection with such bonds or other instruments. The Agency shall have no obligation to reimburse Participant for debt service, repayment of principal or interest, penalties or any other amounts due in connection with the bonds or similar instruments, including but not limited to any amounts which may become payable -as a result of Participant's failure to pay special taxes and/or to timely perform Participant's other as thereunder. The Agency's payment obligations under this Attachment No. 7 shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. (g) Subordination. The Agency's obligation to pay Available Site -Generated Property Tax Increment in accordance with this Part 2 shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds Attachment No. 7 Schedule of Feasibility Gap Payments 10 Item 14. - 108 HB -294- the Agency may issue and the bonded indebtedness incurred in connection therewith, provided that at the time of issuance of any such future bonds, (i) Agency provides to Participant a fiscal report prepared by a qualified independent fiscal consultant demonstrating that the gross annual Available Site -Generated Property Tax Increment, less the amount of such Available Site -Generated Property Tax Increment paid to Participant, is equal to or greater than one hundred -and ten percent (1 l0%) of the. total bonded debt service for both the existing and proposed bonds,. and (ii) the Agency reasonably determines that such issuance and indebtedness will not materially adversely affect the Agency's ability to perform its obligations under this Part 2. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Available Site -Generated Property Tax Increment to Participant under this Part 2 is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 3367I.5 of the California Health and Safety Code. In the event Available Site -Generated Property Tax Increment is received by Agency and is not reimbursed to Participant during any Fiscal Year pursuant to this Attachment No. 7 by reason of the diversion of such Available Site -Generated Property Tax Increment to repay senior Agency bonded indebtedness to which such tax increments were pledged (the "Diverted Tax Increment"), then, in the following Fiscal Year, in addition to paying to Participant sixty percent (60%).of Available Site -Generated Property Tax Increment owed to Participant for that Fiscal Year, Agency shall draw from the remaining forty percent (40%) of Available Site -Generated Property Tax Increment such amount as necessary. -to compensate Participant for all Diverted Tax Increment. (h) QFA. This Part 2 is part of the OPA and is subject to all of the terms and conditions thereof. (i) SQL -Off. The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts owed by Participant to the Agency under this Agreement against amounts payable by the Agency under this Part 2. (�} pay�eni Qbltga io s Forgiven. Except for any Diverted Tax Increment, any balance remaining in Agency's payment -obligations under this Part 2 after the Reimbursement.Term shall automatically be deemed forgivers. (k) D fmiti=. The following definitions shall apply to this Part 2: (1) "City" as used herein shall mean the City of Huntington Beach. (2) "Completion Date" as used herein shall mean the date on which the Release of Construction Covenants to be issued by Agency pursuant to the Agreement with respect to the redeveloped Site and improvements is recorded in the Official Records of Orange County. (3) . "Fiscal Year," as used herein, means. each twelve-month period beginning on Attachment No. 7 Schedule of Feasibility Gap Payments I HB -295- Item 14. - 109 July t and ending on June 30. (4) 'Operating Commencement Date" as used herein means the last to occur of either the date of issuance by the City of the Certificate of Occupancy for the redevelopment of the Site, or the opening for business to the general public of the first -quality shopping center required by the OPA to be redeveloped on the Site by Participant. (5) "Reimbursement Term" as used herein means the period beginning on the Operating Commencement Date and ending twenty (24) years after the Operating Commencement Date, during which Agency is obligated to make reimbursement payments to Participant pursuant to this Attachment No. I. {6) "Site" as used herein means that certain real property (excluding the Ward Parcel) in the City of Huntington Beach, more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference, and any improvements constructed or to be constructed thereon in accordance with the OPA. (1) ArticicOEA• Nothing contained in this Attachment No. 7 shall alter or modify in any way any of the provisions of Article 7 of the OPA. k:tce.hbkeoterl(easgap 1.5 Attachment No. 7 Schedule of Feasibility Gap Payments 12. Item 14. - 110 - - HB -296- EXHIBIT A TO PART i LEGAL DESCRIPTION OF SITE [includes Ward Parcel] Attachment No. 7 Schedule of Feasibility Gap Payments _. -- -- -- -xB -297- - -- Item 14. - 111 ORDER NO.: 9910492-45. PARCEL A: Parcels 2 through 9 inclusive of Parcel Map No. 86-200, in the City of Huntington Beach, County of Orange. State of California, as shown on a map recorded in Book 255, Pages 40 to 45 inclusive of Parcel Maps, in the office of the county Recorder of said County. Except those portions of Parcel A (being portions of said Parcel 4 and 8) conveyed to the City of Huntington Beach, a municipal corporation by deed recorded May 1. 1951 as Instrument No. 91-209426 of official Records. Also except that portion of Parcel A lying below a depth of S00 feet, measured from the surface of said land. Also except from a portion of Parcel A (being Parcels 4, 5, 6. 7, 8 and a portion of - Parcel 2) an undivided 551r interest in all the land. lying more than 500 feet below the surface, but none of the land lying above a depth of Soo feet below the surface of the lands with no right of surface access or use of the lands lying more than 500 feet below the surface, • hereinafter referred to as "said land, for the purposes of exploring and prospecting for (by geological, geophysical and all other means whether now known or not), drilling for, producing, savings, taking.and owning oil,. gas, asphaltum and other minerals, whether similar or dissimilar to those herein specified and including ` fissionable materials collectively hereinafter referred to as *said substances" in, under or that may be produced from, said. land, together withh all rights, privileges and easements useful or convenient for operations in said land, in adjacent or contiguous lands, and ih other lands in the same vicinity, including, but not limited to: (1) Subsurface rights of way for drilling, repairing, redrilling, deepening, maintaining, operation, abandoning, .reworking and removing wells to, in, into and through said land. tat The right to conduct operations by methods now known.or unknown which are reasanahly designed to benefit or facilitate the drilling for, or production of said substances from said laird. (3) The unrestricted and exclusiva right, power.€3tsd authority to produce said substances beneath or recoverable from said land, and to exercise all other rights and privileges herein set forth by means of any well or mines which -are slant drilled from surface drill sites located on such other lands and the producing intervals of which are bottomed in said land, and Item 14. - 112 - - _._HB -298-- ORDER NO.: 9910472.45 (continued) (4) The right to drill a well or wells or use any existing wells, to, in, into or through said portion of said land, for the purpose of injecting into said portion of said land, or into other lands, oil, gas, air, water or other liquid or gaseous substances, including the right, from time to time to ignite or otherwise activate any or all of such substances so injected or any or all of said minerals and materials described herein within said portion of said land or other lands, reserved in deed.recorded April 4, 1986 as Instrument No. 96-136183 of Official Records and re -recorded August 13. 1986 as Instrument No. 86-360236 of Official Records. PARCEL 8: Easements for ingress and egress, automobile parking, pedestrian uses, installation, operation and maintenance of separate and common utility lines, *structure support, signs and other shopping center uses,• all as more particularly defined and described in that . certain construction, operation and Reciprocal Easement Agreement recorded August 4, 1965 in Book 7617, Page 539 together with amendments recorded in Book 11087, Page 1770; Book 11091. Page 983 and as instrument No. 87-406989 all of Official Records. xB -299- Item 14. - 113 Y ' Site #21 Huatia a Beach Mall T E ger Ave HuftbVca Beach, CA PARCEL 1, XX T39 CITY OF HMrr=TON BZ&CX, CUUUTY OP ORA=, STATE OF CALiFovxr.A, OF P4kRC9j, M" NO. 66-200 AS DER MAP 1=iM= IN ZOOK 211 PAGES 40 TMAO kL 43 INCLtISIVS OF PAACYL KAPS IN THE OFFICE OF TIM COVXT'Y RSCGR1*R OF SAID COUNTY. SXCEPTn= TiiOMMON THI BMLDYNGs, BTRUCTnES mm nwROv'tmu= {INCLtiDixo StM.iiURT&CS STROCTGM An pq=DATioma agr bMT INCLUO= STOUK BERM AND AREA DRASSB) AS N=r= IN A CowwANCR PRw mm=MT uA3tD 08vaLOMM CORPORATICK, A HELA*= CORPORATION, DATED NVVMQ= 14, 1972 R(X%YADSD NDVMOMER 30, I972 XX BOOS 10448 PAOX 683 OF OFFICIAL i:SCO=2. ALSO SXC5t4'1' THAT PORTIODY T'MMOF LYTNO BELOW A DBPTB OF 300.00 FZX7 MEMURED FRCM T'ii$ StWXACE OF GAM LAND, A3 ANSERvw IN TM D= FRO*( iiDNIMT'OAT CEac=l A PARTN=U=P C*=SSD CF TiVI$'Y3StD M BLACK COMPANT, A CALIFOUM =PORATION AM CORAL pjAL'TY CORP., A Nr4= COMPAT20H, QVAL%FTEB `10 DO SUSIMS IN TRI STATE Off' CALIFORNZA, RSCOVM=.AMMr 14, 1963 IN BMX 1617 PALES 334, OFFICIAL RSCM8- PARGCL at �. • • .: t'Y.,t �. Y�r _ _ --_.`. - .. � !�' - 1� 1. -' . 'd.::. i'" . I -. .ram. �t • ''".I, .. a PARC*b Ct nwMa, sons, AvrOMBILZ VARUM, PMMUM ts TN ON,OVM=ZM ANC HAD=OMM OF SXPARATS AND 17��Cb2g°: T,IN , SUVFMT, ZZMA ADO OTC AMPVMM MWnM == I ALL A0 MM PAMCUtaRLY =nM= AM V M TNAT MTA= CMXTAUMO9,. ONZFA=QK A= RZCIPROCAL ZAS92dw AaRREKENT BOOR = AM=T 4,.196S = BOOX 7617, VP= 529 TOMMium =TS Axamtown RSCO=w) YH BOOK 11097, PROS 2.7706 IN SM 11091, PAGE $93 AN8 AS =MTRMCM NO. 47-4099199 ALL OF OFFICIAL KUMMN. ozddr:-00039025 "DmacrAptlon: 2000.216987 FA9V 24 Of 94 c t: m----- ZO 'd 'ON XV3 WV 2:11 13J OOOZ-10-43S Item 14. - 114 HB -300- EXHIBIT A TO PART LEGAL DESCRIPTION OF SITE {excludes Ward Parcel] Attachment No. 7 Schedule of Feasibility Gap Payments HB -301- Item 14. - 115 ORDER NO.: 9910472-45 PARCEL A: PsTcels 2 through 9 inclusive of. Parcel Map No. 86-200, in the. City of Huntington Beach, County of Orange, State of California, as shownon a map recorded in Hook 255, Pages 40 to 45 inclusive of Parcel Maps, in the office of the County Recorder of said County - Except those portions of Parcel A (being portions of said Parcel 4 and 8) conveyed to the City of Huntington Beach, a municipal corporation by deed recorded May 1,. 1991 as Instrument 110. 91-209426 of official Records. Also except that portion of Parcel A lying below a depth of $00 feet, measured from the surface of said land. Also except from a portion of Parcel A (being Parcels 4, 5, 6, 7, 8 and a portion of Parcel 2) an undivided 550 interest in all the land lying more than 500 feet below the surface, but none of the land lying above a depth of 500.feet below the surface of the lands with no right of surface access or use of the lands lying more than Soo feet below the surface, hereinafter referred to as "said land, for the purposes of exploring &Ad prospecting for (by geological, geophysical and all other means whether now known or not), drilling for, producing, saviaga, taking and owning oil, gas, asphaltum and other minerals, whether similar or dissimilar to those herein specified.and including fissionable materials collectively hereinafter referred to as 4said substances° in, under = or that may be produced from said land, together with all rights, privileges and easements useful or convenient far operations in said land, is adjacent or contiguous lands, and in other lands in the same vicinity, including, but not limited to: (1) Subsurface rights of way for drilling, repairing, redrilling, deepening, maintaining, operation, abandoning,'reworking and removing wells to, in, into and through said land. (2) The right to conduct operations by methods. now known or unknown which are reasonably designed to benefit or facilitate the drilling for, or production of said substances from said land. W ' The unrestricted and exclusive right, power e;nd authority to produce said substances beneath or recoverable from said land, and to exercise all other rights and privileges herein set forth by means of any well or mines which are slant drilled from surfaces drill sites located on such other lands and the producing intervals of which are bottomed in said land; and Item 14. - 116 HB -302- ORDER NO.: 9910472-45 (Coatinuad) (4) The right to drill a well or wells or use any existing swells, to; in, into or through said portion of said land, for the purpose of injecting into said portion of said land. or into other lands, oil, gas, air, water or other liquid or gaseous substances, including the right, from time to time to ignite or otherwise activate any or all of such substances so injected or any or all of said minerals and materials described herein within said portion ot.said land or other lands. reserved to deed recorded April 4, 1986 as Instrument No. 86-136183 of official Records and re -recorded August 13. 1986 as Instrument No. 86-360236 of Official Records. PARCEL B: Easements for ingress and egress, automobile parking, pedestrian uses, installation, operation and maintenance of separate and common utility lines, structure support, signs and other shopping center uses, all as more particularly defined and described in that certain Construction, Operation and Reciprocal Easement Agreement recorded August 4. 1965 1t1`Soak 7617.*.Page 539 together with amendments recorded in Book 11087; Page 1770; Book 11091, Page 983 and as Instrument No. 87-4o6989 all of Official Records. HB -303- - Item 14. - 117 ATTACHMENT NO.6 FORM OF RELEASE OF CONSTRUCTION COVENANTS [behind this page] Item 14. - 118 HB -304- Recording Requested By and When Recorded Mail to: Huntington Center Associates, LLC C/o The Ezralow Company, LLC 23622 Calabasas Road, Suite 100 Calabasas, California 91302 Attention: Ms. Cristina Agra -Hughes SPACE ABOVE THIS LINE FOR RECORDING USE WHEREAS, HUNTINGTON CENTER, LLC,'a Delaware limited liability company ("Participant") is the owner of certain real property situated in'the City of Huntington Beach, California described in Exhibit A which is attached hereto and made a part hereof (the "Property"), and has agreed to rehabilitate, renovate and construct certain improvements thereon (the "Improvements"); and WHEREAS, pursuant to the Owner Participation Agreement ("OPA") dated 2000 entered into by and between the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Participant, the Agency has agreed to furnish Participant with a Release of Construction Covenants ("Release") upon the completion of the redevelopment of the Improvements pursuant to the OPA, and such Release is to be in such form as to permit it to be recorded in the Recorder's Office of Orange County; and WHEREAS, the OPA states that the Release shall be conclusive determination of satisfactory completion of the rehabilitation, renovation and construction of. the Improvements as required by the Scope of Development (Attachment No. 4 of OPA) and Sections 401 and 501 (a) and (b). of the OPA; and WHEREAS, the Agency has determined that the rehabilitation, renovation and construction of the Improvements, as defined in the Scope of Development and Sections 401 and 501 (a) and (b) of the OPA, has been satisfactorily completed in accordance with the requirements of the Scope of. Development and Sections 401 and 501 (a) and (b) of the OPA; and NOW THEREFORE, it is hereby acknowledged and agreed by the parties hereto that: 1. The Agency does hereby certify that the rehabilitation, renovation and construction of the Improvements on the Property has been fully and satisfactorily performed and completed as required by the Scope of Development and Sections 401 and 501 (a) and (b) of the OPA, and that Participant has fully complied with the terms of the Scope of Development and Sections 401 and 501 (a) and (b) of the OPA with respect to such redevelopment of the Property. Release of Construction Covenants. HB -305- Item 14. - 119 2. All covenants set forth in the OPA and the Agreement Containing Covenants (Attachment No. 5 of OPA) remain in effect in accordance with the terms thereof. 1N WITNESS WHEREOF, the Agency has executed this Release this_ day of , 2000. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Dated: 12000 By: Chairman ATTEST: APPROVED AS TO FORM: Agency Clerk, REVIEWED AND APPROVED: Ray Silver, Executive Director kAcg\h1krnw\sc1easeI.2 Agency General Counsel. INITIATED AND APPROVED: - Director of Economic Development Release of Construction Covenants 2 Item 14. - 120 - - HB -306- EXHIBIT A HB -307- Item 14. - 121 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , 2000 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ics), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Item 14. - 122 -- - -7- - - xB -308- - -- - ATTACHMENT NO.9 FORM OF GUARANTY AGREEMENT [behind this page] -- -- —_ xB -309- r Item 14. - 123 GUAR AN Y.AGftE1r,MELLNI.I THIS GUARANTY AGREEMENT (this "Guaranty") is made and entered into by HUNTINGTON MANAGEMENT, ENT.. LLC, a Delaware limited liability company (the "Guarantor"), to and for the benefit of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency"), and its successors and assigns. RECIIALS: A. HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Participant"), and Agency.have entered into that certain Owner Participation Agreement dated on or about the date hereof (the "OPA"). Guarantor is the managing member of Participant. The OPA and all of the terms and provisions therein are fully incorporated herein by this reference as though fully set forth herein. B. Guarantor acknowledges that this Guaranty is required by the Agency as a condition precedent and as an inducement to the Agency to enter into the OPA to provide certain financial assistance to the Participant and carry out various other obligations in accordance with the terms of the OPA. NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration given by Agency to Guarantor, the receipt and- sufficiency of which is hereby acknowledged, and in further consideration of and to induce the Agency to execute the OPA and perform its obligations under the OPA, the Guarantor does hereby irrevocably warrant, guarantee and agree as follows: 1. Guarantor acknowledges receipt.of a copy of the OPA and all of the instruments described therein andlor attached thereto. 2. Guarantor hereby guarantees to, as managing member of the Participant and pursuant to Participant's operating agreement, take all necessary action to make operating or capital calls of Participant's members in order to redevelop the Site in accordance with the. OPA. 3. The execution by Agency of the OPA shall conclusively evidence the reliance by the Agency upon this Guaranty and the obligations and agreements of Guarantor as set forth herein. 4. The obligations of Guarantor shall not be discharged, impaired or otherwise affected by (i) any sale, transfer, assignment, pledge, surrender, indulgence, forbearance, alteration, substitution, exchange, change in, amendment, revision, modification or other disposition of the Guaranty Agreement Item 14. - 124 HB -310- OPA or the Site or any portion thereof or any improvements thereon or any interest therein or (ii) any failure, negligence or omission on the part of the Agency to enforce the terms of the OPA. 5. Guarantor hereby expressly waives (a) notice of acceptance of this Guaranty; (b) all notices to which Guarantor might otherwise be entitled, except as required herein; (c) any defense arising by reason of any disability of Guarantor; (d) diligence in enforcement of any and all formalities which might otherwise be legally required to charge the Guarantor with liability except as required herewith; and(c) all diligence in collection or protection and all presentment, demand, protest and notice of protest, notice of dishonor. Guarantor shall be provided with copies of Agency notices of default of Participant. 6. In the event that Guarantor should fail to fully perform promptly as herein provided, Agency shall have the following remedies: (a) at its option and without any obligation to do so, upon prior thirty (30) days written notice from Agency to Guarantor, proceed to perform on behalf of Guarantor any and all of the obligations guaranteed hereunder, and Guarantor shall, upon demand, pay to the Agency all such sums reasonably expended by Agency in such performance on behalf of Guarantor; and (b) from time to time and without requiring anything more than notice of default to Participant and opportunity to cure the obligations guaranteed hereunder by Guarantor, to enforce the provisioris of this Guaranty by action at. law or in equity or both, and further to collect in any such action compensation for all loss, cost, damage, injury and expense sustained or incurred by Agency. as -a consequence of Guarantor's failure to perform the obligations guaranteed hereunder when due hereunder. 7. This Guaranty is a guaranty of the performance of the obligations guaranteed hereunder, and Guarantor shall be strictly liable for any claims by Agency against Guarantor with respect thereto. 8. Guarantor shall pay to the Agency, upon demand, all' fees and costs (including, without limitation, reasonable attorneys' fees and disburseinents) incurred by the Agency in instituting and/or maintaining any action for damages or specific performance against Guarantor pursuant to the terms of this Guaranty. 9. As of the date of execution of this Guaranty, (i) Guarantor warrants that. it has full authority to execute this Guaranty and comply with its terms, and (ii) Guarantor declares to and covenants with Agency and its successors and assigns, that, except for the lawsuits described in the Section 406.1 of the OPA, Guarantor knows of no defense whatsoever to any action, suit or proceeding, at Iaw or otherwise, that may be instituted on this Guaranty. Guaranty Agreement 2 xB -311- Item 14. - 125 10_ This Guaranty shall terminate upon the earlier of (i) Agency's determination, in its sole discretion, to terminate this Guaranty, (ii) Agency's approval of a release of Participant pursuant to Section 410 of the OPA, or (iii) twenty (20) years after the Operating Commencement Date_ 1 t. Each reference herein to "-Agency" shall be deemed to include the Redevelopment Agency of the City of Huntington Beach in its capacity as Agency under the OPA, and each of its successors and assigns; and all of the provisions of this Guaranty shall run in favor of said named Agency,.the City of'Huntington Beach, and their respective successors and assigns. 12. This Guaranty shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles of said state. 13. Any legal actions pursuant to this Guaranty must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the Federal District Court in the Central District of California. 14. In the event legal action is commenced by the Agency against the Guarantor, service of process on the Guarantor shall be made by personal service upon an officer of Guarantor and shall be valid whether made within or without the State of California, or in such manner as may be provided by law. 15. Time is of the essence hereof. 16. 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. (end -.signature page follows] Guaranty Agreement 3 Item 14. - 126 HB -312- IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date set forth below. Dated: , 2000 Uc&blcen=a guwanty1.4 "GUARANTOR" Huntington Management Ent., LLC, A Delaware iimited iiability company By: BMLF/Huntington, LLC, A Delaware limited liability company, Its Manager Bryan Ezralow; Trustee of the Bryan Ezralow 1994 Trust Its Manager Guaranty Agreement 2 ----HB -313- - Item 14. - 127 ATTACHMENT NO- 10 COOPERATION AGREEMENT [bchind this page] ,Item 14. - 128"'—" — - HB -314- THIS COOPERATION AGREEMENT (this "Agreement") is entered into this 2nd day of October , 2000, by and between the CITY OF HUNTINGTON BEACH (the "City") and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency"), with reference to the following facts: A. Concurrently with the approval and execution of this Agreement,. the Agency is entering into that certain Owner Participation Agreement (the "OPA") with HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Participant" }. The OPA provides for the development and operation on the Site (as defined in the OPA) by Participant of improvements described in the Scope of Development appended to the OPA as Attachment No. 4, including, without limitation, improvements for commercial, retail, entertainment and other uses. Except as otherwise provided in this Agreement, all capitalized terms in this Agreement shall have the meanings ascribed to such terms in the OPA. B. The Schedule of Feasibility Gap Payments appended to the OPA as Attachment No. 7 conditionally obligates the Agency to apply certain funds to reimburse Participant for specified costs.. Paragraph (d)(3) of the Schedule of Feasibility Gap Payments provides that under specified circumstances, the Agency may be obligated to pay to Participant Available Site -Generated Sales Tax (as defined in Paragraph (k)(3) of the Schedule of Feasibility Gap'Payments) received by the City from the improvements developed on the Site by Participant. C. The City and the Agency intend by this Agreement for the City to advance funds to the Agency only if and to the extent necessary to enable the Agency to perform its obligations under Paragraph (d)(3) of the Schedule of Feasibility Gap Payments. The -City's obligation to advance funds to the Agency in any given year is limited to the amount of Available Site -Generated Sales Tax actually received by the City in the year such obligation arises. This Agreement does not obligate the City to use any future Available Site -Generated Sales Tax for current advances to the Agency, nor does it obligate the City to set aside any Available Site -Generated Sales Tax for advances to the Agency in future years'. NOW, THEREFORE, the City and the Agency do mutually agree as follows: [§ 100] ADVANCE OF FUNDS On or prior to each date the Agency is required to make a payment to Participant pursuant to Paragraph (d)(3) of the Schedule of Feasibility Gap Payments, City shall -advance to Agency an amount equal to the amount required to be paid by the Agency to Participant pursuant to said Paragraph (d)(3), as reasonably determined by the Agency. The City's advance shall bear interest at a variable rate equal to the rate earned from time to time on the City's investments with the Local Agency Investment Fund administered by the State of California, from the date on which such funds are advanced until the date of repayment. The City's obligation to advance funds to the Agency in any given year is limited to the amount of Available Site -Generated Sales Tax (as defined in Paragraph (k)(3) of the Schedule of Feasibility Gap Payments) generated from the improvements developed on the Site and actually received by the City in the year such obligation arises. This HB -315- Item 14. - 129 Agreement does not obligate the City to use any future Available Site -Generated Sales Tax for current advances. to the Agency, nor does it obligate the City to set aside any Available Site - Generated Sales Tax for advances to the Agency in future years: !i. [§ 2001 REPAYMENT A. [§ 201 ] Source -of Funds Consistent with and subject to the proper and orderly implementation of the Redevelopment Plan for the Huntington Beach Redevelopment Project, the Agency shall use lawfully, available funds for the purpose of repaying to City the principal amount advanced by City pursuant to this Agreement and any accrued interest thereon. 1 •• a •. •- • •. • .� The indebtedness of the Agency to the City created by this Agreement is subordinate to any pledge of tax increments to the bondholders of any tax allocation bondswhich are or may be issued by the Agency and to any other indebtedness incurred by the Agency as reasonably necessary for the' proper and orderly implementation of the Redevelopment Plan for the Huntington Beach Redevelopment Project. In addition, the indebtedness of the Agency to the City created by this Agreement is subordinate to Agency's obligations to make payments to Participant under the OPA, including but not limited to repayment of funds advanced by Participant pursuant to the OPA. Ill. [§300] LIABILITY AND INDEMNIFICATION In contemplation of the provisions of California Government Code Section 995.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defused by Government Code Section 895, the parties hereto, as between themselves, pursuant to the authorization contained in Government Code Sections 895.4 and 895.6, shall each assume the full Iiability imposed upon it, or any of its officers, agents or employees, by law for injury caused by negligent or wrongful acts or omissions occurring in the performance of this Agreement to the same extent that such liability would be imposed in the absence of Government Code Section 895.2. To achieve the above -stated purpose, each party indemnifies, defends -and holds harmless the other party for any liability, losses, costs or expenses that may be...43curred by such other party solely.by reason of Government Code Section 895.2. IV. [§ 400] ENTIRE AGREEMENT; WAIVERS AND AMENDMENTS (a) This Agreement shall be executed in three (3) duplicate originals, each of which is deemed to -be a original. This Agreement consists of three (3) pages and constitutes the entire understanding and agreement of the parties. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the -parties with respect to the subject matter of this Agreement. 2 Item 14. - 130 --- HB -316- (c) All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representatives of the parties. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. Dated: �t� , 2000 ATTEST: City Clerk REVIEWED AND APPROVED: s.fA f Ray Si} er, City Administrator Dated: Od , 2000 ATTEST: Agency Clerk CITY OF HUNTINGTON BEACH APPROVED AS TO FORM: City Attorney INITIATED AND APPROVED. & e/10 - Director of Economic Development REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH is �f� n Chairman L / 11 �...• APPROVED AS TO FORM: Agency General Counsel HB -317- Item 14. - 131 r t FIRST IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and HUNTINGTON CENTER ASSOCIATES, LLC Item 14. - 132 HB -318- t, 1 41 FIRST IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT This FIRST IMPLEMENTATION AGREEMENT ("Agreement") is dated as of August 4, 2005 for reference purposes only, and- is entered into by and between the REDEVELOPMENT AGENCY 'OF -THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency'% and HUNTINGTON CENTER ASSOCIATES, LLC, a California limited liability company ("Participant"), with reference to the following facts: RECITALS A:. The Agency and Participant entered -into that certain Owner Participation Agreement dated October2, 2000, (the "OPA'�. The OPA is hereby incorporated by this reference. Reference herein to the OPA shall include any and all attachments'thereto. Any capitalized term not defined herein shall have the meaning ascribed to it in the OPA. B. The OPA pertains to the construction, development, operation and management of the Site, generally comprised of a retail shopping center formerly known as Huntington Center and currently known as Bella Terra. C. An Agreement Containing Covenants Affecting Real Property by and between the Agency and Participant was recorded against the Site recorded on , 2005 as Document No. . within the official records of the Office ofthe Recorder of the County of Orange. D. The Participant entered into that certain Purchase Agreement dated'as of March 31, 2005 for the Site pursuant to which the Site shall, be ultimately conveyed to Bella Terra Associates, LLC, a Delaware limited liability company (the "Assignee") and has requested that the Agency approve assignment of the OPA to the Assignee (the "Assignment' E. The Agency and Participant desire to enter into this Agreement to implement and clarify the OPA in light of the proposed Assignment as follows: (1) to extend certain dates in the Schedule of Performance; (2) to provide for approval of a Project Budget as required by Section 202 of the OPA; (3) to. terminate the OPA as to the Montgomery Wards Parcel, including without limitation, the Schedule of Feasibility Gap Payment Part 1- and (4) to provide for the payment of the "Implementation Fee," as defined herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agency and Participant agree as follows: l . Extension of the Schedule of Performance. The DDA is hereby amended by changing all references to the "Schedule of Performance" and "Attachment No. 3" to the "Revised Schedule of Performance" and the "Revised Attachment No. 3." The "Revised Schedule of Performance" is attached hereto as Exhibit A, labeled "Revised Attachment No. 3" and HB -319- Item 14. - 133 ..0. incorporated herein by this reference. The Participant hereby agrees to comply with all provisions of the Revised Schedule of Performance. 2. Project Budget. The Agency, in accordance with Section 202 of the OPA, hereby approves the Project Budget dated August 8 , 2005, a true and correct copy of which is on file in the office of the Agency Clerk, and incorporated herein by this reference. (SEE Attached) 3. Termination of OPA as to Montgomery Ward Parcel. The OPA is hereby terminated in its entirety as to the Montgomery Ward Parcel, including, without. limitation, the Schedule .of Feasibility 'Gap Payments, Part 1- and the Agency is not obligated to make any Agency.. reimbursement payments,relating to the Montgomery Ward Parcel. Neither Participant nor Agency shall have any further obligations to the other party with respect to the Montgomery Ward Parcel. 4. Implementation Fee. Upon execution of this Agreement by Agency and.its delivery to . Participant, the Participant shall pay the total sum of One Million Five Hundred Thousand Dollars ($1,500,000) to the Agency or the City, as first directed in writing by the Agency's Executive Director, as consideration for the Agency entering into this First Implementation Agreement, including, without limitation, extension by the Agency of the Schedule of Performance, and as consideration for any potential adverse effects this Agreement may have on the City. Approval of GMAC Financing. By execution of this Agreement, Agency shall be deemed to have provided its prior written approval pursuant to Section 411 of the OPA of the deeds of trust and other documents encumbering the Site to be provided to GMAC iri connection with the .proposed purchase of. the Site in - accordance' with that certain Assignment and Assumption Agreement of even date herewith by and among Participant, Agency -and Bella Terra Associates, LLC. 6. Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors, .assignees, personal representatives, heirs and legatees of the parties hereto.' - 7. OPA in Full Force and Effect. Except as otherwise modified herein, the terms and conditions of the OPA shall remain unmodified and in full force and effect.. In the event of any conflict between the.terms ofthis Agreement and the OPA, the terms of this Agreement shall control. 8. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Agreement. 9. Date of this Agreement. The "Effective Date" of this Agreement shall be the date this Agreement is executed by the Agency. Item 14. - 134 HB -320- 10. Counterparts.. This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined with the balance. of this Agreement, it shall constitute one single instrument. [remainder of page left intentionally blank] [signatures on following pages] HB -321- Item 14. - 135 "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Dated: August 8 , 2005 Exe utive Director ATTEST: A cy. Secretary APPROVED AS TO FORM: Agency General Counsel YY �t APPROVED AS TO FORM: Agency Special Counsel KANE, BALLMER & BERKMAN [Signatures continue on following page] Item 14. - 136 HB -322- "PARTICIPANT" HUNTINGTON CENTER ASSOCIATES, LLC By: Huntington Management Ent., LLC, a Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, a Delaware limited liability company, Its Manager Dated: August ! , 2005 t4ljoTrustee of the Bryan Ezralow 1994 Trust Its Manager HB -323- Item 14. - 137 Exhibit A REVISED SCHEDULE OF PERFORMANCE [behind this page] Item 14. - 13 8 HB -324- SCHEDULE OF PERFORMANCE (Revised August 8, 2005) Submission — Guaranty Agreement. Participant Prior to Agency's execution of this shall submit Guaranty Agreement to Agency Agreement. pursuant to Section 105.2 (b) of this Agreement. COMPLETED Submission — Original Letter of Credit. Participant shall submit Original Letter of Credit to Agency pursuant to Section 305 of this Agreement. Submission — Evidence of .Financing. Participant shall submit to Agency for approval the evidence of financing referred_ to - in Section 202 of this Agreement. Approval — Evidence of Financing. Agency shall approve or disapprove evidence of financing. Submission — Project Budget. Participant shall submit to Agency for approval or disapproval a proposed Project Budget pursuant to Section 202 of this Agreement. Approval — Project Cost Budget. Agency shall approve or disapprove the proposed Project Budget. Submission — Aonlications for Demolition. Grading and Excavation Permits. Participant shall submit to City for approval applications for demolition, grading and excavation permits and related documents. No later than 30 days after the date of Agency's determination to Acquire Additional Properties by authorizing Agency staff to initiate negotiations to acquire such -properties, if any. COMPLETED No later than 180 days after the date of .this Agreement. COMPLETED Within 30 days after receipt by Agency. COMPLETED Concurrently with submission of Evidence of Financing. COMPLETED Within 30 days after receipt of proposed Project Budget. COMPLETED No later than 180 days after the date of this Agreement. COMPLETED Entitlements and Approvals. Participant to obtain No later than ail entitlements and approvals necessary for. the Agreement. redevelopment of the Site. COMPLETED Schedule of Performance 1 180 days after the date of this xB -325- Item 14. - 139 Commencement of Construction'. Participant shall commence the work and improvements required for redevelopment of the site. Completion of Construction. Participant shall complete construction of all improvements. Certificate of Occupancy. Participant shall obtain a certificate of , occupancy from the City for the redevelopment Site.' Release of Construction Covenants. Agency to execute Release of Construction Covenants approving completion of redevelopment pursuant to this Agreement and terminating Guaranty Agreement. Operating Commencement Date. Participant's obligation to make Agency Participation Payments pursuant to Section 601 of this Agreement commences. Agency's obligation to make reimbursement. payments to Participant pursuant to Attachment No. 7 commences. NOTES: Within 210 days after the date of this Agreement for grading. Within 270 days after the date of this Agreement for vertical improvements. COMPLETED Not later than December 31, 2006 Participant shall apply for certificate of occupancy upon completion -of construction and diligently prosecute in accordance with City requirements Upon Participant's completion of redevelopment of the Site pursuant to this Agreement and Participant's written request for a Release of Construction Covenants. The last to occur of either the date of issuance of a Certificate of. Occupancy by the City for the redevelopment Site, or the opening for business to the general public of the first -quality shopping center required to be redeveloped be this Agreement. 1. Deadlines set forth in this Schedule of Performance are subject to the enforced delay provisions of Section 808 of the Agreement. 2. Extensions may be approved in writing by the Agency's Executive Director pursuant .to the Agreement. 3. Descriptions of items of performance and deadlines in this Schedule of Performance are not intended to supercede more complete deceptions in the text of the Agreement; and in the event of any conflict between the text of the Agreement and this Schedule, the text of the Agreement shall govern. Schedule. of Performance 2 Item 14. - 140 xB -326- SECOND IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and BELLA TERRA ASSOCIATES, LLC CA1Documents and SettingAestipp\Local Settingffernporary Internet Files10LK21\2nd Impl Agmt-BEC-041007.doe xB -327- Item 14. - 141 SECOND IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT This SECOND IMPLEMENTATION AGREEMENT ("Agreement") is dated as of September 17, , 2007 for reference purposes only, and is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and BELLA TERRA ASSOCIATES, LLC a Delaware limited liability company ("Participant"), with reference to the following facts: RECITALS A. The Agency and Participant's predecessor in interest, Huntington Center Associates, LLC, a Delaware limited liability company, entered into that certain Owner Participation Agreement dated October 2, 2000, as implemented by that certain First Implementation Agreement dated as of August 1, 2005, (collectively, the "OPA"). The OPA is hereby incorporated by this reference.:; Reference herein to the OPA shall include any and all attachments thereto. Any capitalized term not defined herein shall have the meaning ascribed to it in the OPA. The OPA was subsequently assigned to Participant pursuant to that certain Assignment and Assumption Agreement dated as of August 4, 2005. . B. The OPA pertains to the construction, development, operation and management of the "Site," as defined in the OPA, generally comprised of a retail shopping center formerly known as Huntington Center and currently known as Bella Terra (the "Project"). C. Subject to and in accordance with the terms and conditions of the OPA and the Schedule of Feasibility Gap Payments attached thereto, the Agency is obligated to reimburse the Participant as set forth in Part 2 of the Schedule of Feasibility Gap Payments ("Feasibility Gap Obligation"). D. The Agency and Participant desire to enter into this Agreement to clarify and amend the OPA to provide: (i) a commencement date for interest accrual on the Feasibility Gap Obligation; (ii) a required one time only prepayment of the Feasibility Gap Obligation in the amount of $629,447; (iii) that interest on the Feasibility Gap Obligation shall be fixed at 6.9357% per year; (iv); that, except for the prepayment described in clause (ii) above, all principal and interest Feasibility Gap Obligation payments to Participant shall be made solely from Available Site -Generated Property Tax Increment; and (v) a further limitation on appeals, challenges and/or contests of property tax assessments on the Site. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agency and Participant hereby agree as follows: Item 14. - 142 HB -328- 1. Feasibility Gap Obligation. a. Schedule of Feasibility Gap Payments. Part 2 of the Schedule of Feasibility Gap Payments, Attachment No. 7 to the DDA, is hereby amended as follows: (1) Section (c) entitled "Interest Rate" is hereby deleted in its entirety and replaced with the following new Section (c): "(c) Interest Rate. The principal amount of this Part 2 shall bear interest at the rate of 6.9357% per annum from November 1, 2005 until paid." (2) Section (d) entitled "Obligation to Make Payments" is hereby deleted in its entirety and replaced with the following new Section (d): "(d) Obligation to Make Payments. The obligations of the Agency under this Part 2 shall be a special and limited obligation payable to Participant solely from the source of funds expressly identified in this Part 2. The Agency shall have no obligation to pay any amounts to Participant pursuant to this Part 2 except as follows: (1) Conditions Precedent. The following conditions precedent to each payment hereunder shall be satisfied: A. The Completion Date, as defined in paragraph (k) below, shall have occurred; B. The Operating Commencement Date, as defined in paragraph (k) below, shall have occurred; C. Participant shall be not be in default of any of its material obligations under the OPA; and y D. The amendment(s) described in Section 2.b. of the Second Implementation Agreement to the OPA have been duly executed in recordable form and recorded against the Site in accordance with Section 2.b. of the Second Implementation Agreement to the OPA. (2) Available Site -Generated PropgM Tax Increment. On or prior to September 30 of each year, beginning with the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1) above, and continuing until the principal amount specified in paragraph (b) above (and any accrued interest thereon) has been paid in full or until the day after the nineteenth (i 9th) anniversary of PA HB -329- Item 14. - 143 the first Agency payment under this Part 2, whichever first occurs, the Agency shall calculate and pay to Participant all Available Site -Generated Property Tax Increment received by the Agency during the prior Fiscal Year, For illustrative purposes only, assuming the first Agency payment under this Part 2 occurs on September 30, 2007 and all funds owed by Agency to Participant pursuant to this Attachment No. 7 have not yet been paid, the last Agency payment hereunder shall be due September 30, 2026, and any balance remaining in Agency's payment obligations under this Part 2 after such date shall automatically be deemed forgiven. "Available Site -Generated Property Tax Increment" means the total ad valorem property tax increment revenue allocated to and received by Agency in any fiscal year pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIlA of the California Constitution, in an amount equal to any increase in the assessed value of the. Site over and above an assessed value of Forty Three Million Two Hundred and Twenty Eight Thousand Dollars ($43,228,000), but specifically excluding therefrom all of the following: (A) a portion of such tax increment revenues equal to the twenty percent (20%) of tax increment revenue from the redevelopment project area as a whole that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law for low- and moderate -income housing purposes; and (B) a portion of such tax increment revenues equal to the percentage of tax increment revenues from the redevelopment project area as a whole that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements entered into prior to the OPA by the Agency and such governmental entities implementing the tax sharing/pass-through agreements; and (C) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter -approved indebtedness; and (D) charges for County administrative charges, fees or costs equal to the percentage of such charges in the Project Area as a whole. (3) Required One Time Prepa ent. Without limiting in any way paragraph (e), below, the Agency shall be required to make a one time .only prepayment to Participant towards the amount owed by the Agency under this Part 2 in the amount of Six Hundred Twenty -Nine Thousand Four Hundred Forty -Seven Dollars ($629,447) on the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1). above. Payment shall not be made from or reduce the Available Site -Generated Property Tax Increment. The Item 14. - 144 HB -330- payment shall be treated, for accounting purposes, as if it had been made on September 30 of the year preceding the first payment under Section (d)(2) hereof, and shall be applied first to accrued interest and thereafter to .principal. (3) The second paragraph of Section (g) entitled "Subordination" is hereby deleted in its entirety. (4) Section 0) entitled "Payment Obligations Forgiven" is hereby deleted in its entirety and replaced with the following new Section 0): cio) Payment Obligations Forgiven. Any balance remaining in Agency's payment obligations under this Part 2 after the Reimbursement Term shall automatically be deemed forgiven." (5) Section (k) entitled "Definitions" is hereby deleted in its entirety and replaced with the following new Section (k): "(k) Definitions. The following definitions shall apply to this Part 2: (1) "City" as used herein shall mean the City of Huntington Beach. (2) "Completion Date" as used herein shall mean the date on which the Release of Construction Covenants to be issued by Agency pursuant to the Agreement with respect to the redeveloped Site and improvements is recorded in the Official Records of Orange County. (3) "Fiscal Year," as used herein, means each twelve-month period beginning on July 1 and ending on June 30. (4) "Operating Commencement Date" as used herein means November 1, 2005 only for purposes of calculating the commencement of interest accrual on the Agency's payment obligation and for all other purposes under the OPA, including the commencement of the Agency's payment obligations and the Agency Participation Payments, it shall mean the Completion Date. (5) "Reimbursement Term" as used herein means the period commencing on the first September 30 which follows the satisfaction of all conditions precedent specified in paragraph (d)(1) above, and continuing until the principal amount specified in paragraph (b) above (and any accrued interest thereon) has been paid in full orz until the nineteenth (19th) year following the first Agency payment under this Part M HB -331- Item 14. - 145 2, whichever first occurs, during which Agency is obligated to make reimbursement payments to Participant pursuant to this Attachment No_ 7. (6) "Site" as used herein means that certain real property (excluding the Ward Parcel) in the City of Huntington Beach, more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference, and any improvements constructed or to be constructed thereon in accordance with the OPA. b. Reimbursement Term. All references to "Reimbursement Term" in the OPA, including all attachments thereto, shall be deemed to refer to the Reimbursement Term described in Part 2 of the Schedule of Feasibility Gap Payments as revised pursuant to this Agreement. 2. Assessments. a. Participant hereby covenants and agrees on behalf of itself and any successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein that Participant, such successors and assigns shall pay when due all real estate taxes and assessments assessed and levied on the Site and any improvements thereon and, except as may be requested by tenants of the Project whose leases predate August 1, 2005, refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Site; provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of an erroneous initial assessment for property tax purposes of the Site in the fiscal year of the completion of the improvements to be constructed and/or renovated pursuant to this Agreement provided, however, that that no such appeal, challenge or contest shall be permitted to attempt to obtain or result in an assessed value of the Site, including land and improvements, which is lower than Two Hundred Three Million Three Hundred Seventeen Thousand Dollars ($203,317,000). b. Participant agrees to execute in recordable form amendment(s) to the Covenant Agreement and any other document (including, without limitation, any other attachment to the OPA) reasonably deemed necessary by the Agency Executive Director to implement the purposes of this Section, which amendment(s) shall be in form and content reasonably approved by the Agency Executive Director. The parties agree that the Agency shall record any such amendment(s) against the Site. 5 Item 14. - 146 HB -332- 3. Example. As an example of the payments to be made hereunder, assuming that (i) the Completion Date occurs prior to September 30, 2007 and (ii) the Available Site -Generated Property Tax Increment for the July 1, 2006 - June 30, 2007 fiscal year is $1,534,651, the payment to be made to Participant on September 30, 2007 would be $2,164,018 ($629,447 + $1,534,571 = $2,164,018) applied as follows: $15,000,000 Principal amount + 979,014 Interest from 11/01/05 - 9/30/06 $15,979,014 Principal and interest as of 9/30/06 - 629,447 Prepayment deemed made as of 9/30/06 $15,349,567 Balance as of 10/01/06 + 1,083,059 Accrued interest from 10/1/06 - 9/30/07 $16,432,626 Balance as of 9/30/07 -1,534,571 Assumed payment as of 9/30/07 $14,898,055 Balance as of 10/1/07 4. Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties hereto. 5. OPA in Full Force and Effect. Except as otherwise modified herein, the terms and conditions of the OPA shall remain unmodified and in full force and effect, including, without limitation, the conditions precedent to Agency's obligation to commence payment of the Feasibility Gap Obligation. In the event of any conflict between the terms of this Agreement and the OPA, the terms of this Agreement shall control. 6. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Agreement. Date of this Agreement. The "Effective Date" of this Agreement shall be the date this Agreement is executed by the Agency. Counterparts.. This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined with the balance of this Agreement, it shall constitute one single instrument. [signatures on following pages] 1.1 HB -333- Item 14. - 147 Dated:,'. ' . 2007 ATTEST: Agency General Counsel r,nn� APPROVED AS TO FORM: KANE, BALLMER & BERKMAN Agency Special Counsel "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Chaff an INITIATED AND APPROVED: Director of Economic Development REVIEWED AND APPROVED: Executive Director [Signatures continue on following page] 7 Item 14. - 148 HB -334- Dated: ��o , 2007 Dated: -//v , 2007 "PARTICIPANT" BELLA TERRA ASSOCIATES, LLC By: Bella Terra Borrower, LLC, a Delaware limited liabi ' any, its member B � John Miller, President By: N Al ., Verlin 'mm "sIts dependent Director HB -335- THIRD IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT by and between THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and BELLA TERRA ASSOCIATES, LLC Item 14. - 150 HB -336- THIRD IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT This THIRD IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT (the "Third Implementation Agreement") is dated as of , 2014, for reference purposes only, and is made and entered into by and between the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Successor Agency"), and BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company ("Participant"). RECITALS: This Implementation Agreement is entered into with reference to the following facts: A. The former Redevelopment Agency of the City of Huntington Beach ("Former Redevelopment Agency") and Participant's predecessor in interest, Huntington Center Associates, LLC, a Delaware limited liability company, entered into that certain Owner Participation Agreement dated October 2, 2000, as implemented by that certain First Implementation Agreement to Owner Participation Agreement dated as of August 1, 2005 (collectively, the "OPA"). The OPA was subsequently assigned to Participant pursuant to that certain Assignment and Assumption Agreement dated as of August 4, 2005. B. Former Redevelopment Agency and Participant entered into that certain Second Implementation Agreement to Owner Participation Agreement dated as of September 17, 2007 (the "Second Implementation Agreement"). The OPA, as amended by the Second Implementation Agreement, is referred to herein as the "Existing Bella Terra I Site Agreement." The Existing Bella Terra I Site Agreement is hereby incorporated by this reference. Reference herein to the Existing Bella Terra I Site Agreement shall include any and all attachments thereto. C. The Existing Bella Terra I Site Agreement pertains to the construction, development, operation, and management of a retail shopping center formerly known as Huntington Center and currently known as Bella Terra on real property referred to therein as the "Site" and in this Implementation Agreement as the "Bella Terra I Site." Subject to and in accordance with the terms of the Existing Bella Terra, I Site Agreement and the Schedule of Feasibility Gap Payments set forth in Attachment No. 7 thereto, the Former Redevelopment Agency is obligated to reimburse certain sums to Participant (referred to in Part 2 of Attachment No. 7 of the Existing Bella Terra I Site Agreement as the "Feasibility Gap Obligation"). In particular, Section (d)(2) of Attachment No. 7 to the Existing Bella Terra I Site Agreement provides for the Former Redevelopment Agency to periodically calculate and pay to Participant all "Available Site -Generated Property Tax Increment" (as that tern is defined in said Section (d)(2)) based on increases in the assessed value of the Bella Terra I Site over and above an assessed value of Forty -Three Million Two Hundred and Twenty -Eight Thousand Dollars ($43,228,000) (herein, and subject to reduction as set forth in Paragraph 1 of this Third Implementation Agreement, the "Bella Terra I Baseline Value"), as more particularly set forth in Attachment No. 7 to the Existing Bella Terra I Site Agreement. v31 061314 -2` HB -337- Item 14. - 151 1 D. The Former Redevelopment Agency and BTD3M Phase II Associates, LLC, a Delaware limited liability company ("Original AHA Developer"), entered into that certain Affordable Housing Agreement dated October 4, 2010 (the "Bella Terra II Site AHA"). Reference herein to the Bella Terra II Site ABA shall include any and all attachments thereto. Any capitalized term not defined herein shall have the meaning ascribed to it in the Existing Bella Terra I Site Agreement or the Bella Terra II Site AHA, as applicable. E. The Bella Terra 11 Site AHA pertains to the construction, development, operation, and management of a 467-unit housing project, including 71 "Affordable Rental and/or Agency approved For -Sale Units" (as that term is defined in Section 1.4 of the Bella Terra 1I Site AHA) on land, located immediately to the west of the Bella Terra shopping center, referred to therein as the "Property" and in this Third Implementation Agreement as the "Bella Terra II Site." Subject to and in accordance with the terms of the Bella Terra I1 Site AHA and the Schedule of Feasibility Gap Payments set forth in Attachment No. 7 thereto, the Former Redevelopment Agency is obligated to reimburse certain costs incurred for construction of the 71 Affordable Rental and/or Agency -approved For -Sale Units (the "Reimbursement"). The periodic Reimbursement payments are calculated in part based upon the amount of "Available Site - Generated Property Tax Increment" (as that term is defined in Paragraph (i)(1) on page 6 of Attachment No. 7 to the Bella Terra II Site AHA) generated from the Bella Terra 11 Site, which amount in turn is based on increases in the assessed value of the Bella Terra 1I Site over and above an assessed value of Eleven Million Six Hundred Seventy -Seven Thousand Dollars ($11,677,000) (herein the "Bella Terra 11 Baseline Value"), as more particularly set forth in Attachment No. 7 to the Bella Terra II Site AHA. F. At the time the Bella Terra II Site AHA was approved, it was contemplated that Participant and the Original AHA Developer, which at the time had certain common ownership interests, would process a lot line adjustment for the properties comprising the Bella Terra I Site and the Bella Terra II Site that would "eliminate parcels from the Bella Terra [1] site and commute those parcels into the [Bella Terra 11] Site." (See footnote 1 at page 6 of Attachment No. 7 to the Bella Terra 11 Site AHA.) As further stated in footnote 1 at page 6 of Attachment No. 7 to the Bella Terra II Site AHA: "[t]he lot line adjustment will therefore reduce the property tax base from ,the Bella Terra [i] site and commensurately increase the property tax base for the [Bella Terra II Site]. As a result, [Former Redevelopment] Agency and [the Original AHA] Developer agree that (i) the Baseline Value [for the Bella Terra II Site] will be adjusted upward to reflect the change in the property tax base for the [Bella Terra II Site] upon Completion and (ii) prior to the adjustment of the [Bella Terra II] Baseline Value and as a condition thereto, the [Former Redevelopment] Agency and [Participant] shall execute a Third Implementation Agreement to the Owner Participation Agreement... to reduce the [Bella Terra I Baseline Value] by the same amount as the adjustment upward in the [Bella Terra II] Baseline Value." G. Pursuant to an Assignment and Assumption Agreement entered into by and between the Original AHA Developer and Bella Terra Villas, LLC, a Delaware limited liability company ("AHA Developer"), that was consented to by the Former Redevelopment Agency on v11 061314 -3- Item 14. - 152 HB -338- or about August 24, 2011, the Original AHA Developer transferred title to the Bella Terra II Site to AHA Developer and upon recordation of the grant deed for said transaction all of the rights and obligations of the Original AHA Developer arising under the Bella Terra lI Site AHA were assigned by the Original AHA Developer to AHA Developer and all of said rights and obligations were assumed by AHA Developer, as more particularly set forth therein. H. On October 21, 2011, the lot line adjustment contemplated in the Bella Terra I1 Site AHA and referred to in Recital F. above (City of Huntington Beach Lot Line Adjustment No. 10-006) was recorded as Document No. 2011000527951 in the Official Records of the Orange County Recorder's Office. 1. Pursuant to Assembly Bill x1 26 of the California Legislature's First Extraordinary Session of 2011 that was signed into law by Governor Brown on June 28, 2011 ("ABxl 26"), in particular California Health and Safety Code Sections 34172(a), 34173(a) and (b), and 34177, as modified by the California Supreme Court's decision in California Redevelopment Association v. Matosantos, et al. (2011) 53 Ca1.4a' 231, the Former Redevelopment Agency was dissolved on February 1, 2012, and the Successor Agency succeeded to the rights and obligations of Former Redevelopment Agency, with the responsibility, from and after that date, to "[c]ontinue to make payments due for [Former Redevelopment Agency's] enforceable obligations" and to "[p]erform obligations required pursuant to any enforceable obligation." (Health & Safety Code Section 34177(a) and (c)), including without limitation the Former Redevelopment Agency's rights and obligations under the Existing Bella Terra I Site Agreement and the Bella Terra II Site AHA. J. The Former Redevelopment Agency's obligations under the Existing Bella Terra I Site Agreement and the Bella Terra II Site AHA are "enforceable obligations" within the meaning of the "Redevelopment Dissolution Law". For purposes of this Third Implementation Agreement, "Redevelopment Dissolution Law" shall mean ABxl 26, making certain changes to the California Community Redevelopment Law and the California Health and Safety Code by adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) ("Part 1.85") to Division 24 of the California Health and Safety Code, as amended by Assembly Bill No. 1484 (Chapter 26, Statutes 2012) which was signed by the Governor of California on June 27, 2012, and as further amended. by Assembly Bill No. 1585 which was signed by the Governor of California on September 29, 2012, and as further amended by Senate Bill No. 341 which was signed by the Governor of California on October 13, 2013, and as may be further amended from time to time. Successor Agency's Oversight Board and the California Department of Finance have approved the Existing Bella Terra I Site Agreement and the Bella Terra II Site AHA as "enforceable obligations" on each of Successor Agency's first six (6) Recognized Obligation Payment Schedules (each, a "ROPS") for the January 1, 2012-June 30, 2012, July 1, 2012-December 31, 2012, January 1, 2013-June 30, 2013, July 1, 2013-December 31, 2013, January 1, 2014-June 30, 2014, and July 1, 2014-December 31, 2014, time periods. K. Successor Agency and Participant agree that, as a result of the lot line adjustment between the Bella Terra I Site and Bella Terra 11 Site and the provisions of the Bella Terra II Site AHA referred to in Recitals E and F above, (1) effective as of July 1, 2013, the Bella Terra I Baseline Value should be reduced by the sum of Sixteen Million Four Hundred Seventy -Five Thousand Eight Hundred Dollars ($16,475,800), from Forty -Three Million Two Hundred v11' 061314 -4- HB -339- Item 14. - 153 Twenty -Eight Thousand Dollars ($43,228,000) to Twenty -Six Million Seven Hundred Fifty -Two Thousand Two Hundred Dollars ($26,752,200), consistent with the provision in the Bella Terra 11 Site AHA whereby the Bella Terra H Baseline Value will be increased by the sum of Sixteen Million Four Hundred Seventy -Five Thousand Eight Hundred Dollars ($16,475,800), from Eleven Million Six Hundred Seventy -Seven Thousand Dollars ($11,677,000) to Twenty -Eight Million One Hundred Fifty -Two Thousand Eight Hundred Dollars ($28,152,800), and (2) commencing with Successor Agency's ROPS 14-15B (for the period of January 1, 2015-June 30, 2015) and continuing with each subsequent ROPS for as long as Successor Agency is obligated to make payments to Participant under the Existing Bella Terra I Site Agreement, Successor Agency should calculate the amounts owing to Participant and reflect such amounts on each such ROPS consistent with such adjusted Bella Terra I Baseline Value figure. Successor Agency and Participant further agree that the adjustments between the Bella Terra I Baseline Value and the Bella Terra 1I Baseline Value: (1) implement and do not amend either the Existing Bella Terra I Site Agreement or the Bella Terra H Site AHA; and (2) are consistent with Successor Agency's obligation to perform Former Redevelopment Agency's existing "enforceable obligations," and do not create a "new" enforceable obligation within the meaning of Health and Safety Code Section 34177.3(a) or any other provision of the Redevelopment Dissolution Law. Notwithstanding the foregoing and notwithstanding any other provision set forth in this Third Implementation Agreement, however, in order to avoid potential conflicts and disputes by and among Successor Agency, Participant, and AHA Developer as to their respective rights and obligations under the Existing Bella Terra I Site Agreement (as implemented by this Third Implementation Agreement) and the Bella Terra II Site AHA, Successor Agency and Participant agree that this Third Implementation Agreement should not become effective and should not be binding upon either Successor Agency or Participant unless and until AHA Developer executes and delivers to Successor Agency a separate document in a form reasonably satisfactory to Successor Agency's legal counsel confirming that AHA Developer agrees with and consents to the increase of the Bella Terra II Baseline Value by the sum of Sixteen Million Four Hundred Seventy -Five Thousand Eight Hundred Dollars ($16,475,800), from Eleven Million Six Hundred Seventy -Seven Thousand Dollars ($11,677,000) to Twenty -Eight Million One Hundred Fifty - Two Thousand Eight Hundred Dollars ($28,152,800). COVENANTS: Based upon the foregoing Recitals, which are incorporated into this Third Implementation Agreement by this reference, and in order to implement and not amend the Existing Bella Terra I Site Agreement, Successor Agency and Participant agree and confirm as follows: 1. Effective as of July 1, 2013, the Bella Terra I Baseline Value figure set forth in Section (d)(2) of Part 2 of Attachment No. 7 to the Existing Bella Terra I Site Agreement is and shall be reduced by the sum of Sixteen Million Four Hundred Seventy -Five Thousand Eight Hundred Dollars ($16,475,800), from Forty -Three Million Two Hundred Twenty -Eight Thousand Dollars ($43,228,000) to Twenty -Six Million Seven Hundred Fifty -Two Thousand Two Hundred Dollars ($26,752,200). 2. Commencing with Successor Agency's ROPS 14-15B (for the period of January 1, 2015-June 30,- 2015) and continuing with each subsequent ROPS for as long as Successor A 1061314 -5- Item 14. - 154 - HB -340- Agency is obligated to make payments to Participant under the Existing Bella Terra I Site Agreement, Successor Agency shall calculate the amounts owing to Participant and reflect such amounts on each such ROPS consistent with this Third Implementation Agreement. Not by way of limitation of the foregoing, Successor Agency's calculation of the amount owing to Participant on its ROPS 14-I5B and each subsequent ROPS, as applicable, shall include any theretofore previously unpaid, but due amounts that may remain owing to Participant under the Existing Bella Terra I Site Agreement. 3. Participant, for itself and on behalf of each and all of its members, partners, employees, agents, attorneys, successors and assigns, hereby fully, absolutely and irrevocably waives, releases, remises, acquits and forever discharges Successor Agency and City of Huntington Beach and each of their respective members, commissioners, employees, partners, shareholders, principals, agents, attorneys, successors and assigns from any and all claims, rights, demands, suits, awards, judgments, damages, actions, causes of action, lawsuits, costs, obligations, liabilities, defaults and duties of every kind and nature, known or unknown, existing or future, suspected or unsuspected, asserted or unasserted, fixed or contingent, at law or in equity against Successor Agency and/or City of Huntington Beach and/or any of their respective members, commissioners, employees, partners, shareholders, principals, agents, attonneys, successors and assigns arising out of or relating in any way to the Successor Agency approving or entering into this Third Implementation Agreement and/or implementation of this Third Implementation Agreement, including, without limitation, in the event any of the following situations occurs: (i) Successor Agency's Oversight Board and/or the California Department of Finance asserts jurisdiction and/or the right to approve or disapprove this Third Implementation Agreement or threatens to assert jurisdiction and/or the right to approve or disapprove this Third Implementation Agreement; (ii) In the event Successor Agency's Oversight Board and/or the California Department of Finance asserts jurisdiction and/or the right to approve or disapprove this Third Implementation Agreement and Successor Agency's Oversight Board and/or the California Department of Finance disapproves or threatens to disapprove this Third Implementation Agreement or any term set forth herein as an "enforceable obligation" or any ROPS or payment that is based on and consistent with this Third Implementation Agreement, whethef with respect to a future Successor Agency ROPS or otherwise (or any similar disapproval); (iii) Successor Agency's Oversight Board and/or the California Department of Finance determines or threatens to determine that the Existing Bella Terra Site I Agreement or any terms therein or any parts thereof is/are no longer an "enforceable obligation(s)" under the Redevelopment Dissolution Law due in any way to the Successor Agency approving or entering into this Third Implementation Agreement and/or implementation of this Third Implementation Agreement (or any similar disapproval/determination) or any third party initiates or threatens to initiate any litigation or administrative proceeding or action pursuant to the Redevelopment _Dissolution Law claiming or arguing that the Existing Bella Terra Site I Agreement or any terms therein or any parts thereof is/are no longer an "enforceable obligation" under the Redevelopment Dissolution Law due in any way to Successor Agency approving or entering into 01061314 -6_ HB -341- Item 14. - 155 1 this Third Implementation Agreement and/or implementation of this Third Implementation Agreement; and/or (iv) Successor Agency's Oversight Board and/or the California Department of Finance determines or threatens to determine that any amounts listed on any ROPS pertaining to either the Existing Bella Terra Site I Agreement should be reduced or disapproved in whole or in part due in any way to the Successor Agency approving or entering into this Third Implementation Agreement and/or implementation of this Third Implementation Agreement (or any similar disapproval/determination). The events in Paragraphs 3(i) through 3(iv) above may collectively be referred to herein as "Challenges". Participant, for itself and on behalf of each and all of its members, partners, employees, agents, attorneys, successors and assigns hereby agree that Participant and each and all of its members, partners, employees, agents, attorneys, successors and assigns shall not initiate, institute, maintain or prosecute in any manner any suit, action, or other proceeding, or voluntarily aid in the initiation, institution, maintenance or prosecution of any claim or legal action, state or federal, in law or in equity, against Successor Agency or City of Huntington Beach or any of their respective members, commissioners, employees, partners, shareholders, principals, agents, attorneys, successors and assigns with respect to any matter, cause or thing whatsoever arising out of or relating in any way to the Successor Agency approving or entering into this Third Implementation Agreement and/or implementation of this Third Implementation Agreement, including, without limitation, in the event any of the Challenges occurs. In this regard, and not by way of limitation of the foregoing, Participant acknowledges that it has been represented by its own legal counsel with respect to the subject matter of this Third Implementation Agreement and the negotiation and preparation of same, that it has not relied upon any representation or warranty of Successor Agency or the City of Huntington Beach with respect thereto or the validity or enforceability of this Third Implementation Agreement, and in particular that Successor Agency has not made and is not making any representation or warranty to Participant with respect to Successor Agency's authority to approve and execute this Third Implementation Agreement under applicable provisions of the Redevelopment Dissolution Law without seeking and obtaining the approvals of Successor Agency's Oversight Board and the California Department of Finance, and that Participant assumes the full risk with respect thereto. Participant forever and irrevocably waives the protections of California Civil Code Section 1542, entitled "General release, extent," and which provides that "[a] general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Notwithstanding the foregoing, however, nothing herein is intended or shall be interpreted as a release, waiver, or covenant not to sue arising out of any actual or alleged default or breach by Successor Agency in performing its obligations under this Third Implementation Agreement, the Existing Bella Terra I Site Agreement, and any other agreement, covenant, or v] ] 061314 'T Item 14. - 156 HB -342- document executed by Farmer Redevelopment Agency or Successor Agency pursuant to or in connection with any of the foregoing. In addition, subject to the indemnity, defense and hold harmless provisions in Paragraph 4 below, in the event of a third party challenge consisting of litigation, the foregoing release, waiver, and covenant not to sue is not intended and shall not be interpreted to prohibit Participant from naming Successor Agency as a party (whether as a cross - defendant, cross -respondent, or real party in interest) or participating in said litigation with Successor Agency as a party (if named by another party to the action) as needed to enforce Participant's rights hereunder, including without limitation in a situation in which Successor Agency is an indispensable or necessary party within the meaning of California Code of Civil Procedure Section 389. 4. Participant agrees to indemnify, defend and hold harmless Successor Agency and the City of Huntington Beach and each of their respective members, commissioners, employees, partners, shareholders, principals, agents, attorneys, successors and assigns from and against any and all loss, liability, damage, claim, cost and expense (including, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses, court and litigation costs and fees of expert witnesses) resulting or arising from or in any way connected to the Successor Agency approving or entering into this Third Implementation Agreement and/or implementation of this Third Implementation Agreement, including, without limitation, in the event any of the Challenges occurs. Without limiting the foregoing, and as a part of the foregoing indemnity, defense and hold harmless, in the event any of the Challenges occurs, Participant shall be liable for promptly paying or reimbursing Successor Agency and/or City of Huntington Beach, as applicable, for all of Successor Agency's and/or City of Huntington Beach's actual and reasonable costs and expenses related to contesting, challenging and/or defending any such disapproval/determination or threat of any such disapproval/determination, including; without limitation, participating in whatever administrative appeal or proceeding, meet -and -confer and/or meet -and -discuss process may be available and/or initiating, cooperating with, participating in, defending and/or pursuing litigation (including any appellate proceeding relating to any order or judgment entered in any such litigation or administrative appeal or proceeding). Such costs and expenses shall include, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses, court and litigation costs and fees of expert witnesses. 5. Either party receiving notice of any Challenge to this Third Implementation Agreement shall use good faith efforts to endeavor to promptly notify the other party in writing of such Challenge in accordance with the applicable notice provisions in the Existing Bella Terra I Site Agreement, and shall include any written correspondence, pleading, or other documents in the possession of the party delivering the notice. After delivery of any such notice, the parties to this Third Implementation Agreement agree to promptly meet and confer at such mutually agreeable time and place or via a conference telephone call with respect to the Challenge. 6. Participant shall pay all of its own attorneys' and other fees and costs with respect to any Challenge. 7. Subject to its limited duties set forth in the following sentence, Successor Agency shall have no obligation to contest, challenge or defend a Challenge. If the California v11061314 -8- HB -343- Item 14. - 157 1 Department of Finance asserts jurisdiction and takes action to disapprove this Third Implementation Agreement, Successor Agency agrees, subject to the indemnity, defense and hold harmless provisions in Paragraph 4 above, upon receipt of a timely written request from Participant, to cooperate with Participant in participating in whatever administrative appeal or meet -and -confer process may be available under applicable provisions of the Redevelopment Dissolution Law, including, without limitation, Health and Safety Code Section 34177(m). Notwithstanding the foregoing, it is not the parties intent to limit in any way the Successor Agency's authority or right (without a request from Participant) to contest, challenge or defend any Challenge. Nothing in this Third Implementation Agreement shall limit such authority or right and any such contest, challenge or defense shall be subject to the indemnity, defense and hold harmless provisions in Paragraph 4 above. 8. It is understood and agreed by the parties hereto that the provisions of Paragraphs 3, 4, and 9 of this Third Implementation Agreement shall survive any termination of this Third Implementation Agreement. 9. In the event that for any reason this Third Implementation Agreement is terminated or is determined to be invalid or unenforceable by a final and non -appealable judgment or ruling of any court or administrative agency with jurisdiction, including, without limitation, Successor Agency's Oversight Board, the California Department of Finance, or the California State Controller's office, nothing herein shall be deemed to modify or terminate the Existing Bella Terra I Site Agreement or any other agreement, covenant, or document executed by Participant (or its predecessors), Former Redevelopment Agency, or Successor Agency pursuant to or in connection with any of the foregoing, in each case as such agreement, covenant, or document is currently written, and the same shall survive and shall be enforceable in accordance with and subject to the terms and conditions set forth therein. In the event of a determination that the Existing Bella Terra I Site Agreement is no longer an "enforceable obligation" under the Redevelopment Dissolution Law and/or in the event any amounts) listed on any ROPS pertaining to the Existing Bella Terra Site I Agreement is reduced or disapproved in whole or in part nothing shall be deemed to modify or terminate any terms or provisions of that certain Agreement Containing Covenants Affecting Real Property entered into on or about August 10, 2005 by Former Redevelopment Agency and Participant's predecessor in interest, Huntington Center Associates, LLC, recorded as Document No. 2005000643199 on August 16, 2005 in the Official Records of the Orange County Recorder's Office (as amended from time to time), and/or any other agreement, covenant, or document executed by Participant (or its predecessors), Former Redevelopment Agency, or Successor Agency pursuant to or in connection with any of the foregoing, in each case as such agreement, covenant, or document is currently written, and the same shall survive and shall be enforceable in accordance with and subject to the terms and conditions set forth therein. 10. This Third Implementation Agreement is intended to implement, clarify, and enforce the Existing Bella Terra I Site Agreement. Nothing herein is intended to modify or amend any provision set forth in the Existing Bella Terra I Site Agreement, and the same shall remain in full force and effect in accordance with its terns. v] 1061314 -9- Item 14. - 15 8 HB -344- 11. Notwithstanding any other provision set forth in this Third huplementation Agreement, this Third Implementation Agreement shall not become effective and shall not be binding upon either Successor Agency or Participant unless and until AHA Developer executes and delivers to Successor Agency a separate document in a form reasonably satisfactory to Successor Agency's legal counsel confirming that AHA Developer agrees with and consents to the increase of the Bella Terra II Baseline Value by the sum of Sixteen Million Four Hundred Seventy -Five Thousand Eight Hundred Dollars ($16,475,800), from Eleven Million Six Hundred Seventy -Seven Thousand Dollars ($11,677,000) to Twenty -Eight Million One Hundred Fifty - Two Thousand Eight Hundred Dollars ($28,152,800). Successor Agency shall notify Participant of the status of the required AHA Developer's consent and the Successor Agency legal counsel's review and approval of same upon Successor Agency's receipt of Participant's written request. 12. This Third Implementation Agreement shall be binding upon the successors and assigns of each party hereto. 13. The parties agree to execute such other documents and to take such other actions as may be reasonably necessary to further the purposes of this Third Implementation Agreement. 14. This Third Implementation Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined with the balance of this Third Implementation Agreement it shall constitute one single instrument. [SIGNATURES ON NEXT PAGE] A 1461314 -10- HB -345- Item 14. - 159 1 "SUCCESSOR AGENCY" SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic i Dated: 12014 . 91- Executiv ir,v or "PARTICIPANT" BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company By: Bella Terra Borrower, LLC, a Delaware limited liability company, . s member Dated: , 2014 By: Eric H: Sahn, Vice President PROVED AS `O r ,r 'i Y A_ . --rTT*FY v11 0613W Item 14. - 160 HB -346- — I i -- � - �; x :: �:. ' °� ,,: — _ � � �t .� `._ i ; — __ s ESTOPPEL CERTIFICATE AND REQUEST FOR NOTICE (Successor Agency to the Redevelopment Agency of the City of Huntington Beach; Owner Participation Agreement) Metropolitan Life Insurance Company 10 Park Avenue Morristown, New Jersey 07962 Re: The Owner Participation Agreement ("OPA") by and between the Redevelopment Agency of the City of Huntington Beach and Huntington Center Associates, LLC, a Delaware limited liability company ("HCA"), dated effective as of October 2, 2000, as amended. Property: That certain real property located in Huntington Beach, California, formerly known as the Huntington Center, and now commonly known as Bella Terra Mall (the "Property") Ladies and Gentlemen: Capitalized terms used but not defined herein shall have the meanings set forth in the OPA. The undersigned, being an authorized representative of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach ("Successor Agency"), certifies and agrees as follows for your reliance: 1. The OPA is in full force and effect and constitutes a legal, valid and binding obligation of the parties thereto. Bella Terra Associates, LLC, a Delaware limited liability company (`BTA"), has succeeded to the rights of HCA as "Participant" under the OPA with the consent and approval of Successor Agency's predecessor -in -interest, the former Redevelopment Agency of the City of Huntington Beach ("Former Agency"). The Successor Agency has succeeded to the rights and obligations of the Former Agency under the OPA. 2. The OPA has not been amended or modified either orally or in writing, except as follows: (if any modifications or amendments exist, describe here or state "none"). The OPA has been implemented and modified by that certain First Implementation Agreement dated as of August 8 2005 Second Implementation Agreement dated as of September 17, 2007, and Third Implementation Agreement dated as of June 17, 2014. 3. There are no current uncured defaults under the OPA, except as follows: (if no defaults, state "none"; otherwise describe the nature and monetary amount, if any, of any such defaults) None. 4. BTA is current in the performance of its obligations under the OPA, and, as of the date hereof, there are no conditions or events which, with the passage of time or giving of notice or both, would constitute defaults under the OPA, except as follows: (if no defaults, state "none"; otherwise describe the nature and monetary amount, if any, of any such defaults). None. ACTIVE 206255282v.4 5. There are no Additional Properties, except as follows: (if no such Additional Properties, state "none"; otherwise describe such Additional Properties) None. 6. Successor Agency has consented to the acquisition of an indirect membership interest in BTA by PR Bella Terra, LLC. 7. This instrument is being executed and delivered by Successor Agency in connection with the request by BTA that Metropolitan Life Insurance Company ("Met Life") provide to MTA a loan secured in part by the Property ("Mortgage Loan"), for the benefit of Met Life and its participants and assigns (collectively, "Lender"). Successor Agency confirms that, as of the date the Successor Agency executes this Estoppel Certificate, the deed of trust executed by BTA in connection with the Mortgage Loan is consistent with and permitted by the terms of the OPA, including but not limited to Section 411 of the OPA, and that the OPA permits BTA to assign to Lender its rights under the OPA, including but not limited to the right to receive any Feasibility Gap Payments payable pursuant to the OPA during the Reimbursement Term. The Successor Agency has not reviewed any other documents related to the Mortgage Loan and has only reviewed the OPA for consistency with the OPA. Successor Agency further confirms as follows: (a) the most recent Feasibility Gap Payment made by Successor Agency to BTA was made on June 30, 2014 in the amount of $1,157,333.75, (b) as of June 30, 2014, the outstanding principal balance of the Feasibility Gap Obligation is $ $12,685,311.77, (c) Successor Agency received from BTA an Agency Participation Payment for the [2013] Operating Year in the amount of $0, and (d) for purposes of calculating the amount of future Agency Participation Payments, the amount of Project Costs is $160,000,000, the amount of Adjusted Project Costs is $219,121,207, and the amount of Participant's Annual Return is $26,296,545. No future amendment of,, or implementation agreement with respect to, the OPA shall be enforceable unless such amendment or implementation agreement has been consented to by Lender in writing, which consent shall not be unreasonably withheld. The Agency understands that Lender will rely upon this Estoppel Certificate in connection with a loan to be made by Lender to BTA with respect to the Property. The Agency represents and warrants that the information contained in this Estoppel Certificate is true and correct as of the date hereof. This Estoppel Certificate will inure to the benefit of Lender and its successors and assigns, and shall be binding on Successor Agency and its legal representatives, successors, and assigns. Lender hereby requests notice in the event of default(s) pursuant to Article 700 of the OPA, and Successor Agency hereby agrees that it will not exercise any remedies under the OPA without first (1) providing Lender with written notice of the alleged Participant default at the address provided below and (2) the opportunity to cure such default within the time frame set forth in the OPA for such cure. Agency acknowledges that Lender is not obligated to cure any Participant default, but if Lender elects to do so, Agency agrees to accept such cure by Lender as that of Participant under the OPA and will not exercise any right or remedy under the OPA for a Participant default if cured by Lender as provided herein. 2 ACTIVE 206255282v.4 Address for notices to Lender: Metropolitan Life Insurance Company 10 Park Avenue Morristown, New Jersey 07962 Attention: Senior Vice President, Real Estate Investments Re: Bella Terra With a required copy to: Metropolitan Life Insurance Company 333 S. Hope St., Suite 3650 Los Angeles, California 90071 Attention: Richard Benner Re: Bella Terra IN WITNESS WHEREOF, the undersigned has executed this Estoppel Certificate at the City of Huntington Beach, State of California, on the date set forth below. Dated: e,tq= AJ, 2015 SUCCESSOR AGENCY TO TIME REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: r 1/ / (� rl d Print Name: vgfzb A. / —sOno Its: Executive Director Address: City of Huntington Beach City Hall 2000 Main Street Huntington Beach, California 92648 Attn: Economic Development Director APPROVED AS FORM: Gates, Agency Counsel 3 ACTIVE 206255282v.4 Parking Garage Agreements and Annual Budget 1. Operating Agreement for Huntington Center Parking Structure dated as of March 1, 2004 2. Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 3. Grant Deed dated November 29, 2004 4. Amended and Restated Grant Deed dated October 16, 2006 5. Parking License Agreement and Covenant (City Parking Structure) dated October 17, 2011 6. 2014-2015 Annual Budget [behind this page] Official Statement concerning the issuance by the City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) of its City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) 2013 Special Tax Refunding Bonds in the aggregate principal amount of $20,915,000 [behind this page] OPERATING AGREEMENT FOR HUNTINGTON CENTER PARKING STRUCTURE THIS OPERATING AGREEMENT (`Agreement") is entered into as of -I-- l- MaTch-.I 2004- between the CITY OF HUiv'TINGTON BEACH, a California charter city (`City"), HUNTINGTON CENTER ASSOCIATES, L.L.C.; a Delaware limited liability company ("Operator"), pursuant to a resolution adopted by the City Council of the City of Huntington Beach at its meeting held on January 5, 2004. Recitals: A. City will be the owner of a parking structure (the "Structure") to be constructed on the site identified in Exhibit A hereto, which the City desires to utilize for public parking purposes. B. The Structure is being financed with bonds issued under the provisions of the Mello -Roos Community Facilities Act of I982, as amended, and Chapter 3.56 of the City's Municipal Code, the interest on which is excluded from gross income under applicable Federal tax law. C. The City acquired the Structure subject to that certain Parking and Reciprocal Easement Agreement and Option to Purchase, dated as of :Ianuaf-yT-Njaf ch= 13 2004, and effective as of its date of recordation (the "Reciprocal Easement Agreement"). D. City desires that Operator maintain and operate the structure consistent with the Reciprocal Easement Agreement for the public purpose of the City to provide adequate public parking and City and Operator wish to set forth their agreement as to the operation of the Structure_ Agreement; In consideration of the foregoing recitals and for other consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Use. City authorizes Operator to operate the Structure; and Operator agrees to use the Structure solely for the purpose of vehicular parking, and vehicular and pedestrian ingress and egress, and for no other use or purpose. No portion of the Structure shall be used for the sale of goods, wares, merchandise, services or other commercial purposes other than (a) the display of advertising in, on, and about the Structure and (b) incidental uses such as pay telephones and vending machines not occupying two percent (2%) or more of the floor area of the Structure. Operator acknowledges that the use of the Structure is to provide adequate public parking for the City. Operator acknowledges that no portion of the Structure, other than the Private Retail Spaces (as defined in and designated pursuant to Section 2(a) of the Reciprocal RVPUB\KAB\659574.1 Easement Agreement), shall be reserved for parking by its employees or employees of any other business. Operator shall make the Structure available to members of the general public, without preference or priority for any class of persons over any other class of persons except as otherwise expressly provided herein. The Structure shall at all times be posted with signs acceptable to the Operator and the City designating the Structure as "public parking." Subject to the provisions of Section 19 of this Agreement, Operator shall (a) manage and operate the Structure, (b) employ sufficient personnel for the operation of the Structure, (c) maintain accounting records of all revenues and expenses related to the operation of the Structure, and (d) periodically consult with the City regarding such operation. Operator agrees to comply with all statutes, ordinances, rules, orders, regulations of federal, state, county and city governments regulating the use by Operator of the Structure. Operator shall not use or permit the use of the Structure in any manner that will create or tend to create a nuisance. The hours of operation for the Structure shall be determined in Section 8 hereof and shall be consistent with the purposes of the Reciprocal Easement Agreement. The Operator acknowledges that the Stricture shall be used for unrestricted free parking, except for 5% of spaces as set forth in the Reciprocal Easement Agreement, and that the City, in consultation with Operator, shall have the power to establish rates and charges for the use of the Structure at a later date. In consideration of the foregoing, the Operator hereby agrees to operate the structure in the manner described in Section 7(a) of the Reciprocal Easement Agreement. Section 2. Rates. Parking rates to be initially charged for the Structure shall be free. City shall determine, from time to time, revisions to the rates to be charged for the Structure, in consultation with the Operator and upon City's obtaining a parking rate study, which illustrates the range of fees charged at competing parking facilities and shall advise the Operator in writing of any changes to the Stricture rates at least 30 days prior to the date any such change becomes effective. Notwithstanding the foregoing, final determination of rates and charges for the Structure shall be made by the City Council. Section 3. Operator's Employees. All of Operator's employees and the employees of any subcontractor of the Operator that operates the Structure as provided in Section 19 hereof, shall, at all times while on duty at the Structure, wear standard uniforms, conduct themselves with exemplary demeanor, be courteous and polite to the public and not engage in any raucous or offensive conduct. The City shall be the sole judge, using reasonable discretion, as to whether the conduct of the employees of' Operator meets the requirements hereof and upon notice from City of any non -conformity with these standards, Operator shall immediately take all steps necessary to eliminate the condition complained of. Any laborers or employees engaged by the Operator shall not be the employees of the City and the City shall in no any way be liable for the payment of any wages or benefits to any such laborers or employees. Any such laborers or employees shall in no way be third party beneficiaries of this Agreement. Section 4. Operating Fee. City shall pay to Operator as its management fee for each month of the term of this Agreement, a fee of $1,500,00, such amount to be increased on each annual anniversary of the Commencement Date of this Agreement by a percentage increase agreed to by the City and the Operator as reflective of the percentage increase during the preceding year in the Consumer Price Index -Urban Wage Earners and Clerical Workers (Los 2 RVPUH'�<A$`,659574.1 Angeles -Anaheim -Riverside, CA, All Items, Base 1982-84 = 100) as published by the United States Department of Labor, Bureau of Labor Statistics. In addition, City shall reimburse Operator for those reasonable expenses and costs incurred by Operator in the performance of its parking services ("Operating Expenses"). Such Operating Expenses shall include, without limitation, the aggregate of. subcontractor fees and expenses, salaries and wages, health insurance, uniforms, security guard service, supplies, signs, utilities, Structure maintenance, public liability, garage keepers liability and other insurance (including but not limited to insurance required by Section 10 of this Agreement and Section 7(b) of the Reciprocal Easement Agreement), and all other necessary and reasonable costs related to the provision of such parking services by the Operator and/or any subcontractor thereof, provided, that such costs are reasonable, and are not duplicative (in the event the Operator engages a subcontractor as described in Section 19 hereof). Payroll taxes, workers' compensation insurance and sick leave pay shall be reimbursed at the percentage of gross payroll as may be determined by the Operator in accordance with applicable State and Federal laws. Operating Expenses shall not include any of Operator's general overhead expense which shall include, but shall not be limited to: (a) Administrative and related costs and expenses incurred in the operation of the Structure or the other operations of Operator, as they are incurred in the general management of the affairs of Operator generally, including the monitoring of the operation and management of Operator; y (b) Maintenance of the general books and records of Operator; (c) Office supplies and equipment used by Operator which are not used exclusively for the Structure; (d) Postal, telephone and travel expense which are not directly related to the management of the Structure; (e) The cost of any managers or supervisors who are not employed at the Structure on a full time basis; and (f) Capital repairs required to be paid for by parties other than the City pursuant to the Reciprocal Easement Agreement. Within 30 days after the end of each month, Operator shall submit to City a reasonably detailed written statement of the management fee earned and the Operating Expenses incurred during the preceding month. The City shall remit to Operator, within 30 days after City's receipt of the statement, the amount invoiced on the statement. No delay in the delivery of such written statement will affect the Operator's right to receive such amounts within 30 days of the date such statement is actually delivered to the City. The management fee and all operating expenses shall be payable solely from the Parking Fund, discussed in Section 5 below, and proceeds of the "Parking Structure Maintenance Special Tax" collected from Community Facilities District No. 2003-1 of the City of Huntington. Beach (the "CFD") which have been levied for the purpose of paying for the maintenance and operation of the Structure. No other funds of the City shall be available to pay for the operation and maintenance of the Structure. RVI'LIBI CAB\659574.1 Notwithstanding any other provision hereof, Operating Expenses shall not include, and in no event shall the City be liable for payment of, any management fee of any subcontractor of the Operator hereunder, but such limitation on liability of the City shall not prevent or in any way restrict the Operator from using or assigning all or a portion of its management fee described in the first sentence of this Section 4 for such purpose. The City shall levy the Parking Structure Maintenance Tax on the taxable real property within the CFD monthly, bi-monthly or semi-annually as determined by the Treasurer_ Section 5. Payment of Operating Revenues to City. Any revenues received by the Operator in connection with the operations of the Structure (including any vending machine or other incidental revenues, and any revenues from advertising or other promotions at the Structure) shall be transferred by the Operator to the City as such funds are received, for deposit in the "Parking Fund" to be established and maintained by the City for the benefit of the City and the Operator. The Operator shall maintain records of all revenues so received, and transferred to the City. The City shall maintain records of deposits to the Parking Fund. Monies deposited in the Parking Fund shall be applied first to the maintenance and operation of the structure, second to the payment of cost of repairing and replacement of the Structure, and third to the payment of the operating fee set forth in Section 4 hereof. City shall pay Operator expenses billed solely from moneys deposited in the Parking Fund and such payment shall be made 30 days from receipt of the invoice from the Operator. City shall provide Operator with monthly statements showing income and expenses of the Parking fund. Section 6. Accounting and Budget. Operator shall maintain, for a period of 36 months from the date of mailing such statements to City, records of such gross revenues collected and Operating Expenses disbursed in accordance with recognized accounting practices. Upon reasonable notice to Operator, City or its designated agents may examine Operator's records pertaining to the Structure, including amounts for maintenance. Upon completion of the Structure and annually on each July 15 thereafter during the term of this Agreement, Operator shall submit to City a proposed budget for the operation of the Structure such proposed budget shall set forth the projected income, special taxes to be levied and expenses to be incurred by Operator (the "Proposed Budget"). Each Proposed Budget shall include both an annual aggregate budget for the structure and monthly budgets for each calendar month during the applicable Fiscal year covered by the proposed Budget. Each Proposed Budget shall be submitted in a form reasonably acceptable to City. Each Proposed Budget shall be for planning and information purposes only and shall not be deemed to be binding upon either Operator or City. Each such budget, prior to adoption and implementation by Operator, shalt require the written approval of City such approval not to be unreasonably withheld or delayed. Any budget so approved by City shall become the budget for the ensuing fiscal _year and shall form the basis on which Operating Expenses are incurred in that fiscal year. If the budget is not approved, then the budget effective the in the prior fiscal year shall govern the operating costs of the Structure until a new budget is agreed upon by the City and the Operator. The budget for any fiscal year may only be amended in writing, subject to the written approval of City. Operator shall not incur any Operating Expenses which is in excess of five percent (5%) of the annual amount allocated for that particular Operating Expense line item in the budget, unless Operator has obtained the prior written approval of the City Administrator (or his designee), such approval 4 RVPUBtKABi659574.1 not to be unreasonably withheld or delayed, or such increased expenditure is otherwise authorized by this Agreement. All financial statements submitted pursuant to the last sentence of Section 5 and this Section 6 shall be certified as fairly representing the Structure's financial condition. Section 7. Term of Agreement. This Agreement shall commence on the day the Structure is open for parking by the general public and the City has issued a certificate of occupancy (temporary or final) for the Structure (the " Comntcncement Date''), and shall terminate on the earlier of (a) the date on which the City no longer owns the Structure, or (b) the date which is fifteen (15) years after the Commencement Date. Notwithstanding the foregoing, upon the termination of this Agreement, pursuant to clause (b) above, the Developer irrevocably agrees to extend the term of this Agreement for an additional fifteen years_ Section 8. Hours of Operation._ Unless otherwise determined by the City in consultation with Operator, and consistent with the Reciprocal Easement Agreement, the hours of operation of the Structure shalt be from 8 a.m. to 2 a.m. daily, and the City shall advise the Operator of such hours and any change thereto. Section 9. Indemnification. Operator expressly agrees to defend, protect, indemnify and hold harmless the City and its officers, agents, elected and appointed officials, employees and volunteers free and harmless from and against any and all claims, demands, damages, expenses, losses, judgments or liability of any kind or nature whatsoever which City, and its officers, agents, elected and appointed officials, employees and volunteers may sustain or incur or which may be imposed upon them or any of them for injury to or death of persons or damage to property arising out of or resulting from the alleged acts or omissions of Operator, its officers, agents or employees or in any manner connected with this Agreement or with the occupancy, use or misuse of the Structure by Operator, its officers, agents, employees, subtenants or licensees, patrons or visitors; and Operator agrees to defend at its own cost, expense and risk all claims or legal actions that may be instituted against either the City (provided the City has timely tendered a request for a defense to Operator) and the Operator agrees to pay any settlement entered into with Operator's consent and satisfy any final judgment that may be rendered against the Operator or the City or any other party indemnified by the Operator hereunder as a result of any injuries or damages which are alleged to have resulted from or be connected with this Agreement or the occupancy or use of the Structure. Notwithstanding the foregoing in no event shall the Operator or any such subcontractor be obligated to indemnify the City for the City's intentional misconduct. Section 10. Insurance. A. Insurance_ Prior to the first date on which the Structure is open for public parking, Operator, or a subcontractor of Operator, shall procure and maintain insurance as set forth in Section. 7(b) of the Reciprocal Easement Agreement, which insurance shall be considered an Operating Expense for purposes of Section 4 above, and shall remain in effect for the duration of this Agreement, including any extensions, renewals, or holding over thereof, from insurance RVPU8TAB\6595,74. 1 companies that are admitted to write insurance in the State of California or from authorized nonadmitted insurers that have ratings of or equivalent to an A:VIII by A.M. Best Company. Operator shall pay the premium on all insurance required herein in a prompt and timely manner. Operator acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Operator covenants that it shall comply with such provisions prior to the commencement of this Agreement. Operator shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Operator shall require all sub -contractors to provide such workers' compensation and employers' liability insurance for all of the sub -contractors' employees. Operator shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Operator shall similarly require all sub -contractors to waive subrogation. The requirements hereunder for insurance coverage shall not diminish Operator's obligations to defend, hold harmless and indemnify set forth in this Agreement. B. Subcontractors. So long as a subcontractor of the Operator maintains insurance in compliance with the provisions of this Section, the Operator shall not be required to obtain such insurance (except to the extent required by applicable law, such as worker's compensation insurance as described in Section W.A. above). C. Self-insurance and deductibles. Any self-insurance program, self -insured retention or deductible must be reasonably approved separately in writing by City and shall protect the City and its officials, employees, and agents in the same manner and to the same extent as they would have been protected had the policy or policies not contained such self-insurance or deductible provisions. D. Cancellation: severability of interests: primary and noncontribUtinR. Each insurance required hereunder shall be endorsed to provide as follows: (i) that coverage shall not be voided, canceled or changed by either party except after thirty (30) days prior written notice to City, (it) that the insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability: and (iii) and that coverage shall be primary and not contributing to any other insurance or self-insurance maintained by City and its officials, employees, or agents. E. Delivery of insurance documentation. Prior to the commencement of public parking in the Structure, Operator shall deliver to City certificates of insurance and the endorsements required hereunder for approval as to sufficiency and form, including the certificates of insurance and endorsements of any subcontractor to Operator. The certificates and endorsements for each insurance policy shall contain the original signature of a person authorized by that insurer to bind coverage on its behalf_ In addition, Operator shall, at least fifteen (15) days prior to expiration of such policies, furnish City with evidence of renewals. City reserves the right to require complete certified copies of all said policies at any time. City, or its representatives, shall have the right to demand the original or a copy of any or all of the policies of insurance required in this Agreement. 5 RVPU'B;KA B,659574, l F. No limitation of liability. Such insurance as required herein shall not be deemed to limit Operator's liability relating to performance under this Agreement. The procuring of insurance shall not be construed as a limitation on liability or as full performance of the indemnification and hold harmless provisions of this Agreement. Operator understands and agrees that, notwithstanding any insurance, Operator's obligation to defend, indemnify, and hold City, and its officials, agents, and employees harmless hereunder is for the full and total amount of any damage, injuries, loss, expense, costs, or liabilities caused by the condition of the Structure or in any manner connected with or attributed to the acts or omissions of Operator, its officers, employees, agents, or subcontractors, or the operations conducted by or on behalf of Operator, or the Operator's use, misuse, or neglect of the Structure, all as more particularly provided in Section 9 above. G. Books and records. Operator agrees to make available to City all books, records, and other information relating to the insurance coverage required by this Agreement during normal business hours. 11. Amendments to the insurance provisions. (1) Not more frequently than every year, if in the reasonable opinion of City's Risk Manager or designee, based on practices in other publicly owned parking structures at or adjacent to large retail facilities in Southern California, the amount or scope of the foregoing insurance coverages is not adequate, Operator shall, to the extent any additionally required coverage is available at commercially reasonable rates, amend its insurance coverage and/or, if applicable, require its subcontractors to amend their insurance coverage, as reasonably required by City's Risk Manager or designee. (2) Any modification or waiver of the insurance requirements herein shall be made only with the -written approval of the City's Risk Manager or designee. Section 11. Assignment. Operator covenants that it will not assign, transfer, convey, sublet, sell, mortgage, pledge, or encumber this Agreement, the Structure or any part of it, or any rights of Operator under this Agreement, whether voluntary or by operation of law, except upon written consent of City which consent shall not be unreasonably withheld or delayed; provided that no such consent shall be required for an assignment by the Operator to an entity which is a successor to the "Developer" under (and as such term is defined in) the OPA. Section 12. Surrender of Possession. Upon termination of this Agreement, any improvements constructed or installed at the Structure shall become the property of the then owner of the Structure, and Operator shall surrender to such owner the Structure in good order, condition and repair except for ordinary wear and tear and casualty damage. Operator will be required to remove all personal property prior to the termination of this Agreement unless other arrangements are made with and approved by the then owner of the Structure. Operator agrees that City will have, without prior notice, the right to sell or otherwise dispose of any personal property belonging to Operator which has been left: at the Structure after Operator has vacated the Structure. Section 13. Defaults of Operator; Remedies Upon Default. Operator agrees drat: 7 RVPUBIKAB\6-i95 74.1 (a) If Operator shall be in default in the payment of any sum due from it to City pursuant to this Agreement for ten (10) days after -witten demand shall have been made therefor by City; or (b) If Operator shalt neglect, violate, be in default under, of fail to perform or observe any of the other covenants, agreements, terms or conditions contained in this Agreement on its part to be performed and shall not have remedied, or commenced action which will promptly remedy same which action is thereafter diligently pursued, within thirty (30) days after written notice thereof given by City, or if such violation or default cannot reasonably be remedied in such period and Operator commences to cure such default within such thirty (30) day period, such additional time as the City determines is reasonably necessary to complete such remedy but not more than one hundred twenty (120) days; or (c) If the Operator shall fail to operate the premises for any forty-eight (48) hour period; then at the option of the City, (x) this Agreement and the term hereof shalt, upon the date specified in a written notice given by City to Operator setting forth the nature of- such default, breach, matter, or condition, be terminated and City may recover possession of the Structure, or (y) the City may keep this Agreement in effect and pursue all other legal remedies available to City, including specific performance. Section 14. Independent Contractor. It is expressly acknowledged that Operator shall be an independent contractor with respect to all services performed under this Agreement and Operator agrees to and accepts full and exclusive liability for the payment of any and all contributions or taxes for social security, unemployment insurance, or old age retirement benefits, pensions, or annuities now or later imposed under any state or federal law which are measured by the wages, salaries, or other remuneration paid to persons employed by Operator on work performed under the terms of this Agreement, and further agrees to obey all rules and regulations which are now, or later may be, issued or promulgated under these respective laws by any duly authorized state or federal officials; and Operator shall indemnify and save harmless City from any such contributions or taxes or liability therefor. Section 15. Maintenance and Security of Facilitv. Operator shall be responsible for the maintenance of the Structure at a level consistent with the Standards of Maintenance in Exhibit B hereto and the Reciprocal Easement Agreement. Operator shall also be responsible for providing security upon or about the Structure and the premises through a subcontract with a licensed security company (the City agrees to accept any security company selected by the Operator in good faith that is providing security services for other improvements in the area of the Structure). The security company and the contract shall be reasonably approved in writing by City and the company so employed shall hold Operator and City harmless with respect to its activities, Operator shall be responsible for securing access to and from the facilities in accordance with written operating policies and procedures to be mutually agreed upon from time to time and be responsible for monitoring the security service contract as to hours worked and level of service. RVPUBUC4,$\659574.1 Section 16. Property Rights; Access to the Structure. No property rights in the Structure, or right of possession thereof, is granted by this Agreement. However, and in accordance with California Revenue and Taxation Code Section 107.6(a), the City advises the Operator that by entering into this Agreement, a possessory interest subject to property taxes may be created, and the Operator or other party in whom the possessory interest is vested may be subject to the payment of property taxes levied on such interest. Notwithstanding the foregoing, it is the intent of the City and the Operator that this Agreement shall in no way create a possessory interest of the Operator in the Structure for purposes of possessory interest taxes under Califomia Revenue and Taxation Code Section 107.6(a) and that any interest conveyed hereunder not be subject to any possessory interest, ad valorem or any other similar tax imposed by the State or any other governmental entity. The Operator agrees that any authorized representative of the City shall have the right at all reasonable times to enter upon and to examine and inspect the Structure. The Operator further agrees that any such authorized representative shall have such rights of access to the Structure as may be reasonably necessary to cause the proper maintenance of the Structure in the everit of failure by the Operator to perform its obligations hereunder. Section 17. Remedies Will Be Cumulative. All rights and remedies of City enumerated will be cumulative and none will exclude any other right or remedy allowed by law. Likewise, the exercise by City of any remedy provided or allowed by law will not be the exclusion of any other remedy. Section 18. Limitation of City Liability. .Any and all monetary obligations of the City under this Agreement shall be payable solely from any revenues derived by the City from the Structure or from the proceeds of the Parking Structure Maintenance Special Tax. In no event shall City's general fund be liable hereunder. Section 19_ Waiver. One or more waivers of any covenant, term or condition of this Agreement by either party will not be construed by the other party as a waiver of subsequent breach of the same covenant, term or condition. The consent or approval of either party to or of any act by the other party of a nature requiring consent or approval will not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. Section 20. Subcontracts. Operator shall have the right to engage a subcontractor to conduct the physical operation of the Structure. Any such entity shall be subject to the prior written approval of the City, such approval not to be Unreasonably withheld or delayed, provided that the City may base its approval or denial, in part, on the financial condition of the subcontractor in light of the provisions of the second paragraph of Section 10 hereof. Section 21. Anti -Discrimination. Operator agrees that this Agreement is made and accepted on and subject to the following conditions: That there will be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, national origin, sex, sexual orientation, AIDS, AIDS -related condition, age, marital status, disability or handicap, or Vietnam Era veteran status in the leasing, subleasing, transferring, use, occupancy, hiring, employment, tenure or enjoyment of the Structure, nor will Operator or any person 0 R VPUB'TAB\65957 3.1 claiming under or through it establish or permit any practice or practices of discrimination or segregation with reference to the Structure. Section 22. Attorneys' Fees. In the event that either party fails to comply with any of the terms of this Agreement and the other party commences legal proceedings to enforce any of the terms of this Agreement, the prevailing party in any such suit will receive from the other attorneys' fees including applicable court costs. Section 23. Notices_ Any and all notices to be given under this Agreement or required by law to be served on either of the parties may be given by first-class mail deposited in the United States mail, postage prepaid, addressed as follows: To City: City of Huntington Beach P.O. Box 190 2900 Main Street 1-Iuntington Beach, CA 92648 Attention: Economic Development Department with a copy to: City of Huntington Beach P.O. Box 190 2900 Main Street Huntington Beach, CA 92648 Attention: City Attorney To Operator: Huntington Center Associates LLC 5757 Wilshire Blvd., Penthouse 30 Los Angeles, CA 90036 Attention: Mike Wise With a copy to: Allen Matkins Leck Gamble & Mallory LLP 515 South Figueroa, 7t1i Floor Los Angeles, CA 90071-3398 Attn: Michael J. Kiely, Esq. Any notices may be personally served on the party to be given notice. Any notice served by means of the United States mail will be effective three business days from the date of mailing. Section 24. Execution. This Agreement may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Agreement. Section 25. Validity. If any one or more of the terms, provisions, promises, covenants, conditions or option provisions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reasons whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants, conditions, and option provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 10 R VPUB%X AB1659574 1 Section 26. Amendments. This Agreement may only be amended in writing executed by both of the parties hereto. Section 27, Entire Agreement. It is understood that there are no oral agreements between the parties affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. ATTEST: City Clerk REVIEWED AND APPROVED City Administrator OPERATOR: HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, Its Manager By: BlvILFIHuntin.gton, LLC, a Delaware limited liability company, Its Managey By: /� / ryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, Its Manager CITY OF HUNTINGTON BEACH By: Mayor APPROVED AS TO FORM: City Attorney Bond Counsel II RVPMKAM654574.1 Section 26. Amendments. This Agreement may only be amended in writing executed by both of the parties hereto_ Section 27. Entire Agreement. It is understood that there are no oral agreements between the parties affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. OPERATOR: HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, a Delaware limited liability company, Its Manager Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, Its Manager ATTEST: CITY OF HUNTINGTON BEACH C_By. City Clerk �2_ rr�� Mayo REVIEWED AND APPROVED: <2c-AL41 City Ad inistrator APPROVED AS TO FORM. City Attorney Bond Counsel j RVPUB\KAB\659574.1 EXHIBIT A DESCRIPTION OFTHE SITE A- I RVPUB'KA13't659574.1 LD 1018 02-100 LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE SHEET 1 OF 2 THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCEL 2 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89029'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED IN BOOK 3675, PAGE 63 AND GRANT DEED RECORDED IN BOOK 3159, PAGE 483 BOTH OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89029'30" WEST A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00030'30" WEST A DISTANCE OF 334,58 FEET; THENCE NORTH 89Q29'30" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70132'16" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89°29'30" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89°29'30" WEST A DISTANCE OF 274.25 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89°29'30" EAST A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. CHRISTOPHER W_ DANIELS SHEET 2 OF 2 02-100 CENTER DRIVE _ — N89'29'30"W _ 534.08' _ T SOUTHERN CALIFORNIA EDISON RIGHT OF WAY SK, 3159, PG 483 O.R. ( SK. 4519, S'LY LINE OF THE NTY 150' OF THE SOUTH 1/2 PG 491 O-R. OF THE SOUTHEAST 1/4 OF SECTION 14 — — -BK. 3675, PG. 63 O.R.=�—o N89-29'30"W � 763.76' 416.50' I SCALE: 1" = 80' PARCEL'Al 2.41 AC PARKING STRUCTURE t"_ t �-t N89`29'30"W 274.25' t III N � ` W O M I O M N89.29'30"W 135.12' L2 LINE TABLE LINE BEARING LENGTH L1 N89'29'30'W 3.00 L2 N70'32'16"E 4.39 co U-7 v M M W DATE: 05-13— 04 Engineers / Planners / Surveyors EXHIBIT "B" i92a—$E S=E 3W, IRiM1E. GA 92614 p� TEL(K914M— FAX(99)4860]]9 SKETCH TO ACCOMPANY LEGAL DESCRIPTION Z�SE WARM 89WNGS ROPD,5�11`;W. W"�EGi4 NJ &�;19 FOR PARKING STRUCTURE ❑ TEL (1921 dfi6{iG6G iAX 19�17 966si8Q5 BELLA TERRA MALL, HUNTINGTON BEACH. CA. EXHIBIT B STANDARDS OF MAINTENANCE, During the term of the Agreement and any extensions hereof; the Operator shall: 1. Clean and maintain all surfaces of the Public Parking Structure and keep such surfaces level and evenly covered with the type of surfacing material originally installed thereon, or such substitute thereof as shall be equal thereto in quality, appearance and durability; 2. Remove all papers, debris, filth and refuse from the Public Parking Structure and wash or thoroughly sweep paved areas; 3. Remove trash from trash receptacles and clean trash receptacles; 4. Clean, maintain, repair and replace entrance, exit and directional signs, traffic control signage, markers and lights into and with the Public Parking Structure; 5. Keep the parking areas, stairways, elevators and other portions of the Public Parking Structure well -lit from dusk each day until dawn at least during the applicable hours of operation of the Public Parking Structure, and clean, relamp and reballast all lighting fixtures; 6. Maintain, repair and replace striping and curbing; 7. Maintain and replace as necessary the landscaping surrounding the Public Parking Structure; 8. Maintain and repair the structure of the Public Parking Structure, as needed; 9. Repaint and refinish all painted and finished surfaces; 10. Clean, maintain and repair all stairs; stairwells and stairwell doors within the Public Parking Structure; 11. Clean, maintain, repair and operate all elevators; 12. Maintain, repair and replace, if needed, all mechanical, electrical and utility facilities and systems that are a part of or serve the Public Parking Structure, including, without limitation, sprinkler and fire control systems, parking revenue control equipment, parking access control equipment; security systems and equipment, mechanical venting systems, lighting and emergency lighting systems, roll up doors and traffic barriers; 13. Making all repairs, improvements or alterations required to comply with applicable laws; 14. Except to the extent maintained by a utility company, maintain the Utility Facilities located within the Public Parking Structure, other than those which are owned by B-1 R VPU W&AB,659574, i Developer or are exclusively sen/ing the Retail Parcel pursuant to the Developer Utilities Easement; 15. Obtain and maintain the public liability insurance and property/casualty insurance required in the Operating Agreement; and 16. Provide, or cause to be provided, reasonable security services within the Public Parking Structure_ B-2 RVPUE3\KAB':659_574 t RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Allen Matkins Leck Gamble & Mallory LLP 515 South Figueroa Street, 7th Floor' Los AnGetes, California 90071 Attn: Michael J. Kiely, Esq. (above Space for Recorder's Use Only) PARKING AND RECIPROCAL EASEMENT AGREEMENT AND OPTION TO PURCHASE This PARKING AND RECIPROCAL, EASEMENT AGREEMENT AND OPTION TO PURCHASE ("Agreement") is made and entered into as of the 1st day of March, 2004 (the "Effective Date"), by and between HUNTiNGTON CENTER ASSOCIATES, LLC, a Delaware Iimited liability company ("Developer"), and the CITY OF I-IUNTINGTON BEACH, CALIFORNIA, a California charter city- ("City"). RECITALS: A. Developer is the fee owner of that certain parcel of real property Iocated in the City of Huntington Beach, County of Orange ("County"), State of California ("State") formerly known as "Huntington Center" and recently renamed as "Bella Terra Mall", and more particularly described on Exhibit "A" attached hereto (together with all improvements now or hereafter located on such property, the "Retail Parcel"). Pursuant to that certain Owner Participation Agreement dated as of October 2. 2000, between Developer and the Redevelopment Agency of the City of I Iuntington Beach, a public body, corporate and politic (the "Agency"), Developer has agreed to redevelop Retail Parcel to include up to 800,000 square feet of retail and entertainment uses. B. Concurrently herewith, Developer has conveyed to City the fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "B" , attached hereto (the "Parking Parcel"). The Parking Parcel is currently improved with an asphalt surface parking lot and is contiguous on all sides to the Retail Parcel. C- Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January b, 2003, adopted a Resolution of Intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the 604317.1 3%LA If4i64-0013-29-0 1;m3krp financirtm (the "CFD Financing") of the design, construction and acquisition of certain public facilities, including a six -level parking structure on the Parking Structure Parcel containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available for parking use by the public. D. City desires to grant a temporary exclusive easement to Developer over the Parking Parcel for the purpose of constructing the Public Parking Structure. E. City and Developer desire to establish certain reciprocal and other casements including, but not limited to, vehicular and pedestrian ingress and egress, utilities, subjacent and lateral support, encroachment and other easements, including certain limited parking rights, together with various other conditions and covenants, which are intended to burden and benefit the Retail Parcel and the Parking Parcel, as the case may be. F. In addition to the terms defined in the foregoing Recitals, the following defined terms, when used in this Agreement, shall have the meaning set forth below: (i) "Funding Agreement" means that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of March 1, 2004, between City and Developer. (11) "Force Majeure" shall mean any event or occurrence outside the reasonable control of Developer and which Developer did not learn of in time to reasonably avoid a delay in completion of construction of the Public Parking Structure including, but not limited to: (1) a strike or labor stoppage; (2) delay resulting from inclement weather beyond that which would reasonably be anticipated for the seasons during which the work oil the Public Parking Structure is continuing; (3) riot; (4) insurrection; (5) war; (6) governmental order or decree-, (7) unforeseen site conditions, including, without limitation, the presence of Hazardous Substances in, on, around or under the Project site that could not have been discovered through the exercise of reasonable due diligence prior to commencement of construction of the Improvements on or within the Project. (Ili) "Hazardous Substances" means any chemical, substance, material, object, condition, waste or combination thereof (i) the presence of which requires investigation or remediation under any applicable statute, regulation, ordinance, order, action, policy or common law; (it) which is defined as a "hazardous waste", "hazardous substance", "hazardous material", pollutant, toxic or contaminant under any statute, regulation, rule or ordinance or amendments thereto of any governmental agencies having jurisdiction thereof-, (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any governmental agencies having jurisdiction thereof; or (iv) the presence of which on the Project causes or threatens to cause a nuisance or injury upon the Project, to adjacent properties or to the environment or poses or threatens to pose a hazard to the health or safety of persons on or about the Project. (zv) "Improvements" shall mean and refer to any building or structure located on the Parking Parcel or Retail Parcel, 6043%" 13,'LA 1i356i-002.3.29-641;n}Iv,rp -2- (v) "Mortgage" shall mean and refer to any mortgage, indenture of mortgage, deed of trust (whether fee or leasehold), sale and leaseback transaction or assignment and subleaseback transaction which covers all or any portion of the Retail Parcel, made by a reputable third party bank or other institutional investor. (vi) "Mortgagee" shall mean and refer to a mortgagee and/or a trustee and beneficiary under a Mortgage and, to the extent applicable, a fee owner if the Retail Parcel is the subject of a sale and leaseback transaction. (vii) "Operating Agreement" means that certain Operating Agreement dated as of March I, 2004, between the City and Developer, pursuant to which Developer has undertaken certain of the obligations of the City hereunder. (viii) "Parcel" or "Parcels", as the case may be, shall mean and refer to the. Retail Parcel and the Parking Parcel, or either of them, as applicable. (ix) "Party" or "Parties", as the case may be, shall mean and refer to City and Developer, or either of them; as applicable, and any party after the date hereof acquiring an interest in or to the Retail Parcel and/or the Parking Parcel. (x) "Permittees" shall mean and refer to each Party, the tenants of each Party, and their respective officers, directors, employees, agents, contractors, subcontractors, customers, visitors, invitees, licensees, utility suppliers and concessionaires entering such Party's Parcel or such tenant's premises within such Parcel. (xi) "Project" means, collectively, the Retail Parcel, the Parking Parcel and the Public Parking Structure. (xii) "Utility Facilities" shall mean all utility and service lines and systems serving the Project or portions thereof; including sewers, ejector pumps; water pipes and systems; intake and exhaust vents; gas pipes and systems; sprinkler pipes and systems; drainage lines and systems; electrical power conduits, lines and wires; energy transfer stations and substations; chillers; transformers; electrical panels; vaults; cable television lines; microwave communication systems; telephone conduits, lines and wires- security Iines and systems; any utilities required for teleconferencing facilities; and other service or utility lines necessary or convenient to operate the Project. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer hereby agree as follows: CONSTRUCTION EASEMENT. City hereby grants to Developer for the use by Developer and its Permittees a temporary ingress, egress and general access easement (the "Construction Easement"), appurtenant to and for the benefit of the Retail Parcel over, beneath and across the Parking Parcel for the purpose of (a) constructing and installing the Public Parking Structure; including, without limitation, all foundations, footings, columns, Boors, Utility Facilities, directional signs, hardware, painting, striping, lighting and other improvements comprising the Public Parking 004377 i3!1,A H4564-00213.29-041mjki p -3- Structure (all of which construction shall comply with the provisions of Section 6 below), and (b) vehicular and pedestrian ingress, egress and access by Developer and its Permittees for purposes of such construction, and (c) parking of vehicles in connection with the construction and project management of the construction of the Public Parking Structure, and (d) if applicable, performing the maintenance, repair and reconstruction obligations of the City as contemplated hereunder, if the City fails to do so. The Construction Easement (other than the easement in clause (d), which shall survive completion of the Public Parking Structure but shall be effective only during periods when the Developer or its Permittees are performing the applicable obligations of the City) shall terminate upon completion of the Public Parking Structure (as determined by the issuance by the City (acting in its governmental capacity) of a final certificate of occupancy for the Public Parking Structure and delivery to and acceptance by the City (in its proprietary capacity) of the Public Parking Structure. 2. EASEMENT FOR DEVELOPER PARKING. City hereby grants to Developer and its Permittees, including any valet parking services operators engaged by Developer in connection with the operation of the Retail Parcel, and such operators employees and contractors) an exclusive easement (the "Developer Private Parking Easement") over and across the Parking Parcel and all levels of the Public Parking Structure for the purpose of providing to Developer and its Permittees the exclusive right to use up to five percent (5%) of the total parking spaces striped in the Public Parking Structure (the "Private Retail Spaces") for so long as the Public Parking Structure exists. The Private Retail Spaces shall be located generally on the upper -most portions of the Public Parking Structure at specific locations to be reasonably agreed upon between City and Developer. Pursuant to the Developer Private Parkin-, Easement, Developer shall have the rights at its sole expense to (i) install signs designating the Private Retail Spaces, (ii) segregate the Private Retail Spaces by partition, ropes, barricades or other means provides such devices do not interfere with the orderly flow of traffic in the Private Parking Structure by the City and its Permittees, and (Ili) tow vehicles parked in such spaces that are not invitees of Developer or its Permittees. EASEMENT FOR CITY INGRESS AND EGRESS TO STRUCTURE. Developer hereby grants to City for the use of City and its Permittees a non- exclusive permanent easement (the "City Access Easement"), appurtenant to and for the benefit of the Parking Parcel, over and across all areas of the Retail Parcel designated from time to time by Developer and regularly used for vehicular ingress, egress and access of the vehicles of Developer and/or its Permittees, but specifically excluding any areas designated and exclusively reserved for loading or emergency access, for the purpose of providing vehicular and pedestrian ingress and egress to and from the Public Parking Structure to public streets adjacent to the Project. 4. UTILITIES AND OTHER EASEMENTS. (a) Developer Utility Easement. City hereby grants to Developer for the use of Developer and its Permittees a non-exclusive permanent easement, appurtenant to and for the 604377,13iLA H4564-002l3-29-04,mik p -4- benefit of the Retail Parcel, in, over, under and across the Parking Parcel (the "Developer Utility Easement"), and any portion thereof, for the purpose of (i) installation, construction, operation, maintenance, repair or replacement of the Developer's utility Facilities, and (ii) ingress, egress and access by vehicles and pedestrians to the Developer's Utility Facilities for the purposes stated above; provided, however, in no event shall any portion of the Developer's Utility Easement materially adversely affect or impair City's operation, use or enjoyment of the Parking Parcel. Except as otherwise provided herein, Developer shall be solely responsible for the cost of maintaining and servicing the Developer's Utility Facilities that serve Retail Parcel. As may be reasonably required, Developer shall have the right to relocate the Developer's Utility Facilities to a different location in the Parking Parcel; provided; however, (X) Developer shall be solely responsible for any all costs incurred in connection with or as a result of such relocation, (Y) there shall be no material interruption of power service or other utilities to the Parking Parcel as a result of or in connection with the relocation of any utility lines or equipment, and (Z) there shall be no material adverse effect on the City's operation, use and enjoyment of the Parking Parcel. Developer shall use its reasonable good faith efforts to consult with the appropriate utility company providing service to the Parking Parcel to reduce the amount of interruption of service to City as a result of the re -location of utility lines and equipment, including, but not Iimited to, performing such work at a time when the Public Parking Structure is least used by the public, City and its Permittees. (b) City Utility Easement. Developer hereby grants to City for the use of City and its Permittees, in common with all others entitled to use the same; a non-exclusive permanent easement; appurtenant to and for the benefit of the Public Parking Structure, in, over, under and across the Retail Parcel (the "City Utility Easement") for the purpose of ingress to, egress from, and the construction, installation, operation, maintenance, repair, removal, and replacement of future public utilities necessary to service the Public Parking Structure; provided, however, in no event shall any portion of the City Utilities Easement materially adversely affect or impair Developer's operation, use or enjoyment of the Retail Parcel- (c) Easement for Common Structural Support. Each Party hereby establishes for the benefit of the other Party, appurtenant to and for the benefit of such other Party's Parcel and burdening the burdened Party's Parcel, an easement on the first Party's Parcel (to the extent reasonably necessary for the benefited Party's enjoyment or preservation of its Improvements situated upon or adjacent to the burdened Party's Parcel) for the installation, construction, restoration, replacement, modification, repair and maintenance of any: (a) separate or common footings, girders, columns, braces, foundations, tieback systems and other standard support elements as may be necessary for the structural support of any Improvements of the benefited Party situated upon or adjacent to the burdened Party's Parcel, and (b) common wails shared by burdened Party and benefited Party as may be necessary for the structural support and enclosure of adjacent or subjacent Improvements of the benefited Party, provided that, at the request of either burdened Party, the benefited Party shall prepare and record an instrument specifying the exact locations of such footings, girders, columns, braces, foundations, common walls, tieback systems and other standard support elements, and provided further that the manner of attachment shall be designed in accordance with good construction and engineering practice in the manner customary for such improvements. 664377 t irLA H4 564.U013-29-04"nijk.•rp -J - (d) Easement for Lateral and SgbJ4ceat-$tpport. Each Party hereby grants and establishes for the use and benefit of the other Party, appurtenant to and for the benefit of such other Party's Parcel and burdening the burdened Party's Parcel, an easement for lateral and subjacent support of improvements (i) on the Parking Parcel, approved and constructed (or reconstructed) pursuant to Section 6 below, and (ii) on the Retail Parcel, that are approved and constructed pursuant to the requirements of and in accordance with plans and specifications approved pursuant to, the OPA. (e) Easement for Minor Encroachment- Each Party hereby grants and establishes for the use and benefit of the other Party, appurtenant to and for the benefit of such benefited Party's Parcel and burdening the burdened Party's Parcel, an easement for unintentional minor encroachments onto the burdened Party's property or air rights which unintentional minor encroachments exist or result from construction of any new, rebuilt, repaired or reconstructed building or improvement; provided, however, that no such encroachment shall interfere, even temporarily, with the operation or maintenance of the improvements on the burdened Party's Parcel. (t) SecjjEity. Each Party hereby grants to the other Party, for the use and benefit of such benefited Party and establishes for the benefit of and appurtenant to such benefited Party's Parcels and burdening the burdened Party's Parcels, at no charge, a non- exclusive easement over and upon the pedestrian ways and vehicular ways on the burdened Party's Parcel for security purposes to include pedestrian and vehicular access over the burdened Parcels by security personnel employed or engaged by the benefited Party. [INTENTIONALLY OMITTED1 6. CONSTRUCTION OF PUBLIC PARKING STRUCTURE. (a) Developer to Obtain Permits. Pursuant to the Funding Agreement, Developer shall cause the Public Parking Structure to be constructed and shall obtain all necessary permits, entitlements and other authorizations from the City (acting in its governmental capacity) and any other governmental entity- maintaining jurisdiction over the Parking Parcel permitting Developer to construct the Public Parking Structure. In constructing the Public Parking Structure, Developer shall comply with all applicable City ordinances, codes, rules, regulations and applicable conditions of approval to the entitlements for the Public Parking Structure and the Retail Parcel renovation as specified in the Funding Agreement. The review of any such plans and specifications shall not constitute the assumption of any responsibility by, or impose any liability upon, City as to the accuracy, efficacy, sufficiency or legality thereof. (b) Developer's Cost. Any and all construction or other improvement work undertaken by Developer for purposes of constructing the Public Parking Structure as described in the Funding Agreement shall be at the sole cost and expense of Developer (other than as provided in the OPA andior the Funding Agreement). (c) Insurance. In connection with the construction and improvement work contemplated herein; Developer shall maintain builder's all risk insurance with commercially reasonable limits of coverage and deductibles, and commercial general liability insurance and in 604397 13/LA H4564-003:3.29-04r4ujk•Yp -6- accordance with this Agreement and the Funding Agreement. Developer covenants to keep the Parking Parcel free and clear from and against any mechanic's and/or materialmen's liens or stop notice which may be recorded against the Parking Parcel relating to Developer's construction or improvement work referred to herein. Developer further agrees that it will undertake such reasonable actions as may by necessary to cause any such mechanic's or materialmen's liens or stop notice to be removed within sixty {60) days of receipt of notice that such lien or stop notice has been attached to the Parking Parcel, including, but not limited to, bonding around any such lien or stop notice in accordance with statute. 7. MAINTENANCE OF PUBLIC PARKING STRUCTURE. (a) Covenant to Maintain Public Parking Structure. City covenants and warrants it will, solely from the proceeds of the Parking Structure Maintenance Special Tax authorized to be levied in the District and from revenues, if any, from the operation of the Public Parking Structure, (1) promptly pay prior to delinquency all real and personal property taxes assessed against the Parking Parcel, and (2) operate, maintain or repair, or cause to be operated, maintained and repaired, the Public Parking Structure in good order, condition and repair. The Public Parking Structure shall remain open and accessible for parking and retrieval of vehicles (at least) from 8:00 a.m. (or such earlier time that is at least two (2) hours before the tenants and occupants of the Retail Parcel open for business) until 2:00 a.m. (or such later time that is at least one (1) hour after all tenants and occupants of the Retail Center have closed for business), seven days a week (including all holidays), and such additional hours as City may elect. Notwithstanding the generality of the foregoing, City shall, solely from the proceeds of the Parking Structure Maintenance Special Tax authorized to be levied in the District and from revenues, if any, from the operation of the Public Parking Structure, maintain, repair and operate, or cause to be maintained, repaired or operated the Public Parking Structure in accordance with the practices generally prevailing in the operation of structured parking adjacent to other retail facilities located in Southern California similar in character to those located on the Retail Parcel, and shall at all times perform the following services as frequently as reasonably required for the Public Parking Structure to satisfy such standard of operation and remain in good order. condition and repair (the "Operating Standard"): i. Clean and maintain all surfaces of the Public Parking Structure and keep such surfaces level and evenly covered with the type of surfacing material originally installed thereon, or such substitute thereof as shall be equal thereto in quality, appearance and durability; ii. Remove all papers, debris, filth and refuse from the Public Parking Structure and wash or thoroughly sweep paved areas: Remove trash from trash receptacles and clean trash receptacles; IV. Clean, maintain, repair and replace entrance, exit and directional signs, traffic control signage, markers and lights into and within the Public Parking Structure; 604377.13/LA H4364-00 2/3-29-04:'mJk. rp -7- v. Keep the parking areas; stairways, elevators and other portions of the Public Parking Facility well -lit from dusk each day until dawn at least during the applicable hours of operation set forth in 7(a) above, and clean, relamp and reballast all lighting fixtures; vi. Maintain, repair and replace striping and curbing-, vii. Maintain and replace as necessary the landscaping surrounding the Public Parking Structure; viii. Maintain and repair the structure of the Public Parking Structure, as needed (except as provided in Section 10(a); ix. Repaint and refinish all painted and finished surfaces; X. Clean, maintain and repair all stairs; stairwells and stairwell doors within the Public Parking Structure; xi. Clean, maintain, repair and operate all elevators; xii. Maintain, repair and replace, if needed, all mechanical, electrical and utility facilities and systems that are a part of or serve the Public Parking Structure, including, without limitation, sprinkler and fire control systems, parking revenue control equipment, parking access control equipment, security systems and equipment, mechanical venting systems, lighting and emergency lighting systems, rollup doors and traffic barriers; xiii. Make all repairs, improvements or alterations required to comply with applicable laws; xiv. Except to the extent maintained by a utility company, maintain the Utility Facilities located within the Public Parking Structure, other than those which are owned by Developer or are exclusively serving the Retail Parcel pursuant to the Developer's Utilities Easement; xv. Obtain and maintain the public liability insurance and property/casualty insurance required by this Agreement; and xvi. Provide, or cause to be provided, reasonable security services within the Public Parking Structure. 'Notwithstanding the foregoing; following completion of the Public Parking Structure Developer shall be solely responsible for capital repairs and improvements thereto and capital replacements therein, and shall maintain reasonably adequate capital reserves for such purposes. Such capital reserve may be included within a capital reserve fund covering the Project as whole. As used in the previous sentence, Developer shall be deemed to have maintained adequate capital reserves during any time it is in compliance with the capital reser e requirements set forth in any first in priority Mortgage (or in loan agreement or other documents incorporated by reference into such Mortgage) encumbering the Retail Parcel. 604377.13%LA H4364-002i3-29.04; m1Vrp -S- (b) Covenant to Maintain Insurance. City hereby covenants and agrees to all times maintain (i) commercial general liability insurance and (ii) "alI-risk" casualty insurance in connection with the ownership and operation of the Public Parking Structure. Except as may otherwise be prohibited by law, Developer shall be named as an additional insured on all such liability insurance policies and, solely for purposes of performing its obligations to reconstruct the Public Parking Structure under Section i0(a) below, on such casualty insurance policy. Such insurance shall (v) (with respect to liability insurance) include coverage for any accident resulting in personal injury to or death of any person and consequential damages arising therefrom in an amount not less than Five Million Dollars ($5,000,000) per occurrence, and excess limits under a commercial umbrella liability policy of not less than Twenty Five Million Dollars ($25,000,000) per occurrence; (w) (with respect to property/casualty insurance) include comprehensive property damage insurance'in an amount equal to the greater of (A) Twelve Million Dollars ($12,000,000), or (B) the full replacement value of the Public Parking Structure, (x) shall be issued by a financially reasonable insurance company or companies having a rating of not less than A-Vlll in Best's Key Rating Guide, (y) shall provide that the same may not be canceled without at least thirty (30) days prior written notice being given by the insurer to Developer, and (z) shall contain a waiver of subrogation provision for the benefit of Developer and the tenants of the Retail Parcel. City_ shall furnish to Developer evidence that such insurance is in full force and effect. (C Cite Indemnity. Subject to Section 34 hereof, City shall indemnify and hold Developer harmless from and against any claim(s), toss or other damage, including, but not limited to, reasonable attorneys' fees and costs, arising out of the operation, use, maintenance, repair or replacement of the Public Parking Structure by City or any party or person acting on behalf or under the authority or control of' City. Notwithstanding, the indemnity set forth above shall not extend to any claims, loss or other damage arising out ofor resulting from (i) the design or construction of the Public Parking Structure, (ii) land conditions that existed prior to the construction of the Public Parking Structure, or (ill) the operation, use, maintenance; repair or replacement of the Public Parking, Structure during any period in which Developer is acting as a Qualified Operator. (d) Developer Indemnity. Developer shall indemnify and hold the City harmless from and against any claim(s), loss or other damage, including, but not limited to. reasonable attorneys' fees and costs, arising out of the operation, use, maintenance, repair or replacement of the Retail Parcel by Developer or any party or person acting on behalf or under the authority or control of Developer. Notwithstanding, the indemnity set forth above shall not extend to any claims, loss or other damage arising out of or resulting from the negligence or willful misconduct of the City, or any party or person acting on behalf or under the authority or control of City, in or around the Project. (e) Right of Self -Help. In the event City shall fail in its duty to perform its obligations under this Agreement (including Section 7, 9 and 10), including without limitation its obligation, if any, to pay real property taxes assessed against the Parking Parcel, then Developer or any Permittee of the Retail Parcel may give City written notice of such fact, and thereupon City shall; within ten (10) working days of such notice, commence the performance of the actions required and diligently pursue such actions to completion in a timely manner. Should City fail to fulfill this duty after such notice, Developer or its designee shall have the right and 604371 13,rA H4564-00M-29-04: mjk,rp - 9- power, but not the obligation, to perform such actions and pay any necessary costs or expenses and City shall promptly reimburse (subject to Section 34 hereof) Developer or its designee for any costs or expenses paid by Developer or its designee or incurred in comie.ction with Developer's or its designee's performance of such actions. (f) Assumption of Operation by Parking Operator. City shall have the right to delegate all of the obligations under this Article 7 and Article 9 below to a "Qualified Operator" (as defined below). As used herein, the term "Qualified Operator" means a person or entity of good general reputation engaged in the business of management, maintenance and operation of multi -level parking structures of similar type and similar or larger size in Southern California, adhering to a standard of operation commensurate with the Operating Standard established hereunder, with reasonably sufficient financial resources to adequately indemnify, protect and defend Developer and City, taking into account the nature of the indemnities herein and the potential risks thereunder_ Developer or any Affiliate of Developer shall be deemed to be a Qualified Operator in all circumstances. As used herein, "Affiliate of Developer" mean any entity .which controls, is controlled by, or is under common control tivith Developer, J.H. Snyder Company, Jerry Snyder, Michael Wise or Bryan Ezralow. For the purposes of the preceding sentence, "control" means the legal power and right to control the operations and business affairs of the subject entity. Provided that such Qualified Operator expressly assumes the obligations of the City hereunder pursuant to a written management agreement; including,, without limitation, City's operation, indemnification and insurance obligations hereunder, and agrees that Developer shall be an express third party beneficiary of such assumption, Developer agrees to look solely to the Qualified Operator with respect to any breach of the City's obligations hereunder during the term of such management agreement. Without limiting the generality of the foregoing, if the Qualified Operator (i) maintains the insurance required to be maintained hereunder and causes Developer to be named as an additional insured thereunder, and (ii) does not seek to avoid indemnification of Developer with respect to any claim made against Developer that would otherwise be covered by City's indemnification of Developer hereunder, Developer shall not make any demand, claim or cross claim against City with respect to such claim. b. USE, Of PUBLIC PARKING STRUCTURE:. Except as provided in Section Z(a) above with respect to the Private Retail Spaces, the Public Parking Structure will be used only for daily public parking, and for no other use whatsoever. Notwithstanding the generality of the foregoing, long term and leased parking are specifically prohibited. City shall be permitted to charge parking fees in its sole discretion. Prior to setting initial fees or any increase thereafter; City shall consult with Developer and obtain a written parking rate study of other publicly accessible parking facilities in the vicinity of the Project illustrating the range of fees charged for parking in such facilities prepared by a reputable consultant possessing knowledge and experience commensurate with the needs of such study. if City elects to impose parking fees for use of the Public Parking Facility, City shall establish a procedure for paid validation service to facilitate payments of parking fees directly by Developer and/or other business owners on behalf of individual users of the Public Parking Structure. At any time the Public Parking Structure is not owned by City, the District or other public agency, then the right to charge parking fees shall terminate and no fees may be charged to park in the Public Parking Structure. 9. MAINTENANCE OF EASEMENT AREAS. Notwithstanding anything herein to the contrary, each Party shall maintain, or cause to be maintained, the easement area(s) within its 604. 77 13; LA HJi64-002; 3-29-04 m1klm -1 Q- Parcel, in good order, condition and repair, without expense to the other Party, subject in any event on the part of the City to Section A hereof. Without limiting the generality of the foregoing, each Party shall observe the following minimum standards in connection with the maintenance of the easement area(s) located on its respective Parcel: (a) Maintain the surface of any driveway areas and sidewalks level, smooth and evenly covered with the type of surfacing material originally installed thereon, or with such substitute therefor as shall be in all respects equal to in quality, appearance and durability. (b) Remove all papers, debris, filth and refuse from such easement areas and wash or thoroughly sweep paved areas as required. (c) Maintain such appropriate entrance, exit or directional signs, markers and lights within such easement areas as shall be reasonably required or necessary and in accordance with all applicable governmental rules and regulations. (d) Clean, repair and maintain all lighting fixtures necessary to provide adequate light for the easement area(s) and relamp and reballast such fixtures as needed. (e) Repaint striping, markers; directional signs; etcetera, as necessary, to maintain the same in a condition commensurate with the Operating Standard. (0 Maintain landscaping as necessary to keep the easement area(s) and the applicable Parcel in a condition commensurate with the Operating Standard. (g) Maintain all signs thereof in a clean and orderly condition, including relamping and repairs as may be required. In the event a Party shall fail in its duty to maintain all or any part of any easement area(s) located within such Party's Parcel, or a Party or its Permittees shall cause damage to any portion of an easement area, whether on such Party's Parcel or the other Party's Parcel, due to any intentional or unintentional misuse of such easement area(s) and such shall not be corrected by the Party who caused such damage (the "Non -Performing Party"), then the other Party (the "Performing Party") may give the Non -Performing Party written notice of such fact, and thereupon the Non -Performing Party shall, within ten (10) working days of such notice, commence the performance of the actions required and diligently pursue such actions to completion in a timely manner. Should the Non -Performing Party fail to fulfill this duty after such notice, the Performing Party shall have the right and power, but not the obligation, to perform such actions and the Non -Performing Party (subject, in the case of the City, to Section 34 hereof) shall promptly reimburse the Performing Party for the cost of such work. 10. CASUALTY AND CONDEMNATION. (a) Rarking Structure Repair. In the event of any casualty to the Public Parking Structure (including but not limited to acts of God, fire, earthquake, explosion or similar occurrences) which results in damage or destruction to the Public Parking Structure (or any portion thereof), Developer shall promptly restore, repair or rebuild such damaged portion to the condition that existed immediately prior to the occurrence of such casualty pursuant to the 604377.13 ! A 1t4564-0O2)i3.29-0s;mjiUrp i 1 Construction Easement and the provisions of Article 6, proceeds of property/casualty insurance for such damage shall be placed in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of reconstructing the Public Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that City is in compliance with its insurance maintenance obligations hereunder, and provided that the proceeds thereunder are available for the reconstruction of the Public Parking Structure, Developer shall be responsible for all uninsured costs of such reconstruction. To the extent that City was in default of its obligations to maintain insurance under this Agreement at the time of the destruction, then, subject to Section 34 hereof, City shall be responsible for paying all costs of restoration, rebuilding and repair that would have been covered by the insurance required to be maintained. All such restoration, repair and rebuilding shall be performed in a good and workmanlike manner and shall conform to and comply with, in all material respects, all applicable requirements, laws, codes, rules and regulation of governmental agencies having jurisdiction thereof. Upon completion of restoration, rebuilding and repair in accordance with the foregoing, excess insurance proceeds shall be used by the City for the sole purpose of paying and redeeming Bonds of the District. (b) Drivc�-vav Repair- In the event of any casualty to the easement areas located on the Retail Parcel (including but not limited to acts of God, fire, earthquake, explosion or similar occurrences) which results in damage or destruction to such easement areas (or any portion thereof, Developer shall promptly restore, repair or rebuild such damaged portion to the condition that existed immediately prior to the occurrence of such casualty, at its sole cost. All such restoration, repair and rebuilding shall be performed in a good and workmanlike manner and shall conform to and comply with, in all material respects, all applicable requirements, laws, codes, rules and regulations of governmental agencies having jurisdiction thereof. (c) Condemnation. In the event proceedings to take by eminent domain or condemn the Parking Parcel or any portion thereof (including, without limitation, the Public Parkin-, Structure) are commenced (collectively, a "Taking"), City shall gave immediate notice thereof to Developer. In the event of a Taking, the Parties rights shall be as set forth below: i. Complete Taking Prior to Commencement of Construction. If a Taking occurs with respect to the whole of the Parking Parcel or if City shall grant a deed or other instrument in lieu of such Taking prior to commencement of construction of the Public Parking Structure prior to the issuance of bonds of the City for the District and prior to the commencement of construction of the Public Parking Structure, then Developer shall be entitled to receive the entire award or payment in connection therewith (the "Proceeds"), except that City shall have the right to file any separate claim available to City for (a) the Taking of any personal property of City, (b) the Taking of the Land underlying the Parking Parcel, and (c) reimbursement to City for any and all costs incurred as of such date relating to the development of the Parking Parcel as contemplated hereunder, so long as such claim is payable separately to City and does not diminish or otherwise adversely affect the Proceeds payable to Developer hereunder. ii. Partial Taking Prior to Commencement of Construction. In the event of a partial Taking of the Parking Parcel prior to the issuance of bonds of the City for the District and prior to commencement of construction of the Public Parking Structure, then City 604377.13itA I14564.002; 3-?9-04i mjtJrp - t Z - shall deliver a quitclaim deed with respect to the Parking Parcel to Developer and assign to Developer the right to receive all Proceeds in connection with such Taking (provided, however, City shall have the right to file a separate claim for the matters which, in the case of the City, shall include all amounts expended by the City in connection with construction of the Public Parking Structure referred to in clause (1)(a) and (b) above), and upon delivery of such quitclaim deed from City for recordation in the Official Records, City shall be relieved of any further obligations under this Agreement. iii. Cornplete Taking Following Issuance of the Bonds. If a Taking occurs with respect to the whole of the Parking Parcel (including, without limitation, the Public Parking Structure) or if City shall grant a deed or other instrument in lieu of such Taking at any time after the issuance of bonds of the City for the District, then the Proceeds in connection therewith shall be paid to the City, except that either Developer or City shall have the right to file any separate claim available to such Party for any Taking of such Party's personal property and fixtures belonging to such Party (including, in the case of Developer, Taking of Developer's right to use the Private Retail Spaces), so long as such claim is payable separately to such Party. Provided that Developer undertakes to promptly construct a replacement public parking structure on another portion of the Retail Parcel or other real property in the vicinity of the Project ("Replacement Public Parking Structure"), the Citv's share of such condemnation proceeds shall be placed in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of constructing the Replacement Public Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that such condemnation proceeds are available for the construction of the Replacement Public Parking Structure, Developer shall be responsible for all uninsured costs of such construction_ Upon completion of construction of the Replacement Public Parking Structure in accordance with the foregoing, excess condemnation proceeds shall be used by the City for the sole purpose of paving and redeeming Bonds of the District. Any insurance proceeds remaining following completion of construction of the Replacement Public Parking Structure in accordance with the foregoing and payment and redemption in full of the Bonds of the District shall be the property of the City. iv. Partial Taking Following Issuance of the Bonds. If a Taking occurs with respect to a portion of the Parking Parcel (including, without limitation, the Public Parking Structure) that constitutes less than substantially all of the Public Parking Structure, or if City shall grant a deed or other instrument in lieu of such Taking following the issuance of the Bonds of the City for the District, then (A) Proceeds thereof shall be paid to City; (B) City's obligation to provide the number of Private Retail Spaces set forth in Section 2(b) shall be reduced to five percent (5%) of the remaining total number of spaces; and (C) either Developer or City shall have the right to file any separate claim available to such Party for any Taking of such Party's personal property and fixtures belonging to such Party (including, in the case of Developer, Taking of Developer's right to use the Private Retail Spaces), so long as such claim is payable separately to such Party. Provided that Developer undertakes to promptly construct a Replacement Public Parking Structure, CIty's share of condemnation proceeds shall be placed in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of constructing the Replacement Public Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that such condemnation proceeds are available for the construction of the Replacement 608377.13''LA HA 5at-00 ?; 39-04, mj k'rp - ( 3 Public Parking Structure, Developer shall be responsible for all costs of such construction in excess of the amount of such condemnation proceeds. Upon completion of construction of the Replacement Public Parking Structure in accordance with the foregoing, excess condemnation proceeds shall be used by the City for the sole purpose of paving and redeeming Bonds of the District. Any condemnation proceeds remaining following completion of construction of the Replacement Public Parking Structure in accordance with the foregoing and payment and redemption in full of the Bonds of the District shall be the property of the City. 11. DEVELOPER'S OPTION TO PURCHASE PUBLIC PARKING STRUCTURE SITE. (a) Grant of Option. In consideration of Developer's agreement to enter into this Agreement, City hereby grants to Developer the exclusive right and option (the "Option") to purchase the Parking Parcel for a purchase price equal to the fair market value of the Parking Parcel at the time the option is exercised (the "Exercise Price") upon the terms and conditions set forth more particularly set forth in this Section. (b) Conditions to Exercise of Option. Developer's right to exercise the Option shall only be effective after the earliest to occur of the following (the "Exercise Date"). (i) the date on which the CF'D Financing has been fully paid and retired, or (ii) the date on which the Public Parking Structure is no longer owned either by (A) City, or (B) other governmental entity. It shall be a further condition to exercise of the Option by Developer that Developer furnishes the City with an opinion of nationally recognized bond counsel, which opinion may contain reasonable and customary assumptions and exclusions, that the exercise of the Option and acquisition of the Parking Parcel by Developer pursuant to this Section I I would not by itself render the interest payable under the Bonds to be taxable for federal income tax purposes. (c) Determination of Fair Market Value of the Parking Parcel. City and Developer shall attempt in good faith to agree upon the Exercise Price. If Developer and City (or City's successor -in -interest) fail tq reach an agreement within ninety (90) days following the Exercise Date (the "Outside Agreement Date"), then each Party shall submit to the other a separate written determination of the fair market value of the Parking Parcel within ten (t 0) business days after the Outside Agreement Date, and such determinations shall be submitted to arbitration in accordance with the provisions below. The failure of City or Developer to submit a written determination of the fair market value of the Parking Parcel within such ten (10) business day period shall conclusively be deemed to be such Party's approval of the fair market value of the Parking Right submitted within such ten (10) business day period by the other Party. i. Developer and City shall each appoint one (1) arbitrator who shall by profession be an independent real estate broker who shall have no ongoing relationship with either Party and who shall have been active over the five (5) year period ending on the date of such appointment in the purchase and sale or financing of large retail projects in Orange County or Los Angeles County. The determination of the arbitrators shalt be limited solely to the issue of whether City's or Developer's submitted fair market value of the Parking Parcel is the closer to the actual fair market value of the Parking Parcel as determined by the arbitrators. Each arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. 604377. 13%1-A H4364-002;3-39-04,mjk,rp -14- ii. The two (2) arbitrators appointed shall, within fifteen (15) days of the date of the appointment of the last appointed arbitrator.. agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators. iii. The three (3) arbitrators shall, within thirty (30) days of the appointment of the third arbitrator, reach a decision as to which Party's submitted fair market value of the Parking Parcel is closer to the actual fair market value of the Parking Parcel. The three (3) arbitrators shall then select such closer determination as the fair market value of the Parking Parcel and notify City and Developer thereof. iv. The decision of the majority of the three (3) arbitrators shall be binding upon City and Developer. V. If either Party fails to appoint an arbitrator within the time period specified above, the arbitrator appointed by one of them shall reach a decision, notify the Parties thereof, and such arbitrator's decision shall be binding upon City and Developer. vi. If the two (2) arbitrators fail to agree upon and appoint a third arbitrator, within the time period provided above; then the Parties shall mutually select the third arbitrator. If Developer and City are unable to agree upon the third arbitrator within ten (10) days after the ten (10) day period described above, then either party may, upon at least five (5) days' prior written notice to the other party, petition the Orange County Superior Court pursuant to California Civil Code Section 1281.6, to appoint the third arbitrator. Following the appointment of the third arbitrator, the panel of arbitrators shall within thirty (30) days thereafter reach a decision as to which Party's submitted Fair market value of'the Parking Parcel shall be used as the Exercise Price and shall notify Developer and City thereof. vii. The cost of the arbitrators and the arbitration proceeding shall be paid by the party whose fair market value of the Parking Parcel was not selected by the arbitrators. (d) Closing?. The closing of a purchase and sale of the Parking Parcel held pursuant to this Section 1 I shall be held through escrow within ninety (90) days following the determination of the Exercise Price pursuant to Section I I (c) above. The Exercise Price for the Parking Parcel shall be paid by Developer by delivering, at the closing through escrow, cash in the amount of the Exercise Price. The Parking Parcel shall be conveyed free and clear of all liens, encumbrances and other title matters other than those on title to the Parking Parcel as of the date of acquisition thereof by the City or otherwise approved by Developer. The City shall deliver to Developer, through escrow upon the closing, such grants deeds, bills of sale, assignments and other instruments of transfer and such evidence of due authorization, execution, and delivery, and of the absence of any such liens, encumbrances and other title matters, as Developer shall reasonably request_ All costs associated with removing or curing unpermitted title exceptions, and any legal fees incurred by the City shalt be paid by the City. All escrow charges, title premiums, recording fees, and other closing costs shall be paid by Developer. 604377.13l1.A H3564-00213-29-04lmi1c,rp —15- 12. DEVELOPER AS OPERATOR. During any period in which Developer or any Affiliate of Developer is acting as operator of the Public Parking Structure, Developer waives any right or remedy with respect to the breach by City of any obligation of City hereunder that has been delegated to and assumed by Developer or such Affiliate of Developer. 13. DOMINANT AND SERVIENT TENEMENTS. Each easement and right granted pursuant to the provisions of this Agreement is expressly for the benefit of the Retail Parcel or the Parking Parcel, as the case may be, and the Parcel so benefited shall be the dominant tenement and the Parcel upon which easement is located shall be the servient tenement. Notwithstanding the preceding sentence, where only a portion of such Parcel is bound and burdened, or benefited by a particular easement, only that portion so bound and burdened, or benefited, as the case may be, shall be deemed to be the servient or dominant tenement, as the case may be. Any easement granted pursuant to the provisions of this Agreement may be abandoned or terminated only by an agreement in writing executed by the owners of the dominant and servient tenements. 14. COVI;NANI'S RUNNING WITH TI-IE LAND. Each easement granted or described herein; and every covenant of a Party contained herein, shall be deemed to be a covenant running with the land, or in the alternative, an equitable servitude, affecting and binding the servient tenement and successive owners thereof, and inuring to the benefit of the dominant tenement and the successive owners thereof. 15. NO FASEIVIENT BY IMPLICATION; PRF?VENTION OF PRESCRIPTIVE, FIGHTS. Neither the execution of this Agreement or any instrument which may be executed in connection herewith nor the granting of the easements described herein shall be deemed to grant any other easement to any third party or to establish any easement by implication. The Parties to this Agreement understand and agree that the only easements made and granted by the Parties are those easements which are expressly made and granted by this Agreement. Each Party hereby reserves the right to eject or cause the ejection from its Parcel any person not authorized, empowered or privileged to use that Parcel. Further, each Party reserves the right to restrict access to its Parcel for such reasonable period or periods of time as may be legally necessary to prevent the acquisition of prescriptive rights by any person; provided, however, that prior to such restriction of access the Party exercising that right shall give written notice to the other Party of its intention to do so and shall coordinate such restriction of access with the other Party so that no unreasonable interference with the operation of the other Party's Parcel shall occur. Nothing contained herein shall be deemed to be a gift or dedication of any portion of either Parcel to the general public or for the general public or for any public purpose whatsoever. lb. RECIPROCAL REPRESENTATIONS AND WARRANTIES. The followina constitute reciprocal representations and warranties of both City and Developer to the other Party. (a) Power. Each Party has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby. 60437? i3ILA H4564-002'329-04-mjk:'rp -16- (b) Requisite Action. All requisite action (corporate trust, partnership or otherwise) has been taken by each Party in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. Except as expressly described in this Agreement, no consent of any partner, shareholder, creditor, investor, judicial or administrative body, governmental authority or other party is required. (c) Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of each Party and the partners, officers or trustees of such Party, if any, have the legal power, right, and actual authority to bind such Party to the terms and conditions hereof and thereof. (d) Validity. This Agreement and all documents required hereby to be executed by each Party are and shall be valid, legally binding obligations of and enforceable against such Party in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. 17. LIMITATION ON PREPAYMENT OF SPECIAL TAX. Developer acknowledges that the prepayment of the Special Tax (as defined in the Fiscal Agent Agreement) prior to defeasance of the Bonds in full with respect to any sub -parcel within the Retail Parcel may result in the expiration of the City's subsequent right to levy the Parking Structure Maintenance Tax (as defined in the Operating Agreement) on such sub -parcel. Accordingly. Developer agrees that, at all times prior to defeasance of the Bonds, neither it nor its successor or assign with respect to any portion of the Project shalt prepay the Special Tax with respect to any portion of the Retail Parcel constituting less than the entire Retail Parcel, unless it provides the City with reasonable assurances that the Parking Structure Maintenance Tax collectible from the remainder of the Retail Parcel and the Parking Fund (as defined in the Operating Agreement), will be sufficient to cover the reasonably estimated costs of operating and maintaining the Public Parking Structure. 18. ATTORNEYS' FEES. In the event at any time during the term of this Agreement anv action or suit is brought by a Party against another Party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other Party arising out of this Agreement, then in that event the prevailing Party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, including actual attorneys' fees, accounting and engineering fees, and any other professional fees resulting therefrom. 19. NOTICE TO PARTIES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered (including by means of professional messenger or overnight courier service) or sent by fax showing confirmed receipt, and shall be deemed received upon the date of receipt thereof. 691 i77.13.,LA H4564-001'3.29-04. a„ ik m -17- To Developer: Huntington Center Associates, LLC c/o J.H. Snyder Company 5757 Wilshire Boulevard, Penthouse 30 Los Angeles, California 90036 Attn-. Mr. Michael Wise Telephone: (323) 857-5546 Facsimile: (323) 857-7042 With a copy to: Huntington Center Associates, LLC c/o The Ezralow Company 23622 Calabasas Rd., Suite 100 Calabasas, CA 91302-1549 Attn: Mr. Bryan Ezralow Telephone: (818) 223-3500 Facsimile: ((818) 223-3536 and Allen Matkins Deck Gamble & Mallory UY 515 S. 17igueroa, Suite 700 Los Angeles, California 90071 Attn: Michael J. Kiely, Esq. Telephone: (21.3) 622-5555 Facsimile: (213) 620-8816 To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Director of Economic Development Telephone: (714) 536-5509 Facsimile: (714) 375-5087 With copies to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Scott F. Field, Esq. Assistant City Attorney Telephone: (714) 536-5555 Facsimile: (714) 374-1590 Notice of change of address shall be given by written notice in the manner detailed in this Section 19. 20, AMENDMENT. The provisions of this Agreement may be modified or amended, in whole or in part, only with the consent of bath Parties, by declaration in writing, executed and acknowledged by all of the same, duly recorded in the Official Records of Orange County, California (the "Official Records"). 604377 13iLA H4 G4-002_'3-29-04;mjk,rp t 8 21. NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the exclusive benefit of the Parties; any Mortgagees and Permittees,(as expressly provided herein) of the Retail Parcel, and as to Section 34 for the intended benefit of the Agency, and of their successors and assigns, and not for the benefit of any other party(ies), nor shall this Agreement be deemed to have conferred any rights, express or implied; upon any other party(ies). It is expressly understood and agreed that no modification or amendment, in whole or in part, of this Agreement shall require any consent or approval of any third party(ies). 22. TERMINATION. Except as otherwise specifically provided in this Agreement, the easements granted hereunder shall last in perpetuity, unless sooner terminated by written agreement between the Parties which is recorded in the Official Records or until such earlier date as the Developer exercises the option granted in Section 1 I . 23. ESTOPPEL CERTIFICATE. Each Party hereby severally covenants that upon written request of the other Party, it will within twenty (20) days of such request, issue to such other Party, or to any Mortgagee or any other party specified by such requesting Party, an estoppel certificate stating: (i) whether the Party to whom the request has been directed knows of any default under the Agreement, and if there are any known defaults; specifying the nature thereof, (ii) whether to its knowledge the Agreement has been assigned, modified or amended in any way (or if it has, then stating the nature thereof), and (fit) that to the Party's knowledge the Agreement as of that date is in full force and effect. Such statement shall act as a waiver of any claim by the Party furnishing it to the extent such claim is based upon facts contrary to those asserted in the statement and to the extent the claim is asserted against a bona tide encumbrancer or purchaser for value without knowledge of facts to the contrary of those contained in the statement, and who has acted in reasonable reliance upon the statement. However, such statement shall in no event subject the Party furnishing it to any liability whatsoever, notwithstanding the negligence or other inadvertent failure of such Party to disclose correct and/or relevant information. 24. NO PARTNERSHIP. Nothing contained in this Agreement, nor any acts of the Parties, shall be deemed or construed to create any relationship of principal and agent, or of partnership; or of joint venture, or of any association between the Parties. 25. PARTIAL INVALIDITY. If any term; provision or condition contained in this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law provided, however, if the intent and purpose of the parties hereto is rendered unachievable due to such invalid term or provision, then either party shall have the right to terminate this Agreement. 26, SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto. Notwithstanding anything contained herein to the contrary, either Party may delegate all or any portion of its respective rights and obligations under this Agreement to any third party, so long as such assignee expressly assumes in writing the obligations of such delegating Party hereunder and 604,-,' 33;LA 114 i64-002'3-29-041m3k'rp -1 9- such delevating Party remains principally liable for such assignee's performance under this Agreement, except in the event that a Party sells its entire interest in its Parcel, in which case it shall be relieved of any and all obligations under this Agreement from and after the time of closing of any such sale provided such purchaser enters into an assumption agreement pursuant to which such purchaser shall assume each of the assigning party's obligations hereunder. 27. MUTUAL COOPERATION. The parties recognize that, subject to the terms of this Agreement, Developer retains the right to redevelop or further develop the Retail Parcel and nothing in this Agreement is intended to limit or restrict such right so long as Developer is in compliance with its obligations under this Agreement. The Parties agree that in the event Developer elects to redevelop or further develop the Retail Parcel, then the Parties shall cooperate with one another in all reasonable respects so as to allow for such development to occur with minimal impact to the rights of the non -developing Party under this Agreement; provided, however, in no event shalt the non -developing Party be required to incur any material cost or expense in connection with such cooperation. In the event (1) such development cooperation causes City to incur additional costs and expenses with respect to the Public Parking Structure and/or (ii) such development prevents City from fully realizing its rights under this Agreement, then Developer shall reimburse City for any costs or expenses incurred by City as a result of such development. Moreover, City agrees to reasonably cooperate with Developer's construction and permanent lenders, including making such immaterial changes to this Agreement which may be requested by Developer's construction and permanent lenders, so long as such changes do not (i) increase City's obligations hereunder, or (ii) adversely effect or reduce City's rights hereunder_ With respect to those matters relating to the development of the Public Parking Structure for which City's consent or approval is required, except where City is entitled to withhold such consent or approval in its sole and absolute discretion, City agrees that it shall exercise such consent or approval on a reasonable basis and with the understanding that the Parties desire that the Project be a commercially viable project and that any bonds issued for the District remain tax-exempt. 28. TIME OF ESSENCE;. The Parties hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a material breach of and a non -curable (but waivable) default under this Agreement by the party so failing to perform. 29. CONSTRUCTION. Headings at the beginning of each paragraph are solely for the convenience of the Parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs and subparagraphs are to this Agreement- All exhibits referred to in this Agreement are attached and incorporated by this reference. In the event the date on which either Party is required to take any action under the terms of this Agreement is riot a business day, the action shall be taken on the next succeeding business day. 30. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same 6043' 7. 131, A H4564-002+3.39-03imjk4p -20- instrument. Signature pages may be detached from the counterparts and attached to a single copy of this document to physically form one document. 31. GOVERNING LAW. The Parties acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. 32. NO EFFECT ON MORTGAGE. The Parties acknowledge and agree that any default or breach by Developer of its obligations hereunder shall in no way defeat, affect, render void or reduce in any way the rights of any Mortgagee of the Retail Parcel. 33. DISPUTE RESOLUTION. (a) Any action or proceeding, whether in law or equity, to interpret or enforce the provisions of this Agreement or to declare the rights and obligations of the parties hereto shall be determined and conducted by the filing of a complaint in Orange County Superior Court and immediate referral thereof to a reference with respect to all issues, whether fact or law, as provided in California Code of Civil Procedure ("CCP") Section 638(A). A referee shall be selected in the manner set forth below. As provided for in CCP Section 645, any party may take exception to and/or appeal frorn the decision of the referee in the same manner provided for decisions of court hearing a matter and rendering ajudgment without ajury. Notwithstanding anything to the contrary herein, each party- shall have the right to seek temporary restraining orders, preliminary injunctions and similar provisional and equitable relief in a court of competent jurisdiction in the event of a material breach of the terms of this Agreement. (b) The referee for any such reference shall be selected in the following manner: the party initiating the proceeding ("Initiating Party") shall nominate a proposed referee from the Orange County Superior Court list of retired judges, who shall be independent parties and shall so notify, the other party of such choice. If the other party ("Responding Party") disagrees with the selection made by the Initiating Party, the parties shall endeavor to agree upon another referee within ten (10) days ("Negotiation Period") following written notice to the Responding Party from the Initiating Party of the Initiating Party's selection, In the absence of an agreement between the parties within the Negotiation Period, the referee shall be selected by the court in accordance with CCP Section 640. (c) The referee's decision shall be made by application of statutory and common law of the State of California, including without limitation the rules of evidence, to the facts as found by the referee. The proceeding shall be transcribed by court reporter unless the parties agree otherwise. The reference proceedings shall be held in Orange County. California unless mutually agree otherwise. The cost of any fees or expenses incurred by the prevailing party, including without limitation attorneys' fees, shall be included in the award to such prevailinb party. (d) The parties shall have all rights of discovery in connection with the reference proceedings as would be allowed and/or permitted in a case being heard under the unlimited jurisdiction of the Orange County Superior Court. 6033?7.1311,.A H4564-00213-29-04,m1k•'rp -2 t - 34- LIABit.-ITY OF CITY. Notivathstanding anything herein to the contrary, City shall not have any liability or obligation of any kind under this Agreement in connection with (1) the design or construction of the Public Parking Structure, (ii) land conditions that existed prior to the construction of the Public Parking Structure, (iii) the operation, use, maintenance, repair or replacement of the Public Parking Structure during any period in which Developer is acting as a Qualified Operator, (iv) any failure by Developer to complete the Public Parking Structure or otherwise make the Public Parking Structure available on or before any schedulcd date, or (v) any failure of the Public Parking Structure, as initially constructed by Developer, to comply with any legal requirements relating to such construction. Notwithstanding anything herein to the contrary, any and all monetary obligations of the City under this Agreement, including, but not limited to, obligations pursuant to Sections I l(c) (vii) and 18 shall be payable solely from any revenues derived by the City from the Public Parking Structure or from the proceeds of the Parking Structure Maintenance Special Tax (after deduction for the costs of collection and other administrative expenses) levied by the City on the District. In no event shall the City's general fund be liable hereunder. Developer hereby waives and releases City from any and all such liability or obligation. Developer shall indemnify and hold City, the Agency, and their respective councilmembers, board members, commissioners, officers and employees harmless from and against any claim(s), loss or other damage, including; but not limited to, reasonable attorneys' fees and costs, arising out of or resulting from the matters described in clauses (1) through (v) above. [Signatures on following page] 60437; 13'4-A H456a-002.3-_9-04 ayldrp -22- IN WITNF,SS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. "Developer" ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator HUNTINGTON CENTER ASSOCIATES, L.L,C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Hunticigton, LLC, a Delaware limited liability company; � Manage !i ryan Ezral w, Trustee of the Bryan Ezralow 1994 Trust, its Manager CITY OF HUNTINGTON BEACH By: Mayor APPROVED AS TO FORM: City Attorney Bond Counsel 604377 131LA F P i 64-002'3-29-0:/mj!lrp -23 - IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. "Developer" HUNTINGTON CENTER ASSOCIA"IES, I..L.C., a Delaware limited liability company By: Huntington Management Ent_, LLC, a Delaware limited liability company, its Manager By: BMLF[Huntington, LLC, a Delaware limited liability company, its Manager By: Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, its Manager "Chy,, CITY OF HUNTINGTON BEACH Mawr — q� City Clerk REVIEWED AND APPROVED: Cit� inistrator APPROVED AS TO FORM: City Attorney all Bond Counsel �1 ti0dS%'• I3:LA � E{755-i-00?il..>.y-Jla�yl'�tp -23- STATE Or�1i�_) ss. COUNTY Or �s_) On 4v, L. d QL_ _; before me �v?v1 �� �� , a Notary Public in and fbr said state, personally appeared „� E� ��t� , personally known to me (e"roveEl to rye evito be the person whose name is subscribed to the within instrument and acknowledged to me that heft executed the same in his/her authorized capacity, and that by his5;v--r 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. tart' Public in ai d for said State JUAN CARLOS HERNANDEZ : Commission 4 1380176 z Z Notary Public C;011fOrn ; w� Los Angeles County my Comm. Fxpires Oct 15, 2006 601377.13l1-A H4364-002_33 _9-04 fmjkirp -24- STATE OF l r t Gin tit✓ ) ss. COUNTY OF On OjO0, before me, a >6 A) , a Notary Public in and four said state, personally appeared 1 , personalty known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that+ie/she executed the same in --4i-s/her authorized capacity, and that by�is/her 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. 2 a ` Not . y Public in and f r said State 60437 1 1A H4564-00 '/3-29-04%m3k,rp EXHIBIT "A" LEGAL DESCRIPTION OF RETAIL PARCEL PROPERTY Parcels 2 through 9 as shown on Parcel Map No. 86-200 filed in Book 255, pages 40-45, of Parcel Maps in the Official Records of the County Recorder of Orange County, California EXCEPT those portions of Parcel A (being portions of said parcel 4 and 8) conveyed to the City of Huntington Beach, a municipal corporation by deed recorded May 1, 1991 as Instrument No. 91-209426 of Official Records, AND FURTHER EXCEPTING THE PARCEL DESCRIBED ON PAGES 2 - 4 OF THIS EXHIBIT "A". EXHIBIT "A" TO 60437 7. I NLA PREA HSi64-002i t 2-23-031mjkiry EXHIBIT "B" DESCRIPTION OF PARKING PARCEL PROPERTY 604377 I NLA H4564.002J3-29-04/mjk/rp EXHIBIT "B" LD 1018 02-100 LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE SHEET 1 OF 2 THE. LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCEL 2 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89'29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED IN BOOK 3675, PAGE 63 AND GRANT DEED RECORDED IN BOOK 3159, PAGE 483 BOTH OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89029'30" WEST A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00030'30" WEST A DISTANCE OF 334.58 FEET; THENCE NORTH 89029'30" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70032'16" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89'29'30" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89°29'30" WEST A DISTANCE OF 274.25 FEET; THENCE NORTH 00°30'30" EAST A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89029'30" EAST A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. CHRISTOPHER W. DANIELS LD 1018 02-100 _ r CENTER DRIVE N89'29'30"W _ SOUTHERN CALIFORNIA EDISON RIGHT OF WAY BK. 3159, PG 483 O.R. S'LY LINE OF THE N'LY 150' OF THE SOUTH 1/2 OF THE SOUTHEAST 1/4 OF SECTION 14 -F BK. 3675, PG. 63 O.R. :/'� b _ N89'29'30"W ¢ 763-76' 416.50' _ o N CD D C C z SCALE: 1" = 80' PARCEL 'A" 2.41 AC PARKING STRUCTURE 39'29'30"W 274.25' r� 0 _ LINE TABLE LINE BEARING LENGTH L1 N89'29'30'W 3.00 L2 N70'32'16"E 4.39 — SHEET 2 OF 2 534.08' I o BK. 4519, PG 491 O.R. } •�C 67.51' P.O. B. O M o «� C - CD i L1 } N89'29'30"W t 35.12' DATE: 05-13- 04 Engineers I Planners / Surveyors EXHIBIT "B" :9ti M.w+Siq£ET, S(RtE ESa, iftv:NE. Cn 9I8f� ® TEL19°9148&V11I FM(991+860a19 SKETCH TO ACCOMPANY LEGAL DESCRIPTION 1e5 E. WARN smNG5 RON' 'VTE 10Q. US VECAS, W E9119 0 rELouz,ese6Wa FM(M7)ME-Ge 5 FOR PARKING STRUCTURE BELLA TERRA MALL. HUNTINGTON BEACH, CA. EXHIBIT C PUBLIC FACILITIES A. Developer Managed Public Facilities l . Edinger Avenue Improvements 2. Center- Avenue Improvements 3. Design/Build Parking Structure 4. On -Site Public Utilities - Wet 5. Fire Sprinklers for Garage 6. Technical Services, Fees & Permits Parking Garage Land Value Police Substation Improvements Relocation of existing utilities for Garage foundations Total Costs Cost .Estimate 3,400,000 600,000 11,771,250 1,200,000 400,000 880,000 1,600,000 165,000 450,000 $20,466,250 RVPUB%KAB,645932 C- 1 EXHIBIT D PUBLIC CONTRACT REQUIREMENTS (1) CONTRACTOR'S LICENSE /INVITATION TO BID Developer shall specify the type of contractor's license required in both the plans and the invitation for bids. Cal. Pub. Cont. Code § 3300. The contractor must include its license number in the bid documents. Cal. Bus. & Prof. Code § 7030.5. Developer, as City's agent, may exercise its discretion in determining which license class is permitted for a particular project, subject to consultation with the Contractor's License Board, to determine the validity of the license and what license category is required. Developer hetebywarrants that all contractors hired as of the effective date of this agreement were properly licensed at the time it submitted its bid, prior to awarding a contract or prior to issuing a purchase order. Cal. Bus. & Prof. Code § 7028.15(e). (2) MAJOR SUBCONTRACTORS Developer hereby warrants that the bid specifications or general conditions issued prior to entering into the Constriction Contracts required the bidder to list in its bid all its subcontractors who will perform work in excess of one-half percent of the total bid or, in the case of streets orhighways, one-half percent or $ 10,000, whichever is greater. Cal. Pub. Coat. Code § 4104. (3) DEBARRED CONTRACTORS AND SUBCONTRACTORS Developer hereby warrants that the Construction Contracts contained a provision prohibiting work by contractors or subcontractors who are ineligible pursuant to Labor Code sections 1777.1 and 1777.7. Cal. Pub. Cant. Code § 6109. [The California Department of Industrial Relations publishes a list of debarred contracts on the Internet at: www.dir.ca.gov/dlse/debar.html <http:i/www.dir.ca.gov/dlse/debar.html>.} (4) UNFAIR BUSINESS PRACTICE CLAIMS Developer herebywarrants that the Construction Contracts contained a provision assigning unfair business practices claims (Clayton Act and Cartwright Act) from the contractor to the City. Cal. Pub. Cont. Code § 7103.5. (5) 'TRENCHING REQUIREMENTS Developer herebywarrants that the Construction Contracts contained a provision that where trenching is more than four feet deep, the contractor shall notify Developer of hazardous materials, subsurface or latent physical site conditions different from those indicated and unusual site conditions, set forth the duties of Developer as to investigation thereof and specify how disputes must be addressed. Cal. Pub. Cont_ Code § 7104. (6) NON -COLLUSION AFFIDAVIT Developer hereby warrants that the Construction Contracts contain a "noncollusion affidavit" signed by the bidder in the statutory form. Cal. Pub. Cont. Code § 7106. RVP[13'•,I AK,64597Z D-1 (7) RETENTION Developer shall retain at least ten percent of the contract price. Cal. Pub. Cont. Code §9203. After one-half of the work is completed and Developer determines satisfactory progress is being made to complete the job, Developer may make the remaining payments in full. The retention shall be released (with the exception of one hundred fifty percent of any disputed amount) within 60 days after the "date of completion" of the work. Cal. Pub. Cont. Code § 7107. Developer shall make progress payments within 30 days after receipt of an undisputed and properly submitted request. Cal. Pub. Cont. Code § 20104.50. (8) SECURITIES IN LIEU OF RETENTION Developer hereby warrants that the Construction Contracts contain a statement that the contractor may substitute securities in place of retained funds withheld by the City. Cal. Pub. Cont, Code § 22300. Alternatively, an escrow agreement, in the form prescribed by the code, may be used by the contractor. (9) RESOLUTION OF CLAIMS Developer hereby warrants that the Construction Contracts contain certain mediation and arbitration provisions to claims of $375,000 or less. Cal. Pub. Cont. Code §§ 20104, 20104.2, 20104A. (10) PREVAILING WAGE LAW The following provisions of the prevailing wage law are discussed in greater detail below in section IV.B.8. of this handbook. (a) Developer hereby warrants that the Construction Contracts contain a provision specifying the general rate of per diem wages ("prevai ling wage") for each craft, classification or type of worker needed to execute the contract or contain a statement that copies of the prevailing rate of per diem wages are on file at Developer's principal office. Cal. Lab. Code § 1773.2. Developer must also cause a copy of the wage rates to be posted at each Job site. The Construction Contracts also require payment of travel and subsistence payments as required by statute. Cal. Lab. Code § 1773.8. (b) Developer hereby warrants that the Construction Contracts state the statutory provisions for penalties for failure to pay prevailing wages and the state's wage and hour laws will be enforced. Cal. Lab. Code § § 1775, 1813. (c) Developer hereby warrants that the ConstructionContracts contain aprovision requiring compliance with the statutory requirements relating to certified copies of payroll records including the maintenance of the records, their certification and their availability for inspection (Cal. Lab. Code § 1776), the employment of apprentices. (Cal. Lab. Code § 1777.5), and that eight hours labor constitutes a legal day's work. (Cal_ Lab. Code § 1810.) (11) WORKER'S COMPENSATION KVPUB;i_AR1645932 D-2 Developer hereby warrants that the Construction Contracts state the contractor must secure the payment of worker's compensation to its employees as provided in Labor Code section 3700. Cal. Lab. Code § 1860. (12) BRAND OR TRADE NAMES Developer hereby warrants that the Construction Contracts do not specify brand or trade names except: (1) when at least two are listed (including Cali forniamanufacturers, ifknown) and "or equal" substitutions are permitted, or (2) when necessary to match existing items in use on a specific public improvement, or (3) when a unique or novel product application is required, or (4) when only one brand or trade name is known. Cal. Pub, Cont. Code § 3400. (13) RELEASE OF CLAIMS Developer hereby warrants that the Construction Contracts do not provide that acceptance of a payment is a waiver of all claims, or which require submission of a release of all claims as a precondition to payment. Cal. Pub. Cont. Code § 7100. However, Developer may require a release of claims for undisputed payments. Cal. Civ. Code § 3262. (14) LIQUIDATED DAMAGES Developer hereby warrants that the Construction Contracts do not limit a contractor's damages for delays caused by Developer to a time extension only. Cal. Pub. Cont_ Code §7102. (15) RESOLUTION OF CONTRACT DISPUTES Developer hereby warrants that the Construction Contracts do not require construction contract disputes to be decided by its agent or employee. Cal. Civ. Code § 1670. (16) LIMITS ON INDEMNIFICATION Developer hereby warrants that the Construction Contracts do not impose on the contractor indemnification against the contractor's sole negligence or willful misconduct, or relieve Developer from liability for its active negligence. Cal. Civ. Code § 2782(b). (17) ASSUMPTION OF RESPONSIBILITY FOR PLANS AND SPECIFICATIONS Developer hereby warrants that the Construction Contracts do not require a contractor to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications, except on clearly designated design -build projects, and further, that the contractor reviewed the plans and specifications and report any errors or omissions. Cal. Pub. Cont. Code § 1104. RVPL;FT,K,A 3%645932 D-3 This Document was electronically recorded by Chicago Title Commercial RECORDING REQUESTED BY Recorded In Official Records, Orange County CHICAGO TffLE COMPANY Tom Daly, Clerk -Recorder REQUEST DOCUMENT TO BE RECORDED AND TO E EXEMPT 111lI1 111111I111.111MI NO FEE FROM RECORDING .FEES 2005000414924 01:56prn 06/31/05 PER GOVERNMENT CODE §§ 6103 AND 2�t G0210 a 0.00 0.00 0.00 0.00 0.00 0.00 0.00 City of Huntington Beach 2000 Main Street Post Office Box 190 Huntington Beach, CA 92648 Attention: Director of Economic Development Space above this line for Recorder's use Documentary Transfer Tax is $ 0.00. This conveyance is exempt since Grantee is an exempt agency under R&T 11922 GRANT DEED (CFD No. 2003-1 - HUNTINGTON CENTER PARKING PARCEL) THIS GRANT DEED (CFD No. 2003-1 - Huntington Center Parking Parcel) (this "Deed"), is made this 2.1 day of NmR. d 2004 by HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer") in favor of CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City"), with reference to the following facts: A. Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January 6, 2003, adopted a Resolution of Intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the financing (the "CFD Financing") of the design, construction and acquisition of certain public facilities, including a six -level parking structure on the Parking Structure Parcel consisting of 2.41 acres and containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available for parking use by the public; (b) Pursuant to that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of 650610.01/LA H45 64.00L 12. I0.04/ntjWd e March 1, 2004, between City and Developer, Developer agreed to convey and the City agreed, subject to the terms and condition therein contained, to accept fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "A", attached hereto (the "Property"), on which the Public Parking Structure is to be constructed; (c) Concurrently herewith, Developer and the City have executed, acknowledged and caused to be recorded in the Official Records of Orange County, California (the "Official Records") that certain Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 (the "PREA"), covering the Property and the "Retail Parcel" (as defined therein), which is contiguous to the Property on all sides; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Grant of Proerty. Developer hereby GRANTS and conveys to the City a fee simple estate in and to the Property. 2. Grants Subject to All Matters of Record. The grant contained in this Deed is subject to all matters of record, including without limitation the PRBA, and all easements, covenants, conditions and restrictions described in any of the foregoing as benefiting and/or burdening the Property or any portion thereof and to all other matters visible by an inspection or survey of land. 3. The conveyance of the Property is subject to the following covenants, conditions and restrictions which shall be binding upon City and its heirs, personal representatives, successors and assigns and all persons claiming under or through City: 3.1 There shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex• or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the granteelassignee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. 3.2 All deeds, assignments and subagreements or contracts made or entered into by any owner, its successors or assigns, as to any portion of the Property, shall contain therein the following language: (a) In Deeds and Assiennients. "Grantee/Assignee herein covenants by and for itself, its heirs, personal representatives, successors and assigns and all persons claiming under or through grantee/assignee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of 650610A ULA H4564-002112-]0.0VmjVdg -2- persons on account of race, color, religion; creed, national origin, ancestry, physical handicap or disability (including HiV and AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vend ees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases. "The Lessee herein covenants by and for the Lessee and Lessee's heirs, personal representatives, successors and assigns and all persons claiming under or through Lessee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the land or improvements herein leased or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the Lessee or any person claiming under or through the Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." 4. Notwithstanding anything to the contrary contained herein, so long as City and any successor or assignee of City is a governmental agency and has adopted its own nondiscrimination policy then City's (or its successors' or assigns') compliance with such nondiscrimination policy shall be deemed to comply with the foregoing covenants contained in Section 3 above. [SIGNATURES APPEAR ON FOLLOWING PAGE] 650610.01IL4 H4564.002/12•10•D4/mjk1dg -3- IN WITNESS WHEREOF, Developer has executed this Deed as of the day and year first written above. "Developer" HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware limited liability comA ager Y: lo , Trustee of the Bryan Ezralow 1994 Trust, its Manager 6506 [ 0.01/LA H4564-W2/6-S0-041mjkJrp .4- CERTIFICATE OF ACCEPTANCE GOVERNMENT CODE SECTION 27281 This is to certify acceptance of the Property conveyed by the foregoing Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) ("Deed") from HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer") to the CITY OF HUNI'INGTON BEACH, CALIFORNIA, a California charter city ("City") and consent by City to recordation of this Deed by its duly authorized officer, pursuant to the Funding Agreement, a duty authorized obligation of the City. Dated thisZ2 day of &at�koW004, at Huntington Beach, California. °City' CITY OF HIJNT GTON BEACH By: ATTEST: /� �..�✓ Cit `ierk REVIEWED AND APPROVED: /ittyd inistrator APPROVED AS TO FORM: A -City Attorney 6306 OULA M 4 5 64 -00W 2.10-041mj Wdg 5- State of California ) County of ) On AtAtM ?I, � _ before personally appeared personally known to me (et pto to be the persons whose name f� is/ape subscribed to the within insirument and acknowledged to me that hehd7A t * executed the same in his/i VIhait authorized capacity(io&), and that by his/k Wtharr signature(4on the instrument the personA or the entity upon behalf of which the person* acted, executed the instrument. WITNESS my hand and official seal. 1t1AN CQLOS HERNANDI Z Commisslon # 1380176 4s� Notary Public - Colifomia Los Angeles CoUnty ivy Conan, Fames Oct l fi 200b State of Califomia County of On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) islare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public 650510.01" H4564.002f6•10.04/mjVrp -7- State of California ) County of —"AVW 1 On 1t,214 Ile-V before personally person} whose name & are subscribed to the within instrument and acknowledged to me that sh they executed the same in er their authorized capacity(ies), and that by4i4Fe?jkhPw signature(,§) on the instrument the persono), or the entity upon behalf of which the person�o acted, executed the instrument. personally appeared to me WITNESS my hand and official seal. &41 Cfi ,ri ! Notary P c State of California ) County of be the On /ah� 71'obefore me, MsA .ALp onally appeared personally known to me (m prey to be the �pe,r�s-�on(4.whose name is are subscribed to the within instrument and acknowledged to me that shexecuted the same in • er their authorized capacity(ics), and that by kis. er tl signatureW on the instrument the person(a`}, or the entity upon behalf of which the perso acted, executed the instrument. WITNESS my hand and official seal. Notary P Lblic 650690.01/1.A W64.002132•10-04h1jW& -6- EXHIBIT "A" (Attach legal description of Parking Parcel) 650610.OIlLq H4564-00216-10.041mjUrp 1' LD 1018 SHEET 1 OF 2 02-100 EXHIBIT "A" LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO, 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID PORTION OF LAND ALSO SHOWN AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO, 2003-163 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89°29'30" WEST 703.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED OECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89032'06" WEST (N89°29'30"W) A DISTANCE OF 67.61 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00027'54" WEST (S00"30'30"W) A DISTANCE OF 334.56 FEET; THENCE NORTH 89"32'06" WEST (N89°29'30"W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70129'40" WEST (S70°32'16"W) A DISTANCE OF 4.39 FEET; THENCE NORTH 89"32'06' WEST (N89°29'30"W) A DISTANCE OF 3.00 FEET; THENCE NORTH 00027'54" EAST (N00°30'30"E) A DISTANCE OF 126.75 FEET; THENCE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 274.25 FEET; THENCE NORTH 001127'S4" EAST (N00°30'30"E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89'32'06" EAST (989`29'30"E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING 13ETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO. 5110 AND STATION G.P,S. NO, 5112, BEING NORTH 89°32`06" WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR. BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO, 86-200. SEE EXHIBIT "B" SHEET 2 OF 2 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF. ER (I- C##iDANIE S tRl QA4itEd,S CHRIST PHER W. DANIELS SHEET 2 OF 2 LD 1018 02-100 CENTER DRIVE �N89'29'30"N!) N89.32'06"W 534,08' _ SOUTHERN CALJFORNlA EDISON RIGHT OF WAY 1{{ 8K, 3159, i PG 483 Q.R. o 8K. 4519, S'LY LINE OF THE N'LY 150' OF THE SOUTH 1/2 PG 491 O.R. OF THE SOUTHEAST 1/4 OF SECTION 14 /BK. 3675, PG. 63 O.R.:�T Q N69'29'30"W N8932'06"W I troJ.ra I I I I IT 416.50' �66.7.J511'PARCEL'AT.P.O.B. 2.41 AC { t_? PARKING STRUCTURE j{ . d- " PROPOSED PARCEL 11 4•_ c PER T.P.M. NO. 2003--163 (N89'29'30"W) N89'32'O6"W 274.25' Ld N tii. PROPOSED PARCEL 2 z (N89'29'3O*W) PER T.P.M. NO, 2003-163 � N8932'06"W SURVEY NQTES: ( ) DENOTES BEARINGS BASED ON P.M. 96--200, P`X,B, 255/40-45 CnllRSF TAAIF BASED ON BASIS OF 6EARINGS I BASED ON P.M. 86-200 LINE BEARING LENGTH LS N89'32'OVW 3.00 N89'29'30-W 1-2 N7079'40"E 4.39' N70'32 WE SCALE: 1" = 80' � ].snaz PROPOSER PARCEL 10 PER T.P.M. NO. 2003-163� BASIS OF BEARINGS. BEARINGS SHOWN ARE BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO, 5110 AND STATION GPS NO. 5112 BEING NORTH 89'32'06" WEST DATE: i1-29-04 Engineers / Planners / Surveyors EXHIBIT "St t oz a wa+ rrt�r. aA � ax mv� a ae t l SKETCH TO ACCOMPANY LEGAL DESCRIP11ON fiSEYCYW pYNKiSROM.RItf iED. VSVEQ.IT,MV6711 � ,��„�,�, r�xnaeleeacaas FOR PARKING 5TRUCTIlR�,�, �, REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§ 6103 AND 27383. RECORDING REQUESTED BY Recorded in Official AND WHEN RECORDED MAIL TO: TO'T' Daly, Clerk-ReCorde lords Orange County I1�11111�11l1111«I�lu��j�11j1111�111111t111111�1��«I111�l1�11u11N0 City of Huntington Beach FEE 2000 Main Street 213 2 ZOQ600072gg1311: 928m 10127106Post Office Box 190 0 02 12 Huntington Beach, CA 92648 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 Attention: Director of Economic Development Space above this ]me for Recorder's use 1 i Documentary Transfer Tax is $ 0.00. This conveyance is exempt since Grantee is an exempt agency under R&T 11922 AMENDED AND RESTATED GRANT DEED (CFD No. 2003-1 - HUNTINGTON CENTER PARKING PARCEL) THIS AMENDED AND RESTATED GRANT DEED (CFD No. 2003-1 - Huntington Center Parking Parcel) (this "Amended and Restated Deed"), is made this &!"`day of 2006 and is effective as of May 31, 2005 (the "Effective Date"), the date on which the Original Grant Deed (as defined below) was recorded in the Official Records (as defined below), by and between HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer"), and BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company ("Owner"), in favor of CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City"), with reference to the following facts: A. Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January 6, 2003, adopted a Resolution of Intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the financing (the "CFD Financing") of the design, construction and acquisition of certain public facilities, including a six -level parking structure on the Parking Structure Parcel consisting of 2.41 acres and containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available for parking use by the public; MMOEB1t1S 13892_2 F\RE013e11aT=alAm dcd and Restated Gran: Datl(nty)-,I-DOC (b) Pursuant to that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of March 1, 2004, between City and Developer, Developer agreed to convey and the City agreed, subject to the terms and conditions therein contained, to accept fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "A" (the "Original Parking Property") of that certain Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) dated as of November 29, 2004 (the "Original Grant Deed") and recorded in the Official Records of Orange County, California (the "Official Records") on May 31, 2005 as Instrument No. 2005000414924, on which the Public Parking Structure has been constructed; (c) Further, Developer and the City entered into that certain Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 (the " PREA"), covering the Original Parking Property and the "Retail Parcel" (as defined therein), which is contiguous to the Original Parking Property on all sides. Developer and the City caused the PREA to be recorded in the Official Records as instrument No. 2005000414926 concurrently with the Original Grant Deed; (d) A portion of the Original Parking Property is used as a loading dock area (the "Loading Dock Area") by Burlington Coat Factory (the "Tenant"). Pursuant to the terms of that certain Side Letter Re: Borrower's Disclosure in Connection with First Amendment to and Modification of Construction Loan Agreement date as of April _, 2005, Developer and City agreed to enter into an easement agreement in form reasonably acceptable to JPMORGAN CHASE BANK, N.A., a national banking association, successor by merger to BANK ONE, NA, main office Chicago, Illinois, individually and as administrative agent for the financial institutions, which from time to time become parties thereto (collectively, "Lenders"), pursuant to which the City would grant Developer and Tenant the right to continue to use the Loading Dock Area for loading dock purposes; (e) On August 15, 2005, Developer conveyed to Owner, all of Developer's right, title and interest in and to that certain shopping center project located in Huntington Beach, California and commonly referred to as `Bella Terra Shopping Center" by Grant Deed recorded on August 15, 2005, as Instrument No. 2005 000643200, in the Official Records of the County of Orange, State of California as more particularly described in said Grant Deed; further, the Revised Property is contained within Bella Terra Shopping Center; (f) In lieu of an easement agreement, Developer, Owner, and City have agreed to amend and completely restate the Original Grant Deed by conveying to the City fee interest in that certain revised parcel of real property located in the City of Huntington Beach, County of Orange, State of California, as more particularly described on Exhibit "A" hereto, which excludes the Loading Dock Area (the "Revised Property"), together with an easement over the Loading Dock Area. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: MMOEBTUS 13892_2 F 1BEC1BellaTerra\ —ded aed Restated Gram Deed (a(y)rv1_DOC I . Grant of Property. Developer and Owner hereby GRANT and convey to the City a fee simple estate in and to the Revised Property. Developer and Owner hereby grant and convey to the City a perpetual non- exclusive easement for public vehicular and pedestrian access over and across the Loading Dock Area, which is described as the exception from Parcel "A" on Exhibit "A". In making any use of this easement, City shall hold Developer and Owner harmless against all claims, liabilities or expenses, including costs and attorneys' fees, arising from City's use of such area. 2. Amendment and Restatement/Grant Subject to All Matters of Record. The grant contained in this Amended and Restated Deed: (a) is intended to and does supersede and replace the Original Grant Deed and (b) is subject to all matters of record, including without limitation the PREA, and all easements, covenants, conditions and restrictions described in any of the foregoing as benefiting and/or burdening the Revised Property or any portion thereof and to all other matters visible by an inspection or survey of land, 3. The conveyance of the Revised Property is subject to the following covenants, conditions and restrictions which shall be binding upon City and its heirs, personal representatives, successors and assigns and all persons claiming under or through City: 3.1 There shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. 3.2 All deeds, assignments and subagreements or contracts made or entered into by any owner, its successors or assigns, as to any portion of the Property, shall contain therein the following language: (a) In Deeds and Assignments. "Grantee/Assignee herein covenants by and for itself, its heirs, personal representatives, successors and assigns and all persons claiming under or through grantee/assignee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV and AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee or any person claiming under or MMOEBIUS 13892_2 F MOBaJ.T—r Am d,d and Restated anent Deed (cSty).rvI Doe through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases. "The Lessee herein covenants by and for the Lessee and Lessee's heirs, personal representatives, successors and assigns and all persons claiming under or through Lessee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the land or improvements herein leased or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the Lessee or any person claiming under or through the Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." 4. Notwithstanding anything to the contrary contained herein, so long as City and any successor or assignee of City is a governmental agency and has adopted its own nondiscrimination policy then City's (or its successors' or assigns') compliance with such nondiscrimination policy shall be deemed to comply with the foregoing covenants contained in Section 3 above. [SIGNATURES APPEAR ON FOLLOWING PAGE] MMOEBIUS13892_2 FSEC�BeOaTeffMA ndedandRealatadCm lDeed(city)rvlDOC IN WITNESS WHEREOF, Developer and Owner have executed this Amended and Restated Deed as of the day and year first written above. "Developer" HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware ' ed liability company, its anager / B /tIfanJUralwk, Trustee of the Bryan Ezralow 1994 Trust, its Manager "Owner" ?.V!John SS IATES, LLC, company iller, President By: Eric Sahn, Secretary MMOEBIUS13892_2 F\seaecuarcrra�Amer.dMayeRestatedcramDce (city)-nIDOC State of California ) County of c li�.an�y e,g ) On before m Notary Public, personally appeared L)_J pjnn personally known tome () to be the person(s) whose name(sa is/,ffe subscribed to the within instrument and acknowledged to me that he/sh@Ahoy executed the same in his4w&4hok authorized capacity(ie&), and that by his/1w44teif signature(F) on the instrument the person($), or the entity upon behalf of which the person( acted, executed the instrument. WITNESS my hand and official seal. U 'k V- Notary Public State of California ) f� ) County of n ,mA, &Lroi ) 01:�)%A6r I1, 20t t D before me, I v 1(�,�ty� �Oryq , Notary Public, personally appeared E-r;Sk6n personally known to me (er�nr^�'PGl t^ Tnf' nn th �. o ^�aac - - - �� to be the person(&) whose name(&) is/are subscribed to the within instrument and acknowledged to me that he/&hefthe7 executed the same in hiss authorized capacity(i ), and that by his/haf4heir signature(e) on the instrument the person(s), or the entity upon behalf of which the person(4) acted, executed the instrument. WITNESS my hand and official seal. MARLENE SOFiA MOtdt0YA L � Cortrnls6ion N 167551 Notary Pt�btlC • CW=ft _10,MV , ,— Notary Public wm Cr�a cc^ COMM. E PIMIS,Ain 16, 201 MMOEBIU3l3892 2 F\BEC\BegaT—\..A—.dedandReatalcdOr=Deed(aty)-MDOC State of California ) County of 1A S ) On 14, Wbefore me, Ji/Dn1 eQ#S ["p`t� , Notary Public, person fly appeared ) E:.22A 1,) -j personally known to me to be the person(pf whose name(4is/asubscribed to the within instrument and acknowledged to me that he/s /t13gy executed the same 1n his/her4their-authorized capacity and that by his/heiVthOr signature* on the instrument the person(,,* or the entity upon behalf of which the person(o acted, executed the instrument. WITNESS my hand and official seal, AOR JUAN CARLOS HERNANDEL Commission It 1380176 Notary Public — California Los Angeles County Ce� My Comm. Expires Oct 15, 2006 State of California County of On before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public MMOEBIUS 13892_2 F\BF.CB,11.Tm \Am ded and Rw wd Gmt Ne d(cny)-,[ DOC CERTIFICATE OF ACCEPTANCE GOVERNMENT CODE SECTION 27281 This is to certify acceptance of the Revised Property conveyed by the foregoing Amended and Restated Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) ("Amended and Restated Deed") from HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer"), and BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company("Owner"), to the CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City") and consent by City to recordation of this Amended and Restated Deed by its duly authorized officer, pursuant to the Funding Agreement, a duly authorized obligation of the City. Dated this Z ay of t» 2006, at Huntington Beach, California. "City" CITY OF HUNTINGTON BEACH By: Mayor ATTEST: t.•v ` it Jerk REVIEWED AND APPROVED: City Administrator APP OVED AS TO FORM: "14±:� Inn- 2k�— ty Attorney 0 �fp q• j •0(, S •Q 6 MMOEBIUS 13892_2 6 \BEC%Rd1.T—\Amended and R—al d U-L Ned (6(y)—I.DOC CALIFORNIA•ACKNOWLEDGMENT i, tee. a..a,,.i•,.�,. _a .T:. a. ».-..;a<!:i.r ,.�..a�.ae .�.._-�.-....af.:e3,a.,ai, :� ,-.� ,-� eC.>e4ca ..A n...a..a.!:�. ,.a5,».,�> ,� _a.,Y. State of California D,e�6E I ss. County of —[ On De.rV6*-0_ /I L before me, ( L. Date �� Name and Title of Officer (e.g , "Jane Doe, otary Public") personally appeared .G t��E-Ll-�uRr� 411 TDA,) Narni of Signers) P. L. ESFAR7A Camrbpion # 1599179 Hokxy-Ccl/wNo Orange Coin My Comm. E7pkvs Aug 4.40 Place Notary Seal Above personally known to me proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNE y hand and official seal. Signatu of Notary Pu li 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: ^( /4= 1✓/' Imo%% CE Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: 0 Individual U Corporate Officer — Title(s): ❑ Partner — U Limited Ll General L] Attorney in Fact Top or thumb Here LL Trustee ❑ Guardian or Conservator ❑ Other. Signer Is Representing: Number of Pages: Signer's Name: El El El El 11 El Individual Corporate Officer — Titie(s): Partner — E. Limited ❑ General Attorney in Fact Trustee Guardian or Conservator Other: Signer Is Representing: RIGHT THUh9_BPRINT. OF SIGNER 0 2004 National Notary Association • 9350 De Soto Ave . P 0 Box 2402 • Chatsworth, CA 91313-2402 item No. 5907 Reorder Call Toll -Free 1-800-876-6827 LD 1091 SHEET 1 OF 3 02-100 EXHIBIT "A" LEGAL DESCRIPTIONS FOR BELLA TERRA PARKING STRUCTURE THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO.86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID PORTION OF LAND ALSO SHOWN AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO. 2003-163 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89°29'30" WEST 763.76 FEET' ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH GG02T54" WEST (S00030'30"W) A DISTANCE OF 334.58 FEET; THENCE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70°2940" WEST (S70°32'16"W) A DISTANCE OF 4.39 FEET, THENCE NORTH 89°32'06" WEST (N89°29'3(Y"W) A DISTANCE OF 3.00 FEET; THENCE NORTH 00°27'54" EAST (N00°30'30"E) A DISTANCE OF 126.75 FEET; THENCE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 274.25 FEET; THENCE NORTH 00°27'54" EAST (N00°30'30"E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89032'06" EAST (S89°29'30"E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. EXCEPMQ_ THEREFROM A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, AND FURTHER DESCRIBED AS FOLLOWS: SHEET 2 OF 3 BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89°29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO.86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 67.51 FEET; THENCE DEPARTING SAID LINE SOUTH 00227'54" WEST A DISTANCE OF 334.58 FEET; THENCE NORTH 89°32'06" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70°29'40" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89°32'06" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 001127'54" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89032'06" WEST A DISTANCE OF 148.34 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 00027,54" EAST A DISTANCE OF 26.67 FEET; THENCE NORTH 89°32'06" WEST A DISTANCE OF 109.65 FEET; THENCE SOUTH 75027'54" WEST A DISTANCE OF 9.33 FEET; THENCE NORTH 89°32'06" WEST A DISTANCE OF 7.25 FEET TO THE WEST LINE OF SAID PARCEL "A" CONVEYED TO THE CITY OF HUNTINGTON BEACH; THENCE SOUTH 00°27'54" WEST, ALONG SAID WEST LINE, A DISTANCE OF 24.26 FEET; THENCE SOUTH 891132'06" EAST A DISTANCE OF 125.91 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 0.08 ACRES MORE OR LESS. TOGETHER WITH AN UPPER ELEVATION OF 41.0 FEET AND A LOWER ELEVATION OF 21.5 FEET BASED ON A COUNTY OF ORANGE BENCHMARK ALUMINUM DISK STAMPED "HB-231-75" ELEVATION = 36.969 FEET (NGVD29) ON FILE AT THE COUNTY OF ORANGE P.F.R.D. / GEOMATICS-L.I.S. VERTICAL CONTROL DATA SHEET - O.C.S. 1995 ADJUSTMENT AND AS SHOWN ON THE PROJECT IMPROVEMENT PLANS "PW#03-116 L-03-282" ON FILE AT THE CITY OF HUNTINGTON BEACH. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO. 5110 AND STATION G.P.S. NO. 5112, BEING NORTH 89032'06" WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR. BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO. 86-200. SEE EXHIBIT "B" SHEET 3 OF 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF. d2 - Z�o 6 CHRIST PHER W. DANIELS �o/Z810 SHEET 3 OF 3 0 1091 2CENTER ®RIVE �-- Y-iN89'29'30"W) N89'32'06"W 534.08' _ SOUTHERN CALIFORNIA EDISON RIGHT OF WAY BK. 3159, PG 483 O.R. y- b S'LY LINE OF THE N'LY 150' OF THE SOUTH 1 /2 OF THE SOUTHEAST 1/4 OF SECTION 14 - — — — — —BK. 3675, PG. 63 O.R.�b CN89'29'30"W) (763.76') N8932'06"W 416.50' - PARKING T.P.0.8. STRUCTURE POR. PARCEL 2 PARCEL PROPOSED PARCEL 11 PER T.P.M. NO. 2003-163 0 2.41 ACRES EXCEPTING THEREFROM "- _ V WITH UPPER ELEVATION OF 41.0 FEET 3 4 AND LOWER ELEVATION OF 21.5 FEET z '•` L3 N89'32Ofi'W 109.;0 NOO'27'S4"E rrr/ /177P �26.67' •J'' I_ N89'32'06"W _274.25'— (148929'30"W) "' � a LRO.B. EXCEPTION a�O O L4 N L5 S00 I SCALE: V = 8O' DATE: 06-28-06 T� I I BK. 4519, PG 491 O.R. 67.51' P.0.8. i - N8932'06"W f' { 135.12' kL2 € BASIS OF 994FM9S: BEARS 81-M AFIS BASED ON TIC BEAFM BETINM O.C,S HORMWAL Ca OROL STATION GPS N0. SM AND STATION CPS NO 5#2 934 NORTH 89"JZW WEST BEAMW INPtFENTHESI.S ARE 8AS® ON PAH114 BENCHMARK IPIFORMATbN: MAP NO.86-200 ALUMINUM BENCHMARK DISK STAMPED "HB-231-75" - ELEV: 36,969 FEET (NGVD29) COUNTY OF ORANGE. P.F.R.D./GEOMATICS-L.I.S. VERTICAL CONTROL DATA SHEET-O.C.S. 1995 ADJUSTMENT RECORDING REQUESTED BY Fl9ST AMERICAN TITLE GOMPANY NATIONAUCOMMERCIAL SERVICES COMMERCIAL/INDUSTRIAL DIVISION wC-S-4BW60i-5C. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Costco Wholesale Corporation 999 bake Drive Issaquah, Washington 98027 Attn: Legal Department (SSK) Recorded in Official Records, Orar190 County Tom Daly, Clerk -Recorder IlAllllllllllllilll811illllllllllllllllllll881111118 69.00 2011000527963 03:46pm 10/21/11 66 422 Alt 22 0.00 0.00 0.00 0.00 63.00 0.00 0.00 0.00 (space above this line for Recorder's use only) PARMNG LICENSE AGREEMENT AND COVENANT (City Parking Structure) made by and among Costco Wholesale Corporation, a Washington corporation, and City of Huntington Beach, a California charter city Location of Property: Huntington Beach, California 25835.00001\5770689.2 PARKING LICENSE AGREEMENT AND COVENANT (City Parking Structure) This PARKING LICENSE AGREEMENT AND COVENANT ("Agreement") is made and entered into as of the /:I!" day of (JCi��E_ _, 2011 (the "Effective Date"), by and between the CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City"), and COSTCO WHOLESALE CORPORATION, a Washington corporation ("Costco"). RECITALS: A. City is the fee owner of that certain parcel of real properly located in the City of Huntington Beach, County of Orange ("County"), State of California ("State") as more particularly described on Exhibit "A" attached hereto (together with all improvements now or hereafter located on such property) (the "Parking Parcel"), adjacent to that certain shopping center commonly referred to as the `Bella Terra Mall," as more particularly described on Exhibit "B" attached hereto (together with all improvements now or hereafter located on such property, the "Retail Parcel"). The Parking Parcel is currently improved with a six -level parking structure containing approximately 1,532 automobile parking spaces that is owned by City and available for parking use by the general public. B. The Public Parking Structure, defined herein, was financed with a portion of the proceeds of Community Facilities District No. 2003-1 of the City of Huntington Beach (Huntington Center) 2004 Special Tax Bonds (the "Special Tax Bonds") which Special Tax Bonds were issued so that interest paid thereon is exempt from gross income for federal income tax purposes. C. Costco is the leasehold owner and has a right to purchase that certain parcel of real property located adjacent to the Parking Parcel, and more particularly described on Exhibit "C" attached hereto (together with all improvements now or hereafter located on such property, the "Costco Parcel"). Costco intends to construct certain buildings and improvements on the Costco Parcel and operate a Costco wholesale warehouse club thereon. D. City and Costco desire to establish a parking license which allows for temporary construction to improve the elevators which will benefit Costco and users of the Public Parking Garage. E. In addition to the terms defined in the foregoing Recitals, the following defined terms, when used in this Agreement, shall have the meaning set forth below: (i) "Developer" shall mean and refer to BTDJM Phase 11 Associates, LLC, a Delaware limited liability company. (ii) "Developer/City Parking Agreement" shall mean and refer to that certain Parking and Reciprocal Easement Agreement and Option to Purchase, dated as of March 1, 2004, made by and between City and Huntington Center Associates, LLC. 25835.00001 \57706892 (iii) "Elevator System" means the elevator system located within the Parking Parcel, including the "Revised Elevator System" as defined in Section I below_ (iv) "Improvements" shall mean and refer to any building or structure located on the Parking Parcel. (v) "Mortgage" shall mean and refer to any mortgage, indenture of mortgage, deed of trust (whether fee or leasehold), sale and leaseback transaction or assignment and subleaseback transaction which covers all or any portion of any Parcel, made by a reputable third party bank or other institutional investor. (vi) "Mortgagee" shall mean and refer to a mortgagee and/or a trustee and beneficiary under a Mortgage and, to the extent applicable, a fee owner or lessor or sublessor of any Parcel that is the subject of a sale and leaseback transaction or assignment and subleaseback transaction. (vii) "Operator" shall mean Bella Terra Associates, LLC, a Delaware limited liability company, as successor -in -interest to Huntington Center Associates, LLC, or a successor "Qualified Operator," as defined in the Developer/City Parking Agreement. (viii) "Operating Agreement" shall mean that certain Operating Agreement dated as of March 1, 2004, between City and Operator, pursuant to which Operator has undertaken certain of the obligations of City. (ix) "Parcel" or "Parcels", as the case may be, shall mean and refer to the Parking Parcel or Costco Parcel, or either of them, as applicable. (x) "Party" or "Parties", as the case may be, shall mean and refer to City and Costco, or either of them, as applicable, and any party after the date hereof acquiring an interest in or to the Parking Parcel and/or the Costco Parcel. (xi) "Permittees" shall mean and refer to each Party, the tenants of each Party, and their respective officers, directors, employees, agents, contractors, subcontractors, customers, members, visitors, invitees, licensees, utility suppliers and concessionaires entering such Party's Parcel. (xii) "Project" shall mean and refer to, collectively, the Parking Parcel, Public Parking Structure, Retail Parcel and the Costco Parcel. (xiii) "Public Parking Structure" shall mean the six -level parking structure containing approximately 1,532 automobile parking spaces owned by City, including the Revised Elevator System. (xiv) "SCE Lease" shall mean and refer to that certain Lease, dated as of March 15, 2004, made by and between Operator and Southern California Edison Company ("SCE"), relating to the lease of land located immediately adjacent to the Costco Parcel (the "SCE Land") for use as a parking area and driveways for the Costco Parcel and that certain Sublease Agreement by and between Developer and Costco. -2- 25835,00001l5770689.2 (xv) "Utility Facilities" shall mean and refer to all utility and service lines and systems serving a Parcel or portions thereof, including sewers; ejector pumps; water pipes and systems; intake and exhaust vents; gas pipes and systems; sprinkler pipes and systems; drainage lines and systems; electrical power conduits, lines and wires; energy transfer stations and substations; chillers; transformers; electrical panels; vaults; cable television lines; microwave communication systems; telephone conduits, lines and wires; security lines and systems; any utilities required for teleconferencing facilities; and other service or utility lines necessary or convenient to operate such Parcel. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Costco hereby agree as follows: I. CONSTRUCTION LICENSE. City hereby grants to Costco for the use by Costco and its Permittees a temporary non-exclusive ingress, egress and general access license (the "Construction License"), appurtenant to and for the benefit of the Costco Parcel over, beneath and across the Parking Parcel and the Public Parking Structure for the purpose of (a) constructing and installing a revised elevator system within the Public Parking Structure (the "Revised Elevator System"), including, without limitation, all foundations, footings, columns, floors, Utility Facilities, directional signs, hardware, painting, striping, lighting, cart corrals and other improvements comprising the Revised Elevator System (all of which construction shall comply with the provisions of Section 3 below), (b) vehicular and pedestrian ingress, egress and access by Costco and its Permittees for purposes of such construction, (c) parking of vehicles in connection with the construction and project management of the construction of the Revised Elevator System; (d) if applicable, performing the maintenance, repair and reconstruction obligations of City to the Elevator System as contemplated hereunder, if City fails to do so, and (e) performing the maintenance, repair and reconstruction obligations of Costco related to the Revised Elevator System as permitted herein. The Construction License (other than the rights in clauses (d) and (e), which shall survive completion of the Revised Elevator System shall terminate upon completion of the Revised Elevator System (as determined by the issuance by City (acting in its governmental capacity) of a final certificate of occupancy for the Revised Elevator System and delivery to and acceptance by City (in its proprietary capacity) of the Revised Elevator System). Conceptual plans will be delivered separately to the City for approval. The rights in clauses (d) and (e) shall survive the completion of the Revised Elevator System and shall be exercised in the same manner as Section 7 of the Developer/City Parking Agreement. 2. LICENSE FOR INGRESS AND EGRESS. City hereby grants to Costco for the use by Costco and its Permittees a license for non-exclusive ingress, egress and general access (the "Costco Access License"), for the purpose of providing vehicular and pedestrian ingress and egress to and from the Parking Parcel and all levels of the Public Parking Structure to and from the Costco Parcel in the same manner as members of the general public. CONSTRUCTION OF REVISED ELEVATOR SYSTEM. (a) Costco to Obtain Permits. Costco may cause the Revised Elevator System to be constructed within the Public Parking Structure and in such case shall obtain all necessary permits, entitlements and other authorizations from City (acting in its governmental capacity) -3- 25835.000OM770689.2 and any other governmental entity maintaining jurisdiction over the Parking Parcel permitting Costco to construct the Revised Elevator System. In constructing the Revised Elevator System, Costco shall comply with all applicable City ordinances, codes, rules, regulations and applicable conditions of approval to the entitlements for the Revised Elevator System. City shall have the right to review plans and specifications of the Revised Elevator System, and shall have the right to inspect Revised Elevator System during and after construction thereof and prior to acceptance by the City of the Revised Elevator System. The review of any such plans and specifications shall not constitute the assumption of any responsibility by, or impose any liability upon, City as to the accuracy, efficacy, sufficiency or legality thereof. (b) Costco's Cost. Any and all construction or other improvement work undertaken by Costco for purposes of constructing the Revised Elevator System shall be at the sole cost and expense of Costco as between Costco and City. The cost of maintaining, repairing and replacing the Revised Elevator System, once completed and accepted by City, shall be at the sole cost and expense of City as provided in Section 7 of the Developer/City Parking Agreement. Notwithstanding the foregoing, Costco reserves the right, but shall not have the obligation, to maintain, repair and replace the Revised Elevator System at its cost and expense pursuant to the provisions of Section 7 of the Developer/City Parking Agreement, as may be amended. (c) Insurance. In connection with the construction and improvement of the Revised Elevator System only, Costco shall maintain builder's all risk insurance and commercial general liability insurance with commercially reasonable limits of coverage and deductibles. Costco covenants to keep the Parking Parcel free and clear from and against any mechanic's and/or materialmen's liens or stop notice which may be recorded against the Parking Parcel relating to Costco's construction or improvement work referred to herein. Costco further agrees that it will undertake such reasonable actions as may by necessary to cause any such mechanic's or materialmen's liens or stop notice to be removed within sixty (60) days of receipt of notice that such lien or stop notice has attached to the Parking Parcel, including, but not limited to, bonding around any such lien or stop notice in accordance with statute. Notwithstanding the foregoing, Costco shall have the right to satisfy its insurance obligations hereunder by means of self-insurance to the extent of all or part of the insurance required hereunder, but only so long as (i) Costco (or an affiliate providing the insurance) shall have a net worth of at least $200,000,000; and (ii) Costco (or an affiliate providing the insurance) shall, upon request, provide a public securities filing showing the required net worth. In addition, the insurance required to be carried by Costco may be carried under a policy or policies covering other liabilities and locations of Costco; provided, however, that such policy or policies apply to the Costco Parcel in an amount not less than the amount of insurance required to be carried by Costco with respect thereto, which policy shall contain a per location endorsement. 4. MAINTENANCE OF PUBLIC PARKING STRUCTURE. The provisions of Section 7 of the Developer/City Parking Agreement, as may be amended, apply to this Agreement without limitations. City hereby represents and warrants that it will not amend the Developer/City Parking Agreement without the written consent of Costco. 5. USE OF PUBLIC PARKING STRUCTURE. Except as provided in Section 2(a) of the Developer/City Parking Agreement, the Public Parking Structure, providing exclusive rights to a certain number of spaces, the Public Parking Structure will be used only for daily -4- 25 8 3 5. 00001 \5 770689.2 public parking, and for no other use whatsoever. Notwithstanding the generality of the foregoing, long term and leased parking are specifically prohibited. City shall be permitted to charge parking fees in its sole discretion in accordance with the provisions of Section 8 of the Developer/City Parking Agreement, and prior to doing so, shall obtain a written parking rate study of other publicly accessible parking facilities in the vicinity of the Project illustrating the range of fees charged for parking in such facilities prepared by a reputable consultant possessing knowledge and experience commensurate with the needs of such study. If City elects to impose parking fees for use of the Public Parking Structure, City shall require parking operators to provide procedures for validation privileges for Permittees of Costco and any other business owners on behalf of individual users of the Public Parking Structure. 6. CASUALTY AND CONDEMNATION. Upon the event of Casualty Loss or condemnation of the Public Parking Structure, the provisions of Section 10 of the Developer/City Parking Agreement shall apply. 7. TAX MATTERS. The parties hereto acknowledge and agree that it is intended that the interest on the Special Tax Bonds remain excluded from the gross incomes of the owners thereof for purposes of federal income taxation, and that this Agreement does not confer any "special legal entitlement" within the meaning of the Code and the regulations promulgated thereunder upon the Developer or any other nongovernmental entity with respect to the Public Parking Structure. 8. DISPUTE RESOLUTION. The dispute resolution provisions of Section 33 of the Developer/City Parking Agreement shall apply hereunder in the event of any dispute between the parties hereto. 9. NO LICENSE BY IMPLICATION, PREVENTION OF PRESCRIPTIVE RIGHTS; PROHIBITION AGAINST GRANTING LICENSES. Neither the execution of this Agreement or any instrument which may be executed in connection herewith nor the granting of the rights described herein shall be deemed to grant any other license or easement to any third party or to establish any easements or licenses by implication. The Parties to this Agreement understand and agree that the only license or easement made and granted by the Parties are those licenses and easements which are expressly made and granted by this Agreement. The City hereby reserves the right to ejector cause the ejection from its Parcel any person not authorized, empowered or privileged to use that Parcel. Further, the City reserves the right to restrict access to its Parcel for such reasonable period or periods of time as may be legally necessary to prevent the acquisition of prescriptive rights by any person; provided, however, that prior to such restriction of access the Party exercising that right shall give written notice to the other Party of its intention to do so and shall coordinate such restriction of access with the other Party so that no unreasonable interference with the operation of the other Party's Parcel shall occur. Nothing contained herein shall be deemed to be a gift or dedication of any portion of the following Parcel to the general public or for the general public or for any public purpose whatsoever. No Party, nor any person not a Party, shall grant an easement or license or licenses of the type set forth in this Agreement for the benefit of any property not within the Project at the time of such grant. 10. RECIPROCAL REPRESENTATIONS AND WARRANTIES. The following constitute reciprocal representations and warranties of City and Costco to the other Party. -5- 25835. 0000 1 �5 770689.2 (a) Power. Each Party has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby. (b) Requisite Action. All requisite action (corporate, trust, partnership or otherwise) has been taken by each Party in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. Except as expressly described in this Agreement, no consent of any partner, shareholder, creditor, investor, judicial or administrative body, governmental authority or other party is required. (c) Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of each Party and the partners, officers or trustees of such Party, if any, have the legal power, right, and actual authority to bind such Party to the terms and conditions hereof and thereof. (d) Validity. This Agreement and all documents required hereby to be executed by each Party are and shall be valid, legally binding obligations of and enforceable against such Party in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. 11. ATTORNEYS' FEES. In the event at any time during the term of this Agreement any action or suit is brought by a Party against another Party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other Party arising out of this Agreement, then in that event the prevailing Party shall be entitled to recover from the other Party all costs and expenses of the action or suit, including, without limitation, actual attorneys' fees, accounting and engineering fees, and any other professional fees resulting therefrom, and all fees and costs incurred on any appeal from such action or proceeding. 12. NOTICE TO PARTIES. All notices or other communications required or permitted hereunder shal I be in writing, and shall be personally delivered (including by means of professional messenger or overnight courier service) or sent by fax showing confirmed receipt, and shall be deemed received upon the date of receipt thereof. To Costco: Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington 98027 Attention: Property Management (Legal Dept.) Facsimile No.: 425-313-8105 with a copy to: Voss, Cook & Thel LLP 895 Dove Street, Suite 450 Newport Beach, California 92660 Attention: David A_ Lurker, Esq. Facsimile No.: 949-435-0226 -6- 25835.00001 \5770689.2 To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Director of Economic Development Facsimile: 714-375-5087 - With copies to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: City Attorney Facsimile: 714-374-1590 Notice of change of address shall. be given by written notice in the manner detailed in this Section 12. 13. AMENDMENT. The provisions of this Agreement may be modified or amended, in whole or in part, only with the consent of the Parties, by declaration in writing, executed and acknowledged by all of the same, duly recorded in the Official Records. 14, NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the exclusive benefit of the Parties, any Mortgagees, and of their successors and assigns, and not for the benefit of any other party, nor shall this Agreement be deemed to have conferred any rights, express or implied, upon any other party. It is expressly understood and agreed that no modification or amendment, in whole or in part, of this Agreement shall require any consent or approval of any third party. 15. TERMINATION• BREACH SHALL NOT PERMIT TERMINATION. Except as otherwise specifically provided in this Agreement, the licenses granted pursuant to Section 1(a), (b) and (c) shall terminate upon the completion of the Revised Elevator System. The remaining interests hereunder shall last until the termination of the Costco Lease, or if Costco acquires the Costco parcel, shall last in perpetuity, unless sooner terminated by written agreement between the Parties which is recorded in the Official Records. It is expressly agreed that no breach of this Agreement shall entitle any Party to cancel, rescind, or otherwise terminate this Agreement, and such limitations shall not affect in any manner any of the rights or remedies which the Parties may have by reason of any breach of this Agreement. 16. ESTOPPEL CERTIFICATE. Each Party hereby severally covenants that upon written request of the other Party, it will within thirty (30) days of such request, issue to such other Party, or to any Mortgagee or any other party specified by such requesting Party, an estoppel certificate stating: (a) whether the Party to whom the request has been directed knows of any default under the Agreement, and if there are any known defaults, specifying the nature thereof, (b) whether to its knowledge the Agreement has been assigned, modified or amended in any way (or if it has, then stating the nature thereof), and (c) that to the Party's knowledge the Agreement as of that date is in full force and effect. Such statement shall act as a waiver of any claim by the Party furnishing it to the extent such claim is based upon facts contrary to those asserted in the statement and to the extent the claim is asserted against a bona fide encumbrancer or purchaser for value without knowledge of facts to the contrary of those contained in the -7- 25835.00001\5770689.2 or purchaser for value without knowledge of facts to the contrary of those contained in the statement, and who has acted in reasonable reliance upon the statement. However, such statement shall in no event subject the Party furnishing it to any liability whatsoever, notwithstanding the negligence or other inadvertent failure of such Party to disclose correct and/or relevant information. 17. NO PARTNERSHIP. Nothing contained in this Agreement, nor any acts of the Parties, shall be deemed or construed to create any relationship of principal and agent, or of partnership, or of joint venture, or of any association between the Parties. 18. PARTIAL INVALIDITY. If any term, provision or condition contained in this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law provided, however, if the intent and purpose of the parties hereto is rendered unachievable due to such invalid term or provision, then either party shall have the right to terminate this Agreement. 19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto. Notwithstanding anything contained herein to the contrary, either Party may delegate all or any portion of its respective rights and obligations under this Agreement to any third party, so long as such assignee expressly assumes in writing the obligations of such delegating Party hereunder and such .delegating Party remains principally liable for such assignee's performance under this Agreement, except as otherwise provided in Section 26 below. 20. TIME OF ESSENCE. The Parties hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either Party shall constitute a material breach of and a non -curable (but waivable) default under this Agreement by the Party so failing to perform. 21. CONSTRUCTION. Headings at the beginning of each paragraph are solely for the convenience of the Parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs and subparagraphs are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated by this reference. In the event the date on which either Party is required to take any action under the terms of this Agreement is not a business day, the action shall be taken on the next succeeding business day. 22. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. Signature pages may be detached from the counterparts and attached to a single copy of this document to physically form one document. -8- 25835.00001 \5770689.2 23. GOVERNING LAW. The Parties acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. 24. NO EFFECT ON MORTGAGE. The Parties acknowledge and agree that any default or breach by a Party of its obligations hereunder shall in no way defeat, affect, render void or reduce in any way the rights of any Mortgagee of any Parcel. 25. CONSENT. In any instance in which any Party shall be requested to consent to or approve of any matter with respect to which such Party's consent or approval is required by any of the provisions of this Agreement, such consent or approval or disapproval shall be given in writing, and shall not be unreasonably withheld, conditioned or delayed, unless the provisions of this Agreement with respect to a particular consent or approval shall expressly provide otherwise. 26. RELEASE. If a Party shall sell, transfer or assign its entire Parcel or its interest therein, it shall, except as provided otherwise in this Agreement, be released from its unaccrued obligations hereunder from and after the date of such sale, transfer or assignment. It shall be a condition precedent to the release and discharge of any grantor or assignor Party that the following conditions are satisfied: (a) such grantor or assignor shall give notice to the other Parties of any such sale, transfer, conveyance or assignment promptly following the filing for record of the instrument effecting the same; and (b) the transferee shall execute and deliver to the other Parties a written statement in a form suitable for recording in the appropriate County Recorder's office in which: (i) the name and address of the transferee shall be disclosed; and (ii) the transferee shall acknowledge its obligation hereunder and agree to be bound by this Agreement and perform all obligations hereunder in accordance with the provisions of this Agreement. Failure to deliver any such written statement shall not affect the running of any covenants herein with the land, nor shall such failure negate, modify or otherwise affect the liability of any transferee pursuant to the provisions of this Agreement, but such failure shall constitute a default by the transferee hereunder. Notwithstanding anything in this Section to the contrary, it is expressly understood and agreed that no such sale, transfer or assignment shall effectuate a release pursuant to this Section until such successor in interest to the transferor Party has executed and recorded in the appropriate County records an instrument whereby such successor in interest agrees to be fully bound under the provisions of this Agreement in the place and stead of the transferor Party. 27. ENTIRE AGREEMENT. This Agreement and the exhibits hereto contain all the representations and the entire agreement between the City and Costco with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are superseded in total by this Agreement and Exhibits hereto. The provisions of this Agreement shall be construed as a whole according to their common meaning and not strictly for or against any Party. This Agreement is not, however, intended to supersede or otherwise modify the provisions of Developer/City Parking Agreement. 28. WAIVER OF DEFAULT. No waiver of any default by any Party shall be implied from any omission by any Party to take any action in respect of such default if such -9- 25835.0000115770689.2 default continues or is repeated. No express written waiver of any default shall affect any default or cover any period of time other than the default and period of time specified in such express waiver. One or more written waivers of any default in the performance of any term, provision or covenant contained in this Agreement shall not be deemed to be a waiver of any subsequent default in the performance of the same term, provision or covenant or any other term, provision or covenant contained in this Agreement. The consent or approval by any Party to or of any act or request by any other Party requiring consent or approval shall not be deemed to waive or render unnecessary the consent to or approval of any subsequent or similar acts or requests. The rights and remedies given to any Party by this Agreement shall be deemed to be cumulative and no one of such rights and remedies shall be exclusive of any of the others, or if any other right or remedy at Iaw or in equity which any such Party might otherwise have by virtue of a default under this Agreement, and the exercise of one such right or remedy by any Party shall not impair such Party's standing to exercise any other right or remedy. 29. LIABILITY OF CITY. Notwithstanding anything herein to the contrary, City shall not have any liability or obligation of any kind under this Agreement in connection with (a) the design or construction of the Public Parking Structure, or (b) the operation, use, maintenance, repair or replacement of the Public Parking Structure during any period in which Developer is acting as a Qualified Operator. Notwithstanding anything herein to the contrary, any and all monetary obligations of City under this Agreement shall be payable solely from any revenues derived by City from the Public Parking Structure or from the proceeds of the Public Parking Structure Maintenance Special Tax (after deduction for the costs of collection and other administrative expenses) levied by City on the District. In no event shall City's general fund be liable hereunder. Costco hereby waives and releases City from any and all such liability or obligation. [Signatures follow on next page] -10- 25835.00001 \5770689.2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. CITY ATTEST: CITY OF HUNTTNGTO EACH, CALIFORNYA, a Caliromia charter city By By: N Joa L. ly Name, Joe Ti tl ': City Clerk Title: Mayo CO COSTCO WHOLESALE CORPORATION; a Washington co ora io r By: Name: Title: a�t��ax�re B �a aaR i'� a aAAaiaa nao via yv�n►�� v R'—/ !8?0e 8694 �77 HAC6ent Fold—r Costco (04210)\U1. Terre Lease (020)UDOa\C* Puking License Agreemmt & Covenant VCT 041311.D0C -11- 25 83 5.00001 \5770689.2 STATE OF CALIFORNIA ) ss. COUNTY OF On Q °(,7*•�L—'k /0 , 20 ,4L, before me, a Notary Public, personally appeared [, 1:;ynJai Anil 40— who proved to me on the basis of satisfactory evidence to be the persorlpwhose name jare ubscribed to the within instrument and acknowledged to me that �hthe executed the same in .hiei authorized capaci res , and that by hjs4w<t el signatureQ on the instrument, the persono or the entity upon behalf of which the persoroacted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P t ESPARZA Commission * 1857021 Q . z "� Notary Public - California i Notaryblic Pu� %. (Se ) Orange County My COMM Expires Aug 4, 2013 2583 5.00001 \5770689.2 -I- 4 wa S � w STATE OF-Eti } gg ) ss. COUNTY OF On �"y' 20, before me, G�'rer—pka r� e VZ . � tr';k a Notary Public, personally appeared b ( ka,\ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of at the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Not `Public � -2- 25835.00001 \5770689.2 CONSENT AND APPROVAL BELLA TERRA ASSOCIATES, LLC The undersigned hereby expressly approves and consents to the terms of this Agreement and, to the extent applicable, agrees to be bound by the terms and provisions hereof. This Consent and Approval shall be binding on the undersigned's successors and assigns. The undersigned agrees not to amend or modify the terms of the Developer/City Parking Agreement or the Operating Agreement without the prior written consent of Costco, which consent shall not be unreasonably withheld. Nothing herein shall be deemed to limit any rights or remedies of Costco under the terms of the Ground Lease between BTDJM Phase II Associates, LLC, Costco, the Developer/City Parking Agreement, or the Amended and Restated Construction, Operation and Reciprocal Easement Agreement applicable to the Retail Parcel, the Costco Parcel, and the SCE Lease Parcel. [signatures follow on next page] -1- 25835.00001\5770689.2 Dated: 0 l,1' 77 , 2011 BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company By: Name: D. John Miller Its: President ATTEST: City Clerk APPROVED AS TO FORM: Huntington Beach City Attorney -2- 25835.00001\5770689.2 STATE OF CALIFORNIA ) ss. COUNTY OF,';,, On cc"?, , 20 �� before me, �- (�- 9S /11-/9 a Notary Public, personally appeared 17 �l'Orl/E� , who proved to me on the basis of satisfactory evidence to be the perso whose name(s) are subscribed to t . within instrument and acknowledged to me that she/they executed the same in (her/their authorized capacity}, and that bydiD?her/their signatureKon the instrument, the person), or the entity upon behalf of which the personA acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. S. R. ESHETT Comm.# 1902187 NOTARYPUSUC•C41F0MA '> Notary Public SANTA CLAM COUNTY (Seal) MY Coo. EXP. Atic. aU, 2f}14 -3- 25835.0000115??0b89.2 CONSENT AND APPROVAL BTDJM PRASE II ASSOCIATES, LLC The undersigned is the fee owner of the Costco Parcel. The undersigned hereby expressly approves and consents to the terms of this Agreement and, to the extent applicable, agrees to be bound by the terms and provisions hereof. This Consent and Approval shall be binding on the undersigned's successor and assigns. Nothing herein shall be deemed to limit any rights or remedies of Costco under the terms of the Ground Lease between the undersigned and Costco, the Developer/City Parking Agreement, or the Amended and Restated Construction, Operation and Reciprocal Easement Agreement applicable to the Retail Parcel, the Costco Parcel, and the SCE Lease Parcel. Dated: 0--"_ 7 , 2011 BTDJM PHASE II ASSOCIATES, LLC, a Delaware fi company By: Name: ohn Miller Its: President -1- 25835.0000115770689.2 STATE OF CALIFORNIA ) ss. COUNTY OF S--., -I-z— On do 72- , 20/�, before me, a Notary Public, personally appeared — /I VZ 4, ,y'-w'z , who proved to me on the basis of satisfactory evidence to be the persoukj whose name(901 /are subscribed to the within instrument and acknowledged to me that 6Wshe/they executed the same in hi'/her/their authorized capacity(ies�j, and that by 6's erhheir signature(Sybn the instrument, the perso�K' or the entity upon behalf of which the persoi s acted, executed the instrument. I certify.under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. �. S. R. ESHETT� Comm) 1902187 ,,nn NOTARY PUBLIC°CALIFOW W SANTA CLAM COUNTY (Seal) �° M' COW. EXP. AM. 30, 2➢1i 25 835.00001\5770689.2 Notary Public -2- EXHIBIT "A" PARKING PARCEL LD 1018 SHEET 1 OF 2 02-100 EXHIBIT "A" LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL 'A' BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID PORTION OF LAND ALSO SHOWN _ AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO. 2003-153 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS; BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89'29'30" WEST 753.76 FEET' ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89'32'06" WEST (N89-29'30"W) A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID' LINE SOUTH 00027'54" WEST (S00'30'30-W) A DISTANCE OF 334.58 FEET; THENCE NORTH 89'32'06" WEST (N89'2930-W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70°29'40' WEST (S70'32'16"W) A DISTANCE OF 4.39 FEET; THENCE NORTH 89'32'05' WEST (N89'29'30'W) A DISTANCE OF 3.00 FEET; THENCE NORTH 00027'54' EAST (N00'30'30"E) A DISTANCE OF 126.75 FEET; THENCE NORTH 89*32*06' WEST (N89'29'30"W) A DISTANCE OF 274.25 FEET; THENCE NORTH 00027'54" EAST (N00'30'30'E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH UNE; THENCE EASTERLY ALONG SAID LINE SOUTH 89'32'06' EAST (S89'29'3("E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO. 5110 AND STATION G.P. S. NO. 5112, BEING NORTH 89'32'06' WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR. BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO, 86-200. SEE EXHIBIT'&" SHEET 2 OF 2 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF. N HER CHRIS�W. DN EL$ fCWMTAN�15 as a3za �p 4� dF CAl1i0�a Exhibit "A" 25835.0000115770684.2 EXHIBIT `B" RETAIL PARCEL In the City of Huntington Beach, County of Orange, State of California, being Parcels 1 through 10, inclusive of Parcel Map No. 2003-163 as per map filed in Book 358, Pages I through 9, inclusive of Parcel Maps in the office of the County Recorder of said County, together with Parcel I of Parcel Map No. 86-200 as per map filed in Book 255, Pages 40 through 45, inclusive of said Parcel Maps. Exhibit `B" 25835.00001157706892 EXHIBIT "C" C®STCO PARCEL PARCEL A (COSTCO PARCEL): PARCELS 1 AND 2 OF LOT LINE ADJUSTMENT NO, 1_ -OW RECORDED G�C'2l . 2011 AS INSTRUMENT NO. W QQQs2 ig5 I OF OFFICIAL RECORDS IN ORANGE COUNTY, CALIFORNIA Exhibit "C" 25835.0000 M5770689 2 Garage Expenses Elevator* Janitorial Janitorial Supplies Security Security Supplies/Cameras Sweeping PowerWash ing" Elevator Phones Utilities Misc R & M*** Lighting Lighting Supplies Utility Engineer Insurance Management Fees TOTAL GARAGE EXPENSES Approved City of Huntington Beach Huntington Center Parking Structure for the period of 07/01/2012 through 06/30/2013 Full Year 2013-2014 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 25,800 5,400 1,500 1,500 1,500 1,500 1,500 5,400 1,500 1,500 1,500 1,500 1,500 69,600 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 4,200 350 350 350 350 350 350 350 350 350 350 350 350 185,100 15,250 15,250 15,250 15,250 15,250 15,250 15,600 15,600 15,600 15,600 15,600 15,600 6,000 500 500 500 500 500 500 500 500 500 500 500 500 26,100 2,175 2,175 2,175 2,175 2,175 2,175 2,175 2,175 2,175 2,175 2,175 2,175 46,489 1,950 1,950 11,107 1,950 1,950 1,950 6,725 1,950 11,107 1,950 1,950 1,950 3,000 250 250 250 250 250 250 250 250 250 250 250 250 61,100 6,000 5,500 5,800 5,000 4,100 4,200 5,000 5,000 5,000 5,000 5,000 5,500 3,000 250 250 250 250 250 250 250 250 250 250 250 250 1,200 100 100 100 100 100 100 100 100 100 100 100 100 7,800 650 650 650 650 650 650 650 650 650 650 650 650 33,900 2,800 2,800 2,800 2,800 2,800 2,800 2,850 2,850 2,850 2,850 2,850 2,850 37,600 0 0 0 0 0 0 0 0 0 0 37,600 0 28,500 2,350 2,350 2,350 2,350 2,350 2,350 2,400 2,400 2,400 2,400 2,400 2,400 539,389 43,825 39,425 48,882 38,925 38,025 38,125 48,050 39,375 48,532 39,375 76,975 39,875 Name: Title Date. *Cleaning of Travertine in the 5 Elevators (2x annually) = $1,950.00 each * Honing of Travertine in the 5 lobbies (2x annually) = S 1,950.00 each **Powerwash Exterior Parking Structure (1 x annually) = $4,775.00 **Powerwash Interior Parking Structure - All Levels including stairwells, driveways and ramps (2x annually) = $9,257 each ***Re -striping - All Levels & Directionals = $11,000 ATTACHMENT #3 ESTOPPEL, CERTIFICATE (Parking Garage Agreements) TO: PR Bella Terra, LLC or assignee ("Buyer"), Bella Terra Associates, LLC ("BTA") and Bella Terra C, LLC Four Embarcadero Center, Suite 2700 San Francisco, California 94111 ATTN: Timothy Hennessey AND: Metropolitan Life Insurance Company 333 South Hope Street, Suite 3650 Los Angeles, CA 90071 ATTN: Richard Benner The undersigned, the City of Huntington Beach, a California charter city, is a party to that certain Operating Agreement for Huntington Center Parking Structure dated as of March 1, 2004, Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 (the "Parking and Reciprocal Easement Agreement"), Grant Deed from Huntington Center Associates, LLC ("HCA") dated November 29, 2004 and recorded May 31, 2005 as Instrument No. 2005000414924 of the Official Records of the Orange County Recorder, the Amended and Restated Grant Deed dated October 16, 2006 between HCA, Bella Terra Associates, LLC and the City recorded October 26, 2006 as Instrument No. 2006000726613 of the Official Records of the Orange County Recorder, and the Parking License Agreement and Covenant (City Parking Structure) dated October 17, 2011 and recorded October 21, 2011 as Instrument No. 2011000527963 in the Official Records of the Orange County Recorder (collectively, the "Parking Garage Agreements"). Capitalized terms not defined herein shall have the meanings ascribed to them in the Parking Garage Agreements. Buyer is considering the acquisition of an indirect membership interest in the "Developer", "Operator", or "Property Owners", as the case may be, under the Parking Garage Agreements, and Lender (as defined below) is considering providing BTA with a mortgage loan secured in part by the Retail Parcel, and in connection therewith, Buyer, BTA and Lender have requested this Estoppel Certificate. The undersigned has agreed to execute estoppel certificates pursuant to Section 23 of the Parking and Reciprocal Easement Agreement and reasonably cooperate with BTA's permanent lenders pursuant to Section 27 of the Parking and Reciprocal Easement Agreement. The undersigned certifies as follows: 1. True and correct copies of the Parking Garage Agreements and the current annual budget for the operation of the Structure are attached hereto. To the actual knowledge of the City, the Parking Garage Agreements, and any rights or obligations thereunder, have not been assigned, transferred, amended, modified or supplemented except as described herein, and no other agreements to which the undersigned is a party exist which would materially modify the Parking Garage Agreements. 2. BTA is the successor in interest to HCA under the Parking Garage Agreements. 3. To the actual knowledge of the undersigned, there is no default under the Parking Garage Agreements. 4. To the actual knowledge of the undersigned, the Parking Garage Agreements are in full force and effect. 5. A true and correct copy of the Official Statement (the "2013 Official Statement") concerning the issuance by the City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) of its City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) 2013 Special Tax Refunding Bonds in the aggregate principal amount of $20,915,000 is attached hereto. The undersigned is duly authorized to execute this Estoppel Certificate. The undersigned acknowledges that this instrument is being requested in connection with the request by BTA that Metropolitan Life Insurance Company, together with its participants and assigns (together, the "Lender") provide a mortgage loan secured in part by the Retail Parcel (the "Loan") to BTA. The undersigned consents to Lender as a lender to BTA and agrees that for purposes of the Operating Agreement and the Parking and Reciprocal Easement Agreement Lender is a lender to and permitted assignee of BTA and shall be entitled to any and all notices relating to defaults and cure rights of BTA under the Operating Agreement and the Parking and Reciprocal Easement Agreement (without obligation to effect such cure). Lender's address for notices is: Metropolitan Life Insurance Company, a New York corporation 10 Park Avenue Morristown, New Jersey 07962 Attention: Senior Vice President Real Estate Investments Re: Bella Terra And: Metropolitan Life Insurance Company 333 S. Hope St., Suite 3650 Los Angeles, California 90071 Attention: Richard Benner Re: Bella Terra The undersigned hereby acknowledges and agrees that this Estoppel Certificate may be relied upon by Buyer, BTA, Bella Terra C, LLC and Lender and any of their respective permitted successors and assigns in their decision to acquire an indirect membership interest in the "Developer", "Operator", or "Property Owners", as the case may be, under the Parking Garage Agreements (provided that this Estoppel Certificate speaks to factual matters only as of the date hereof). 2 Dated: i - )-S' 2015 ATTEST: Attorney "CITY" THE CITY OF HUNTINGTON BEACH AA i- G4ty anager Parking Garage Agreements and Annual Budget 1. Operating Agreement for Huntington Center Parking Structure dated as of March 1, 2004 2. Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 3. Grant Deed dated November 29, 2004 4. Amended and Restated Grant Deed dated October 16, 2006 5. Parking License Agreement and Covenant (City Parking Structure) dated October 17, 2011 6. 2014-2015 Annual Budget [behind this page] HB -353- Item 14. - 167 Official Statement concerning the issuance by the City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) of its City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) 2013 Special Tax Refunding Bonds in the aggregate principal amount of $20,915,000 [behind this page] Item 14. - 168 HB -354- N OPERATING AGREEMENT FOR HUNTINGTON CENTER PARKING STRUCTURE THIS OPERATING AGREEMENT ("Agreement") is entered into as of jatry -V__­,Iy1_arch 1 2004, between the CITY OF HUNTINGTON BEACH, a California charter city ("City"), HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company ("Operator"), pursuant to a resolution adopted by the City Council of the City of Huntington Beach at its meeting held on January 5, 2004. Recitals: A. City will be the owner of a parking structure (the "Structure") to be constructed on the site identified in Exhibit A hereto, which the City desires to utilize for public parking purposes. B. The Structure is being financed with bonds issued under the provisions of the Mello -Roos Community Facilities Act of 1982, as amended, and Chapter 3.56 of the City's Municipal Code, the interest on which is excluded from gross income under applicable Federal tax law. C. The City acquired the Structure subject to that certain Parking and Reciprocal Easement Agreement and Option to Purchase, dated as of january 151 March= l.3 2004, and effective as of its date of recordation (the "Reciprocal Easement Agreement"). D. City desires that Operator maintain and operate the structure consistent with the Reciprocal Easement Agreement for the public purpose of the City to provide adequate public parking and City and Operator wish to set forth their agreement as to the operation of the Structure. Agreement: In consideration of the foregoing recitals and for other consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Use. City authorizes Operator to operate the Structure, and Operator agrees to use the Structure solely for the purpose of vehicular parking, and vehicular and pedestrian ingress and egress, and for no other use or purpose. No portion of the Structure shall be used for the sale of goods, wares, merchandise, services or other commercial purposes other than (a) the display of advertising in, on, and about the Structure and (b) incidental uses such as pay telephones and vending machines not occupying two percent (2%) or more of the floor area of the Structure. Operator acknowledges that the use of the Structure is to provide adequate public parking for the City. Operator acknowledges that no portion of the Structure, other than the Private Retail Spaces (as defined in and designated pursuant to Section 2(a) of the Reciprocal Rk1PU B\ KAB\ 659574_i t HB -355- Item 14. - 169 Easement Agreement), shall be reserved for parking by its employees or employees of any other business. Operator shall make the Structure available to members of the general public, without preference or priority for any class of persons over any other class of persons except as otherwise expressly provided herein. The Structure shall at all times be posted with signs acceptable to the Operator and the City designating the Structure as "public parking." Subject to the provisions of Section 19 of this Agreement, Operator shall (a) manage and operate the Structure, (b) employ sufficient personnel for the operation of the Structure, (c) maintain accounting records of all revenues and expenses related to the operation of the Structure, and (d) periodically consult with the City regarding such operation. Operator agrees to comply with all statutes, ordinances, rules, orders, regulations of federal, state, county and city governments regulating the use by Operator of the Structure. Operator shall not use or permit the use of the Structure in any manner that will create or tend to create a nuisance. The hours of operation for the Structure shall be determined in Section 8 hereof and shall be consistent with the purposes of the Reciprocal Easement Agreement. The Operator acknowledges that the Stricture shall be used for unrestricted free parking, except for 5% of spaces as set forth in the Reciprocal Easement Agreement, and that the City, in consultation with Operator, shall have the power to establish rates and charges for the use of the Structure at a later date. In consideration of the foregoing, the Operator hereby agrees to operate the structure in the manner described in Section 7(a) of the Reciprocal Easement Agreement. Section 2. Rates. Parking rates to be initially charged for the Structure shall be free. City shall determine, from time to time, revisions to the rates to be charged for the Structure, in consultation with the Operator and upon City's obtaining a parking rate study, which illustrates the range of fees charged at competing parking facilities and shall advise the Operator in writing of any changes to the Structure rates at least 30 days prior to the date any such change becomes effective. Notwithstanding the foregoing, final determination of rates and charges for the Structure shall be made by the City Council. Section 3. Operator's Employees. All of Operator's employees and the employees of any subcontractor of the Operator that operates the Structure as provided in Section 19 hereof, shall, at all times while on duty at the Structure, wear standard uniforms, conduct themselves with exemplary demeanor, be courteous and polite to the public and not engage in any raucous or offensive conduct. The City shall be the sole judge, using reasonable discretion, as to whether the conduct of the employees of Operator meets the requirements hereof and upon notice from City of any non -conformity with these standards, Operator shall immediately take all steps necessary to eliminate the condition complained of. Any laborers or employees engaged by the Operator shall not be the employees of the City and the City shall in no any way be liable for the payment of any wages or benefits to any such laborers or employees. Any such laborers or employees shall in no way be third party beneficiaries of this Agreement. Section 4. Operating Fee. City shall pay to Operator as its management fee for each month of the term of this Agreement; a fee of $1,500.00, such amount to be increased on each annual anniversary of the Commencement Date of this Agreement by a percentage increase agreed to by the City and the Operator as reflective of the percentage increase during the preceding year in the Consumer Price Index -Urban Wage Earners and Clerical Workers (Los 2 .sws9s74.1 Item 14. - 170 xB -356- Angeles -Anaheim -Riverside, CA, All Items, Base 1982-84 = 100) as published by the United States Department of Labor, Bureau of Labor Statistics. In addition, City shall reimburse Operator for those reasonable expenses and costs incurred by Operator in the performance of its parking services ("Operating Expenses"). Such Operating Expenses shall include, without limitation, the aggregate of: subcontractor fees and expenses, salaries and wages, health insurance, uniforms, security guard service, supplies, signs, utilities, Structure maintenance, public liability, garage keepers liability and other insurance (including but not limited to insurance required by Section 10 of this Agreement and Section 7(b) of the Reciprocal Easement Agreement), and all other necessary and reasonable costs related to the provision of such parking services by the Operator and/or any subcontractor thereof, provided, that such costs are reasonable, and are not duplicative (in the event the Operator engages a subcontractor as described in Section 19 hereof). Payroll taxes, workers' compensation insurance and sick leave pay shall be reimbursed at the percentage of gross payroll as may be determined by the Operator in accordance with applicable State and Federal laws. Operating Expenses shall not include any of Operator's general overhead expense which shall include, but shall not be limited to: (a) Administrative and related costs and expenses incurred in the operation of the Structure or the other operations of Operator, as they are incurred in the general management of the affairs of Operator generally, including the monitoring of the operation and management of Operator; V (b) Maintenance of the general books and records of Operator; (c) Office supplies and equipment used by Operator which are not used exclusively for the Structure; (d) Postal, telephone and travel expense which are not directly related to the management of the Structure; (e) The cost of any managers or supervisors who are not employed at the Structure on a full time basis; and (f) Capital repairs required to be paid for by parties other than the City pursuant to the Reciprocal Easement Agreement. Within 30 days after the end of each month, Operator shall submit to City a reasonably detailed written statement of the management fee earned and the Operating Expenses incurred during the preceding month. The City shall remit to Operator, within 30 days after City's receipt of the statement, the amount invoiced on the statement. No delay in the delivery of such written statement will affect the Operator's right to receive such amounts within 30 days of the date such statement is actually delivered to the City. The management fee and all operating expenses shall be payable solely from the Parking Fund, discussed in Section 5 below, and proceeds of the "Parking Structure Maintenance Special Tax" collected from Community Facilities District No. 2003-1 of the City of Huntington Beach (the "CFD") which have been levied for the purpose of paying for the maintenance and operation of the Structure. No other funds of the City shall be available to pay for the operation and maintenance of the Structure. RVPU13""',659574.1 HB -357- Item 14. - 171 Notwithstanding any other provision hereof, Operating Expenses shall not include, and in no event shall the City be liable for payment of, any management fee of any subcontractor of the Operator hereunder, but such limitation on liability of the City shall not prevent or in any way restrict the Operator from using or assigning all or a portion of its management fee described in the first sentence of this Section 4 for such purpose. The City shall levy the Parking Structure Maintenance Tax on the taxable real property within the CFD monthly, bi-monthly or semi-annually as determined by the Treasurer. Section 5. Payment of Operating Revenues to City. Any revenues received by the Operator in connection with the operations of the Structure (including any vending machine or other incidental revenues, and any revenues from advertising or other promotions at the Structure) shall be transferred by the Operator to the City as such funds are received, for deposit in the "Parking Fund" to be established and maintained by the City for the benefit of the City and the Operator. The Operator shall maintain records of all revenues so received, and transferred to the City. The City shall maintain records of deposits to the Parking Fund. Monies deposited in the Parking Fund shall be applied first to the maintenance and operation of the structure, second to the payment of cost of repairing and replacement of the Structure, and third to the payment of the operating fee set forth in Section 4 hereof. City shall pay Operator expenses billed solely from moneys deposited in the Parking Fund and such payment shall be made 30 days from receipt of the invoice from the Operator. City shall provide Operator with monthly statements showing income and expenses of the Parking Fund. Section 6. Accounting and Budget. Operator shall maintain, for a period of 36 months from the date of mailing such statements to City, records of such gross revenues collected and Operating Expenses disbursed in accordance with recognized accounting practices. Upon reasonable notice to Operator, City or its designated agents may examine Operator's records pertaining to the Structure, including amounts for maintenance. Upon completion of the Structure and annually on each July 15 thereafter during the term of this Agreement, Operator shall submit to City a proposed budget for the operation of the Structure such proposed budget shall set forth the projected income, special taxes to be levied and expenses to be incurred by Operator (the "Proposed Budget"). Each Proposed Budget shall include both an annual aggregate budget for the structure and monthly budgets for each calendar month during the applicable Fiscal year covered by the proposed Budget. Each Proposed Budget shall be submitted in a form reasonably acceptable to City. Each Proposed Budget shall be for planning and information purposes only and shall not be deemed to be binding upon either Operator or City. Each such budget, prior to adoption and implementation by Operator, shall require the written approval of City such approval not to be unreasonably withheld or delayed. Any budget so approved by City shall become the budget for the ensuing fiscal year and shall form the basis on which Operating Expenses are incurred in that fiscal year. If the budget is not approved, then the budget effective the in the prior fiscal year shall govern the operating costs of the Structure until a new budget is agreed upon by the City and the Operator. The budget for any fiscal year may only be amended in writing, subject to the written approval of City. Operator shall not incur any Operating Expenses which is in excess of five percent (5%) of the annual amount allocated for that particular Operating Expense line item in the budget, unless Operator has obtained the prior written approval of the City Administrator (or his designee), such approval 4 n rnn i v n g\659574. I Item 14. - 172 xB -358- not to be unreasonably withheld or delayed, or such increased expenditure is otherwise authorized by this Agreement. All financial statements submitted pursuant to the last sentence of Section 5 and this Section 6 shall be certified as fairly representing the Structure's financial condition. Section 7. Term of Agreement. This Agreement shall commence on the day the Structure is open for parking by the general public and the City has issued a certificate of occupancy (temporary or final) for the Structure (the "Commencement Date''), and shall terminate on the earlier of (a) the date on which the City no longer owns the Structure, or (b) the date which is fifteen (15) years after the Commencement Date. Notwithstanding the foregoing, upon the termination of this Agreement, pursuant to clause (b) above, the Developer irrevocably agrees to extend the term of this Agreement for an additional fifteen years_ Section 8. Hours of Operation. Unless otherwise determined by the City in consultation with Operator, and consistent with the Reciprocal Easement Agreement, the hours of operation of the Structure shall be from 8 a.m. to 2 a.m. daily, and the City shall advise the Operator of such hours and any change thereto. Section 9, Indemnification. Operator expressly agrees to defend, protect, indemnify and hold harmless the City and its officers, agents, elected and appointed officials, employees and volunteers free and harmless from and against any and all claims, demands, damages, expenses, losses, judgments or liability of any kind or nature whatsoever which City, and its -officers, agents, elected and appointed officials, employees and volunteers may sustain or incur or which may be imposed upon them or any of them for injury to or death of persons or damage to property arising out of or resulting from the alleged acts or omissions of Operator, its officers, agents or employees or in any manner connected with this Agreement or with the occupancy, use or misuse of the Structure by Operator, its officers, agents, employees, subtenants or licensees, patrons or visitors; and Operator agrees to defend at its own cost, expense and risk all claims or legal actions that may be instituted against either the City (provided the City has timely tendered a request for a defense to Operator) and the Operator agrees to pay any settlement entered into with Operator's consent and satisfy any final judgment that may be rendered against the Operator or the City or any other party indemnified by the Operator hereunder as a result of any injuries or damages which are alleged to have resulted from or be connected with this Agreement or the occupancy or use of the Structure. Notwithstanding the foregoing in no event shall the Operator or any such subcontractor be obligated to indemnify the City for the City's intentional misconduct. Section 10. Insurance. A. Insurance. Prior to the first date on which the Structure is open for public parking, Operator, or a subcontractor of Operator, shall procure and maintain insurance as set forth in Section 7(b) of the Reciprocal Easement Agreement, which insurance shall be considered an Operating Expense for purposes of Section 4 above, and shall remain in effect for the duration of this Agreement, including any extensions, renewals, or holding over thereof, from insurance 5 RVPUBIKAB\659574.1 HB -359- Item 14. - 173 companies that are admitted to write insurance in the State of California or from authorized nonadmitted insurers that have ratings of or equivalent to an AXIII by A.M. Best Company. Operator shall pay the premium on all insurance required herein in a prompt and timely manner. Operator acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Operator covenants that it shall comply with such provisions prior to the commencement of this Agreement. Operator shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Operator shall require all sub -contractors to provide such workers' compensation and employers` liability insurance for all of the sub -contractors' employees. Operator shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Operator shall similarly require all sub -contractors to waive subrogation. The requirements hereunder for insurance coverage shall not diminish Operators obligations to defend, hold harmless and indemnify set forth in this Agreement- B. Subcontractors. So long as a subcontractor of the Operator maintains insurance in compliance with the provisions of this Section, the Operator shall not be required to obtain such insurance (except to the extent required by applicable law, such as worker's compensation insurance as described in Section I.O.A. above). C. Self-insurance and deductibles. Any self-insurance program, self -insured retention or deductible must be reasonably approved separately in writing by City and shall protect the City and its officials, employees, and agents in the same manner and to the same extent as they would have been protected had the policy or policies not contained such self-insurance or deductible provisions. D. Cancellation: severability of interests: primary and noncontributing. Each insurance required hereunder shall be endorsed to provide as follows: (i) that coverage shall not be voided, canceled or changed by either party except after thirty (30) days prior written notice to City, (ii) that the insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability: and (iii) and that cove -rage shall be primary and not contributing to any other insurance or self-insurance maintained by City and its officials, employees, or agents. E. Delivery of insurance documentation. Prior to the commencement of public parking in the Structure, Operator shall deliver to City certificates of insurance and the endorsements required hereunder for approval as to sufficiency and form, including the certificates of insurance and endorsements of any subcontractor to Operator. The certificates and endorsements for each insurance policy shall contain the original signature of a person authorized by that insurer to bind coverage on its behalf. In addition, Operator shall, at least fifteen (15) days prior to expiration of such policies, furnish City with evidence of renewals. City reserves the right to require complete certified copies of all said policies at any time. City, or its representatives, shall have the right to demand the original or a copy of any or all of the policies of insurance required in this Agreement. 0 ... aBi659S7a. u Item 14. - 174 H13-360- F. No liritation of liability. Such insurance as required herein shall not be deemed to limit Operator's liability relating to performance under this Agreement. The procuring of insurance shall not be construed as a limitation on liability or as full performance of the indemnification and hold harmless provisions of this Agreement. Operator understands and agrees that, notwithstanding any insurance, Operator's obligation to defend, indemnify, and hold City, and its officials, agents, and employees harmless hereunder is for the full and total amount of any damage, injuries, loss, expense, costs, or liabilities caused by the condition of the Structure or in any manner connected with or attributed to the acts or omissions of Operator, its officers, employees, agents, or subcontractors, or the operations conducted by or on behalf of Operator, or the Operator's use, misuse, or neglect of the Structure, all as more particularly provided in Section 9 above. G. Books and records. Operator agrees to make available to City all books, records, and other information relating to the insurance coverage required by this Agreement during normal business hours. H_ Amendments to the insurance provisions. (1) Not more frequently than every year, if in the reasonable opinion of City's Risk Manager or designee, based on practices in other publicly owned parking structures at or adjacent to large retail facilities in Southern California, the amount or scope of the foregoing insurance. coverages is not adequate, Operator shall, to the extent any additionally required coverage is available at commercially reasonable rates, amend its insurance coverage and/or, if applicable, require its subcontractors to amend their insurance coverage, as reasonably required by City's Risk Manager or designee. (2) Any modification or waiver of the insurance requirements herein shall be made only with the written approval of the City's Risk Manager or designee. Section 11. Assignment. Operator covenants that it will not assign, transfer, convey, sublet, sell, mortgage, pledge, or encumber this Agreement, the Structure or any part of it, or any rights of Operator under this Agreement, whether voluntary or by operation of taw, except upon written consent of City which consent shall not be unreasonably withheld or delayed; provided that no such consent shall be required for an assignment by the Operator to an entity which is a successor to the "Developer" under (and as such term is defined in) the OPA. Section 12. Surrender of Possession. Upon termination of this Agreement, any improvements constructed or installed at the Structure shall become the property of the then owner of the Structure, and Operator shall surrender to such owner the Structure in good order, condition and repair except for ordinary wear and tear and casualty damage. Operator will be required to remove all personal property prior to the termination of this Agreement unless other arrangements are made with and approved by the then owner of the Structure. Operator agrees that City will have, without prior notice, the right to sell or otherwise dispose bf any personal property belonging to Operator which has been left at the Structure after Operator has vacated the Structure. Section 13. Defaults of Operator; Remedies Upon Default. Operator agrees that: RVPUBIKAM659574.1 7 HB -361- Item 14. - 175 (a) If Operator shall be in default in the payment of any sum due from it to City pursuant to this Agreement for ten (10) days after '�tiTitten demand shall have been made therefor by City; or (b) If Operator shall neglect, violate, be in default under, of fail to perform or observe any of the other covenants, agreements, terms or conditions contained in this Agreement on its part to be performed and shall not have remedied, or commenced action which will promptly remedy same which action is thereafter diligently pursued, within thirty (30) days after written notice thereof given by City, or if such violation or default cannot reasonably be remedied in such period and Operator commences to cure such default within such thirty (30) day period, such additional time as the City determines is reasonably necessary to complete such remedy but not more than one hundred twenty (120) days; or (c) If the Operator shall fail to operate the premises for any forty-eight (48) hour period; then at the option of the City, (x) this Agreement and the term hereof shall, upon the date specified in a written notice given by City to Operator setting forth the nature of such default, breach, matter, or condition, be terminated and City may recover possession of the Structure, or (y) the City may keep this Agreement in effect and pursue all other legal remedies available to City, including specific performance. Section 14. Independent Contractor. It is expressly acknowledged that Operator shall be an independent contractor with respect to all services performed under this Agreement and Operator agrees to and accepts full and exclusive liability for the payment of any and all contributions or taxes for social security, unemployment insurance, or old age retirement benefits, pensions, or annuities now or later imposed under any state or federal law which are measured by the wages, salaries, or other remuneration paid to persons employed by Operator on work. performed under the terms of this Agreement, and further agrees to obey all rules and regulations which are now, or later may be, issued or promulgated under these respective laws by any duly authorized state or federal officials; and Operator shall indemnify and save harmless City from any such contributions or taxes or liability therefor. Section 15. Maintenance and Security of Facility. Operator shall be responsible for the maintenance of the Structure at a level consistent with the Standards of Maintenance in Exhibit B hereto and the Reciprocal Easement Agreement. Operator shall also be responsible for providing security upon or about the Structure and the premises through a subcontract with a licensed security company (the City agrees to accept any security company selected by the Operator in good faith that is providing security services .for other improvements in the area of the Structure). The security company and the contract shall be reasonably approved in writing by City and the company so employed shall hold Operator and City harmless with respect to its activities. Operator shall be responsible for securing access to and from the facilities in accordance with written operating policies and procedures to be mutually agreed upon from time to time and be responsible for monitoring the security service contract as to hours worked and level of service. RVP1 iR1KAB:G59574.1 Item 14. - 176 HB -362- Section 16. Property Rights; Access to the Structure. No property rights in the Structure, or right of possession thereof, is granted by this Agreement. However, and in accordance with California Revenue and Taxation Code Section 107.6(a), the City advises the Operator that by entering into this Agreement, a possessory interest subject to property taxes may be created, and the Operator or other party in whom the possessory interest is vested may be subject to the payment of property taxes levied on such interest. Notwithstanding the foregoing, it is the intent of the City and the Operator that this Agreement shall in no way create a possessory interest of the Operator in the Structure for purposes of possessory interest taxes under California Revenue and Taxation Code Section 107.6(a) and that any interest conveyed hereunder not be subject to any possessory interest, ad valorem or any other similar tax imposed by the State or any other governmental entity. The Operator agrees that any authorized representative of the City shall have the right at all reasonable times to enter upon and to examine and inspect the Structure. The Operator further agrees that any such authorized representative shall have such rights of access to the Structure as may be reasonably necessary to .cause the proper maintenance of the Structure in the event of failure by the Operator to perform its obligations hereunder. Section 17. Remedies Will Be Cumulative. All rights and remedies of City enumerated will be cumulative and none will exclude any other right or remedy allowed by law. Likewise, the exercise by City of any remedy provided or allowed by law will not be the exclusion of any other remedy. Section 18. Limitation of City Liability. Any and all monetary obligations of the City under this Agreement shall be payable solely from any revenues derived by the City from the Structure or from the proceeds of the Parking Structure Maintenance Special 'Fax. In no event shall City's general fund be liable hereunder. Section 19. Waiver. One or more waivers of any covenant, term or condition of this Agreement by either party will not be construed by the other party as a waiver of subsequent breach of the same covenant, term or condition. The consent or approval of either party to or of any act by the other party of a nature requiring consent or approval will not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. Section 20. Subcontracts. Operator shall have the right to engage a subcontractor to conduct the physical operation of the Structure. Any such entity shall be subject to the prior written approval of the City, such approval not to be unreasonably withheld or delayed, provided that the City may base its approval or denial, in part, on the financial condition of the subcontractor in light of the provisions of the second paragraph of Section 10 hereof. Section 21, Anti -Discrimination. Operator agrees that this Agreement is made and accepted on and subject to the following conditions: That there will be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, national origin, sex, sexual orientation, AIDS, AIDS -related condition, age, marital status, disability or handicap, or Vietnam Era veteran status in the leasing; subleasing, transferring, use, occupancy, hiring, employment, tenure or enjoyment of the Structure, nor will Operator or any person 9 RVPUB`T,AB1659573.1 HB -363- Item 14. - 177 claiming under or through it establish or permit any practice or practices of discrimination or segregation with reference to the Structure. Section 22. Attorneys' Fees. In the event that either party fails to comply with any of the terms of this Agreement and the other party .commences legal proceedings to enforce any of the terms of this Agreement, the prevailing party in any such suit will receive from the other attorneys' fees including applicable court costs. Section 23. Notices. Any and all notices to be given under this Agreement or required by law to be served on either of the parties may be given by first-class mail deposited in the United States mail, postage prepaid, addressed as follows: To City: City of Huntington Beach P.O. Box 190 2900 Main Street Huntington Beach, CA 92648 Attention: Economic Development Department with a copy to: City of Huntington Beach P.O. Box 190 2900 Main Street Huntington Beach, CA 92648 Attention: City Attorney To Operator: Huntington Center Associates LLC 5757 Wilshire Blvd., Penthouse 30 Los Angeles, CA 90036 Attention: Mike Wise With a copy to: Allen Matkins Leek Gamble & Mallory I:LP 515 South Figueroa, 7`h Floor Los Angeles, CA 90071-3398 Attn: Michael J. Kiely, Esq. Any notices may be personally served on the party to be given notice. Any notice served by means of the United States mail will be effective three business days from the date of mailing. Section 24. Execution. This Agreement may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Agreement. Section 25. Validity. If any one or more of the terms, provisions, promises, covenants, conditions or option provisions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reasons whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants, conditions, and option provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 10 R VPi 1MV aB\659574.1 Item 14. - 178 HB -364- Section 26. Amendments. This Agreement may only be amended in writing executed by both of the parties hereto. Section 27. Entire Agreement. It is understood that there are no oral agreements between the parties affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator OPERATOR: HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, a Delaware limited liability company, Its Manage? Bv: % — ryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, Its Manager CITY OF HUNTINGTON BEACH By: Mayor APPROVED AS TO FORM: City Attorney Bond Counsel 11 RVPUB\Kr1B1659574. I HB -365- Item 14. - 179 Section 26. Amendments. This Agreement may only be amended in writing executed by both of the parties hereto. Section 27. Entire Agreement. It is understood that there are no oral agreements between the parties affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. OPERATOR: HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, Its Manager By: BMLF/Huntington, LLC, a Delaware limited liability company, Its Manager Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, Its Manager ATTEST: CITY OF HUNTINGTON BEACH �y: City Clerk �-�� Mayo REVIEWED AND APPROVED: C�.t.., CIAL/ ct City AdnTinistrator APPROVED AS TO FORM: City Attorney Bond Counsel o vn' rug v k 3\659574. Item 14. - 180 HB -366- EXHIBIT A DESCRIPTION OFTHE SITE RVPUB%XAB:554574.1 M HB -367- Item 14. - 181 LD 1018 02-100 LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE SHEET 1 OF 2 THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCEL 2 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89"29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED IN BOOK 3675, PAGE 63 AND GRANT DEED RECORDED IN BOOK 3159, PAGE 483 BOTH OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89029'30" WEST A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00130'30" WEST A DISTANCE OF 334.58 FEET; THENCE NORTH 89Q29'30" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70132'16" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89029'30" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89029'30" WEST A DISTANCE OF 274.25 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89°29'30" EAST A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. CHRISTOPHER W. DANIELS Item 14. - 182 HB -368- SHEET 2 OF 2 LD 1018- 02-100 CENTER DRIVE ' _ N89'29'30°W _ . 534.08' _ SOUTHERN CALIFORNIA EDISON RIGHT OF WAY BK. 3159, PG 483 Q.R. S'LY LINE OF THE WILY 150' OF THE SOUTH 1/2 OF THE SOUTHEAST 1/4 OF SECTION 14 — BK. 3675, PG. 63 O.R. o _--_- N89'29'30"W 763.76' 416.50' ' < M O t.t N 6,1J w tom' - 0 O O O Z I SCALE: 1" = 80' ) -- — — T 7 o BK. 4519, PG 491 O.R. i' PARCEL "A" co 2.41 AC PARKING STRUCTURE tv t' W s N89.29'30"W 274.25' o b — i!] O r) O O >v Z a L1 r, i VL2 N89'29'30"W I 135.12' LINE TABLE LINE BEARING LENGTH L1 N89'29'30'W 3.00 L2 N70'32'16'E 4.39 Engineers ! Planners ! Surveyors 1!9a229 MAIN SMai. 5.1% 5W. Ri E. CA 926q p� TEL (94916960111 FA):(%9) "60219 215E. WK SfPoNGS ROAD. SURE :W,(7b VEGAS NJ 69.19 ❑ TEL(M21S66460C FAX (M)86 46% HB -369- L1J DATE: 05-13-04 EXHIBIT "B" SKETCH TO ACCOMPANY LEGAL DESCRIPTION FOR PARKING STRUCTURE BELLA TERRA MALL, HUNTINGTON BEACH_ CA. Item 14. - 183 EXHIBIT B STANDARDS OF MAINTENANCE During the term of the Agreement and any extensions hereof; the Operator shall: 1. Clean and maintain all surfaces of the Public Parking Structure and keep such surfaces level and evenly covered with the type of surfacing material originally installed thereon, or such substitute thereof as shall be equal thereto in quality, appearance and durability; 2. Remove all papers, debris, filth and refuse from the Public Parking Structure and wash or thoroughly sweep paved areas; 3. Remove trash from trash receptacles and clean trash receptacles; 4. Clean, maintain, repair and replace entrance, exit and directional signs; traffic control signage, markers and lights into and with the Public Parking Structure; 5. Keep the parking areas, stairways, elevators and other portions of the Public Parking Structure well -lit from dusk each day until dawn at least during the applicable hours of operation of the Public Parking Structure, and clean, relamp and reballast all lighting fixtures; 6. Maintain, repair and replace striping and curbing; 7. Maintain and replace as necessary the landscaping surrounding the Public Parking Structure; S. Maintain and repair the structure of the Public Parking Structure, as needed; 9. Repaint and refinish all painted and finished surfaces; 10. Clean, maintain and repair all stairs; stairwells and stairwell doors within the Public Parking Structure; 11. Clean, maintain, repair and operate all elevators; 12. Maintain, repair and replace, if needed, all mechanical, electrical and utility facilities and systems that are a part of or serve the Public Parking Structure, including, without limitation, sprinkler and fire control systems, parking revenue control equipment, parking access control equipment, security systems and equipment, mechanical venting systems, lighting and emergency lighting systems, rollup doors and traffic barriers; 13. Making all repairs, improvements or alterations required to comply with applicable laws; 14. Except to the extent maintained by a utility company, maintain the Utility Facilities located within the Public Parking Structure, other than those which are owned by B-1 - .� Item 14. - 184 y HB -370- Developer or are exclusively serving the Retail Parcel pursuant to the Developer Utilities Easement; 15. Obtain and maintain the public liability insurance and property/casualty insurance required in the Operating Agreement; and 16. Provide, or cause to be provided, reasonable security services within the Public Parking Structure_ RVI'MICAA;654-574. t IM HB -371- Item 14. - 185 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Allen Matkins Leck Gamble & Mallory LLP 515 South Figueroa Street, 7th Floor' Los Angeles, California 90071 Attn: Michael J. Kiely, Esq. (Above Space for Recorder's Use Only) PARKING AND RECIPROCAL EASEMENT AGREEMENT AND OPTION TO PURCHASE This PARKING AND RECIPROCAL, EASEMENT AGREEMENT AND OPTION TO PURCHASE ("Agreement") is made and entered into as of the 1st day of March, 2004 (the "Effective Date"), by and between HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer"), and the CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City"). RECITALS: A. Developer is the fee owner of that certain parcel of real property located in the City of Huntington Beach, County of Orange ("County"), State of California ("State") formerly known as "Huntington Center" and recently renamed as "Bella Terra Mall", and more particularly described on Exhibit "A" attached hereto (together with all improvements now or hereafter located on such property, the "Retail Parcel"). Pursuant to that certain Owner Participation Agreement dated as of October 2, 2000, between Developer and the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic (the "Agency"), Developer has agreed to redevelop Retail Parcel to include up to 800,000 square feet of retail and entertainment uses. B. Concurrently herewith, Developer has conveyed to City the fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "B", attached hereto (the "Parking Parcel"). The Parking Parcel is currently improved with an asphalt surface parking lot and is contiguous on all sides to the Retail Parcel. C_ Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January 6, 2003, adopted a Resolution of Intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center.)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the -- --- -%A Item 14. - 186 3- 0d?ngk4p HB -372- financing (the "CFD Financing") of the design, construction and acquisition of certain public facilities, including a sit -level parking structure on the Parking Structure Parcel containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available for parking use by the public. D. City desires to grant a temporary exclusive easement to Developer over the Parking Parcel for the purpose of constructing the Public Parking Structure. E. City and Developer desire to establish certain reciprocal and other casements including, but not limited to, vehicular and pedestrian ingress and egress, utilities, subjacent and lateral support, encroachment and other easements, including certain limited parking rights, together with various other conditions and covenants, which are intended to burden and benefit the Retail Parcel and the Parking Parcel, as the case may be. F. In addition to the terms defined in the foregoing Recitals, the following defined terms, when used in this Agreement, shall have the meaning set forth below: (i) "Funding Agreement" means that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of March 1, 2004, between City and Developer. (ii) "Force Maieure" shall mean any event or occurrence outside the reasonable control of Developer and which Developer did not learn of in time to reasonably avoid a delay in completion of construction of the Public Parking Structure including, but not limited to: (1) a strike or labor stoppage; (2) delay resulting from inclement weather beyond that which would reasonably be anticipated for the seasons during which the work on the Public Parking Structure is continuing; (3) riot; (4) insurrection; (5) war; (f) governmental order or decree; (7) unforeseen site conditions, including, without limitation, the presence of Hazardous Substances in, on, around or under the Project site that could not have been discovered through the exercise of reasonable due diligence prior to commencement of construction of the Improvements on or within the Project. (iii) "Hazardous Substances" means any chemical, substance, material, object, condition, waste or combination thereof (i) the presence of which requires investigation or remediation under any applicable statute, regulation, ordinance, order, action, policy or common law; (ii) which is defined as a "hazardous waste", "hazardous substance", "hazardous material", pollutant, toxic or contaminant under any statute, regulation, rule or ordinance or amendments thereto of any governmental agencies having jurisdiction thereof; (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any governmental agencies having jurisdiction thereof; or (iv) the presence of which on the Project causes or threatens to cause a nuisance or injury upon the Project, to adjacent properties or to the environment or poses or threatens to pose a hazard to the health or safety of persons on or about the Project. (iv) "Improvements" shall mean and refer to any building or structure located on the Parking Parcel or Retail Parcel. 6043'?225Item 14. - 187 tias�-000023-Z9•G4i:n1�'�P HB -373- (v) "Mortgage" shall mean and refer to any mortgage, indenture of mortgage, deed of trust (whether fee or leasehold), sale and leaseback transaction or assignment and subleaseback transaction which covers all or any portion of the Retail Parcel, made by a reputable third party bank or other institutional investor. (vi) "Mortgagee" shall mean and refer to a mortgagee and/or a trustee and beneficiary under a Mortgage and, to the extent applicable, a fee owner if the Retail Parcel is the subject of a sale and leaseback transaction. (vii) "Operating Agreement" means that certain Operating Agreement dated as of March 1, 2004, between the City and Developer, pursuant to which Developer has undertaken certain of the obligations of the, City hereunder. (viii) "Parcel" or "Parcels", as the case may be, shall mean and refer to the Retail Parcel and the Parking Parcel, or either of them, as applicable. (ix) "Party" or "Parties", as the case may be, shall mean and refer to City and Developer, or either of them, as applicable, and any party after the date hereof acquiring an interest in or to the Retail Parcel and/or the Parking Parcel. (x) "Permittees" shall mean and refer to each Party, the tenants of each Party, and their respective officers, directors, employees, agents, contractors, subcontractors, customers, visitors, invitees, licensees, utility suppliers and concessionaires entering such Party's Parcel or such tenant's premises within such Parcel. (xi) "Project" means, collectively, the Retail Parcel, the Parking Parcel and the Public Parking Structure. (xii) "Utility Facilities" shall mean all utility and service lines and systems serving the Project or portions thereof; including sewers; ejector pumps; water pipes and systems; intake and exhaust vents; gas pipes and systems; sprinkler pipes and systems; drainage lines and systems; electrical power conduits; lines and wires; energy transfer stations and substations; chillers; transformers; electrical panels; vaults; cable television lines; microwave communication systems; telephone conduits, lines and wires; security lines and systems; any utilities required for teleconferencing facilities; and other service or utility lines necessary or convenient to operate the Project. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer hereby agree as follows: CONSTRUCTION EASEMENT. City hereby grants to Developer for the use by Developer and its Permittees a temporary ingress, egress and general access easement (the "Construction Easement"), appurtenant to and for the benefit of the Retail Parcel over, beneath and across the Parking Parcel for the purpose of (a) constructing and installing the Public Parking Structure; including, without limitation, all foundations, footings, columns, floors, Utility Facilities, directional signs, hardware, painting, striping, lighting and other improvements comprising the Public Parking Item 14. - 18 8'29-04Jmjkirp HB -3 74- Structure (all of which construction shall comply with the provisions of Section 6 below), and (b) vehicular and pedestrian ingress, egress and access by Developer and its Permittees for purposes of such construction, and (c) parking of vehicles in connection with the construction and project management of the construction of the Public Parking Structure, and (d) if applicable, performing the maintenance, repair and reconstruction obligations of the City as contemplated hereunder, if the City fails to do so. The Construction Easement (other than the easement in clause (d), which shall survive completion of the Public Parking Structure but shall be effective only during periods when the Developer or its Permittees are performing the applicable obligations of the City) shall terminate upon completion of the Public Parking Structure (as determined by the issuance by the City (acting in its governmental capacity) of a final certificate of occupancy for the Public Parking Structure and delivery to and acceptance by the City (in its proprietary capacity) of the Public Parking Structure. EASEMENT FOR DEVELOPER PARKING. City hereby grants to Developer and its Permittees, including any valet parking services operators engaged by Developer in connection with the operation of the Retail Parcel, and such operators employees and contractors) an exclusive easement (the "Developer Private Parking Easement") over and across the Parking Parcel and all levels of the Public Parking Structure for the purpose of providing to Developer and its Permittees the exclusive right to use up to five percent (5%) of the total parking spaces striped in the Public Parking Structure (the "Private Retail Spaces") for so long as the Public Parking Structure exists. The Private Retail Spaces shall be located generally on the upper -most portions of the Public Parking Structure at specific locations to be reasonably agreed upon between City and Developer. Pursuant to the Developer Private Parking Easement, Developer shall have the rights at its sole expense to (i) install signs designating the Private Retail Spaces, (ii) segregate the Private Retail Spaces by partition, ropes; barricades or other means provides such devices do not interfere with the orderly low of traffic in the Private Parking Structure by the City and its Permittees, and (iii) tow vehicles parked in such spaces that are not invitees of Developer or its Permittees. EASEMENT FOR CITY INGRESS AND EGRESS TO STRUCTURE. Developer hereby grants to City for the use of City and its Permittees a non- exclusive permanent easement (the "City Access Easement"), appurtenant to and for the benefit of the Parking Parcel, over and across all areas of the Retail Parcel designated from time to time by Developer and regularly used for vehicular ingress, egress and access of the vehicles of Developer and/or its Permittees, but specifically excluding any areas designated and exclusively reserved for loading or emergency access, for the purpose of providing vehicular and pedestrian ingress and egress to and from the Public Parking Structure to public streets adjacent to the Project. 4. UTILITIES AND OTHER EASEMENTS. (a) Developer Utility Easement. City hereby grants to Developer for the use of Developer and its Permittees a non-exclusive permanent easement, appurtenant to and for the .131La H4564 - 002:'3-?9.Oa,mjk.-:p HB -375- Item 14. - 189 benefit of the Retail Parcel, in, over, under and across the Parking, Parcel (the "Developer Utility Easement"), and any portion thereof, for the purpose of (i) installation, construction, operation, maintenance, repair or replacement of the Developer's Utility Facilities, and (ii) ingress, egress and access by vehicles and pedestrians to the Developer's Utility Facilities for the purposes stated above; provided, however, in no event shall any portion of the Developer's Utility Easement materially adversely affect or impair City's operation, use or enjoyment of the Parking Parcel. Except as otherwise provided herein, Developer shall be solely responsible for the cost of maintaining and servicing the Developer's Utility Facilities that serve Retail Parcel. As may be reasonably required, Developer shall have the right to relocate the Developer's Utility Facilities to a different location in the Parking Parcel; provided, however, (X) Developer shall be solely responsible for any all costs incurred in connection with or as a result of such relocation, (Y) there shall be no material interruption 6f power service or other utilities to the Parking Parcel as a result of or in connection with the relocation of any utility lines or equipment, and (Z) there shall be no material adverse effect on the City's operation, use and enjoyment of the Parking Parcel. Developer shall use its reasonable good faith efforts to consult with the appropriate utility company providing service to the Parking Parcel to reduce the amount of interruption of service to City as a result of the re -location of utility lines and equipment, including, but not limited to, performing such work at a time when the Public Parking Structure is least used by the public, City and its Permittees. (b) City Utility Easement. Developer hereby grants to City for the use of City and its Permittees, in common with all others entitled to use the same, a non-exclusive permanent easement; appurtenant to and for the benefit of the Public Parking Structure, in, over, under and across the Retail Parcel (the "City.Utility Easement") for the purpose of ingress to, egress from, and the construction, installation, operation, maintenance, repair, removal, and replacement of future public utilities necessary to service the Public Parking Structure; provided, however, in no event shalt any portion of the City Utilities Easement materially adversely affect or impair Developer's operation, use or enjoyment of the Retail Parcel. (e) Easement for Common Structural Support. Each Party hereby establishes for the benefit of the other Party, appurtenant to and for the benefit of such other Party's Parcel and burdening the burdened Party's Parcel, an easement on the first Party's Parcel (to the extent reasonably necessary for the benefited Party's enjoyment or preservation of its Improvements situated upon or adjacent to the burdened Party's Parcel) for the installation, construction, restoration, replacement, modification, repair and maintenance of any: (a) separate or common footings, girders, columns, braces, foundations, tieback systems and other standard support elements as may be necessary for the structural support of any Improvements of the benefited Party situated upon or adjacent to the burdened Party's Parcel, and (b) common walls shared by burdened Party and benefited Party as may be necessary for the structural support and enclosure of adjacent or subjacent Improvements of the benefited Party; provided that, at the request of either burdened Party, the benefited Party shall prepare and record an instrument specifying the exact locations of such footings, girders, columns, braces, foundations, common walls, tieback systems and other standard support elements, and provided further that the manner of attachment shall be designed in accordance with good construction and engineering practice in the manner customary for such improvements. -- * -- Item 14. - 190 04-ikirp HB -376- (d) Easement for Lateral and Subiacgnt StD ort. Each Party hereby grants and establishes for the use and benefit of the other Party, appurtenant to and for the benefit of such other Party's Parcel and burdening the burdened Party's Parcel, an easement for lateral and subjacent support of improvements (1) on the Parking Parcel, approved and constructed (or reconstructed) pursuant to Section 6 below, and (it) on the Retail Parcel, that are approved and constructed pursuant to the requirements of and in accordance with plans and specifications approved pursuant to, the OPA. (e) Easement for Minor Encroachment. Each Party hereby grants and establishes for the use and benefit of the other Party, appurtenant to and for the benefit of such benefited Party's Parcel and burdening the burdened Party's Parcel, an easement for unintentional minor encroachments onto the burdened Party's property or air rights which unintentional minor encroachments exist or result from construction of any new, rebuilt, repaired or reconstructed building or improvement; provided, however, that no such encroachment shall interfere, even temporarily, with the operation or maintenance of the improvements on the burdened Party's Parcel. (0 Securit Each Party hereby grants to the other Party, for the use and benefit of such benefited Party and establishes for the benefit of and appurtenant to such benefited Party's Parcels and burdening the burdened Party's Parcels, at no.charge, a non- exclusive easement over and upon the pedestrian ways and vehicular ways on the burdened Party's Parcel for security purposes to include pedestrian and vehicular access over the burdened Parcels by security personnel employed or engaged by the benefited Party. . I INTENTIONALLY OMITTED] 6. CONSTRUCTION OF PUBLIC PARKING STRUCTURE. (a) Developer to Obtain Permits. Pursuant to the Funding Agreement, Developer shall cause the Public Parking Structure to be constructed and shall obtain all necessary permits, entitlements and other authorizations from the City (acting in its Governmental capacity) and any other governmental entity maintaining jurisdiction over the Parking Parcel permitting Developer to construct the Public Parking Structure. In constructing the Public Parking Structure, Developer shall comply with all applicable City ordinances, codes, rules, regulations and applicable conditions of approval to the entitlements for the Public Parking Structure and the Retail Parcel renovation as specified in the Funding Agreement. The review of any such plans and specifications shall not constitute the assumption of any responsibility by, or impose any liability upon, City as to the accuracy, efficacy, sufficiency or legality thereof. (b) Developer's Cost. Any and all construction or other improvement work undertaken by Developer for purposes of constructing the Public Parking Structure as described in the Funding Agreement shall be at the sole cost and expense of Developer (other than as provided in the OPA and/or the Funding Agreement). (c) Insurance. In connection with the construction and improvement work contemplated herein, Developer shall maintain builder's all risk insurance with commercially reasonable limits of coverage and deductibles, and commercial general liability insurance and in 644377.13/LA H4564.002.i3-29_04;rn;1urp HB -377- Item 14. - 191 accordance with this Agreement and the Funding Agreement. Developer covenants to keep the Parking Parcel free and clear from and against any mechanic's and/or materialmen's liens or stop notice which may be recorded against the Parking Parcel relating to Developer's construction or improvement work referred to herein. Developer further agrees that it will undertake such reasonable actions as may by necessary to cause any such mechanic's or materialmen's liens or stop notice to be removed within sixty (60) days of receipt of notice that such lien or stop notice has been attached to the Parking Parcel, including; but not limited to, bonding around any such lien or stop notice in accordance with statute. MAINTENANCE OF PUBLIC PARKING STRUCTURE. (a) Covenant to Maintain Public Parking Structure. City covenants and warrants it will, solely from the proceeds of the Parking Structure Maintenance Special Tax authorized to be levied in the District and from revenues, if any, from the operation of the Public Parking Structure; (1) promptly pay prior to delinquency all real and personal property taxes assessed against the Parking Parcel, and (2) operate, maintain or repair, or cause to be operated, maintained and repaired, the Public Parking Structure in good order, condition and repair. The Public Parking Structure shall remain open and accessible for parking and retrieval of vehicles (at least) from 8:00 a.m. (or such earlier time that is at least two (2) hours before the tenants and occupants of the Retail Parcel open for business) until 2:00 a.m. (or such later time that is at least one (1) hour after all tenants and occupants of the Retail Center have closed for business), seven days a week (including all holidays), and such additional hours as City may elect. Notwithstanding the generality of the foregoing, City shall, solely from the proceeds of the Parking Structure Maintenance Special Tax authorized to be levied in the District and from revenues, if any, from the operation of the Public Parking Structure, maintain, repair and operate, or cause to be maintained, repaired or operated the Public Parking Structure in accordance with the practices generally prevailing in the operation of structured parking adjacent to other retail facilities located in Southern California similar in character to those located on the Retail Parcel, and shall at all times perform the following services as frequently as reasonably required for the Public Parking Structure to satisfy such standard of operation and remain in good order; condition and repair (the "Operating Standard"): i. Clean and maintain all surfaces of the Public Parking Structure and keep such surfaces level and evenly covered with the type of surfacing material originally installed thereon, or such substitute thereof as shall be equal thereto in quality, appearance and durability; ii. Remove all papers, debris, filth and refuse from the Public Parking Structure and wash or thoroughly sweep paved areas: iii. Remove trash from trash receptacles and clean trash receptacles; iv. Clean, maintain, repair and replace entrance, exit and directional signs, traffic control signage, markers and lights into and within the Public Parking Structure; Item 14. - 192 3 29-04.•m 1u'rp HB -378- V. Keep the parking areas, stairways, elevators and other portions of the Public Parking Facility well -lit from dusk each day until dawn at least during the applicable hours of operation set forth in 7(a) above, and clean, relamp and reballast ail lighting fixtures; vi. Maintain, repair and replace striping and curbing; vii. Maintain and replace as necessary the landscaping surrounding the Public Parking Structure; viii- Maintain and repair the structure of the Public Parking Structure, as needed (except as provided in Section 10(a); ix. Repaint and refinish all painted and finished surfaces; X. Clean, maintain and repair all stairs, stairwells and stairwell doors within the Public Parking Structure; Xi. Clean, maintain, repair and operate all elevators; xii. Maintain, repair and replace, if needed, all mechanical, electrical and utility facilities and systems that are a part of or serve the Public Parking Structure, including, without limitation, sprinkler and fire control systems, parking revenue control equipment, parking access control equipment, security systems and equipment, mechanical venting systems, lighting and emergency lighting systems, rollup doors and traffic barriers; xiii. Make all repairs, improvements or alterations required to comply with applicable laws; xiv. Except to the extent maintained by a utility company, maintain the Utility Facilities located within the Public Parking Structure, other than those which are owned by Developer or are exclusively serving the Retail Parcel pursuant to the Developer's Utilities Easement; xv. Obtain and maintain the public liability insurance and property/casualty insurance required by this Agreement; and xvi. Provide, or cause to be provided, reasonable security services within the Public Parking Structure. Notwithstanding the foregoing, following completion of the Public Parking Structure Developer shall be solely responsible for capital repairs and improvements thereto and capital replacements therein, and shall maintain reasonably adequate capital reserves for such purposes. Such capital reserve may be included within a capital reserve fund covering the Project as whole. As used in the previous sentence, Developer shall be deemed to have maintained adequate capital reserves during any time it is in compliance with the capital reserve requirements set forth in any first in priority Mortgage (or in loan agreement or other documents incorporated by reference into such Mortgage) encumbering the Retail Parcel. 604377.WLA Item 14. - 193 H4564-OM3-29.041mjVrp HB -379- (b) Covenant to Maintain Insurance. City hereby covenants and agrees to all times maintain (1) commercial general liability insurance and (ii) "all-risk" casualty insurance in connection with the ownership and operation of the Public Parking Structure. Except as may otherwise be prohibited by law; Developer shall be named as an additional insured on all such liability insurance policies and, solely for purposes of performing its obligations to reconstruct the Public Parking Structure under Section I0(a) below, on such casualty insurance policy. Such insurance shalt (v) (with respect to liability insurance) include coverage for any accident resulting in personal injury to or death of any person and consequential damages arising therefrom in an amount not less than Five Million Dollars ($5,000,000) per occurrence, and excess limits under a commercial umbrella liability policy of not less than Twenty Five Million Dollars ($25,000,000) per occurrence; (w) (with respect to property/casualty insurance) include comprehensive property damage insurance'in an amount equal to the greater of (A) Twelve Million Dollars ($12,000,000), or (B) the full replacement value of the Public Parking Structure, (x) shall be issued by a financially reasonable insurance company or companies having a rating of not less than A-VIII in Best's Key Rating Guide, (y) shall provide that the same may not be canceled without at least thirty (30) days prior written notice being given by the insurer to Developer, and (r) shalt contain a waiver of subrogation provision for the benefit of Developer and the tenants of the Retail Parcel. Citti, shall furnish to Developer evidence that such insurance is in full force and effect. (c) City Indemnity. Subject to Section 34 hereof, City shall indemnify and hold Developer harmless from and against any claim(s), loss or other damage, including, but not limited to, reasonable attorneys' fees and costs, arising out of the operation, use, maintenance, repair or replacement of the Public Parking Structure by City or any party or person acting on behalf or under the authority or control of City. Notwithstanding, the indemnity set forth above shall not extend to any claims, loss or other damage arising out of or resulting from (i) the design or construction of the Public Parking Structure, (ii) land conditions that existed prior to the construction of the Public Parking Structure, or (iii) the operation, use, maintenance; repair or replacement of the Public Parking Structure during any period in which Developer is acting as a Qualified Operator. (d) Developer Indemnity. Developer shall indemnify and hold the City harmless from and against any claim(s), loss or other damage, including, but not limited to, reasonable attorneys' fees and costs, arising out of the operation, use, maintenance, repair or replacement of the Retail Parcel by Developer or any party or person acting on behalf or under the authority or control of Developer. Notwithstanding; the indemnity set forth above shall not extend to any claims, loss or other damage arising out of or resulting from the negligence or willful misconduct of the City, or any party or person acting on behalf or under the authority or control of City, in or around the Project. (e) Right of Self -Help. In the event City shall fail in its duty to perform its obligations under this Agreement (including Section 7, 9 and 10), including without limitation its obligation, if any, to pay real property taxes assessed against the Parking Parcel, then Developer or any Permittee of the Retail Parcel may give City written notice of such fact, and thereupon City shall, within ten (10) working days of such notice, commence the performance of the actions required and diligently pursue such actions to completion in a timely manner. Should City fail to fulfill this duty after such notice, Developer or its designee shall have the right and Item 14. - 194 29 °a:m,� HB -380- power, but not the obligation; to perform such actions and pay any necessary costs or expenses and City shall promptly reimburse (subject to Section 34 hereof) Developer or its designee for any costs or expenses paid by Developer or its designee or incurred .in coturection with Developer's or its designee's performance of such actions. (f) Assumption of Operation by Parking Operator. City shall have the right to delegate all of the obligations under this Article 7 and Article 9 below to a "Qualified Operator" (as defined below). As used herein, the term "Qualified Operator" means a person or entity of good general reputation engaged in the business of management, maintenance and operation of multi -level parking structures of similar type and similar or larger size in Southern California, adhering to a standard of operation commensurate with the Operating Standard established hereunder, with reasonably sufficient financial resources to adequately indemnify, protect and defend Developer and City, taking into account the nature of the indemnities herein and the potential risks thereunder. Developer or any Affiliate of Developer shall be deemed to be a Qualified Operator in all circumstances. As used herein, "Affiliate of Developer" mean any entity -which controls, is controlled by, or is under common control with Developer, J.H. Snyder Company, Jerry Snyder, Michael Wise or Bryan Ezralow. For the purposes of the preceding sentence, "control" means the legal power and right to control the operations and business affairs of the subject entity. Provided that such Qualified Operator expressly assumes the obligations of the City hereunder pursuant to a written management agreement, including, without limitation. City's operation, indemnification and insurance obligations hereunder, and agrees that Developer shall be an express third party beneficiary of such assumption, Developer agrees to look solely to the Qualified Operator with respect to any breach of the City's obligations hereunder during the term of such management agreement. Without limiting the generality of the foregoing, if the Qualified Operator (i) maintains the insurance required to be maintained hereunder and causes Developer to be named as an additional insured thereunder, and (ii) does not seek to avoid indemnification of Developer with respect to any claim made against Developer that would otherwise be covered by City's indemnification of Developer hereunder, Developer shall not make any demand, claim or cross claim against City with respect to such claim. 8. USE OF PUBLIC PARKING STRUCTURE. Except as provided in Section Z(a) above with respect to the Private Retail Spaces, the Public Parking Structure will be used only for daily public parking, and for no other use whatsoever. Notwithstanding the generality of the foregoing, long term and leased parking are specifically prohibited. City shall be permitted to charge parking fees in its sole discretion. Prior to setting initial fees or any increase thereafter, City shall consult with Developer and obtain a written parking rate study of other publicly accessible parking facilities in the vicinity of the Project illustrating the range of fees charged for parking in such facilities prepared by a reputable consultant possessing knowledge and experience commensurate with the needs of such study. if City elects to impose parking fees for use of the Public Parking Facility, City shall establish a procedure for paid validation service to facilitate payments of parking fees directly by Developer and/or other business owners on behalf of individual users of the Public Parking Structure. At any time the Public Parking Structure is not owned by City, the District or other public agency, then the right to charge parking fees shall terminate and no fees may be charged to park in the Public Parking Structure. 9. MAINTENANCE OF EASEMENT AREAS. Notwithstanding anything herein to the contrary, each Party shall maintain, or cause to be maintained, the easement area(s) within its 604377.13' LA 144564-0o213-29.04, mjklp HB -3 81- Item 14. - 195 Parcel, in good order, condition and repair, without expense to the other Party, subject in any event on the part of the City to Section 34 hereof. Without limiting the generality of the foregoing, each Party shall observe the following minimum standards in connection with the maintenance of the easement area(s) located on its respective Parcel: (a) Maintain the surface of any driveway areas and sidewalks level, smooth and evenly covered with the type of surfacing material originally installed thereon, or with such substitute therefor as shall be in all respects equal to in quality, appearance and durability. (b) Remove all papers, debris, filth and refuse from such easement areas and wash or thoroughly sweep paved areas as required. (c) Maintain such appropriate entrance, exit or directional signs, markers and lights within such easement areas as shall be reasonably required or necessary and in accordance with all applicable governmental rules and regulations. (d) Clean, repair and maintain all lighting fixtures necessary to provide adequate light for the easement area(s) and relamp and reballast such fixtures as needed. (e) Repaint striping, markers, directional signs, et cetera, as necessary, to maintain the same in a condition commensurate with the Operating Standard. (f) Maintain landscaping as necessary to keep the easement area(s) and the applicable Parcel in a condition commensurate with the Operating Standard. (g) Maintain all signs thereof in a clean and orderly condition; including relamping and repairs as may be required. In the event a Party shall fail in its duty to maintain all or any part of any easement area(s) located within such Party's Parcel, or a Party or its Permittees shall cause damage to any portion of an easement area, whether on such Party's Parcel or the other Party's Parcel, due to any intentional or unintentional misuse of such easement area(s) and such shall not be corrected by the Party who caused such damage (the "Nan -Performing Party"), then the other Party (the "Performing Party") may give the Non -Performing Party written notice of such fact, and thereupon the Non -Performing Party shall, within ten (10) working days of such notice, commence the performance of the actions required and diligently pursue such actions to completion in a timely manner. Should the Non -Performing Party fail to fulfill this duty after such notice, the Performing Party shall have the right and power, but not the obligation, to perform such actions and the Non -Performing Party (subject, in the case of the City, to Section 34 hereof) shall promptly reimburse the Performing Party for the cost of such work. 10. CASUALTY AND CONDEMNATION. (a) Parking Structure Repair. In the event of any casualty to the Public Parking Structure (including but not limited to acts of God, fire, earthquake, explosion or similar occurrences) which results in damage or destruction to the Public Parking Structure (or any portion thereof), Developer shall promptly restore, repair or rebuild such damaged portion to the condition that existed immediately prior to the occurrence of such casualty pursuant to the 60437'.1I' A Item 14. - 196 HB -382- Construction Easement and the provisions of Article 6, proceeds of propertyicasualty insurance for such damage shall be placed in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of reconstructing the Public Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that City is in compliance with its insurance maintenance obligations hereunder, and provided that the proceeds thereunder are available for the reconstruction of the Public Parking Structure, Developer shall be responsible for all uninsured costs of such reconstruction. To the extent that City was in default of its obligations to maintain insurance under this Agreement at the time of the destruction, then, subject to Section 34 hereof,. City shall be responsible for paying all costs of restoration, rebuilding and repair that would have been covered by the insurance required to be maintained. All such restoration, repair and rebuilding shall be performed in a good and workmanlike manner and shall conform to and comply with, in all material respects, all applicable requirements, laws, codes, rules and regulation of governmental agencies having jurisdiction thereof. Upon completion of restoration, rebuilding and repair in accordance with the foregoing, excess insurance proceeds shall be used by the City for the sole purpose of paying and redeeming Bonds of the District. (b) Driveway Repair- In the event of any casualty to the easement areas located on the Retail Parcel (including but not limited to acts of God, fire, earthquake, explosion or similar occurrences) which results in damage or destruction to such easement areas (or any portion thereof), Developer shall promptly restore, repair or rebuild such damaged portion to the condition that. existed immediately prior to the occurrence of such casualty, at its sole cost. All such restoration, repair and rebuilding shall be performed in a good and workmanlike manner and shall conform to and comply with, in all material respects, all applicable requirements, laws, codes, rules and regulations of governmental agencies having jurisdiction thereof. (c) Condemnation. In the event proceedings to take by eminent domain or condemn the Parking Parcel or any portion thereof (including, without limitation, the Public Parking Structure) are commenced (collectively, a "Taking"), City shall give immediate notice thereof to Developer. In the event of a Taking, the Parties rights shall be as set forth below: i. Complete Taking Prior to Commencement of Construction. If a Taking occurs with respect to the whole of the Parking Parcel or if City shall grant a deed or other instrument in lieu of such Taking prior to commencement of construction of the Public Parking Structure prior to the issuance of bonds of the City for the District and prior to the commencement of construction of the Public Parking Structure, then Developer shall be entitled to receive the entire award or payment in connection therewith (the "Proceeds"), except that City shall have the right to file any separate claim available to City for (a) the Taking of any personal property of City, (b) the Taking of the Land underlying the Parking Parcel, and (c) reimbursement to City for any and all costs incurred as of such date relating to the development of the Parking Parcel as contemplated hereunder, so long as such claim is payable separately to City and does not diminish or otherwise adversely affect the Proceeds payable to Developer hereunder. ii. Partial Taking Prior to Commencement of Construction. In the event of a partial Taking of the Parking Parcel prior to the issuance of bonds of the City for the District and prior to commencement of construction of the Public Parking Structure, then City 604377.134A H4564-00^_13.29-04Anjklrp HB -383- Item 14. - 197 shall deliver a quitclaim deed with respect to the Parking Parcel to Developer and assign to Developer the right to receive all Proceeds in connection with such Taking (provided, however, City shall have the right to file a separate claim for the matters which, in the case of the City, shall include all amounts expended by the City in connection with construction of the Public Parking Structure referred to in clause (i)(a) and (b) above), and upon delivery of such quitclaim deed from City for recordation in the Official Records, City shall be relieved of any further obligations under this Agreement. iii. Complete Taking Following Issuance of the Bonds. If a Taking occurs with respect to the whole of the Parking Parcel (including, without limitation, the Public Parking Structure) or if City shall grant a deed or other instrument in lieu of such Taking at any time after the issuance of bonds of the City for the District, then the Proceeds in connection therewith shall be paid to the City, except that either Developer or City shall have the right to file any separate claim available to such Party for any Taking of such Party's personal property and fixtures belonging to such Party (including, in the case of Developer; Taking of Developer's right to use the Private Retail Spaces), so long as such claim is payable separately to such Party. Provided that Developer undertakes to promptly construct a replacement public parking structure on another portion of the Retail Parcel or other real property in the vicinity of the Project ("Replacement Public Parking Structure"), the City's share of such condemnation proceeds shall be placed in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of constructing the Replacement Public -Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that such condemnation proceeds are available for the construction of the Replacement Public Parking Structure, Developer shall be responsible for all uninsured costs of such construction. Upon completion of construction of the Replacement Public Parking Structure in accordance with the foregoing, excess condemnation proceeds shall be used by the City for the sole purpose of paying and redeeming Bonds of the District. Any insurance proceeds remaining following completion of construction of the Replacement Public Parking Structure in accordance with the foregoing and payment and redemption in full of the Bonds of the District shall be the property of the City. iv. Partial Taking Following Issuance of the Bonds. If a Taking occurs with respect to a portion of the Parking Parcel (including, without limitation, the Public Parking Structure) that constitutes less than substantially all of the Public Parking Structure, or if City shall grant a deed or other instrument in lieu of such Taking following the issuance of the Bonds of the City for the District, then (A) Proceeds thereof shall be paid to City; (B) City's obligation to provide the number of Private Retail Spaces set forth in Section 2(b) shall be reduced to five percent (5%) of the remaining total number of spaces, and (C) either Developer or City shall have the right to file any separate claim available to such Party for any Taking of such Party's personal property and fixtures belonging to such Party (including, in the case of Developer, Taking of Developer's right to use the Private Retail Spaces), so long as such claim is payable separately to such Party. Provided that Developer undertakes to promptly construct a Replacement Public Parking Structure, City's share of condemnation proceeds shall be placed, in a separate account held by the City and shall be made available to Developer, or such contractor as may be agreed to by City and Developer, for the purpose of constructing the Replacement Public Parking Structure on terms and conditions similar to those in the Funding Agreement. Provided that such condemnation proceeds are available for the construction of the Replacement 604377.JYLA Item 14. - 198 HB -384- Public Parking Structure, Developer shall be responsible for all costs of such construction in excess of the amount of such condemnation proceeds. Upon completion of construction of the Replacement Public Parking Structure in accordance with the foregoing, excess condemnation proceeds shall be used by the City for the sole purpose of paying and redeeming Bonds of the District. Any condemnation proceeds remaining following completion of construction of the Replacement Public Parking Structure in accordance with the foregoing and payment and redemption in full of the Bonds of the District shall be the property of the City. 11. DEVELOPER'S OPTION TO PURCHASE PUBLIC PARKING STRUCTURE SITE. (a) Grant of Option. In consideration of Developer's agreement to enter into this Agreement, City hereby grants to Developer the exclusive right and option (the "Option") to purchase the Parking Parcel for a purchase price equal to the fair market value of the Parking Parcel at the time the option is exercised (the "Exercise Price") upon the terms and conditions set forth more particularly set forth in this Section. (b) Conditions to Exercise of Option. Developer's right to exercise the Option shall only be effective after the earliest to occur of the following (the "Exercise Date"): (i) the date on which the CFD Financing has been fully paid and retired, or (ii) the date on which the Public Parking Structure is no longer owned either by (A) City, or (B) other governmental entity. It shall be a further condition to exercise of the Option by Developer that Developer furnishes the City with an opinion of nationally recognized bond counsel, which opinion may contain reasonable and customary assumptions and exclusions, that the exercise of the Option and acquisition of the Parking Parcel by Developer pursuant to this Section 11 would not by itself render the interest payable under the Bonds to be taxable for federal income tax purposes. (c) Determination of Fair Market Value of the Parking Parcel. City and Developer shall attempt in good faith to agree upon the Exercise Price. If Developer and City (or City's successor -in -interest) fail tq reach an agreement within ninety (90) days following the Exercise Date (the "Outside Agreement Date"), then each Party shall submit to the other a separate written determination of the fair market value of the Parking Parcel within ten (10) business days after the Outside Agreement Date, and such determinations shall be submitted to arbitration in accordance with the provisions below. The failure of City or Developer to submit a written determination of the fair market value of the Parking Parcel within such ten (10) business day period shall conclusively be deemed to be such Party's approval of the fair market value of the Parking Right submitted within such ten (10) business day period by the other Party. i. Developer and City shall each appoint one (1) arbitrator who shall by profession be an independent real estate broker who shall have no ongoing relationship with either Party and who shall have been active over the five (5) year period ending on the date of such appointment in the purchase and sale or financing of large retail projects in Orange County or Los Angeles County. The determination of the arbitrators shall be limited solely to the issue of whether City's or Developer's submitted fair market value of the Parking Parcel is the closer to the actual fair market value of the Parking Parcel as determined by the arbitrators. Each arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. 604377.134 A H4564.002:3-29-04,'mjk'rp HB -385- Item 14. - 199 ii_ The two (2) arbitrators appointed shall, within fifteen (15) days of the date of the appointment of the last appointed arbitrator, agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators. ill. The three (3) arbitrators shall, within thirty (30) days of the appointment of the third arbitrator; reach a decision as to which Party's submitted fair market value of the Parking Parcel is closer to the actual fair market value of the Parking Parcel. The three (3) arbitrators shall then select such closer determination as the fair market value of the Parking Parcel and notify City and Developer thereof. iv. The decision of the majority of the three (3) arbitrators shall be binding upon City and Developer. V. If either Party fails to appoint an arbitrator within the time period specified above, the arbitrator appointed by one of them shall reach a decision; notify the Parties thereof and such arbitrator's decision shall be binding upon City and Developer. vi. If the two (2) arbitrators fail to agree upon and appoint a third arbitrator, within the time period provided above, then the Parties shall mutually select the third arbitrator. If Developer and City are unable to agree upon the third arbitrator within ten (10) days after the ten (10) day period described above, then either party may, upon at least five (5) days' prior written notice to the other party, petition the Orange County Superior Court pursuant to California Civil Code Section 12181.6, to appoint the third arbitrator. Following the appointment of the third arbitrator, the panel of arbitrators shall within thirty (30) days thereafter reach a decision as to which Party's submitted Fair market value of the Parking Parcel shall be used as the Exercise Price and shall notify Developer and City thereof. vii. The cost of the arbitrators and the arbitration proceeding shall be paid by the party whose fair market value of the Parking Parcel was not selected by the arbitrators. (d) Closing?. The closing of a purchase and sale of the Parking Parcel held pursuant to this Section 11 shall be held through escrow within ninety (90) days following the determination of the Exercise Price pursuant to Section I I (c) above. The Exercise Price for the Parking Parcel shall be paid by Developer by delivering, at the closing through escrow, cash in the amount of the Exercise Price. The Parking Parcel shall be conveyed free and clear of all liens, encumbrances and other title matters other than those on title to the Parking Parcel as of the date of acquisition thereof by the City or otherwise approved by Developer. The City shall deliver to Developer, through escrow upon the closing, such grants deeds, bills of sale, assignments and other instruments of transfer and such evidence of due authorization, execution, and delivery, and of the absence of any such liens, encumbrances and other title matters, as Developer shall reasonably request. All costs associated with.removing or curing unpermitted title exceptions, and any legal fees incurred by the City shall be paid by the City. All escrow charges, title premiums, recording fees, and other closing costs shall be paid by Developer. .a Item 14. - 200S-29-04-m;itrp xB -386- 12. DEVELOPER AS OPERATOR. During any period in which Developer or any Affiliate of Developer is actinc.3 as operator of the Public Parking Structure, Developer waives any right or remedy with respect to the breach. by City of any obligation of City hereunder that has been delegated to and assumed by Developer or such Affiliate of Developer. 13. DOMINANT AND SERVIENT TENEMENTS. Each easement and right granted pursuant to the provisions of this Agreement is expressly for the benefit of the Retail Parcel or the Parking Parcel, as the case may be, and the Parcel so benefited shall be the dominant tenement and the Parcel upon which easement is located shall be the servient tenement. Notwithstanding the preceding sentence, where only a portion of such Parcel is bound and burdened, or benefited by a particular easement, only that portion so bound and burdened, or benefited, as the case may be, shall be deemed to be the servient or dominant tenement, as the case may be. Any easement granted pursuant to the provisions of this Agreement may be abandoned or terminated only by an agreement in writing executed by the owners of the dominant and servient tenements. 14. COVI NANI'S RUNNING WITH TH .LAND. Each easement granted or described herein, and every covenant of a Party contained herein, shall be deemed to be a covenant running with the land, or in the alternative, an equitable servitude, affecting and binding the servient tenement and successive owners thereof, and inuring to the benefit of the dominant tenement and the successive owners thereof. 15. NO EASEMENT BY IMPLICATION: PREVENTION OF PRESCRIPTIVE RIGHTS. Neither the execution of this Agreement 6r anv instrument which may be executed in connection herewith nor the granting of the easements described herein shall be deemed to grant any other easement to any third party or to establish any easement by implication. The Parties to this Agreement understand and agree that the only easements made and granted by the Parties are those easements which are expressly made and granted by this Agreement. Each Party hereby reserves the right to eject or cause the ejection from its Parcel any person not authorized, empowered or privileged to use that Parcel. Further, each Party reserves the right to restrict access to its Parcel for such reasonable period or periods of time as may be legally necessary to prevent the acquisition of prescriptive rights by any person; provided, however, that prior to such restriction of access the Party exercising that right shall give written notice to the other Party of its intention to do so and shall coordinate such restriction of access with the other Party so that no unreasonable interference with the operation of the other Party's Parcel shall occur. Nothing contained herein shall be deemed to be a gift or dedication of any portion of either Parcel to the general public or for the general public or for any public purpose whatsoever. 16. RECIPROCAL REPRESENTATIONS AND WARRANTIES. The following constitute reciprocal representations and warranties of both City and Developer to the other Party. (a) Power. Each Party has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby. 604;?? 131LA M4564-002.3 _9-0VMi!c.rp ! HB -387- Item 14. - 201 (b) Requisite Action. All requisite action (corporate, mist, partnership or otherwise) has been taken by each Party in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. Except as expressly described in this Agreement, no consent of any partner, shareholder, creditor, investor, judicial or administrative body, governmental authority or other party is required. (c) Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of each Party and the partners, officers or trustees of such Party, if any, have the legal power, right, and actual authority to bind such Party to the terms and conditions hereof and thereof. (d) Validity. This Agreement and all documents required hereby to be executed by each Party are and shall be valid, legally binding obligations of and enforceable against such Party in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. 17. LIMITATION ON PREPAYMENT OF SPECIAL TAX. Developer acknowledges that the prepayment of the Special Tax (as defined in the Fiscal Agent Agreement) prior to defeasance of the Bonds in full with respect to any sub -parcel within the Retail Parcel may result in the expiration of the City's subsequent right to levy the Parking Structure Maintenance Tax (as defined in the Operating Agreement) on such sub -parcel. Accordingly. Developer agrees that, at all times prior to defeasance of the Bonds, neither it nor its successor or assign with respect to any portion of the Project shall prepay the Special Tax with respect to any portion of the Retail Parcel constituting less than the entire Retail Parcel, unless it provides the City with reasonable assurances that the Parking Structure Maintenance Tax collectible from the remainder of the Retail Parcel and the Parking Fund (as defined in the Operating Agreement), will be sufficient to cover the reasonably estimated costs of operating and maintaining the Public Parking Structure. 18. ATTORNEYS' FEES. In the event at any time during the term of this Agreement anv action or suit is brought by a Party against another Party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other Party arising out of this Agreement, then in that event the prevailing Party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, including actual attorneys' fees, accounting and engineering fees, and any other professional fees resulting therefrom. 19. NOTICE TO PARTIES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered (including by means of professional messenger or overnight courier service) or sent by fax showing confirmed receipt, and shall be deemed received upon the date of receipt thereof. Item 14. - 202.29-04mjbvrp HB -388- To Developer: Huntington Center Associates, LLC c/o J.H. Snyder Company 5757 Wilshire Boulevard, Penthouse 30 Los Angeles, California 90036 Attn: Mr. Michael Wise Telephone: (323) 857-5546 Facsimile: (323) 857-7042 With a copy to: Huntington Center Associates, LLC c/o The Ezralow Company 23622 Calabasas Rd., Suite 100 Calabasas, CA 91302-1549 Attn: Mr. Bryan Ezralow Telephone: (818) 223-3500 Facsimile: ((818) 223-3536 and Allen Matkins Leck Gamble & Mallory LLP 515 S.Figueroa, Suite 700 Los Angeles, California 90071 Attn: Michael J. Kiely, Esq. Telephone: (213) 622-5555 Facsimile: (213) 620-8816 To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Director of Economic Development Telephone: (714) 536-5509 Facsimile: (714) 375-5087 With copies to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Scott F. Field, Esq. Assistant City Attorney Telephone: (714) 536-5555 Facsimile: (714) 374-1590 Notice of change of address shall be given by written notice in the manner detailed in this Section 19. 20, AMENDMENT. The provisions of this Agreement may be modified or amended, in whole or in part, only with the consent of both Parties, by declaration in writing, executed and acknowledged by all of the same, duly recorded in the Official Records of Orange County, California (the "Official Records"). Go567- H4:G4-00213-�2;3.39-o4im)k.:rp HB -389- Item 14. - 203 21. NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the exclusive benefit of the Parties; any Mortgagees and Permittees,(as expressly provided herein) of the Retail Parcel; and as to Section 34 for the intended benefit of the Agency, and of their successors and assigns, and not for the benefit of any other party(ies), nor shall this Agreement be deemed to have conferred any rights, express or implied, upon any other party(ies). It is expressly understood and agreed that no modification or amendment, in whole or in part; of this Agreement shall require any consent or approval of any third party(ies). 22. TERMINATION. Except as otherwise specifically provided in this Agreement, the easements granted hereunder shall last in perpetuity, unless sooner terminated by written agreement between the Parties which is recorded in the Official Records or until such earlier date as the Developer exercises the option granted in Section 11. 23. ESTOPPEL CERTIFICATE. Each Party hereby severally covenants that upon written request of the other Party, it will within twenty (20) days of such request, issue to such other Party, or to any Mortgagee or any other party specified by such requesting Party; an estoppel certificate stating: (i) whether the Party to whom the request has been directed knows of any default under the Agreement, and if there are any known defaults, specifying the nature thereof, (ii) whether to its knowledge the Agreement has been assigned, modified or amended in any way (or if it has, then stating the nature thereof), and (iii) that to the Party`s knowledge the Agreement as of that date is in full force and effect. Such statement shall act as a waiver of any claim by the Party furnishing it to the extent such claim is based upon facts contrary to those asserted in the statement quid to the extent the claim is asserted against a bona tide encumbrancer or purchaser for value without .knowledge of facts to the contrary of those contained in the statement, and who has acted in reasonable reliance upon the statement. However, such statement shall in no event subject the Party furnishing it to any liability whatsoever, notwithstanding the negligence or other inadvertent failure of such Party to disclose correct and/or relevant information. 24. NO PAR"iNERSHIP. Nothing contained in this Agreement, nor any acts of the .Parties, shall be deemed or construed to create any relationship of principal and agent, or of partnership, or of joint venture; or of any association between the Parties. 25. PARTIAL. INVALIDITY. If any term, provision or condition contained in this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such tern or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law provided, however, if the intent and purpose of the parties hereto is rendered unachievable due to such invalid term or provision,.then either party shall have the right to terminate this Agreement. 26. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto. Notwithstanding anything contained herein to the contrary, either Party may delegate all or any portion of its respective rights and obligations under this Agreement to any third party, so long as such assignee expressly assumes in writing the obligations of such delegating Party hereunder and 6043,77. t 3iLA Item 14. - 2041 401'mj4;,'rp � n HB -390- such deleuating Party remains principally liable for such assignee's performance under this Agreement, except in the event that a Party sells its entire interest in its Parcel, in which case it shall be relieved of any and all obligations under this Agreement from and after the time of closing of any such sale provided such'purchaser enters into an assumption agreement pursuant to which such purchaser shall assume each of the assigning party's obligations hereunder. 27. MUTUAL COOPERATION. The parties recognize that, subject to the terms of this Agreement, Developer retains the right to redevelop or further develop the Retail Parcel and nothing in this Agreement is intended to limit or restrict such right so Iong as Developer is in compliance with its obligations under this Agreement. The Parties agree that in the event Developer elects to redevelop or further develop the Retail Parcel, then the Parties shall cooperate with one another in all reasonable respects so as to allow for such development to occur with minimal impact to the rights of the non -developing Party under this Agreement; provided, however, in no event shall the non -developing Party be required to incur any material cost or expense in connection with such cooperation. In the event (1) such development cooperation causes City to incur additional costs and expenses with respect to the Public Parking Structure and/or (ii) such development prevents City from fully realizing its rights under this Agreement, then Developer shall reimburse City for any costs or expenses incurred by City as a result of such development. Moreover, City agrees to reasonably cooperate with Developer's construction and permanent lenders, including making such immaterial changes to this Agreement which may be requested by Developer's construction and permanent lenders, so long as such changes do not (i) increase City's obligations hereunder, or (if) adversely effect or reduce City's rights hereunder. With respect to those matters relating to the development of the Public Parking Structure for which City's consent or approval is required, except where City is entitled to withhold such consent or approval in its sole and absolute discretion, City agrees that it shall exercise such consent or approval on a reasonable basis and with the understanding that the Parties desire that the Project be a commercially viable project and that any bonds issued for the District remain tax-exempt. 28. TIME OF ESSENCE.. The Parties hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a material breach of and a non -curable (but waivable) default under this Agreement by the party so failing to perform. 29. CONSTRUCTION. Headings at the beginning of each paragraph are solely for the convenience of the Parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs and subparagraphs are to this Agreement- All exhibits referred to in this Agreement are attached and incorporated by this reference. In the event the date on which either Party is required to take any action under the terms of this Agreement is not a business day, the action shall be taken on the next succeeding business day. 30. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shalt constitute one and the same 6043'7.13A,A Item 14. - 205 H4564-00213-29-04;mjL!p HB -391- instrument. Signature pages may be detached from the counterparts and attached to a single copy of this document to physically form one document. 31. GOVERNING LAW. The Parties acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. 32. NO EFFECT ON MORTGAGE.The Parties acknowledge and agree that any default or breach by Developer of its obligations hereunder shall in no way defeat, affect, render void or reduce in any way the rights of any Mortgagee of the Retail Parcel. 33. DISPU"TE RESOLUTION. (a) Any action or proceeding, whether in law or equity, to interpret or enforce the provisions of this Agreement or to declare the rights and obligations of the parties hereto shall be determined and conducted by the filing of a complaint in Orange County Superior Court and immediate referral thereof to a reference with respect to all issues, whether fact or law, as provided in California Code of Civil Procedure ("CCP") Section 638(A). A referee shall be selected in the manner set forth below. As provided for in CCP Section. 645, any party may take exception to and/or appeal from the decision of the referee in the same manner provided for decisions of a court hearing a matter and rendering a judgment without a jury. Notwithstanding anything to the contrary herein, each party shall have the right to seek temporary restraining orders, preliminary injunctions and similar provisional and equitable relief in a court of competent jurisdiction in the event of a material breach of the terms of this Agreement. (b) The referee for any such reference shall be selected in the following manner: the party initiating the proceeding ("Initiating Party") shall nominate a proposed referee from the Orange County Superior Court list of retired judges, who shall be independent parties and shall so notify the other party of such choice. If the other party ("Responding Party") disagrees with the selection made by the Initiating Party, the parties shall endeavor to agree upon another referee within ten (10) days ("Negotiation Period") following written notice to the Responding Party from the Initiating Party of the Initiating Party's selection. In the absence of an agreement between the parties within the Negotiation Period, the referee shall be selected by the court in accordance with CCP Section 640. (c) The referee's decision shall be made by application of statutory and common law of the State of California, including without limitation the rules of evidence, to the facts as found by the referee. The proceeding shall be transcribed by court reporter unless the parties agree otherwise. The reference proceedings shall be held in Orange County, California unless mutually agree otherwise. The cost of any fees or expenses incurred by the prevailing party, including without limitation attorneys' fees, shall be included in the award to such prevailing party. (d) The parties shall have all rights of discovery in connection with the reference proceedings as would be allowed and/or permitted in a case being heard under the unlimited jurisdiction of the Orange County Superior Court. Al)]'177 1111 A Item 14. - 206 290Vm1k••rp HB -392- 34. LIABILITY OF CITY. Notwithstanding anything herein to the contrary, City shall not have any liability or obligation of any kind under this Agreement in connection with (1) the design or construction of the Public Parking Structure, (ii) land conditions that existed prior to the construction of the Public Parking Structure, (iii) the operation, use, maintenance, repair or replacement of the Public Parking Structure during any period in which Developer is acting as a Qualified Operator, (iv) any failure by Developer to complete the Public Parking Structure or otherwise make the Public Parking Structure available on or before any scheduled date, or (v) any failure of the Public Parking Structure, as initially constructed by Developer, to comply with any legal requirements relating to such construction. Notwithstanding anything herein to the contrary, any and all monetary obligations of the City under this Agreement, including, but not limited to, obligations pursuant to Sections 1 l(c) (vii) and 18 shall be payable solely from any revenues derived by the City from the Public Parking Structure or from the proceeds of the Parking Structure Maintenance Special Tax (after deduction for the costs of collection and other administrative expenses) levied by the City on the District. In no event shalt the City's general fund be liable hereunder. Developer hereby waives and releases City from any and all such liability or obligation. Developer shall indemnify and hold City, the Agency, and their respective councilmembers, board members, commissioners, officers and employees harmless from and against any claim(s), loss or other damage, including; but not limited to, reasonable attorneys' fees and costs, arising out of or resulting from the matters described in clauses (i) through (v) above. (Signatures on following page] O 60437,.13,i.A Item 14. - 207 Has6a-oa1`3->>-oA;mjkirp HB -393- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove' written. "Developer" „City,, ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware limited liability com:/(/ryan ny; � Manage i gy: Ezral w, Trustee of the Bryan Ezralow 1994 Trust, its Manager CITY OF HUNTINGTON BEACH By: Mayor APPROVED AS TO FORM: City Attorney Bond Counsel 604377.131LA -23- Item 14. - 208 ?� t�,.m'N`p HB -394- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. "Developer" HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware limited liability company, its Manager By: Bryan Ezralow, Trustee of the Bryan Ezralow 1994 Trust, its Manager l,CitYl CITY OF HUNTINGTON BEACH Bv: — Mayor ATTE City Clerk 4f-6�� REVIEWED AND APPROVED: Cityinistrator APPROVED AS TO FORM: City Attorney Bond Counsel it (304 } 77 13� i. A _1)1 _ . HJ„4-aa2i3.29 U4.,n;k'R> HB -395- Item 14. - 209 STATE OF (�6_) ) ss. COUNTY OF 6o On On before me, �v��t t lnc, 1 't,a.,t X?s, , a Notary Public in and ffir said state, personally appeared i✓ g6;:L n& �_, personally known to me {er ed-•te me—eir-tl} to be the person whose naive is subscribed to the within instrument and acknowledged to me that het executed the same in his/Ner authorized capacity, and that by his r 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. JUAN CARLOS HERNANDEZ Commission # 1380176 z «� Notary Public C 0000O Los Angeles COWY . % N/�, Comm. Expirew OCt 15, M Z&,0L - V-4 - tary Public in aid for said State Item 14. - 210=9-04rm;w',p HB -396- STATE OF 4-' ct✓ ) ss. I� COUTY OF ' On �� 01 Do before me, �� - _ � , a Notary Public in and fer said state, personally appeared , personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that-lte/she executed the same in -hi-s/her authorized capacity, and that by4tWher 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. lic in and f r said State l 604377.1 VLA H4564-00 2n-29.04.,mjWrp HB -397- Item 14. - 211 EXHIBIT "A" LEGAL DESCRIPTION OF RETAIL PARCEL PROPERTY Parcels 2 through 9 as shown on Parcel Map No. 86-200 filed in Book 255, pages 40-45, of Parcel Maps in the Official Records of the County Recorder of Orange County, California, EXCEPT those portions of Parcel A (being portions of said parcel 4 and 8) conveyed to the City of Huntington Beach, a municipal corporation by deed recorded May 1, 1991 as Instrument No. 91-209426 of Official Records, AND FURTHER EXCEPTING THE PARCEL DESCRIBED ON PAGES 2 - 4 OF THIS EXHIBIT "A EXHIBIT "A" TO 60437.77 A YLA H4564-001;12-23-031mjklrp PREA Item 14. - 212 HB -398- EXHIBIT "B" LEGAL DESCRIPTION OF PARKING PARCEL PROPERTY 604377 13/LA H4564-002/3-?9-041mjkirp Ex; HB -399- Item 14. - 213 LD 1018 02-100 LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE SHEET 1 OF 2 THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCEL 2 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89029'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED IN BOOK 3675, PAGE 63 AND GRANT DEED RECORDED IN BOOK 3159, PAGE 483 BOTH OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89029'30" WEST A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00130'30" WEST A DISTANCE OF 334:58 FEET; THENCE NORTH 89°29'30" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70°32'16" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89029'30" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89029'30" WEST A DISTANCE OF 274.25 FEET; THENCE NORTH 00030'30" EAST A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89°29'30" EAST A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. CHRISTOPHER W. DANIELS Item 14. - 214 HB -400- SHEET 2 OF 2 LID 1018 — — 02-100 CENTER DRIVE _-- i N8929'30"W 534.08' SOUTHERN CALIFORNIA EDISON RIGHT OF WAY I BK. 3159, PG 483 O.R. b BK. 4519, S'LY LINE OF THE N'LY 150' OF THE SOUTH 1/2 PG 491 O.R. OF THE SOUTHEAST 1/4 OF SECTION 14 BK. 3675, PG. 63 O.R� o — _ N89'29'30"W 763.76' 17z7--L— 416.50' 0 t1J M CD 0 Q z SCALE: 1" = 80' 'I: PARCEL "An - 2.41 AC PARKING STRUCTURE j 1S- �`it• +' 39'29'30"W 274.25' ' � 4 L1 N89'29'30"W 135.12' L2 LINE TABLE LINE BEARING LENGTH L1 N89'29'307W 3.00 L2 N7932'16'E 4.39 w O 0 n Q Q z 67.51' P.O.B. DATE: 05-13-04 Engineers / Planners i Surveyors EXHIBIT "B" 19AM WSTREET.-7EtWWVWE.CASWU ® TEL(9-91486-02T7 FM19+81+8b0T79 SKETCH TO ACCOMPANY LEGAL DESCRIPTION 2245 E WMM SPRINGS ROAD. SUff-;Oo,I S%EGAS.NV 591,9 FOR PARKING STRUCTURE TEl{702)66&6W4 FAx(702)66E1G0S BELLA TERRA MALL, HUNTINGTON BEACH, CA. xB -401- Item 14. - 215 EXHIBIT C PUBLIC FACILITIES A. Developer Managed Public Facilities Cost .Estimate 1. Edinger Avenue Improvements $ 3,400,000 2. Center Avenue Improvements 600,000 3. Design/Build Parking Structure 11,771,250 4. On -Site Public Utilities - Wet 1,200,000 5. Fire Sprinklers for Garage 400,000 6. Technical Services, Fees & Permits 880,000 7. Parking Garage Land Value 1,600,000 8. Ponce Substation Improvements 165,000 9. Relocation of existing utilities for Garage foundations 450,000 Total Costs $20,466,250 Item 14. - 216 AI3',645972 HB -402- EXHIBIT D PUBLIC CONTRACT REQUIREMENTS (1) CONTRACTOR'S LICENSE /INVITATION TO BID Developer shall specify the type of contractor's license required in both the plans and the invitation for bids. Cal. Pub. Cont. Code § 3300. The contractor must include its license number in the bid documents. Cal. Bus. & Prof. Code § 7030.5. Developer, as City's agent, may exercise its discretion in determining which license class is permitted for a particular project, subject to consultation with the Contractor's License Board, to determine the validity of the license and what license category is required. Developer hereby warrants that all contractors hired as of the effective date of this agreement were properly licensed at the time it submitted its bid, prior to awarding a contract or prior to issuing a purchase order. Cal. Bus. & Prof. Code § 7028.15(e). (2) MAJOR SUBCONTRACTORS Developer hereby warrants that the bid specifications or general conditions issued prior to entering into the Construction Contracts required the bidder to list in its bid all its subcontractors who will perform work in excess of one-halfpercent ofthe total bid or, in the case of streets orhighways, one-half percent or S 10,000, whichever is greater. Cal. Pub. Cont. Code § 4104. (3) DEBARRED CONTRACTORS AND SUBCONTRACTORS Developer hereby warrants that the Construction Contracts contained a provision prohibiting work by contractors or subcontractors who are ineligible pursuant to Labor Code sections 1777.1 and 1.777.7. Cal. Pub. Cont. Code § 6109. [The California Department of Industrial Relations publishes a list of debarred contracts on the Internet at: www.dir.ca.gov/dlse/debar.htmi <http://wtivw.dir.ca.gov/dlse/debar.html>.) (4) UNFAIR BUSINESS PRACTICE CLAIMS Developer hereby warrants that the Construction Contracts contained a provision assigning unfair business practices claims (Clayton Act and Cartwright Act) from the contractor to the City. Cal. Pub. Cont. Code § 7103.5. (5) TRENCHING REQUIREMENTS Developer hereby warrants that the Construction Contracts contained apron ision that where trenching is more than four feet deep, the contractor shall notify Developer of hazardous materials, subsurface or latent physical site conditions different from those indicated and unusual site conditions, set forth the duties of Developer as to investigation thereof and specify how disputes must be addressed. Cal. Pub. Cont. Code § 7104. (6) NON -COLLUSION AFFIDAVIT Developer hereby warrants that the Construction Contracts contain a "noncollusion affidavit" signed by the bidder in the statutory form. Cal. Pub. Cont. Code § 7106. RVP.645932 HB -403- Item 14. - 217 (7) RETENTION Developer shall retain at least ten percent ofthe contract price. Cal. Pub. Cont. Code §9203. After one-half of the work is completed and Developer determines satisfactory progress is being made to complete the job, Developer may make the remaining payments in full. The retention shall be released (with the exception of one hundred fiftypercent of any disputed amount) within 60 days after the "date of completion" of the work. Cal. Pub. Cont. Code § 7107. Developer shall make progress payments within 30 days after receipt of an undisputed and properly submitted request. Cal. Pub. Cont. Code § 20104.50. (8) SECURITIES IN LIEU OF RETENTION Developer hereby warrants that the Construction Contracts contain a statement that the contractor may substitute securities in place of retained funds withheld by the City. CaI. Pub. Cont. Code § 22300. Alternatively, an escrow agreement, in the form prescribed by the code, may be used by the contractor. (9) RESOLUTION OF CLAIMS Developer hereby warrants that the Construction Contracts contain certain mediation and arbitration provisions to claims of $375,000 or less. Cal. Pub. Cont. Code §§ 20104, 20104.2, 20104A. (10) PREVAILING WAGE LAW The following provisions of the prevailing wage law are discussed in greater detail below in section IV.B.8. of this handbook. (a) Developer hereby warrants that the Construction Contracts contain a provision specifying the general rate ofper diemwages ("prevailing wage") foreach craft, classification or type of worker needed to execute the contract or contain a statement that copies of the prevailing rate of per diem wages are on file at Developer's principal office. Cal. Lab. Code § 1773.2. Developer must also cause a copy of the wage rates'to be posted at each job site. The Construction Contracts also require payment of travel and subsistence payments as required by statute. Cal. Lab. Code § 1773.8, (b) Developer hereby warrants that the Construction Contracts state the statutory provisions for penalties for failure to pay prevailing wages and the state's wage and hour laws will be enforced. Cal. Lab. Code § § 1775, 1813. (c) Developer hereby warrants that the Construction Contracts contain a provision requiring compliance with the statutory requirements relating to certified copies of payroll records including the maintenance of the records, their certification and their availability for inspection (Cal. Lab. Code § 1776), the employment of apprentices. (Cal. Lab. Code §1777.5), and that eight hours labor constitutes a legal days work. (Cal. Lab. Code § 1810.) (11) WORKER'S COMPENSATION Item 14. - 218 ,B,6,593, xB -404- Developer hereby warrants that the Construction Contracts state the contractor must secure the payment of worker's compensation to its employees as provided in Labor Code section 3700. Cal. Lab. Code § 1860. (12) BRAND OR TRADE NAMES Developer hereby warrants that the Construction Contracts do not specify brand or trade names except: (1) when at least mo are listed (including Cali forni a manufac turers, ifknown) and "or equal" substitutions are permitted, or (2) when necessary to match existing items in. use on a specific public improvement, or (3) when a unique or novel product application is required, or (4) when only one brand or trade name is known. Cal. Pub. Cont. Code § 3400. (13) RELEASE OF CLAIMS Developer hereby warrants that the Construction Contracts do not provide that acceptance of a payment is a waiver of all claims, or which require submission of a release of all claims as a precondition to payment. Cal. Pub. Cont. Code § 7100. However, Developer may require a release of claims for undisputed payments. Cal. Civ. Code § 3262. (14) LIQUIDATED DAMAGES Developer hereby warrants that the Construction Contracts do not limit a contractor's damages for delays caused by Developer to a time extension only. Cal. Pub. Cont. Code §7102. (15) RESOLUTION OF CONTRACT DISPUTES Developer hereby warrants that the Construction Contracts do not require construction contract disputes to be decided by its agent or employee. Cal. Civ. Code § 1670. (16) LIMITS ON INDEMNIFICATION Developer hereby warrants that the Construction Contracts do not impose on the contractor indemnification against the contractor's sole negligence or willful misconduct, or relieve Developer from liability for its active negligence. Cal. Civ. Code § 2782(b). (17) ASSUMPTION OF RESPONSIBILITY FOR PLANS AND SPECIFICATIONS Developer hereby warrants that the Construction Contracts do not require a contractor to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications, except on clearly designated design -build projects, and further, that the contractor reviewed the plans and specifications and report any errors or omissions. Cal. Pub. Cont. Code § 1104. RVPL,'F3`&AR.645932 xB -405- Item 14. - 219 This Document was electronically recorded by Chicago Title Commercial RECORDING REQUESTED By Recorded In Officlal Records, Orange County CHICAGO TI LE COMPANY Tom Daly, Clerk -Recorder kEC®�ED AND TOME NT TO BE BE EN MPT 1111 �a 1i 11l�o FEE FROM RECORDING FEES 2006000414924 01:56pm 06/31/05 PER GOVERNMENT CODE §§ 6103 AND 2�1 G0210 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Post Offce Box 1R0 Huntington Beach, CA 92648 M Attention: Director of Economic Development WSpace above ibis line for Recorder's use Documentary Transfer Tax is $ 0.00. This conveyance is exempt since Grantee is an exempt agency tinder R&T 11922 GRANT DEED (CFD No. 2003-1 - HUNTINGTON CENTER PARKING PARCEL) THIS GRANT DEED (CFD No. 2003-1 - Huntington Center Parking Parcel) (this "Deed"), is made this 7.1 day of W*.Ai2004 by HUNTINGTON CENTER ASSOCIATES, L,LC, a Delaware limited liability company ("Developer") in favor of CITY OF HUNTINGTON BEACH, CAL.IFORNLA, a California charter city ("City"), with reference to the following facts: A. Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January 6, 2003, adopted a Resolution of intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the financing (the "CFD Financing") of the design, construction and acquisition of certain public facilities, including a six -level parking structure on the Parking Structure Parcel consisting of 2.41 acres and containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available forparking use by the public; (b) Pursuant to that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of 650610.GMA H4564.ODbJ 2• 10.04/nijWdp Item 14. - 220 HB -406- March 1, 2004, between City and Developer, Developer agreed to convey and the City agreed, subject to the terms and condition therein contained, to accept fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "All, attached hereto (the "Property"), on which the Public Parking Structure is to be constructed; (c) Concurrently herewith, Developer and the City have executed, acknowledged and caused to be recorded in the Official Records of Orange County, California (the "Official Records") that certain Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 (the "PREA"), covering the Property and the "Retail Parcel" (as defined therein), which is contiguous to the Property on all sides; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Grant of Property. Developer hereby GRANTS and conveys to the City a fee simple estate in and to the Property. 2. Grants Subject to All Matters of Record. The grant contained in this Deed is subject to all .matters of record, including without limitation the PREA, and all easements, covenants, conditions and restrictions described in any of the foregoing as benefiting and/or burdening the Property or any portion thereof and to all other matters visible by an inspection or survey of land. 3. The conveyance of the Property is subject to the following covenants, conditions and restrictions which shall be binding upon City and its heirs, personal representatives, successors and assigns and all persons claiming under or through City: 3.1 There shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex• or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. 3.2 All deeds, assignments and subagreements or contracts made or entered into by any owner, 'its successors or assigns, as to any portion of the property, shall contain therein the following language: (a) In Deeds and Assignments. "Grantee/Assignee herein covenants by and for itself, its heirs, personal representatives, successors and assigns and all persons claiming under or through grantee/assignee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of 650610.011LA H4564-002/12-10.041njk/ft -z- HB -407- Item 14. - 221 persons on account of race, color, religion; creed, national origin, ancestry, physical handicap or disability (including HIV and AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation ofthe improvements thereon; nor shall the granteelassignee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vend ees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases. "The Lessee herein covenants by and for the Lessee and Lessee's heirs, personal representatives, successors and assigns and all persons claiming under or through Lessee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the land or improvements herein leased or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the Lessee or any person claiming under or through the Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." 4. Notwithstanding anything to the contrary contained herein, so long as City and any successor or assignee of City is a governmental agency and has adopted its own nondiscrimination policy then City's (or its successors' or assigns') compliance with such nondiscrimination policy shall be deemed to comply with the foregoing covenants contained in Section 3 above. [SIGNATURES APPEAR ON FOLLOWING PAGE) 650610.011L4 H4564.002/12•10•o41mjudg .3- Item 14. - 222 HB -408- IN WITNESS WHEREOF, Developer has executed this Deed as of the day and year first written above. "Developer" HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware limited liability ZY ,itanageewv r an Uralo , Trustee of the Bryan Ezralow 1994 Trust, its Manager 650610.01R.A N4564-002/6-$M4%W,p -4- HB -409- Item 14. - 223 CERTIFICATE OF ACCEPTANCE GOVERNMENT CODE SECTION 27281 This is to certify acceptance of the Property conveyed by the foregoing Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) ("Deed") from HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer") to the CITY OF HUNTINGTON BEACH, CALIFORNM a California charter city ("City") and consent by City to recordation of this Deed by its duly authorized officer, pursuant to the Funding Agreement, a duly authorized obligation of the City. Dated this'42 day oflvcd—�,0004, at Huntington Beach, California. ,lcity- ATTEST: Cit ierk REVIEWED AND APPROVED: t�s/.���etiCG�r sty Ad 4nistrator 650610.01&A H 4 5 64.00V M i 0.04 t m j kld g APPROVED AS TO FORM: >Q'City Attorney -5- Item 14. - 224 HB -410- State of California County of T_^____ ^} On .&Jd6eK Of � i before n1e,t} an t� i �,�'i � _ , personally appeared personally known to me (or pie to be the persons whose name is/aFae subscribed to the within instrument and acknowledged to me that he/&VA1$ y executed the same in his/h4�thait authorized capacity(iiN4, and that by his/heMhQir signature(40r) the instrument the person, or the entity upon behalf of which the person* acted, executed the instrument. WITNESS my hand and official seal. ^JUZ CARLOs HERNANDU Commlaslon # I380I76 Notory Public - Colifo(nio Los Angeles CouUM MY CQMM. Eames OCt State of California County of On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public 650610.01/LA H4564.OQM-1044lmjSJcp -7— HB -411- Item 14. - 225 State of California } County of ^} On /2/4 7%G"V before personally appeared personally known to me { ) to be the person} whose name & are subscribed to the within instrument and acknowledged to me that sh they executed the same in er f% authorized capacity(ies), and that by hef t signatureW on the instrument the persbno, or the entity upon behalf of which the perso) acted, executed the instrument. WITNESS my hand and official seal. 4 State of California } County of 6fQf.KSt�___ _} On /o��� 7�0 before me, �� y /%�. Atit4 � &'vf � Xk; trsonal ly appeared personally known to me { T ) to be the persons).whose namise are subscribed to the within instrument.and acknowledged to me that sh executed the same in er their authorized capacity(ies), and that by ins. ez th44 signature(.o on the instrument the person(4, or the entity upon behalf of which the perso acted, executed the instrument. WITNESS my hand and official seal. 650610.01/LA H4S64.001I)2.10.04/)1jVdg Notary P gblie -6. Item 14. - 226 HB -412- EXHIBIT "A" (Attach legal description of Parking Parcel) 650610.011LA H4564-00216.10.04/mj Vip - t- HB -413- Item 14. - 227 LD 1018 SHEET 1 OF 2 02-100 EXHIBIT "A" LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO, 86-200, RECORDED IN ROOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID PORTION OF LAND ALSO SHOWN AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO. 2003-163 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89`29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89`32'06" WEST (N89°29'30"W) A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00027'54" WEST (S00°30'30"W) A DISTANCE OF 334.58 FEET; THENCE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70°29'40" WEST (S70°32'16"W) A DISTANCE OF 4.39 FEET; THENCE NORTH 89°32'06" WEST (N89°29'30"W) A DISTANCE OF 3.00 FEET; THENCE NORTH 00027'54" EAST (N00°30'30"E) A DISTANCE OF 126,75 FEET, THENCE NORTH 89-3206" WEST (N89"29'30"W) A DISTANCE OF 274.25 FEET; THENCE NORTH 00027'54" EAST (N00°30'30"E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89°32'06" EAST (989"29'30"E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING, CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO. 5110 AND STATION G.P,S. NO.5112, BEING NORTH 89°32'06" WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR, BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO. 86-200. SEE EXHIBIT "B" SHEET 2 OF 2 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF, IsTopw (rwBANIEI.S CHRIST PHER W. DANIELS i-M 2-3 .80 �N Item 14. - 228 Hs -414- SHEET 2 OF 2 _D 1018 )2-100 CENTER DRIVE N89'29'34'W) N89`32'08"W 534.08' _ SOUTHERN CALIFORNIA EDISON RIGHT OF WAY i SK, 3159, PG 4-83 O.R. o BK. 4519, AY LINE OF THE N'LY 150' OF THE SOUTH 1/2 to PG 491 O.R. OF 711E SOUTHEAST 1/4 OF SECTION 14 rBK. 3675, PG, 63 O.R.-/� o N89'29'30"W N89 32'06'W (763.76') 416.8V ('4 12 PARCEL 'A' 2.41 AC PARKING STRUCTURE PROPOSED PARCEL 11 PER T.P.M. NO. 2003-153 (N89`29'30'W) *ram. ' .N s• ' I rvr a le C .1. %) PROPOSED PARCEL 2 PER T.P.M. NO. 2003--163 TIP 67.5i' P.0.6. r. f+' 0 J t7 ; . t7 � t� • i" 1 O .. w� LL: h` Q .�. � o t!) O tt SURVEY NOTES: DENOTES BEARINGS BASED ON P.M. 86--200, P.M.B. 255/40-45 rrU tRGF TARI F BASED ON BASIS Of BEARINGS BASED ON P.M. 86-200 UNE BEARING ILENGTHI L1 N89'32'OVW 1 3.00' N89'29'3t}'° L2 N70'29'40'E 4.39' N70.32161 wo-lz FARUEL PROPOSED PARCEL 10 PER T.P.M. NO. 2003-163� DASIS -Q BEARINGS.- BEARINGS SHOWN ARE BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO, 5110 AND STATION CPS NO. 5112 BEING NORTH 89'32'06" WEST Engineers I Planners I Surveyors rmaxw�r,amEaead�.caaeu lb M(WO14Wm FAXt,,"y,* ttSEYW W dt�1YGSRp,O.SUtE iGD. W V£RhtM'e911t SCALE: i" = 80' o aev r�xamoes DATE: 11-29-04 SKETCH TO ACCOMPANY LEGAL DESCRIPTION FOR PARKING STRUCTURE xB -41 s- Item 14. - 229 Off, REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§ 6103 AND 27383. RECORDING BY REQUESTED Q Recorded in Torn Da'Y, CleOrk-Reaorderrds, Or Orange AND WHEN RECORDED MAIL TO: count, I1IiIIiIIjIIIlII1IIiI�I�IJiiNIIIIIIIIi�IIIIIir✓III�IIJIJIIII� City of Huntington Beach 2000 Main Street 00012661 128m ?11111�1�p FEE 213'Go G02 12 0127106 Post Box 190 ° 00 0.0° °'°° 0.00 ° Huntington Beach, CA 92648 0.00 0.00 0.00 Attention: Director of Economic Development Space above this line for Recorder's use Documentary Transfer Tax is $ 0.00. kC This conveyance is exempt since Grantee is an exempt agency under R&T 11922 AMENDED AND RESTATED GRANT DEED (CF'D No. 2003-1- HUNTINGTON CENTER PARKING PARCEL) THIS AMENDED AND RESTATED GRANT DEED (CFD No. 2003-1 - Huntington Center Parking Parcel) (this "Amended and Restated Deed"), is made this d*!day of 2006 and is effective as of May 31, 2005 (the "Effective Date"), the date on which the Original Grant Deed (as defined below) was recorded in the Official Records (as defined below), by and between HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer"), and BELLA TERRA ASSOCIATES, LLC, a Delaware limiters liability company ("Owner"), in favor of CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City"), with reference to the following facts: A. Pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311), Part 1, Division 2, Title 5 of the Government Code of the State of California, the City on January 6, 2003, adopted a Resolution of Intention to form a community facilities district over and including the Retail Parcel designated "City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center)" (the "District") and a resolution of intention to issue bonds of the District for the purpose of providing through the sale of bonds proceeds in an amount not to exceed $30,000,000 for the financing (the "CF'D Financing") of the design, construction and acquisition of certain public facilities, including a six -level parking structure on the Parking Structure Parcel consisting of 2.41 acres and containing approximately 1,532 automobile parking spaces (the "Public Parking Structure") to be owned by City and available for parking use by the public; Item 14. — 2301922 HB -416- F \BFC\BellaTert Amcndcd and Rmated Gruff Deed (city)- ] DOC (b) Pursuant to that certain Funding and Construction Agreement Relating to City of Huntington Beach Community Facilities District No. 2003-1 (Huntington Center) dated as of March 1, 2004, between City and Developer, Developer agreed to convey and the City agreed, subject to the terms and conditions therein contained, to accept fee interest in that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described on Exhibit "A" (the "Original Parking Property") of that certain Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) dated as of November 29, 2004 (the "Original Grant Deed") and recorded in the Official Records of Orange County, California (the "Official Records") on May 31, 2005 as Instrument No. 2005000414924, on which the Public Parking Structure has been constructed; (c) Further, Developer and the City entered into that certain Parking and Reciprocal Easement Agreement and Option to Purchase dated as of March 1, 2004 (the "PREA"), covering the Original Parking Property and the "Retail Parcel" (as defined therein), which is contiguous to the Original Parking Property on all sides. Developer and the City caused the PREA to be recorded in the Official Records as Instrument No. 2005000414926 concurrently with the Original Grant Deed; (d) A portion of the Original Parking Property is used as a loading dock area (the "Loading Dock Area") by Burlington Coat Factory (the "Tenant"). Pursuant to the terms of that certain Side Letter Re: Borrower's Disclosure in Connection with First Amendment to and Modification of Construction Loan Agreement date as of April _, 2005, Developer and City agreed to enter into an easement agreement in form reasonably acceptable to JPMORGAN CHASE BANK, N.A., a national banking association, successor by merger to BANK ONE, NA, main office Chicago, Illinois, individually and as administrative agent for the financial institutions, which from time to time become parties thereto (collectively, "Lenders"), pursuant to which the City would grant Developer and Tenant the right to continue to use the Loading Dock Area for loading dock purposes; (e) On August 15, 2005, Developer conveyed to Owner, all of Developer's right, title and interest in and to that certain shopping center project located in Huntington Beach, California and commonly referred to as "Bella Terra Shopping Center" by Grant Deed recorded on August 15, 2005, as Instrument No. 2005 000643200, in the Official Records of the County of Orange, State of California as more particularly described in said Grant Deed; further, the Revised Property is contained within Bella Terra Shopping Center; (f) In lieu of an easement agreement, Developer, Owner, and City have agreed to amend and completely restate the Original Grant Deed by conveying to the City fee interest in that certain revised parcel of real property located in the City of Huntington Beach, County of Orange, State of California, as more particularly described on Exhibit "A" hereto, which excludes the Loading Dock Area (the "Revised Property"), together with an easement over the Loading Dock Area. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: HB -417- Item 14. - 231 MMOEBIUS 13892_2 F \RF0Se11aTerratA=nded and Renated Grant Dmd (cityt-rvt.rwt. 1. Grant of Property. Developer and Owner hereby GRANT and convey to the City a fee simple estate in and to the Revised Property. Developer and Owner hereby grant and convey to the City a perpetual non- exclusive easement for public vehicular and pedestrian access over and across the Loading Dock Area, which is described as the exception from Parcel "A" on Exhibit "A". In making any use of this easement, City shall hold Developer and Owner harmless against all claims, liabilities or expenses, including costs and attorneys' fees, arising from City's use of such area. 2. Amendment and Restatement/Grant Subject to All Matters of Record. The grant contained in this Amended and Restated Deed: (a) is intended to and does supersede and replace the Original Grant Deed and (b) is subject to all matters of record, including without limitation the PREA, and all easements, covenants, conditions and restrictions described in any of the foregoing as benefiting and/or burdening the Revised Property or any portion thereof and to all other matters visible by an inspection or survey of land. 3. The conveyance of the Revised Property is subject to the following covenants, conditions and restrictions which shall be binding upon City and its heirs, personal representatives, successors and assigns and all persons claiming under or through City: 3.1 There shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. 3.2 All deeds, assignments and subagreements or contracts made or entered into by any owner, its successors or assigns, as to any portion of the Property, shall contain therein the following language: (a) In Deeds and Assignments. "Grantee/Assignee herein covenants by and for itself, its heirs, personal representatives, successors and assigns and all persons claiming under or through grantee/assignee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV and AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the property herein conveyed or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the grantee/assignee or any person claiming under or Item 14. - 2323922 HB -4 1 0— F 1BFOBellafe %Amended and Restated Grwft Deed (city)-ml DOC through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases. "The Lessee herein covenants by and for the Lessee and Lessee`s heirs, personal representatives, successors and assigns and all persons claiming under or through Lessee that there shall be no unlawful discrimination, harassment or allowance of harassment against or segregation of a person or of a group of persons on account of race, color, religion, creed, national origin, ancestry, physical handicap or disability (including HIV or AIDS), medical condition (cancer), mental disability, age (over 40), marital status, domestic partner status, sex or sexual orientation or disability, family and medical care leave or denial of pregnancy disability leave in the transfer, use, occupancy, tenure or enjoyment of the land or improvements herein leased or the construction, alteration, maintenance, repair, management or operation of the improvements thereon; nor shall the Lessee or any person claiming under or through the Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners, lessees, sub -owners, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." 4. Notwithstanding anything to the contrary contained herein, so long as City and any successor or assignee of City is a governmental agency and has adopted its own nondiscrimination policy then City's (or its successors' or assigns') compliance with such nondiscrimination policy shall be deemed to comply with the foregoing covenants contained in Section 3 above. [SIGNATURES APPEAR ON FOLL®WING PAGE] xs -419- Item 14. - 233 MMOE$IUS l3892_2 FIAE�BellaTemaWmcnded and Restated Grant Dad(6), IN WITNESS WHEREOF, Developer and Owner have executed this Amended and Restated Deed as of the day and year first written above. "Developer" HUNTINGTON CENTER ASSOCIATES, L.L.C., a Delaware limited liability company By: Huntington Management Ent., LLC, a Delaware limited liability company, its Manager By: BMLF/Huntington, LLC, a Delaware ' ed liability company, its anager / B an alo , Trustee of the Bryan Ezralow 1994 _ a Trust, its Manager "Owner" B TERRA ASS IATES, LLC, Delaware limited company Y: John Miller, President By: Eric Sahn, Secretary Item 14. — 234$92_2 HB —420— F,B,%Bell&Tr a\A—dcd and Acatatcd Gant Dced(city)-nl DOC State of California ) County of c �n On 1Z,26bu before me, NotaryPublic, personally appeared . �Q)nr' M- \ 'ex personally known to me ( ) to be the personH whose name(s) is/ffe subscribed to the within instrument and acknowledged to me that he/sh@Ah" executed the same in his/1uwA4& authorized capacity(ies), and that by his/l heir signature(s) on the instrument the person($), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. NlARIENE $MIA &IAA cawnww ® 1476617 M J., U —k Ceara CounVf cootwro Notary Public ARyCcarur►.I�w� State of California ) County of )Art-ta &Lro ) On�L�1Z, 20n t nt n before me, Mokf kp-rie� Mont Wq , Notary Public, personally appeared �rl h� Sa�' personally known to me (E pr^uP,1 to me an Lbe t,��.r ^a _yi en eto be the person(&) whose names) is/are subscribed to the within instrument and acknowledged to me that he/skeMier executed the same in his/herd authorized capacity(aes), and that by his/heFAheir signature(a) on the instrument the person(&&), or the entity upon behalf of which the person(44 acted, executed the instrument. WITNESS my hand and official seal. AAAiilErlE SOfiA MO5617 n P aowrr P COUO M . Notary Public sorft Ckm eow*1Y 1rIV Cornet. EXPIMJW 16, 901 MMOEBIUS 13892 2 HB -421- Item 14. - 235 F)BMBOMTe )Amended and Renatcd Gant Deed {cdyr-. —.. State of California ) County of 1&2�,Q5 ) On 14, Wi before me, jl*t Aett. s ["Mi0 — , Notary Public, person fly appeared YzLiq„.) F.:R:2A L) ,j personally known to me to be the person(v5 whose name(4is/a�fsubscribed to the within instrument and acknowledged to me that he/06/tlfig executed the same in his/her4their-authorized capacity and that by his/1er/tle:ir signature(g) on the instrument the person(, or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. JUAN CAltLos ll -i6 A Commission # 1390176 Notary Public — California Los Angeles County MY Comm Expires Oct 15, 2006 — State of California ) County of ) On before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public Item 14. - 2368922 HB —422— FABEC\BcllafcrraNAmcnded and Restated Gram Dad (city)-rvt DOC CERTIFICATE OF ACCEPTANCE GOVERNMENT CODE SECTION 27281 This is to certify acceptance of the Revised Property conveyed by the foregoing Amended and Restated Grant Deed (CFD No. 2003-1 - Huntington Center Parking Parcel) ("Amended and Restated Deed") from HUNTINGTON CENTER ASSOCIATES, LLC, a Delaware limited liability company ("Developer"), and BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company("Owner"), to the CITY OF HUNTINGTON BEACH, CALIFORNIA, a California charter city ("City") and consent by City to recordation of this Amended and Restated Deed by its duly authorized officer, pursuant to the Funding Agreement, a duly authorized obligation of the City. Dated this -day of 2006, at Huntington Beach, California. "City" CITY OF HUNTINGTON BEACH By: Mayor ATTEST: 4it Jerk REVIEWED AND APPROVED: City Admilfistrator APP OVED AS TO FORM: ty Attorney �.f1�(q ( 0(� S'.Q G MMOEBIUS 13892_2 HB -423- Item 14. - 237 FABECIB.H.TeMc Amended and Aestatcd Grant Deed (cite- State of California o,� toE ss. County of On 6&Y(_ before me, ;Ll. L. � Date Name and Title of Officer (e.g., "Jane Doe, l4otary Public") personally appeared40a Names) of Signeri P L EBP RZA Coffins ion # 1599179 Notary PAft - cdwond° Cowdy luprCo m-ExpbwAug4, Place Notary Seal Above personally known to me I proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNE y hand and official seal. Signatu of Notary Pu li OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying 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: M`-X,1Q 3-,r7 0/c- Document Date: Signers) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — LL Limited L General L Attorney in Fact Top of thumb here LL Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: Signer's Name: ❑ Individual ❑ Corporate Officer — Ttie(s): ❑ Partner — ❑Limited El General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Top cf thumb here Signer Is Representing ''RIGHT THUMBPRINT --OF SIGNER ® 2004 National Notary Association • 9350 De Soto Ave., P.O. Boa 2402 •Chatsworth, GA 91313-2402 item No, 5907 Reorder. Call Toll -Free 1-600-876-6627 Item 14. - 23 8 HB -424- LD 1091 SHEET 1 OF 3 02-100 EXHIBIT "A" LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL "A" BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO.86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID PORTION OF LAND ALSO SHOWN AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO. 2003-163 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS -NORTH 89-29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 890321061 WEST (N89-29'30-W) A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID LINE SOUTH 00°2T54" WEST (S00°30'30"W) A DISTANCE OF 334.58 FEET; THENCE NORTH 89032'06" WEST (N89°29'30"W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70*2940" WEST (S70°32'16"W) A DISTANCE OF 4.39 FEET; THENCE NORTH 89-32'06" WEST (N89°29'30"W) A DISTANCE OF 3.00 FEET; THENCE NORTH 00027'54" EAST (N00'30'30"E) A DISTANCE OF 126.75 FEET; THENCE NORTH 89032'06" WEST (N89°29'30"W) A DISTANCE OF 274.25 FEET; THENCE NORTH 00°2754" EAST (N00030'30"E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89032'06" EAST (889-29'30"E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. EXCEPILNG LHEREFROM A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, AND FURTHER DESCRIBED AS FOLLOWS: HB -425- Item 14. - 239 SHEET 2 OF 3 BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89°29'30" WEST 763.76 FEET" ON SAID PARCEL MAP NO.86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89032'06" WEST (N89°29'30"W} A DISTANCE OF 67.51 FEET; THENCE DEPARTING SAID LINE SOUTH 00927'54" WEST A DISTANCE OF 334.58 FEET; THENCE NORTH 89°32'06" WEST A DISTANCE OF 135.12 FEET; THENCE SOUTH 70029'40" WEST A DISTANCE OF 4.39 FEET; THENCE NORTH 89032'06" WEST A DISTANCE OF 3.00 FEET; THENCE NORTH 00027'54" EAST A DISTANCE OF 126.75 FEET; THENCE NORTH 89032'06" WEST A DISTANCE OF 148.34 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 00027'54" EAST A DISTANCE OF 26.67 FEET; THENCE NORTH 89032'06" WEST A DISTANCE OF 109.65 FEET; THENCE SOUTH 75027'54" WEST A DISTANCE OF 9.33 FEET; THENCE NORTH 89"32'06" WEST A DISTANCE OF 7.25 FEET TO THE WEST LINE OF SAID PARCEL "A" CONVEYED TO THE CITY OF HUNTINGTON BEACH; THENCE SOUTH 00027'S4" WEST, ALONG SAID WEST LINE, A DISTANCE OF 24.25 FEET; THENCE SOUTH 891132'06" EAST A DISTANCE OF 125.91 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING AN AREA OF 0.08 ACRES MORE OR LESS. TOGETHER WITH AN UPPER ELEVATION OF 41.0 FEET AND A LOWER ELEVATION OF 21.5 FEET BASED ON A COUNTY OF ORANGE BENCHMARK ALUMINUM DISK STAMPED "HB-231-75" ELEVATION = 36.969 FEET (NGVD29) ON FILE AT THE COUNTY OF ORANGE P.F.R.D. / GEOMATICS-L.I.S. VERTICAL CONTROL DATA SHEET - O.C.S. 1995 ADJUSTMENT AND AS SHOWN ON THE PROJECT IMPROVEMENT PLANS "PW#03-116 L-03-282" ON FILE AT THE CITY OF HUNTINGTON BEACH. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO, 5110 AND STATION G.P.S. NO. 5112, BEING NORTH 89-32'06" WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR. BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO. 86-200. SEE EXHIBIT "B" SHEET 3 OF 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF. av-*L uj- ZL� CHRIST PHER W. DANIELS ��28f©& Item 14. - 240 HB -426- SHEET 3 OF 3 0 2 � r CENTER DRIVE �-- - r-- Y_LN89'29'30"W) N89'32'06"W 534.08' - oM _ SOUTHERN CALIFORNIA EDISON RIGHT OF WAY BK. 3159, PG 483 O.R. 0 8K. 4519, S'LY LINE OF THE N'LY 150' OF THE SOUTH 1/2 PG 491 O.R. — — OF THE SOUTHEAST 1/4 OF SECTION 14 BK. 3675, PG. 63 O.R. --/ b N89 29'3WW) N89°32'D6"w (763.76') 416,50' PARKING STRUCTURE T.P.O.B. POR. PARCEL 2 PARCEL "A" o : PROPOSED PARCEL 11 ... `" PER T.P.M. NO. 2003-163 0 2.41 ACRES tY EXCEPTING THEREFROM v WITH UPPER ELEVATION OF 41.0 FEET , 0LAND LOWER ELEVATION OF 21.5 FEETN89*32 "W N0027'54"E m� rr�r �26.6T I N89'32'06"w 274.25' (N89°29'30"W) T.P.O.B. cP EXCEPTION L5 s0 L4 Ni SCALE. V — 8( DATE; 06-28-06 - 67.51' P.O.B. yL2 135.12' BASIS OF 6EA BEAP&M SHOWN AFEE BASED ON THE BEAiM BETWEEN O.C.S. HON¢R0/NT�AL CONTROL SNORTH .T�eIIQ1 AIIO�{�GWS}� NO. W AND STATION (PS NO.BEAf1 M IN PAWMEM ARE BASED ON PARCR BENCHMARK INFO RMAT MAP NO. W200 ALUMINUM -BENCHMARK DISK STAMPED "HB-231-75" - ELEV; 36.969 FEET (NGVD29) COUNTY OF ORANGE. P.F.R.D./GEOMATICS-LI.S. VERTICAL CONTROL DATA SHEET-O.C.S. 1995 ADJUSTMENT xB -427- Item 14. - 241 \10 RECORDING REQUESTED BY F19ST AMERICAN TITLE COMPANY NATIONALICOMMERCIAL SERVICES COMMERCIAUINDUSTRIAL DIVISION K48-gB(A(60 i - 5C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington 98027 Attn: Legal Department (SSK) Recorded in official Records, Orange County Torn Daly, Clerk -Recorder V111IIIIIIIII 1111IIIIIIiI 69.00 2011000527963 03:46pm 10/21/11 66 422 Al2 22 0.00 0.00 0.00 0.00 63.00 0.00 A00 0.00 (space above this line for Recorder's use only) PARKING LICENSE AGREEMENT AND COVENANT (City Parking Structure) made by and among Costco Wholesale Corporation, a Washington corporation, and City of Huntington Beach, a California charter city Location of Property: Huntington Beach, California 25835.00001\MO689.2 Item 14. - 242 HB -428- PARKING LICENSE AGREEMENT AND COVENANT (City Parking Structure) This PARKING LICENSE AGREEMENT AND COVENANT ("Agreement") is made and entered into as of the J_1*1 day of Crn,OE— , 2011 (the "Effective Date"), by and between the CITY OF HLNTINGTON BEACH, CALIFORNIA, a California charter city ("City"), and COSTCO WHOLESALE CORPORATION, a Washington corporation ("Costco"). RECITALS: A. City is the fee owner of that certain parcel of real property located in the City of Huntington Beach, County of Orange ("County"), State of California ("State") as more particularly described on Exhibit "A" attached hereto (together with all improvements now or hereafter located on such property) (the "Parking Parcel"), adjacent to that certain shopping center commonly referred to as the "Bella Terra Mall," as more particularly described on Exhibit "B" attached hereto (together with all improvements now or hereafter located on such property, the "Retail Parcel'). The Parking Parcel is currently improved with a six -level parking structure containing approximately 1,532 automobile parking spaces that is owned by City and available for parking use by the general public. B. The Public Parking Structure, defined herein, was financed with a portion of the proceeds of Community Facilities District No. 2003-1 of the City of Huntington Beach (Huntington Center) 2004 Special Tax Bonds (the "Special Tax Bonds") which Special Tax Bonds were issued so that interest paid thereon is exempt from gross income for federal income tax purposes. C. Costco is the leasehold owner and has a right to purchase that certain parcel of real property located adjacent to the Parking Parcel, and more particularly described on Exhibit "C" attached hereto (together with all improvements now or hereafter located on such property, the "Costco Parcel'). Costco intends to construct certain buildings and improvements on the Costco Parcel and operate a Costco wholesale warehouse club thereon. D. City and Costco desire to establish a parking license which allows for temporary construction to improve the elevators which will benefit Costco and users of the Public Parking Garage. E. In addition to the terms defined in the foregoing Recitals, the following defined terms, when used in this Agreement, shall have the meaning set forth below: (i) "Developer" shall mean and refer to BTDJM Phase II Associates, LLC, a Delaware limited liability company. (ii) "Developer/City Parking Agreement" shall mean and refer to that certain Parking and Reciprocal Easement Agreement and Option to Purchase, dated as of March 1, 2004, made by and between City and Huntington Center Associates, LLC. -I- 25835.00001157746892 HB -429- Item 14. - 243 (iii) "EIevator System" means the elevator system located within the Parking Parcel, including the "Revised Elevator System"as defined in Section 1 below. (iv) "Improvements" shall mean and refer to any building or structure located on the Parking Parcel. (v) "Mortgage" shall mean and refer to any mortgage, indenture of mortgage, deed of trust (whether fee or leasehold), sale and leaseback transaction or assignment and subleaseback transaction which covers all or any portion of any Parcel, made by a reputable third party bank or other institutional investor. (vi) '*Mortgagee" shall mean and refer to a mortgagee and/or a trustee and beneficiary under a Mortgage and, to the extent applicable, a fee owner or lessor or sublessor of any Parcel that is the subject of a sale and leaseback transaction or assignment and subleaseback transaction. (vii) "Operator" shall mean Bella Terra Associates, LLC, a Delaware limited liability company, as successor -in -interest to Huntington Center Associates, LLC, or a successor "Qualified Operator," as defined in the Developer/City Parking Agreement. (viii) "Operating Agreement" shall mean that certain Operating Agreement dated as of March 1, 2004, between City and Operator, pursuant to which Operator has undertaken certain of the obligations of City. (ix) "Parcel" or "Parcels", as the case may be, shall mean and refer to the Parking Parcel or Costco Parcel, or either of them, as applicable. (x) "Party" or "Parties", as the case may be, shall mean and refer to City and Costco, or either of them, as applicable, and any party after the date hereof acquiring an interest in or to the Parking Parcel and/or the Costco Parcel. (xi) "Permittees" shall mean and refer to each Party, the tenants of each Party, and their respective officers, directors, employees, agents, . contractors, subcontractors, customers, members, visitors, invitees, licensees, utility suppliers and concessionaires entering such Party's Parcel. (xii) "Project" shall mean and refer to, collectively, the Parking Parcel, Public Parking Structure, Retail Parcel and the Costco Parcel. (xiii) "Public Parking Structure" shall mean the six -level parking structure containing approximately 1,532 automobile parking spaces owned by City, including the Revised Elevator System. (xiv) "SCE Lease" shall mean and refer to that certain Lease, dated as of March 15, 2004, made by and between Operator and Southern California Edison Company ("SCE"), relating to the lease of land located immediately adjacent to the Costco Parcel (the "SCE Land") for use as a parking area and driveways for the Costco Parcel and that certain Sublease Agreement by and between Developer and Costco. -2- 'YSQas 00001\.5770689.2 Item 14. - 244 HB -430- (xv) "Utility Facilities" shall mean and refer to all utility and service lines and systems serving a Parcel or portions thereof, including sewers; ejector pumps; water pipes and systems; intake and exhaust vents; gas pipes and systems; sprinkler pipes and systems; drainage lines and systems; electrical power conduits, lines and wires; energy transfer stations and substations; chillers; transformers; electrical panels; vaults; cable television lines; microwave communication systems; telephone conduits, lines and wires; security lines and systems; any utilities required for teleconferencing facilities; and other service or utility lines necessary or convenient to operate such Parcel. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Costco hereby agree as follows: 1. CONSTRUCTION LICENSE. City hereby grants to Costco for the use by Costco and its Permittees a temporary non-exclusive ingress, egress and general access license (the "Construction License"), appurtenant to and for the benefit of the Costco Parcel over, beneath and across the Parking Parcel and the Public Parking Structure for the purpose of (a) constructing and installing a revised elevator system within the Public Parking Structure (the "Revised Elevator System"), including, without limitation, all foundations, footings, columns, floors, Utility Facilities, directional signs, hardware, painting, striping, lighting, cart corrals and other improvements comprising the Revised Elevator System (all of which construction shall comply with the provisions of Section 3 below), (b) vehicular and pedestrian ingress, egress and access by Costco and its Permittees for purposes of such construction, (c) parking of vehicles in connection with the construction and project management of the construction of the Revised Elevator System, (d) if applicable, performing :the maintenance, repair and reconstruction obligations of City to the Elevator System as contemplated hereunder, if City fails to do so, and (e) performing the maintenance, repair and reconstruction obligations of Costco related to the Revised Elevator System as permitted herein. The Construction License (other than the rights in clauses (d) and (e), which shall survive completion of the Revised Elevator System shall terminate upon completion of the Revised Elevator System (as determined by the issuance by City (acting in its governmental capacity) of a final certificate of occupancy for the Revised Elevator System and delivery to and acceptance by City (in its proprietary capacity) of the Revised Elevator System). Conceptual plans will be delivered separately to the City for approval. The rights in clauses (d) and (e) shall survive the completion of the Revised Elevator System and shall be exercised in the same manner as Section 7 of the Developer/City Parking Agreement. 2. LICENSE FOR INGRESS AND EGRESS. City hereby grants to Costco for the use by Costco and its Permittees a license for non-exclusive ingress, egress and general access (the "Costco Access License"), for the purpose of providing vehicular and pedestrian ingress and egress to and from the Parking Parcel and all levels of the Public Parking Structure to and from the Costco Parcel in the same manner as members of the general public. 3. CONSTRUCTION OF REVISED ELEVATOR SYSTEM. (a) Costco to Obtain Permits. Costco may cause the Revised Elevator System to be constructed within the Public Parking Structure and in such case shall obtain all necessary permits, entitlements and other authorizations from City (acting in its governmental capacity) -3- 25835.00001\57706892 HB -431- Item 14. - 245 and any other governmental entity maintaining jurisdiction over the Parking Parcel permitting Costco to construct the Revised Elevator System. In constructing the Revised Elevator System, Costco shall comply with all applicable City ordinances, codes, rules, regulations and applicable conditions of approval to the entitlements for the Revised Elevator System. City shall have the right to review plans and specifications of the Revised Elevator System, and shall have the right to inspect Revised Elevator System during and after construction thereof and prior to acceptance by the City of the Revised Elevator System. The review of any such plans and specifications shall not constitute the assumption of any responsibility by, or impose any liability upon, City as to the accuracy, efficacy, sufficiency or legality thereof. (b) Costco's Cost. Any and all construction or other improvement work undertaken by Costco for purposes of constructing the Revised Elevator System shall be at the sole cost and expense of Costco as between Costco and City. The cost of maintaining, repairing and replacing the Revised Elevator System, once completed and accepted by City, shall be at the sole cost and expense of City as provided in Section 7 of the Developer/City Parking Agreement. Notwithstanding the foregoing, Costco reserves the right, but shall not have the obligation, to maintain, repair and replace the Revised Elevator System at its cost and expense pursuant to the provisions of Section 7 of the Developer/City Parking Agreement, as may be amended. (c) Insurance. In connection with the construction and improvement of the Revised Elevator System only, Costco shall maintain builder's all risk insurance and commercial general liability insurance with commercially reasonable limits of coverage and deductibles. Costco covenants to keep the Parking Parcel free and clear from and against any mechanic's and/or materialmen's liens or stop notice which may be recorded against the Parking Parcel relating to Costco's construction or improvement work referred to herein. Costco further agrees that it will undertake such reasonable actions as may by necessary to cause any such mechanic's or materialmen's liens or stop notice to be removed within sixty (60) days of receipt of notice that such lien or stop notice has attached to the Parking Parcel, including, but not limited to, bonding around any such lien or stop notice in accordance with statute. Notwithstanding the foregoing, Costco shall have the right to satisfy its insurance obligations hereunder by means of self-insurance to the extent of all or part of the insurance required hereunder, but only so long as (i) Costco (or an affiliate providing the insurance) shall have a net worth of at least $200,000,000; and (ii) Costco (or an affiliate providing the insurance) shall, upon request, provide a public securities filing showing the required net worth. In addition, the insurance required to be carried by Costco may be carried under a policy or policies covering other liabilities and locations of Costco; provided, however, that such policy or policies apply to the Costco Parcel in an amount not less than the amount of insurance required to be carried by Costco with respect thereto, which policy shall contain a per location endorsement. 4. MAINTENANCE OF PUBLIC PARKING STRUCTURE. The provisions of Section 7 of the Developer/City Parking Agreement, as may be amended, apply to this Agreement without limitations. City hereby represents and warrants that it will not amend the Developer/City Parking Agreement without the written consent of Costco. 5. USE OF PUBLIC PARKING STRUCTURE. Except as provided in Section 2(a) of the Developer/City Parking Agreement, the Public Parking Structure, providing exclusive rights to a certain number of spaces, the Public Parking Structure will be used only for daily -4- 25835.00001 \5770689.2 Item 14. - 246 HB -432- public parking, and for no other use whatsoever. Notwithstanding the generality of the foregoing, long term and leased parking are specifically prohibited. City shall be permitted to charge parking fees in its sole discretion in accordance with the provisions of Section 8 of the Developer/City Parking Agreement, and prior to doing so, shall obtain a written parking rate study of other publicly accessible parking facilities in the vicinity of the Project illustrating the range of fees charged for parking in such facilities prepared by a reputable consultant possessing knowledge and experience commensurate with the needs of such study. If City elects to impose parking fees for use of the Public Parking Structure, City shall require parking operators to provide procedures for validation privileges for Permittees of Costco and any other business owners on behalf of individual users of the Public Parking Structure. 6. CASUALTY AND CONDEMNATION. Upon the event of Casualty Loss or condemnation of the Public Parking Structure, the provisions of Section 10 of the Developer/City Parking Agreement shall apply. 7. TAX MATTERS. The parties hereto acknowledge and agree that it is intended that the interest on the Special Tax Bonds remain excluded from the gross incomes of the owners thereof for purposes of federal income taxation, and that this Agreement does not confer any "special legal entitlement" within the meaning of the Code and the regulations promulgated thereunder upon the Developer or any other nongovernmental entity with respect to the Public Parking Structure. 8. DISPUTE RESOLUTION. The dispute resolution provisions of Section 33 of the Developer/City Parking Agreement shall apply hereunder in the event of any dispute between the parties hereto. 9. NO LICENSE BY IMPLICATION• PREVENTION OF PRESCRIPTIVE RIGHTS; PROHIBITION AGArNST GRANTING LICENSES. Neither the execution of this Agreement or any instrument which may be executed in connection herewith nor the granting of the rights described herein shall be deemed to grant any other license or easement to any third party or to establish any easements or licenses by implication. The Parties to this Agreement understand and agree that the only license or easement made and granted by the Parties are those licenses and easements which are expressly made and granted by this Agreement. The City hereby reserves the right to ejector cause the ejection from its Parcel any person not authorized, empowered or privileged to use that Parcel. Further, the City reserves the right to restrict access to its Parcel for such reasonable period or periods of time as may be legally necessary to prevent the acquisition of prescriptive rights by any person; provided, however, that prior to such restriction of access the Party exercising that right shall give written notice to the other Party of its intention to do so and shall coordinate such restriction of access with the other Party so that no unreasonable interference with the operation of the other Party's Parcel shall occur. Nothing contained herein shall be deemed to be a gift or dedication of any portion of the following Parcel to the general public or for the general public or for any public purpose whatsoever. No Party, nor any person not a Party, shall grant an easement or license or licenses of the type set forth in this Agreement for the benefit of any property not within the Project at the time of such grant. 10. RECIPROCAL REPRESENTATIONS AND WARRANTIES. The following constitute reciprocal representations and warranties of City and Costco to the other Party. -5- 25835.0000115770689.2 HB -433- Item 14. - 247 (a) Power. Each Party has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby. (b) Requisite Action. All requisite action (corporate, trust, partnership or otherwise) has been taken by each Party in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. Except as expressly described in this Agreement, no consent of any partner, shareholder, creditor, investor, judicial or administrative body, governmental authority or other party is required. (c) Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of each Party and the partners, officers or trustees of such Party, if any, have the legal power, right, and actual authority to bind. such Party to the terms and conditions hereof and thereof. (d) Validity. This Agreement and all documents required hereby to be executed by each Party are and shall be valid, legally binding obligations of and enforceable against such Party in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. 11. ATTORNEYS' FEES. In the event at any time during the term of this Agreement any action or suit is brought by a Party against another Party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other Party arising out of this Agreement, then in that event the prevailing Party shall be entitled to recover from the other Party aII costs and expenses of the action or suit, including, without limitation, actual attorneys' fees, accounting and engineering fees, and any other professional fees resulting therefrom, and all fees and costs incurred on any appeal from such action or proceeding. 12. NOTICE TO PARTIES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered (including by means of professional messenger or overnight courier service) or sent by fax showing confirmed receipt, and shall be deemed received upon the date of receipt thereof. To Costco: Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington 98027 Attention: Property Management (Legal Dept.) Facsimile No.: 425-313-8105 with a copy to: Voss, Cook & Thel LLP 895 Dove Street, Suite 450 Newport Beach, California 92660 Attention: David A. Lurker, Esq. Facsimile No.: 949-435-0226 In 2583 5.0000 1 \5770689.2 Item 14. - 248 HB -434- To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Director of Economic Development Facsimile: 714-375-5087 With copies to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: City Attorney Facsimile: 714-3 74-1590 Notice of change of address shall.be given by written notice in the manner detailed in this Section 12. 13. AMENDMENT. The provisions of this Agreement may be modified or amended, in whole or in part, only with the consent of the Parties, by declaration in writing, executed and acknowledged by all of the same, duly recorded in the Official Records. 14. NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the exclusive benefit of the Parties, any Mortgagees, and of their successors and assigns, and not for the benefit of any other parry, nor shall this Agreement be deemed to have conferred any rights, express or implied, upon any other party. It is expressly understood and agreed that no modification or amendment, in whole or in part, of this Agreement shall require any consent or approval of any third party. 15. TERMINATION; BREACH SHALL NOT PERMIT TERMINATION. Except as otherwise specifically provided in this Agreement, the licenses granted pursuant to Section 1(a), (b) and (c) shall terminate upon the completion of the Revised Elevator System. The remaining interests hereunder shall last until the termination of the Costco Lease, or if Costco acquires the Costco parcel, shall last in perpetuity, unless sooner terminated by written agreement between the Parties which is recorded in the Official Records. It is expressly agreed that no breach of this Agreement shall entitle any Party to cancel, rescind, or otherwise terminate this Agreement, and such limitations shall not affect in any manner any of the rights or remedies which the Parties may have by reason of any breach of this Agreement. 16. ESTOPPEL CERTIFICATE. Each Party hereby severally covenants that upon written request of the other Party, it will within thirty (30) days of such request, issue to such other Party, or to any Mortgagee or any other party specified by such requesting Party, an estoppel certificate stating: (a) whether the Party to whom the request has been directed knows of any default under the Agreement, and if there are any known defaults, specifying the nature thereof, (b) whether to its knowledge the Agreement has been assigned, modified or amended in any way (or if it has, then stating the nature thereof), and (c) that to the Party's knowledge .the Agreement as of that date is in full force and effect. Such statement shall act as a waiver of any claim by the Party furnishing it to the extent such claim is based upon facts contrary to those asserted in the statement and to the extent the claim is asserted against a bona fide encumbrancer or purchaser for value without knowledge of facts to the contrary of those contained in the -7- 25835.00001\57706891 HB -435- Item 14. - 249 or purchaser for value without knowledge of facts to the contrary of those contained in the statement, and who has acted in reasonable reliance upon the statement. However, such statement shall in no event subject the Party furnishing it to any liability whatsoever, notwithstanding the negligence or other inadvertent failure of such Party to disclose correct and/or relevant information. 17. NO PARTNERSHIP. Nothing contained in this Agreement, nor any acts of the Parties, shall be deemed or construed to create any relationship of principal and agent, or of partnership, or of joint venture, or of any association between the Parties. 18. PARTIAL INVALIDITY. If any term, provision or condition contained in this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law provided, however, if the intent and purpose of the parties hereto is rendered unachievable due to such invalid term or provision, then either party shall have the right to terminate this Agreement. 19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the bendfit of the successors and assigns of the Parties hereto. Notwithstanding anything contained herein to the contrary, either Party may delegate all or any portion of its respective rights and obligations under this Agreement to any third party, so long as such assignee expressly assumes in writing the obligations of such delegating Party hereunder and such .delegating Party remains principally liable for such assignee's performance under this Agreement, except as otherwise provided in Section 26 below. 20. TIME OF ESSENCE. The Parties hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either Party shall constitute a material breach of and a non -curable (but waivable) default under this Agreement by the Party so failing to perform. 21. CONSTRUCTION. Headings at the beginning of each paragraph are solely for the convenience of the Parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs and subparagraphs are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated by this reference. In the event the date on which either Party is required to take any action under the terms of this Agreement is not a business day, the action shall be taken on the next succeeding business day. 22. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. Signature pages may be detached from the counterparts and attached to a single copy of this document to physically form one document. " ' 00001\5-n06892 Item 14. - 250 11:2 HB -436- 23. GOVERNING LAW. The Parties acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance. with the laws of the State of California. 24, NO EFFECT ON MORTGAGE. The Parties acknowledge and agree that any default or breach by a Party of its obligations hereunder shall in no way defeat, affect, render void or reduce in any way the rights of any Mortgagee of any Parcel. 25. CONSENT. In any instance in which any Party shall be requested to consent to or approve of any matter with respect to which such Party's consent or approval is required by any of the provisions of this Agreement, such consent or approval or disapproval shall be given in writing, and shall not be unreasonably withheld, conditioned or delayed, unless the provisions of this Agreement with respect to a particular consent or approval shall expressly provide otherwise. 26. RELEASE. If a Party shall sell, transfer or assign its entire Parcel or its interest therein, it shall, except as provided otherwise in this Agreement, be released from its unaccrued obligations hereunder from and after the date of such sale, transfer or assignment. It shall be a condition precedent to the release and discharge of any grantor or assignor Party that the following conditions are satisfied: (a) such grantor or assignor shall give notice to the other Parties of any such sale, transfer, conveyance or assignment promptly following the filing for record of the instrument effecting the same; and (b) the transferee shall execute and deliver to the other Parties a written statement in a form suitable for recording in the appropriate County Recorder's office in which: (i) the name and address of the transferee shall be disclosed; and (ii) the transferee shall acknowledge its obligation hereunder and agree to be bound by this Agreement and perform all obligations hereunder in accordance with the provisions of this Agreement. Failure to deliver any such written statement shall not affect the running of any covenants herein with the land, nor shall such failure negate, modify or otherwise affect the liability of any transferee pursuant to the provisions of this Agreement, but such failure shall constitute a default by the transferee hereunder. Notwithstanding anything in this Section to the contrary, it is expressly understood and agreed that no such sale, transfer or assignment shall effectuate a release pursuant to this Section until such successor in interest to the transferor Party has executed and recorded in the appropriate County records an instrument whereby such successor in interest agrees to be fully bound under the provisions of this Agreement in the place and stead of the transferor Party. 27. ENTIRE AGREEMENT. This Agreement and the exhibits hereto contain all the representations and the entire agreement between the City and Costco with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are superseded in total by this Agreement and Exhibits hereto. The provisions of this Agreement shall be construed as a whole according to their common meaning and not strictly for or against any Party. This Agreement is not, however, intended to supersede or otherwise modify the provisions of Developer/City Parking Agreement. 28. WAIVER OF DEFAULT. No waiver of any default by any Party shall be implied from any omission by any Party to take any action in respect of such default if such -9- 25835.0000115770689.2 HB -437- Item 14. - 251 default continues or is repeated. No express written waiver of any default shall affect any default or cover any period of time other than the default and period of time specified in such express waiver. One or more written waivers of any default in the performance of any term, provision or covenant contained in this Agreement shall not be deemed to be a waiver of any subsequent default in the performance of the same term, provision or covenant or any other term, provision or covenant contained in this Agreement. The consent or approval by any Party to or of any act or request by any other Party requiring consent or approval shall not be deemed to waive or render unnecessary the consent to or approval of any subsequent or similar acts or requests_ The rights and remedies given to any Party by this Agreement shall be deemed to be cumulative and no one of such rights and remedies shall be exclusive of any of the others, or if any other right or remedy at law or in equity which any such Party might otherwise have by virtue of a default under this Agreement, and the exercise of one such right or remedy by any Party shall not impair such Party's standing to exercise any other right or remedy. 29. LIABILITY OF CITY. Notwithstanding anything herein to the contrary, City shall not have any liability or obligation of any kind under this Agreement in connection with (a) the design or construction of the Public Parking Structure, or (b) the operation, use, maintenance, repair or replacement of the Public Parking Structure during any period in which Developer is acting as a Qualified Operator. Notwithstanding anything herein to the contrary, any and all monetary obligations of City under this Agreement shall be payable solely from any revenues derived by City from the Public Parking Structure or from the proceeds of the Public Parking Structure Maintenance Special Tax (after deduction for the costs of collection and other administrative expenses) levied by City on the District In no event shall City's general fund be liable hereunder. Costco hereby waives and releases City from any and all such liability or obligation. [Signatures follow on next page] -10- ' `.00001 \5770689.2 Item 14. - 252 xB -438- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. CITY ATTEST: CITY OF HUNTINGTO EACH, CALIFORNYA, a Ca omia charter city 8y By: N oa L. rly Nam( Ti tl ': City Clerk V Title: CL COSTCO WHOLESALE CORPORATION, a Washington co Ora io By: Name: Title:RIGHARD a V.P/ SMOtWY H \Client Folders\Costco (04210)\Be11a Term lease (020)\Docs\City Parking License Agreemmt & Covenant VCi 041311 DOC 6Be� JiN9 AM -11- 25835.0000115770689.2 HB -439- Item 14. - 253 STATE OF CALIFORNIA ) ss. COUNTY OF 6R4,069- ) On 20,// , before me, a Notary Public, personally appeared,.TOAA; % X.Yn1� 50—� ,ro, who Proved to me on the basis of satisfactory evidence to be the personowhose name ' are ubscribed to the within instrument and acknowledged to me that they executed the same in ei authorized capaci ies , and that by hi.s t et signaturea on the instrument, the person(e or the entity upon behalf of which the persono acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ! ESPARZA Commission * 1857021 a Notary Public - California z Z Orange County (Se ) My Comm. Expires Aug 4, 2013 Item 14. - 2541-1101\5770689.2 Notary Public -I- . FOR MEI STATE OF4�) gg ) ss. COUNTY OF 7&( k!! ) On j r Ej- /Y , 20_lt,, before me, ��'�e�i c 2 a Notary Public, personally appeared gJL who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.-^ fia�,% h I certify under penalty of perjury under the laws of the State of C�dat the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) No Public -2- 25835.00001 \57706892 HB -441- Item 14. - 255 CONSENT AND APPROVAL BELLA TERRA ASSOCIATES, LLC The undersigned hereby expressly approves and consents to the terms of this Agreement and, to the extent applicable, agrees to be bound by the terms and provisions hereof. This Consent and Approval shall be binding on the undersigned's successors and assigns. The undersigned agrees not to amend or modify the terms of the Developer/City Parking Agreement or the Operating Agreement without the prior written consent of Costco, which consent shall not be unreasonably withheld. Nothing herein shall be deemed to limit any rights or remedies of Costco under the terms of the Ground Lease between BTDJM Phase II Associates, LLC, Costco, the Developer/City Parking Agreement, or the Amended and Restated Construction, Operation and Reciprocal Easement Agreement applicable to the Retail Parcel, the Costco Parcel, and the.. SCE Lease Parcel. [signatures follow on next page] -1- 25835.00001\.5770689 2 Item 14. - 256 HB -442- Dated: 0, ,f -7 , 2011 ATTEST: City Clerk APPROVED AS TO FORM: Huntington Beach City Attorney BELLA TERRA ASSOCIATES, LLC, a Delaware limited liability company By: Name: D. John Miller Its: President -2- 25835,00001\5770689.2 HB -443- Item 14. - 257 STATE OF CALIFORNIA ) ss. COUNTY OF - Cr�✓z` ) On CC, / , 20A before me, J - P-S lv , a Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the perso whose name) i are subscribed to hMt .. within instrument and acknowledged to me that Ushe/they executed the same in ' /her/their authorized capacity), and that by(�'i,�7her/their signatureK on the instrument, the person), or the entity upon behalf of which the person acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. S. R. ESHETT Cow. # 1902187 kj �® NOTARYPUBUC•CAUFORMA er y &WA CuwA CO Nn Seal) Mr Coo. EXP. AUG. 30. 20M Notary Public -3- 25835.00001157 70689.2 Item 14. - 258 HB -444- CONSENT AND APPROVAL BTDJM PHASE II ASSOCIATES, LLC The undersigned is the fee owner of the Costco Parcel. The undersigned hereby expressly approves and consents to the terms of this Agreement and, to the extent applicable, agrees to be bound by the terms and provisions hereof. This Consent and Approval shall be binding on the undersigned's successor and assigns. Nothing herein shall be deemed to limit any rights or remedies of Costco under the terms of the Ground Lease between the undersigned and Costco, the Developer/City Parking Agreement, or the Amended and Restated Construction, Operation and Reciprocal Easement Agreement applicable to the Retail Parcel, the Costco Parcel, and the SCE Lease Parcel. Dated: 2011 BTDIM PHASE H ASSOCIATES, LLC, a Delaware 1' company By: Name: ohn Miller Its: -President -1- 2583 5. 00001 \5770689.2 Item 14. - 259 STATE OF CALIFORNIA ) ) ss. , COUNTY OF:�-/Z- C`«- ) On -7� , 20//, before me, �cS jam' a Notary Public, personally appeared% ,who proved to me on the basis of satisfactory evidence to be the persou('j whose nameare subscribed to tbje within instrument and acknowledged to me that &/she/they executed the same in 0/her/their authorized capacity(i--s ,, and that by(�"�-A)S'erhheir signature(�'f on the instrument, the persoo', or the entity upon behalf of which the persopWacted, executed the instrument. I certify .under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. .X S. R. ESHETT Comm # 1902187 rrrtrt P-My NOTARY PUM-CALIFORNIA W jSANTA CLARA COUNTY Seal) . Cow, ExP. ADG. 30. 2D14 � Notary Public -2- 25835,00001\5770689.2 Item 14. - 260 xB -446- EXHTBTT "A" PARKING PARCEL LD 1018 SHEET 1 OF 2 02-100 EXHIBIT "A" LEGAL DESCRIPTION FOR BELLA TERRA PARKING STRUCTURE' THE LAND BEING REFERRED TO HEREIN IS SITUATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. PARCEL'A' BEING A PORTION OF PARCELS 2 AND 6 AS SHOWN IN PARCEL MAP NO. 86-200, RECORDED IN BOOK 255, PAGES 40 THROUGH 45 INCLUSIVE OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OF ORANGE, SAID' PORTION OF LAND ALSO SHOWN AS PARCEL 11 OF APPROVED TENTATIVE PARCEL MAP NO. 2003-163 DATED MARCH 5, 2004, DESCRIBED AS FOLLOWS; BEGINNING AT THE EASTERLY TERMINUS OF THE NORTH LINE OF SAID PARCEL 2, SHOWN AS "NORTH 89'2V30' WEST 763.75 FEET" ON SAID PARCEL MAP NO. 86-200, SAID POINT ALSO BEING ALONG THE SOUTHERLY LINE OF THE SOUTHERN CALIFORNIA EDISON RIGHT OF WAY (150.00 FEET IN WIDTH) PER GRANT DEED RECORDED DECEMBER 18, 1958 IN BOOK 4519, PAGE 491 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE NORTH 89'32'06' WEST (N89'2V30"W) A DISTANCE OF 67.51 FEET TO THE TRUE POINT OF BEGINNING; THENCE DEPARTING SAID' LINE SOUTH 0002754" WEST (S00'30'30-W) A DISTANCE OF 334.58 FEET; THENCE NORTH 89'3Z06" WEST (N89'29.30'W) A DISTANCE OF 135.12 FEET; THENCE SOUTH 70029'40' WEST (S70'32'16"W) A DISTANCE OF 4.39 FEET; THENCE NORTH 89'32'06' WEST (N89'29'30'W) A DISTANCE' OF 3.00 FEET; THENCE NORTH 00027'54- EAST (00'30'30"E) A DISTANCE OF 126.75 FEET; THENCE NORTH 89*32*06' WEST (N89'29'30'W) A DISTANCE OF 274.25 FEET; THENCE NORTH 00027'54' EAST (N00'30'30'E) A DISTANCE OF 209.33 FEET TO ABOVE MENTIONED NORTH LINE; THENCE EASTERLY ALONG SAID LINE SOUTH 89'32'06' EAST (S89'29'3("E) A DISTANCE OF 416.50 FEET TO THE TRUE POINT OF BEGINNING. ,CONTAINING AN AREA OF 2.41 ACRES MORE OR LESS. BASIS OF BEARINGS USED FOR THIS LEGAL DESCRIPTION IS BASED ON THE BEARING BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS NO. 5110 AND STATION G.P.S. NO. 5112, BEING NORTH 89'32'06' WEST PER RECORDS ON FILE IN THE OFFICE OF THE COUNTY SURVEYOR. BEARINGS IN PARENTHESIS ARE BASED ON PARCEL MAP NO.86-200. SEE EXHISIT'B" SHEET 2 OF 2 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART THEREOF. D�ABJIEl.S CHRISTCfPHER W. DANIELS `f 25835.00001 \5770689.2 �. 91D E328 Exhibit "A" HB -447- Item 14. - 261 EXIEIIBTP "B" RETAIL PARCEL In the City of Huntington Beach, County of Orange, State of California, being Parcels I through 10, inclusive of Parcel Map No. 2003-163 as per map filed in Book 358, Pages I through 9, inclusive of Parcel Maps in the office of the County Recorder of said County, together with Parcel I of Parcel Map No. 86-200 as per map filed in Book 255, Pages 40 through 45, inclusive of said Parcel Maps. Exhibit `B" 25835.00001157706892 Item 14. - 262 . HB -448- EXHIBIT "C" C®STCO PARCEL PARCEL A (COSTCO PARCEL): PARCELS t AND 2 OF LOT LINE ADJUSTMENT NO. la RECORDED.. Zi 2011 A5 INSTRUMENT NO. 2 n1 000523 55 OF OFFICIAL RECORDS IN ORANGE COUNTY, CALIFORNIA 25835.W001\5 70689.2 Exhibit "C" HB -449- Item 14. - 263 I� CD N i� I Huntington Center Parking Structure for the period of 07/01/2012 through 06/30/2013 Full Year 2013-2014 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Garage Expenses Elevator* 25,800 5,400 1,500 1,500 1,500 1,500 Janitorial 69,600 5,800 5,800 5,800 5,800 5,800 Janitorial Supplies 4,200 350 350 350 350 350 Security 185,100 15,250 15,250 15,250 15,250 15,250 Security SupplieWCameras 6,000 500 500 500 500 500 Sweeping 26,100 2,175 2,175 2,175 2,175 2,175 PowerWashing** 46,489 1,950 1,950 11,107 1,950 1,950 Elevator Phones 3,000 250 250 250 250 250 Utilities 61,100 6,000 5,500 5,800 5,000 4,100 Misc R & M*** 3,000 250 250 250 250 250 Lighting 1,200 100 100 100 100 100 Lighting Supplies 7,800 650 650 650 650 650 Utility Engineer 33,900 2,800 2,800 2,800 2,800 2,800 Insurance 37,600 0 0 0 0 0 Management Fees 28,500 2,350 2,350 2,350 2,350 2,350 TOTAL GARAGE EXPENSES 539,389 43,825 39,425 48,882 38,925 38,025 Approved: City of Huntington Beach By Name: Title: Date: *Cleaning of Travertine in the 5 Elevators (2x annually) _ $1,950.00 each * Honing of Travertine in the 5 lobbies (2x annually) = $1,950.00 each **Powerwash Exterior Parking Structure (1 x annually) _ $4,775.00 **Powerwash Interior Parking Structure - All Levels including stairwells, driveways and ramps (2x annually) = $9,257 each ***Re -striping - All Levels & Directionals = $11,000 1,500 5,400 1,500 1,500 1,500 1,500 1,500 5,800 5,800 5,800 5,800 5,800 5,800 5,800 350 350 350 350 350 350 350 15,250 15,600 15,600 15,600 15,600 15,600 15,600 500 500 500 500 500 500 500 2,175 2,175 2,175 2,175 2,175 2,175 2,175 1,950 6,725 1,950 11,107 1,950 1,950 1,950 250 250 250 250 250 250 250 4,200 5,000 5,000 5,000 5,000 5,000 5,500 250 250 250 250 250 250 250 100 100 100 100 100 100 100 650 650 650 650 650 650 650 2,800 2,850 2,850 2,850 2,850 2,850 2,850 0 0 0 0 0 37,600 0 2,350 2,400 2,400 2,400 2,400 2,400 2,400 38,125 48,050 39,375 48,532 39,375 76,975 39,875