The URL can be used to link to this page

Home My WebLink AboutPoseidon Resources Corporation - 2006-02-27 (3) �p CA RECEIVED Council/Agency Meeting Held: , Deferred/Continued to: ,,,,y. 't tag- CIS A proved ❑ Conditional) Approved ❑ Deniedp� City CI 's i natu e p Council Meeting Date: 2/27/2006 Department ID Number: ED 05-30 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: PEN �PECU6_R'�E_T�-G�RA , CUTIVE DMBETW PREPARED BY: PAUL EMERY, DEPUTY CITY ADMINISTRATOR SUBJECT: - OWNER PARTICIPATION AGREEMENT BY ANDTHE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND POSEIDON RESOURCES CORPORATION IEEEssue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Poseidon Resources Corporation (Poseidon) proposes to construct and operate a seawater desalination plant at a site in the Southeast Coastal Redevelopment Area. The Redevelopment Agency of the City of Huntington Beach would like to ensure projected revenues are protected to the greatest extent possible. Funding Source: Not applicable Recommended Action: Motion to: Upon approval of Conditional Use Permit No. 02-04 and Coastal Development Permit No. 02-05 by the City of Huntington Beach to permit the Seawater Desalination Project, approve and authorize execution by the Chairman, Executive Director and Agency Clerk the Owner Participation Agreement (OPA) by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation including the consent of the site owner. Alternative Action(s): Do not authorize the execution by the Chairman, Executive Director and Agency Clerk the Owner Participation Agreement (OPA) by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation and any documents in furtherance thereof pending all appropriate document execution by the applicant and subject site owner. REQUEST FOR ACTION MEETING DATE: 2/27/2006 DEPARTMENT ID NUMBER:ED 05-30 Analysis: Poseidon Resources Corporation proposes to construct and operate a seawater desalination plant at a site in Huntington Beach, located in the Southeast Coastal Redevelopment Project Area. Improvements in redevelopment project areas result in an increased property values within those areas. As such, tax increment generated by the increase in property value would be revenue to the City Redevelopment Agency, after accounting for state-mandated pass-through revenue to other entities as well as the base year revenue that would continue to be received by the City of Huntington Beach. A description of the property tax revenue and additional deal points included in the OPA (Attachment 1) are delineated below: Property Tax/Property Tax In Lieu The agreement would commit the project developer and any future property owner, public or private, to pay property taxes or an equivalent property tax in-lieu fee to the Redevelopment Agency for 30 years from the issuance of a Certificate of Occupancy. This tax or in-lieu fee, assuming the assessed valuation is consistent with the minimum amount outlined in the terms of the OPA, $186,500,000 (construction cost estimate), would equate to 1% of valuation ($1,865,000). Of this $1,865,000, 20% would be allocated to the Housing Set Aside fund and a portion of the balance would then be passed through to other local tax entities. In this scenario, just over $1.1 million annually would go to the Redevelopment Agency. Should the assessed valuation be higher than the estimated construction costs the higher assessment would be applied to the property. In the event that the property for any reason is removed from the tax rolls (including the sale to a public agency) then the participant shall pay the agency an amount equal to the term left in the agreement or pay an in lieu amount for the duration of the agreement. City Improvement Funds Poseidon has agreed to pay the City $2,000,000. These funds may be used at the sole discretion of the City Council for projects that will improve the quality of life in the City of Huntington Beach. These funds will be payable prior to the Certificate of Occupancy. Right of Way Improvement Funds Included in the conditions of approval and the OPA is the requirement that Poseidon pay $1,900,000 for improvements adjacent to the subject property and along the pipeline route, including tree-damaged sidewalk repair/replacement, vacant tree well planting, median planting restoration/enhancement and frontage road landscaping replacement/enhancement. Payment of these funds is required within five days after the closing of the Participant's construction financing for the project. G:\Emery\Poseidon\RCA- Poseidon February 27,2006.doc -2- 2/14/2006 8:38 AM REQUEST FOR ACTION MEETING DATE: 2/27/2006 DEPARTMENT ID NUMBERED 05-30 Utility Users Tax The Agency stipulates that Poseidon and any successor's use of electricity in connection with operation of the project and site would be subject to terms and payments to the City under the City's Utility Users Tax. The Utility Users Tax, Section 3.36.060 of the Municipal Code, was adopted in 1970, when the only known technology for "pumping" water was raising water from the groundwater basin with electrical pumps. Poseidon is treating water, or manufacturing water, by pushing water through reverse osmosis membranes, which is uniquely different from transporting water by pumping. Poseidon has identified $16.8 million in electricity purchases for the plant. They have further opined that 6% of that electricity is for "non-pumping purposes Under Poseidon's definition of pumping the City would receive approximately $50,000 annually in Utility Tax revenue from electricity purchases. If it was determined that 100% of the electricity purchased is for the treating or manufacture of water (not pumping) then the City would realize approximately $840,000 annually in Utility Tax revenue from electricity purchases. Resolution of this tax issue has not been resolved through negotiation of the OPA and could be subject to litigation. Staff has determined that an OPA is the most effective vehicle to guarantee these revenues should a sale of the project to a public entity occur. The OPA could be subject to challenge should the successor-in-interest to the project be a public entity. However, the City has a greater likelihood of success in defending terms of the OPA based on state law and the assignment provisions of an OPA. A review of all of the financial benefits of the proposed project is summarized in the attached matrixes (Attachment 2). Identified within the matrixes are the condition/deal point, the financial benefit of the condition/deal point and the identification of the point of accrual of that benefit, i.e. the general fund,the water fund etc. One matrix reflects the revenue accrued with the application of the utility tax to all of the electricity purchased at the site and the second matrix reflects the revenues accrued with the application of the utility tax to electricity purchased at the site for non-pumping activities as defined by Poseidon. One of the requirements of the OPA is for execution of an agreement containing covenants affecting real property; this requirement includes obtaining the consent of the Site Owner. The signed consent by the site owner is a necessary requirement for the agreement to be effective and is included. There are no substantive deal point changes between the OPA presented on January 9, 2006 and the OPA signed for execution attached except for the clarification of the relationship of the three signatory parties. G:\Emery\Poseidon\RCA-Poseidon February 27,2006.doc -3- 2/16/2006 9:23 AM REQUEST FOR ACTION MEETING DATE: 2/27/2006 DEPARTMENT ID NUMBER:ED 05-30 Environmental Status: Not applicable. Attachment(s): City Clerk's . - NumberDescription 1. Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation 2. Financial Benefit Matrix 3. 1 PowerPoint G:\Emery\Poseidon\RCA-Poseidon February 27,2006.doc -4- 2/14/2006 8:38 AM ATTACHMENT # 1 OWNER PARTICIPATION AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, Agency, and POSEIDON RESOURCES CORPORATION Participant. Final(2-9-06) TABLE OF CONTENTS Page PART 1. SUBJECT OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 101 Purpose of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 102 The Redevelopment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 103 The Redevelopment Project Area . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 104 The Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . 2 Section 105 The Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 106 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 107 Transfer of Project and Assignment of Agreement . . . . . . . . . . . . . . . 3 Section 108 Effect of City Entitlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 PART 2. DEVELOPMENT OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 201 Scope of Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . 5 Section 202 Construction Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 203 Construction Schedule; Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 204 Cost of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 205 Construction Pursuant to Plans and Laws . . . . . . . . . . . . . . . . . . . . . 7 Section 206 Eigual Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 207 Condition of the Site. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 208 Construction Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 209 Zoning and Land Use Requirements . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 210 Indemnification; Bodily Injury and Property Damage Insurance . . . . . . 8 Section 211 Local, State and Federal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Section 212 Permits and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 213 Rights of Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 214 Disclaimer of Responsibility by the Agency . . . . . . . . . . . . . . . . . . 12 Section 215 CEQA Review;Compliance with Environmental Laws . . . . . . . . . . . 13 Section 216 Environmental Indemnification by the Participant . . . . . . . . . . . . . . 13 Section 217 Rigb!s of Obligees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PART 3. USE OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 301 Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 302 Maintenance of Site and Environs- Payment of Taxes and Assessments 15 Section 303 Obligation to Refrain from Discrimination . . . . . . . . . . . . . . . . . . . 18 Section 304 Form of Nondiscrimination and Nonsegregation Clauses . . . . . . . . . . 18 Section 305 Effect and Duration of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 306 Agreement Containing Covenants Affecting Real Property. . . . . . . . . 19 Section 307 Relationship of the Agency and the Participant . . . . . . . . . . . . . . . . 19 Section 308 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 20 PART 4. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 -i- OPA FINAL(2-9-06) Section 401 Defaults-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 402 Defaults-Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 PART 5. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 501 Notices Demands and Communications between the Parties . . . . . . . 23 Section 502 Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 503 Nonliability of Ag!!,M Officials and Employ . . . . . . . . . . . . . . . 23 Section 504 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 505 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 506 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 507 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 508 No Third Party Beneficiaries;Noniiability of Site Owner. . . . . . . . . . 24 Section 509 Authority to Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 510 Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 511 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 512 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 512 Enforced Delay Extension of Times of Performance . . . . . . . . . . . . 25 PART 6. ENTIRE AGREEMENT,WAIVERS AND AMENDMENTS . . . . . . . . . . . 26 PART 7. TIME FOR ACCEPTANCE OF AGREEMENT BY THE AGENCY;TERM. 2 6 ATTACHMENTS ATTACHMENT NO. I - SITE MAP ATTACHMENT NO. 2 - LEGAL DESCRIPTION ATTACHMENT NO. 3 - SCOPE OF DEVELOPMENT ATTACHMENT NO. 4 - AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY -ii- OPA FINAL(2-9-06) OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT(the"Agreement")is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and POSEIDON RESOURCES CORPORATION, a Delaware corporation (the "Participant"). The Agency and the Participant agree as follows: PART 1. SUBJECT OF AGREEMENT Section 101 Purpose of the Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan for the Southeast Coastal Redevelopment Project by providing for the development by the Participant of a seawater desalination facility(the"Facility")on that certain real property described as the"Site"in Section 104 of this Agreement, below, as well as a water transmission line from the Site to an existing regional transmission system (the "Pipeline," collectively with the Facility, the"Project"). This Agreement does not grant any easement or permit or approve any development of the Project and does not contemplate or authorize any development of the Project beyond those entitlements and approvals listed in and subject to the conditions of Sections 108,202,207,209,212,and 215 of this Agreement. All approvals,easements or permits necessary to construct and operate the Project must be granted independently of this Agreement by the entities with jurisdiction thereof. This Agreement is solely a finance mechanism to ensure the benefits of the Project that become due and payable under this Agreement accrue to the Agency and the City of Huntington Beach("City"),and does not provide any entitlement to construct or operate the Project. The development of the Site and the Project pursuant to this Agreement,and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health,safety and welfare of its residents,and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. I Section 102 The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan for the Southeast Coastal Redevelopment Project, which was approved and adopted on June 17, 2002, by the City Council of the City of Huntington Beach by Ordinance No.3 561 (the"Redevelopment Plan"). The Redevelopment Plan is incorporated herein by reference and made a part hereof as though fully set forth herein. Section 103 The Redevelopment Project Area The Southeast Coastal Redevelopment Project area is located in the City of Huntington Beach, California. The exact boundaries of the Redevelopment Project area are specifically and legally described in the Redevelopment Plan. -1- OPA FINAL(2-9-06) Section 104 The Site a. The"Site"is that certain real property comprised of approximately 10.96 acres located in the City of Huntington Beach, illustrated and designated as the Site on the"Site Map" (attached hereto and incorporated herein as Attachment No. 1) and as described in the "Legal Description of the Site"(attached hereto and incorporated herein as Attachment No. 2). b. The Participant hereby represents that it owns an equitable interest in the Site by way of a written option with the fee owner of the Site,AES Huntington Beach Development,LLC (the "Site Owner"), to lease or buy the Site (the "Participant's Interest"). The Site Owner has consented to the Participant entering into this Agreement and to the recordation of the document set forth in Attachment 4 hereto required hereby against the fee ownership interest of the Site Owner in the Site,if the Participant is not the fee owner at the time such recordation must occur. Section 105 The Agency a. 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. b. The address of the Agency for purposes of receiving notices pursuant to this Agreement is as follows: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Executive Director C. "Agency"as used in this Agreement includes the Redevelopment Agency of the City of Huntington Beach, California and any assignee or successor to its rights, powers and responsibilities. All of the terms,covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Agency and any such assignee or successor of the Agency. Section 106 Participant a. The Participant is Poseidon Resources Corporation,a Delaware corporation. The Project will be developed, owned and managed by the Participant. b. The address of the Participant for purposes of receiving notices pursuant to this Agreement is as follows: Poseidon Resources Corporation 3760 Kilroy Airport Way, Suite 260 Long Beach, CA 90806 -2- OPA FINAL(2-9-06) Attn: Chief Executive Officer With a copy to: Poseidon Resources Corporation -1055 Washington Boulevard Stamford,CT 06901 Attn: Chief Executive Officer C. "Participant' as used in this Agreement means Poseidon Resources Corporation and any assignee or successor to its rights, powers and responsibilities which is permitted as such under the terms of this Agreement or which acquires any interest in the Site or the Project under the power of eminent domain or by a voluntary conveyance in lieu of or under threat of eminent domain. All of the terms,covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Participant and any such assignee or successor of the Participant. Section 107 Transfer of Project and Assignment of Agreement The qualifications and identity of the Participant are of particular concern to the City and the Agency. The Participant recognizes that it is because of such qualifications and identity that the Agency is entering into this Agreement with the Participant. Therefore,no voluntary or involuntary transferee of the Project or the Participant's Interest in the Site shall acquire any rights or powers under this Agreement except as expressly set forth herein. Except as provided in paragraph(a) below, prior to Completion, the Participant shall not assign all or any part of this Agreement nor make any total or partial sale or transfer of Participant's Interest in the Site or the Project without the prior written approval of the Agency pursuant to paragraph(b)below. Such approval shall not be unreasonably withheld, conditioned or delayed, provided that the proposed transferee has demonstrated.to the Agency that it has the experience and financial capability to complete the Project,pursuant to paragraph(b),below. "Completion"for purposes of this Agreement shall mean the point in time when: (i)the Participant has completed construction of the Project as set forth in this Agreement(including without limitation the Scope of Development)and in accordance with all laws, rules, regulations, standards, guidelines and other requirements issued by any federal, state, county,municipal(including the City)or other governmental authority having jurisdiction over the Site and/or the Pipeline route,and all land use,development and building approvals,entitlements, and/or permits as may be required by the City and any other governmental body having jurisdiction over the Site for the development of and construction of the Facility on the Site or as maybe required by the City and any other governmental body having jurisdiction over the Pipeline route for the development of and construction of the Pipeline, and (ii) a final certificate of occupancy, or equivalent document, has been issued by the City for the Facility, and by the City and any other government body having jurisdiction over the Pipeline route for the Pipeline (collectively, the "Certificate of Occupancy"),and(iii)the Participant has received all governmental permits required to operate the Project and to distribute the water produced therein for public consumption. -3- OPA FINAL(2-9-06) (a) Permitted Transfers Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or conveyance of the Participant's Interest in the Site or the Project or any portion thereof shall not be required in connection with any of the following(each a"Permitted Transfer"): (i) the conveyance or dedication of any portion of the Site to the City or the granting of easements or permits to facilitate construction of the Project; (ii) any assignment of this Agreement or the Project for financing purposes related to this Agreement, including, without limitation, the grant of a deed of trust to secure the funds necessary for land acquisition,construction and/or permanent financing of the Project; (iii) contracts for the management of the development upon the Site or the Pipeline route, or providing services necessary or incidental for its management; (iv) any transfer of the Project to (i) any holding company, corporation, association or entity which is or becomes a parent, subsidiary or affiliate of the Participant or(ii) any successor of the Participant by reason of merger,consolidation,public offering, reorganization, dissolution, or sale of stock or assets (any such entity described in clause(i)or(ii)is a"Related Company"),provided that not less than thirty(30)days prior to the effective date of any such proposed transfer,the Agency is provided with (1) documentation sufficient in the reasonable judgment of the Agency to demonstrate that the transferee is a Related Company, and (2) an instrument of assignment and novation reasonably acceptable to the Agency's legal counsel containing the express assumption by the proposed transferee of the rights and obligations of the Participant under this Agreement; (v) any transfer of the Project to the City or other public agency(other than under the power of eminent domain or a voluntary conveyance in lieu of or under threat of eminent domain), provided that not less than thirty(30) days prior to the effective date of any such proposed transfer, the Agency is provided with an instrument of assignment and novation reasonably acceptable to the Agency's legal counsel containing the express assumption by the proposed transferee of the rights and obligation of the Participant under this Agreement. (b) Agency Consideration of Requested Transfer or Assignment If a request is made for an assignment of this Agreement or a conveyance of the Participant's Interest in the Site or the Project or any portion thereof other than a Pemitted Transfer during the period in which this Section 107 applies,the Agency agrees that it will not unreasonably withhold approval of such a request,provided the Participant delivers written notice to the Agency -4- OPA FINAL(2-9-06) requesting such approval, together with the following documentation: (1)sufficient evidence, as reasonably determined by the Agency, regarding the proposed transferee's development qualifications and experience, qualifications and experience in operating the applicable type and respective portion of the Project proposed for transfer,and its financial resources,insufficient detail to enable the Agency to evaluate the proposed transferee pursuant to the criteria set forth in this paragraph(b);and(2)an instrument of assignment and novation in a form reasonably acceptable to the Agency's legal counsel containing the express assumption by the proposed transferee of the rights and obligations of the Participant under this Agreement. Within thirty(30)days after receipt of such a written notice,the Agency shall respond in writing by stating that the request is complete or by describing such further information as the Agency requires in order to determine the request is complete. Such additional information shall be provided within thirty(30) days of the Agency's response,or the request shall be deemed withdrawn. Within thirty(30)days of the Agencyobtaining a completed request, the Agency shall either approve, conditionally approve, or disapprove the proposed transfer,pursuant to the criteria set forth in this paragraph(b). The Agency shall evaluate each proposed transferee on the basis of its operational qualifications and experience and its financial commitments and resources,and may disapprove any proposed transferee which Agency determines, in its reasonable judgment, does not possess qualifications that enable the proposed transferee to meet the obligations of the Participant under this Agreement, or may condition approval of a proposed transfer upon such conditions as the Agency determines are necessary to assure that the proposed transferee will meet the obligations of the Participant under this Agreement. The provisions of this paragraph(b)shall not apply to any Permitted Transfer set forth in paragraph(a), above. Section 108 Effect of City Entitlements The Project which is the subject of this Agreement is the subject of Conditional UA Permit No. 2-03 and Coastal Development Permit No. 02-05, approved by the City on f o0010 (collectively,the"City Entitlements"). Nothing in this Agreement shall be deemed to vary,waive or affect in any way any term or condition of either City Entitlement. PART 2. DEVELOPMENT OF THE SITE Section 201 Scope of Development The Participant agrees to diligently pursue the necessary permits and entitlements required for development of the Project in addition to the City Entitlements, and to commence and complete construction of the Project in a timely manner upon obtaining such permits and entitlements,and in conformance with the provisions of the Scope of Development(attached hereto and incorporated herein as Attachment No. 3). Section 202 Construction Drawings a. The Participant shall cause its architect or engineer to prepare the plans and drawings necessary to obtain a building permit("Construction Drawings") for the Project. -5- OPA FINAL(2-9-06) b. The Participant shall have no obligation to submit Construction Drawings to the Agency for review and approval,but shall submit plans and Construction Drawings to the City in compliance with all applicable City rules and procedures,and shall develop the Project on the Site and Pipeline route in accordance with any Construction Drawings approved and permits and entitlements issued and approved by the City,and no further filing by the Participant,or approval by the Agency, as to Construction Drawings, shall be required except as provided in subsection c., below. C. Following issuance of a building permit for the Project,the Participant shall submit to the Agency's Executive Director(the"Executive Director") for review and reasonable approval any proposed material changes to the Construction Drawings that do not conform to the Scope of Development. Approval of such changes by the Executive Director shall not be deemed to relieve the Participant from the requirement to obtain approval of such changes from any other governmental entity which has jurisdiction over the portion of the Project to be so changed. Section 203 Construction Schedule; Bond Prior to issuance of any building permit for the Facility, the Participant shall provide the Agency with the anticipated date for completion of construction of the Project (the "Projected Completion Date"). The Participant shall commence construction of the Project and shall diligently prosecute construction of the Project to completion. If the Project is not completed within two(2) years after the Projected Completion Date,the Participant shall be required to demolish and remove all construction on the Site and to return the Site to the state it was in prior to the start of construction. The Projected Completion Date shall be extended for the time of any enforced delay pursuant to Section 513,and may also be extended upon request of the Participant for reasons which do not constitute an enforced delay upon the reasonable determination of the Executive Director that the Participant has been proceeding with reasonable diligence in light of then present circumstances. Prior to the commencement of construction of the Project,the Participant shall obtain,and thereafter shall maintain at all times prior to the issuance of the Certificate of Occupancy a bond or other form of security reasonably acceptable to the Agency in such amount reasonably as is reasonably necessary to pay for the costs of demolition and removal and renovation of the Site required by this Section, as determined by the City's Director of Public Works. Section 204 Cost of Construction It is the responsibility of the Participant,at the Participant's sole cost and expense,to pay(or cause to be paid) all Development Costs, without any cost or liability to the Agency or the City. "Development Costs"shall collectively mean: development,construction,operational,maintenance and management costs in connection with the Project and the Site,including,without limitation,all off-site improvements and on-site improvements required by the City Entitlements in connection therewith, and including, without limitation all hard costs, soft costs, the cost of services, wages required to be paid to any person employed by the Participant,any contractor or subcontractor,and any cost overruns. -6- OPA FINAL(2-9-06) Section 205 Construction Pursuant to Plans and Laws a. The Participant shall construct the Project in conformance with the Construction Drawings approved by the City in issuing a building permit for the Project, all conditions of approval imposed upon the Project by any governmental entity with jurisdiction over the Project or any portion thereof, and any modifications thereof pursuant to any change order(s) permitted or approved by the Agency,the City,or such other governmental entities(the"Approved Plans"). b. The Participant shall cause all work performed in connection with the Project to be performed in compliance with the Approved Plans and(1)all applicable laws,ordinances,rules and regulations of federal,state,county or municipal governments or agencies now in force or that may be enacted hereafter, and (2) all directions, rules and regulations of any fire marshal, health officer,building inspector,or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and the Participant shall be responsible for causing the procurement and maintenance thereof, as may be required of the Participant and all entities engaged in work on the Project. c. All construction work and professional services shall be performed by persons or entities licensed or otherwise authorized to perform the applicable construction work or service in the State of California. Section 206 Equal Opportunity During the construction of the Project there shall be no discrimination on the basis of race, color, creed,religion,age, disability,sex, marital status,national origin,or ancestry, in the hiring, firing, promoting,or demoting of any person engaged in the.construction work. Section 207 Condition of the Site As to all portions of the Site and Project,the Site and Project and any portion thereof shall be held by the Participant with no warranty,express or implied,by the Agency as to the condition of the soil or water,its geology,or the presence of known or unknown faults or the condition of the Project. It shall be the sole responsibility of the Participant, at the Participant's expense, to investigate and determine the soil and water conditions of the Site and the suitability of the Site and the Project for the development to be constructed by the Participant. If the soil or water conditions of the Site,or any part thereof,or the condition of the Project,are not in all respects entirely suitable for the use or uses to which the Site and Project will be put pursuant to the Scope of Development(Attachment No.3),and the Participant determines to proceed with the development of the Project,then it is the sole responsibility and obligation of the Participant to take such action as may be necessary to place the Site and the soil and water conditions thereof, and the Project, in all respects in a condition entirely suitable for such development of the Site. The provisions of this Section 207 shall not be -7- OPA FINAL(2-9-06) deemed to imply or create any warranty of the Agency or the City regarding the Pipeline route or any portion thereof,which maybe utilized by the Participant only in accordance with a franchise granted by the City or such other governmental entity as has jurisdiction thereof. Section 208 Construction Responsibilities a. It shall be the responsibility of the Participant to coordinate and schedule the work to be performed so that commencement and completion of construction will take place in accordance with this Agreement. The cost of developing the Project shall be the sole responsibility of the Participant. The Participant shall be responsible for obtaining and complying with any condition relating to any and all permits which may be required by any governmental agency having jurisdiction over the work to be performed. b. The Participant shall be solely responsible for all aspects of the Participant's conduct in connection with the development of the Project,including(but not limited to)the quality and suitability of the Construction Drawings, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors,suppliers,consultants,and property managers. Section 209 Zoning and Land Use Requirements It is the responsibility of the Participant,without cost to the Agency,to ensure that zoning of the Site and all applicable City land use requirements and franchises will be such as to permit the development of the Project in accordance with the provisions of this Agreement. The Participant acknowledges that this Agreement is not a Development Agreement pursuant to Government Code Section 65865 et seq. Section 210 Indemnification; Bodily Injury and Property Damage Insurance a. In the event of any legal action instituted by a third party or any governmental entity or official (other than the Agency, the City or an official of the Agency or the City), challenging the validity of any provision of this Agreement or the City Entitlements, the parties hereby agree to cooperate in defending said action; provided, however the Participant shall indemnify and hold harmless the Agency, the City, and their respective officers, employees, contractors and agents from all litigation expenses, including reasonable attorneys' fees and costs arising out of any legal action instituted by such third party,or other governmental entity or official (other than the Agency,the City or an official of the Agency or the City)challenging the validity of any provision of this Agreement or the City Entitlements,except if and to the extent that such action arises out of or relates to an act or omission by the Agency,the City or an official of the Agency or the City in violation of any applicable laws or regulations. The Agency shall promptly notify the Participant of any such action and shall cooperate in the defense thereof. b. The Participant agrees to and shall defend,indemnify and hold the Agency, the City,and their respective officers,employees,contractors and agents harmless from and against -8- OPA FINAL(2-9-06) all liability,loss,damage,costs,or expenses(including attorneys' fees and court costs)arising from or as a result of the death of any person or any accident,injury,loss and damage whatsoever caused to any person or to the property of any person which shall occur on or adjacent to the Site or on or adjacent to the Pipeline route and which shall be directly or indirectly caused by or result from any acts,errors or omissions of the Participant or its officers,employees,contractors or agents,except if and to the extent that such accident,injury,loss or damage shall be directly or indirectly caused by or result from any negligent act,error or omission by the Agency,the City or their respective officers, employees, contractors and agents. C. Indemnification Procedure. In any situation in which the Participant is required to indemnify a party(the"Indemnified Party")pursuant to this Agreement,as a condition thereto the Indemnified Party shall give the Participant reasonably prompt notice of any matter for which indemnification is sought hereunder. The indemnified Party shall cooperate in the defense of such claim(and pending assumption of defense,the Indemnified Party,in its good faith judgment, may take such steps to defend itself against such claim as it deems appropriate to protect its interests). The Participant shall pay the Indemnified Party's reasonable out-of-pocket expenses incurred in connection with such cooperation and such steps taken to defend itself pending the Participant's assumption of defense. The Participant shall keep the Indemnified Party reasonably informed as to the status of the defense of such claim. After notice from the Participant to the Indemnified Party of the assumption and the defense of a claim,the Participant shall not be liable to the indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than those expressly referred to above and expenses of Separate Counsel referred to below. The Participant,at its own expense and through counsel chosen by it(which counsel shall be reasonably acceptable to the Indemnified Party),shall defend any such claim;provided,however,that if,in the Indemnified Party's reasonable judgment at any time,either a conflict of interest arises between the Participant and the Indemnified Party or if there are defenses which are different from or in addition to those available to the Participant and/or the Indemnified Party and the representation of both parties by the same counsel would be inappropriate,then in each such case the Indemnified Party shall have the right to employ a separate law firm in each applicable jurisdiction(if necessary)("Separate Counsel"),to represent the Indemnified Party in any action or group of related actions(which firm or firms shall be reasonably acceptable to the Participant),and in that event: (a)the reasonable fees and expenses of such Separate Counsel shall be paid by the Participant;and(b)the Participant shall have the right to conduct its own defense in respect of such claim. If the Participant does not defend against a claim, the Indemnified Party may defend, compromise and settle such claim and shall be entitled to indemnification hereunder(to the extent permitted by this Agreement). Notwithstanding the foregoing,the Participant shall not,without the Indemnified Parry's prior written consent(which shall not be unreasonably withheld,conditioned or delayed),settle or compromise any claim or consent to the entry of any judgment unless:(x)there is no finding or admission of any violation of law or any violation of the rights of any person by the Indemnified Party and no effect on any other claims that may be made against the Indemnified Party, and(y)the sole relief provided is monetary damages that are paid in full by the Participant. d. Prior to commencing construction on the Site and continuing until Completion,the Participant shall furnish or cause to be furnished to the Agency duplicate originals -9- OPA FINAL(2-9-06) or appropriate certificates (countersigned by an authorized agent of the insurer) of insurance as follows: 1. Comprehensive general liability(bodily injury and property damage), automobile liability (including owned, hired, and non-owned vehicles), blanket contractual liability, and personal injury liability, all with limits not less than $5,000,000 combined single limit per occurrence. All such policies shall contain a waiver of subrogation for the benefit of the Agency and the City. 2. All such insurance policies shall contain the following three endorsement provisions: (i) Additional Insureds: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), their elective and appointive boards, officers, and employees are added as additional insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate, be canceled, nor the coverage reduced until after thirty (30) days written notice is given to the Redevelopment Agency of the City of Huntington Beach." (iii) Primary Coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointed boards, officers and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." e. All such insurance policies shall be provided by insurers admitted and authorized to do business in the State of California with a minimum rating of A:VIII. The Participant must deliver proof of the insurance required under this Section 210 to the Agency prior to the Agency's execution of this Agreement. f. The insurance coverage and limits required herein shall not be construed as a limit of the Participant's liability. The Participant agrees to respond for any losses subject to indemnification under this Agreement incurred by the Agency or the City and not covered by the -10- OPA FINAL(2-9-06) Participant's insurance, whether by reason of coverage being inapplicable or by the Participant's failure to obtain coverage. The Participant agrees to provide immediate notice to the Agency and the City of any claim or loss against the Participant that includes the Agency or the City as a defendant. The Agency and the 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 likely to involve the Agency or the City. Section 211 Local,State and Federal Laws The Agency acknowledges that it is not providing any financial assistance with respect to acquisition of the Participant's Interest in the Site by the Participant or with respect to the Project in any other way and that this Agreement is entered into solely for the purpose of complying with the Redevelopment Plan. Notwithstanding the foregoing, the Participant hereby agrees to carry out development and construction (as defined by applicable law) of the Project, including, without limitation,any and all public works(as defined by applicable law),in conformity with all applicable local,state and federal laws,including,without limitation,all applicable federal and state labor laws (including,without limitation, any requirement to pay state prevailing wages). The Participant hereby expressly acknowledges and agrees that neither the City nor the Agency has ever previously affirmatively represented to the Participant or its contractor(s) for the Project in writing or otherwise,in a call for bids or otherwise,that the Project or any portion thereof is,or is not, a"public work,"as defined in Section 1720 of the Labor Code. Should the Project or any portion thereof be determined to be a"public work"as defined in the Labor Code,the Participant hereby agrees that the Participant shall have the obligation to provide any and all disclosures, representations,statements,rebidding,and/or identifications which may be required by Labor Code Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time,or any other provision of law. The Participant hereby further agrees that the Participant shall have the obligation to maintain or cause to be maintained any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work)which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time,or any other provision of law. The Participant hereby further agrees that the Participant shall have the obligation,at the Participant's sole cost,risk and expense,to obligate any party as may be required by Labor Code Sections 1726 and 1781,as the same maybe enacted,adopted or amended from time to time, or any other provision of law. The Participant shall indemnify,protect,defend and hold harmless the Agency,the City and their respective officers, employees,contractors and agents,with counsel reasonably acceptable to the Agency and the City, from and against any and all loss, liability,damage,claim,cost,expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, including, without limitation,any and all public works(as defined by applicable law),results or arises in any way from -11- OPA FINAL(2-9-06) any of the following.(1)the noncompliance by the Participant with any applicable local,state and/or federal law,including,without limitation,any applicable federal and/or state labor laws(including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code,as the same may be enacted,adopted or amended from time to time,or any other similar law;(3)failure by the Participant to provide any required disclosure,representation,statement,rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time,or any other provision of law; (4)failure by the Participant to provide and maintain,or to cause to be provided and maintained, any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work)which may be required by the Civil Code, Labor Code Section 1781,as the same may be enacted, adopted or amended from time to time,or any other provision of law;and/or(5)failure by the Participant to obligate any party as may be required by Labor Code Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time, or any other provision of law; provided, however, that the foregoing indemnity shall not apply to or cover any such loss,liability, damage, claim, cost,expense and/or "increased costs"if and to the extent arising out of or resulting from a violation of applicable laws or regulations by the Agency,the City or other indemnified party or a negligent act,error or omission by the Agency, the City or other indemnified party. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the Project, including,without limitation,any public work(as defined by applicable law),the Participant shall bear all risks of payment or non-payment of state prevailing wages and/or Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs"as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781,as the same maybe enacted,adopted or amended from time to time.The foregoing indemnity shall survive termination of this Agreement and shall continue after Completion. Section 212 Permits and Approvals Before commencement of construction, the Participant, without cost or expense to the Agency, shall obtain any and all permits which may be required by the City or any other governmental agency having jurisdiction over the work to be performed. As applicable,the Agency shall provide appropriate assistance to the Participant in obtaining these permits and other City approvals,provided such assistance imposes no cost or expense on the Agency. Section 213 Rights of Access Representatives of the Agency shall have the reasonable right of access to the Site and Project without charges or fees,at normal construction hours during the period of construction and without interfering with business operations on the Site for the purpose of inspecting the Site to determine the Participant's compliance with this Agreement. Such representatives of the Agency shall be those who are so identified in writing by the Executive Director. Section 214 Disclaimer of Responsibility by the Agency -12- OPA HNAL(2-9-06) The Agency neither undertakes nor assumes nor will have any responsibility or duty to the Participant or to any third party to review, inspect,.supervise, pass judgment upon or inform the Participant or any third party of any matter in connection with the development or construction of the Project or Site,whether regarding the quality,adequacy or suitability of the plans,any labor,service, equipment or material furnished to the Site or in connection with the Project,any person furnishing the same,or otherwise. The Participant and all third parties shall rely upon its or their own judgment regarding such matters,and any review,inspection,supervision,exercise of judgment or information supplied to the Participant or to any third party by the Agency in connection with such matter is for the public purpose of redeveloping the Site,and neither the Participant(except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. The Agency shall not be responsible for any of the work of construction,improvement or development of the Site. Section 215 CEQA Review;Compliance with Environmental Laws In connection with its adoption in 2002 of the Redevelopment Plan,the Agency caused an environmental impact report(State Clearinghouse No.2001-091144),to be prepared in accordance with the requirements of the California Environmental Quality Act(Public Resources Code§21000 et seq.; "CEQA"), the Guidelines for Implementation of CEQA (Title 14, California Code of Regulations § 15000 et seq.;"CEQA Guidelines"),and local regulations enacted pursuant thereto. Pursuant to Public Resources Code§21090 and CEQA Guidelines§ 15180,development of the Site with the Project constitutes private activities and undertakings pursuant to and in furtherance of the Redevelopment Plan. In connection with its approval of the City Entitlements,the City Council of the City certified Environmental Impact Report No 00-02 (the"Project EIR") and adopted a mitigation monitoring plan(the"Mitigation Monitoring Plan"). The Participant agrees to comply with all conditions in the Project EIR and the Mitigation Monitoring Plan at its sole cost and expense. The Participant shall also comply with all environmental laws and environmental permits applicable to the operations of the Project and the ownership or use of the Site and the Project,shall immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, shall keep the Site and Project free and clear of any environmental claims or liens imposed pursuant to any environmental law as a result of the Participant's development or use of the Project(subject to the Participant having a reasonable time to contest any such claims or remove any such liens),and shall obtain and renew all environmental permits required for ownership or use of the Project or the Site. Section 216 Environmental Indemnification by the Participant The Participant agrees to defend,indemnify and hold harmless the Agency,the City,and their respective officers, employees, contractors and agents (collectively the "Indemnitees") from and against any and all obligations(including removal and remedial actions),losses,claims(including third party claims), suits,judgments, liabilities, penalties, damages (including consequential and -13- OPA FINAL(2-9-06) punitive damages),costs and expenses(including consultants' and attorneys' fees and expenses)of whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or asserted against the Indemnitees directly or indirectly based on,or arising or resulting from: (a)the actual or alleged presence of Hazardous Substances on the Site as a result of development or operation of the Project, including, without limitation, Hazardous Substances presently on the Site required to be removed upon development of the Project, or (b) any environmental claim with respect to the Project,except in each case if and to the extent directly or indirectly caused by or resulting from any negligent act, error or omission by the Agency, the City or their respective officers, employees, contractors and agents. "Hazardous Substances"as used herein shall mean any substance regulated by applicable law as hazardous or toxic and shall include,without limitation,the following: a. a"Hazardous Substance"as defined by Section 9601 of the Comprehensive Environmental Response,Compensation and Liability Act of 1980,42 U.S.C.§§9601,et seq.,or as "Hazardous Waste"as defined by Section 6903 of the Resource Conservation and Recovery Act,42 U.S.C. §§ 6901,etseq.; b. an "Extremely Hazardous Waste," a "Hazardous Waste," or a "Restricted Hazardous Waste," as defined by The Hazardous Waste Control Law under §§ 25115, 25117 or 25122.7 of the California Health and Safety Code,or as listed or identified pursuant to § 25140 of the California Health and Safety Code; C. a "Hazardous Material," "Hazardous Substance," "Hazardous Waste," or "Toxic Air Contaminant," as defined by the California Hazardous Substance Account Act, law pertaining to the underground storage of hazardous substances,hazardous materials release response plans, or the California Clean Air Act under §§ 25316, 25281, 25501, 25501.1 or 39655 of the California Health and Safety Code; d. "Oil"or a"Hazardous Substance"listed or identified pursuant to§311 of the Federal Water Pollution Control Act, 33 U.S.C. §1321; e. "Hazardous Waste," "Extremely Hazardous Waste," or an "Acutely Hazardous Waste" listed or defined pursuant to Chapter 11 of Title 22 of the California Code of Regulations Sections 66261.1-66261.126; f. any chemical listed by the State of California under Proposition 65 Safe Drinking Water and Toxic Enforcement Act of 1986 as a chemical known by the State to cause cancer or reproductive toxicity pursuant to § 25249.8 of the California Health and Safety Code; g. a material that,due to its characteristics or interaction with one or more other substances,chemical compounds,or mixtures,materially damages or threatens to materially damage, health, safety, or the environment, or is required by any law or public agency to be remediated, including remediation which such law or government agency requires in order for the property to be put to any lawful purpose; -14- OPA FINAL(2-9-06) h. any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual,whether or not the presence of such material resulted from a leaking underground fuel tank; i. pesticides regulated under the Federal Insecticide,Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; j. asbestos, PCBs,and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. §§2601 et seq.; k. any radioactive material including,without limitation,any"source material," "special nuclear material," "by-product material," "low-level wastes," "high-level radioactive waste," "spent nuclear fuel" or "transuranic waste," and any other radioactive materials or radioactive wastes,however produced,regulated under the Atomic Energy Act,42 U.S.C.§§2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. §§ 10101 et seq., or pursuant to the California Radiation Control Law,California Health and Safety Code§§ 114960 et seq.; 1. hazardous substances regulated under the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq., or the California Occupational Safety and Health Act, California Labor Code§§ 6300 et seq.;and/or in. materials,substances and wastes regulated under the Clean Air Act,42 U.S.C. §§7401 et seq.or pursuant to The California Clean Air Act,§§3900 et seq.of the California Health and Safety Code. Section 217 Rights of Obligees The provisions of this Agreement do not limit the right of any mortgagee or other obligee to foreclose or otherwise enforce any mortgage,deed of trust or other encumbrance upon the Site and Project,or the right of any obligee to pursue any remedies for the enforcement of any pledge or lien upon the Site and Project,provided,however,the foregoing shall not be deemed to vary,waive,or otherwise affect the order of priority of any documents recorded in connection with this Agreement. PART 3. USE OF THE SITE Section 301 Uses The Participant covenants and agrees for itself,its successors,its assigns and every successor in interest to the Participant's Interest in the Site or any part thereof,that during the period referred to in Section 305, the Participant, such successors and such assignees shall devote the Participant's Interest in the Site to the uses specified in the Scope of Development(Attachment No. 3)and the Agreement Containing Covenants Affecting Real Property(Attachment No. 4). Section 302 Maintenance of Site and Pipeline Area; Payment of Taxes and Assessments -15- OPA FINAL(2-9-06) a. The Participant covenants and agrees for itself,its successors and assigns,and every successor in interest to the Site or any part thereof that it shall maintain the Site and, to the extent required pursuant to the franchise agreement referred to below,the area of the Pipeline route, or cause the Site and,to the extent required pursuant to the franchise agreement referred to below, such Pipeline area to be maintained, in accord with the following criteria and conditions: 1. The Site and the Project shall be operated and maintained in conformity with all applicable laws,rules,regulations and ordinances, including without limitation, all applicable federal and state labor standards. 2. The Site and all improvements thereon shall be maintained and kept free from any accumulation of debris or waste materials. 3. All landscaping on the Site shall be maintained in a healthy condition. 4. The Pipeline shall be maintained as specified in the franchise agreement to be approved by the City for use of City rights-of-way, and any other applicable franchise agreement or other entitlement approved by any governmental entity with jurisdiction over the Pipeline or any portion thereof 5. The Participant shall help assure that construction of the Project, including but not limited to the Pipeline,has no adverse impact on the quality of life in the City by paying the City,within five(5)days after the closing of the Participant's construction financing for the Project, the sum of One Million Nine Hundred Thousand Dollars ($1,900,000),which may be used by the City in its sole discretion for improvements adjacent to the Site or along the route of the Pipeline. 6. The Participant shall pay to the City the sum of Two Million Dollars ($2,000,000)which may be used by the City in its sole discretion for such improvements as the City Council determines will improve the quality of life in the City of Huntington Beach. These funds shall be paid by Participant at such time as it elects after the closing of the Participant's construction financing for the Project but prior to Completion. b. As a material part of the consideration for this Agreement, the Participant covenants and agrees for itself,its successors and assigns,and every successor in interest to the Site or any part thereof,that for each year of the term of this Agreement that real property taxes are levied on the Site or any portion thereof: -16- OPA FINAL(2-9-06) 1. the Participant shall pay when due all real estate or possessory interest taxes and assessments assessed and levied on the Site or any portion thereof or any improvements thereon or any interest therein,and shall waive and refrain from making any appeal,challenge or contest of the validity of any tax assessment, encumbrance or lien on the Site, in part or in full, whether by property tax assessment appeal or otherwise;provided,however that such waiver shall not apply to the extent that such assessment(or encumbrance or lien relating thereto) exceeds One Hundred Eighty Six Million Five Hundred Thousand Dollars($186,500,000);and 2. if the real estate or possessory interest taxes on the Participant's Interest in the Site in any fiscal year(July 1 through June 30)after the Certificate of Occupancy has been issued are less than One Million Eight Hundred Sixty Five Thousand Dollars ($1,865,000), then on July 1 of the next fiscal year,the Participant shall pay to the City the difference between(i)the total real estate or possessory interest taxes paid by the Participant in such fiscal year and(ii)One Million Eight Hundred Sixty Five Thousand Dollars($1,865,000). C. In the event that by reason of any property tax exemption or otherwise the Site is not carried on the County Assessment Roll and/or real property taxes are not levied and collected on the Site for any reason,the Participant covenants for itself,its successors and assigns,and every successor in interest to the Site or any part thereof or any interest therein that the Participant shall pay to the Agency an amount equal to the product of the Site Tax Increment Revenue (as hereafter defined)payable to the Agency for the fiscal year immediately preceding the cessation of the levy or collection of taxes on the Site(the"Base Year Revenue Amount")multiplied by the number of years remaining in the term of this Agreement (or, if less, the number of years during which such exemption or cessation will continue to be applicable). At the option of the Participant, such payment shall be payable either(i)by a lump sum which shall be due within thirty(30)days after the occurrence of the event which has caused or will cause the Site not to be carried on the County Assessment Roll and/or real property taxes not to be levied and collected on the Site, or(ii) by annual payments made on July 1 of each year,in which case the first such payment shall be made on the July 1 after the occurrence of such event and shall be in the amount of the Base Year Revenue Amount, and each subsequent annual payment shall be increased by the permitted statutory rate (presently two percent(2%o) per year). The"Site Tax Increment Revenues" from the Site shall be defined to be that portion of the ad valorem property tax increment revenues attributable to the Site and payable to the Agency pursuant to Section 33670(b)of the California Health and Safety Code(as said statute may be amended from time to time), including without limitation the twenty percent (20%) of said revenues that the Agency is required to set aside for affordable housing purposes pursuant to California Health and Safety Code Section 33334.2. In the event that the payment required by this subsection 302 c. is due at a time when the Agency is no longer legally entitled to receive Site Tax Increment Revenues from the Site,the Base Year Revenue Amount shall be deemed to be the amount of Site Tax Increment Revenues which the Agency was entitled to receive in the -17- OPA FINAL(2-9-06) last full fiscal year preceding termination of its right to receive such Site Tax Increment Revenues. Notwithstanding the foregoing,in determining the Site Tax Increment Revenues for purposes of this subsection 302 c. for any fiscal year(July I through June 30)after the Certificate of Occupancy has been issued,the ad valorem property taxes attributable to the Site shall be calculated at the greater of (i)the actual amount of such taxes prior to the obtaining of the property tax exemption or removal of the Site from the County Assessment Roll or(ii) the ad valorem property taxes due at the then- applicable rate for property with an assessed valuation of One Hundred Eighty Six Million Five Hundred Thousand Dollars($i 86,500,000). This subsection 302 c.shall apply regardless of whether a public entity acquires an interest in or title to the Site and/or the Project. Section 303 Obligation to Refrain from Discrimination The Participant covenants and agrees for itself,its successors and assigns and every successor in interest to the Participant's Interest in the Site or any part thereof that there shall be no discrimination against or segregation of any person,or group of persons,on account of race,color, creed,religion,sex,marital status,national origin or ancestry in the sale, lease,sublease,transfer, use,occupancy,tenure or enjoyment of the Participant's Interest in the Site nor shall the Participant itself or any person claiming under or through it 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. Section 304 Form of Nondiscrimination and Nonsegrregation Clauses The Participant shall refrain from restricting the rental,sale,or lease of the Site on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All deeds, leases or contracts with respect to the rental,sale or lease of the Participant's Interest in the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses- a. In deeds: "The grantee herein covenants by and for itself,its successors 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 race, color, creed, religion, sex, marital status,national origin or ancestry in the sale,lease,sublease,transfer,use,occupancy,tenure or enjoyment of the land herein conveyed,nor shall the grantee itself or any person claiming under or through it, 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 itself its successors and assigns,and all persons claiming under or through them,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 race, color, creed, religion, sex, marital status, national origin or ancestry in the leasing,subleasing,transferring,use or enjoyment of the land herein leased nor shall the lease itself, or any person claiming under or through it, establish or permit any -18- OPA HNAL(2-9-06) such practice or practices of discrimination or segregation with reference to the selection,location, number, use or occupancy of tenants,lessees,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 race, color, creed, religion, sex,marital status, national origin or ancestry in the sale, lease,sublease, transfer,use, occupancy,tenure or enjoyment of the land,nor shall the transferee itself or any person claiming under or through it,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." Section 305 Effect and Duration of Covenants The covenants established in this Agreement shall,without regard to technical classification and designation, be binding for the benefit and in favor of the Agency and the City and their successors and assigns. Such covenants as are to survive Completion shall be as contained in the Agreement Containing Covenants Affecting Real Property(Attachment No.4)and shall remain in effect for the periods specified therein. Section 306 Agreement Containing Covenants Affecting Real Property a. Concurrent with the execution of this Agreement, the Participant and the Agency shall enter into and cause the recordation of an Agreement Containing Covenants Affecting Real Property substantially in the form attached hereto and incorporated herein as Attachment No.4. Such Agreement Containing Covenants Affecting Real Property shall establish the covenants, conditions and restrictions pertaining to the Site, as set forth in Section 300 to 305 of this Agreement,for the period of time set forth in the Agreement Containing Covenants Affecting Real Property, and shall run in favor of the City as well as the Agency. b. The Agreement Containing Covenants Affecting Real Property shall be recorded against both the Participant's Interest in the Site and the Site Owner's fee interest in the Site (should the Participant not be the fee owner of the Site at the time recordation is required pursuant to subsection a.,above)and shall not be subordinated to any liens and encumbrances applicable to the Site except those applicable to the Site Owner's fee interest which have been recorded prior to the Effective Date of this Agreement. The Site Owner has consented to the recordation of the Agreement Containing Covenants Affecting Real Property,as set forth at the end of this Agreement. Section 307 Relationship of the ApepSy and the Participant Nothing contained in this Agreement or in any other document or instrument made in connection with this Agreement shall be deemed or construed to create a partnership, tenancy in common,joint tenancy,joint venture or co-ownership by or between the Agency and the Participant. The Agency shall not be in any way responsible or liable for the debts,losses,obligations or duties of the Participant with respect to the Site or otherwise. -19- OPA FINAL(2-9-06) Section 308 Representations and Warranties a. As an inducement to the Agency to enter into this Agreement,the Participant hereby represents and warrants to the Agency, which representations and warranties are true and correct as of the date of this Agreement: l. The Participant has the legal power,right and authority to enter into this Agreement and the instruments referenced herein,and to satisfy all obligations of the Participant in this Agreement or in any instrument or document referred to herein(referred to collectively as the "Participant's Obligations"); 2. This Agreement and all documents required hereby to be executed by the Participant are, and shall be, valid,legally binding obligations of and enforceable against the Participant in accordance with their terns, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally, 3. There is no provision of any indenture, instrument, or agreement, written or oral,to which the Participant is a party or which governs the actions of the Participant or which is otherwise binding upon the Participant or the Participant's property,nor is there any statute, rule or regulation, or any judgment, decree, or order of any court or the Agency binding on the Participant or the Participant's property which would be contravened by the execution,delivery or performance of any of the Participant's Obligations; 4. There is no action, suit, or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending,or,to the knowledge of the Participant, threatened against or affecting the Participant, or any properties or rights of the Participant, which, if adversely determined,would materially impair the right of the Participant to execute or perform any of the Participant's Obligations, or would materially adversely affect the financial condition of the Participant; 5. Neither the execution and delivery of this Agreement and documents referenced herein,nor the incurrence of the Participant's Obligations,nor the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement and the documents referenced herein conflict with or result in the material breach of any terms,conditions or provisions of,or constitute a default under,any bond,note or other evidence of indebtedness or any contract,indenture,mortgage,deed of trust,loan,partnership agreement,lease or other agreements or instruments to which the Participant is a party; 6. To the best of the Participant's knowledge, there are no pending, threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity, affecting the Participant's Interest in the Site or in which the Participant is, or to the best of the Participant's knowledge will be,a party by reason of the Participant's Obligations,including,but not limited to,judicial,municipal or administrative proceedings in eminent domain,unlawful detainer or -20- OPA FINAL(2-9-06) tenant evictions, collections, alleged building code, health and safety or zoning violations, employment discrimination or unfair labor practices,or workers'compensation,personal injuries or property damages; 7. No attachments,execution proceedings,assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against the Participant, nor are any of such proceedings contemplated by the Participant; 8. All reports, documents, instruments, information and forms of evidence delivered to the Agency concerning or required by this Agreement were accurate and correct at the time of delivery in all material respects; 9. No representation, warranty or statement of the Participant in this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. b. As an inducement to the Participant to enter into this Agreement and develop the Site as provided herein, the Agency hereby represents and warrants to the Participant, which representations and warranties are true and correct as of the date of this Agreement: I. The Agency has the legal power,right and authority to enter into this Agreement and the instruments referenced herein,and to consummate the transactions contemplated hereby; 2. This Agreement and all documents required hereby to be executed by the Agency are,and shall be,valid,legally binding obligations of and enforceable against the Agency 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; 3. No attachments,execution proceedings,assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against the Agency,nor are any of such proceedings contemplated by the Agency; C. The truth and accuracy of each party's representations and warranties made herein shall constitute a condition for the benefit of the other party to the performance of such other party's obligations hereunder. PART 4. DEFAULTS AND REMEDIES Section 401 Defaults- General Failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately -21- OPA FINAL(29-06) commence to cure,correct or remedy such failure or delay and shall complete such cure,correction or remedy with reasonable diligence,and during any period of curing shall not be in default,so long as it endeavors to complete such cure,correction or remedy with reasonable diligence,and provided such cure,correction or remedy is completed within the applicable time period set forth herein after receipt of written notice(or such additional time as may be deemed by the complaining party in its reasonable discretion to be reasonably necessary to correct the default). Section 402 Defaults -Notice a. 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 written 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. b. 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 thirty(30)calendar days after such written notice is received or deemed received within which to cure the default prior to exercise of remedies by the injured party. C. If a non-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. If the default is reasonably capable of being cured within thirty(30)calendar days after such written 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,not to exceed ninety(90)days after the first written notice of default is given. d. 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. PART 5. GENERAL PROVISIONS -22- OPA FINAL(2-9-06) Section 501 Notices Demands and Communications between the Parties Formal notices,demands and communications between the Agency and the Participant shall be deemed sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested,to the respective addresses of the Agency and the Participant set forth in Sections 105 and 106 hereof. 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. Section 502 Conflict of Interest a. 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 the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested b. The Participant warrants that it has not paid or given,and will not pay or give, any third person any money or other consideration for obtaining this Agreement. Section 503 Nonliability of Officials and Employees 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 successor or on any obligation under the terms of this Agreement. No member,official or employee of the Participant shall be personally liable to the Agency, or any successor in interest in the event of any default or breach by the Participant or for any amount which may become due to the Agency or successor or on any obligation under the terms of this Agreement. Section 504 Approvals a. Except as otherwise expressly provided in this Agreement,approvals required of the Agency or the Participant in this Agreement, including the attachments hereto,shall not be unreasonably withheld, conditioned or delayed. All approvals shall be in writing. Except as otherwise expressly provided in this Agreement,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 not be deemed an approval. b. Except as otherwise expressly provided in this Agreement,approvals required of the Agency shall be deemed granted by the written approval of the Executive Director or his/her designee. The Agency agrees to provide notice to the Participant of the name of the Executive -23- OPA FINAL(2-9-06) Director's designee on a timely basis,and to provide updates from time to time. Notwithstanding the foregoing, the Executive Director or designee may, in his or her sole discretion, refer to the governing body of the Agency any item requiring the Agency's approval; otherwise, "Agency approval"shall mean and refer to approval by the Executive Director or designee. Section 505 Time of Essence Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement. Section 506 No Partnership Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture,or any other similar relationship between the parties hereto or cause the Agency to be responsible in any way for the debts or obligations of the Participant or any other Person. Section 507 Compliance with Law The Participant agrees to comply with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the development of the Site and the Project. The judgment of any court of competent jurisdiction,or the admission of the Participant or any lessee or permittee of the Participant's Interest in the Site in any action or proceeding against them,or any of them,whether the Agency be a party thereto or not,that the Participant,lessee or permittee has violated any such ordinance or statute in the development and use of the Site shall be conclusive of that fact as between the Agency and the Participant. Section 508 No Third Party Beneficiaries; Nonliability of Site Owner (a) The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the Agency and the Participant,and not for the benefit,directly or indirectly,of any other person or entity,provided,however,that the City shall be deemed a third party beneficiary of each term or condition except as otherwise expressly provided herein,and the Site Owner shall be deemed a third party beneficiary of this Section 508 and Section 702 of this Agreement. (b) The parties to this Agreement acknowledge and agree that,notwithstanding anything herein to the contrary, neither the Site Owner, nor any member (or other affiliate), official or employee of the Site Owner, shall be liable to the Participant, the Agency, the City or any of their respective officers, employees, contractors and agents or any successors or assigns of any of the foregoing,for any obligations or responsibilities of the Participant or the Agency arising under or in connection with this Agreement or the Agreement Concerning Covenants Affecting Real Property or the development, construction, operation and maintenance of the Project or any portion thereof unless the Site Owner develops and/or operates the Project under the City Entitlements, in which -24- OPA FINAL(2-9-06) event the Site Owner shall be deemed the Participant for all purposes thereafter arising under or in connection with this Agreement and the Agreement Containing Covenants Affecting Real Property. The parties further acknowledge and agree that the Site Owner shall not be deemed to be a successor to the Participant's interests and obligations under this Agreement as a result of the Site Owner's ownership of the Site or its repossession of the Site from the Participant following any termination, expiration or breach of the Participant's Interest in the Site unless the Site Owner were to develop and/or operate the Project under the City Entitlements, in which event the Site Owner shall be deemed the Participant for all purposes thereafter arising under or in connection with this Agreement and the Agreement Containing Covenants Affecting Real Property. Section 509 Authority to Sign The Participant hereby represents that the persons executing this Agreement on behalf of the Participant have full authority to do so and to bind the Participant to perform pursuant to the terms and conditions of this Agreement. Concurrently with the Participant's submission of this Agreement to the Agency for execution, the Participant will submit to the Agency a copy of documents evidencing the due formation and nature of the Participant and the signatory's authority to sign on behalf of the Participant. Section 510 Incorporation by Reference Each of the attachments and exhibits attached hereto is incorporated herein by this reference. Section 511 Counterparts This Agreement may be executed by each party on a separate signature page,and when the executed signature pages are combined, shall constitute one single instrument. Section 512 No Merger There shall be no merger of this Agreement or the Agreement Containing Covenants Affecting Real Property. Section 513 Enforced Delay; Extension of Times of Performance In addition to specific provisions of this Agreement,performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to causes beyond the control and without the fault of the party claiming an extension of time to perform, including 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,unusually severe weather,inability to secure necessary labor, materials or tools,delays of any contractor,subcontractor or suppliers,acts of the other party,or acts or failure to act of City or any other public or governmental agency or entity(except that an act or -25- OPA RNAL(2 9-06) failure to act of Agency shall not excuse performance by Agency). An extension of time for any such-cause shall be for the period of the enforced delay and shall 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 cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the Participant and the Agency. PART 6. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement is executed in five(5)duplicate originals,each of which is deemed to be an original. This Agreement includes twenty eight (28) pages and four (4) 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. PART 7. TIME FOR ACCEPTANCE OF AGREEMENT BY THE AGENCY;TERM Section 701 Time for Acceptance of Agreement This Agreement, when executed by the Participant and delivered to the Agency,must be authorized,executed and delivered by the Agency within sixty(60)days after date of the consent to this Agreement by the Site Owner or this Agreement may be terminated by the Participant upon written notice to the Agency. The effective date of this Agreement(the"Effective Date")shall be the date when this Agreement has been executed by the Agency. Section 702 Term Except as set forth below,this Agreement shall be effective for a period of thirty(30)years from the issuance of the Certificate of Occupancy. Notwithstanding the foregoing, this Agreement and the Agreement Containing Covenants Affecting Real Property described in Section 306 shall be deemed terminated and of no further force or effect upon the happening of either of the following: (a) if prior to the commencement of any construction on the Site,either City Entitlement terminates or expires for any reason including but not limited to a determination by any court or governmental entity with jurisdiction thereof that such City Entitlement -26- OPA FINAL(2-9-06) is void or of no force or effect,in which event thereafter neither the Agency nor the Participant shall have any rights against, or obligations to, the other hereunder; or (b) if, whether prior to or after the issuance of the Certificate of Occupancy, the Participant or the Site Owner provides written notice to the Agency that the Participant is abandoning or has abandoned the development and/or operation of the Project under the City Entitlements; provided, however, that termination of this Agreement and the Agreement Containing Covenants Affecting Real Property under this paragraph (b) shall not be deemed to affect any obligation of the Participant to complete the demolition,removal, and restoration work required by Section 203 of this Agreement nor to maintain the bond required therein until such work is completed. IN WITNESS WHEREOF,the Agency and the Participant have signed this Agreement as of the dates set opposite their signatures. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Dated: Dave Sullivan, Chairman Dated: enelope ulbreth-Graft, Executi e irector Dated: oa lynn, Agency erk APPROVED AS TO FORM: r4 Lgency General Couns 1 bu )41 APPROVED AS TO FORM: Special Oi /Agency Counsel Kane, Ballmer&Berkman [Signatures continued on next page] -27- OPA(2-8-06)FINAL-signature pages.doc POSEIDON RESOURCES CORPORATION, a Delaware corporation Dated: ` Z� J�o By: Its: G a o Dated: 4 By: /" ----�� s: D CONSENT TO AGREEMENT AND RECORDATION OF DOCUMENTS AES Huntington Beach Development,LLC("Site Owner"),as fee owner of the Site,hereby consents (i)to the Participant's entry into this Agreement, as the Participant's Interest in the Site is the subject of this Agreement, and (ii) to the recordation of the Agreement Containing Covenants Affecting Real Property(Attachment No.4)against its fee ownership in the Site in accordance with Section 306 of this Agreement. Site Owner further agrees to execute such other and further documents as the Agency determines in its reasonable discretion are necessary to effectuate the terms and conditions of this Agreement. Dated: 0(o By: Its: �,r'GS/ G1?.✓t fi Dated: By: Its: -28- OPA(2-8-06)FINAL-signature pages.doc ^-•---2 „-._ SCwtc'f ea C,y:-.%r -""�-- ��-•)fa_�. ` _..•-•--•�-.�- .. �,••• -' ��.�..lF>Sr K :,7 ONINC NFnRMAN F MATRIX TRATIW "SpUDS 6UI PI NE PUBLIC-SEMI-PUBLIC 0NN G OI9MC r(PS) lC T — Cu USE OESCRIPTON:RSGPCE PRODUCTION OERMTE US:YE RAG .�.,., ._._- .........a r. IP gm— IOtuA1 IaR IW 2Y9'f a I�' - '/�e� �---�= � �� f 'Q:k':tS7! •}�'u,'.r-'s. .cey .a!- ��{ 'i 0 hW/ XIxWi . II:, //� �, �... �. ....=� -�::... _ •-� / v �>� 7)1'' mown a to to >lo LE�u°NNr I ///...� ((.l r7J aA oA no aa®9N RO BUILDING �I a `, I L UTA79G1RN9 ._ I , I r.1 �T ^,`/i�/I+, ��L l '�L'•\(? REAW.T WA IV- IFB[Ux[ �- << ! r,.' l f•" I /''~ \ i I li . 4)J ` �F!17,PUMP STATION NcCNr°or w'vuar / r f {A 11% ' f \ ) )I w ' / 50' S6' 7s M 1 J / G=" , l SfR mm .ami 3 0 (f .._ .^/ ( !, f LOADING 1 t /� � `S�" R�Ag I� vi+w ffM ZONE s d_ • rtl! ; - •i:t•.. girl!I �•�_�....,�'' I _ Cj i+. .�� r c�K,. .?fir FEED LIN� tl mx6 nxo of av �'�� • F r _ _ ._:. ` �. � �,,,rrr > \\\$a�`�r~'i,_t AWBy By st�xwae res•] asr x�ira S' I ! 'i c'�.._•-_• S i.."`t`''-��--z=s`- >r/ ,,,,�\TRASHCUP cw CLOSU y n I 1L' I •�":z�;r t4. I'-- I EMT r-'L P .. \,'/•,i( r `,4\ •.,�\ ]y` � )ti I Ll 4_Nj /in s.`�.: 1! �.. 4 L_. \^ ( t / )l \ n �T•-..._- n r p�i TAN i45 na I �� 7> ` y 4�„ t ff ��I !I(t �..:�"'.��„r:.. ,�; t �'uy�:t,.r''�- P�LAI< <r�r iq: �-f"�' ��•/ � _.� K,\ l��/,/ (�i�.� '•/�«� �� '\„ ��,} 1 i ��'�,k` -*mow, �..._ _.-.�, ' �\ s.vr H5a' , ,/,. ,✓(i / ( T.� S u, 'E. , tl �, '"�. i ;I t I, ��., ; _.. s><, r 1__ I"' r �la i ' l ,/! ( �i/. //•'l" \ \ �. f.,.' '.r t�\ (D mr DING Al0 Rn AaFA utiryx (D ' it{ r...CU AINIIS.-•�- 11/ _ �•__ .� vl ..�h"rJ ft t; III a t er. 48M Pli ,� �� ir' 9 5TA7)ON s®NouNc Ar�D BuwR+c......._......).s3o s.F- I C1 ` k'1 t WATER LCC {e /?'y ( ADMINISTRATION BULGING._....._,........._..10.T20 S.F. O '�/% ��.. R.O.BUILDING........................._._._..._._38,090 S.F. !fir'^!) C/ �.. \ ElECTPoCX SU9STATgN_...........'..............I 600 SF. W I 1 I 9CJIVFk'..:,...'.._..'_IAr I. 1 1 ,' \ / / / / , < \t •/' ALB N ._ ._..._....._....5 a5�0 S.. 0 1 STO A�: TANK r ^.. / �� ti�® ._.�L1 Y1111 � y: 0 T DIINFLUENT PUMP STATIONn AWED(4. \ , 12"! ( PRElRU11IENT iLrER 51RUCruRE.......-......SB:2m 9.F.V ) PRODUCT WATER \- .(! /i ii. pia \ 5d° Y✓' `.. `��••i T •�i� N)SHCHEMI�WAIER TAW O TANKS......_....._.�.......i}90 Si PR T WATER I' STORAGE TANK O �! ! wsl TANK......... s.F: ' 215'0 y4 P. STATION L. l .e `\ , / ,! ! ,_. :// �v/ 1 ry ! LIME 131 q IANKS.............._....._..... .....458O SF. �.O n '�; '�0 9r t \!' //3 ,�1�'T, \ t( v� �."`/� l,' Q` /d� PRODUCT WATER SrOR/CE TANC.................36.J05 SF- i 149 RROOUC7 1 I I / 00.;a. \ / .�'4 ti \ °j iry4( 7g r fi..; AMMONIA STORKS TANK._._..........._._...., ...20 IF, i ' �!i " f d .,(.•v. '� '\ \• ? ,j. PRODUCT WATEfl PUN SfArWN.._.... ._A50 5.. 1' 1 I I 98 \43 . v �n F y}\`S /, �wt !. \�% \v�.,,4\:. C•C`\„ / ' SUBTOTAL TANKS AX SrfdlC RFS..........9BD82 F. �!J w-�.=_ A I T9.i 41 f PV\� -/7 H)dn)1 f .z."- `A\j"/C\^y.A�S\�OtV l�',Ft!`1t•�.�n,�l\X 4'ii a ,\:2a�+' -\�>� / /\, <`'1,\'�\�.CY'^`.."4y \crF�"�l ,. iTAiOL BUILDINGS FTAiN: D SrRU 4'SS AES CORPORATION/r � IL i'LN [NTANE{ r 21730 rMAN0 CS T1LRgEFE5r FEN ` / HUNBNGTON BEACH,CALA ..V..,.R.N_N..149211441 f j 2 S.F. (714)J)4-1491 x_{-ay#�. � APPUCA+rr.Pos000H Resou sEs CORPORATION :a,_ A M I. ]]60 NR.tgY NRPORr NAT.SUITE 260 M a LONG BEACH.C.WFORMN 90806 I. : 'I" ' Fi �9�{.` \ 1. �\`� ,'o t 1\♦ / (562)490-1003 i f ii 7T "�'--._...._...._._`.._._.- 3 / > ,\<\ j ,� r/f4'p�p• '��i./'i` (/ if^ .,t-° `. tlQlb $ -• "t �� '�. �T Al�� !!( I;I 9 4�LI!]tL) ;'`\��r. N •\\�'=`h ( ,i i,/ i ^�\, ,i ,.�( BUILD.PLANS SMA ADHER LL SEISMIC AND STRUCTURAL BADNG CODES, _ DRAWINGS PREP D BY: DRAWINGS PREPARED FOR: PROJECT: C ( Q {.Q POSEIDON RESOURCES Poseidon GENERAL J� Seawater Desalination Project SITE PLAN i xr:..w-.n.>..>o.ww�mw Hwtingwn Beach,Cdif0miR POSEIDON SEAWATER DESALINATION PROJECT . HUNTINGTON BEACH, CALIFORNIA �,98EMB;TAND ItAE R PM A aRE! a wiw NID B.YLa w II�t0.►NKir.Ni`"PfO1 I I .. Tna PDNLOIrv1•w IW uK NAn61N00 Na n.I N RL M sRtN Oa M OnfW truORO 1IGnD/NO W INL o"[usaO1aMvaFtao®oN o`ailan�I°rin a'y"o�i+�uLeRDrin RE{nm1¢wnt A rwrt xottt. Iw70178N1 w wflwl N®7RD9.el mAx w TK count Acall r �meim P('LY. LIKE PARCEL 4 l�Q ILL ONIM12 PAAM A t®1m1„,,,aNKr Da,t®a rnao� W ¢� 1-01,Ne w 0 IS w eeaAa emet 12 {w[Acmw[•awafQ NM7rlta tm.T - _ —`.—— simm M'N at0n110 C JJA.aI•RA A NwrON w M r[lITALY lAQ •I ww sw vU1Ql♦tNOCt INtt Nfriltft[yL1 w A W M MC V Nw' uerAC�1�AOOIaNII�'�WLI �K�na i "LI rro LW.•�tatmlr—L CMJDI1N1r IECOIC®PI pC�9EG i,tlL7 IS 9aD01YM rD. F== l ataw m1KN e[x A tDK1oIf w M i516RY Raul-w-rr LNC Iw ]WI w Iwnr. K aaw w we cawr � f =——-I\ I v M alANz calm rIDDo 9wrADL Donna rLNmllolol Aaalen w wr corm oeultim"a Raiata PARCEL 'B' taw orNK�.M mCNiO Naar aM r..0p llt twogx frA KUNOoML w a01tw twtlo ArD ws MMM NIa1 w A PNr PARCEL t I I I v sro MnGI iL91o;wD ult iNo A O1R[mwK w0 Ywvt�R.muvt�w�1r la.m pNR",o'v'�w NID4,oixnrt w � �'' LEASE tafMNNr rrNL.tADw w[.a.n rar,a Nma AM aaolo, PC ftw Ot MInClYu[w NO Ate+wl O�afM�a w xt.tT ralollNO o[tcRLtO aftiAl . Rsr n1Aa1w A aNmr A1iL4 w s1A7r:nuNoc Lf1rN0 rND mr{otaw w nR itAN{«maLY MaNaaAA w 1Na aww 413 ACRES I PAACt1♦ III I re9TL96Y Rats-w'IJK,!m1'rrC•tlA.a fez A1DNO M muret tear{AL'f 17RIr t a41P wN A r�w M •�. I CITY OF HUN0.TINGXN EACH II I A tAtlrNr uN:w r+D Mca.W K,oMrtarRr fatNaocAtr t1n[w tAr wAts+sNMN:L raNf LOT LNE ADJUSTMENT I rNSDIr.OION w Nw faRNN t9ue[IMM A9�!7ri79t■ lOI+NrMitl[1'URN 1Tw'fr[lem W M lr!ra«r w S I _ TMAt 1111♦wl1011 w M nOMOLi tAR N Lt0 rAIC6.: [@plltli.MONi!iTAI.Or[14.IOti)OICC!o1/ar t It1A1 J d 1R11C[MDIO ir0 ONOIDNaRa4 WVl61V LNC APO A PaMOON /COI 1N11S L NtrVr L fA.,7t for NI iK INrrR'OOM w A 1rK wrttm'r dye a RECORDED IP/8/07 I�I I I w rN:•clear 11,1[w aW M'ne[t.S9 Nsrawu mlvs' fem"Mc Is ow ({awter a won.—J ro 1K Ir r,.YLY U E PARCEL t I INST.NO 19970918191,O.R. rt !71I»t O96e1/QT,N Sr17W r L01 Rtf: Nm900tC 1h9.i ItLk NFU lK w U AKA r A9 ilCnefD AMC 71w8 [f / Nw-tr¢ non rtn ro N wmaCt a1as1 rsr m 1Nt pinta r ow fnr erD I Ill urc w u n—•r Nr I J • tL I ��/� All)I o DDrIN�t ot/ra,r ,"rmi 1!.v[rt[MIT IC:f I I I II II 4 rt, 4*Mm At AKA w La!Aw4 NOi ON Um I/O i ODOtOD'r Mt.71 iQF 71[tR[6 JS9!'it L W.00 Rif;w01tt I .r y. y y .Rr Y•Y « ITT L 41.w FMn MOQ t Mr1r r I99A0 fSD TKMSC rpbc watts ro tarLwNa.mrasaOi N[rsnaolL 11tp1.LTG4 N hfa0'Ir a M&4-3 fCq TO.CC N 7M.3r r ID1.fI M MMNY AIa1R w r1r A{O CAlwE1n w ntmll4 I NIr. Y Ar lt'a•/O7.,A rtat 11NC[N UmIr r.tlur ISM W rK NtrtYAtA RSLr!'r g N.701m•C I'JrO A4 A!aNafN w M el,{w NaONa KAOr row 11.a lDNM Wt[R.t'rort-w-vaY LLS w NatMK trNar A ea•r I————— i.It PAema Nr A,•V p55 r•e� ON f+O lOf UK ADIUATYOIT. rLY l9JE PARCEL 1 II 6 N•IS. v f� troll•rn 1' {A1hv 1:' NOQfItL YK A Mw KA61/. KIa w ND!aP Ai W i ItaOI0t0 DN 9gW[KO W a9Mme!a Aa'Kra $ iCJYNAE A M OaIAY UK w M AA9K aE99NetD LIA9C '."m= f i i \\,r'o� momm M I I �1d/1tt �/11tt «LfLY AIE/7 AS OLXKm W iVRr[DO[O,ILK Ara rw LL175�Y(A A aaanwrtaY ntM•wiw tK w 1Rtl•r{0 OIQT a rxDNN rlc r'oMtrr w NNtm.w ur urL AOAa+1m«a a-.{« w rAr w LrR.a11eNe,t. Pl1GC.7r // \ \ MIO ti.a' xtt 1 \..•{ I i Ul r.. Lq tK Lat /l[QN w 1NLfY01Ol Atlal•CaNIM'f w aRNfL t w pr�[tOmND,N*AaOJ tAmaq / \\ ) ND99Oto't I 'A 0 (t aUaOM ND90®a Om[NiN OL 9tl K MPW „D• A�ppOOta \ �MOti ;� I eI Iw]n01ai1 w ORIOK Nawo[.a M w:rs w M mum toetra arN AN tra,ea rnr K IIM olrlAnoN,tl>.mel.r.woNNn,rnNr. U9A1®Ir tEaeat v muo caNNr.xlcltnx,Aa raJJNm «arau.w,urrlra Nmro, Naroww wt Nlrucaart v nano ArD NRR® ♦ / — ,� 9 yry BmN{IO Af TIR SaiRr6lfR.t•1fM110A13 w iNt L'9RM1 raraulo n A INCIrAt a NOWa 11aouDN•AA114 IaOi AND Dlae{.tns oM •. PARCFL IA„4 Mm far A aRN A INiral w rNmt t ANP.6 WD IGf u1[Mu•1Nwf• /CITY O/HUNTINGT0 atI101 A a,ws s,r.{s Y Ar.»r N In1s•wt.roN1o1 w K ttra last aN�Jal me w lIR Ta1Orw DEACRacD uNloNwc, p • \ \\\ a ` y �..............." I k b 0 SOw4mmw LK w!rO INIRii V sID1a Alatl!AO as,{oa,R w IK tonraloat'fawr,t w rwr LOT UNE AOJyg}NFNT TOInNf16SN.T tNR r rr•TI r[t1, a Oq1 1N1fN11Ot N 1Twa t 1m RN1 A PMM w wC NIRtM XY UK w YO INML 4;"a AUNO L'O �l Na 97_3 who M>;1 W rR N7roBl9 CIE w W PIAf1.;7In71a Nd1D rPY1W CiNS lM[N AT•)YY L YQD In M 75.��=7""""r ti.t•re NJ� RECORDED 11/9/97 \ �''• f'Iq PARCEL 'A'I I $ rt fAa wl[N trtr It r•tot.a Mat W AMR Mwr n rANa.6 Nral C IIT f®1 IN012 9 JC1te1'r 41.: r61i TKKt N 970YLt N imp IO M NST.NO 19'9706 191,OR. \ CAI N' Aw.Dw raM e+au w x I1LKAlIM w K+{wlo e1NaM M wNNarfAv Nwr•v..rw{As w NaAAK trNm n notr DN rD tv rK \\ ? LEASE I I xm{��a a,petl oN taD uDr LAR,wu[DAtIT NO.!7-;rlw[C NONO t1a \ AREA "I I D 0 N rArAua LK S m1r.e-■ULN raq M"9 9 lrtra t 1.I.Y fm K rpDNlp w 9tO tplP AR W i RIaAK[0 W f10K[xa W R7111t tR Ar wt _ To M Ktuf rD w A TN to i ttnac roNDat lWp6l16Y tr Glr Nr v ra{t.r.'f M 000•®r tvAA.l[otourfN «n v t 8.83 ACRES wwe A gala w Aa10 rm•nNN2 MA6uY lDnllraloiu S&AMOOM ILLY N4MM-w-W UK w MCtIAND tDQi'w LIOtN ON!MO Lm uK �q„ — \ AND IIOUNQIU'ALONG fN0 tU6R AN Ai Ot4AlCC w Io1.M ser .wwrvrt. _trAaal A ronat ruNt w fr rtf !Klt.r a M'D a4elLOf ro[rIONJa,OOIRIMIONf.fNALWNDR4 NL9NICADMU Nwte w Na MO OAIMDm rAKR V M6T ro A ADRtON w M laRl&LY LII[Oi L10 P�RB..:RNItC or IEOM r Nfl. CL w Rt Ara!eAo lovntltt'IK a vtl7f t t ltht w M rrwT v —, t®ara 911RGr ro[onwla m110Rtl114 Iww•anoa,Na1NCADM �o PARCO,v' ,y t0�a t Nnm w w Na WLNNm w Nmw9.►wv. 'it4' N'mu S mMIYN M NN?w lM[Aa1M NDK DA lm Ame[ / IAL. � WNwYlyfa w T Ov OO RrNortfKtAx.pww •M1a{R AaltaO{a. ■seAa9 Q90 anO N.nra.n SM{HNAmt STOMP DRTO NO eY 9 sanO tA9IDQM A� g PRCEL A'6FALII WOC A NPT "A.K 'a'a KItiO iw n Te r ,i s siteCal •CWK ll I Ol1eNK A7lING r9g� F`•, 'M rAsaalr rna x Lt;Olaytw,e{saral NNra,w7[. '6. + •.•.'4,�.V• 'iBMR U IN9MOG MlDUTaI IthtaWON AM bA i`�' ... Ifa1CDRK v NtIJKt A1R NrAND frt1011/6 N A I Nrenex ImINE w aolto ADfa AwCQ Nr 1DOW A 1OlL t •�.•.� i l \ aTNr w tAr 1 x.oD rm ra va"Ac A raKw v Naoa9 8 Nw t v IAa ® t 1>.Dv rm DN tNa1 as w su ��. A7 TNL � w Tx0 itM,ol m PARCEL I scare sar1,N ti Or.rlr w I W.IY ra•rDNrrr w n[ ACRUGS OTY OF HUNTNLJTCN 9EACH nvla vrur IAN:v arD rafaa N tNMNCt cars D10 ItAla 04:M A= L11T UNOO,07A1]IAfNT e9a/NBaMDNr IOR N Zrfrlt[eDAO ro M TINt raNM w RECORDED 17/9/97 tiAwtllR rf/CC 1 173TAr[LLM Ri7;IIIIItR r lTWN C NI.{I PRp•rO7 rtltt 110,s f comer t ttta 1m W RN taRRY tLR w A•N LOCATION N91.NO t99706i0{91.C.R. �' B PARCEL t IEA9C ARSA'r M DL9a1om w ffnrAA D9curaML � �� •.��•.� DN leeao v a•o 9r�Ai W i wOtwOm a flncalw W cow _ IOYMO[w 11[OeOel lAC w LAI[AKA Y.NO tK fpS11r lca LDi ArA'r At aUaAtm V®raMt - tLAW L'.IK MCLAR , JRM �ocJ►noHw►� 4 CQrOLLO POSEIDON RESOURCES • tfllrlr Irwam N.•wru.G,re,A11.n �� e n � Enear • r.•r..,..•w,>...r..4,r,•w ATTACHMENT NO. 3 SCOPE OF DEVELOPMENT The Project shall consist of a seawater desalination plant and water transmission line as approved by the City of Huntington Beach in Conditional Use Permit No. 02-04 and Coastal Development Permit No.02-05. OPA FINAL(2-9-06) ATTACHMENT NO.4 AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY [behind this page] AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) ATTACHMENT NO. 4 Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder IIII(IIIIlllilllllililllllllllliillllllllll(IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIINO FEE OFFICIAL BUSINESS 200600038387108:08am 06/08/06 Document entitled to free 212 50 Al2 17 recording per Government 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Code Section 6103 Recording Requested by and When Recorded Return to: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY THIS AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY ("Agreement") is entered into as of . h5�MU q,4V a7., 2006, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a public body corporate and politic ("Agency") and POSEIDON RESOURCES CORPORATION, a Delaware corporation("Participant"). (J- A. Participant owns an equitable interest by way of a written option to lease or buy certain property within the City of Huntington Beach,California(the"Site"). The Site is owned by AES Huntington Beach Development, LLC ("AES-HBD"). The Site is legally described in the "Legal Description"attached hereto and incorporated herein as Exhibit A. B. The Site is within the Southeast Coastal Redevelopment Project area (the "Redevelopment Project") in the City of Huntington Beach and is subject to the provisions of the Redevelopment Plan for the Redevelopment Project adopted by Ordinance No. 3561 on June 17, 2002,by the City Council of the City of Huntington Beach(the"Redevelopment Plan"). C. Participant has requested the City of Huntington Beach ("City") to approve Conditional Use Permit No.2-03 and Coastal Development Permit No.02-05(collectively,the"City Entitlements") to permit the development and operation of a seawater desalination facility (the "Facility") on the Site, as well as a water transmission line from the Site to an existing regional transmission system(the"Pipeline,"collectively with the Facility,the"Project"). Upon approval by AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) the City,the City Entitlements will run with the land and therefore will be of benefit to any person or entity which develops and/or operates the Project (a `Beneficiary"), subject to the conditions of approval imposed thereon. The interest of Participant(or any Beneficiary)in the Site is hereinafter referred to as the"Participant's Interest". D. Draft conditions of approval for the City Entitlements require the person or entity developing and/or operating the Project to comply with certain financing and operation covenants relating to the Project to be established in an owner participation agreement with Agency. In furtherance thereof, and in furtherance of the Redevelopment Plan, Agency and Participant have entered into that certain Owner Participation Agreement,dated as of t�FE�,g�t� , 2006(the"OPA"),and AES-HBD has consented to the OPA. Any capitalized term not otherwise defined in this Agreement shall have the meaning ascribed to such term in the OPA. E. This Agreement is entered into and recorded in accordance with the Redevelopment Plan and the OPA and to fulfill any condition(s)of approval of the City Entitlements which requires an owner participation agreement. NOW,THEREFORE, in consideration of the foregoing, "Participant" and Agency hereby agree that: (i)upon approval by the City, the City Entitlements will run with the Site and therefore will be of benefit to any person or entity which develops and/or operates the Project (a `Beneficiary"), subject to the conditions of approval imposed thereon, and (ii) the following covenants and conditions shall run with the Site and be binding on any and all parties having any right,title or interest in the Site,their respective heirs,legatees,devisees,administrators,executors, successors and assigns(including,without limitation,any Beneficiary),which develop and/or operate the Project on the Site pursuant to the City Entitlements, and shall inure to the benefit of Agency, City and their respective successors and assigns: 1. Participant, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof (including, without limitation, any Beneficiary), which develops and/or operates the Project on the Site pursuant to the City Entitlements,hereby covenants and agrees as follows: a Participant shall develop the Project on the Site in accordance with the OPA (including the Scope of Development,Attachment No.3 to the OPA),the City Entitlements,and the Approved Plans. b. Participant shall use the Site only for the development permitted and the uses specified in the OPA and this Agreement,namely, a seawater desalination facility. AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) C. Participant shall maintain the Site and,to the extent required pursuant to the franchise agreement referred to below, the area of the Pipeline route, or cause the Site and, to the extent required pursuant to the franchise agreement referred to below, such Pipeline area to be maintained, in accord with the following criteria and conditions: (1) The Site and the Project shall be operated and maintained in conformity with all applicable laws,rules,regulations and ordinances, including without limitation, all applicable federal and state labor standards. (2) The Site and all improvements thereon shall be maintained and kept free from any accumulation of debris or waste materials. (3) All landscaping on the Site shall be maintained in a healthy condition. (4) The Pipeline shall be maintained as specified in the franchise agreement to be approved by City for use of City's rights-of-way,and any other applicable franchise agreement or other entitlement approved by any governmental entity with jurisdiction over the pipeline or any portion thereof. (5) Participant shall help assure that construction of the Project,including but not limited to the Pipeline, has no adverse impact on the quality of life in the City by paying City,within five(5)days after the closing of Participant's construction financing for the Project,the sum of One Million Nine Hundred Thousand Dollars($1,900,000),which maybe used by City in its sole discretion for improvements adjacent to the Site or along the route of the Pipeline. (6) Participant shall pay to City the sum of Two Million Dollars ($2,000,000)which may be used by City in its sole discretion for such improvements as the City Council of City determines will improve the quality of life in the City of Huntington Beach. These funds shall be paid by Participant at such time as it elects after the closing of the Participant's construction financing for the Project but prior to Completion. d. For each year of the term of the OPA that real property taxes are levied on the Site or any portion thereof: AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) (1) Participant shall pay when due all real estate or possessory interest taxes and assessments assessed and levied on the Site or any portion thereof or any improvements thereon or any interest therein,and shall waive and refrain from making any appeal,challenge or contest of the validity of any tax assessment, encumbrance or lien on the Site, in part or in full, whether by property tax assessment appeal or otherwise; and (2) if the real estate or possessory interest taxes on the Participant's Interest in the Site in any fiscal year(July 1 through June 30)after the Certificate of Occupancy has been issued are less than One Million Eight Hundred Sixty Five Thousand Dollars ($1,865,000), then on July i of the next fiscal year, Participant shall pay to City the difference between(i)the total real estate or possessory interest taxes paid by Participant in such fiscal year and (ii) One Million Eight Hundred Sixty Five Thousand Dollars($1,865,000). e. In the event that during the term of the OPA, by reason of any property tax exemption or otherwise,the Site is not carried on the County Assessment Roll and/or real property taxes are not levied and collected on the Site for any reason, Participant shall pay to Agency an amount equal to the product of the Site Tax Increment Revenue(as hereafter defined) payable to Agency for the fiscal year immediately preceding the cessation of the levy or collection of taxes on the Site(the"Base Year Revenue Amount")multiplied by the number of years remaining in the term of the OPA(or,if less,the number of years during which such exemption or cessation will continue to be applicable). At the option of Participant, such payment shall be payable either(i)by a lump sum which shall be due within thirty(30)days after the occurrence of the event which has caused or will cause the Site not to be carried on the County Assessment Roll and/or real property taxes not to be levied and collected on the Site,or(ii)by annual payments made on July 1 of each year,in which case the first such payment shall be made on the July i after the occurrence of such event and shall be in the amount of the Base Year Revenue Amount,and each subsequent annual payment shall be increased by the permitted statutory rate (presently two percent (2%) per year). The "Site Tax Increment Revenues"from the Site shall be defined to be that portion of the ad valorem property tax increment revenues attributable to the Site and payable to Agency pursuant to Section 33670(b)of the California Health and Safety Code(as said statute may be amended from time to time),including without limitation the twenty percent(20%)of said revenues that Agency is required to set aside for affordable housing purposes pursuant to California Health and Safety Code Section 33334.2. In the event that the payment required by this subsection e. is due at a time when Agency is no longer legally entitled to receive Site Tax Increment Revenues from the Site, the Base Year Revenue Amount shall be deemed to be the amount of Site Tax Increment Revenues which Agency was entitled to receive in the last full fiscal year preceding termination of its right to receive such Site AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) Tax Increment Revenues. Notwithstanding the foregoing, in determining the Site Tax Increment Revenues for purposes of this subsection e. for any fiscal year (July 1 through June 30) after the Certificate of Occupancy has been issued,the ad valorem property taxes attributable to the Site shall be calculated at the greater of(i) the actual amount of such taxes prior to the obtaining of the property tax exemption or removal of the Site from the County Assessment Roll or (ii) the ad valorem property taxes due at the then-applicable rate for property with an assessed valuation of One Hundred Eighty Six Million Five Hundred Thousand Dollars($186,500,000). This subsection e. shall apply regardless of whether a public entity acquires an interest in or title to the Site and/or the Project. f. There shall be no discrimination against or segregation of any person,or group of persons,on account of race,color,creed,religion,sex,marital status,national origin or ancestry in the sale,lease,sublease,transfer,use,occupancy,tenure or enjoyment of the Participant's Interest in the Site nor shall Participant itself or any person claiming under or through it 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. g. Participant shall refrain from restricting the rental,sale,or lease of the Site,or any portion thereof,on the basis of race,color,creed,religion,sex,sexual orientation,marital status, national origin,or ancestry of any person. Every deed,lease,and contract entered into with respect to the rental,sale or lease of the Participant's Interest in the Site,or any portion thereof,after the date of this Agreement shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, its successors 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 race, color, creed,religion,sex,sexual orientation,marital status,national origin,or ancestry in the sale,lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, 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." (2) In leases: "The lessee herein covenants by and for itself,its successors and assigns, and all persons claiming under or through them, 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 race,color,creed,religion,sex,sexual orientation,marital status,national origin,or ancestry in the leasing,subleasing,transferring,use or enjoyment of the land herein leased nor shall the lease itself,or any person claiming under or through AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) it,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 or vendees 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 race,color,creed,religion,sex,sexual orientation, marital status,national origin,or ancestry in the sale,lease sublease,transfer,use,occupancy,tenure or enjoyment of the land,nor shall the transferee itself or any person claiming under or through it, 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." 2. All conditions, covenants and restrictions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation,legal or otherwise,be,to the fullest extent permitted by law and equity, binding for the benefit and in favor of,and enforceable by Agency,its successors and assigns, and City and its successors and assigns, against Participant, and its successors and assigns to or of the Site or any portion thereof or any interest therein,and any party in possession or occupancy of said Site or any portion thereof(including without limitation, any Beneficiary)which develops and/or operates the Project on the Site pursuant to the City Entitlements,. Agency and City shall be deemed the beneficiaries of the covenants,conditions and restrictions of this Agreement both for and in their own rights and for the purposes of protecting the interests of the community. The covenants, conditions,and restrictions shall run in favor of Agency and City,without regard to whether Agency or City has been, remains, or is an owner of any land or interest therein in the Site or the Redevelopment Project area. Except as provided in the preceding sentence, the covenants, conditions and restrictions contained in this Agreement shall not benefit nor be enforceable by any owner of any other real property within or outside the Redevelopment Project area or any person or entity having any interest in any such other real property. 3. No sale, conveyance, assignment, leasing or other transfer of any kind of the Participant's Interest in the Site or any portion thereof shall be permitted, except as expressly authorized by the OPA. 4. Agency and Participant shall have the right, in the event of any breach of any agreement or covenant contained herein by the other party, to exercise all the rights and remedies, and to maintain any actions at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant. 5. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) charge of any deed of trust recorded on the Site,provided,however,that any subsequent successor to the Participant's Interest in the Site(including,without limitation,any Beneficiary)shall be bound by the covenants,conditions,restrictions, limitations and provisions of this Agreement,whether such successor in interest's title to the Participant's Interest in the Site was acquired by foreclosure,deed in lieu of foreclosure, trustee's sale or otherwise. 6. The covenants set forth in subparagraph l.a.and Section 3 shall remain in effect until Completion. The covenants against discrimination set forth in subparagraph l.£ and l.g. of this Agreement shall remain in effect in perpetuity. Every other covenant and condition and restriction contained in this Agreement shall remain in effect for a period of thirty(30)years from the issuance of the Certificate of Occupancy. Notwithstanding the foregoing,this Agreement shall be deemed terminated and of no further force or effect upon the happening of either of the following: (a) if prior to the commencement of any construction on the Site,either City Entitlement terminates or expires for any reason including but not limited to a determination by any court or governmental entity with jurisdiction thereof that such Entitlement is void or of no force or effect,in which event thereafter neither Agency nor Participant shall have any rights against, or obligations to,the other hereunder; or (b) if,whether prior to or after the issuance of the Certificate of Occupancy,Participant or AES-HBD provides written notice to Agency that the Participant is abandoning or has abandoned the development of the Project and operation of the Facility;provided, however, that termination of this Agreement under this paragraph(b) shall not be deemed to affect any obligation of Participant to complete the demolition,removal, and restoration work required by Section 203 of the OPA nor to maintain the bond required therein until such work is completed. Termination of any covenant in accord with this paragraph 6 shall not be deemed to affect the obligations or duties imposed upon Participant by any other term or condition of any other entitlement or permit. Each of the Participant and the Agency hereby agree(for the express benefit of AES-HBD) that. upon and in connection with any termination of this Agreement in accordance with this paragraph 6,(i)it will take all actions necessary to promptly remove and release this Agreement and any and all terms and conditions hereof from being of record against, or in any other manner encumbering, any interest in the Site or any portion thereof, including without limitation promptly AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) executing and delivering any and all documents as AES-HBD may determine in its reasonable discretion are necessary to effectuate such removal and release of this recorded Agreement,and(ii) AES-HBD is hereby authorized and empowered to execute and file of record, on behalf of the Participant and/or the Agency, any and all such notices or documents as may be necessary to effectuate such release and removal of this Agreement and any and all terms and conditions hereof from the land records applicable to the Site, in the event that the Participant or the Agency fails to take such action promptly upon AES-HBD's request pursuant to clause(i) of this paragraph. 7. If a violation of any of the foregoing covenants occurs or is attempted, and such occurrence or attempt is uncorrected for the applicable period described in Section 402 of the OPA, Agency,City, and their successors and assigns, without regard to whether Agency or City or their successors and assigns is an owner of any land or interest therein to which these covenants relate, may institute and prosecute any proceedings at law or in equity to abate,prevent or enjoin any such violation or attempted violation or to compel specific performance by Participant of its obligations hereunder. No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the right of any party entitled to enforce the provisions hereof or to obtain relief against or recover for the continuation or repetition of such breach or violations or any similar breach or violation hereof at any later time. 8. There shall be no merger of this Agreement or the OPA. 9. The parties to this Agreement acknowledge and agree that,notwithstanding anything herein to the contrary,neither AES-HBD,nor any member(or other affiliate),official or employee of AES-HBD,shall be liable to the Participant,the Agency,the City or any of their respective officers, employees, contractors and agents or any successors or assigns of any of the foregoing, for any obligations or responsibilities of the Participant or the Agency arising under or in connection with this Agreement or the OPA or the development, construction, operation and maintenance of the Project or any portion thereof unless AES-HBD develops and/or operates the Project under the City Entitlements,in which event AES-HBD shall be deemed the Participant for all purposes thereafter arising under or in connection with this Agreement and the OPA. The parties further acknowledge and agree that AES-HBD shall not be deemed to be a successor to the Participant's interests and obligations under this Agreement or the OPA as a result of AES-HBD's ownership of the Site or its repossession of the Site from the Participant following any termination, expiration or breach of the Participant's Interest in the Site unless AES-HBD were to develop and/or operate the Project under the City Entitlements, in which event AES-HBD shall be deemed the Participant for all purposes thereafter arising under or in connection with this Agreement and the OPA. AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY OPA FINAL(2-9-06) IN WITNESS WHEREOF, Agency and Participant have signed this Agreement as of the dates set opposite their signatures. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Dated: .S o DDT' ✓ Dave Sullivan, Chairman Dated: enelope ulbret -Graft, Executi e Director Dated: Jo lynn, ge Clerk APPROVED AS TO FORM: ROVED AS TO FORM: r ency eneral Counse Speci ity/Agency Counsel Kane, Ballmer&Berkman POSEIDON RESOURCES CORPORATION, a Delaware corporation Dated: ?.'d By: /W/ht—�� ame: T. / Its: 61M Dated: By: - 1�4 — ame: w �. Its: �� AUTHORIZATION FOR RECORDATION: AES HUNTINGTON BEACH DEVELOPMENT,LLC Dated: / ® By: � —,, 2 Y Its: AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California � County of ss. lt.� e On t'3 before me, Date Name and Title of Officer(e.g.�"Jane Doe,Notary Public") personally appeared 15t 1�'1(C#�'I L k of F�� Name(s)of Signer(s) ❑ personally known to me proved to me on the basis of satisfactory evidence to be the persono whose name(e) is/afe-subscribed RA AUM to the within instrument and acknowledged to me that C.a doll*UOIM/ he/sloe/1 ey executed the same in his/lam/t°h& Notary Fil•caraM OmngeCa� authorized capacity(+es), and that by his/#per/their i4P*C01IVMEVWAU91Z1 signature(s) on the instrument the person(*), or the entity upon behalf of which the person(* acted, executed the instrument. WIT SS my han and official seal. Place Notary Seal Above I 0&e1_16 Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. �� Description of Attached Document Title � ^ ,`�G ��('�l Title or Type of Document: t3 `r l �� /? Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): ❑ Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General ❑ Partner—❑ Limited ❑ General ❑ Attorneyin Fact • Top of thumb here ❑ Attorney in Fact Top of thumb here ❑ Trustee ❑ Trustee ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is Representing: 0 2004 National Notary Association•9350 De Soto Ave.,P.O.Box 2402•Chatsworth,CA 91313-2402 Item No.5907 Reorder:Call Toll-Free 1-800-876-6827 * * * * * * * * * * * * * * * Acknowledgement * * * * * * * * * * * * * * * State of Connecticut County of Fairfield On this the 24th day of April 2006, before me, Margaret Jane Drzyzga, the undersigned officer, personally appeared Andrew P. Kingman, known to me to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained. In witness whereof I hereunto set my hand. Margaret Jane Drzyzga '. . RET JANE DRZYZGA ')TARY PUBLIC ` SION EXPIRES JULY 31,2008 * * * * * * * * * * * * * * * Acknowledgement * * * * * * * * * * * * * * * State of Connecticut County of Fairfield On this the 24th day of April 2006, before me, Margaret Jane Drzyzga, the undersigned officer, personally appeared Walter J. Winrow, known to me to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained. In witness whereof I hereunto set my hand. NA'argaret Jane Drzyzga I ET JANE DRZYZGA t'v YPUBLIC LSS``SION EXPIRES JULY 31,2008 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On May 16,2006 , before me, ---------P. L. Espatza, Notary Public------- Date Name and Title of Officer(e.g.,"Jane Doe,Notary Public") personally appeared Dave Sullivan,Chairman Name(s)of Signers) %personally known to me ❑ proved to me on the basis of satisfactory evidence to be the persons} whose names) is/e#e subscribed to the within instrument and acknowledged to me that he/ski Ahey executed the same in his/4efAheir authorized capacity(ies), and that by his/*eftpeir P L.Mill signatureM on the instrument the person f&), or CO""1111111101 a 1694179 the entity upon behalf of which the persons) LID 1"Ofty Pubft-Canamb acted, executed the instrument. MVC0M-6*6ftAUV4.=i4 WITNESS my hand and official seal. Place Notary Seal Above Signature,rotary Publ 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 Docuent Title or Type of Document: Agreement Containing Covenants Affecting Real Property Document Date: February 27,2006 Number of Pages: 9 Signer(*) Other Than Named Above: Capacity(io) Claimed by Signer Signer's Name: Dave Sullivan,Chairman ,C] Individual Top of thumb here ❑ Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Redevelopment Agency of the City of Huntington Beach 0 1 M National Notary Awociation•9350 De gab Ave.,P.O.Box 2402•ChNaaronh,CA 91313-2402•www.r*Wom*vot".org Prod.No.5907 Reorder Call Toll-free 1.800-876.8927 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On May 16,2006 , before me, ---------P. L. Esparza, Notary Public------- , Date Name and Title of Ofrioer(e.g.,"Jane Doe,Notary Public") personally appeared Penelope Culbreth-Graft,Executive Director Names)of Signer(s) %l personally known to me ❑ proved to me on the basis of satisfactory evidence to be the persons} whose nameW is/ewe subscribed to the within instrument and acknowledged to me that Oeishe/they executed the same in his/her/their authorized capacity(ies), and that by his/her/tkeir Lon3A signature(* on the instrument the person(s), or C411MA6111kM•1044179 the entity upon behalf of which the person(&) NOWYPd Mc-Cd M Ilia acted, executed the instrument. ox"Pco+h WITNESS my hand and official seal. �q�. Z45��_ Place Notary Seal Above signs of Notary P 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 Docu)rre Title or Type of Document: Agreement Containing Covenants Affecting Real Property Document Date: February 27,2006 Number of Pages: 9 Signer(e) Other Than Named Above: Capacity(kn) Claimed by Signer Signer's Name: Penelope Culbreth-Graft,Executive Director ,C7 Individual Top of thumb here ❑ Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General ❑ Attorney in Fact ❑ .rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Redevelopment Agency of the City of Huntington Beach 0 1999 Na9onal Notary AswcMw•93W Do Soto Ave.,P.O.Box 2402•ChatevrodA,CA 91313.2402•www.raborWnouvy.org Prod.No.5907 Reorder:Cell Tbll-Free 1.9911.9764W7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On May 16,2006 , before me, ---------P. L. Esparza, Notary Public------- Date Name and Title of Officer(e.g.,"Jane Doe,Notary Public") personally appeared Joan Flynn,Agency Clerk Name(s)of Signer(s) personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(o whose name(&) is/me subscribed to the within instrument and acknowledged to me that Oe/shefthey executed the same in hWher/tOmir authorized ' ► capacity(ies), and that by Wher/their conw,,01*Intl signature(&) on the instrument the person(&), or N0ftVftft-0011110111110 the entity upon behalf of which the person(r4 owwCa ft acted, executed the instrument. 1Nf►�• Iwp4, WITNESS y�hand and official seal. �1f Place Notary Seal Above Signature 01 tary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Documegre Title or Type of Document: ement Containing Covenants Affecting Real Property Document Date: February 27,2006 Number of Pages: 9 Signer(*) Other Than Named Above: Capacity(io) Claimed by Signer Signer's Name: Joan Flynn,Agency Clerk �1 Individual Top of thumb here ❑ Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Redevelopment Agency of the City of Huntington Beach 0 1999 Nalionsl NW"Association•WIN De Sob Ave.,P.O.Box 2402•ChabrwwM,CA 91313.2402•www.natiorx WxA".org Prod.No.6907 Reorder:Cell Toll-Five I-WM76$627 Exhibit A LEGAL DESCRIPTION OF THE SITE -12- [C&P comments(2/I/06) POSEID ON SEAWATER DESALINATION PROJECT HUNTINGTON BEACH, CALIFORNIA EXHIBIT EA LEASE AREAS'I AND Lr PA106.•r 1„am:r m L'OltlYtn.m«ara,c Mptx+Ntaa1.Na1NOtM4 I ' UAK MCA NN I IDaIR o Ya ANG t9gIrNO of Holm A 11 NS P'ORION ff Nr1Oi{d 101 UI!AdU57NM 11G h�N ALL A4 910NN OM 111E CDt1P NUOItO IIiO ND QYfNt N r 91r Ott llf NUMYGIOf EC«.mI pM�Y 6 O'WCC-FtlE d' A6HIONE WD[A pMt NEIEOi. Ja1{ IYIA1iBiDl QKOFF1011 RlD�I1Dr•N ME�QFl¢ IN WUT AI N �• N.0 COQfIQQ K7f.P1 1 ' PtmtaN o sN0 Gm«M¢sw�Aa faADNs, tE,D ra MTY. LIKE PARCEL 4 omwapLe Ar M MIDMDLr rwNw[1«tT CGawn oDIMY pr rt0[Ap®ElfeLertj W '� «enru•r Tm.ar f100M Af M OPOOAIC E 3]I.DIP mP A PDR1p1 0(INC 1T0t0.Y INi pN,O p/D01 O fNnst U Aw a ar Lm L!s ADNNYDr q MTa F ————— 6 SMD MNI¢L!MOGr fIOK SLID IAK!arm7)f.1119 frtT 70 N Mr CII d'IINdNmN 1[ApA OOati'1 K OPMiC OTAR O _ q11��@ iNBICE N COO9r f.1i{QI IECT m A tNPannr.tEGOI�m a OCG91[a a,Ittl As INi111UYtNt Nn W pjtf 'iNKr�It{Fi flf 9M0 PMCFL a.4Mp FJ1pR1 lM 1NAfIDa( V CFIGIL MLtiP�•N 1M[OtNR Oi ML LGW1• ——— Y&10 COYNON trN A PalDtl DT Ili ESI01C/RQ1ff-Or-QAr LME RBXAOti Or!MD rAMr OtlOpiD M O iMf aNAt1Z OaMIr ROOD OOIIIOI.DOMtlCT NUI/IN1fO1 [rALa,au««a•.s auc a N.NaM aMA p [le MnDir.M fEa PARCEL eBf LT SLOG wIKK IEC.lilt IAK aNa A ael'�rn,al�c M MMM OI Y�OLQ[MUIfO A Poom WMOi MOK MOI[L'A QMP Q. ly PARCEL 4 III 1 uNVLi,PN«c A Nwua>aaM.lD far.a naRL LAa 1Paa N°iLt�sr A wt7fnprt u«n is im aP aoL cARCELS oc)ai♦mi �rC'�7. y LEASE SAD poor a !ISIYI7!f1iiCE lNRNMy ALONG!ID tvMK ArD FiOiEN.T IN,[a nuts{M Nc pnN¢tY lx.a (EEr MPOUaI A DVIDf1 Al1aF a nr.K;TIaNDF luv«D sa0 muoow�sn,«.muar naiNlt a.II,P tbRNM � � � 4.13 ACRES .. I PPrtcEi s IE11FAr pClf-Op-MY INIL t GO17tlN■31&W RIr ALONG 11E OWNS,91ON Af•t i>ar17••pS.n•RJR A POISON OF NE Oy ',�. I GTY OF HUNTNWTCN(EACH I �' rAMtrar Lrc a MAR pAATA.a tD 1K«wNrA[,rnr MOUD,fAD[MW U,[Ls f•,I testa 1MMCt NON:LD PRLpfAIOM Gf Rlr CBfIMI COlrag 910M M'9 7(t]'O/■ MI,rNTAfr[OY tM M)>IT'I E W.00 m llE TMtE PaK of S 1} I LOT LINE AOJU5TNENT >L6LY Opt A NDIDM p M t2T,D6r lll[N NMD PAA[£L a: [f17 1Naa 1 2Ti,'/r[MMA11lLq ldri 1 r>lrar r 111.•1 a �t 1 MD.97-3 III ' Lm 1MENU NAK SAD PPp01G1RO4 SOVIEMI lNf AND A mIDGM 71t11¢0 IOGGDN!r1f.x n92 W IK IIrBpECNON M A Ill(! wflSiil ,., t .CORDED IP/890, I l✓ a 41 rtsleur.81F Dm .!9 •ME Ia1 "OVQ(KW� rtc IA N I is N MY«ASCAM tN M[ V 1N F+it•P le �5 LY lrE PARCEL 4I INST.NO 19970928F91.O.R. 0 IItJW[RG91 iEET,N$179N Y tbl fEEI; NW000?E 1.6.fi IEff: 16fOLLY lf!R IrMC NG'7'/!OEXIIGLD f 1101¢ � / • Or s ITs1>rm.rD M mm,D'r DA!)far m Iw 180..�tO pAMfI)a RM s«D aalfNLr LOr v W>R AMu'r tw ( -ra L rpLONMD ooull:s t Irarar r II.If tM t tP9 S1.E Wn N Aa O COMIN16 AM AIEA OF M AMU WK OILS AID!0000'0?■41.71 P1Ei:TKIIOf!.I9y'1N•A.00 FED:MG15 Ar 0 74 DG [N.M REI:MOEL I#-I"Y 11)OO FF MIKE I L 199n _aY Y A Y tM1 I I I I� f^t llltrp m mi«wo,®ocGNf.ApNNcp,>t neDwcmta• N!(21•Nr 1 JM44 rM%TINGE M 7rta77 Y 1m.11 iHt;M[NCi Mp0!Of W MO fA1C1[NR p'MfLa1D.E Nor. N]r11'27'■IT.I►IIDt TIiTCT M Lm If..we rw 10 K ti 14IIMTADrIIr Nal-,s-rd La.a«DIAMD soar A tww« I————— Nern'a'r +�'et r sYma•O'N tir k n IMID,c I +f I'iea ALLa atMaN aN M t—Arbp,[I wMetO AND n r,o a Lb lOr la[MNU57MDR. L'LY LNE PARCEL 1 tlt3 � (D y-.+ RUMMOE MACE A WM ME Ear, ADDI10 A POf1L•a DON.-m'A' •SIJr l✓ V K 9GOND K SAD riPP ANC W i MapLOtO OR 9,DRRNO W fAB-W t ANlA't 'IOA, TENYNA3 Q INC(/GIRT UNE O rK LOG,!OEXN6m llA7f enO-eSY Y.1' A \ S16d1¢TR I I � ~' a•C ALU 7 AS OfSLIBm W YfePOi DOGALtM AND tic +� \\ 4�, 0 ,..f. MAK NIA w t N%m,WtENr RM)Ir-G(-Nn Irl Op NEtlN10 111QT A!BMDNM Pam'Q' \! 1 a s•,I Ln uMf NLIaMa1L iL M•Nm8 dT nO,q•m•Ir xar r 1,r PwM,w Ls w n.a w Lx Nwmo,t q ny N / \\ 1L[a1T OF INrRILGia/ffrAA MtAOY O DIWEL m8 of a•war 10mMNn IROI t4.-* �ONOAiE \\ ULU KDtlo171 I m GNsnatt.Nt®am a GG:nrA a.I!e>AI NsnuMGR q �' ACCrtt / \./ I —tf.1a,, III F-1• 1N700f1N1 OT OFRfIK RfDa100.N M 0ti0i Or IIK mWir tOuTlEll NN„NL TANS—IDN M uSS.orsrtAnon,atlma,,MNw i.Nt�«. &"M aw NmoR¢I t Irm cOUNn.¢s�1aD A9 ralGe: a uA,m«.wtN.De.NmtsnGOpMN,,NtlmMAtDx Nr0 NrNtAt'afn w PN,RItEO eD Harm / — \ •\ 11 S INtIIID AT rIQ lOIRO6RMp I0111IN0 O<MIT CBfIIaI r01UGNN!S 1Y A/MICT(JL AOVR q NOpt1.LpA AOR4 A[AOW AMD RgGI A 81pP Ot PARCEL A. .•,... i/ ,y. _ LAq xm fttr raL,KN A rtwa O MMm!! ,Or lNst NLIfMDG, �" /DTr Or HUNTINGION O CACH \ 1 1 f�11,6E TNIM Af'1 a>a,r 1 IILiM'mN A PORn]L O lw LMD IIOr pw ON DLN r0E or ING muff OEXRQm afflom ou 0' ♦ 90URIKOriY LNi OF SAO PI/tCG.41 1NFINE ALONG SAD m,ILna,i D M rmfYsrtar to —0r LSNNN Caro[AN,Prt Af's"-,Y.. � LOT UNE ADJVSINENT sLtulMrA:gNp uK«asr,r c+aau at 1,OGf«I—ST t 12LIsP FOR A NOTION Or ME tOUIOdIEMLT UK a SAD PAM♦MENCE LOOK 5A0 Na e7-} PARCEL 'A' I S Q IOT31 RD.T W➢LE IIOP/61LT 11E D<SAO IMAC�Y nOa ALONG sOUMMa[v LNc M a>•r',Y[00m m M, ei t,rNOr f rr)1'Ir RECORDED il/8�97 rAD 11,1[N MT[rur r MDDA7 em W A LAPI I,LE a Lti,NNLn LrM f{1.7t t®;IxaR/Ir1701'Y Ir690 T[Cli REKC M STSYLf M ImM t¢T m Ile f( INST.NO 19070r 401,OA. \\ 3n' LEASE I NTi9flOt ,� Na noD em rAtrlNp p K¢rMrnMr a MDHM/tillal N tna«P,DtMu•NMNr-n-rw u[or MDL.Mn srr[r a 1,DN«IM r0 LOr NK tINNM oN iN0 tm pK NNYCY@Lr No.IT-a tIENc[LOOK SAID AMtlfNG T. \ AREA "I I I LOAD NAAMLQ LME s 001 r{I'N 1OI./a fiF;REKE!of-V r 1M iR OE OOOMO K So ENP AM W tE Rm1IIKEA DR OIDRRNW TO rENNMM r ME W 9K ELNINLG Ir A rNurllr an♦e m1GIf GIUDI6ERY MAMm,LI LPE x LrAnc«DAME OF Oaaa®M 1 AS NOINYN.La U 6.83 ACRES) — a A s a INA/i :M«S t6LRf sO1MLSm,Lr i011MFARttiT Aat_p_rAy ix of ME.OINO sf�AS IMOrx ON WO Lm u/K Ttpf, — \ AND lOUNIRIY NOND INO pR.E AN NC asrAK[tt IOI.N IBI AGA DNtM. — stPDLUL A tttmw.wtlr Ir tT•r,f•IN]GL 8 OOtrar.M.NI )UQitr m tc,00M OONOrtaLR RISOMRIIOt4 AMIC1012 RG1R or nY AND pa mm ————— FELT m A POISON OF RE lORIBILY 111E Or s10 Rwca.f:RmLR If MCM F M. ` — ALONG SAG WUmwUK I ePE17Y E itBJ>W K MIII? - C[Ir Nor 1L7AM,M6 slaiar m COtt1M119,@MDltt A6TICIDML �0 PAMM m- idBl gY@fl' R i NNatR a rAY AID D,¢NIMa aF Nmn4►wr. 4\ at,Kn NMNs w ANSA Lr uM.a¢NON ON. aaeattt ALL A9 SHM"ON R[OOOC 00"D HE CM AND Nr 90 zA3w"r PutGFi,4 I i/'• I - \ R NMltp m�Ilxn.Daman.woarftriDits nelppom. NaFN[KE«.a A rNrt Mtay. ♦� Y i , III � 1 r� Nap V A,D 4S[Na�NLt4q E tMV. W M Y«Mr ArtKMm Iral[NO n lNf A SI � I I \\ -� ADFMEMY W0C A INI IiNDIF. � . M—RI PIV0/i Gt931tM ATLANTA ;w CANAStr PON K LR IION101,,N9'mtD,l MMMBN«L �A•� T� t IEPAR IIStAII.rOt.uvGpae NIDNIIDN.MerISMNiG1I Np rn >AfSy,��__ SOd N r I I ``\ A@LN9FK O tN101 PNWMIT AK N6Aaa t>aGRRS W A IP{a f i«y !IA ;",� III /PAGTrAI POUR OI IIOUI6 1MDIfJL AlOtlq Ap109 ND IRD01 A 2 SINp O 1.M0.N.00 fEE7 10C OKA A 1'GmOI O NRrd9!MD 4. wraliaifLG""aEso�eem�wdR"w'Ne'am rm RM ncM 1Gc v Mr p ,2 b+ Op1LNaD R 1NE t01[IMtF3I0tD ER11NIp 6 fNAI 6da1 / m PARCEL 1 LmeL Dn.N M Y a>Nr,r N IaL,Y ran A eL>non Of INS ACREAGE GTY OF HUNTNOTCN BEACH��• \M 0 0� \ I I . MDUM,r sD,Lr Lp[a tN0 rrcn a rNru.Ines ND NA�AattM m LOT LINEA0JJS1LffTlT IW'f V + i 7Wt18JflMV UMf N ZTf71T f MOm m M ING POltt Ot tsYN i a NO.07-0 a i IiAMaM4 b♦ILC[a u)1•!s[MM faT:Iltnti S!7»'M i AG L-OCAT 7 RECORDED T aot, rtpe aDL¢f RNa00a E,....etv m Mt MaiMa LN[d tAG LOG7mN N97.NO T9970GI8{91.0.R. PARCEL I IEtME NRA'r At OFiQ1®Gr SfADAA pJCY101i. � _ Mt IOONO Of fuD11MP AN[10 a PKLtGmr ON 9DftOlm,O I0ILNGE a IK WI01D lNE M Lax No*r AND IK CCUN �-•��"� NEEIOM.r lAE LDQ Ap•,'K fN6,mm 4®.PAIL (Alb L.•ifP oocuar. JRM A 2' Loe�noH MAr mroLLSo P O S E I D O N RESOURCES NDYtNN. e n ■ I n e s r•.! n:`w;`;..�' ':r:.u,m..,,., ATTACHMENT #2 Financial Benefits to the City of Huntington Beach Poseidon Project Poseidon Definition of Utility Tax Application One Time Annual Ongoing Cumulative Description of Benefit Revenue/Cost Revenue Total Agency Revenue Revenue/Benefit 30 Years Avoidance Water Enterprise Funds Water Purchase $100,000 $3,000,000 Booster Station $2,650,000 $56,000 $4,330,000 OC 44 Interconnect JPA $1,000,000 $1,000,000 Infrastructure Funds Right of Way Improvements $1,900,000 $1,900,000 Agency Funds Property Tax (In-Lieu) $1,119,000 $33,570,000 $33,570,000 Housing Set Aside $373,000 $11,190,000 $11,190,000 General Fund Pipeline Franchise Fee $100,000 $3,000,000 Utility Tax (Poseidon Definition) $50,000 $1,500,000 City Improvement Funds $2,000,000 $2,000,000 Pass through from Agency $68,000 $2,040,000 Total $7,550,000 $1,866,000 $44,760,000 $63,530,000 2/13/2006 1 Financial Benefits to the City of Huntington Beach Poseidon Project 100%Application of Utility Tax One Time Annual Ongoing Cumulative Description of Benefit Revenue/Cost Revenue Total Agency Revenue Revenue/Benefit 30 Years Avoidance Water Enterprise Funds Water Purchase $100,000 $3,000,000 Booster Station $2,650,000 $56,000 $4,330,000 OC 44 Interconnect JPA $1,000,000 $1,000,000 Infrastructure Funds Right of Way Improvements $1,900,000 $1,900,000 Agency Funds Property Tax (In-Lieu) $1,119,000 $33,570,000 $33,570,000 Housing Set Aside $373,000 $11,190,000 $11,190,000 General Fund Pipeline Franchise Fee $100,000 $3,000,000 Utility Tax (100% application) $840,000 $25,200,000 City Improvement Funds $2,000,000 $2,000,000 Pass through from Agency $68,000 $2,040,000 Total $7,550,000 $2,656,000 $44,760,000 $87,230,000 2/13/2006 1 ATTACHMENT #3 Owner Participation Agreement (OPA) Poseidon Resources Corporation and City of Huntington Beach Redevelopment Agency City of Huntington Beach � February 27, 2006 Owner Participation Agreement - Property Tax Benefits - City Improvement Funds - Right of Way Improvement Funds - Utility Users Tax - Recommended Action � Owner Participation Agreement Tax Benefits - Tax Increment estimated @ $1 , 119,000 annually $33,570 ,000 over 30 years - Housing Set-Aside estimated @ $373,000 annually - $ 11 , 190,000 over 30 years - Benefit to the Agency accrues over 30 years from issuance of Certificate of Occupancy Owner Participation Agreement City Improvement Funds - $2 ,000,000 payable prior to Certificate of Occupancy - Utilized at the discretion of the City Council Owner Participation Agreement Right-of-Way Improvement Funds - $1 .9 million to be utilized at the city's discretion along the pipeline route - Included in CUP/CDP - Payable within five days of closing of Poseidon's construction financing � for the project d Fu�' Owner Participation Agreement Utility Users Tax - Not addressed in OPA - Difference in definition City's perspective $840,000 Poseidon's perspective $ 507000 - Resolution may be litigated � iA Owner Participation Agreement Recommended Action - OPA is the most effective tool available to guarantee the revenues - Approve and Authorize Execution of the OPA by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation Financial Benefits to the City of Huntington Beach Description of Benefit One Time Annual Ongoing Total Agency Cumulative Revenue/Cost Revenue Revenue Revenue/Benefit 30 Avoidance Years Water Enterprise Funds Water Purchase $100,000 $3,000,000 Booster Station $2,650,000 $56,000 $4,330,000 OC 44 Interconnect JPA $1,000,000 $1,000,000 Infrastructure Funds Right of Way $1,900,000 $1,900,000 Improvements Agency Funds Property Tax (In-Lieu) $1,119,000 $33,570,000 $33,570,000 Housing Set Aside $373,000 $11,190,000 $11,190,000 r General Fund Pipeline Franchise Fee $100,000 $3,000,000 Utility Tax (100% $840,000 $25,200,000 application) City Improvement Funds $2,000,000 $2,000,000 Pass through from Agency $68,000 $2,040,000 Total $7,550,000 $2,656,000 $44,760,000 $87,230,000 Financial Benefits to the City of Huntington Beach Description of Benefit One Time Annual Ongoing Total Agency Cumulative Revenue/Cost Revenue Revenue Revenue/Benefit Avoidance 30 Years Water Enterprise Funds Water Purchase $100,000 $3,000,000 Booster Station $2,650,000 $56,000 $4,330,000 OC 44 Interconnect JPA $1,000,000 $1,000,000 Infrastructure Funds Right of Way Improvements $1,900,000 $1,900,000 Agency Funds Property Tax (In-Lieu) $1,119,000 $33,570,000 $33,570,000 Housing Set Aside $373,000 $11,190,000 $11,190,000 General Fund Pipeline Franchise Fee $100,000 $3,000,000 Utility Tax (Poseidon Definition) $50,000 $1,500,000 City Improvement Funds $2,000,000 $2,000,000 Pass through from Agency $68,000 $2,040,000 Total $7,550,000 $1,866,000 $44,760,000 $63,530,000 The End RCA ROUTING SHEET INITIATING DEPARTMENT: Administration SUBJECT: Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation COUNCIL MEETING DATE: February 27, 2006 RCA ATTACHMENTS ISTATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement w/exhibits if applicable) Attached ❑ ( pp ) Not Applicable (Signed in full by the City Attorney) Attached ❑ Subleases, Third Party Agreements, etc. Not Applicable (Approved as to form by City Attorney) Certificates of Insurance (Approved b the City Attorne Attached ❑ ( PP Y Y Y) Not Applicable Attached ❑ Fiscal Impact Statement (Unbudget, over $5,000) Not Applicable Attached ❑ Bonds (If applicable) Not Applicable Attached ❑ Staff Report (If applicable) Not Applicable Commission, Board or Committee Re ort If applicable Attached El p ( Pp ) Not Ap licable Find in s/Conditions for Approval and/or Denial Attached El g pp Not Applicable EXPLANATIONFOR�MISSLNG ATTACHMENTS` REVIEWED RETURNED. FORWARDED , . Administrative Staff Assistant City Administrator Initial City Administrator (Initial) ( ) ) City Clerk ( ) ' EXPLANATION FOR RETURN OF ITEM: Only)(Below Space For City Clerk's Use RCA Author: Emery City of Huntington Beach " 2000 Main Street - Huntington Beach, CA 92648 March 29, 2006 Mr. Billy Owens, Sr. Vice President Poseidon Resources 3760 Kilroy Airport Way, Suite 260 Long Beach, CA 90806 Subject: Signature Pages Mr. Owens: Per our exchanged emails, enclosed are five original signature pages for the Owner Participation Agreement(OPA)and the Agreement Containing Covenants. Please have Mr. Kingman and yourself execute on behalf of Poseidon Resources and Mr. Pendergraft execute on behalf of AES Huntington Beach. It is necessary for these signatures to be notarized as well. Should any other individuals execute the agreements we will require documentation of their authorization. In addition, please mail a final hard copy of the legal description and site map for inclusion as attachments to the OPA. Thank you in advance for your assistance. Please call me at(714) 536-5482 should you have any questions. Sincerel , aul Emery Deputy City Administrator PE:dwb Attachment Sister Cities: Anjo, Japan 9 Waitakere, New Zealand CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK May 18, 2006 Tom Daly O. C. Clerk— Recorder 12 Civic Center Plaza, Rm. 101 Santa Ana, CA 92701-4057 Attn: Document Examiner Enclosed please find the Agreement Containing Covenants Affecting Real.Property entered into as of 2/27/06 by and between the Redevelopment Agency of the City of Huntington Beach and Poseidon Resources Corporation to be recorded and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. Please return a conformed copy of the Agreement when recorded to this office in the enclosed self-addressed stamped envelope. oan L. Flynn City Clerk JF:pe Enclosure Attachment G:/fol lowup/deeds/deed lette r2002.doc Procedure#18 (Telephone: 714-536-5227) �J,"je CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK May 16, 2006 i Josie McKinley Poseidon Resources Corporation 3760 Kilroy Airport Way, Suite 260 Long Beach, CA 90806-2455 Dear Ms. McKinley: Enclosed for your records is are two executed Owner Participation Agreements by and between the Redevelopment Agency of the City of Huntington Beach, Agency, and Poseidon Resources Corporation, Participant. Sincerely, Joan L. Flynn City Clerk JF:pe Enclosure: Agreements G:followup:agrmtltr (Telephone: 714-536-5227) Esparza, Patty From: McGrath, Jennifer Sent: Tuesday, May 16, 2006 9:05 PM To: Esparza, Patty Subject: Re: Poseidon OPA Yes, with�init�ials �from �Posei�dons wellp�' -----Original Message----- From: Esparza, Patty To: McGrath, Jennifer _ Sent: Tue May 16 18: 10:24 2006 Subject: Poseidon OPA I just discovered that the address for Poseidon on page 2 is incorrect. It should be 3760 Kilroy Airport Way, not 1760 Kilroy Airport Way. Can this be hand corrrected on the document? Thx. Sincerely, Patty Esparza Acting Senior Deputy City Clerk (714) 536-5260 1 CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK May 16, 2006 Poseidon Resources Corporation 1055 Washington Blvd. Stamford, CT 06901-2216 Attn: Chief Executive Officer Dear Sir: Enclosed for your records is a executed Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach, Agency, and Poseidon Resources Corporation, Participant. Sincerely, tyyClerk Flynn JF:pe Enclosure: Agreement G:followup:agrmtltr 1 Telephone:714-536-5227) CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK July 13, 2006 Josie McKinley Poseidon Resources Corporation 3760 Kilroy Airport Way, Ste. 260 Long Beach, CA 90806-2455 Dear Josie: Enclosed is a fully executed original of the Poseidon Resources Corporation Owner Participation Agreement (OPA) requested by you to forward on to the AES Corporation. Thanks for all your assistance in getting this transaction completed. Sincerely, Joan L. Flynn City Clerk JF:pe Enclosure: Agreement g G:foIIowuP:a rmtltr (Telephone:714-536-5227) I