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HomeMy WebLinkAboutROBERT L. MAYER CORP. - 1991-10-19 j City of Huntington Beach * 4 ` 2000 MAIN STREET CALIFORNIA 92648 ,. �• DEPARTMENT OF ECONOMIC DEVELOPMENT Office of the Director 536-5582 Housing 536-5542 Redevelopment 536-5582 Fax (714)375-5087 April 22, 1992 Stephen Bone, President The Waterfront, Inc. 660 Newport Center Drive Suite 1050 Newport Beach, California 92660 Dear Steve: SUBJECT: EXECUTED ORIGINAL — FOURTH AMENDMENT — THE WATERFRONT DISPOSITION AND DEVELOPMENT AGREEMENT Enclosed is an orignally executed version of the captioned document for your files. If you should have any guestions please call me at the number above. Si ely, Step en V. Kohl r Proje Mana e SVK:jar xc: Barbara A. Kaiser, Deputy City Administrator/Economic Development Robert Franz, Deputy City Administrator/Administrative Services Connie Brockway, City Clerk + REQUEST FOR CITY COU CIL/ SIT AGENCY ACTION 0, _-_Ut9�v Apri 1 20, 1992 date Submitted to: CITY CLL'RK n y Muncil Submitted by: Michael T. Uberuaga, City Administrator Pa"red'by: Robert 3. Franz, Deputy City Administ t Sibject: Fourth Amended DDA — Waterfront Consistent with Council Policy? t ] yes [X] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attechnmts: OBJECTIVE: A further modification to the Disposition and Development Agreement (DDA) between the Redevelopment Agency and the Robert L. Mayer Corporation (Waterfront) is necessary in order to finalize the Agency and Developer's Agreement on revising the financial obligations under the subject DDA. RECOMMENDED ACTION_: 1 . Adopt Agency Res. Z7 Z approving the Fourth Amendment to the Disposition and Development Agreement (DDA) between the Redevelopment Agency and the Robert L. Mayer Corporation. 2. Adopt City' CouncilRes. 6370 consenting to the approval of the Fourth Amendment to the Disposition and Development Agreement between the Redevelopment Agency and the Robert L. Mayer Corporation. ANALYSIS: One of the 'provisions of the third amended DDA between the parties as approved by the Agency on March 16, 1992 was that the litigation filed against the Waterfront by J. A. Jones Construction Company be settled prior to the funding of the payments to the Waterfront by the Agency. The Waterfront and J. A. Jones Construction Company have not reached. a final settlement. Instead, funds for settlement of the litigation will be placed in escrow to be used only for the settlement of the lawsuit. If the -Redevelopment Agency approves this modification to the terns of the prior DDA, then the financing as previously contemplated can go forward. Since this matter involves litigation between the developer and its construction company to which the Agency has also been named, the City Attorney and Agency Legal Counsel will need to brief the Agency in closed session on the portion of the litigation that involves the Agency. ALTERNATIVES: Do not approve any further amendment to the DDA. FUNDING SOURCE: Not applicable. ATTACHMENTS: DDA Amendment WPADSERT:858 J. iwE4 CITY OF HUNTINGTON BEACH CA 92-6 COUNCIL. - ADMINISTRATOR COMMUNICATION TO: Mayor and City Council FROM: Michael T. Uberuaga, City Administrato ��— ( DATE: April 17, 1992 SUBJECT: Agenda Item F-1/Revised Resolutions and Fourth Amendment to Waterfront Disposition and Development Agreement Enclosed are final amended versions of the Resolutions relating to, and the Fourth Amendment to the Waterfront DDA previously sent to you as Agenda Item F-1. ROOLUTIONS The resolutions were amended at Section 2 to reflect your approval of the revised Morgan Guarantee Trust Credit Agreement on file with the Agency secretary. Also, Section I was amended by adding "and Agency Special Counsel" to the last line thereof. EQTIRTH AMENDMENT TO DDA The fourth amendment to the DDA was amended at Page 3, Section 1, by increasing the net proceeds of the bonds to$4,300,000. Additionally, Section 3, Page 4, was amended to Include a covenant by the developer to pay any final judgment, with respect to the construction Iitigation on the Hilton Hotel, which may exceed the dollar amount placed in the escrow mentioned in Section F of the same agreement at Page 3. Finally, the Iast sentence of Section 3 was added to require the deposit of excess funds with Dai Ichi Kangyo Bank in the event the funds in escrow are greater than any judgment relating to the Hilton construction litigation. MTU:ADL:lp HMCITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGEON BEACH TO: Connie Brockway, City Clerk FROM: Stephen V. Kohler, Project an e SUBJECT: Executed Copies — Third Amendment to Disposition and Development Agreement —The Waterfront DATE: April 3, 1992 Attached please find two originally executed editions of the captioned document now ready for execution by you as Agency Clerk and by the Agency Chairman. If you should have any questions please call me at ext. 5457. SVK:jar 0701r xc: Barbara A. Kaiser, Deputy City Administrator/Economic Development Gail Hutton, City Attorney Art De La Loza, Deputy City Attorney Robert Franz, Deputy City Administrator/Administrative Services FC90 CITY CF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION TO: Barbara Kaiser, Deputy City Administrators Economic Development FRCM: Corxie Brockway, City Clerk SUBJECr: Resolution 6311, .Resolution 215 (Agency) Second ant-Waterfront MA DATE: March 4, 1992 (1) The above resolutions were adopted 815191. At the tuna the Agenda material was provided to this office your department submitted Draft Resolutions in lieu of originals due to the time crunch. Please provide original resolutions with signatures as soon as possible. (2) Also the original of the Second Amerwnent of the MA was to be returned to this office from you: department once you had obtained Tom Clack's signature. We still have only a copy. �� zo CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION "VNT1W.T0%st4c" TO: Art De La Loza, Deputy City Atto FROM: Stephen V. Kohler, Project Manager SUBJECT: Second Amendment Waterfront Disposition and Development Agreement Original Documents DATE: March 13, 1992 Attached is a memo we have received from Connie Brockway, City Clerk, in regards to the captioned matter. The Clerk seeks to locate the original documents listed in her memo. Also attached is my memo to you of August 9, 1991, through which were transmitted the original documents in question as we discussed on the phone yesterday, Thursday, March 12, 1992. I would like to ask that you search your files to determine if the original files are resting there. Thank you for your cooperation and assistance. SVK:jar 0618r xc: Barbara A. Kaiser, Deputy City Administrator/Economic Development Connie Brockway, City Clerk Jl �4 CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION "U rz+�cron 9LACH TO: STEPHEN KOHLER, Principal Redevelopment Specialist FROM: ARTHUR DELALOZA, Deputy City Attorney SUBJECT: SECOND AMENDMENT TO WATERFRONT DDA ORIGINAL DOCUMENTS DATE: April 7, 1992 This will confirm my voice mail message to you of April 7, 1992, regarding the above matter, to the effect that Tom Clark has the original document you are attempting to locate. Y understand that Waterfront Corp. needs a certified copy as soon as possible. Please handle. ARTHUR DELALOZA Deputy City Attorney cc: Barbara Kaiser, Director of Economic Development Connie Brockway, City Clerk H 4 CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HU►JTPOCTOH 814CH TO: Stephen Kohler, Economic Development FROM: Betty Tate, City Clerk's Office W� DATE: March 18, 1992 SUBJECT: THIRD kiENDIAENT TO THE DDA FOR THE WATERFRONT Enclosed are the two original agreements - Third Amendmend to Disposition and Development Agreement by and among the Redevelopment Agency of the City of Huntington Beach, Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended and Waterfront Construction No. 1, a California Limited Partnership. These agreements need to be signed. The only one who has signed so far is Robert Mayer and Stephen Bone. Please obtain the necessary signatures and return to our office. Thanks. THEIRo WGE �ORA 0 0 TUN T Y This space is for the County Clerk's filing Stamps 625 N GranC Ave..Santa Ana.CA 92701 [PROW ors PURMCaITooM (2015.5 C.C.P.) STATE OF CALIFORNIA, SS. PUBLIC NOTICE County of Orange, Proof of Publication of NOTICE OF PUBLIC HEARING I am a citizen of the United States and a resident of the Cou,.t-, ol-eighceo - years, and not a party to or interested in the above entitled matter. I am the principal clerk of the printer of The Orange County Register, a newspaper of PUBLOC W07110 general circulation, published in the City of Santa Ana, NOTICE OF PUBLIC HEARING CITY COUNCIL/REDEdEIOPMENT of County of Orange, and which newspaper has been AGE NCY DISPOSITION END AND TO adiudged a newspaper of general circulation by the AGREEMENTETHEPVW TERFRONT MAIN-PIER E REDEVELOPMENT 1 Superior Court of the County of Orange, State of AREA On Monday,March 7992,of 7:00 p.m., or as soon there- California under the date of November 29, 1905, Case after as the matter may be Number A21046 that the notice of which the annexed is heard at the City council Chambers located at 2000 Beach,ain Street, then City a printed copy, has been published in each regular and Council of the City of Hunting- entire issue of said newspaper and not in any ton Beach and The hed City Of Agency of the City of Huntington Beach will hold' supplement thereof on the following dates, to wit: joint public hearings to con- sider approval of the Third Amendment to the Disposition and Development Agreement (the Agreement"), by and among the Redevelopment . Agency of the City of Hunting- ton Beach(the"Agency"),The I - March 2 & 9, 1992 Robert L. Mayer Trust, and'. Waterfront Construction No.1. The proposed Agreement and a staff report including a sum- mary of the Agreement is available for public inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach,California.Should you desire further information concerning this matter,kindly call Stephen Kohler at (714) 536-5457. CITY CLERK/AGENCY City Council/City of --- — — _ ------' _ _-- Huntington-Beo_c Red6ve(opmeni Agency-Cr of Huntington Beach - Publiis 992 I certify (or declare) under Penality of Periury that the foregoing is true and correct. Executed at Santa Ana, California. Michele Medina Date . . . . . . .Marsh. 11... . . . . . . . . . . . . . . . . 19 . . .9.2. . . . . . . Signatur"e pQooP ors p� � aoc�Q�oo� STATE OF CALIFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newsraper of general circulation, printed and published in the City of PUBLIC NOTICE Huntington Beach, County of Orange, State of NOTICE OF PUBLIC HEARING Ca(ifomia, and that attached Notice is a true and CITY COUNCIL/ complete copy as was printed and published in REDEVELOPMENT AGENCY the Huntington Beach and Fountain Valley AMENDMENTTO DISPOSITION AND. issues of said newspaper to wit the issue(s) of: DEVELOPMENT AGREEMENT THE WATERFRONT MAIN-PIER REDEVELOPMENT PROJECT AREA February 27, 1992 On Monday, March 16, 1992 at 7:00 p.m., or as March 5, 1992 soon thereafter as the mat- ter may be heard, at the City Council Chambers lo- cated at 2000 Main Street, Huntington Beach, Califor- nia, the City council of the City of Huntington.Beach and the Redevelopment Agency of the City of Hun- tington Beach will hold.a joint public hearing to con- sider approval of the Third Amendment to the Disposi-, tion and Development Agreement (the "Agree- ment") by and among the Redevelopment Agency of the City of Huntington Beach (the"Agency"),The _ Robert . Mayer Trust, and Waterfront Construction No. 1. The proposed I declare, under penalty of perjury, that the `port Including ngd a staff re- J port includin a summary foregoing is true and correct of the Agreement is anon able for public inspection 'at the Office of the City 'Clerk, 2000 Main Street, March 5 2 Huntington Beach, Califor- 19� I nia. Should you desire fur, Executed on r ther.information concerning at Costa Mesa, California. this matter, kindly call Ste- phen Kohler at (714) 536- 5457. CITY CLERK/AGENCY, Council/City of� L ICity Huntington Beach, Re. Signature a development Agency, City of Huntington Beach Published Huntingtoni Beach/Fountain Valley In-� dependent February 27,+ March 5, 1992 , a 024-267 PROOF OF PUBLICATION ` r JPMorgan Williarn P.Hansen Jr. Vice President Mr. Robert Franz Public Finance Deputy City Administrator ]Morgan cuarant. City of Huntington Beach Trust Company of 2000 Main Street dew Fork Huntington Beach, CA 92649 Fepresentatiw Office 101 California Sueet March 5, 1992 Suite 2750 San Francisco CA 94111 TA.4159i4-3270 Dear Bob, Fax:415 954-3244 Hunter Holding has brought me up to date on your financial needs, and I am pleased to say that Morgan Guaranty is prepared to offer you an interim alternative to a stand-alone new money bond issue for your Main Pier Project Area. Borrowing from us would give you timing flexibility for your bond sale and the potential efficiency of including this new money need in the refunding issue you have been discussing with Hunter. We currently can lend at very attractive rates. For instance, if you were to borrow today, your interest cost for up to 6 months would not exceed 5 0. The terms under which we are prepared to lend are as follows: BORROWER: Huntington Beach Redevelopment Agency Amotwr: $4,750,000 PURPOSE: Bridge loan to finance infrastructure for the Main Pier Project Area. UP-FRONT FEE: None Coy mmiENT FEE: None BORRO147\G RATE: Adjusted LIBOR + I/27o RATE BASIS: Actual/360 IYrEREST PERIODS: .1, 2, 3 or 6 months A subsidiary of JT Morgan R Co. Ineerporated JPMorgan ExrmA,nON OF Co:NMITME.*rr TO LEND: April 15, 1992 F LNAL MATURITY OF LOAN: September 30, 1992 PREPAY ENE Loans prepaid are subject to a $500 administrative charge and break-funding costs (if any). SECURITY: Pledge of tax increment revenues from the Ruin Pier Project Area, subordinate to the pledge of such tax increment revenues under the Main Pier Loan Agreement securing the Huntington Beach Public Financing Authority-1988 Revenue Bonds, Series A. ADDITIONAL COVENAMS: All borrowing to be repaid from the proceeds of the next sale of bonds for the Main Pier Project Area. Lw.AL ExPENsFs: We anticipate using White& Case, Los Angeles, as bank counsel. Their fees and expenses are for the account of the Huntington Beach Redevelopment Agency, whether or not the loan closes. Their fees and disbursements will not exceed $25,000 if the loan closes by April 15, 1992 in the structure currently envisioned. We have provided you, we think, with an attractive alternative, Bob. Please give me a call if you have any questions. I look forward to hearing from you. Sincerely, cc: Hunter Holding, V.P., J.P. Morgan Securities Neil Rust, Esq, White & Case Mark Northcross, KeIling, Northcross & Nobriga Scott Sailers, Stone & Youngberg Ed Schilling, Stone & Youngberg Notice of Exemption Appendix I To: ❑ Office of Planning and Research From: (Public Agency) Cif of Huntington Beacl 1400 Tench Street,Room 121 2000 Main Street Sacramento,CA 95914 (Addreas)] County Clerk liunt^iAg County of Oran e 700 Civic Center Dr. West, P.O. Box 838 Santa Ana, CA 92701 �__ C. Project Title: Amendment to the_Waterfront Disposition and Development Agreement Project Location - Specific: Separate Development Parcel No. 1 (Waterfront IIilton- 21I00 Pacific Coast13iahway_) . _. Project Location - City: guntinqf-nn reach Project Location - County: Orancre Description of Project: -me1Ldment--tothe pDAbetween Robert L.�rfayer and 'the.City_of Uun at m Re-ach Red¢Yelopment gencv--regaraing the financial terms of -Separate D"plapmen t parxe]min_. Name of Public Agency Approving Project: City of Huhtington Beach City Council Name of Person or Agency Carrying Out Project: -Stephcn_.Kohler____� Exempt Status: (check one) ❑Knisterial (Sec.21080(b)(1): 15268); ❑Declared Emergency(Sec.21080(b)(3); 15269(a)): ❑Emergency Project(Sec.21080(b)(4); 15269(b)(c)); ❑Categorical Exemption.State type and section number: ❑Statutory Exemptions. State code number: X Other. State Code No. 15 Reasons why project Is exempt The ,amnndmerit revises economic aspects _between the City of Huntington Beach Redevelopment Agency and the developer for an already existing hotel! as such there is no possibility that the project will have a significant adverse impact on the environment and is not subject to CEQA. �T Lead Agency Contact Person: Stephen Kohler ArcaCodelrelephonc/Extcnsion: (714) 536-5457 If filed by applicant: 1.Attach certified document of exemption finding. 2. Has a notice of exemption been filed by the public agency approving the project? ❑ Yes ❑No Signature: Date: Title: . Signed by Lead Agency Date received for filing at OPR: ❑Signed by Applicant Revised October 1939 Revised 3/5/92 HUNTINGTON BEACH REDEVELOPMENT AGENCY Discharge of Debt - Waterfront Reimbursement Developer Incentive Payments Total Current 46,158,901 $3,100,000* $6,158,901 to $9,258,901 (1988 DDA) Proposed $4,225,000 to $4,300,000 $886,000 $5,111,000 to $5,186,000 (See "Contingency") Total Savings: Minimum = $972,000 Maximum = $4,147,901 SUMMARY 1. Agency saves minimum of 4972,901. 2. All payments to Waterfront are funded by taxes received from Hilton Hotel. 3. Lender Bank extends Waterfront loan to 1/1/93. 4. After 1/1/93 Agency/City will receive all bed taxes from Hilton (currently required to reserve 60% of bed tax revenues for repayments to Waterfront). CONTINGENCY Bonds to generate $4,300,000 ($4,225,000 if "stand alone" bond issue) for discharge of debt to be issued only if Disposition and Development Agreement is amended. *NOTES: 1. Present Value of Developer Incentive payments through July, 2000 (Total estimated payments equal $4.1 million) 2. Developer Incentive payments under 1988 DDA are paid only if second Hotel is constructed. REPORTSIRJF-6 REQUEST FOR CITY COUNCIL/ IFVC., REDEVELOPMENT AGENCY ACTION ED92-13 Date March 2, I992 Submitted to: Honorable Mayor/Chairman and City Council/Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Executive Director Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development S-ubject: REDUCTION OF 30-DAY REVIEW TO 14 DAYS - THIRD AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE WATERFRONT Consistent with Council Policy? [ ] Yes [A New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alt a �, q%uNcrL 3 - �- t STATEMENT OF ISSUE: --ate, - _ CI C:FXK Current policy requires Disposition and Development Agreements (DDA), or amendments thereto, to be submitted for review 30 days prior to a public hearing. Amendment No. 3 to The Waterfront DDA needs to be considered simultaneously with refunding of the Agency's 1988 tax allocation bonds and the schedule for this Bond issue will not permit the 30-day review period. REMMMENDATIQ Reduce the 30-day advance review period to 14 days for the Third Amendment to the Disposition and Development Agreement for The Waterfront Project between the Robert Mayer Trust and the Redevelopment Agency of the City of Huntington Beach. ANALYSIS: Under the terms -of the existing DDA between the Redevelopment Agency and the Robert Mayer Trust, the Agency owes certain sums of money.expended by the Robert Mayer Corporation for improvements attendant to the construction of The Waterfront Hilton. The original Agreement calls for the Agency to reimburse these costs over time from tax increment and transient occupancy tax. Recently staff has been successful in re-negotiating the terms of this Agreement so that the Agency may prepay this obligation in cash at a discount (the specific terms of this Agreement will be the subject of review by the City Council/Redevelopment Agency as part of your regular meeting agenda for March 16. 1992). In order to coordinate the Amendment of The Waterfront DDA and the sale of the refunding tax allocation bonds, the usual 30-day review by the City Council/Redevelopment Agency of the Amended DDA will not be possible and it is requested that this 30 day requirement be reduced to 14 days. PIO 4184 RCA ED 92-13 March 2, 1992 Page two FUNDING SOURCE: Not applicable. LTERNAT A TI N: Do not waive the 30-day review period of the Development and Disposition Agreement, and delay the proposed Bond issue. ATTACNMENT5• Request for Redevelopment Agency Action, dated June 3, 1991 implementing 30 day review requirement. MTU/BAK/SVK:jar 0543r FOE CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION MUNnNGSOw MACH To Stephen Kohler From Connie Brockway Principal Redevelopment Specialist City Clerk Subject Second Amendment Date August 6, 1991 Waterfront Disposition & Development Agreement Please get the signatures of Deputy City Administrator, Executive Officer, Attorney, etc. then the Chairman and Clerk will execute the document. a994K REQUEST FOR CITY COUNCIL/ REDEVELOPMENT AGENCY ACTION AND HUNTINGTON BEACH PUBLIC FINANCE AUTHORITY Date March11 1997 CZ.G�4f+/ Submitted to: Honorable Mayor/Chairman and City Council/Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Executive Directo Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Develop n$ "� Robert Franz, Deputy City Administrator/Administrative Services Subject: Third Amendment — The Waterfront Disposition & Developm t ee ent, Robert L. Mayer Trust/Waterfront Construction No. 1 C d . ` , 3 ? Consistent with Council Policy? [ ] Yes New Policy or Exception U qfEtza Statement of Issue, Recommendation,Analysis, Fending Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: The existing DDA between the Redevelopment Agency and the Robert L. Mayer Trust was originally approved in 1988. Presented herewith is the proposed Third Amendment to this document through which the Redevelopment Agency will prepay certain financial obligations. RECOMMENDATIQN: 1. Conduct a public hearing. 2. Adopt City Council and Redevelopment Agency resolutions approving the Third Amendment to the Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and Robert L. Mayer, Trustee of Robert L. Mayer Trust. 3. Authorize Agency Chairman/Mayor and Clerk/City Clerk (or designee) to execute approving resolutions and DDA Amendment. 4. Approve Notice of Exemption as environmental review of the proposed DDA Amendment. S. Approve in concept the offer of J.P. Morgan Bank (underwriters for the Agency's refinancing bond issue) to make a temporary loan (up to b months) to the Agency of $4,300,000 (net loan) to be used by the Agency to pay it's obligations under the amended DDA and direct staff to prepare appropriate loan documents for subsequent Agency approval. Loan to be repaid from proceeds of the Agency's refinancing bond issue as approved on March 2. 1992. ANALYSIS: A Disposition and Development Agreement (DDA) approved in 1988 specified the obligations of both Robert L. Mayer Corporation and the Redevelopment Agency in regards to the development of the multi-phased development known as The Waterfront. Under the terms of the original DDA the Redevelopment Agency had certain obligations to reimburse Robert L. Mayer Corporation for expenses incurred in the construction of The Waterfront Hilton (reimbursables ). In addition, the Agency agreed to pay to the Robert Mayer Corporation a portion of the tax increment and transient occupancy tax generated by the Hilton over a period of time (developer incentives). P10 4184 RCA/RAA ED 92-15 March 16, 1992 Page two The Third Amended DDA proposes to change the way these amounts are paid and specifically to pay reimbursable expenses of approximately $6.2 million in cash of $4.3 million and to reduce the term of developer incentive payments from ten years to terminate on January 1. 1993 (see attached summary of the current and proposed DDA that was also included as part of the Request for Redevelopment Agency and Public Finance Authority Action approved by the City Council on March 2. 1992). These changes were negotiated with the Robert Mayer Corporation by staff and under authority granted by the Redevelopment Agency members in an Executive Session conducted on February 10, 1992. Points of the proposed amendment are as follows: 1) The First California financing (Second DDA Amendment ) is terminated and the City/Agency has received a release from First California Capitol Market Groups, Inc. satisfactory to the City/Agency Counsel. 2) The Agency will issue tax allocation bonds using annual redevelopment tax increment revenues equal to 80 per cent of the current annual tax increment generated by The Waterfront Hilton (net proceeds of approximately $4.3 million). The timing of this issuance of bonds is dependent on favorable interest rates. The recommended temporary loan from J.P. Morgan will provide funds pending issuance of bonds. These proceeds to be paid to Dai Ichi Kangyo Bank for use in settlement of the J.A. Jones lawsuit against Waterfront Construction No. 1 with any remaining balance to fund additional interest reserves on the Hilton loan. 3) The Agency will pay to DKB accrued Paragraph 4 (Developer Incentive payments) tax increment and transient occupancy tax generated by the Waterfront Hilton (estimated $496,000) plus 60% of the actual (10%) transient occupancy taxes enerated by the Hilton for the balance of calendar year 1992 (estimated 390,000) to be utilized as additional interest reserves. 4) The payment of the monies discussed in 2 and 3 above will fully discharge the Agency's responsibility for those reimbursable expenses ($6,158,901 as of 3/2/92) owed under Paragraph 5 of Attachment No. 5 of the Disposition and Development Agreement between the Mayer Trust and the Redevelopment Agency and discharge any further incentive payments regarding the Hilton under Paragraph 4 of Attachment 5 of the existing Disposition and Development Agreement (present value of future payments is an estimated $3.1 million as of 3/2/92). 5) If construction of Phase II of The Waterfront (Sheraton Grande) commences, the Agency will commit 60% of the actual (10%) of the transient occupancy tax generated by the Hilton to debt service on a bond issue to finance the Agency's Phase II obligations under the existing DDA. From January 1, 1993 until the sale of this future bond issue, however, the 60% of the actual (10%) of the transient occupancy tax generated by the Hilton will be retained by the Agency for any lawful purpose. RCA/RAA ED 92-15 March 16, 1992 Page three If approved, the Third Amendment to the DDA will result in net savings to the Redevelopment Agency by shortening the term of developer incentive payments significantly and by reducing the amount owing for reimbursable expenses from approximately $6.2 million to $4.3 million. Also, since the reimbursable obligation will be paid in cash it will eliminate interest which would have accrued at 10% per year under terms of the original DDA (the economic impact of the proposed amendment is more fully described in the attached summary report prepared by Independent economic consultant Keyser Marston Associates, Inc. in accordance with Section 33433 of the Health and Safety Code). F� r�ANC The Agency authorized, on March 2, 1992, issuing bonds to generate $4,300,000 for the discharge of debt to the Waterfront as a part of the refinancing of 1998 Agency debt. In the event the refinancing projects to save at least $100,000 in debt service payments, the refinancing will go forward. If this criteria is not met, the Agency could issue a smaller "stand alone" bond issue which would generate funds for the discharge of the Waterfront debt only. A smaller "stand-alone" bond issue is Inefficient in terms of the fixed costs of bond issuance (printing costs, bond counsel and rating agency fees) and would result in staff time and effort for two bond issues. Although documents have been prepared to issue a "stand-alone" bond issue (see alternative #2 below) the staff recommendation is to approve a temporary loan from J.P. Morgan Bank as outlined in their letter dated March 5, 1992. The temporary loan from J.P. Morgan would provide funds ($4,300,000) to discharge the Waterfront debt. The Agency would pay a low interest rate (less than 5%) on the loan which would be repaid when the Agency's refinancing bond issue goes forward (expected within 3-6 months). If the refinancing bond issue criteria (see discussion above) is not met within the next 6 months, then the Agency staff will recommend a "stand-alone"bond issue to repay the J.P. Morgan loan. All debt service and interest payments will be funded from property tax and transient occupancy tax revenues from the Waterfront Hilton. ALTERNA'[1VES: I. Do not approve the proposed Third Amendment to the DDA. 2. Authorize a "stand-alone" bond issue to discharge the Waterfront debt. Adopt Redevelopment Agency Resolution-2z4 and Huntington Beach Public Finance Authority Resolution A authorizing the sale of bonds (estimated net proceeds of$4,225,000) to be issued instead of the refinancing bonds previously authorized (3/2/92). ENDING SQURCE: Sate of Tax Allocation bonds and Tax Increment/Translent Occupancy Tax accrued in 1992. RCA/RAA ED 92-15 March 16, 1992 Page four ,ATTACHMENTS: 1. J.P. Morgan letter dated March 5, 1992 2. Environmental Exemption 3. Discharge of Debt (Chart) 4. Summary Report 33433 5. Disposition and Development Agreement 6. Resolutions of City Council/Redevelopment Agency/Huntington Beach Finance Authority MTUBAK/SVK:Jar 0563r KeyserMarstonAssociatesInc. Richard L Betti 500 South Grand Avenue,Suite 1480 Calvin E.Hollis,11 Los Angeles,California 90071 Kathleen 11.Head 213/622.8095 Fax 213/622-5204 SAN DIEGO6191942.0380 Heinz A.Schilling SAN FRANCISCO415/398-3050 Timothy C.Kclly A.Jerry Keyser Kate Earle Funk Robert J.Wetmore Michael Conlon Denise E.Conley February 28, 1992 Mr, Stephen Kohler Project Manager Huntington Beach Redevelopment Agency 2000 Main Street Huntington Beach, California 92648 Dear Stephen: In accordance with your request, Keyser Marston Associates, Inc. (KMA) reviewed the Third Amendment to the DDA for the multi-phased commercial/residential Waterfront Project. The amendment concerns the repayment of the Developer loan by the Huntington Beach Redevelopment Agency, which is defined in Paragraph 5 of Attachment 5 in the 1988 DDA. This amendment also includes a restructuring of the developer incentive payments related to the Hilton Hotel; the -original terms are defined in Paragraph 4 of Attachment 5 in the 1988 DDA. The KMA review was performed to quantify the differential costs to be incurred by the Agency by virtue of the implementation of the Third Amendment to the DDA, and to determine if an amendment or revision is required to the original Summary Report written pursuant to Section 33433 of the California 'Health and Safety Code. The terms of the original DDA for the Waterfront Project require the Developer to provide the Agency with a loan for various infrastructure improvements. The Agency was obligated to repay the Developer for the allowable costs with 38.5% of the property tax increment revenues and 50% of the transient occupancy tax (TOT) ' revenues (calculated at a 6W TOT rate) generated by the Waterfront development. Based on the terms of the Second Amendment to the DDA, which was executed on or about August 1, 1991, the unpaid principal on the loan amount bears interest at 10% per annum. . The Agency is obligated by the 1988 DDA to continue to repay this obligation until such time as the loan plus accrued interest is completely discharged. There is no forgiveness clause in the loan' __ _ _Real!'statePtedevrlopment& valuationSrrvices ~ Mr. Stephen Kohler February 28, 1992 Page 2 agreement. As of March 2, 1992, the outstanding balance on the Developer loan is estimated by the Huntington Beach Finance Department at $6, 158 ,901 . The executed DDA also provides the Developer with incentive payments equal to 38.5% of the property tax increment revenues and 50% of the TOT revenues (6% TOT rate) for a ten year period following the construction of the Hilton Hotel . However, these incentive payments are deferred until construction is commenced on the second commercial phase of the Waterfront development. Therefore, if no subsequent commercial development occurs on the Waterfront Project, the Developer is not entitled to receive any incentive payments. However, assuming the subsequent development proceeds on schedule the present value of these incentive payments over the ten year period is currently projected by the Huntington Beach Finance Department at $3, 117,000 . The Third Amendment to the DDA provides for a restructuring of both the loan repayment obligation and the Developer incentive payment terms delineated in the original DDA and the subsequent amendments . In return for discharging the Agency's obligation to repay the $6, 158, 901 loan, the Third Amendment calls for the Agency to issue a bond with net proceeds of $4 . 3 million, and to restructure the incentive payments . The amended transaction requires the Agency to provide the Developer with the incentive payments equal to 50% of the 6% TOT rate that have accrued to the Hilton Hotel through the end of calendar year 1991, and to provide the Developer with 60% of the total TOT revenues at 10% generated by the Hilton Hotel during calendar year 1992 . In addition, the Agency must provide the developer with 38 .5% of the property tax increment revenues accruing through March, 1992 . The total Developer incentive payments related to this proposed amendment are estimated at approximately $886, 000. The terms of the Third Amendment dictate that the payment of the estimated $886, 000 incentive payment will relieve the Agency of the obligation to make any additional Developer incentive payments related to the Hilton Hotel in the future. The payments to be made by the Agency total approximately $5.2 million. The currently outstanding loan balance, which continues to accrue interest at 10% per annum, is approximately $6.2 million. Thus, the Agency is saving $1 .0 million in known costs by entering into the Third Amendment to the DDA. In addition, the Agency is eliminating a contingent liability of $3. 1 million in future Developer incentive payments . Thus, the potential savings to the Agency related to the execution of the Third Amendment total approximately $4 . 1 million in present value terms . California Health and Safety Code Section 33433 requires that a Summary Report setting forth the details of a proposed Disposition and Development Agreement (DDA) be made available for public KeyserMarsfonMswateslnc, Mr. Stephen Kohler February 28, 1992 Page 3 inspection prior to the approval of the Agreement. The Summary Report must describe and specify: 1. The cost of the proposed Agreement to the Agency, including relocation costs, site clearance costs_ , infrastructure costs and the expected interest on any loans or bonds to finance the Agreement; 2 . The estimated value of the interests conveyed and leased, determined at the highest uses permitted under the Redevelopment Plan; 3 . The purchase and lease payments to be paid by the Developer. The KMA review of the proposed Third Amendment to the Waterfront Project DDA indicates that there has been a reduction in the cost of the proposed Agreement to the Agency from that estimated in the original Summary Report. The original Summary Report estimated the Agency's total cost for the entire Waterfront commercial and residential project at $3 .99 million. Based on the proposed modifications to the Agreement, the cost to the Agency should be reduced by $1 .4 million. This would result in net Agency costs of $2 .59 million. If the elimination of the contingent liability for Developer incentive payments is taken into account, the Agency is anticipated to generate net revenues of $510, 000, based on the assumptions embodied in the original Summary Report, as modified to reflect the terms of the proposed Third Amendment. The balance of the assumptions utilized in the original Summary Report were not modified, because they were not impacted by the terms of the proposed Third Amendment to the DDA. A copy of the original Summary Report is attached for your convenience. Please do not hesitate to call if we can be of any f urther assistance. Yours very truly, KEYSER MARSTON ASSOCIATES, INC. Kathleen H. Head KHH:gbd K ryserMautQnAssociatuJnc. 1r/ SUMMARY REPORT This summary report has been prepared for the . Huntington Beach Redevelopment Agency ( "Agency" ) pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of a proposed Disposition and Development Agreement ( "Agreement" ) between the Agency and Robert L. Mayer ( "Developer" ) for the development of a multi-phased commercial/residential project including four 'first quality hotels, an athletic/tennis club, a specialty retail center and a medium density residential subdivision. The proposed project is located in the Main-Pier Redevelopment' Project Area in the City of Huntington Beach. This report describes and specifies : 1. The cost of the proposed Agreement to the Agency, includ- ing relocation costs , site clearance costs , infrastruc- ture costs and the expected interest on any loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed and leased, determined at the highest uses permitted under the Redevelopment Plan; 3 . The purchase and lease payments to be paid by the Developer. This report and the proposed Agreement is made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT 1. Under the proposed Agreement, the Developer agrees to ground lease the 20 acre commercial parcel and purchase the . 24 acre residential parcel from ' the Agency. The developer must develop and construct, or cause the development and construc- tion of, a multi-phased commercial and residential development at a cost of at least two hundred and twenty-five million dol- lars ($225 million) , exclusive of land value. The project must be constructed within the prescribed time frame and must consist of the following uses: a) A Sop room first quality hotel to be commenced no later than 30 months after the signing of the DDA. b) An. athletic/tennis club to be commenced no later than 1996. c) A 430 to 600 room first quality hotel".-tv' be'-commenced no later than 1996 . a d) A 225 to 250 room';'all-suite hotel to be commenced- no .' later than 2001 . e) A 75,000 to 991000. square foot specialty retail center to be commenced no later than 2004 . f) A 400 to 450 room first quality hotel to be commenced no later than 2004 . g) Residential development at a maximum density of 35 units per acre, with total, development of 875 to 094 units . The residential phasing must coincide with the commercial development. h) All on-site improvements relating to the development of the property. These improvements must be constructed in accordance with the terms and schedules set forth in the Agreement including, but not limited to, the following: I. All on=site improvements - sidewalks, street light- ing, curbs, street trees, street improvements, park- ing structures, etc. These improvements shall con- form to the design and materials standards approved by the Agency. ii. Sanitary sewers, storm drains, fire hydrants, water supply, gas lines, telephone and electrical, power facilities must be brought to, modified, or relo- cated from the perimeter of the property. iii. Additional improvements required as a rbsult of an Agency and/or City review of plans, drawings, or en- vironmental assessments relating to the Developer improvements or to this Agreement. i) The costs associated with relocating the beach main- tenance facility located on the development site, and 1/2 of the costs ( $250, 000 maximum) associated with con- structing an overpass across Pacific Coast Highway. �) The developer shall be responsible for providing the Agency with a loan of up to $4 .5 million to relocate the existing mobilehome park residents, plus loot of the costs required to .extend Walnut Avenue, provide a spur • street from Pacific Coast Highway to the residential development and the •.reabandonment of the oil wells lo- cated on the development site. 2. Agency Rgeggngibllj�jeq The Agency is responsible for and shall commit to the project the following: a) Ptirchase'. the ' development parcel _from' ,the :City. Ground lease the' 20 acre commercial, parcel'.."and sell-, the 24 acre residential parcel to the developer: b) All ' co.s.ts associated with relocatl:ng the existing mobilehome park residents. c) Repayment to the developer of the costs associated with the _infraetruc.ture improvements detailed in 1 -j ) above, to -a maximum of 38 .5% of the property tax increment revenues and Sol of the transient occupancy tax revenues generated ,during the first ten operating . yeara of each development phase. d) All costs associated with the relocation of' the existing oil pipeline, plus a maximum of $900, 00o. in soils test- ing/clean-up activities . e) In addition to (b) above, ' 'a rebate to the developer of 38.5% of the property tax increment revenues and 50% of the transient occupancy tax revenues generated by the commercial uses during the first ten operating years of each development phase. These revenues will be deferred and accumulated with interest until the commencement of the subsequent development phase. f) In addition to (b) above, a rebate to the developer of 38.5% of the property tax increment generated during the first ten operating years of each residential development phase. 3. Method of•_Einnging The proposed Agreement provides that the Agency will acquire the development parcel from the City 'of Aluntington Beach. However, $16. 1 million of the acquisition costs will be offset by the disposition proceeds received by the Agency from the developer. The remaining balance will be financed with a promissory note from the-.Agency to the City. This note will be repaid with project area revenues generated 'in the future. The Agency will repay the developer loans for regional in- frastructure improvements and mobilehome park residents relocation costs from 38.5% of the property tax increment and 501 .of the transient occupancy tax revenues generated by each development phase .for the. first 10 years ' of. opera►tion. . The Agency shall- finance the mobilehome parr) -residents- reloca- tion costs not advanced by the developer .u.sing'-project area tax increment ;funds . The infrastructure ; improvements not financed- by the .developer wii.11 . also :.be :.funded :with project area revenues : . H. , COST Or AGREEMENT TO THE The estimated net costs..of the Agreement . to the Agency, in present value terms, are' as follows : . Costs Fair market value of City parcel $45,200, 000 (Less) Developer leasehold interest 22, 800,000 ..____----- Agency cost to acquire City parcel $22,400, 000 Direct public improvement and relocation costs 41820, 000 Developer loan repayment -- including interest • 9, 2801000 Property tax increment and transient occupancy tax rebate to developer 91550,000 Total Costs $46,050,000 Revenues Land Disposition Proceeds Commercial ground lease $10, 060, 000 Residential land sale 6,0101000 Total land disposition proceeds $16, 070, 000 Property tax increment 19lisor000 Transient occupancy tax transferred to the Agency per Agreement 61840, 000 Total Revenues ' $42,0601000 .: Net Cost to Agency $ 3,9901000 C. ESTIMATED VALUE or THE INTERESTS TO BE . CONVEZED TO THE DEVELOPER DETERMINED AT TSE ' RIOHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The determination of the- estimated - value - of the interests to , - be -conveyed to the Developer pursuant- to the proposed . Agree-- , ment was made by Keyser Marston Associates, _ Inc. (KMA) . KMA : concluded that moderate dens ty . residential development would ; generate -the highest value =to the.land, and that .this type :af development would support '-a .land 'value -of .approximately .$45 _ ' Million,' or $23 .50 per:- square foot: However; :-the site .is cur= rently encumbered by a lease, which has a value to the lessee of $22.�8:'million: ' . Thus, the fair market:va. .1: f the site at the-- highest=and best use, and not taking the Agency goals and objectives into account, , is $22 . 4 million. D. PURCHASE PRICE BY DEVELOPER AND REASONS 'FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN 1 . The developer shall ground lease the 20 acre commercial parcel for a 99 year term. The total of these payments is estimated at approximately $150 million, and the net present value of these payments is $10. 06 million. 2 . The• Developer shall purchase the 24 acre residential par- cel in phases . The net present value of the land payment is' $6.01 million 3 . The Developer land acquisition payment will be offset by a public revenues rebate with a net present value of $9 . 01 million. The net acquisition price of the parcel is $7. 06 million, which is $15.34 million less than the fair market value at the highest and best use . Given this differential in the actual sales price and lease payments, versus the fair market value of the site at the highest and best use consistent with the Redevelopment Plan, California Health and Safety Code Section 33433 , requires an ex- planation for the Agency accepting a lower price. As a component of the Main-Pier Redevelopment Project Area Specific Plan the Agency established the goal of attracting major visitor serving commercial uses to the project area. The proposed project achieves this goal with the inclusion of four major hotels and a specialty retail center, which creates a resort type atmosphere, and is expected to attract over 150 , 000 visitors annually . However, the magnitude of the project, and the quality level re- quired by the Agency makes the proposed project a pioneering. ven- ture within the context of the downtown Huntington Beach market -area. Thus, the developer must incur a significant level of risk to undertake this project. The economic analysis undertaken by KMA concluded that in order to mitigate the extraordinary developer risk level, and to allow the project to achieve economic viability, the Agency must reduce the land costs to the level justified given the economic characteristics of the proposed development. The FM analysis determined that the economic terms embodied in the DDA and the ground lease are ' fair and reasonable . However, this conclusion is inextricably tied to the enforcement of the development scope and restrictions -embodied in the proposed DDA. AGENCY CLOSING CERTIFICATE A The undersigned hereby state and certify on this,)7 day of August, 1991: 1. We are the Chairman and Secretary, respectively, of the Redevelopment Agency of the City of Huntington Beach (the "Agency"), a public body, corporate and politic, organized and existing under and by virtue of the California Community Redevelopment Law and, as such,we are familiar with the facts herein certified and are authorized to certify the same. All capitalized terms used and not defined herein shall have the meanings given to such terms in the Consent of Assignment dated August 1, 1991, by and among the Agency, Waterfront Construction No. 1, the Robert L. Mayer, as Trustee of the Robert L Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer") and First California Capital Markets Group,Inc. ("First California"). 2. The following named persons were and are the duly qualified and acting officers of the Agency at and during all the times as indicated as follows: -N-arn MUS Term Qf 4frce Peter Green Chairman At all Jim Silva Vice Chairman times during Don MacAllister Commissioner these proceedings Linda Moulton-Patterson Commissioner and at time Jack Kell Commissioner present time Earle R%itaille Commissioner Grace Winchell Commissioner 3. On August 15, 1988, the Agency adopted Resolution No. 157 approving the execution by the Agency of the Disposition and Development Agreement dated August 15, 1988 (the "DDA"), by and between the Agency and the Robert L Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer")at a regular meeting held pursuant to regular adjournment at the next preceding meeting, or special meetings duly called and held,where proper notice was given in the manner required by law. 4. The Redevelopment Plan for a redevelopment project known and designated as the "Main- Pier Redevelopment Project" was approved by the City of Huntington Beach (the "City") pursuant to Ordinance No. 2578 and amended by Ordinance No. 2634, which ordinances remain in full force and effect as of the date hereof, and no action has been filed attacking or otherwise questioning the validity of said Redevelopment Plan or the adoption or approval thereof, or any of the findings and determinations of the Agency or the City in connection with said Redevelopment Plan. 5. The Agency has complied with the provisions of the DDA and the Consent and satisfied all the conditions on its part to be performed or satisfied thereunder at or prior to the date hereof. 6. The interest rate on the obligation under Paragraph 5 of Attachment No. 5 of the DDA (the "Obligation") as of the date hereof is 10%per annum, compounded monthly. 7. The Agency has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (a) which may be used solely to prevent a default in the payment of principal of or interest on the Phase 1 Paragraph 5 Costs or (b) which is reasonably expected to be used to pay principal of or interest on the Phase 1 Paragraph 5 Costs. To the extent any accrued interest is paid on the Phase 1 Paragraph 5 Costs, such accrued interest will be first applied to interest on the Phase 1 Paragraph 5 Costs when due. 8. The improvements set forth in Mayer's letter to First California dated July 18, 1991, which were acquired by the Agency as set forth in Exhibit A have not been and are not expected to be sold or otherwise disposed of, either in whole or in major part, to any nongovernmental person. 9. The Agency will submit any required informational filings to the United States Treasury Department within the time prescribed by law. 10. The Agency will comply with all applicable federal laws with respect to the Phase 1 Paragraph 5 Costs. 11. The Agency has not been notified of any listing or proposed Iisting of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon. Redevelopment Agency of the City of ntington Beach, California By Chairman (SEAL) ATTEST: 1.ft•C.e, . /Fr+ ` " • - REQUEST FOR REDEVELOPMENT AGENCY-ACTION • APPROVED By I Y UNCIL 40 ED 91-50 Date June 17, 1991 2 1TY GL�3tK Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Executive DlreMg5;�� Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Develop me'f/� �t Subject: MINOR AMENDMENT - THE WATERFRONT DISPOSITION AND DEVELOPMENT AGREEMENT Consistent with Council Policy? [ ) Yes I l New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Under the current Disposition and Development Agreement between the Agency and The Waterfront, the Agency owes certain transient occupancy tax and tax increment payments to the developer. The attached amendment to the D.D.A. would accelerate the initial payment of these sums by approximately 90 days. RECOMMENDAMN: Approve and authorize the Agency Cleric to execute the attached Amendment to the Disposition and Development Agreement by and between . Huntington Beach Redevelopment Agency and Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982 as amended. ANALYSIS: Under paragraph 4 of the Method of Financing of the Disposition and Development Agreement between the Agency and The Waterfront the Agency is required to pay. (1) Fifty percent (50%) of the transient occupancy taxes paid to the City or Agency with respect to the Hilton Hotel, and (2) Thirty-eight and one-half percent (38-1/2%) of the property tax increment received by the Agency from the hotel property. The timing of these payments is governed by the date of the issuance of a Certificate of Completion for the hotel (Section 415 Certificate of Completion). Specifically, the method of financing requires that the initial payment of these sums be made no later than 15 days after the end of the first calendar quarter following the issuance of a final Certificate of Completion. The Certificate of Completion was approved by the Agency on April 22, 1991 (the second quarter). Fifteen days after the close of the following quarter (third quarter 1991) is October 15, 1991. The developer has requested that these payments be accelerated. The attached amendment allows the payments now accrued and owing to The Waterfront to be paid commencing July 15, 1991. 1 3 P�oastas -- ED 91-50 June 17, 1991 Page Two It is important to note that the interest rate paid by the Agency on amounts owing to The Waterfront (M) exceeds the amount now earned on the average of the City/Agency's investments. Therefore, it is the Agency's economic interest to pay the amounts owing at the earliest possible time. FUNDING SOURCI : The Redevelopment Agency tax increment and city transient occupancy tax. ALTERNATIVE ACTION: Do not approve the attached amendment. This will pre-empt early payment of the amounts now owing to The Waterfront. ATTACHMENT: 1. Amendment to the Waterfront D.D.A. MTUBAK/SVK:sar 9159r REQUEST FOR CITY COUNCIL/ . REDEVELOPMENT AGENCY ACTION RH 91-57 August 5, 1991 Date Submitted to: Honorable Mayor/Chairman and City Council/Agency Members (REVISED) Submitted by- Michael T. Uberuaga, City Administrator/Executive Directot W Prepared by: Robert J. Franz, Deputy City Administrator/Administrative Services kloelZ"' SECOND AMENDMENT — THE WATERFRONT DISPOSITION AND Subject: DEVELOPMENT AGREEMENT; ASSIGNMENT AND CONSENT AND GUARANTEE PPAO�'ED BY CITY COUNCIL Consistent with Council Policy? j ] Yes P4 New Policy or Excepti & Statement of Issue, Recommendation.*Analysis, Funding Source,Alternative hs, ttachn*nts• CITY CLtRR STATEMENT OF—ISSUE: . Under the terms of the 1988 Disposition and Development Agreement (DDA) between. the Redevelopment Agency and Robert L. Mayer Corporation (RLM) the Agency`gwes reimbursable expenses to RLM for costs incurred on the Agency's behalf. Through this= amendment to the DDA, RLM wishes to assign this receivable to First California Capital Markets Group, Inc. n CD m m RECOMMENDATION: r: ''- 1. Conduct the public hearing. cry 2. Approve and authorize the City Clerk to execute the attached resolution of the City Council approving the second amendment to the Disposition and Development Agreement with Robert L. Mayer; 3. Approve and authorize the Agency Clerk to execute the attached resolution of the Redevelopment Agency approving the second amendment to the Disposition and Development Agreement with Robert L. Mayer; 4. Approve the Assignment Agreement between Robert L. Mayer Trust and First California and approve and authorize the execution of the Consent to Assignment between the Redevelopment Agency and Robert L. Mayer Trust and; 5. Accept and approve the Guarantee of Robert L. Mayer et al, to the Redevelopment Agency of the City of Huntington Beach dated August 1, 1991. ANALYS15: Under the terms of 1988 Disposition and Development Agreement (DDA) with the Robert L. Mayer Corporation (RLM) the developer incurred expenses on the Agency's behalf in connection with Phase I of The Waterfront. Under the terms of the DDA, these expenses were to be reimbursed to RLM by the Agency through the payment of a percentage of Transient Occupancy Tax (TOT) and Tax Increment (TI) as collected over time. RCA/RAA RH 91-57 August 5, 1991 Page two As part of the renegotiation of the DDA, Agency staff and developer have agreed that the amount to be reimbursed is $5,660,368.00. This amount includes costs incurred for construction of off-site improvements for the Hilton including Pacific View Drive with utility extensions, and construction expenses relating to Ocean View Estates Phase I. Rather than wait for repayment of this amount over time, RLM would prefer to assign the receivable in exchange for a cash payment at this time. First California Capital Market Groups, Inc. has agreed to purchase this receivable from RLM. If approved, this assignment would then require that the Redevelopment Agency make the scheduled • periodic payments of Transient Occupancy Tax and Tax Increment to a trust established by First California. First California would then sell the right to receive the Redevelopment Agency's tax increment and transient occupancy tax to investors in increments no smaller than $100,000 which would be called "Certificates of Participation". The Assignment Agreement stipulates the terms and conditions through which the receivables of the Agency will be assigned by Robert L. Mayer to First California Capital Markets Group (First California) and the consent to assignment provides the Agency's approval for this action. To mitigate the Redevelopment Agency's risk, Robert L. Mayer acting for himself, Trustee of Robert L. Mayer Trust of 1982, and as a partner in Waterfront Construction Number One has agreed in the attached Guarantee dated August 1, 1991 to make available the assets of all these entities to the Redevelopment Agency against the possibility of either a default under the Lease or litigation against the Agency in connection with the balance of the new debt instrument. Additionally, the documents allow the Redevelopment Agency to foreclose upon the balance of the Waterfront site to eliminate the existing master lease between the Redevelopment Agency and Robert L. Mayer Trust to further secure against the above. This would provide the Agency with unencumbered fee title to this property so that it could be remarketed or mortgaged to address a default under the First California transaction and payment to that trust. In addition, the attached second Amendment to the DDA would amend the interest paid on unpaid principal to the fixed rate of 10% per annum compounded monthly rather than an adjustable rate of two points over The Waterfront's cost of funds. Lastly, in exchange for the Agency's approval of this assignment, the attached amendment would eliminate the Agency's requirement to pay RLM lost rental income as a consequence of the removal of coaches from The Driftwood Beach Club (Keyser Marston estimates the total value of this to the Agency is approximately$1.2 million). The Agency's financial advisor, Keyser Marston, has reviewed this proposed amendment and reached the conclusion that it does not substantially alter the economic terms of the original Disposition and Development Agreement. Keyser Marston's report in this regard is attached and also shows that if the Agency's obligation to Waterfront was paid over time from TOT and TI with interest the total amount paid would be in excess of $44 million over forty years with a present value of approximately$3 million. RCA/RAA RH 91-57 August S, 1991 Page three Staff has evaluated the risks of participating in this method of financing. These risks may be summarized as follows: a. RLM's personal guarantee may prove insufficient but the value of regained title to the Waterfront project site (excluding the Hilton Hotel site) outweighs the monetary risks; b. The Agency's credit/management rating may decline since the structure of this financing will be considered as one factor in rating the City/Agency; c. RLM must repurchase $5.6 million in debt prior to starting the next hotel. This will be done from proceeds of the new loan and places a financing burden on the next phase; d. The Agency foregoes the right to offset TOT and TI for other purposes under this financing since the existing bond is cancelled; and e. The Agency has no guarantee as to future financial stability of the Waterfront project. Staff has minimized the risks to the City/Agency to the extent feasible and recommends proceeding with the actions approving and authorizing the financing. It is important to note that the revenue stream of TOT and TI that would be assigned to First California through the attached DDA Amendment, is also planned to be used for the repayment of bonded indebtedness incurred as part of the implementation of future phases of The Waterfront Project. Specifically, the obligations of the Redevelopment Agency to RLM for the next phase of commercial development and the first phase of the residential development will require costs in excess of $31 million to be financed and be repaid from a variety of sources including the TOT and TI from the Hilton. Therefore it will be necessary for RLM to repurchase this assignment from First California in advance of the implementation of the next phases of The Waterfront Project. In this regard, the Agency would be released from its obligations with the DDA In the event the Developer fails to repurchase by September 1996. The current financing on the Hilton, the structure of this transaction and the form of Robert L. Mayer's personal Guarantee are summarized on the attached Exhibits 1 — 3. ALTERNATIVES: 1. Do not approve the attached Amendment to the Waterfront DDA and attendant documents. FUNDING SOURCE: Transient Occupancy Tax and Tax Increment generated by the Waterfront Hilton. RCA/RAA RH 91--57 August 5, 1991 Page four ATTACHMENTS• 1. City Council Resolution 2. Agency Resolution 3. Second Amendment to DDA 4. Assignment Agreement 5. Consent to Assignment 6. Guarantee 7. Keyser Marston Report 8. Exhibits 1 — 3 MTU/BAK:jar 9420r REQUEST FOR CITY COUNCIL/ _ REDEVELOPMENT AGENCY ACTION RH 91-52 7/.t d s Date July 29, 1991 //T Submitted to: ' Honorable Mayor/Chairman and City Council/Agency Members ff � Submitted by: Michael T. Uberuaga, City Administrator/Executive DirectorRrV Prepared b . Robert Franz, Deputy City Administrator/Administrative Services !+ 6041& � Y' Q� Smbject: SECOND AMENDMENT AND CONSENT TO ASSIGNMENT -- THE WATERFRONT DISPOSITION AND DEVELOPMENT AGREEMENT Consistent with Council Policy? D-�r Yes [ ] New Policy or Exception Jac, ,#' a- -S Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: ..01.C;6 �194? STATEMENT OF ISSUE: Under the terms of the 1988 Disposition and Development Agreement (DDA) between the Redevelopment Agency and Robert L. Mayer Corporation (RLM) the Agency owes reimbursable expenses to RLM for costs incurred on the Agency's behalf. Through this amendment to the DDA, RLM wishes to assign this receivable to First California Capital Markets Group, Inc. RECOMMENDATION: 1. Conduct the public hearing. 2. Approve and authorize the City Clerk to execute the attached resolution of the City Council approving the second amendment to the Disposition and Development Agreement with Robert L. Mayer; 3. Approve and authorize the Agency Clerk to execute the attached resolution of the Redevelopment Agency approving the second amendment to the Disposition and Development Agreement with Robert L. Mayer; 4. Authorize all appropriate officers of the City and Agency to execute all documents necessary to conclude the Second Amendment to The Waterfront DDA and assignment of receivables to First California Capital Market Groups, Inc. ANALYST : Under the terms of 1998 Disposition and Development Agreement (DDA) with the Robert L. Mayer Corporation (RLM) the developer incurred expenses on the Agency's behalf in connection with Phase I of The Waterfront. Under the terms of the DDA, these expenses were to be reimbursed to RLM by the Agency through the payment of Transient Occupancy Tax (TOT) and Tax Increment (Ti) as collected over time. As part of the renegotiation of the DDA, Agency staff and developer have agreed that the amount to be reimbursed is $5,660,368.00. This amount includes costs incurred for D� P10 4184 RCA/RAA RH 91-52 July 29, 199I Page two construction of off-site improvements for the Hilton including Pacific View Drive with utility extensions, and construction expenses relating to Ocean View Estates Phase I. Rather than wait for repayment of this amount over time, RLM would prefer to assign the receivable in exchange for a cash payment at this time. First California Capital Market Groups, Inc. has agreed to purchase this receivable from RLM. If approved, this assignment would then require that the Redevelopment Agency make the scheduled periodic payments of Transient Occupancy Tax and Tax Increment to First California. In addition, the attached second Amendment to the DDA would amend the interest paid on unpaid principal to the fixed rate of 10% per annum compounded monthly rather than an adjustable rate of two points over The Waterfront's cost of funds. Lastly, in exchange for the Agency's approval of this assignment, the attached amendment would eliminate the Agency's requirement to pay RLM lost rental income as a consequence of the removal of coaches from The Driftwood Beach Club (Keyser Marston estimates the total value of this to the Agency is approximately $1.2 million). The Agency's financial advisor, Keyser Marston, has reviewed this proposed amendment and reached the conclusion that it does not substantially alter the economic terms of the original Disposition and Development Agreement. Keyser Marston's report in this regard is attached and also shows that if the Agency's obligation to Waterfront was paid over time from TOT and TI with interest the total amount paid would be in excess of $44 million over forty years with a present value of approximately $3 million. It is important to note that the revenue stream of TOT and TI that would be assigned to First California through the attached DDA Amendment, is also planned to be used for the repayment of bonded indebtedness incurred as part of the implementation of future phases of The Waterfront Project. Specifically, the obligations of the Redevelopment Agency to RLM for the next phase of commercial development and the first phase of the residential development will require costs in excess of $31 million to be financed and be repaid from a variety of sources including the TOT and TI from the Hilton. Therefore it will be necessary for RLM to repurchase this assignment from First California in advance of the implementation of the next phases of The Waterfront Project. ALTERNATBIS: 1. Do not approve the attached Amendment to the Waterfront DDA. FUNDING-SOURCE: Transient Occupancy Tax and Tax Increment generated by the Waterfront Hilton. ATTACHMENTS: 1. City Council Resolution 2. Agency Resolution 3. Second Amendment to DDA 4. Keyser Marston Report MTU/RF:jar 9332r . Mal . Kevserl�4 tonA�socla�e nc Richard L.Botti 500 SouM Grand Avenue,Suit 1480 Calvin E.Hollis,II Los Angela:,California 9MI Kathleen H.Head 213/6222.8095 Fax 213/622-5204 SAN DIEGO 619/942.0380 Heinz A.Schilling $AN FRANCISCO s15198.3030 Timothy C.Kelly A.Jerry Keyser Kate Earle Funk Robert J.Wetmore Michael Conlon Denise E.Conley July 24 , 1991 Ms. Barbara Kaiser Deputy City Administrator City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Dear Barbara: In accordance with your request, Keyser Marston Associates, Inc. (KMA) reviewed the Second Amendment to the DDA for the riulti- phased commercial/residential Waterfront Project. The amendment concerns the transfer of the Developer loan to First California Capital Markets Group. The transfer involves the asssignnent of accrued property Tax Increment (TI) and Transient Occupancy Tax i (TOT) revenues, owed to the project developer in return for funding infrastructure improvements related to the project. The KMA review was conducted in order to determine if an amendment or revision is required to the original Summary Report written pursuant to Section 33433 of the California Health and Safety Code. The terms of the original DDA for the Waterfront Project require the Developer to provide the Agency with a loan for various in- frastructure improvements. The Agency was obligated to repay the Developer for the costs with 38 . 5% of the TI and 50% of the TOT revenues generated by the Waterfront development. The unpaid prin- cipal on the loan amount was to bear interest equal to the Developer's cost of • funds, which was not to exceed the rate of 12% per annum. According to the Second Amendment to the DDA, the un- paid principal shall bear interest at the rate of 10% per annum, compounded monthly, commencing on the date the Developer advances, pays or loans such costs. Currently, the total indebtedness payable by the Agency to the Developer through September 1990, equals $5, 660,368 . Asasuning this loan is repaid from the allocated TI and TOT, plus the residential Real Pmdeve ptreat&Evstt.a,i��ervicts JUL 24 '91 14:43 KEYSEP MRPSTON, F.3 Ms. Barbara Kaiser July 24 , 1991 Page 2 land paynants and ground leaso payments, KMA devised an amortiza- tion table at a compounded interest rate of 10%. As shown on Table 11 the total cost of tho loan repayment is nearly $44 . 6 million or $3 million in present value terns, over a 40-year pay back period. In the original Summary Report that surmarized the proposed details of the DDA, the Developer loan repayment costs were Calculated using an assumed average interest cost of 10V annually. Given the fact that the Developer loan repayment was calculated using a 10% interest rate, the amended interest terns do not change the inter- est costa projected to be incurred by the Agency. The second component of the second Amendment to the DDA concerns the rebate of mobilehome park rental revenues foregone by the developer in the event residents vacated the rrobilehone park prema- turely. This contingent liability created a potential coat ex- posure of $1. 2 million to the Agency. However, given the fact that this was strictly a contingent liability, i.e. , no payment would be required unless residents relocated before construction nandated that their coaches be removed, no cost was assigned in the original Sun,nary Report. Thus, while this change eliminates the risk that the Agency will incur any lost rental income rebate payr►entg, it does not affect the results of the summary Report. Based on the Km review of the Second Amendment to the Waterfront DDA, it is our conclusion that no change is required to the su=ary Report. A copy of the original summary Report is attached for your convenience. Please do not hesitate to call if we can be of any further assis- tance. Youre very truly, KEYSER MARSTON ASSOCIATES, INC. xzvxzl� AL__� Kathleen H. Head Kristin T. Friese KHH:KTF: lp 91341.HTB 14066.0006 . Jlr1Z 24 '51 14:44 KEYSER MARSTON, r. ARLI 1 .DEVELOPER ADVANCE • REPAYMENT PROJECTION COST ESTIKATE OF CURRENT' LOAN AMOUNT THROUGH 1EPTEHBER 1990 PROVIDED BY CITY STAff LOAM REPAYMENT AT 10X INTEREST RATE WATERFR09T CCKylAC1AL/RE610E4T1AL PR"OJs<Ci HUNTINCTCN TEACH, CALIFORNIA REVISED DEVELOPMENT SCM0ULl OUTETANO W6 INTER:ST DEBT SERVICE BALLOON ENDING YEAR ••OEV LCAN (NET OF REBID LANO PYMT) BALANCE C 1CX PAYMENT PAYME4T BALANCE 1 1998 a 0 A a 2 1939 0 0 0 0 3 1990 1,600,000 (1) 1,600,000 176,C00 0 1,776,COO 4 1991 1,776,000 195,401 415,768 1,313,632 5 1992 1,515,632 166,700 23,705 1,616,62T 6 1993 1,656,627 132,200 0 1,838,127 7 1994 1,838,977 202,300 0 2,C41,127 8 1995 2,041,127 224,3CO 0 2,265,627 9 1996 2,263,627 240,200 0 2,S14,82T 10 1997 2,514,327 276,600 0 2,791,427 11 1?98 2,791,427 307,100 0 31098,527 12 1999 3,094,527 340,600 0 3,439,327 13 2010 3,439,32T 378,300 0 3,817,627 14 2001 3,817►,627 419,900 0 4,237,527 15 2002 4,237,527 48b,100 0 L,703,627 16 2003 4,703,627 517,400 0 5,221,OZT 17 2004 5,221,027 S74,300 0 5,793,327 18 2003 5,NS,327 637,500 0 6.432,62T 19 2006 6,43Z,827 707,600 0 7,140,427 20 2007 7,140,42T 785,4CC 0 7,925,827 21 2coe 7,925,827 871,d0o a 6,T97,62T 22 2009 8,797,627 967,700 a 9,765,327 23 2010 9,765,321 1,074,200 0 10,839,527 24 2011 10,839,527 1,192,300 0 12,031,827 25 2012 12,031,827 i,323,5C0 0 13,353,327 26 2013 13,335,327 1,460,100 0 14,824,427 21 2014 14,824,427 1,633,100 0 16,435.127 28 2015 16,455,127 1,810,100 0 15,26$,Zd7 29 2016 18,265,227 2,007,200 0 20,274,427 30 2017 20,274,427 2,230,2CO 9,867 22,494,740 31 2013 22,494,740 2,474,400 273,872 24,690,268 3Z 2019 24,690,268 2,715,900 0 27,406,1" 33 2020 27,406,168 3,014,700 4,309,745 26,111,123 34 2021 26,111,IZ3 2,872,200 4,677,379 24,325,944 35 2022 24,325,944 2,675,930 5,01Z,614 2119E9,030 36 2023 21,940,030 2,416,800 �,376,349 19,031,481 37 2024 19,031.481 2,093,300 5,747,984 15,376,997 38 2023 15,376,997 1,191,500 6,128,619 10,939,875 39 2026 10,939,876 1,203,400 6,518,253 5,625,025 40 2027 5,62%o 25 618,800 6,243,82S 0 1) LOAN ISTIMAIED AI $5,660,368, $3,009,000 PRESENT VALUE Of LOAN REPAYMENT AT 8% LESS RESIDENTIAL LAUD PAYMENT Of $4,060,850. $44,763,200 TOTAL LOAN REPAYME4T SOURCES KEYSER 9IRSTCN ASSOCIATES, INC. JULY, 1991 SUMMARY REPORT This sur,umeLry report has been prepared for the Huntington Beach Redevelopment Agency ( "Agency" ) pursuant to Section 33433 of the California Health and Safety Code . This report sets forth certain details of a proposed Disposition and Development Agreement ( "Agreement" ) .betwee;1 the Agency and- Robert L. Mayer ( "Developer" ) for the development of a multi-phased commercial/residential project including four first quality hotels , an athletic/tennis Club/ a specialty retail center and a mediur, density residential subdivision . The proposed project is located in the Main-Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies : 1 . The cost of the proposed Agreement to the Agency, includ- ing relocation costs, site clearance coats, inf raetruc- ture costa and the expected interest on any loans or bonds to finance the Agreement; 2 . The eetimated value of the interests conveyed and leased, determined at the highest uses permitted under the Redevelopment Plan; 3 . The purchase and lease payments to be paid by the Developer. This report and the proposed Agreement is made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT I . DeveIoPel: -Resp9IlR.1b1.1 it; es Under the proposed Agreement, the Developer agrees to ground lease the 20 acre commercial parcel and purchase the 24 acre residential parcel from the Agency. The developer must develop and construct, or cause the development and construc- tion of, a multi-phased commercial and residential development at a cost of at least two hundred and twenty-five million dol- lare ( $225 million) , exclusive of land value . The project must be constructed within the prescribed time frame and must consist of the following uses : a) A 300 room first quality hotel to be commenced no later than 30 months after the signing of the DDA.' b) An athletic/tennis club to be commenced no later than 1996 . c) A 450 to 600 room first quality hotel to be commenced no later than 1996 . JUL _24 '91 14:45 KEYSER MARSTON, N.o d) A 225 . to 250 room all-suite hotel to be commenced no later than 2001 . e) A 75,000 to 99 , 000 square foot specialty retail center to be commenced no later than 2004 . f) A 400 to 450 room first quality hotel to be commenced no later than 2004 . g) Residential development at . a maximun density of 35 unite per Acre, with total development of 875 to 894 units . The residential phasing must coincide with the co=ercial development. h) All on-site improvements relating to the development of the property. These improvements must be constructed in accordance with the terms and schedules Bet forth in the Agreement including, but not limited to, the following: J . All on-site improvements - sidewalks , street light- ing, curbs, street trees, street improvements , park- ing structures , etc . These improvements shall con- form to the design and materials standards approved by the Agency, ii. Sanitary sewers , storm drains , fire hydrants , water supply, gas lines, telephone and electrical power facilities must be brought to, modified, or relo- cated from the perimeter of the property. iii. Additional improvements required as a result of an Agency and/or City review of plans, drawings , or en- vironmental assessments relating to the Developer improvements or to this Agreement. i) The costs associated with relocating the beach main- tenance facility located on the development sites, and 1/2 of the costs ( $250 , 000 maximum) associated with con- structing an overpass across Pacific Coast Highway. j ) The developer shall be roe onaible for providing the Agency with a loan of up to F41 million to relocate the existing mobilehome park residents , plug loot of the costs required to extend Walnut Avenue, provide a spur street from Pacific Coast Highway to the residential development and the reabandonment of the oil wells lo- cated on the development site. 2 . AgOaCy BA82Qneib„ilities The Agency is responsible for and shall commit to the project the following: JUL 24 '31 14:46 KEYSER WiRST(A-1, P.7 a) Purchase the development parcel from the City. Ground lease the 20 acre commercial parcel and sell ' the 24 acre residential parcel to the developer. b) All costs associated with relocating the existing mobilehome park residents . c) Repayment to the developer of the costs associated with the infrastructure improvements detailed in 1-•j ) above, to a maximum of 38 . 5% of the property tax increment revenues and 50% of the transient occupancy tax revenues generated during the first ten operating years of each development prase . d) All costs associated with the relocation of the existing oil pipeline, plus a maximum of $900, 000 in soils test- ing/clean-up activities . e) In addition to (b) above, a rebate to the developer of 36 . 5% of the property tax increment revenues and 50% of the transient occupancy tax revenues generated by the commercial uses during the first ten operating years of each development phase . These revenues will be deferred and accumulated with interest until the commencement of the subsequent development phase. =) In addition to (b) above , a rebate to the developer of 38 .5% of the property tax increment generated during the first ten operating years of each residential development phase. 3 . n j.xLq The proposed Agreement provides that the Agency will acquire the development parcel from the City of Huntington Beach . However, $16 . 1 million of the acquisition costa will be offset by the disposition proceeds received by the Agency from the developer. The remaining balance will be financed with a promissory note from the Agency to the City. This note will be repaid with project area revenues generated in the future. The Agency will repay the developer loans for regional in- • fraetructure improvements and nobilehome park residents relocation costs from 38 . 5% of the property tax increment and 50% of the transient occupancy tax revenues generated by each development phase for the first 10 years of operation. The Agency shall finance the mobilehome park residents reloca- tion costs not advanced by the developer using project area tax increment funds . The infrastructure improvements not financed by the developer will also be funded with project area revenues , 8. COST OF AGREEMENT TO THE AGENCY The estimated net costa of the Agreement to the Agency, in present value terms , are as follows : Fair market value of City parcel $45 , 2001000 (Less ) Developer leaseho d interest 22 , 8001000 Agency cost to acquire City parcel $22, 400, 000 Direct public improvement and relocation costs 41820, 000 Developer loan repayment - including interest 91280, 000 Property tax increment and transient occupancy tax rebate to developer 91550,000 Total Costs $46, 050,000 BAKORAYLU Land Disposition Proceeds Commercial ground leave $10, 060, 000 Residential land sale 61010,000 ---------- Total land disposition proceeds $16, 010,000 D.�nno+•tes tAY i nrrgm�nt 19, 150,000 Transient occupancy tax transferred to the Agency per Agreement 61840, 000 ---------- Total Revenues $42 ,060, 000 Net Cast to Agency $ 31990,000 Cf W==Wft=UW C. ESTIMATED VALUE OF THE INTffiREST9 TO HE CONVEYED TO THE DEVELOPER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN ' The determination of the estimated value of the interests to be conveyed to the Developer pursuant to the proposed Agree- vent was made by Keyser Marston Associates , Inc . (KMA) . KMA concluded that moderate density residential development would generate the highest value to the land, and that this type of development would support a land value of approximately $45 million, or $23 .50 per square foot. However, the site is cur-- J UL a-. 'v 1 14;4 r KL 1 StK P.9 rently encumberod by a lease, ' which has a value to the lessee of $22 . 8 million. Thus, the fair market value of the site at • the highest and beat use, and not taking the Agency goals and objectives into account, is $22 . 4 million. D. PURCRASE PRICE BY DEVELOPER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE" FOR THS HIGHEST USE UNDER THE RLDMLOPMENT PLAN 1 . The developer shall ground lease the 20 acre commercial parcel for a 99 year terra. The total of these payments is estimated at approximately $150 million, and the net present value of these payments is $10 . 06 million. 2 . The Developer shall purchase the 24 acre residential par- cel in .phases . The net present value of the land payment is $6 . 01 million 3 . The Developer land acquisition payment will be offset by a public revenues rebate with a net present value of $9 . 01 million. The net acquisition price of the parcel is $7 . 06 million, which is $15 .34 million less than the fair market value at the highest and beet use . Given this differential in the actual sales price and lease payments , versus the fair market value of the site at the highest and beat use consistent with the Redevelopnent Plan, California Health and Safety Code Section 33433 , requires an ex- planation for the Agency accepting a lower price . As a component. of the Main-Pier Redevelopment Project Area Specific Plan the Agency established the goal of attracting major visitor serving commercial uses to the project area . The proposed project achieves this goal with the inclusion of four major hotels and a specialty retail center, which creates a resort type atmosphere, and is expected to attract over 150, 000 visitors annually. However, the magnitude of the project, and the quality level re- quired by the Agency makes the proposed project a pioneering ven- ture within the context of the downtown Huntington Bench market •area. Thus , the developer must incur a significant level of risk WMA Is l.V Llll\lGl {rQAG 1.!!lb �Jivjc�%. 1llP a�.Vilv..+ . •..�•-j••-� --A- • concluded that in order to mitigate the extraordinary developer risk level, and to allow the project to achieve economic viability, the Agency must reduce the land costs to the level justified given the economic characteristics of the proposed development. The K.*"lA analysis determined that the economic terms a=,bodied in the DDA and wl... ..r.......d 10Z40 -- i-! , &^A r.ainn�rl�� a unwpvi&r this conclusion is inextricably tied to the enforcement of the development scope and restrictions embodied in the proposed DDA. Exhibit No. 1 Dal ichi Kangyo Bank (DKB) Loan to Robert L. MayeARLM) $50 million construction amount (loan from DKB to RLM) plus $10 million reserve (to cover debt service) $10 Million Reservg to be Eundi2: $5 million— additional DKB loan ($2 million+ used for debt service) $5 million — Robert L. Mayer funds $3.5 million cash or Letter of Credit* $1.5 million personal guarantee from RLM Commitment made by RLM at time of construction loan, and planned to be funded from the subject First California Capital Markets Groups, Inc. transaction. 9440r 2. EXHIBIT No. 2 THE WATERFRONJ THE TRANS ACTIQN�STRUCTURE 1. First California Financing: o First California buys receivable o First California sells certificates with investor letter 2. Use of Proceeds: PrQ-Cemi—S: o Receivable sold to First California $ 6.099,325 o Proceeds from Dai-Ichi Kangyo Bank to satisfy J.A. Jones Construction Company $ UL 4S_ Net available in Escrow $ ��ur��►nents: 0 Fee and expenses of Issue to First California $ 914,899 0 Interest Reserve established at Dai-lchi Kangyo Bank $ 3.500,000 0 Cash Payment to J.A. Jones $ 1,619,000 o Cash to Waterfront as Operative Capital $ 595,2I5 o Payment previously received from Agency $ 233,859 $ UN f, Exhibit No. 3 FQRM OE GUARANTEE THE WATERFRONT 1. Security Pledge of Leasehold - In the event of RLM's default on the below liens to the Agency, Agency regains fee title to remaining Waterfront site (excludes Hilton Hotel site and subject to the prior liens as shown) and can remarket or mortgage the property Priority liens on lease: 1) $2,150,000 New leasehold mortgage 2) $3,000,000 Agency 3) $5,000,000 Dai-lchi Kangyo Bank 4) Balance of Value (approximately $10 minion minimum remaining value) Agency All liens to be cleared prior to start of Phase 11 2. General Pledge of Assets Robert L. Mayer personal guarantee on AU assets; but non-specific Currently, total value of all Mayer assets far exceeds amount of First California transaction, Dt there is no guarantee that the asset value will remain the same or increase overtime. RLM has identified those personal guarantees already given and has agreed to provide no additional personal guarantees. 9439r i j"imt f TH E WATERFRDNT EXHIBIT UA+I TO THE AGENCY CLOSING CERTIFICATE July 18, 1991 First California Capital Markets Group 200 Occangate Long Beach, CA 90802-4351 Attention: 'Larry R. Law, Senior Vice President Re: The Waterfront - Use of Funds Advanced by Developer on Behalf of The Redevelopment Agency Pursuant to Attachment No. 5 of the Disposition and Development Agreement Dear Sirs: The Redevelopment Agency of the City of Huntington Beach and Robert L Mayer, as Trustee of The Robert L Mayer Trust of 1982,dated June 22, 1982 as amended ("Mayer"), are parties to that certain Disposition and Development Agreement ("DDA") dated August 15, 1988 providing for the development of certain real property (the "Site") located in the City of Huntington Beach, California. Additionally, Waterfront Construction No. 1, a California limited partnership("Waterfront")and the Agency are parties to that certain lease dated April 28, 1989 (the "Phase 1 Lease"), pursuant to which Waterfront has leased from the Agency a parcel within the Site (which parcel is referred to in the DDA as both "Phase 1"and "Separate Development Parcel No.1" and which shall be referred to herein as"Phase 1") upon which Waterfront has constructed and is operating a 293-room hotel. Paragraph 5 of Attachment No. 5 to the DDA provides for the Agency's reimbursement of certain costs advanced and incurred by Mayer in connection with the development of Phase 1 (the "Phase l Paragraph 5 Costs"). Mayer and Waterfront do hereby attest and confirm that (i) Mayer,Waterfront and the: Agency have agreed that the Phase 1 Paragraph 5 Costs payable in connection with the development of Phase 1, including accrued interest, was $5,660,368 as of September 30, 1990; (ii) such amount is approximately 15% less than the actual costs that were incurred and advanced by Mayer in connection therewith; (iii)Mayer, Waterfront and the Agency have agreed that the Phase 1 Paragraph 5 Costs shall accrue interest after September 30, 1990 at the rate of ten percent(10%) per annum, compounded monthly, until paid in full; and (iv) the Phase 1 Paragraph 5 Costs were advanced and incurred for the following and in approximately the percentage of the total as indicated: • 55% for civil engineering design and construction of the following public street improvements pursuant to the applicable codes, requirements and plans approved by the City of Huntington Beach Department of Public Works, Water Department and the California Department of Transportation: The Robert Mayer Corporation 660 Newport Center Drive, Suite 1050, P.O. Box MW,Newport Beach,CA 92658-OW•Telephone(714)759-80% Ltr to FCC EXHIBIT ItA" TO THE July 18, 1991 AGENCY CLOSING CERTIFICATE Page 2 Pacific View Avenue, including rough and precise grading, curbs, gutters, paving, medians, traffic controls and signalization, street lighting, storm drain structures, sewers, domestic water lines, fire hydrants and associated fire supply water lines Huntington Street modifications including new curbs, gutters, paving, modifications to and relocations of traffic controls, signalization and street lighting, additional storm drain structures, sewt:rs and domestic water fines Pacific Coast Highway modifications including a new turning lane with associated curbs, gutters, paving, modification to and relocations of traffic controls, signalization and street lighting, and additional sewers • 3%for design and construction of sidewalks landscaping and irrigation systems -Aithin the applicable public right-of-ways and medians' of Pacific View Avenue, Huntington Street and Pacific Coast Highway, pursuant to the applicable codes, requirements and plans approved by the Huntington Beach Department of Public Works and the California Department of Transportation • 8% for civil engineering design, construction and connection to the existing City water supply of an 18" water line from Olive and 3rd Street to Pacific View Avenue and Huntington Street pursuant to applicable codes, requirements and plans approved by the Huntington Beach Department of Public Works and Water Department • 4% for site acquisition for new mobilehome park for relocation of residents displaced by Pacific View Avenue • 19% for design and construction of new mobilehome park owned by the City of Huntington Beach for relocation of residents displaced by Pacific View Avenue pursuant to the codes, requirements and plans approved by the City of Huntington Beach Department of Community Services, Department of Public Works and Water Department, including the following improvements: Rough and precise grading, curbs, gutters, paving, sewers and individual point of connections, domestic water lines and individual point of connections, fire hydrants and associated fire supply water lines, traffic controls and signage, finish grading of mobilehome pads, storm drain structures,street lighting, perimeter block walls, perimeter sidewalks, perimeter landscaping and associated irrigation systems r ' Ur to FCC July 18, ] NzsIBIT IRA" TO THE Page 3 AGENCY CLOSING-CERTIFICATE • 1%for relocation and/or removal as necessary of existing underground sewers, domestic water lines, storm drain structures, fire hydrants and associated waterlines from the Pacific View Avenue site • 4% for miscellaneous direct construction expenses in connection with the above • 6% for general and administrative expenses in connection with the above Sincerely, "Mayer" Robert L Mayer, as Trustee of The Robert L Mayer Trust of 1982, dated June 22, 1982, as amended By: Robert L Mayer, ustee "Waterfront" Waterfront Construction No. 1 a California Limited Partnership, by The Waterfront, Inc. a California Corporation, its so] generrra rtner By: Stephen K. Bone President The Waterfront, Inc. By: fuv Robert L May Chairman of the B rd The Waterfront, Inc. Form 8038-G Information Return for Tax-Exempt Governmental Obligations (Rev.October 1989) ►Under Section 149(e) OMB hvo 154S 0'2) See separate Instructlons Ltpres S-31-92 �panrnent M1Knal Reven n�a the�reasvry Use Form 8038•GC it the Issue price is under S 100.000) Ser.rce Reporting Authority Check box if Amended Return ► Lj 1 Issuer's name 2 Issuer's employer identification number REDEHELOPHENT AGENCY OF THE CITY OF HU"rINGTON BEACH 95-6000723 3 Number and street 4 Report number 2000 MAIN STREET C1991 - S Crty or town,state,and ZIP cone 6 Date of Issue HUNTINGTON BEACH, CALIFORNIA 92648 3UNE 30, 1991 7 Name of essue CElLICr'lTIMS P0tSLWVr TO PAPW3RppFj 4 AND 5 CF t CUSIP Number NO. 5 TO THE 1]ISPOSMON & MM N/A DIM T e of Issue check box es that applies and enter the Issue Price) EZ15/RR 9 Check box if obligations are tax or other revenue anticipation bonds► ❑ hsoe Price 10 Check box it obligation$are in the form of a lease or installment sale► ❑ 11 ❑ Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ❑ Health and hospital . . . . . . . . . . . . . . . . . . . . . . . , 13 ❑ Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ❑ Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ❑ Environment(including sewage bonds) . . . . . . . . . . . . . . . . . . . . 16 ❑ Housing . . . . . . . . . . . . . . . . . . . . . . . . . . 17 ❑ Utilities . . . , . . 18 ® Other.Describe(see Instructions) -Description of Obligation (a) (s) (c) 1n W slated redernptan wetanted (f) Net Inlemst malway date Interest rate Issue prKe ice at n+atur I=maturity Y.Nd eel► 19 Final maturity 10 69099,325 NIA 20 Entire issue 6,099 325 1 N/A N/A years 1 10 % % EM Uses of Original Proceeds of Bond Issues(including underwriters'discount 21 Proceeds used for accrued interest . . . . . . . . . . . . . . . . 21 22 Issue price of entire issue(enter line 20c) . . . . . . . . . . 226,099,325 23 Proceeds used for bond issuance costs(including underwriters'discount). . 23 - �0 4 24 Proceeds used for credit enhancement . . . . . . . . . . . . . 24 0 25 Proceeds allocated to reasonably required reserve or replacement fund 23 0 !: 26 Proceeds used to refund prior issues. . . . . . . . . . . . . . 26 0 27 Total(add lines 23.24.25.and 26) . . . . . . . . . . . . . . . . 27 0 28 Nonrefundin roceeds of the issue subtract line 27 from line 22 and enter arrtount here 28 1 6.099.325 UMEL-0—escription of Refunded Bonds corn lette this part only for refunding bonds 29 Enter the remaining weighted average maturity of the bonds to be refunded . . . . . . . . . ► _ _ years 30 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . . . ► 31 Enter the Cates the refunded bonds were issued 6. Miscellaneous 32 Enter the amount of the state volume cap allocated to the issue . . . . . . . . . . . . . ► _NIA 33 Enter the amount of the bonds designated by the issuer tender section 265(bX3X8XiXlll)(small issuer exception) . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► ... N/A 34 Pooled financings: a Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units► NIA b Check box if this issue is a loan made from the proceeds of another tax-exempt issue t. ❑ and enter the name of the issuer ► and the date of the issue la` under penartres of penury.a Declare that I have esatnrned Inri rltum and&"ompar"scredu+n and statements•and to bra best of my anowreoye ano be,-of. trey ate true•correct.and Complete. please Sign10/:2 -4 ' Executive Director . Here ss I o Key O.te Type OF a n+nae one tnte For Paperwork Reduction Pict Notice,see pare 1 of the Instructions. from SD38-G (Rev 10-89) 1/13/90 Pub5she0 by Tax Management Inc.,a Subsidiary of The Bureau of National Affairs.Inc. 8038-C.1 125 CITY OF HUNTINGTON BEACH COUNCIL - ADMINISTRATOR COMMUNICATION Mu�n,ticruH loco To Honorable Mayor and From Michael T. Uberuafee�;;T(� City Councilmembers City Administrator Subject REVISED MINOR AMENDMENT -- Date dune 14, 1991 WATERFRONT DDA On the agenda for Monday, .tune 17, 1991 is an item captioned "Minor Amendment — The Waterfront Disposition and Development Agreement" which would accelerate the timing of certain payments by the Agency to The Waterfront. The version of this amendment transmitted with the agenda packet incorporates a broader revision than was intended. The Request for Agency Action, however, accurately depicts our desire to make available to The Waterfront repayment of certain advances which are now owed and which are accruing interest at a maximum rate of 12% which exceeds interest earned on city investments. Therefore it is to the City and Agency's advantage to pay the amounts that are owed to the Mayer Corporation. With the Agency's approval of this amendment we will continue to work with The Waterfront on an amended Disposition and Development Agreement. MTU/SVK:jar 9200r REQUEST FOR REDEVELOPMENT AGENCY ACTION RH 91-36 J Date June 3, 1991 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Executive Director Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development Subject: A Resolution to Require a Thirty—Day(30) Redevelopment Agency Review Period Prior To Action on Owner Participation/Disposition and Development Agreement Consistent with Council Policy? [ ) Yes t ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSU In order to provide Redevelopment Agency Members with sufficient time to review the Intricacies of Owner Participation/Disposition and Development Agreements (OPA/DDA), a minimum review period of thirty (30) days will need to be established. RECOMRIENDATIQN: Motion to: "Approve Resolution No. a directing the Executive Director to forward copies of Owner Participation Agreements/Disposition and Development Agreements to the Redevelopment Agency thirty (30) days prior to required action." ANALYSIS: At the City Council meeting of April 22, 1991, Councilwoman Grace Winchell requested that the Agency adopt a policy which will provide the Agency with an adequate amount of time to review OPA/DDA Agreements. Attached is a resolution which will require the Executive Director to forward copies of proposed OPA/DDA Agreements to each Redevelopment Agency Member a minimum of thirty (30) days prior to any request for action. FUNDING SOURCE: Not applicable. A TERNATWE ACTIO,�V: 1) Continue this item for additional information. 1) Resolution No. t 4 . } MTU/BAK:ls 906Ir P10/1/85 1 9/19�98 �ox�n.tc'1'.ht.Qt7�r$. 6. 4-11- 1cd 7-o OFFICE OF �{- M _.�, •;�, CITY ATTORNEY �r P.0.BOX 2740 2-; 20M MAIN STREET �Arn FlUNTINGTON BEACH -n�•cl $.�L+M�' CALIFORNIA 92647 GAIL HUTTON TELEPHONE City Attorney t7141 536b555 September 20, 1988 - V K} Jeffrey M. Oderman, Esq. RUTAN & TUCKER Central Bank Tower, Suite 1400 South Coast Plaza Town Center 611 Anton Boulevard P.O. Box 1950 ,. Costa Mesa,cCA 92628-1950 Thomas P. Clark, Jr. , Esq. STRADLING, YOCCA, CARLSON & RAUTH 660 Newport Center Drive, Suite 1600 tlewport Beach, CA 92660 RE: Waterfront DDA and Development Agreement Amendments Dear Jeff and Tom: Pursuant to our discussions of September 19 and 20 , 1988, attached hereto are the amendments to the DDA (Section 707 ) and the Development Agreement at pages 46 and 47 . Since the Development Agreement amendments were read into the record at the Agency/Council meeting on Monday, September 19, I am by copy hereof transmitting the same to the City Cleric for her files . �ery truly. yours, f�C GAIL HUTTON City Attorney GH :gp Attachments �- 5922-1 cc: William S. Amsbary, Assistant City Attorney Art De La Loza, Deputy City Attorney r.Conh1e'-Brockway,-=City Clerk this Section 705 of the Agreement and stating that they are being submitted and will be deeeed approved unless rejected .within the stated time. F. [§706] Amendments to this A reenent The Developer and Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by lending institutions, or the Agency's counsel or financial consultants, provided said requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. Minor modifications to this Agreement which do not materially affect the rights or obligations of the Agency may be approved by the Executive Director without the necessity of additional action by the governing boards of the Agency. G. 49 [§707] Cooperation in the Event of Legal Challenge In the event of any legal challenge instituted by any third party challenging the validity or enforceability of any provision of this Agreement, or any approval by City or Agency referenced in Section 203 hereof (including but not limited to approval of the "change of use". of the existing mobilehome park on the Developer Parcel, the Relocation Assistance Plan approved therefor, and the individual agreements to be entered into between the Agency and individual mobilehome tenants and owners pursuant thereto) , or any other action by either party hereto in performing hereunder or under the aforementioned approved Relocation _ Assistance Plan or individual agreements referenced therein, as the same may be amended from time to time, the parties hereby agree to cooperate in defending said action as set forth in this Section 707 . The Agency shall have the right, but not the obligation, to defend any such action; provided, that without the Developer's prior written consent, which consent shall not be unreasonably withheld, the Agency shall not allow any default or judgment to be taken against it and shall not enter into any settlement or compromise of any claim which has the effect, directly or indirectly, of prohibiting, preventing, delaying, or further conditioning or impairing the Developer's development, use, or maintenance of any portion of the "Site or impairing any of the Developer's rights hereunder. In addition, the Agency shall provide reasonable assistance to the Developer in defending any such action, such assistance to include (i) making available upon reasonable notice, and at' no cost to the Developer, Agency officials and employees who are or ray be witnesses in such -62- 08/15/88 FINAL action, and (ii) provision of other information within the custody or control of the Agency that is relevant to the •subject natter of the action. The Developer shall have the obligation to defend any such action; provided, however, that this obligation to defend shall not be effective if and to the extent that the Developer determines in its reasonable discretion that such action is meritorious or that the interests of the parties justify a compromise or settlement of such action. In this regard, Developer's obligation and right to defend shall include the right to hire attorneys and experts necessary to defend (subject to approval by the Agency) , the right to process and settle reasonable claims, the right to enter into reasonable settlement agreements and pay amounts as required by the tents of such settlement agreements, and the right to pay any judgments assessed against Developer, the Agency or the City. If the Developer defends` any such action, as set forth above, it shall indemnify and hold harmless the Agency and City from and against any claims, losses, liabilities, or damages assessed or awarded against either of them by way of judgment, settlement, or stipulation, but not including any litigation expenses or attorney's fees incurred by either the City or Agency in defending said action as set forth hereinabove. Notwithstanding any other provision of this Agreement to the contrary, all costs and expenses incurred by the Developer in defending any litigation arising out of the processing, approval, and/or implementation of the "change of use" of the existing mobilehome park on the Developer Parcel, the relocation of the tenants therefrom, and payments to or for the benefit of such persons shall be reimbursable pursuant to Section II.I of the Scope of Development (Attachment No. 3) and Paragraph 5 of the Method of Financing (Attachment No. 5) . 'In the event any such litigation involves other claims or issues, the reimbursement due to the Developer shall be a fair proration based upon the percentage of tine and expense allocable to those issues and claims for which the Developer - is entitled to reimbursement and those claims and issues for which the Developer is not entitled to reimbursement. *INSERT H. (§7083 Attorne 's Fees If either party to this Agreement is required to initiate or defend litigation in any way connected with this Agreement, the prevailing party in such litigation, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Except as ray be expressly provided elsewhere in this Agreement, if either party to this Agreement is required to initiate or defend litigation with a third party because of the violation or alleged violation of -63- 08/15/88 FINAL ADDITION TO DISPOSITION AND DEVELOPMENT AGREEMENT S707 Notwithstanding any provision herein to the contrary, should any action be brought with respect to any claim that this contract violates Section 614 of the City of Huntington Beach City Charter and/or the California Public Contracts Code by virtue of Any reimbursement provision herein, the developer agrees at its own . non-reimbursable expense to defend, indemnify and hold the City and Agency harmless due to any failure of the City or the Agency to follow the full public bid requirements as to the reimbursable • portions of the project . Further, developer acknowledges that in the event that the public bidding process is judicially held to be required for any improvements which have already been constructed, the City and/or the Agency nay be enjoined or otherwise ordered to withhold the reimbursement payments hereinabove otherwise required. I� terminated pursuant to the provisions of this Agreement, this Agreement shall be enforceable by either party hereto notwithstanding any change hereafter in any applicable General Plan, Redevelopment Plan, Specific Plan, zoning ordinance, subdivision ordinance or any other land use ordinance or building ordinance, resolution, or regulation, rule, or policy adopted by City. H. Findings. I. City hereby finds and deterrines that executioV of this Agreement is in the best interest of the public health, safety, and general welfare and the provisions of this Agreement are consistent with the City's General Plan. Except as specifically provided in- the DDA, 2. A City further finds, based upon all information made available to the. City prior to or concur- rently with the execution of this Agreement, that there are no City ordinances, regulations, rules, or official policies in force as of the Effective Date of this Agreement that would prohibit or prevent the full completion and occupancy of the Project described herein. I. Severability. _ If any term, provision, cove- nant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, unless the rights and obligations of ATTACHMENT NO. 9 Page 45 of 51 08/15/88 FINAL T the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. J. cooperation; _Execution of Documents. Each party shall execute and deliver to the other all such other further instruments and documents as may be necessary to s carry out this Agreement in order to provide and secure to the other party the full and complete enjoyment of its rights and privileges hereunder. K. Justifiable Reliance. City and Developer each acknowledge that, in investing its tine, money, and expertise for the development of the Project, it will be reasonably and justifiably relying upon the other party's covenants contain- ed in this Agreement, and those specifically articulated in the DDh. City further acknowledges that the Project is and shall be considered a single integrated development project, and that the Developer's development of each component of the Project is dependent upon its right to complete and occupy each other component, and that the economic viability of each component of the Project is and shall be dependent upon the Developer's right to complete and occupy each other -cor.►ponent and upon the City's full performance of its obligations under this Development Agreement. L. Notices. Any notice or communication hereunder between City or Developer shall be in writing, and may be given either personally or by registered or certified mail, ATTACHMENT NO. 9 Page 47 of 51 08/15/88 FINAL ORIGINAL L T L THE WATERFRONT DISPOSITION �.�•.. AND DEVELOPMENT AGREEMENT L L i t - l.. DISPOSITION 7.ND DEVELOPMENT AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, AGENCY, 1 and ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended 1 L DEVELOPER I �r+ L 08/15/88 FINAL L TABLE OF CONTENTS Page w I. [§100] SUBJECT OF AGREEME14T 1 A. [§101] Purpose of Agreement . . . . . . . . . . . . . . 1 f ' �• B. [§102] The Redevelopment Plan . . . . . . . . . . . . 1 t C. [§103] The Site . . . . . . . . . . . . . . . . . . . . . . . . . . 2 D. [9104] Parties to the Agreement . . . . . . . . . . 2 1. [§105] The Agency 2 2. (§106] The Developer . . . . . . . . . . . . . . . . . . 3 3 . [§107] Restrictions on Developer's Rights to Assign . . . . . . . . . . . . . . . 3 II. [§200] TASKS TO BE ACCOMPLISHED PRIOR TO DISPOSITION TRANSFERS 8 ' A. [§201] Agency Acquisition of City's Interest in Site; Revised Lease Covering Developer • Parcel; Acquisition of Remaining Property Interests in the Site Required for Development . . . . . . . . . . . . . . . . . . . . . . . 8 �+ B. [§202] [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . 15 C. [§203] Plan Submittals and Reviews . . . . . . . 15 D. [§204] Submittal of Evidence of Financing Commitments . . . . . . . . . . . . . 18 E. [§205] Approval of Hotel Operators . . . . . . . 20 ' F. [§206] Approval of Hotel Franchisors 21 III. [§300] DISPOSITION TRANSFERS . . . . . . . . . . . . . . . . . . . 23 i A. [§301] Disposition Transfers; General . . . . 23 B. [§302] Purchase Price for the Residential Portion; Rent for the Commercial Portion . . . . . . . . . . . . 27 (i] 08/15/88 FINAL 1 C. [§303] Escrow for Disposition of f Separate Development Parcels . . . . . . 28 D. [§304] Close of Escrow and Transfer and Delivery of Possession of Separate Development Parcels . . . . . . 31 t E. [§305] Form of Deeds for Separate Development Parcels in Residential Portion . . . . . . . . . . . . . . . 32 F. [5306] Condition of Title . . . . . . . . . . . . . . . . 32 G. [§307] Time for and Place of Delivery I of Deed(s) and Lease(s) . . . . . . . . . . . 32 L H. [§308] Taxes and Assessments . . . . . . . . . . . . . 32 I. [§309] Recordation of Deeds and �. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 + J. [§310] Title Insurance 33 K. [§311] Occupants of the Site 34 f L. [§312] Physical Condition of the Site . . . . 34 L M. [§313] Limitations on Time and Phasing of Disposition Transfers. . . . . . . . . . . 34 a. IV. [§400] DEVELOPMENT OF THE SITE BY THE DEVELOPER. . 40 L A. [§401] Scope of Development . . . . . . . . . . . . . . 40 B. [§402] Cost of Construction . . . . . . . . . . . . . . 40 L. C. [§403] Construction Schedule . . . . . . . . . . . . . 40 D. [§404] Bodily Injury and Property Damage Insurance 40 E. [§405] City and Other Governmental Agency Permits . . . . . . . . . . . . . . . . . . . . 41 F. [§406] Rights of Access . . . . . . . . . . . . . . . . . . 42 LG. [§407] Local, State and Federal Laws 43 L � . 08/15/88 FINAL L L L H. [§408] Antidiscrimination During LConstruction . . . . . . . . . . . . . . . . . . . . . . 43 I. [§409] Taxes, Assessments, Encumbrances and Liens 43 J. [§410] Holder Not Obligated to Construct Improvements . . . . . . . . . . . . 44 K. [§411] Notice of Default to Mortgagee or Deed of Trust Holders; i Right to Cure 44 L. [§412] Failure of Holder to Complete Improvements . . . . . . . . . . . . . . . . . . . . . . 45 it. [§4133 Right of the Agency to Cure Mortgage or Deed of Trust Default 46 N. [§414] Right of the Agency to Satisfy Other Liens on the Site After w Title Passes 46 4 O. [§415] Certificate of Completion . . . . . . . . . 46 V. [§500] USE OF THE SITE; EFFECT AND DURATION OF COVENANTS 48 t1 L, A. [§501] Uses 48 B. [§502] Effect and Duration of Covenants . , 50 L VI. [§600] DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 51 1 A. [§601] Defaults--General . . . . . . . . ... . . . . . . . 51 L B. [§602] Legal Actions . . . . . . . . . . . . . . . . . . . . . 51 V 1. [§603] Institution of Legal Actions . . 51 4 2. [§604] Applicable Law . . . . . . . . . . . . . . . . 52 L 3. [§605] Acceptance of Service of Process . . . . . . . . . . . . . . . . . . . . . . . 52 i, C. [§606] Rights and Remedies Are Cumulative. 52 L L 08/15/88 FINAL L { L L D. [§607] Inaction Not A Waiver of Default. . . 52 a.. E. [§608] Termination By The Developer . . . . . . 53 F. [§609] Termination by the Agency . . . . . . . . . 55 G. [§610] No Cross-Defaults . . . . . . . . . . . . . . . . . 57 LH. [§611] Arbitration . . . . . . . . . . . . . . . . . . . . . . . . 57 VII. [§700] GENERAL PROVISIO14S . . . . . . . . . . . . . . . . . . . . . . 60 A. [§701] Notices, Demands and Communi- cations Among the Parties . . . . . . . . . 60 B. [§702] Conflicts of Interest . . . . . . . . . . . . . 60 C. [§703] Enforced Delay; Extension of Times of Performance . . . . . . . . . . . . . . 60 D. [§704] Non-liability of Officials and i Employees of the Agency . . . . . . . . . . . 61 E. [§705] Submittal of Documents to the Agency for Approval . . . . . . . . . . . . . . . 61 } +� F. [§706] Amendments to this Agreement . . . . . . 62 G. [§707] Cooperation In the Event of Legal LChallenge . . . . . . . . . . . . . . . . . . . . . . . . . 62 1 H. [§708] Attorney0s Fees . . . . . . . . . . . . . . . . . . . 63 LI. [§709] Severability . . . . . . . . . . . . . . . . . . . . . . 64 VIII. [§800] ENTIRE AGREEMENT, INTERPRETATION, +,. WAIVERS, APPROVALS 64 IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY V AGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 L L ikr (iv) 08/15/88 FINAL V r .�, r , ATTACWMENTS: No. 1A Site Map No. 1B Legal Description No. 2 [Reserved] i No. 3 Scope of Development No. 4 Schedule of Performance No. 5 Method of Financing No. 6 Lease No. 7 Grant Deed No. 8 Preliminary Title Report No. 9 Development A;reement 6/112/065580-0001/001 e �1 t I rr (v) � 08/15/88 FINAL r { 1 DISPOSITION AND DEVELOPMENT AGREEMENT r THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agree- vent") is entered into this 15th day of August, 1988 (the "Effective Date") , by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982 , dated June 22, 1982, as amended (the "Developer") . The Agency and the Developer hereby agree as follows: i.. I. [§100] SUBJECT OF AGREEMENT A. [§101] Purpose of Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan (as hereinafter defined) for the Main-Pier Redevelopment Project (the "Project") by providing for the disposition and development of certain property situated within the Project Area (the "Project Area") of the Project. That portion of the Project Area to be developed L pursuant to this Agreement (the "Site") is depicted on the "Site Map" which is attached hereto as Attachment No. 1A and incorporated herein by this reference. This Agreement is entered into for the purpose of developing the Site and not iww for speculation in land holding. Completing the development on the Site pursuant to this Agreement is in the vital and best interest of the City of Huntington Beach (the "City") , and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which L the Project has been undertaken. B. [§1021 The Redevelopment Plan i. The Redevelopment Plan was approved and adopted by ordinance No. 2578 of the City Council of the City and amended by Ordinance No. 2634; said ordinances and the Redevelopment Plan (the "Redevelopment Plan") are incorporat- ed herein by this reference. No amendments to the Redevelopment Plan which change the uses or development permitted on the Site, or otherwise change any of the restrictions or controls that apply to the Site, shall be effective with respect to the Site without the written consent of Developer. Jr. -1- 08/15/88 FINAL L C. [§103] The Site The Site is that portion of the Project Area so designated on the Site Map (Attachment No. 1A) and f described in the "Legal Description" which is attached hereto as Attachment No. 1B and incorporated herein by this reference. S ' i The Site includes the "Developer Parcel", the i" "City Beach Maintenance Facility Parcel", and the "Beach Boulevard Remnant Parcel", which are each designated on the Site Map (Attachment No. 1A) . It is understood that the Site will be developed in phases, with approximately twenty and eight- tenths (20.8) acres (net of dedicated streets and right-of- way) ultimately to be developed with commercial uses and approximately twenty-three and six-tenths (23.6) acres (net of dedicated streets and right-of-way) ultimately to be developed with residential uses, in accordance with the Design Concept Drawings (Attachment No. 2) , the "Scope of Development" (Attachment - No. 3) , the "Schedule of Performance" (Attachment No. 4) , and the other terns and conditions set forth herein. The approximately 20.8 acre portion of the Site to be developed with commercial uses is t sometimes hereinafter referred to as the "Commercial Portion" and the approximately 23 .6 acre portion of the Site to be developed with residential uses is sometimes hereinafter referred to as the "Residential Portion." i It is further understood that, subject to the terms and conditions set forth herein, the Site will be i subdivided between the Commercial Portion and Residential Portion and among the phases of development within the Commercial Portion and the Residential Portion. Each indi- vidual legal parcel created pursuant to said subdivision process shall be classified as a "Separate Development Parcel" as that term is used in this Agreement. L D. [§104] Parties to the Agreement 1. [§105] The Agency L. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community L Redevelopment Law of the State of California. The principal office of the Agency is located at City Hall, 2000 Main { Street, Huntington Beach, California 92648. L -2- 08/15/88 FINAL L r� L I The term "Agency, " as used in this L Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. L 2. [§106] The Developer The Developer is ROBERT L. MAYER, as L Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended. The Developer has represented to the Agency that the Developer has the experience and 4 qualifications necessary to perform as Developer pursuant to this Agreement. The principal office and mailing address of the Developer for purposes of this Agreement is 660 Newport ' Center Drive, Suite 1050, Newport Beach, California 92660. L By executing this Agreement, each person signing on behalf of the Developer warrants and represents to L the Agency that the Developer has the full power and authority to enter into this Agreement, that all authoriza- tions required to make this Agreement binding upon the Developer have been obtained, and that the person or persons executing this Agreement on behalf of the Developer has been fully authorized to do so. i LThe term "Developer" as used in this Agreement includes ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended, and any permitted assignee of or successor to any of its rights, powers, and responsibilities hereunder. 3 . [§107] Restrictions on Developer's R ghts to Assign The qualifications and identity of the L Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Accordingly, prior to the Agency's issuance of a Certificate of Completion with respect to the entire Site or, as to each Separate Development Parcel, prior to the Agency's issuance of a Certificate of Completion with respect to said parcel, all as provided in Section 415 below, Developer shall not, except as permitted in this Section 107, assign all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. No purported assignment in violation of this Agreement shall be valid or effective. The Agency agrees that it will not unreasonably withhold or unreasonably condition such approval. The Agency further agrees that in the event of a request by Developer to assign all of Developer's interest in the Agreement, the + Site, or a Separate Development Parcel, the Agency shall i t4 -3« 08/15/88 FINAL L L L grant such approval provided: (i) such assignment is made in connection with the sale or lease for development of the Site or a Separate Development Parcel to a responsible third party who will undertake the Developer's responsibilities under this Agreement to use and develop the Site, or Separate Development Parcel, in accordance with this Agreement; (ii) such third party shall demonstrate development qualifications and experience with respect to the type of development proposed herein to assure the development of the Site, or V Separate Development Parcel, equal to or greater than the qualifications and experience of Robert L. Mayer as of the j Effective Date of this Agreement; and (iii) such third party shall demonstrate sufficient financial commitments or resources to assure development of the Site, or Separate Development Parcel, in accordance with this Agreement. For purposes of clause (ii) above, Agency shall approve the proposed assignee if the assignee demonstrates to Agency's reasonable satisfaction that it possesses financial resources and abilities equivalent to or greater than those of Robert i„ L. Mayer as of the date of this Agreement; provided, that the foregoing shall not be construed to imply that a proposed assignee with a net worth less than the net worth of Robert L L. Mayer as of the date of this Agreement shall not be an acceptable assignee. I Notwithstanding the foregoing, Developer shall be entitled to make an assignment which consists of a mortgage, deed of trust, sale and lease back, or other fora of conveyance for financing, provided that the Agency determines in its reasonable discretion that such an assignment is made to a lender approved by the Agency pursuant to Section 204 below for the purpose of securing loans of funds to be used solely for financing the direct and indirect costs, including without limitation financing costs, interest, and commissions, of planning, designing, constructing, developing, leasing, and operating the improvements to be constructed by the Developer with respect to the Site or Separate Development Parcel thereof. it is understood that Developer's entering into a management contract or contracts and a franchise agreement or agreements to operate any of the hotels to be constructed on the Site shall not be classified as an assignment for purposes of this Agreement; the Agency's right to review and approve the hotel V, operator(s) and franchisor(s) shall be as set forth in Sections 205 and 206 below. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assign- ment of this Agreement or any interest herein shall not be required in connection with any of the following: ti. -4- 08/15/88 FINAL V (i) Any transfers to any entity or entities in which either the 'Developer or Robert ti. L. Mayer retains a minimum of fifty-one percent (51%) of the ownership or bene- ficial interest and retains managenent control. (ii) Transfers resulting from the death or mental or physical incapacity of an L individual. Tranc-=ers or assignments in trust for the benefit of a spouse, children, grand- children, or other family members, provided that the Developer or an L assignee of Developer specifically permitted hereunder retains management control. �.+ (iv) A sale of the Site or any Separate Development Parcel at foreclosure (or a conveyance thereof in lieu of a fore- closure) pursuant to a foreclosure thereof by a lender approved (or deemed approved) by the Agency in accordance with this Section 107 . v (v) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate the development of the Site. (vi) The leasing of any part or parts of a building or structure for occupancy in the normal course of owning and operating the project (and excepting each hotel operator which must be approved in accordance with Section 205) . L (vii) A transfer of stock in a publicly held corporation or the transfer of the beneficial interest in any publicly held partnership or real estate investment trust. L (viii) The subdivision and conveyance of ,individual hotel units in a Separate Development Parcel on the Site for L purposes of financing the development, maintenance, and/or operation of a hotel on such parcel in accordance with this -5- 08/15/88 FINAL L L Agreement, provided that: (A) the subdivision of a Separate Development Parcel into commercial condominium units shall not allow the occupancy of hotel rooms for any use other than as L. individual transient-occupancy hotel rooms; and (B) conmercial condominium units shall not be subdivided or conveyed Ld as a time-share or time-share interest in an individual hotel unit (as those terms are defined in California Business & Professions Code Section 11003.5, as the �+ same now exists or may hereafter be amended) , tine-shares and time-sharing arrangements being strictly prohibited hereby; provided, however, that it is understood and agreed that any method of financing allowing the owner of a condominium hotel unit to occupy such unit for a period or periods not to exceed the greater of two (2) weeks per year or ten percent (10%) of the nunber of days per year that the unit is occupied by hotel guests shall not be deemed to be a time-share arrangement. The Developer shall deliver written notice to the Agency requesting approval of any assignment requiring Agency approval hereunder. Such notice shall be accompanied by sufficient information regarding the proposed assignee's development qualifications and experience and its financial commitments and resources to enable the Agency to evaluate the proposed assignee pursuant to the criteria set forth under (ii) and (iii) of the first paragraph of this Section 107. Such information shall include, without limitation, a balance sheet of the proposed assignee as of a LA date within ninety (90) days of the request for Agency's consent and statements of income or profit and loss of the proposed assignee for the two-year period preceding the 60 request for Agency's consent, if the same be available (or such other similar information as shall be available at the time the request for approval of the assignment is made) , and a written statement in reasonable detail as to the business experience of the proposed assignee during the five (5) years preceding the request for Agency's consent. �+ Within thirty (30) days after receipt of the Developer's written notice requesting Agency approval of an assignment, the Agency shall respond in writing by stating L, what further information, if any, the Agency reasonably requires in order to evaluate those matters it is entitled to Lconsider in determining whether or not to approve the -6- L08/15/88 FINAL L requested assignment. Upon receipt of such a timely response, the Developer shall furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of an assignment for financing purposes shall be deemed complete twenty (20) days after the Agency's receipt thereof and the Developer's request for approval of all other types of assignments shall be deemed complete- thirty (30) days after the Agency's receipt thereof, if no timely response requesting further information regarding the proposed assignee is delivered to the Developer, or, if such a timely response requesting further information is received on the date that the Developer delivers such additional information to the Agency. Once the Developer's request for approval of an assignment has been accepted as or is deemed complete, the Agency shall not be entitled to demand additional information or to disapprove the assignment on the basis that the Developer has not furnished adequate or complete information. None of the foregoing shall restrict Agency's rights to deny approval of any assignment not found acceptable by Agency pursuant to this Agreement. Any assignment requiring L Agency's consent shall only be effective upon Agency's written consent to such assignment. The Agency shall approve or disapprove a +r requested assignment for financing purposes requiring Agency approval within thirty (30) days after the Developer's request therefor is accepted as complete or is deemed L complete and the Agency shall approve or disapprove any other requested assignment requiring Agency approval within forty- five (45) days after the Developer's request therefor is accepted as complete or is deemed complete. Any disapproval shall be in writing and shall specify the reasons for the disapproval and, if applicable, the conditions required to be satisfied by the Developer in order to obtain approval. If the Developer's initial notice requesting approval of an assignment for financing purposes (but not any other type of assignment) complies with the requirements of Section 705 below, the Agency's failure to timely disapprove such a request for assignment shall be conclusively deemed to constitute an approval. No assignment of the Developer's obliga- tions with respect to the Site or a Separate Development Parcel thereof, whether or not Agency approval is required k, therefor (but specifically excluding assignments for financing purposes, and those types of assignments identified in subparagraphs (iv) , (v) , (vi) , (vii) , and (viii) ) , shall 4 be effective unless and until the proposed assignee executes and delivers to the Agency an agreement in form reasonably satisfactory to the Agency's attorney assuming the -7- 1 08/15/88 FINAL f I.. obligations of the Developer which have been assigned. Thereafter, the assignor shall remain responsible to the Agency for performance of the obligations assumed by the assignee unless (i) Agency releases the assignor in writing or (ii) all of the requirements set forth in this Section 107 +� are fully satisfied and the assignor is not then in default under this Agreement, in which event the assignor shall remain responsible to Agency for performance of the obligations arising prior to the effective date of the assignment, and shall be released from any obligation or liability arising subsequent to the effective date of the assignment. No consent or approval by Agency of any '• assignment requiring Agency's approval shall constitute a further waiver of the provisions of this Section 107. In the event of a dispute between the Agency and Developer arising out of an Agency disapproval hereunder, such dispute shall be resolved by arbitration in accordance with Section 611 herein. i�. The restrictions of this Section 107 shall terminate upon issuance by the Agency of a Certificate of Completion for the entire redevelopment of the Site or, as �. to each Separate Development Parcel, upon issuance by the Agency of a Certificate of Completion with respect to said parcel. II. [§200] TASKS TO BE ACCOMPLISHED PRIOR TO DISPOSITION TRANSFERS A. [§201] Agency Acquisition of City's Interest in Site; Revised Lease Covering Developer Parcel; Acquisition of Remaininq Property Interests in the Site Required_ for Develop::tent �.. 1. As of the Effective Date of this Agree- ment, the City owns fee simple title to the entire Site. On or before the Effective Date, the Agency and City have entered into an agreement (hereinafter the "City-Agency Agreement") pursuant to which the Agency will acquire from the City each of the Separate Development Parcels within the Site in time for Agency to convey said parcels to Developer in accordance with this Agreement. The City-Agency Agreement provides for the City to convey to Agency all of the Cityfs right, title, and interest in and to such parcels, including all improvements on the Site which are owned by the City, excepting only: -8- 08/15/88 FINAL L I L (i) the City's interest in oil, gas, hydrocarbon substances, and minerals of iW every kind and character lying more than 500 feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Site lying more than 500 feet below the surface thereof for any and all purposes L incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from said Site or from other lands, but without, however, u any right to use either the surface of the Site or any portion thereof within 4 500 feet of the surface for any purpose L or purposes whatever: and (ii) any and all water, water rights or interests therein, no matter how acquired by the City, together with the right and power to explore, drill, redrill, rer..ove, and store the same from the Site or to ,r divert or otherwise utilize such water, water rights, or interests on any other property owned or leased by the City, ibo whether such water rights shall be riparian, overlying, appropriative, percolating, littoral, prescriptive, adjudicated, statutory, or contractual; L. but without, however, any right to enter upon the surface of the Site in the exercise of such rights and, provided �. further, that the exercise of any such rights by the City shall not result in any damage or injury to any improvements constructed on the Site, including without limitation any subsidence of all or any part of the Developer Improvements to be constructed pursuant to this Agreement. Agency shall take all actions on Agency's part which are required to be taken to acquire each such Separate 6" Development Parcel within the times set forth in the schedule of Performance (Attachment No. 4) . .. The Agency and Developer agree that in order to implement this Agreement and develop the Site, within the times set forth in the Schedule of Performance (Attachment No. 4) , either the Agency or Developer, or both of them, will have to acquire and terminate all of the property interests in the Site other than those of the City, ..g_ 08/15/88 FINAL L L Agency, and Developer as provided herein (or said interests j„ will have to expire or terminate by their own terms) , so that at the time of the "Disposition Transfer" of each Separate Development Parcel referenced in Article III below, title to such Separate Development Parcel will be vested in the Agency subject only to the City's reserved subsurface mineral and water rights referenced above, this Agreement, the ' Developer's rights and interest in such parcel as provided herein, the following approved exceptions to title (to the extent such exceptions apply to such Separate Development f Parcel) , and such other exceptions to title as hereafter may L be Mutually approved by t:ie Agency and Developer (hereinafter the "Approved Title Exceptions") : Exception Nos. 1 (as to then-current taxes and assessments) , 2, 6, 7, and 9 in Schedule B, Section 2, Part II of that certain Commitment for Title Insurance dated December 8, 1986, as supplemented on January 23, 1987, and March 27, 1987, issued by First F American Title Insurance Company covering the Developer Parcel (OR-1455792) , a copy of which document is attached hereto as Attachment No. 8 (the "Preliminary Title Report for the Developer Parcel") . Agency and Developer agree not to enter into any lease, sublease, restrictive covenant, or other agreement nor to modify or amend any existing such agreement rr. which agreement, modification, or amendment could prevent, delay, or impair the parties' mutual objective to acquire and maintain title to the Site subject to only the Approved Title Exceptions; provided, however, that nothing herein is intended to prevent the Agency or Developer from entering into agreements with respect to the Site consistent with the purposes of this Agreement. In addition to the foregoing, the Agency and Developer each understand that, while this Agreement is not intended to commit the Agency to exercise its power of eminent domain (see paragraph 4 below) , in order to implement this Agreement and develop the Site, within the times set forth in the Schedule of Performance (Attachment No. 4) , Agency will have to acquire and terminate all of the property interests in that portion of the adjacent Pacific Mobilehome Park property which must be acquired in order to accommodate (i) the planned extension of Walnut Avenue from its existing terminus at Huntington Street through the Site to Beach Boulevard and (ii) the planned extension of certain public utilities (including without limitation a domestic water line) to the Site along the Walnut Avenue right-of-way. 2. Except as specifically set forth in paragraph 3 below, and subject to the Agency's reserved discretion with respect to deciding whether to exercise its Lpower of eminent domain, as provided in paragraph 4 below, -10- Q8/15/88 FINAL r L ir. the Agency shall exercise its best efforts to cause to be removed of record and to terminate all of the property interests/occupancies in the Site, other than those interests /occupancies reflected in the Approved Title Exceptions, and all interests/occupancies in that portion of the adjacent *" Pacific Mobilehome Park property which must be acquired and terminated in order to accommodate the planned extensions of walnut Avenue and utilities through the Site. Prior to the scheduled date for the Disposition Transfer of the first Separate Development Parcel on which the oil pipeline is located, which pipeline is reflected in Exception No. 4 as shown in Schedule B, Section 2, Part 11 of the Preliminary V Title Report for the Developer Parcel, the Agency shall exercise its best efforts to cause said property interest to be terminated and removed of record and said oil pipeline to be relocated from the Site, at no expense to the Developer. Prior to the scheduled date for the Disposition Transfer of the first Separate Development Parcel including all or any portion of the City Beach Maintenance Facility Parcel, the Agency shall exercise its best efforts to cause the property interest reflected in Exception No. 5 as shown in Schedule B, Section 2, Part II of the Preliminary Title Report for the �* Developer Parcel to be terminated and removed of record, at no expense to the Developer. The Agency shall exercise its best efforts to negotiate the acquisition and termination of all of the property interests/occupancies to be acquired and terminated by the Agency within the times set forth in the Schedule of Performance (Attachment No. 4) . In addition, the Agency agrees to perform all of its obligations under the Mobilehome Acquisition and Relocation Agreement attached to the Relocation Assistance Plan referenced in Section 203 below in order to timely remove and relocate tenants and occupants from the Driftwood Mobilehorie Park on the Developer Parcel. Finally, in the event that, after and despite its best efforts, the Developer is unable to acquire and terminate any of the property interests/occupancies in the Site which are the Developer's responsibility, pursuant to paragraph 3 below, the Agency agrees to consider acquiring and terminating such interests/occupancies through exercise +�+ of the Agency's power of eminent domain, in accordance with paragraph 4 below, provided that all costs and expenses of the Agency in such regard shall be advanced by and the full responsibility of the Developer, 3. The Developer agrees to exercise its best efforts to cause the following exceptions to title shown in Schedule B, Section 2, Part II of the Preliminary Title Report for the Developer Parcel to be removed of record and terminated prior to the Disposition Transfer of the first L Separate Development Parcel with respect to which each such exception applies: Exception Nos. S. 13, 14, 15, 17, and 18. f The Developer further agrees to perform all of its L -11- 08/15/88 FINAL I L. obligations under the Relocation Assistance Plan referenced in section 203 and the Mobilehome Acquisition and Relocation Agreement attached thereto in order to assist the Agency in timely removing and relocating tenants and occupants from the ' Driftwood Mobilehome Park on the Developer Parcel. Finally, -the Developer shall have the responsibility for terminating any of the property interests/occupancies with respect to the { Developer Parcel not specifically referenced herein which interests/occupancies must be acquired and terminated in order that title to each Separate Development Parcel will be subject to only the Approved Title Exceptions at the time of the Disposition Transfer thereof and which interests/ occupancies were or are created by the Developer or any person or entity. claiming under the Developer or any predecessor--in-interest to the Developer's leasehold interest in the Developer Parcel at any time subsequent to January 9, 1961. In the event that the Developer is unable, after and despite its best efforts, to acquire and terminate any of the aforedescribed interests/occupancies which are the Developer's responsibility hereunder, the Developer shall promptly so notify the Agency, which shall then consider s acquiring and terminating such interests/occupancies through exercise of its power of eminent domain, in accordance with paragraph 4 below, provided that all costs and expenses fi incurred by the Agency for acquiring and terminating those exceptions to title which are the Developer's responsibility hereunder shall be advanced and paid for by the Developer. 4 . If, after and despite its exercise of best efforts to do so, the Agency is unable to negotiate the acquisition and termination of all of the property interests/occupancies in the Site and the Pacific Mobilehome Park property which are its responsibility under paragraph 2, or if, after and despite the Developer's exercise of best efforts to do so, the Developer is unable to acquire and terminate all of the property interests/occupancies in the Developer Parcel which are its responsibility under paragraph 3, and the Developer so notifies the Agency, all within the applicable times set forth in the Schedule of Performance, the Agency shall determine, in its sole discretion, whether to acquire the remaining unacquired property interests/ occupancies by exercise of its power of eminent domain. If the Agency elects to exercise its power of eminent domain, such election shall be made and the eminent domain action(s) shall be filed within the applicable times set forth in the Schedule of Performance; provided, that nothing in this w+ Agreement shall be deemed to constitute a commitment by the Agency to condemn property or a prejudgment of the matters required to be considered as part of any decision to condemn property. Upon Agency acquisition of any of the unacquired property interests/occupancies, the Agency and Developer agree that said property interests/occupancies shall be -12- 08/15/88 FINAL 1r.. L r terminated, and the Agency and Developer shall cooperate and execute any documents required to remove said property interests of record. In the event that the Agency exercises ir.. its power of eminent domain to acquire any of the unacquired property interests in the Site or the Pacific Mobilehome Park property, the Agency shall, subject to delays outside the Agency's reasonable control, exercise best efforts to complete the acquisition of (and terminate) such property interests/occupancies as soon as possible after the j commencement of eminent domain proceedings. i In the event that the Agency exercises its power of eminent domain to acquire any or all of the L unacquired property interests/occupancies in the site or the Pacific Mobilehome Park property, the Agency shall, upon the Developer's written request, exercise its best efforts to F obtain a judicial order or orders (hereinafter "order of L Prejudgment Possession") authorizing the Agency to take possession of the premises prior to the final orders) of condemnation. Notwithstanding any other provision of this Agreement to the contrary, if, at any time prior to the Agency's acquisition and termination of all of the property interests/occupancies to be acquired in a Separate Development Parcel, the Agency provides to the Developer a copy of an order or Orders of Prejudgment Possession, and: (i) The Agency delivers possession of the i. premises; and (ii) The Agency is diligently proceeding with the eminent domain action(s) seeking the rendering of a final judgment, which judgment would authorize the taking, and the Agency agrees to 'terminate the �+ applicable property interest/occupancy when Agency completes the acquisition thereof; and L (iii) The right of possession conveyed by the Agency to the Developer is sufficient to L enable the Developer to obtain a title insurance policy as necessary to close its construction and permanent loans for the development of the Separate Develop- L meet Parcel in question; then, the Developer shall accept such right of possession and proceed with the development of such Separate Development Parcel, with the date of transfer of possession from the Agency to the Developer treated the same as the date of the 1. -13- 08/15/88 FINAL L Disposition Transfer (as defined in Section 301) for purposes L of the Developer's obligation to proceed with and complete construction with respect to said Separate Development Parcel. Upon the request of the "Title Company", as that term is defined in Section 310 below, the Agency s shall execute an indemnification agreement in form satis- L factory to such title company and reasonably satisfactory to the Agency by which the Agency shall agree to indemnify the ' Title Company for any losses, damages and expenses incurred L by the Title Company in the event of the Agency's abandonment of the eminent domain proceedings. In this regard, the Developer agrees in turn to indemnify, defend, and hold the Agency harmless if Agency's abandonment is justified because of a default by the Developer hereunder. Nothing herein shall be deemed to obligate the Agency to pay for any additional premium or other charge necessary for the issuance iw of said title policy. In the event that the Title Company declines to issue a title insurance policy under such circumstances, the Developer's obligation to commence and complete the construction with respect to the applicable Separate Development Parcel shall not commence to run until the property interest/occupancy is acquired and terminated and title to the applicable Separate Development Parcel can be vested in the Developer (fee title if in the Residential Portion, leasehold title if in the Commercial Portion) in ' accordance with Section 201.1 above and Article III below. 6d 5. Notwithstanding any other provision of this Agreement to the contrary, in the event that the City, Agency, and Developer are unable to acquire and terminate all of the property interests/occupancies needed to obtain title to a Separate Development Parcel subject only to the Approved Title Exceptions listed in Section 201.1 and/or title to the portion of the Pacific Mobilehome Park property required to accommodate the planned extension of Walnut Avenue, the parties shall negotiate in good faith regarding a potential revision to the development plans required to be approved by the City and Agency under Section 203 and any other provisions of this Agreement which may have to be amended in i order to allow development to proceed on the balance of the L Site or said Separate Development Parcel, as applicable. b. The financial responsibility for acquiring I am, and terminating property interests/occupancies and relocating occupants from the Site and from the portion of the Pacific Mobilehome Park property which is to be acquired pursuant to this Section 201 shall be allocated between the Agency and Developer as referenced in paragraphs 2 and 3 above and as ti set forth in the "Method of Financing" (Attachment No. 5) . L -14- L 08/15/88 FINAL too i 7. On or before the Effective Date of this Agreement, the City and Developer have entered into a revised lease covering the Developer Parcel in the form attached hereto as Attachment No. 6 (hereinafter the "Lease") . 8. On or before the Effective Date of this Agreement, the City and Developer have entered into a "Development Agreement" with respect to the Site. The Development Agreement is attached to this Agreement as Attachment No. 9. B. [§202] -Zeserved C. [§203] Plan Submittals and Reviews Prior to or concurrently with the Effective Date of this Agreement, the City has issued the following approvals for the development of the Site: (i) approval of the "Master Site Plan" for the Commercial Portion of the Site +r' (which consists of the applicable portions of the "Technical Site Plan, Project Description, and Site Statistics" which is attached as Exhibit 1 to the Scope of Development [Attachment �,. No. 3]) ; (ii) approval of the "change of use:" of the existing mobilehome park on the Developer Parcel (including without limitation the removal of the "M-H Overlay Zone" therefrom [Zone Change No. 87-7] and approval of the Impact of ' Conversion Report and Relocation Assistance Plan therefor) ; (iii) Conditional Use Permit No. 87-7 and Coastal Development Permit No. 87-7 for the Phase 1 hotel; (iv) approval of any w. "special permits" for deviation from normal development standards or requirements for the Phase 1 hotel; and (v) Tentative Tract Map No. 13045 for the Phase 1 hotel. The Agency has specifically approved the development of the Phase 1 hotel as reflected in the conditional use permit and coastal development permit approved by the City. In addition to the foregoing approvals, the Developer recognizes that its right to develop each Separate Development Parcel within the Site pursuant to this Agreement is subject to obtaining the following additional specific discretionary land use permits from the City with respect to such Separate Development Parcel: (i) a "Conceptual Plan" for the Separate Development Parcels in the Residential Portion; (ii) except as to the Separate Development Parcel covering the Phase I hotel, a conditional use permit or permits and a coastal development permit or permits; (iii) a "special permit" for any requested ' deviations from normal development standards and require- ments; (iv) except as to the Separate Development Parcel covering the Phase I hotel, a parcel or tract map for the consolidations/divisions of the existing parcels within the Site to create such Separate Development Parcel; and (v) as to the Separate Development Parcel(s) on which the wetlands identified in the City's Downtown Specific Plan is (are) f -15- 08/15/88 FINAL P located, approval of wetlands mitigation in accordance with the Coastal Element of the City's General Plan and the �.. Downtown Specific Plan. The Developer further recognizes that the Agency shall have the right of architectural and planning review of all such plans and submittals, including L any requested changes in plans and submittals after the same have been approved. Notwithstanding any other provision of this Agreement to the contrary, nothing in this Agreement shall be deemed to constitute a commitment by the Agency to L approve any such plans or permits or a prejudgment of the matters required to be considered when the Developer applies for such approvals. Within the tines set forth in the Schedule of Performance (Attachment No. 4) , the Developer shall prepare E and submit to the Agency and City an application for the applicable discretionary development permits as referenced above which are required for each separate Development Parcel, together with all documents, plans, and drawings normally required by the City/Agency for such application. Subject to the next succeeding sentence hereinbelow, each such submittal shall be consistent with the previously issued development approvals referenced above, the Scope of Development (Attachment No. 3) , and the Development Agreement (Attachment No. 9) . Notwithstanding the foregoing, it is understood that Developer may request approval of plans or L. permits which differ from such previously approved items based upon refinements in planning or changes in market or financial feasibility between the Effective Date and the time of actual development, provided that such plans shall in all events be consistent with the Downtown Specific Plan and other City General Plan and Zoning requirements applicable to the Site as of the Effective Date of this Agreement. The Agency agrees to act reasonably in reviewing any such request by the Developer based upon legitimate land use planning concerns and any effect that changes in the scope of the L development may have on the justification for the Agency's financial contributions thereto (as reflected in the Scope of Development (Attachment No. 3) and the Method of Financing L (Attachment No. 5) ) . In the event of any inconsistency or conflict between the approved plans and this Agreement, including without limitation the scope of development, the approved plans shall govern. In the event Agency reasonably L determines that a change in the scope of development from what is contemplated on the Effective Date warrants a t modification of the terms of the Agency's financial L contribution (as reflected in the Scope of Development (Attachment No. 3) and the Method of Financing (Attachment No. 5) ) , Agency agrees to consider riaking any amendments to this Agreement necessary to accommodate such change. k L -1b- 08/15/88 FINAL i With specific regard to the Residential Portion of the Site, the Developer and Agency each recognize that the Developer is required to obtain City approval of a Conceptual Site Plan for the Residential Portion prior to approval of any conditional use permit for residential +r development, in accordance with Section 4.10.02 of the Downtown Specific Plan. The Developer and Agency hereby agree that the Conceptual Residential Phasing Exhibit (attached to the Scope of Development [Attachment No. 3] as Exhibit 2) is provided by the Developer for informational purposes only to allow the City and Agency to analyze the nature of the planned development of the Residential Portion. During the preparation of all drawings and plans, staff of the Agency and the Developer shall hold w, regular progress meetings as needed to coordinate the preparation and review of such items. The staff of the Agency and Developer shall communicate and consult informally f as frequently as is necessary to ensure that the formal submittal of any documents to the City and Agency can receive prompt and speedy consideration. Provided that the submittals by the Developer are complete, the Agency shall approve or disapprove and shall exercise reasonable diligence to cause the City to expeditiously approve or disapprove the applications within the times established in the Schedule of Performance (Attachment No. 4) . The Agency shall review all of the Developer's applications, plans, permits, and related documents in accordance with the Development Agreement (Attachment No. 9) . No plan, permit, or approval required for the development of the Project shall be revoked or subsequently disapproved once issued by the Agency provided that the development is consistent with the plan, permit, or approval. Any disapproval by the Agency shall state in writing the reasons for disapproval. The Developer, upon receipt of a disapproval, shall revise the disapproved portions of its plans or drawings and resubmit to the city or Agency, as applicable, as soon as possible after receipt of �,. the notice of disapproval as provided in ' the Schedule of Performance. If the Developer desires to make any sub- stantial change in any of the plans after their approval by the City or Agency, whether before or after the Disposition Transfers referenced in Article III of this Agreement, the Developer shall submit the proposed change to the City and Agency for approval. The processing, review, and approval of any such revised submittal shall be subject to the same provisions as are set forth above for the initial submittal. r -17- 08j15J88 FINAL k 6* Within the times set forth therefor in the Schedule of Performance (Attachment No. 4) , the Developer shall prepare and submit to the City final building plans and/or construction drawings with respect to all of the Developer Improvements to be constructed on each Separate L Development Parcel and with respect to all public improvements or utilities to be designed or constructed by the Developer with respect to such phase of development, in sufficient detail to obtain a building or construction permit or permits. Said submittals shall be consistent with all previously approved plans for the work in question. The Agency shall exercise reasonable diligence to cause the City to expeditiously complete its review of the final building plans and/or construction drawings within the times established in the Schedule of Performance, and to approve w such plans or drawings and issue appropriate building, construction, and encroachment permits therefor, as applicable, provided that the Developer has complied with all applicable codes and if such plans or drawings are not inconsistent with applicable provisions of all previously approved plans and permits. D. [§204] Submittal of Evidence of Financin Commitments Within the times set forth in the Schedule of Performance (Attachment No. 4) , the Developer shall exercise reasonable diligence to obtain and, if successful, shall submit to the Agency evidence reasonably satisfactory to the i.r Agency that the Developer has obtained the financing neces- sary for the development of each Separate Development Parcel in accordance with this Agreement. Such evidence of financing shall include the following: i a. A copy of the commitment or commit- ments obtained by the Developer for the mortgage loan or loans (both for L interim construction financing and take out financing) to assist in financing the construction of the L "Developer Improvements" (as defined in the Scope of Development, Attach- ment No. 3) on such Separate 4 Development Parcel, certified by the Developer to be a true and correct copy or copies thereof. The commit- ments for financing shall be in such L form and content acceptable to the Executive Director as reasonably evidences a firm and enforceable L ..lg- 08/15/88 FINAL 4 W commitment, with only those conditions which are standard or +�» typical for the lender(s) involved for similar projects; and b. Sufficient information (e.g. , an annual report) regarding the construction and permanent lenders to enable the Executive Director to determine whether or not such lender(s) has (have) sufficient financial resources to fund the V loan(s) ; and C. A financial statement and/or other documentation satisfactory to the Executive Director as evidence of other sources of capital sufficient to demonstrate the Developer has w adequate funds committed to cover the difference, if any, between construction and development cost minus financing authorized by mortgage loans; and d. A copy of the contract between the Developer and the general contractor(s) for the construction of the Developer Improvements on 6-d such Separate Development Parcel, certified by the Developer to be a true and correct copy thereof. i"' Within twenty (20) days of the Developer's request for approval of its evidence of financing, the Agency shall respond in writing by stating what further information, iW if any, the Agency reasonably requires in order to determine whether or not to approve such evidence of financing. Upon receipt of such a timely response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of its evidence of financing shall be deemed complete twenty (20) days after the Agency's receipt thereof, if no timely response requesting further information is delivered to the Developer, or, if such a timely response requesting further information is received, on the date the Developer delivers such additional information to the Agency (provided that 1.; Developer's additional information is responsive to Agency's request) . once the Developer's request for approval of its evidence of financing has been accepted as complete or is L08/15/88 FINAL r L deemed complete, the Agency shall not be entitled to demand LM additional information or to disapprove the request on the basis that the Developer has not furnished adequate or complete information. LThe Agency shall approve or disapprove evidence of financing within thirty (30) days after the Developer's request for such approval is accepted as complete or is deemed complete. If the Developer's initial request for approval of its evidence of financing complies with. the requirements of Section 705 below, the failure of the Agency to approve or disapprove_ such evidence of financing within i' such tires shall be conclusively deemed an approval. If the Agency shall disapprove any such evidence of financing, the Agency shall do so by written notice to the Developer stating the reasons for such disapproval. In the event of a dispute between the Agency and Developer arising out of an Agency disapproval hereunder, such dispute shall be resolved by arbitration in accordance with Section 611 herein. L E. [5205] Approval of Hotel Operators On or before the Effective Date of this Agreement, the Agency has approved Signet Hotel Corporation of Dallas, Texas, as the operator of the Phase 1 hotel. As to each other Separate Development Parcel on which a hotel is to be constructed (i.e. , Separate Development Parcel Nos. 3, v 4, and 6) , within the time set forth in the Schedule of Performance (Attachment No. 4) , the Developer shall exercise reasonable diligence to obtain and, if successful, shall 6., submit to the Agency evidence reasonably satisfactory to the Agency that the Developer has entered into a firm and enforceable agreement with a qualified operator to manage the hotel for a period of not less than five (5) years after the opening of the hotel for business. Within thirty (30) days after receipt of the �+ Developer's request for approval of a hotel operator, the Agency shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine whether or not to approve such hotel operator. Upon receipt of such a timely response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of a hotel operator shall, be deemed complete thirty (30) days �., after the Agency's receipt thereof, if no timely response requesting further information is delivered to the Developer, or, if such a timely response requesting further information -20- 08/15/88 FINAL LO is received, on the date that the Developer delivers such additional information to the Agency (provided that Developer's additional information is responsive to Agency's request) . once the Developer's request for approval of a hotel operator has been accepted as complete or is deemed complete, the Agency shall not be entitled to demand additional information or to disapprove the request on the basis that the Developer has not furnished adequate or L complete information. The Agency shall approve or disapprove each such hotel operator within forty-five (45) days after the Developer's request for such approval is accepted as complete or is deemed complete. Approval will not be unreasonably withheld and shall be given if the Developer demonstrates that the proposed operator is a capable, competent, and experienced operator of hotels similar in quality, size and type as set forth in the Scope of Development. If the Agency shall disapprove a hotel operator, the Agency shall do so by written notice to the Developer stating the reasons for Such disapproval. Notwithstanding any other provision of this DDA to the contrary, in the event the Developer assigns its rights with respect to any Separate Development Parcel on which a hotel is to be constructed to an entity which meets w the qualifications set forth above for an approved hotel operator, nothing in this DOA shall be interpreted to prevent the assignee from operating and managing the hotel itself (without the need for a separate operating agreement) . In the event of a .dispute between the Agency and Developer arising out of an Agency disapproval hereunder, such dispute shall be resolved by arbitration in accordance with Section 611 herein. W F. [§206] Approval of Hotel Franchisors On or before the Effective Date of this Agreement, the Agency has approved Hilton Hotel Corporation of Los Angeles, California, as the franchisor for the Phase 1 hotel. As to each other Separate Development Parcel on which a hotel is to constructed (i.e. , Separate Development Parcel +� Nos. 3, 4, and 6) , within the time set forth in the Schedule of Performance (Attachment No. 4) , the Developer shall exercise reasonable diligence to obtain and, if successful, shall submit to the Agency evidence reasonably satisfactory to the Agency that the Developer has entered into a firm and enforceable agreement with a qualified hotel franchisor permitting the hotel to be operated under said franchisor's name, and with access to such franchisor's national advertising and reservations system, for a period of not less -21- 08/25/88 FINAL 1 L r i�. than ten (10) years after the opening of the hotel for business. Within thirty (30) days after receipt of the Developer's request for approval of a hotel franchisor, the Agency shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine whether or not to approve such hotel franchisor. Upon receipt of such a timely response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of a hotel franchisor shall be deemed complete thirty (30) days after the Agency's receipt thereof, if no timely response requesting further information is delivered to the Developer, r or, if such a timely response requesting further information is received, on the date that the Developer delivers such additional information to the Agency. Once the Developer's request for approval of a hotel franchisor has been accepted as complete or is deemed complete, the Agency shall not be entitled to demand additional information or to disapprove request on the basis that the Developer has not furnished adequate or complete information. The Agency shall approve or disapprove each such hotel franchisor within forty-five (45) days after the Developer's request for such approval is accepted as complete or is deemed complete. Approval will not be unreasonably withheld and shall be given if the Developer demonstrates that the proposed franchisor is a capable, competent, and experienced franchisor of hotels similar in quality, size, and type as set forth in the Scope of Development and meeting the requirements of a "First-Class Hotel" franchisor as that term is defined in Section 7.1 of Exhibit "S" to the Lease attached hereto as Attachment No. 6. If the Agency shall disapprove a proposed hotel franchisor, the Agency shall do so by written notice to the Developer stating the reasons for �. such disapproval. Notwithstanding any other provision of this Agreement to the contrary, in the event the Developer assigns its rights with respect to a Separate Development Parcel to an entity which meets the qualifications set -forth above for an approved hotel franchisor, nothing in this Agreement shall be interpreted to prevent the assignee from operating and managing the hotel itself (without the need for a separate franchise agreement) . In the event of a dispute between the Agency and Developer arising out of an Agency disapproval hereunder, such dispute shall be resolved by arbitration in accordance with Section 611 herein. -22- 08/15/88 FINAL i w L III. [000] DISPOSITION TRANSFERS A. [§301] Dis asition Transfers; General Subject to all of the other terms and condi- tions set forth in this Agreement, within the tines set forth in the Schedule of Performance (Attachment No. 4) : (i) the Agency and Developer agree to execute La and enter into a new lease with respect to each Separate Development Parcel in E the Commercial Portion. Each such lease shall be in the form of the lease set forth in Attachment No. 6 hereto, with the applicable revisions as set forth in L Section 1.11 and Exhibit "B" thereto. The Agency . agrees to sell to the Developer and the Developer agrees to i' purchase from the Agency each of the Separate Development Parcels in the Residential Portion, The conveyances of the Separate Development Parcels in the Site from the Agency to the Developer as set forth in the preceding sentence are sometimes hereinafter referred to as the "Disposition Transfers. " The Developer shall deliver written notice to +.. the Agency of the Developer's intent to schedule the Disposition Transfer of a Separate Development Parcel no + later than eight (8) r.�onths prior to the scheduled date therefor. Notwithstanding any other provision of this Agreement to the contrary, and provided that- the Developer has timely complied with all its obligations hereunder with respect to such matter, the Developer's obligation to close each Disposition Transfer shall be conditioned upon the L satisfaction (or waiver by the Developer) of each of the following conditions precedent: L (i) the Developer and/or the Agency shall have acquired and terminated all of the property interests/occupancies to be acquired within said Separate Development L Parcel such that title thereto is subject only to the Approved Title Exceptions applicable to such parcel which are listed or referenced in Section 201.1 (or the Agency shall have obtained an order or orders for prejudgment -23- 08/15/88 FINAL L i w possession meeting the requirements of Section 201.4 above for any remaining unacquired interests/occupancies) ; The Agency shall have acquired and +.. terminated all of the property interests/occupancies to be acquired on that portion of the Pacific Mobilehome Park property which must be acquired in order to accommodate the planned extension of Walnut Avenue and utilities j to be located within the right-of-way for r Walnut Avenue (or the Agency shall have obtained an order or orders for prejudgment possession meeting the L, requirements of Section 201.4 above for any remaining unacquired interests/ occupancies) ; (iii) the Developer shall have obtained Agency and City approval of all plans (including final building plans) for said Separate Development Parcel required to be approv- ed pursuant to Section 203 above, and the City shall be prepared to issue building a permits at the close of escrow; W (iv) the Agency shall have approved (or be deemed to have approved) the Developer's evidence of financing cormitments for the development of said Separate Development Parcel pursuant to Section 204 above; (v) the Agency shall have approved the hotel operator and franchisor as to each Separate Development Parcel on which the Developer is required to construct a hotel, pursuant to Sections 205 and 206 above; (vi) with respect to the Disposition Transfer of the first Separate Development Parcel on which the oil pipeline reflected in Exception No. 4 to the Preliminary Title Report referenced in Section 201.1 of this Agreement is located, the Agency has +►� caused such oil pipeline to be removed or relocated from the Site, in accordance with Paragraph III.B of the Scope of w Development (Attachment No. 3) ; v -24- ' 08/15/88 FINAL f W (vii) the City and Developer shall have entered into the amended Lease covering the Developer Parcel (Section 201.7) and the Development Agreement covering the Site (Section 201.8 and Attachment No. 9) ; (viii) the City and Agency shall have adopted the ordinances transferring from the City to the Agency the authority to levy and collect transient occupancy taxes securing (in part) the Agency's paynent obligations to the Developer under the �. Method of Financing (Attachment No. 5) ; t (ix) the Agency has complied with its obligations under Section 312 with regard to the physical condition of such , . Separate Development parcel; (x) the Agency has not cleaned up or removed all toxic and hazardous substances on, under, or with respect to such Separate Development Parcel in accordance with Section 312 and Paragraph III of the Scope of Development (Attachment No. 3) ; (xi) with respect to Separate Development Parcel No. 7, the Agency has demolished and cleared therefrom the existing City �.+ beach maintenance facility; (xii) there are no proceedings or litigation w pending which do or could adversely affect the development or use of said Separate Development Parcel for the purposes identified or referenced in this +� Agreement or any of the development approvals referenced in Section 203 above, except for pending eminent domain litigation in which valuation of property interests is the only contested issue, S and further excepting that it is understood that final building permits and permits for the on-Site improvements will not be issued and permits for the " off-Site public improvements nay not be �.. issued until after the closing of escrow; (xiii) there are no actual or any pending or proposals for ordinances, rules, regulations, or other actions on the part of any governmental body, department, or -25- 08/15/88 FINAL agency which would adversely affect the development of said Separate Development +� Parcel; (xiv) the Agency is not in raterial default of w, any of its obligations under this Agreement. Notwithstanding any other provision of this Agreement to the contrary, and provided that the Agency has tinely complied with all of its obligations hereunder with ! respect to such matter, the Agencyte obligation to close each Disposition Transfer shall be conditioned upon the satisfaction (or waiver by the Agency) of each of the following conditions precedent: w (i) the Developer and/or the Agency shall have acquired and terminated all of the property interests/occupancies to be +.. acquired within said Separate Development Parcel such that title thereto is subject only to the Approved Title Exceptions applicable to such parcel which are listed or referenced in Section 201.1 (or the Agency shall have obtained an order or orders for prejudgment possession meeting the requirements of Section 201.4 above for any remaining s unacquired interests/occupancies) ; The Agency shall have acquired and terminated all of the property interests/occupancies to be acquired on that portion of the Pacific Mobilehone Park property which must be acquired in order to accommodate the planned r.. extension of walnut Avenue and utilities to be located within the right-of-way for Walnut Avenue (or the Agency shall have obtained an order or orders for prejudgment possession meeting the requirements of Section 201.4 above for any remaining unacquired interests/ �+ occupancies) ; the Developer shall have obtained Agency and City approval of all plans (including final building plans) for said Separate Development Parcel required to be approv- ed pursuant to Section 203 above, and the City shall be prepared to issue building I� permits at the close of escrow; -26- 08/15/88 FINAL r � . (iv) the Agency shall have approved (or be deened to have approved) the Developer's evidence of financing commitments for the development of said Separate Development j Parcel pursuant to Section 204 above; 6. (v) the Agency shall have approved the hotel + operator and franchisor as to each L Separate Development Parcel on which the Developer is required to construct a hotel, pursuant to Sections 205 and 206 above; (vi) if the Agency reasonably determines that f the costs required for clean-up or removal of all toxic and hazardous substances on, under, or with respect to such Separate Development Parcel exceed the costs committed by the Agency pursuant to Section 312 and Paragraph III of the Scope of Development (Attachment No. 3) • (vii) the Developer is entitled to the conveyance of said Separate Development Parcel in accordance with the phasing schedule set forth in Section 313 below; and «+ (viii) the Developer is not in material default of any of its obligations under this Agreement (provided, that this condition 6,@ shall not apply if and to the extent that the default exists with respect to another portion of the Site which has previously been assigned by the Developer to an assignee permitted under Section 107 above) . �., Nothing in this Section 301 is intended to linit or affect either party's right to specific performance. B. [§302] Purchase Price for the Residential Portion; Rent for the connercial Portion �+ 1. The Developer's purchase price for each of the Separate Development Parcels in the Residential Portion of the Site shall be calculated as set forth in w, Paragraph 1 of the "Method of Financing" (Attachment No. 5 hereto) . -27- 08/15/88 FINAL r • 2 . The rent to be paid by the Developer for each Separate Development Parcel in the Commercial Portion ++ shall be calculated as set forth in the revised lease for said parcel (Attachment No. 6 as modified by the applicable provisions of Section 1.11 and Exhibit "B" thereto) . C. [§303) Escrow for Disposition of Separate Development Parcels Within ten (10) days after receipt of a written request from the Developer, and after all applicable conditions to the Disposition Transfer of a Separate �. Development Parcel set forth in Section 301 have been satisfied or waived, the Agency agrees to open an escrow or escrows with a title insurance company selected by the Developer and approved by the Agency's Executive Director in his/her reasonable discretion (hereinafter the "Escrow Agent") for the disposition to Developer of such Separate Development Parcel. This Agreement constitutes the joint w basic escrow instructions of the Agency and Developer for conveyance of each such parcel. A duplicate original of this f Agreement shall be delivered to the Escrow Agent upon the opening of each escrow. The Agency and Developer shall provide such additional escrow instructions as shall be necessary for and consistent with this Agreement. The Escrow Agent is hereby empowered to act under this Agreement, and +r the Escrow Agent, upon indicating within five (5) days after the opening of each escrow its acceptance of the provisions of this Section 303, in writing, delivered to the Agency and Developer, shall carry out its duties as Escrow Agent hereunder. The Escrow Agent's responsibilities shall be limited to performing its duties set forth or referred to in this Article Ill. Upon delivery of the deed(s) to the applicable parcel (s) within the Residential Portion, pursuant to Section ,r. 307 of this Agreement, the Escrow Agent shall record the deed when fee title can be delivered to the Developer in accordance with the terms and provisions of this Agreement, The Escrow Agent shall pay any applicable transfer tax. Upon delivery of the lease(s) to the applicable parcel(s) within the Commercial Portion pursuant to Section 307 of this Agreement, the Escrow Agent shall record the lease (or, at +r- the Developer's option, a memorandum thereof) when the leasehold estate can be delivered to the Developer in accordance with the terms and provisions of this Agreement. The Developer shall deposit into each escrow for a Separate Development Parcel within the Residential Portion, not later than one (1) business day prior to the scheduled close of escrow, the purchase price for such Separate Development Parcel, calculated in accordance with -28- 08/15/88 FINAL t i L it paragraph 1 of the Method of Financing (Attachment Zdo. 5) . � The Developer shall also deposit into each escrow to the �- Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Developer of the amount of such fees, charges, and costs, but not earlier than ten (10) days prior to the scheduled date for closing the Escrow: L 1. One-half of the escrow fee; 2. Ad valorem taxes and assessments, if any, ' upon the portions of the parcel, if any, included within the Beach Maintenance Facility Parcel and the Beach Boulevard Remnant Parcel for any tire subsequent to the close of escrow, and ad valorem taxes and assessments, if any, upon the portions of the parcel included within the Developer Parcel for any time prior L or subsequent to the close of escrow; and 3. The premiums for the additional title L insurance policy coverage or special endorsements to be paid by the Developer, ' as set forth in Section 310. L The Agency shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Agency of the amount of such fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for closing the escrow: 1. One-half of the escrow fee; 2. Ad valorem taxes and assessments, if any, upon the portions of the parcel, if any, �.. included within the Beach Maintenance Facility Parcel and the Beach Boulevard Remnant Parcel for any time prior to the close of escrow; 3. The premiums for the title insurance policy or policies to be paid by the Agency in accordance with Section 310 of this Agreement; W 4. The costs for any state, county, or city documentary stamps; ink L -29- L 08/15/88 FINAL V hhW 5. Any transfer tax; L 6. The cost of drawing the deed(s) ; 7. Recording fees; and S. Notary fees. The Agency shall tirely and properly execute, acknowledge and deliver the deed(s) , in the form referenced in Section 305 and set forth in the "Form of Deed" (Attach- rent No. 7) , and the l•-,ase(s) , in the fors+ set forth in Attachment No. 6 (as revised pursuant to Section 1.11 and Exhibit "B" thereto) , together with an estoppel certificate certifying that the Developer has completed all acts 60 necessary to entitle the Developer to the conveyance, if such be the fact. The Escrow Agent is authorized to: I. Pay, and charge the Agency and Developer, F respectively, for any fees, charges and costs payable under this Section 303 of this Agreement. Before such payments or charges are made, the Escrow Agent shall notify the Agency and the Developer of the fees, charges and costs necessary to clear title and close the escrow. 2. Disburse funds and deliver the deed or lease, title insurance policy, and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Agency and the Developer. 3. Record any instruments delivered through this escrow, if necessary or proper to deliver insurable fee title or leasehold �.. estate, as applicable, to the Developer in accordance with the terms and provisions of this Agreement. All funds received in this escrow shall be deposited by the Escrow Agent with other escrow funds of the Escrow Agent in an interest earning general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disburse- rents shall be made by check of the Escrow Agent. All adjustments are to be made on the basis of a thirty (30) day month. L -30- 08/15/88 FINAL L If this escrow is not in condition to close on or before the time established therefor in Section 304 of this Agreement, either party who then shall have fully performed the acts to be performed before the scheduled close of escrow may, in writing, demand from the Escrow Agent the L return of its money, papers or documents deposited with the Escrow Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent shall have mailed copies of such demand to the other party at the address of its principal place of business. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other art within the ten 10 day period, in which event the party ( ) Y w. Escrow Agent is authorized to hold all money, papers and documents with respect to the applicable parcel(s) until + instructed by a mutual agreement of the Agency and Developer, i� or by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible. The Escrow Agent shall not be obligated to return any such money, papers, or documents except upon the written instructions of both the Agency and the Developer or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. Any amendment to these Escrow Instructions shall be in writing and signed by both the Agency and the "A Developer. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under ' such amendment. All communications from the Escrow Agent to the Agency and the Developer shall be directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands, and communications between the Agency and the Developer. 6" The Agency will cooperate with the preparation and accommodation of the use of alternative escrow instruc- tions (allocating costs in the manner hereinabove set forth) in the event requested by a lender or lenders for the Developer. D. [§304J Close of Escrow and Transfer and Del very of Possession of Separate Development Parcels LSubject to any extensions of time mutually agreed upon between the Agency and Developer, the close of escrow for each Separate Development Parcel shall be completed on or prior to the dates specified therefor in the Schedule of Performance (Attachment No. 4) . The Agency and Developer shall each perform all acts on its part to be -31-- 08/15/88 FINAL L T 1 lob performed necessary to the transfers in sufficient time for title and/or possession to be delivered in accordance with �+ the foregoing provisions. + Possession of each Separate Development Parcel shall be delivered to the Developer concurrently with the close of escrow, except as provided in Section 201.5. E. [§305] Forn of Deeds for Separate Development Parcels in Residential Portion P The Agency shall transfer to the Developer fee title to each Separate Development Parcel within the Resi- dential Portion pursuant to grant deed in the form attached hereto as Attachment No. 7, with title in the condition provided in Section 306 of this Agreement. F. [§306] Condition of Title w The Agency shall convey fee title to each Separate Development Parcel within the Residential Portion and leasehold title to each Separate Development Parcel within the Cormercial Portion free and clear of all recorded and unrecorded liens, encumbrances, easements, licenses, leases, and other defects of title except the Approved Title �+ Exceptions Listed or referenced in Section 201.1. G. [§307] Time for and Place of Delively of Lh Deed(sl_ and Leases) Subject to any mutually agreed upon extensions of time, the Agency shall deliver the executed deed to each Separate Development Parcel within the Residential Portion and the executed lease (Attachment No. 6, as revised pursuant to section 1.11 and Exhibit "B" thereto) to each Separate +.. Development Parcel within the Commercial Portion on or before the date established for the close of escrow. H. [§308] Taxes and Assessments Ad valorem taxes and assessments, if any, on those portions of the Site included within the Beach Maintenance Facility Parcel and the Beach Boulevard Remnant Parcel which have been levied, assessed or imposed for any period commencing prior to a Disposition Transfer shall be borne by the Agency, and all other taxes and assessments imposed on the Site, or any portion thereof, whether prior or subsequent to a Disposition Transfer, shall be borne by the WDeveloper. -32- 08/15/88 FINAL i I k Mr [§309] Recordation of Deeds and Leases The Escrow Agent shall file each deed and each lease (or, at the Developer's option, a memorandum of lease) for recordation among the land records in the office of the M' County Recorder for Orange County, and shall deliver to the Developer a title insurance policy in conformity with Section ` 310 of this Agreement. J. [§310] Title Insurance Concurrently with recordation of each deed for a Separate Development Parcel within the Residential Portion, a title insurance company selected by the Developer and approved by the Agency's Executive Director in his/her reasonable discretion (the "Title Company") , shall provide and deliver to the Developer an ATLA Survey and owner's and Lender's ALTA Extended Coverage (Form B) policy or policies of title insurance issued by the Title company insuring that title is vested in the Developer in the condition required herein, with coverage in the amount of Developer's purchase price. The Title Company shall provide the Agency with a L copy of each such title insurance policy. The Developer shall pay the entire cost of the premium for each title policy, including the cost of any new survey required in order to obtain the title policy and the cost for any addi- tional coverage or endorsements that Developer (or its lender) may require. L Concurrently with recordation of each lease or memorandum of lease for a Separate Development Parcel within the Commercial Portion, the Title Company shall provide and 6d deliver to the Developer an ALTA Survey and standard form ALTA tenant's policy or policies of title insurance issued by the Title Company insuring that leasehold title is vested in the Developer in the condition required herein. The Title Company shall provide the Agency with a copy of each such title policy. The total amount of title insurance coverage for each Separate Development Parcel within the Commercial Portion shall be equal to the Permanent Annual Base Rental for the first full year for which such Permanent Annual Base Rental is to be charged under the revised lease for such �., Separate Development Parcel multiplied by ten (10) , or such other amount as may be established by Developer and its lender. The Developer shall pay the entire cost of the L premium for each title policy, including the cost of any new survey required in order to obtain the title policy and the cost for any additional coverage or endorsements that Developer (or its lender) may require. L L -33- 08/15/88 FINAL L �;. [§311] Occupants of the Site 6. Possession of each Separate Development Parcel shall be delivered to the Developer with no possessory rights or possession by others, except as may be consistent with the 6W approved condition of title referenced in Section 306, or otherwise as may be specifically approved in writing by Developer if Developer reasonably determines that it can proceed with development pursuant to the approved plans. L. [§312] Physical Condition of the Site L Except as set forth in Paragraph III of the Scope of Development (Attachment No. 3) , and specifically excluding the Matters referenced in Section 311, the Agency shall transfer and convey each Separate Development Parcel to 6d the Developer in an "as is" physical condition. If the Agency reasonably determines that the cost of cleaning up or removing any toxic or hazardous substances on, under, or with �. respect to a Separate: Development Parcel exceeds the maximum Agency financial commitment, as provided in Paragraph III of the Scope of Development, the Agency shall promptly so notify the Developer and if the Developer does not agree within sixty (60) days after receipt of such notice to assume the responsibility for payment of such excess cost, either party may terminate this Agreement with respect to such Separate Development Parcel in accordance with Sections 608 and 609. Subject only to the foregoing and the Method of Financing (Attachment No. 5) , the Developer shall be responsible for all costs incurred in preparing the Site for the provision of the Developer Improvements. M. [§313] Limitations on Time and Phasing of Disposition Transfers. Notwithstanding any other provisions of this Agreement to the contrary, without the Agency's written consent, which consent may be withheld in the Agency's sole and absolute discretion, the time, order, and phasing of the Disposition Transfers of the Separate Development Parcels within the Site shall be consistent with the following requirements and limitations: i� (i) Within the Commercial Portion of the Site, the order of Disposition Transfers shall be as follows: Phase 1, Phase 2, V Phase 3, Phase 4, Phase 5, and Phase 6 (Separate Development Parcel Nos. 1-6) (as such phases are shown and described in the approved Master Site Plan for the Commercial Portion of the Site and the Scope of Development (Attachment No. 3) ) . 64 -34- L08/15/88 FINAL i i (ii) Within the Residential Portion of the L - Site, the order of Disposition Transfers shall be as follows: Phase 1, Phase 2, and Phase: 3 (Separate Development Parcel Nos. 7-9) (as such phases are described LM in the the Scope of Development and tentatively shown in the: "Conceptual Residential Phasing Exhibit" attached L thereto as Exhibit 1) . (fii) The Disposition Transfer for the Phase 1 residential development (Separate L Development Parcel No. 7) shall occur no earlier than the following conditions are satisfied: the Huntington Beach Inn has L been demolished, the Developer has commenced construction of the Phase 3 commercial development (Separate Development Parcel No. 3) , and the Developer has either completed construction of the Phase 3 commercial development or is diligently proceeding 4„i with such construction of the time of the Disposition Transfer of Separate Development Parcel No. 7. (iv) The. Disposition Transfer of Phase 2 of the residential development (Separate Development Parcel No. 8) shall occur no + earlier than the following conditions are satisfied: the Developer has cormenced construction of the Phase 4 commercial development (Separate Development Parcel No. 4) , and the Developer has either completed construction of the Phase 4 commercial development or is diligently proceeding with such construction at the time of the Disposition Transfer of Separate Development Parcel No. S. (v) The Disposition Transfer of the Phase 3 residential development (Separate Development Parcel No. 9) shall occur no earlier than the following conditions are satisfied: the Developer has comnenced construction of the Phase 6 commercial development (Separate Development Parcel No. 6) , and the Developer has either completed construction of the Phase 6 commercial development or is diligently L -35- 08/15/88 FINAL proceeding with such construction at the time of the Disposition Transfer of Separate Development Parcel No. 9. (vi) Subject only to extensions of time to which the Developer may be entitled pursuant to Section 703 below (including, without limitation, extensions resulting from Agency's failure or inability to acquire and terminate all property interests/occupancies required for the Phase 1 commercial development) and extensions of time to which the Developer may be entitled due to any default hereunder by the Agency, if the Developer does not commence construction of the Phase 1 commercial development (Separate Development Parcel No. 1) within thirty (30) months after the Effective Date of this Agreement, the Developer's right to any further Disposition Transfers (including without limitation the Disposition Transfer of Separate Development Parcel No. 1, if such conveyance has not occurred by that time) , shall be terminated. (vii) Subject only to extensions of time to which the Developer rsay be entitled pursuant to Section 703 below (including, without limitation, extensions resulting from Agency's failure or inability to acquire and terminate all property interests/occupancies required for the Phase 3 commercial development) and extensions of time to which the Developer may be entitled due to any default hereunder by the Agency, if the Developer IW does not demolish the existing Huntington Beach Inn and commence construction of the Phase 3 commercial development (Separate Development Parcel No. 3) on or before December 31, 1996, the Developer's right to the Disposition Transfer for the Phase 6 commercial development (Separate Development Parcel No. 6) and the Phase 3 residential development (Separate Development Parcel No. 9) shall be L terminated, except that the Developer shall have the right, at its sole option, r L -36- L08/15/88 FINAL 1 f e to four (4) one-year extensions of said deadline (to a date no later than December 31, 2000) , as follows: (A) If by December 31, 1996, the Developer pays to the Agency the sur.. of Five Hundred Thousand Dollars ($500,000.00) , the Developer shall be entitled to extend the deadline set forth above by an additional period of one year, to December 31, I997 . (8) If by December 31, 1997, the Developer pays to the Agency the sum of Five Hundred Fifty Thousand Dollars ($550,000.00) , the Developer shall be entitled to extend the deadline set forth above by an additional period of one year, to December 31, 1998. (C) If by December 31, 1998, the Developer pays to the Agency the sure of Six Hundred Thousand Dollars ($600, 000.00) , the Developer shall be entitled to extend the deadline set forth above by an additional period of one year, to December 31, #.. 1999 . (D) If by December 31, 1999, the Developer pays to the Agency the sure of Six Hundred Fifty Thousand Dollars ($650,000.00) , the Developer shall be entitled to extend the �+ deadline set forth above by an additional period of one year, to December 31, 2000. (viii) Subject only to extensions of time to which the Developer may be entitled pursuant to Section 703 below (including, ' without limitation, extensions resulting from Agency's failure or inability to acquire and terminate all property r.. interests/occupancies required for the Phase 4 co=mercial development) and extensions of time to which the Developer may be entitled due to any default hereunder by the Agency, if the Developer 4 does not commence construction of the i -37- 08/15/88 FINAL L Phase 4 commercial development (separate Development Parcel No. 4) by December 31, 2001, the Developer's right to the Disposition Transfer of the Phase 6 commercial development (Separate Development Parcel No. 6) and to the Phase 3 residential development (Separate Development Parcel No. 9) shall be terminated, except that the Developer shall have the right, at its option, to four (4) one-year extensions of said deadline (to a date no later than LO December 31, 2004) , as follows: (A) If by December 31, 2001, the L Developer pays to the Agency the sun of Seven Hundred Fifty Thousand Dollars ($750,000.00) , the Developer shall be entitled to extend the deadline set forth above by an additional period of one year, to I1 December 31, 2002. L (8) If by December 31, 2002, the Developer pays to the Agency the sum of Eight Hundred Thousand Dollars ($800,o0o.00) , the Developer shall be entitled to extend the deadline L set forth above by an additional period of one year, to December 31, 2003. (C) If by December 31, 20031 the Developer pays to the Agency the sum 1 of Eight Hundred Fifty Thousand Dollars ($850,000.00) , the Developer shall be entitled to extend the deadline set forth above by an additional period of one year, to December 31, 2004. (ix) Subject only to extensions of tine to L which the Developer may be entitled pursuant to Section 703 below (including, 1 without limitation, extensions resulting L from Agency's failure or inability to acquire and terminate all property interests/occupancies required for the Phase 6 commercial development and L extensions of time to which the Developer may be entitled due to any default Lhereunder by the Agency, if the Developer -38- 1 08/15/88 FINAL k 1€ L L does not satisfy (or the Agency does not Not waive) all conditions precedent to the Developer's right to the Disposition Transfer of the Phase 6 conmercial development (Separate Development Parcel No. 6) no later than December 31, 2004, the Developer's right to such Disposition Transfer and to the Disposition Transfer of the Phase 3 residential development (Separate Development Parcel No. 9) shall be terminated (and the Developer shall have no right to purchase further extensions of said deadline) . (x) subject only to extensions of tine to which the Developer may be entitled pursuant to Section 703 below and ' extensions of time to which the Developer ray be entitled due to any default hereunder by the Agency, if the Developer does not commence construction of all six 4 (6) phases of the commercial development on the Commercial Portion of the Site by December 31, 2004, the lease terra of any portion of the Developer Parcel that has +� not already been conveyed to the Developer pursuant to a Disposition ti Transfer shall expire and terminate effective December 31, 2010, as set forth in Sections 1.4 and 1.5 of the Lease (Attachment No. 6 hereto) . Any option payments made by the Developer pursuant to subparagraphs (vii) and/or (viii) above shall be non-refundable and shall not be credited either to the �.+ purchase price of any of the Separate Development Parcels within the Residential Portion of the Site or to any rent payments to be made by Developer with respect to the �6& Developer Parcel or the Commercial Portion of the Site. Notwithstanding any other provision in this Agreement, the calendar dates specified in subparagraphs (vi) through (ix) above shall be extended by the period of any delay specified in the opening clauses of said subparagraphs. L L L -39- 08/15/88 FINAL IV. [§400] DEVELOPMENT OF THE SITE BY THE DEVELOPER A. [§401] Scope of .Deyelop*�ent Except as may be specifically provided herein, the Site, and each Separate Development Parcel thereof, shall be developed as provided in the Development Agreement (Attachment No. 9) , the previously issued development approvals referenced in Section 203, the Scope of Development (Attachment No. 3) , and the plans and related documents yet to be approved by the C?ty and Agency pursuant to Section 203, as the same may ce amended from time to time in accordance herewith. B. [§402] Cost of Construction All of the costs of demolishing and clearing existing improvements fron the Site and developing and constructing all of the on-Site and off-Site improvements to be provided pursuant to this Agreement shall be allocated r between the Developer and Agency as set forth in the Method of Financing (Attachment No. 5) . C. [§403] Construction Schedule �.+ The Developer and Agency shall begin and complete all construction and development required of each of them within the times specified in the Schedule of Performance (Attachment No. 4) . D. [§404] Bodily Injury and Property_ Damage Insurance The Developer shall defend, assume all respon- sibility for, and hold the Agency, and its officers and employees, harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorney's fees and costs) , which may be caused by any of the Developer's activities under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. Prior to the commencement of construction on any separate Development Parcel, the Developer shall take out and maintain during the entire construction period (until issuance of a Certificate of completion with respect to such parcel, in accordance with Section 415 below) , an "occur- rence" (as opposed to "claims made") basis comprehensive liability policy in the amount of Five Million Dollars ($5, 0001,000.00) combined single limits (part of which _40- 08/15/88 FINAL, L coverage may be provided by umbrella policies) , including contractual liability, as shall protect the Developer and Agency from claims for such damages. The Developer shall furnish a certificate of »- insurance in form acceptable to the Agency countersigned by an authorized agent of the insurance carrier on a fora of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the Agency as an additional insured under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, ;., cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing with any insurance maintained by the Agency, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the Agency. The required certificate shall be furnished by the Developer prior to the �. issuance of building permits. Notwithstanding the foregoing, the Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that its general contractor for the development of the Site pursuant to this Agreement carries workers' compensation insurance as required by law. The Developer's obligations to obtain and maintain insurance shall be limited by what is commercially available in the insurance market. The provisions of this Section 404 are not intended to limit any additional obligations the Developer may have under the Lease with respect to the provision of insurance. E. [§405] City and Other Governmental Agency Pernits Before commencement of construction or development of any buildings, structures, or other works of improvement upon the Site or within the Project Area required +r to be constructed by the Developer, the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or Agency, as w, provided in Section 203 above, and consistent with the Development Agreement (Attachment No. 9) . The Agency shall provide all proper assistance to the Developer in securing -41- 08/15/88 FINAL F such permits pertaining to the Developer Improvements. All application, permit, and inspection fees charged by the City or Agency shall be in accordance with the City's uniform fee schedule and the Development Agreement. i- The Agency agrees to exercise reasonable diligence, at no expense to Agency (other than Agency overhead and payroll expenses) , to secure any and all permits 6" (but not the payment of fees) which may be required by any other governmental agency affected by such construction, development, or work, including without limitation (i) encroachment permit(s) from the California Department of Transportation for any work within the right-of-way along the Beach Boulevard and Pacific Coast Highway frontages of the Site (such as curb cuts and the pedestrian overpass(es) ) , (ii) approval from the California Department of Fish and Game and United States Fish and Wildlife Service for the wetlands mitigation required for any identified wetlands on the Beach Boulevard Remnant Parcel; and (iii) approval of any coastal development permit(s) required from the California Coastal Commission. �• F. [§406] Rights of Access R For the purpose of assuring compliance with L this Agreement, representatives of the Agency shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not hot limited to, the inspection of the work being performed in constructing the Developer Improvements, so long as they comply with all safety rules. Such representatives of the Agency shall be those who are so identified in writing by the Executive Director of the Agency. Each such representative of the Agency shall identify himself or herself at the job site office upon his/her entrance to the Site, and shall provide the Developer, or the construction superintendent or other person in charge on the Site, a reasonable opportunity to have a representative accompany him/her during such J�+ inspection. In addition, the Agency agrees in such event to indemnify, defend, and hold harmless the Developer, Developer's successors and assigns, and their officers, employees, and agents, from and against any and all claims or liabilities for personal injury or death, property damage, or economic loss arising out of the exercise of such rights. i"' The Agency, for itself and for the City and other public agencies, at their sole risk and expense, reserves the right to enter the Site or any part thereof at �. all reasonable times for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any L _42- Lfft 08/15/88 FINAL V such entry shall be 'made only after reasonable notice to the 4+ Developer; provided, however, that the City and the Agency (and their respective officers, agents, and employees) nay enter upon the Site without necessity of prior notice to LDeveloper in the event of any emergency or similar situation in which it is not practicable to provide prior notice to the Developer. In addition to the foregoing, the Agency and the } City shall at all tines retain the unrestricted right of access to all publicly owned areas adjacent to the Site. Subject to obtaining any approvals required �. under the Huntington Beach Ordinance Code, the Developer and the Agency agree to cooperate in placing and maintaining on the Site two signs indicating the respective roles of the Developer and the Agency in the project. G. [§407] Local, State and Federal Laws L. The Developer agrees to carry out the construction of the Developer Improvements in conformity with all applicable laws. . H. [§408] Antidiscrimination During Construc- t Fon The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, f marital status, handicap, national origin or ancestry. S 1. [§409] Taxes Assessments Encumbrances and Liens j., The Developer shall pay when' due all real estate or possessory interest taxes and assessments on the site levied subsequent to the Disposition Transfers. Prior W to the issuance of a Certificate of Completion with respect to each Separate Development Parcel, the Developer shall remove or have removed any lien, levy, or attachment made on such parcel, or assure the satisfaction thereof, within a V reasonable time but in any event prior to a sale of the parcel thereunder. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. -43- Jr 08/15/88 FINAL J. [§410] Holder riot Obl ic;ated to Construct Improvements The holder of any mortgage or deed of trust or other conveyance for financing authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such *• construction or completion; nor shall any covenant or any other provision in the deeds for the Separate Development Parcels in the Residential Portion (Attachment No. 7) or the k, leases for the Separate Development Parcels in the Commercial Portion (Attachment No. 6, as modified in accordance with Section 301 hereof and Section 1.11 and Exhibit "B" of Attachment No. 6) be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site or any j separate Development Parcel thereof to any uses or to w construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. K. [§411] Notice of Default to Mortgagee or Deed of Trust Holders; -Right to Cure With respect to any mortgage, deed of trust, •+ or other conveyance for financing granted by the Developer as provided herein, whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the improvements, the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust, or other conveyance for financing authorized by this Agreement a *i copy of such notice or demand, provided that such holder has requested such notice by writing received by the Agency. No notice of default shall be effective as to the holder unless such notice if given. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder Lb to undertake or continue the construction or completion of the improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) im without first having expressly assumed the Developer's obligations to the Agency by written agreement meeting the requirements of the penultimate paragraph of Section 107. Any such holder properly completing such improvements shall i6o be entitled, upon compliance with the requirements of Section 415 of this Agreement, to a Certificate of Completion (as therein defined) . -44- 08/15/88 FINAL L L L. [§412] Failure of Holder to COM fete L Improvements In any case where, sixty (60) days after default by the Developer in completion of construction of the L Developer Improvements under this Agreement, the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of •:he unpaid mortgage or deed of trust debt, including principal and interest and all other su=s secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: a. The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings) . b. All expenses with respect to foreclosure including reasonable attorneys fees; c. The net expense, if any, incurred by the holder as a direct result of the subse- quent management of the Site or part thereof; d. The costs of any improvements made by such holder; and e. An amount equivalent to the interest that �+ would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. �+ The foregoing rights of the Agency as set forth in this Section 412 shall be in addition to and shall not diminish those rights of the Agency as fee owner of the affected portion of the Site. -45- 08/15/88 FINAL L L ri. [§413] Right of the A Agency to _Cure__Z•iortgage or Deed of Trust Default After the Disposition Transfer of any Separate Development Parcel within the Residential Portion, in the W event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of the Developer Improvements on such Separate Development Parcel, Land the holder of any mortgage or deed of trust has not exercised its option to construct, the Agency may cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses L incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the applicable Separate Development Parcel to the extent of such costs and L disbursements. Any such lien shall be subject to the exist- ing financing mortgages or deeds of trust. Agency shall promptly release any lien it places upon the applicable Separate Development Parcel pursuant to this Section 413 upon 60 Developer's payment of Agency's costs and expenses giving rise to such lien. 60 N. [§414] Right of the Agency to Satisfy Other Liens on the Site After T tie Passes After the Disposition Transfers provided for in Article III above, and prior to the completion of construction, and after the Developer has had a reasonable 66 time to challenge, cure or satisfy any liens or encumbrances on the Site, or portion thereof, the Agency shall have the right to satisfy any such liens or encumbrances, provided, however, that nothing in this Agreement shall require the Developer to pay or make provision for the payment of any tax, assessment, lien or charge, so long as the Developer in good faith shall contest the validity or amount thereof, and .r so long as such delay in payment shall not subject the Site or portion thereof to forfeiture or sale. 6. O. [§415] Certificate of Completion Promptly after completion of all of the Developer Improvements required by this Agreement to be completed by the Developer upon each Separate Development Parcel, together with all of the Developer Improvements off of said parcel which are required to be completed by the W Developer prior to commencement of business on said parcel, but excluding normal and customary tenant improvement items, the Agency shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion L -46- L08/15/88 FINAL L L E shall be a conclusive determination of satisfactory L completion of the construction required by this Agreement upon the applicable parcel and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the parcel covered by the Certificate of Completion shall not (because of such ownership, purchase, lease or acquisition) , incur any obligation or liability under this Agreement except that: (i) as to each Separate Development Parcel within the Residential Portion, such party shall be bound by any covenants contained in the deed for such Separate Development Parcel (Attachment No. 7) , and (ii) as to each Separate Development Parcel within the Commercial Portion, such party shall be bound by any covenants contained in the lease for �. such Separate Development Parcel (Attachment No. 6, as modified in accordance with Section 301 of this Agreement and Section 1.11 and Exhibit "B" of Attachment No. 6) . Each Certificate of Completion of construction i shall be in such farm as to permit it to be recorded in the Recorder's Office of orange- County. If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed L to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate avail- ka ability of specific items of materials for landscaping or other minor and typical "punch-list" items that do not present significant health and safety concerns, the Agency will issue its Certificate of Completion upon the posting of a bond by the Developer with the Agency in an amount representing a fair value of the work not yet completed. If the Agency shall have failed to provide such written 6+ statement within said thirty (30) day period, the Developer shall be conclusively deemed entitled to the Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Developer Improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as �. referred to in the California Civil Code, Section 3093. L -47- 1 08/15/88 FINAL A L V. [§500] USE OF THE SITE; EFFECT AND DURATION OF L COVENANTS A. [§501] Uses LThe Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to each Separate Development Parcel, or part thereof, that during construction and prior to the issuance of a Certifi- cate of Completion with respect to said parcel in accordance with Section 415, the Developer, such successors and such assignees, shall not devote such parcel to any uses not specified in or permitted in the land use permits approved by the City and Agency in accordance with Section 203. The foregoing covenant shall run with the land. The Developer covenants by and for itself and any successors in interest to the Site and any portion 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, age, handicap, national origin or ancestry in the sale, lease, L sublease, transfer, use, occupancy, tenure or enjoyment of the Site or portion thereof, nor shall the Developer 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 or portion thereof. The W foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to W substantially the following nondiscrimination or nonsegrega- tion clauses: 1. In deeds: "The grantee herein covenants by and for hiriself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself -48- L 08/15/88 FINAL L L s or herself or any person claining under L or through hire or her, 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." L2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through hin or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, riarital status, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, L occupancy, tenure or enjoyment of the premises herein leased nor shall the i lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segrega- tion with reference to the selection, r� location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discri- mination against or segregation of, any person, or group of person on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or L -49- L08/15/88 FINAL f M occupancy of tenants, lessees, sub- tenants, sublessees or vendees of the premises." ` The covenants contained in this Section 501 shall, without regard to technical classification and desig- nation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any succes- sor in interest to the Site or any part thereof. B. [§5023 Effect and Duration of Covenants The Agency is deemed the beneficiary of the terms and provisions of this Article V and of the covenants set forth therein running with the land, for and in its own �.. rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit said covenants running with the land have been provided. Such covenants are not for the benefit of, and may not be enforced by anyone except as provided herein; provided that the Agency assumes no respon- sibility for the efficacy of the foregoing part of this sentence. Such covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if such covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such L+ breaches to which it or any other beneficiaries of said covenants may be entitled. This Section 502 shall not limit the rights and remedies of the Agency pursuant to the lease L for any of the Separate Development Parcels within the Commercial Portion (Attachment No. 6, as modified in accordance with Section 301 of this Agreement and Section 1.11 and Exhibit "B" of Attachment No. 6) , or under any of the deeds to the Separate Development Parcels within the Residential Portion (Attachment No. 7) . b+ Notwithstanding any other provision of this Agreement to the contrary, the covenants contained in this Agreement (excepting only the Method of Financing, Attachment No. 5, and such other provisions of this Agreement as shall be applicable to the Agency's and Developer's rights and obligations with respect thereto) shall terminate and be of no further force or effect as to each Separate Development Parcel upon the issuance of a Certificate of Completion therefor, and thereafter all rights and obligations of the y parties with respect to said Separate Development Parcel L shall, except as specifically set forth in this sentence, be as set forth in the applicable lease (for Separate -50- I 08/15/88 FINAL k� i Development Parcels within the Commercial Portion) and deed (for Separate Development Parcels within the Residential Portion) . lr.r VI. [§600) DEFAULTS AND REMEDIES A. [§601] Defaults--General 360 Subject to the extensions of time set forth in Section 703, failure or delay by either party to perform any € tern or provision of this Agreement constitutes a default under this Agreement; provided, however, that if the party who so fails or delays commences to cure, correct, or remedy such failure or delay within thirty (30) days after receipt of a notice specifying such failure or delay, and shall L diligently prosecute such cure, correction, or remedy to completion, then such party shall not be deemed to be in default. 6W The injured party shall give written notice of default to the defaulting party, specifying the default complained of. Except as required to protect against further damage, the injured party shall not institute proceedings against the defaulting party until thirty (30) days after the 4 delivery of the notice of default or during the period in L which the defaulting party is diligently proceeding to cure, correct or remedy such default. Notwithstanding any other provision of this Agreement to the contrary, the failure of the Developer, after and despite reasonable diligence, to obtain City or Agency approval of any of Developer's plans (Section 203) , to i.. obtain financing commitments or Agency approval thereof (Section 204) , or to obtain a hotel operator or hotel franchisor or Agency approval thereof (Sections 205 and 206, respectively) , shall not constitute a default by the Developer hereunder; provided, that nothing in this Section 601 is intended nor shall be construed to limit or restrict the Agency's rights of termination under Section 609 below. B. [§602] Legal Actions �., 1. [§603] Institution of Legal Actions f In addition to any other rights or L remedies and subject to the restrictions in Section 601, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the L t -51- L 08J15/88 FINAL Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2 . [§604] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [§605] Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other ranner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service, whether made within or without the State of California, or in such other manner as may be provided by law. C. [5606] Rights and Remedies Are Cumulative +r Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are curula- + tive, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at ' the same or different times, of any other rights or remedies for the same default or any other default by the other party. Not by way of limitation of the foregoing, the right of a party under Section 608 or 609 to terminate this Agreement due to a default by the other party shall not be deemed to prohibit the party entitled to termination to sue for specific performance, damages, or other appropriate relief except as set forth in Section 611. D. [§607] Inaction Not A Waiver of Default Any failure or delay by a 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, - or deprive such party of its right to institute and maintain any actions or proceedings which it may deem neces- sary to protect, assert or enforce any such rights or remedies. r -52- 08/15/88 FINAL L 4 E. [§608] Termination By The Developer In the event that, prior to the deadline set forth in this Agreement for a Disposition Transfer of a Separate Development Parcel, as set forth in Section 313: L (a) the Developer and Agency fail to timely acquire/terminate all of the property interests/occupancies required to be acquired with respect to said Separate Development Parcel or the Pacific Mobileho::e Park L property in order to allow development to proceed in accordance P with the approved plans, and the L Agency does not timely elect to exercise its power of eminent domain r as needed to acquire the remaining interests/occupancies, in accordance &d with Section 201; or (b) the Agency fails to diligently prosecute any eminent domain actions to completion, in accordance with Section 201; or (c) the Developer is unable, after and despite its exercise of reasonable diligence, to timely obtain approval i.. of its plans and permits for that portion of the Developer Improve- ments to be constructed with respect to said Separate Development Parcel from the City, Agency, or any other governmental agency having juris- diction over the ' project, in �•+ accordance with Section 203; or (d) the Developer is unable, after and despite its exercise of reasonable diligence, to timely obtain financing commitments for the development of said Separate Development Parcel or Agency approv- al thereof, in accordance with ! Section 204; or (e) as to each Separate Development Parcel on which the Developer is required to construct a hotel, the Developer is unable, after and despite its reasonable diligence, to -53- L08/15/88 FINAL R 1 timely enter into an agreement with ` a hotel operator or obtain Agency approval of such operator, in accordance with Section 205; or (f) as to each Separate Development Parcel on which the Developer is required to construct a hotel, the Developer is unable, after and despite its reasonable diligence, to timely enter into an agreement with a hotel franchisor or obtain Agency approval of such franchisor, in accordance with Section 206; or f �,. (g) the Agency does not clean up or remove all toxic and hazardous substances on, under, or with respect to such Separate Development Parcel, and the Developer does not agree to assume the responsibility for payment of any "excess" cost for �• such clean-up or removal, in accordance with Section 312 and Paragraph III of the Scope of Development (Attachment Vo. 3) ; or (h) the Agency is in material default of any of its obligations under this w Agreement with respect to said Separate Development Parcel, and ' such default has not been and is not �.. being cured in accordance with Section 601; then this Agreement shall, at the option of the Developer, be terminated as to such Separate Development Parcel only and as to any other Separate Development Parcel (s) for which the Disposition Transfer of such Separate �.. Development Parcel is a condition precedent (as set forth in Section 313 above) . Termination pursuant to this Section 608 shall be effected by written notice to the Agency, and thereupon neither the Agency nor the Developer shall have any further rights or obligations hereunder with respect to the Separate Development Parcel or Parcels as to which the notice of termination applies, except that if the termination is due to Agency's default (subparagraph (g) above) , Developer shall have such additional rights and remedies as are consistent with the other provisions of this Agreement. It is understood that a termination of this Agreement, in whole or in part, shall not terminate Developers interest in the Developer Parcel, or any portion thereof, pursuant to the --54- 08/15/88 FILIAL lease attached hereto as Attachment No. 6, as the same may have been nodified prior to the date of termination hereof pursuant to Section 301 of this Agreement and Section 1.11 and Exhibit "B" of Attachment No. 6. F. [§609] Termination by the Agency In the event that, prior to the deadline set �,. forth in this Agreement for a Disposition Transfer of a Separate Development Parcel, as set forth in Section 313: L (a) the • Developer (or any successor in interest) assigns any of its rights or liabilities in such Separate Development Parcel in violation of this Agreement and L► such failure or default is not cured in accordance with Section 601; or (b) the Developer and Agency fail to timely acquire/terminate all of the property interests/occupancies required to be acquired with respect to said Separate Development Parcel or the Pacific Mobilehome Park property in order to allow development to proceed in accordance with the approved plans, and the Agency does not timely elect to exercise its power of eminent donain as needed to acquire the remaining inter- ` ests/occupancies, in accordance with Section 201; or s L (c) the Developer does not timely submit any of the plans, drawings, or related documents for that portion of the L Developer Improvements to be constructed with respect to said Separate Development Parcel, as required by Section 203 of this Agreement, and such failure or default is not cured in accordance with Section 601; or v (d) the Developer fails to timely submit reasonably satisfactory proof that it has obtained financing commitments for the development of said separate Development ~" Parcel, in accordance with Section 204 , and such failure or default is not cured in accordance with section 601; or L Lr -55- 08/15/88 FINAL t r (e) as to each Separate Development Parcel on which the Developer is required to construct a hotel, the Developer fails to timely submit satisfactory proof that it has entered into or is prepared to enter into an agreement with an acceptable hotel operator, in accordance with Section 205, and such failure or default r... is not cured in accordance with Section 601', or (f) as to each Separate Development Parcel on which the Developer is required to construct a hotel, the Developer fails to timely submit satisfactory proof that it has entered into or is prepared to enter into an agreement %lith an acceptable franchisor, in accordance with Section 4,, 2 0 6; or (g) the Agency reasonably determines that the costs required for clean-up or removal of all toxic and hazardous substances on, under, and with respect to said Separate Development Parcel exceed the costs committed by the Agency pursuant to Section 312 and Paragraph III of the Scope of Development (Attachment No. 3) , and the Developer does not timely agree to assume the responsibility for payment of the excess cost; or L (h) the Developer is in material default of any of its obligations under this Agree- , went with respect to said Separate Development Parcel, and such default has not been and is not being cured in accordance with Section 601; then this Agreement shall, at the option of the Agency, be terminated as to such Separate Development 4 Parcel only and as to any other Separate Development L Parcel(s) for which the Disposition Transfer of such Separate Development Parcel is a condition precedent (as set forth in Section 313 above) . Termination pursuant to this Section 609 shall be effected by written notice thereof to the Developer, and thereafter neither party shall have any rights or obligations hereunder with respect to said Separate Development Parcel or Parcels as to which the notice of ►W termination applies, except that if the termination is due to Developer's default (subparagraph (g) above) , Agency shall Lhave such additional rights and remedies as are consistent � -56- 08/15/88 FINAL r L r • L with the other provisions of this Agreerent. It is be* understood that a termination of this Agreement, in whole or in part, shall not terminate Developer's interest in the Developer Parcel, or any portion thereof, pursuant to the L lease attached hereto as Attachment No. 6, as the same may have been riodified prior to the date of termination hereof pursuant to Section 301 of this Agreement and Section 1.11 Land Exhibit "B" of Attachment No. 6. G. 1§6103 No Cross-Defaults L Subject to the Agency's rights under Section 313 above, but notwithstanding any other provision of this Agreement to the contrary, subsequent to either a Disposition Transfer of a particular Separate Development Parcel or an assignment by the Developer of its interest in such Separate Development Parcel to an assignee permitted under Section 107 above, no default by the Developer or a permitted assignee L, hereunder as to any other portion of the Site shall be deemed a default by the Developer or a permitted assignee with IF respect to said Separate Development Parcel and no default by the Developer or a permitted assignee with respect to said Separate Development Parcel shall be deemed a default hereunder as to any other portion of the Site. w H. [§6113 Arbitration. 1. Disputed issues arising between the Agency and Developer under this Agreement shall be resolved by arbitration pursuant to this Section 611 if, and only if, this Agreement specifically provides for resolution of such disputed issue by arbitration. Notwithstanding any other provision of this Agreement to the contrary, if the parties are involved in a dispute subject to resolution by + ' arbitration, a party who in good faith maintains such dispute shall not be deemed to be in default under this Agreement until the final arbitration decision is rendered, as provided in this Section 611 and, in the event such party is the losing party, such party fails to cure any default within the times specifically set forth herein or, if no such time is specified, within a reasonable time. A party desiring to initiate a permitted arbitration under this Agreement shall L give notice to the other party specifying (i) the natter -to be arbitrated, (ii) the section of this Agreement permitting t the arbitration, and (iii) the name and address of the. person L designated to act as arbitrator, which person shall be qualified to act as arbitrator in accordance with the provisions of paragraph 3 of this Section 611. Within +. fifteen (15) days after receipt of such notice, the second party shall give notice to the first party specifying the name and address of the person designated to act as arbitrator on the second party's behalf who shall be -57- 08/15/88 FINAL u.+ qualified to act as arbitrator in accordance with the provisions of paragraph 3 below. If the second party fails to give notice to the first party of the appointment of the second party's arbitrator within the required period, the appointment of the second arbitrator shall be rade by �- application to the court in the same manner as provided in paragraph 2 of this section 611 for the appointment of a third arbitrator in a case where the two arbitrators appointed by the parties, or the parties, are unable to agree on the appointment of the third arbitrator. 2 . The arbitrators chosen in accordance with the provisions of paragraph 1 above shall promptly meet to attempt to resolve the disputed matter. If the two arbitrators are unable to agree upon the question at issue �., within thirty (30) days after the second arbitrator was appointed, they shall then have fifteen (15) days jointly to appoint a third arbitrator who shall be qualified to act as arbitrator in accordance with the provisions of paragraph 3 below. If the two arbitrators are unable to agree upon a third arbitrator within such fifteen (15) day period, the Agency and Developer shall then have an additional fifteen 6pd (15) days to select together the third arbitrator. If the Agency and Developer are unable to agree upon the third arbitrator within the required period, either the Agency or Developer, by giving prior notice to the other party, shall have thirty (30) days to request the Presiding Judge of the Superior Court for the County of Orange, State of California, E to appoint as the third arbitrator an impartial person �. qualified to act as arbitrator in accordance with the provisions of paragraph 3, and the other party shall not raise any question as to the judge's full power and jurisdiction to entertain the application and make the appointment. The three (3) arbitrators shall decide the t dispute (if it has not previously been resolved) by following iw the procedure set forth in paragraph 6 of this' section 611. 3. The arbitrators shall be chosen from a class of disinterested experts qualified by training and experience to resolve the particular issue in dispute in an informed and efficient manner. 4. In the event of the failure, refusal, or inability of any arbitrator to act, he shall appoint his successor; provided, however, that any successor to the third arbitrator shall be appointed in the same manner as the third L arbitrator is to be appointed. The arbitrators shall, if possible, render a written decision within fifteen (15) days after the appointment of the third arbitrator. A decision in which any two arbitrators concur shall in all cases be binding and conclusive upon the parties. Each party shall pay the fees and expenses of its arbitrator and both shall L --58- L08/15/88 FINAL I L L share the fees and expenses of the third arbitrator, if any. Each party shall pay the fees and expenses of its attorneys i" and any witnesses it may call. 5. The arbitrators shall have - the right to consult experts and competent authorities skilled in the matters under arbitration, but any such consultation shall be made in the presence of both parties with full right to L cross-examine. The arbitrators shall give a counterpart copy of their written decision to each party. The arbitrators shall have no power to modify the provisions of this Agreement (although the arbitrators shall not be prohibited L from considering written agreements and other evidence of the intent and purposes of this Agreement) , and the jurisdiction of the arbitrators is limited accordingly. L 6. Where an issue cannot be resolved by agreement between any two arbitrators, or by settlement between the parties during the course of arbitration, the issue shall be resolved by the three arbitrators in accordance with the following procedure. The arbitrator selected by each of the parties shall prepare a written proposed resolution of the dispute and the reasons therefor and give counterpart copies to each party and each of the other arbitrators, with the third arbitrator arranging for a simultaneous exchange of these proposed resolutions. The third arbitrator shall select which of the two proposed resolutions most closely approximates his determination of the issue. The third arbitrator shall have no right to 4. propose a middle ground or any modification of either of the two proposed resolution. The resolution which the third arbitrator selects shall constitute the decision of the L arbitrators and shall be final and binding upon the parties. 7. The judgment or the award rendered in any arbitration initiated and conducted in accordance with this w Section 611 may be entered as a judgment in any court of competent jurisdiction and shall be final and binding upon the parties. The arbitration shall be conducted and L determined at any location in the City or in Orange County, upon which the parties agree, in accordance with the then prevailing commercial arbitration rules of the Anerican L Arbitration Association or its successor except to the extent such rules are modified as set forth in this Section 611. L L 08/15/88 FINAL LA i VII. [§700] GENERAL PROVISIONS +� A. [§701] Notices, Demands and Communications Among the Parties 60 Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, to 6" the principal offices of the Agency and the Developer, as applicable. Such written notices, demands and communications may be sent in the samC manner to such other addresses as W either party may from time to time designate by nail as provided in this Section 701. LAny written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the fifth (5th) day from the date it is postmarked if delivered by registered or certified +w+ mail. B. [§702] Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is �., directly or indirectly interested. C. [§703] Enforced Delay; Extension of Tines Lof Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be 4+ deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lock-- &" outs; riots; floods; earthquakes or other geological calamities; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation delays beyond the reasonable control of the party claiming an extension of time to perform; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of an other party; acts or failures to act by any public or governmental L agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency) ; or any other causes beyond the reasonable control or without -60- L08/15/88 FINAL L e L the fault of the party claiming an extension of time to perform. The failure by the Developer to timely obtain financing for its undertakings pursuant to this Agreenent shall not be excused pursuant to this section 703. Notwithstanding anything to the contrary in this Agreenent, L an extension of time for any such cause shall be for the period of the enforced delay only and shall commence to run from the tiine of the commencement of the cause, and shall L commence upon notice by the party claiming such extension, which notice shall be delivered within thirty (30) days after coranencement of the cause. Times of performance under this Agreement nay also be extended in writing by the mutual i+ agreement of Agency and Developer. The Executive Director of the Agency shall have the authority on behalf of the Agency to agree in writing to extensions of times of performance L (but excluding extensions in the dates for Disposition Transfers and commencement of construction) for a period or periods not to exceed ninety (90) days. �-' Not by way of limitation of the foregoing, the Developers deadlines for closing each Disposition Transfer, as set forth in Section 313, shall be extended to the extent �. that the -Developer has timely complied with all of its obligations hereunder with respect to such closing (or would be prepared to so comply) , but the closing is delayed due to L an Agency default or failure to perform hereunder. In such event, the deadlines in Section 313 with respect to such closing only (including without limitation the tines for making the payments and the extension periods) shall be w extended for the period of the delay. D. [§704] Non--liability of officials and L Empl gees of the Agency No member, official or employee of the Agency shall be personally liable to the Developer, 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 Developer or its successors, or on any obligations under the L terns of this Agreement. E. [§705] Submittal of Documents to the Agency for Approval Whenever this Agreement requires the Developer to submit any plan, or drawing, document, or other natter to L. the Agency for approval, which matter shall be deemed approved if not acted on by the Agency (or its Executive Director) within the specified time, said matter shall be L deemed approved only if the request for approval has been accompanied by a letter to the Executive Director referencing -61- 08/15/88 FINAL 1 �r V this Section 705 of the Agreement and stating that they are being submitted and will be deemed approved unless rejected within the stated tine. i F. [§705] Amendments to this Agreement The Developer and Agency agree to mutually i consider reasonable requests for amendments to this Agreement L which may be made by lending institutions, or the Agency's counsel or financial consultants, provided said requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. Minor codifications to this Agreement which do not materially affect the rights or obligations of the Agency may be approved by the Executive Director without the necessity of L additional action by the governing boards of the Agency. G. {g707] cooperation in the Event of Legal Challenge L. In the event of any legal challenge instituted by any third party challenging the validity or enforceability of any provision of this Agreement, or any approval by City or Agency referenced in Section 203 hereof (including but not limited to approval of the "change of use" of the existing mobilehome park on the Developer Parcel, the Relocation Assistance Plan approved therefor, and the individual agreements to be entered into between the Agency and ' individual mobilehome tenants and owners pursuant thereto) , or any other action by either party hereto in performing hereunder or under the aforementioned approved Relocation Assistance Plan or individual agreements referenced therein, ` as the same may be amended from time to time, the parties hereby agree to cooperate in defending said action as set forth in this Section 707. �.• The Agency shall have the right, but not the obligation, to defend any such action: provided, that without the Developer's prior written consent, which consent shall not be unreasonably withheld, the Agency shall not allow any default or judgr.:ent to be taken against it and shall not enter into any settlement or compromise of any clain which has the effect, directly or indirectly, of prohibiting, + preventing, delaying, or further conditioning or impairing the Developer's development, use, or maintenance of any portion of the Site or impairing any of the Developer's rights hereunder. In addition, the Agency shall provide reasonable assistance to the Developer in defending any such action, such assistance to include (i) making available upon reasonable notice, and at no cost to the Developer, Agency officials and employees who are or may be witnesses in such - 62- 08/15/88 FINAL 1 action, and (ii) provision of other information within the custody or control of the Agency that is relevant to the subject matter of the action. The Developer shall have the obligation to defend any such action; provided, however, that this obligation to defend shall not be effective if and to the extent that the Developer determines in its reasonable discretion that such action is meritorious or that the interests of the parties justify a compromise or settlement of such action. In this regard, Developer's obligation and right to defend shall include the right to hire attorneys and experts necessary to defend (subject to approval by the i,, Agency) , the right to process and settle reasonable claims, the right to enter into reasonable settlement agreements and pay amounts as required by the terms of such settlement agreements, and the right to pay any judgments assessed against Developer, the Agency or the City. If the Developer defends any such action, as . set forth above, it shall indemnify and hold harmless the Agency and City from and against any claims, losses, liabilities, or damages assessed or awarded against either of them by way of judgment, settlement, or stipulation, but not including any litigation expenses or attorney's fees incurred by either the City or Agency in defending said action as set forth hereinabove. Notwithstanding any other provision of this Agreement to the contrary, all costs and expenses incurred by the Developer in �.+ defending any litigation arising out of the processing, approval, and/or implementation of the "change of use" of the existing mobilehome park on the Developer Parcel, the relocation of the tenants therefrom, and payments to or for the benefit of such persons shall be reimbursable pursuant to Section II.I of the Scope of Development (Attachment No. 3) and Paragraph 5 of the Method of Financing (Attachment No. 5) . In the event any such litigation involves other claims or issues, the reimbursement due to the Developer shall be a fair proration based upon the percentage of time and expense �., allocable to those issues and claims for which the Developer is entitled to reimbursement and those claims and issues for which the Developer is not entitled to reimbursement. Notwithstanding any provision herein to the contrary, should any action be brought with respect to any claim that this contract violates Section 614 of the city of L Huntington Beach City Charter and/or the California Public Contracts Code by virtue of any reimbursement provision herein, the Developer agrees at its own non-reimbursable expense to defend, indemnify and hold the City and Agency harmless due to any failure of the City or the Agency to follow the full public bid requirements as to the reimbursable portions of the project. Further, Developer acknowledges that in the event that the public bidding �., -63- 08/15/88 FINAL L rr.► process is judicially held to be required for any improvements which have already been constructed, the City and/or the Agency may be enjoined or otherwise ordered to 60 withhold the reimbursement payments hereinabove otherwise required. H. [g708] Attorne 's Fees If either party to this Agreement is required to initiate or defend litigation in any way connected with �+ this Agreement, the prevailing party in such litigation, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys fees. Except as may be expressly provided elsewhere in this Agreement, if either party to this Agreement is required to initiate or defend litigation with a Lthird party because of the violation or alleged violation of L , L r L L L L. -63a- 08/15/88 FINAL � any term or provision of this Agreement, or obligation of the other party to this Agreerent, then the party so litigating • shall be entitled to reasonable attorney's fees from the other party to this Agreement. Attorney's fees shall include 4" attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other ' reasonable costs for investigating such action, taking depositions and discovery, and all other necessary costs incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. 1. [§7093 severability In the event any tern, covenant, condition, provision, or agreement contained herein is held to be invalid, void, or otherwise unenforceable by any court of competent jurisdiction, such holding shall in no way affect the validity or enforceability of any term, covenant, condition, provision, or agreement contained herein unless this Agreement expressly provides to the contrary. VIII. [§800] ENTIRE AGR_E_EMENT, INTERPRETATION, WAIVERS, �. APPROVALS This Agreement is executed in nine (9) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 64 and Attachments 1 through 9, which constitutes the entire understanding and agreement of the parties. This Agreement may be executed in counterparts which shall have full force and effect. This Agreement integrates all of the terms and condi- tions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any L part of the subject matter hereof. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall Iw not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which Haight otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. L 08/15/88 FINAL V All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to obtain the consent or approval of the other party in fulfilling any agreement, covenant, provision, or condition contained in this Agreement, such consent or approval shall not be unreasonably withheld, conditioned, or delayed by the party fr•m whom such consent or approval is ++ sought. IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY 4" This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after +� signing and delivery of this Agreement by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. V r.. i L L L 1iw L trr L -65- L08/15/88 FINAL L I ' L IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. 1988 REDEVEIAPMEN AGENCY OF THE 6# CITY OF HU NGT BEACH By �ls+ airman ATTEST: Agency Secretary APPROVED AS TO FORM: IN IATED AND APPROVED AS TO CON NT Agency Specia Couns 1 De City Administrator/ Red elopment REVIEWED AND APPROVED APPROVED: L AS TO FORM: `r t n L City Attorney/Agency Attorney City Administrator/Executive �j 2-'r Director r THE ROBERT L. MAYER TRUST OF i982 «.. Br 2lv , 1988 By bert L. Mayer, tee L L6/112/065580-0001/001 —66- 08/15/88 FINAL L a� ATTACHMENT ti0. 1 A SITE MAP e J� CITY BEACH MAINTENANCE FACILITY L`0 `i : 5 DEVELOPER PARCEL . ;Gi 5J 3 !9 y i f 'Q4 ' CIO N 10 a 4_A O m �r� �r9 111 ' ad�q'ZZ`rI, ?I h17.0F7 'P4 lie 1+12!k Q BEACH BOULEVARD REMNANT PARCEL P6PARED BY: I h .�^� � i4f.\ lb/irfwMfArirr•.ti.,i1'1A� ATTACHMENT NO. 1 A .9CAP-`Y PAGE 1 OF 1 R + ATTACHMENT ?.0. 113 LEGAL. DESCFt=pTION � R ALL THAT CERTAIN LAND IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF SECTION 14, TOWNSHIP 6 SOUTH RANGE 11 WEST IN THE RANCHO LOS BOLSAS, AS -PER MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS NAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF A LINE THAT IS PARALLEL WITH AND 50.00 FEET WEST OF THE EAST LINE OF SAID SECTION 14 WITH THE NORTH LINE OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION; THENCE SOUTH 0' 44' 22" EAST 1820.36 FEET ALONG SAID PARALLEL LINE i.+ TO THE NORTH LINE OF THE LAND DESCRIBED IN BOOK 2351, PAGE 5 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTH 74. 34' 12" WEST 45.01 FEET ALONG SAID NORTH LINE TO THE NORTHEAST LINE OF THt LAND DESCRIBED AS PARCEL 2 IN BOOK 826, PAGE 379, SAID OFFICIAL RECORDS; THENCE NORTH 53. 05' 49" WEST 172.33 FEET ALONG SAID NORTHEAST LINE TO THE WEST LINE OF THE LAND DESCRIBED IN BOOK 261, ' PAGE 41 OF DEEDS, RECORDS OF SAID COUNTY; THENCE NORTH 0' 44' 22" WEST 12.63 FEET ALONG SAID WEST LINE TO THE NORTHEASTERLY RIGHT OF WAY LINE OF PACIFIC COAST HIGHWAY AS DESCRIBED IN BOOK 455, PAGE 400 OF SAID OFFICIAL RECORDS; THENCE NORTH 53' 05' 49" WEST ;. 2242.93 FEET ALONG SAID NORTHEAST LINE TO THE EAST LINE OF THE LA11D DESCRIBED IN BOOK 13500, PAGE 1394 OF SAID OFFICIAL RECORDS; THENCE ALONG THE BOUNDARY OF SAID LAND THE FOLLOWING COURSES; SOUTH 3. 46' 53" EAST 5.78 FEET TO A POINT ON A NON-TANGENT 1250.00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHWESTERLY A RADIAL TO SAID POINT BEARS NORTH 32' 06' 11" EAST; NORTHWESTERLY 51.48 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2. 21' 34"; NORTH km 60' 15' 23' WEST 71.94 FEET; NORTHERLY 45.79 FEET ALONG A 27.00 FOOT RADIUS CURVE THAT IS CONCAVE EASTERLY THROUGH A CENTRAL ANGLE OF 97' 09' 34"; NORTH 36' 54 ' 11" EAST 141.92 FEET TO THE w NORTHEAST LINE OF THE LAND DESCRIBED AS PARCEL 1 IN BOOK 8020, PAGE 73 OF SAID OFFICIAL RECORDS; THENCE NORTH 53' 05' 49" WEST 17.00 FEET ALONG SAID NORTHEAST LINE TO SOUTHEAST RIGHT OF WAY lw LINE OF HUNTINGTON AVENUE 60.00 FEET IN WIDTH; THENCE NORTH 36' 54' 11" EAST 147.95 FEET ALONG SAID RIGHT OF WAY LINE TO AN ANGLE POINT THEREIN; THENCE NORTH 0' 42' 59" WEST 21.81 FEET ALONG SAID RIGHT OF WAY TO THE NORTH LINE OF SAID SOUTH HALF; THENCE NORTH 89. 42' 58" EAST 1905.70 FEET TO THE POINT OF BEGINNING. (HARRI$ E. COUTCHIE, L.S. 3118 EXPIRATION DATE: JUNE 30, 1988 LAND SG9G v� HA' MR,5 L t`,c ATTACHMENT NO. IB y COPTUV� LG-0222 PAGE 1 OF 1 (P NO. 3118 Q 134.1201 �>F f L* [RESERVED] fg r 1 y f LATTACHMENT NO. 2 I` ATTACHMENT NO. 3 r i6' SCOPE OF DEVELOPMENT ii.. I. ARCHITECTURAL AND DESIGN: The Commercial Portion and the Residential Portion of the Site shall be designed and developed as integrated complexes in which the buildings will have architectural excellence, both individually, as well as in the context of the total j commercial complex and -residential complex, respectively. The improvements to be constructed on the site shall be of high architectural quality, shall be well landscaped, and yr shall be effectively and aesthetically designed. The shape, scale of volume, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancement to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within the Project Area. The Developer's plans, drawings, .. and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Developer Improvements. i The open spaces between buildings where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity �.. with the Redevelopment Plan for the Project Area. II. DEVELOPER'S RESPONSIBILITIES: A. Developer Improvements. The Developer agrees to develop and construct, or cause the development and construction of the improvements (herein the "Developer Improve- rents") defined below, or such additional size, intensi- ty, and character of improvements as May be permitted and approved under applicable land use regulations of the City and Agency and in accordance with the previously issued development approvals referenced in Section 203 of this Agreement, the plans yet to be approved by the City and Agency pursuant to Section 203 , and the Development Agreement (Attachment No. 9) , as the same may be amended from time to time in accordance herewith. Notwithstanding the foregoing, it is �. understood that Developer may request approval of plans or permits which differ from the approvals previously granted and/or this Scope of Development based upon refinements in planning or changes in market or financial feasibility between the Effective Date and the ATTACHMENT NO. 3 Page 1 of 20 o8/15/88 FINAL L �.r date of actual development, provided that such plans shall in all events be consistent with the Downtown Specific Plan and other General Plan and zoning requirements applicable to the Site as of the Effective Date of this Agreement. The Agency agrees to act reasonably in reviewing any such request by the Developer based upon legitimate land use planning concerns and any effect that changes in the scope of the development may have on the justification for the Agency's financial contribution thereto (as reflected in this Scope of Development and the Method of Financing (Attachment No. 5) ) . In the event of any inconsistency L between the approved plans and this Agreement, including without limitation this Scope of Development, the approved plans shall govern. In the event Agency L reasonably determines that a change in the scope of the development from what is contemplated on the Effective Date warrants a modification of the terms of the Agency's financial contribution (as reflected -in this Scope of Development and the. Method of Financing (Attachment No. 5) ) , Agency agrees to act reasonably in raking any amendments to this Agreement necessary to .,� accommodate such change. With specific regard to the Residential Portion of the Site, the Developer and Agency each recognize that the Developer is required to obtain Planning Commission approval of a Conceptual Site Plan for the Residential Portion prior to approval of any conditional use permit 16w for residential development, in accordance with Section 4 .10.02 of the Downtown Specific Plan: The Developer and Agency hereby agree that the Conceptual Residential Phasing Exhibit attached hereto as Exhibit 2 is provided by the Developer for informational purposes only to E allow the City and Agency to analyze the nature of the L planned developnent of the Residential Portion. The minimum total development costs listed below are intended to cover all direct and indirect costs L incurred, including without limitation: direct costs for construction of buildings and improvements, and installation of landscaping; financing costs, fees, and L interest during construction; the purchase price for Separate Development Parcels within the Residential Portion) ; architectural, planning, and engineering costs; broker's fees, marketing expenses, and leasing L commissions; costs for furnishings, fixtures, and equipment (11ME11) to be provided by the Developer (but, except as to the hotels, not including any FF&E to be paid for by a tenant) ; costs for offsite improvements which are the Developer's responsibility and which are L ATTACHMENT NO. 3 Page 2 of 20 08/15/88 FINAL L L H required to be constructed in the phase of development Lin question; applicable governmental fees and charges; legal expense; pre-opening expenses; working capital for a period not to exceed one (1) year after the completion of construction; and all other costs reasonably related v to the development. The ninimum development costs listed below for FF&E for the Separate Development Parcels on which Hotels are to be constructed are L intended to cover all items of furnishings and equipment for all guest rooms, restaurant and lounge facilities, meeting rooms, and other public and employee areas, including, in general, but not limited to, all items attached to or set within or upon the finished walls or surfaces of the Hotels, but excluding computer and electronic equipment. If any item of FF&E is leased rather than purchased by Developer, the fair market value of such leased item shall be included for purposes of computing the development costs for FF&E. Costs are itemized in 1988 constant dollars, and shall increase in subsequent years in accordance with increases in the construction cost index in the Engineering News Record ! (or other available index selected by the Agency and L, Developer) which is cost comparable to the type of construction involved. The Site will be developed in six (6) commercial phases `r and three (3) residential phases. The boundaries between and among the phases of development shall be generally consistent with the phasing plan in Exhibit L 11211 hereto. It is understood that phases may be developed concurrently, subject to the limitations set forth in Section 313 of this Agreement. The six (6) 60 commercial phases and the three (3) residential phases are described generally below. 1. Commercial Portion. The Developer Inprovements on the Commercial Portion of the Site shall be in conformity with the approved Master Plan for the commercial Portion (which consists of the applicable portions of the 'Technical Site Plan, Project Description and Site Statistics" which is attached as Exhibit 1 hereto) and shall include: (a) Phase 1: Separate Development Parcel No. 1: An approximately 300-room first-class hotel on an approximately 3.6 acre parcel, with a total �. development cost of not less than one Hundred Thousand Dollars ($100,000.00) per room, exclusive of land, including an amount equal L to or greater than Fifteen Thousand Dollars L ATTACHMENT Ho. 3 Page 3 of 20 L08/15/88 FINAL I ($15, 000.00) per room for an FF&E in the hotel. (b) _Phase 2 ; Separate Development Parcel No. 2: A recreation/tennis/health and fitness facility, including a swimming pool, exercise/weight training room, sauna, and spa on an approxi- mately 3.5 acre parcel, with a total development cost of not less than Three Million Nine Hundred Forty Thousand Dollars ($3 ,940,000.00) . (c) Phase 3 ; Separate Development Parcel No. 3: A first-class hotel with conference facilities, with a minimum of 450 rooms and a maximum of 600 rooms, located on an approximately 2 .9 acre parcel, and with a total development cost of not less than one Hundred Thousand Dollars r.. ($100,000.00) per room, exclusive of land, including an amount equal to or greater than Fifteen Thousand Dollars ($15,000.00) per room for all FF&E in the hotel. (d) Phase 4 ; Separate Development Parcel Wo. 4s An all-suite hotel with a minimum of 225 rooms L and a maximum of 250 rooms, located on an approximately 1.2 acre parcel, and with a total development cost of not less than Eighty-Five Thousand Dollars ($85,000.00) per room, exclusive of land, including an amount equal to or greater than Fifteen Thousand Dollars ($15,000.00) per room for all FF&E in the hotel. (e) Phase 5 : Separate Development Parcel No. 5: A specialty retail center on .an approximately 3.8 acre parcel, with approximately 75,000- 99,000 square feet of improvements with a total development cost of not less than Six Million Five Hundred Thousand Dollars ($6,500,000.00) , exclusive of land. 1�+1 (f) Phase 6: Se arate Develo ment Parcel No. 6: A luxury hotel with a minimum of 400 rooms and a maximum of 450 rooms located on an approximately 5 acre parcel, and with a total development cost of not less than one Hundred Thousand Dollars ($100,000.00) per room, L exclusive of land, including an amount equal to or greater than Fifteen Thousand Dollars ATTACHMENT NO. 3 Page 4 of 20 08/15/88 FINAL f i L ($15,000.00) per room for all FF&E in the hotel. w 2. Residential Portion. The Developer Improvements on the Residential Portion of the Site shall be phased j� in general conformity with the "Conceptual Residential Phasing Exhibit" attached hereto as Exhibit 2 and shall include: (a) Phase 1, Separate Developnent Parcel No. 7: Approximately one-half (1/2) of the resi- dential units to be constructed on the Resi- L dential Portion (438, based upon the rraxinum development of 875 residential units contemplated in the Supplement to EIR 82-2) , L with a total development cost of not less than Eighty-Seven Thousand Dollars ($87,000.00) per residential unit. LW (b) Phase 2 ; Se arate Develo Ment Parcel. No. 8: Approximately one-fourth (1/4) of the residers- tial units to be constructed on the Residen- tial Portion (219, based upon the maximum development of 875 residential units contemplated in the Supplement to EIR 82-2) , with a total development cost of not less than +� Eighty-Seven Thousand Dollars ($87,000.00) per residential unit. jr (c) Phase 3 ; Separate Development Parcel No. 9: Approximately one-fourth (1/4) of the residen- tial units to be constructed on the Residen- tial Portion (218, based upon the maximum development of 875 residential units contemplated in the Supplement to EIR 82-2) , R with a total developnent cost of not less than Eighty-Seven Thousand Dollars ($87, 000.00) per residential unit. E L 3. Parking. The Developer shall provide all off- street parking required pursuant to the applicable provisions of the Huntington Beach ordinance Code (the "Cade") , including any permitted modifica- tions, per the approved plans. The Agency has agreed that the parking for the Phase 1 hotel (including guest rooms, lounges, meeting rooms, L ball rooms, and guest-serving retail uses) shall be determined on the basis of the Agency's parking requirement for hotels of 1.1 parking L spaces per guest room, pursuant to Article 9606(a) (H) of the Code. If the Agency determines LATTACHMENT NO. 3 Page 5 of 20 O8/15/88 FINAL w I 4 after the Phase 1 hotel is completed and L operating that the parking is not adequate, the Developer agrees to cure such deficiency by providing additional parking (above the Code requirement) in the subsequent commercial phase or phases. The Agency and Developer agree to address such parking deficiency by obligating such subsequent commercial phase or phases to L provide joint-use or shared parking for the benefit of the Phase 1 hotel. Parking for the other hotels planned for the Commercial Portion (Phases 3, 4 ; and 6) tray be handled in the same manner. Parking deficiencies nay not be cured by providing additional parking along the beach side of Pacific Coast Highway. 4. Miscellaneous Site Improvements. The Developer shall provide all landscaping, open areas, drive- ways, and other incidental on-Site improvements required for each Separate Development Parcel as development occurs, in accordance with the approved LO plans. In this regard, the Agency acknowledges that the purpose of the Downtown Specific Plan for District #9 (which encompasses the Commercial Portion of the Site) is, as stated therein, "to encourage large, coordinated development that is beach-oriented and open to the public for both commercial and recreational purposes. " In consideration of (i) the master-planned nature of the Project, (ii) the approved Master Site Plan for the Commercial Portion of the Site, and (iii) the terms of this Agreement, the Agency hereby agrees that the maximum intensity, maximum site coverage and open space requirements for the Commercial Portion of the Site shall be applied on an aggregate basis, and shall not be applied separately to each Separate Development Parcel therein, so long as the proposed improvements for the Separate Development Parcel then in question are in conformity with the approved Cot;>,mercial Master Site Plan. �.. 5. Walnut Avenue Extension and the "Spur" Street. Walnut Avenue shall be extended from its planned intersection with Huntington Street across a portion of the Pacific Mobilehome Park property adjacent to the Site and through the Site to Beach Boulevard, consistent with the Precise Plan of Alignment for Walnut Avenue previously approved by L the City. The north-south connector street between commercial Phases 3 and 4 (the "spur" street) shall ATTACHMENT NO. 3 j page 6 of 20 �� 08/15/88 FINAL i extend across a portion of the Site, from Pacific Coast Highway to Walnut Avenue, between the Phase 3 commercial development (Separate Development Parcel 11o. 3) and the Phase 4 commercial development (Separate Development Parcel No. 4) , as shown on b, the approved Master Plan for the Commercial Portion. + Walnut Avenue and the spur street shall each consist of approximately 80 feet of pavement, including the landscaped median strip, within 90 feet of right-of-way and shall include (i) traffic +" signalization at the intersections of Huntington/ Walnut, Walnut/"spur" street, Walnut/Beach, and "spur" street/PCH, (ii) median landscaping and perimeter landscaping designed to enhance the quality and aesthetic character of the Developer's development on the Site, and (iii) all of the curbs, gutters, sidewalks, street lights, bus benches, storm drains, utilities, parkway landscaping, and other required improvements in the street right-of-way. Developer shall advance the �. costs for the Walnut Avenue and spur street right- of-way improvements which costs shall be reimbursed in accordance with paragraph 5 of the Method of Financing (Attachment No. 5) . The extension of Walnut Avenue shall be phased as follows: (i) the first phase shall be the stub-in from Huntington Street to the area adjacent to the rear of the Phase 1 hotel (Separate Development Parcel No. 1) , and shall be accomplished prior to completion of the Phase 1 hotel; and (ii) the balance of the construction shall be accomplished by the completion of the Phase 3 commercial development (Separate Development Parcel No. 3) . 6. Miscellaneous Public Improvements. The Developer shall be responsible for the following limited and specific off-site public improvements and site work: r L (a) A pedestrian overcrossing of Pacific Coast Highway in the general location of the Phase 3 coru:�ercial development (Separate Development Parcel No. 3) , if incorporated into the approved plans (and Cal Trans provides its approval) . Said overcrossing shall be in conformity with the City's existing Downtown Design Guidelines and CalTrans L minimum design standards as described in Section 7-105 of the State of California Highway Design bow ATTACHMENT NO. 3 Page 7 of 20 L08/15/88 FINAL L I}} L Manual (using pedestrian-only design standards) . In the event that the City or Agency, through the plan approval process or otherwise, require the Developer to construct a pedestrian overcrossing in excess of the foregoing standards or requirements, L any additional cost attributable to such excess standards or requirements shall be the responsi- bility of Agency; Developer shall advance the costs L which shall be reimbursed in accordance with paragraph 5 of the Method of Financing (Attachment f No. 5) . (b) At the Developer's option, an additional pedestrian overcrossing of Pacific Coast Highway in the general location of the Phase 5 commercial L development (Separate Development Parcel No. 5) , with said overcrossing to be consistent with the overcrossing referenced in subparagraph (a) and in conformity with the engineering and design stand- ards referenced therein, and with any "excess" cost to be reimbursed by the Agency as provided therein and in paragraph 5 of the Method of Financing I" (Attachment No. 5) . (c) The following additional public improvements: (i) any street widening required around the perimeter of the Site; (ii) curbs, gutters, r sidewalks, street lights, street furniture, and landscaping within public rights-of-way on the Site; (ifi) signalization improvements or modifi- cations at the intersections of Beach/PCH and PCH/ i Huntington Street; (iv) extension of the City domestic water line from its existing terminus at Olive and Third Streets to the Site; and (v) extension of all other utilities required for development of the Project from their existing locations at the perimeter of the Site across the public rights-of-way on or adjacent to the Site and each Separate Development Parcel thereof. hod To the extent any of the utilities required to be installed by the Developer must be oversized to L accommodate development or uses off of the Site, the Agency shall pay the Developer for the incremental additional cost attributable to such ' oversizing within thirty (30) days after receipt of L invoice; otherwise, the Developer shall advance all of the costs subject to reimbursement from the + Agency in accordance with this subparagraph (c) as L provided hereinbelow and in paragraph 4 or 5 of the Method of Financing (Attachment No. 5) . t k L ATTACHMENT NO. 3 Page 8 of 20 08/15/88 FINAL 1 I �r (d) In connection with the preparation of each v Separate Development Parcel for construction of the Developer Improvements, the Developer shall reabandon any existing abandoned oil wells on such ' parcel to the then-current standards of the �.. California Division of oil and Gas. The Agency shall reimburse all of the costs for such work in accordance with subparagraph (e) below and paragraph 5 of the Method of Financing (Attachment No. 5) . (e) Prior to the Effective Date of this Agreement, ++ the Developer has entered into a contract for engineering and design services with the firm of Fuscoe, Williams, Lindgren and Short, civil Engineers, for the extension of walnut Avenue fron its planned intersection with Huntington Street across a portion of the Pacific Mobilehome Park } property adjacent to the Site and through the site to Beach Boulevard. The Agency's Executive Director has reviewed and approved such contract. Prior to entering into any additional contract for i1 the planning, design, engineering, or construction of any of the work required to be reimbursed in accordance with paragraph 5 of the Method of Financing (Attachment No. 5) (i.e. , the Walnut Avenue and spur street improvements (including the utilities to be located in the rights-of-way of such roadways) , the extension of the City domestic water line from its existing terminus at Olive and Third Streets to the Site, the reabandonment of the existing oil wells on the Site, and, if the City or Agency require the Developer to design either of the pedestrian overcrossings of Pacific Coast Highway to a standard in excess of what is specified in subparagraphs (a) or` (b) above, such improvements as Well) , the Developer shall also first submit a copy of each such proposed contract to the Agency's Executive Director for approval. Prior to entering into any construction contract for any such work, the Developer shall first obtain a minimum of three (3) bids from qualified and responsible contractors, and shall submit such bids to the Agency's Executive Director for approval. The Developer's overhead or management fee for such work shall not exceed six percent (6%) of the �+ balance of its costs and Developer shall not be paid any amount for profit on said portion of the work. It is understood and agreed that the Developer may enter into contracts with respect to all or any portion of the work required to be paid ATTACHMENT No. 3 Page 9 of 20 08/15/88 FINAL r t or reimbursed by the Agency pursuant to Paragraph 5 ` of the Method of Financing (Attachment No. 5) which contracts include work beyond the scope of the Agency's reimbursement obligation in such Paragraph 5 of the Method of Financing. In such event, the Developer shall, to the extent practicable, require each proposed contractor to separately bid the portion of its work required to be paid by the w, Agency pursuant to Paragraph 5 of the Method of Financing from the portion of the work required to be paid by the Developer. If it is not practical to separately bid the work on this basis, the Agency and Developer shall agree upon a fair and reasonable allocation of costs between that portion of the work required to be paid or reimbursed by the Agency pursuant to Paragraph 5 of the Method of Financing and that portion of the work required to be paid by the Developer. It is further understood and agreed that the Developer shall comply with applicable requirements of law relating to such contracts, including without limitation non- discrimination and prevailing wage requirements. After the Agency has approved a contract, the Developer shall not authorize any extra work or change orders which would increase the amount of the Agency's payment or reimbursement obligation pursuant to Paragraph 5 of the Method of Financing without first obtaining the Agency's approval; provided, however, that in the event of emergency work or if the Developer reasonably determines that the delays in obtaining Agency approval would result in additional costs being incurred, the I.� Developer shall be entitled to approve such change orders or extra work as long as the overall scope 1 of work is not thereby increased and Developer promptly notifies Agency of the action taken. In all circumstances, the Developer agrees to act reasonably to have the work required to be paid or reimbursed by the Agency pursuant to Paragraph 5 of the Method of Financing completed at a reasonable cost, consistent with the parties' riutual objective of having such work performed by contractors with a reputation for high quality, experience, and reliability. L The Agency's Executive Director (or his or her designee) shall have the authority on behalf of the Agency to approve or disapprove the Developer's '{ proposed contracts (and change orders and extra L. work) required to be paid for by the Agency pursuant to Paragraph 5 of the Method of Financing. 4 L ATTACHMENT NO. 3 r Page 10 of 20 t 08/15/88 FINAL L f L Approval shall not be ' unreasonably delayed, conditioned, or denied, and provided that the Developer shall have provided full information to the Agency's Executive Director or designee, final F action shall be taken on a request for approval of +w a contract no later than fifteen (15) days after request for approval is received and on a request for a change order or extra work no later than five L (5) days after request for approval is received. Any disapproval shall be in writing and shall state the reasons therefor. Upon receipt of a disapproval, the Developer shall exercise reasonable diligence to promptly remedy the problem (assuming the disapproval was reasonable) and resubmit the matter for approval within a a., reasonable time; provided, however, that notwithstanding any other provision of this Agreement to the contrary, the Developer's times for performance shall be extended for a reasonable period of time to accomplish such task(s) . ' During the course of development of the Site, but +. not more frequently than quarterly, the Developer shall submit to the Agency's Executive Director an Itemized statement, with such supporting information as the Executive Director may reasonably require, documenting all of the Developer's costs eligible for reimbursement fron, the Agency pursuant to Paragraph 5 of the Method of Financing. Each such itemized statement shall separately identify the costs incurred with respect to each separate contract approved by the Agency's �. Executive Director (or designee) and, if applicable, the allocation of costs between those costs required to be paid or reiribursed by the iw Agency and those costs required to be paid by the Developer. The Executive Director shall approve or disapprove �.. each of the Developer's cost statements within sixty (60) days, and thereafter the approved cost figures shall be used for purposes of determining the Agency's reimbursement obligations for such work under paragraph 5 of the Method of Financing (Attachment No. 5) . Approval shall not be unreasonably withheld. Failure to approve or +� disapprove any such statement within thirty (30) days shall be conclusively deemed an approval ' thereof. Any disapproval shall be in writing and L shall either state those portions of the Developer's costs that have been approved and L ATTACHMENT NO. 3 Page 11 of 20 0/15J88 FINAL 1 �r disapproved or the additional information that the 4 Developer must submit to obtain an approval. In the event that the Agency and Developer are unable to agree upon the amount of any costs which ` Developer has submitted for reimbursement, either party nay, by written notice to the other, elect to have the dispute resolved by arbitration, in which event the arbitrators shall be selected, and the arbitration shall be conducted, in accordance with Section 611 of this Agreement. E (f) After the Developer satisfactorily completes +� each of the public improvements required to be constructed in accordance with Paragraph 11.5 and this Paragraph 11.6, such improvements shall be accepted by the City or Agency and the Agency shall maintain or cause the City to maintain such { . improvements at no expense to the Developer, and the Developer shall have no responsibility therefor, except that the Developer shall maintain at its sole expense the sidewalk and landscaping behind the curb. 7. Developer Contribution to Cost of Relocating City Beach Maintenance Facility. In addition to its obligations under paragraph 6, the Developer shall pay to the Agency the Agency's reasonable costs of relocation of the existing beach maintenance facility located on the City Beach Maintenance L Facility Parcel (including the cost of all furnish- ings, fixtures, and equipment, but excluding land costs and administrative, overhead or personnel costs) to another location off of the Site; provid- ed that (i) the Developer's obligation for said costs shall not exceed the sum of Two Hundred Fifty Thousand Dollars ($250,000) , except as said amount may be adjusted as set forth below; (ii) in no event shall the Developer incur any liability under this paragraph 7 prior to the Disposition Transfer(s) of the Separate Development Parcel(s) on which the existing beach maintenance facility is located; and (iii) in the event the existing beach L maintenance facility is not demolished on or before June 30, 1992 (the "Adjustment Date") , the Developer's maximum financial contribution to its relocation shall be adjusted in accordance With the L percentage increase (or decrease) in the Consumer ` Price index for all urban wage earners for the Los Angeles-Long Beach-Anaheim Metropolitan Area w, between said Adjustment Date and the date -the demolition occurs, provided that such adjustment to LATTACHMENT NO. 3 Page 12 of 20 08/15/88 FINAL .r the Developer's maximum financial contribution to said project shall not exceed five percent (5%) per year on a non-cumulative basis from the Adjustment Date to the date demolition occurs. Subject to the provisions set forth above, said costs shall be paid by the Developer to the Agency within thirty (30) days of the Developer's receipt of invoices or similar documentation evidencing payment by the Agency of the above-described costs. In the event that the Developer fails to make such payments) within the time specified above, delinquent amounts shall bear interest at the rate of ten percent (10%) per annum. B. Setbacks. Minimum building and parking setbacks shall ben - conformance with the Development Agreement (Attachment No. 9) and other applicable provisions of the Huntington Beach Municipal Code, including any bp* permitted variances. C. Building Construction. Buildings shall be constructed in conformance with the Development Agreement (Attachment No. 9) and other applicable provisions of the Huntington Beach Municipal Code and in accordance with the approved final building plans. u D. Signs. The Agency shall support the Developer's request to the City that each hotel to be constructed on the site be permitted to have an illuminated sign or signs the name and, if applicable, the logo, of the franchisor on the face of the hotel, with the size of the Sign sufficient to be easily visible from Pacific Coast Highway (and, with respect to Separate Development Parcel No. 6, from Beach Boulevard as well) . In addition, the Agency shall support the Developer's �+ request to the City that each hotel be permitted a minimum of one monument sign on the primary street frontage. Signs shall be in conformance with the Development Agreement (Attachment No. 9) and other applicable provisions of the Huntington Beach Municipal Code and, more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the LA exterior of the improvements unless such signs and signing have been submitted to and approved by the Planning Commission, consistent with the foregoing. k. Developer shall submit for approval by the Planning Commission and shall implement a Planned Signage Program with respect to all signage on the Site prior to the installation of any signs. ATTACHMENT NO. 3 Page 13 of 20 08/15j88 FINAL i.. i E. Screening. All outdoor storage of materials or equip- ment shall be enclosed or screened by walls, landscap- ing, or enclosure to the extent and in the manner reasonably required by the City/Agency staff and the provisions of the Development Agreement (Attachment 1.o. 9) and other applicable provisions of the Huntington Beach ordinance Code. t F. Landscaping. Subject to paragraphs 4 and 5 of the Method of Financing (Attachment No. 5) , the Developer shall provide all landscaping and irrigation required on the Site, including the landscaping and irrigation within the public rights-of-ways on or adjacent to the Site, in accordance with the approved landscape plans. The Developer shall maintain all landscaping on the Site outside the public rights-of-way. After satisfactory installation of the landscaping and irrigation systems within the public rights-of-way on the Site in connection with the development of each Separate Development Parcel, the Agency shall accept or cause the City to accept such improvements and maintain or cause ! the City to maintain the same at no expense to the Developer, and the Developer shall have no further responsibility therefor. t G. Utilities. Subject to paragraphs 4 and 5 of the Method of Financing (Attachment No. 5) , the Developer agrees to extend all utilities required for the development, use and maintenance of the improvements on the Site from the �+ locations to which such utilities will be brought pursuant to Paragraph II.A.6 (c) above to the private improvements to be located on each applicable Separate Development Parcel. All utilities on the Site shall be located underground. H. vehicular Access. The number and location of vehicular driveways and curb breaks shall be in accordance with the approved plans. I. Relocation of Mobilehome Park Tenants. Prior to the Effect ve Date of this Agreement, the Developer has submitted to the City and Agency and the City and Agency " have approved an "Impact of Conversion Report" and "Relocation Assistance Plan" for the "change of use" of the Driftwood Mobilehome Park, all in accordance with +� Article 927 of the Huntington Beach Ordinance Code and other applicable laws and regulations. The Developer has also approved and executed the Mobilehome Acquisition and Relocation Agreement which is attached to the Relocation Assistance Plan. The Developer agrees ATTACHMENT 110. 3 Paga 14 of 20 ' 08/15/88 FINAL r11 ■wl to perform all of its obligations under the approved Relocation Assistance Plan and Mobilehome Acquisition and Relocation Agreement. From December 1, 2986, through the Effective Date of this Agreement, the Developer has incurred costs of Two Hundred Twenty-Five Thousand Eight. Hundred rdinety--Eight Dollars and Thirty-Nine Cents ($225,898.39) to prepare the Impact of Conversion Report and the Relocation sr Assistance Plan for the Driftwood Mobilehome Park, which costs are hereby approved by the Agency. In addition to the foregoing, the Developer agrees upon `" the Agency's written request to loan to the Agency an amount or amounts not to exceed a cumulative total of (i) Four Million Eight Hundred Thousand Dollars �r ($4,800,000.00) , less the sum of (ii) the cost incurred by the Developer pursuant to Paragraph II.A.6(c) above to extend the City domestic water line from its existing terminus at Olive and Third Streets to the Site, and (fii) the amounts required to be advanced or paid by the Developer directly to third parties pursuant to the Mobilehome Acquisition and Relocation Agreement (including Paragraph XIII thereof) ; provided, however, that the Agency shall not be entitled to borrow more than Three Million Six Hundred Fifty Thousand Dollars ($3,650,000.00) earlier than the date that the Developer delivers the "Notice of Phase Closure" (as that term is defined in the approved Relocation Assistance Plan) to those tenants/owners whose coaches must be removed in order to accommodate the Phase 2 and Phase 3 commercial developments. The purpose of this loan shall be to assist the Agency in performing its obligations to i.. acquire and terminate the property interests/occupancies of the tenants and mobilehome owners in the Driftwood Mobilehome Park and to relocate and remove theca from the Site, pursuant to Paragraph III.0 below, the approved Relocation Assistance Plan referenced therein, and the s Mobilehome Acquisition and Relocation Agreement. The Developer shall advance the requested amount or amounts, up to the maximum amounts specified above, within sixty (60) days after receipt of each Agency request for funds. The Agency shall deposit any such funds advanced by the Developer into a special fund, with the principal and interest earned on the fund to be used exclusively for the purposes authorized herein. Upon the Developer's request, the Agency agrees to account to the Developer for the expenditure of all amounts advanced by the Developer pursuant to this Paragraph II.I. v ATTACHMENT NO. 3 Page 15 of 20 08/15/88 FINAL F. r The Developer shall have the right, but not the obligation, to expend funds in excess of the naximum loan amount referenced in the preceding paragraph or to advance such additional funds to the Agency to relocate tenants from the Driftwood Mobilehome Park earlier than the time required in a "Notice of Phase Closure" delivered pursuant to the approved Relocation Assistance Plan. In such event, the additional optional expenditure or advance by the Developer shall be treated as a loan to the Agency to be repaid without interest within thirty (30) days after the date on which the Agency would otherwise have been required to relocate ti such tenant pursuant to the Mobilehome Acquisition and Relocation Agreement (assuming that the tenant is a signatory to said Agreement regardless of whether such is the case) . During the course of development of the Site, but not more frequently than quarterly, the Developer shall submit to the Agency's Executive Director an itemized statement, with such supporting information as the Executive Director may reasonably require, documenting the Developer's costs incurred for performing the following obligations hereunder and under the approved Relocation Assistance Plan and the Mobilehome Acquisition and Relocation Agreement, as the same nay be ,.. amended from time to time: (i) the costs, including attorney's fees and expert witness fees, incurred in defense of any litigation filed which seeks damages, injunctive relief, or any other remedies against the City, Agency, or Developer arising out of the processing, approval, and/or implementation of the "change of use" of the Driftwood Mobilehome Park, and +� actions to be taken pursuant thereto, all as set forth in Section 707 of this Agreement; (ii) the 'costs, including attorneys fees, incurred in prosecuting any unlawful detainer actions and related proceedings required to be pursued to terminate the occupancies and remove any tenants of the Driftwood Mobilehome Park who fail or refuse to relocate from the Premises within the time specified in the: Developer's "Notice of Phase Closure" (as that term is defined in the approved Relocation Assistance Plan) ; (iii) the sum of any purchase or rental discounts which the Developer provides to eligible tenants of the Driftwood Mobilehome Park pursuant to Paragraph VIII.B of the Mobilehome Acquisition and Relocation Agreement; and (iv) all other costs reasonably incurred by the Developer under the Mobilehome Acquisition and Relocation Agreement, including without limitation paragraph XIII thereof. The Executive Director shall approve or disapprove such L ATTACHMENT NO. 3 Page 16 of 20 08/15/88 FINAL f statements within thirty (30) days, and thereafter the approved cost figures shall be used for purposes of determining the Agency's reimbursement obligations under the Method of Financing (Attachment No. 5) . Approval shall not be unreasonably withheld. Failure to approve or disapprove any such statement within thirty (30) days shall be conclusively deemed an approval thereof. Any disapproval shall be in writing and shall either state r those portions of the Developer's costs that have been L approved and disapproved or the additional information that the Developer raust submit to obtain an approval. in the event that the Agency and Developer are unable to agree upon the Developer's costs for any of the i6o foregoing items, either party ray, by written notice to the other, elect to have the dispute resolved by arbitration, in which event the arbitrator(s) shall be selected, and the arbitration shall be conducted, in accordance with Section 611 of this Agreement. Except as specifically set forth hereinabove with respect to optional advances by the Developer to effectuate earlier-than-required removal of tenants from the Driftwood Mobilehome Park, the Developer's costs incurred pursuant to this Paragraph II.I shall be reimbursed by the Agency in accordance with paragraph 5 of the Method of Financing (Attachment Pic. 5) . r Except as specifically set forth or referenced in this Paragraph II.I, the Developer shall have no obligations with respect to the "change of use" of the Driftwood ++ Robilehome Park or compensating nobilehome tenants or owners to be relocated therefrom, and the Developer shall have no obligation for construction or provision of any affordable housing on or off of the Site, all such obligations being assumed by the Agency pursuant to Paragraph III.0 below. J. Liquor Licenses. The Agency recognizes that the hotels and restaurants to be developed in the Commercial Portion of the Site will require liquor licenses from 4 the California Department of Alcohol and Beverage Control ("ABC") . Sale of liquor for on-premises consumption in connection with such uses is in conformity with the Downtown Specific Plan and other local land use regulations and requirements of the City and Agency. The Agency agrees not to oppose, object to, or otherwise provide negative comment upon the W+ Developer's application to ABC for a liquor license or licenses in connection with such uses. L L ATTACHMENT NO. 3 Page 17 of 20 08/15/88 FINAL i L L III. AGENCY'S RESPONSIBILITIES: A. Utilities. The Agency represents that, with the exception of the domestic water line referenced in Paragraph Ix.A.6. (c) above, all utilities (including L sanitary sewer, gas, electrical, store drainage, telephone, and cable TV) are available at the perimeter of the Site and that the capacities of such utilities are and shall remain at all times sufficient to L adequately service the construction, operation, and maintenance of the improvements contemplated for the Site. With respect to the domestic water line to be extended to the Site, the Agency shall cause the City to establish a precise alignment for such line and notify the Developer thereof within ninety (90) days after the Effective Date of this Agreement. Within such period, the Agency shall also provide or cause the City to provide the Developer with all engineering requirements and specifications for the water line and all `. information available to the City regarding the physical conditions along the proposed alignment that are pertinent to construction. M` B. Relocation of Oil Pipeline. Prior to the date set forth in the Schedule of Performance for the Disposition Transfer of the first Separate Development Parcel on 4" which the oil pipeline is located, which pipeline is reflected in Exception No. 4 to the Preliminary Title Report for the Developer Parcel referenced in Section 6. 201.1 of this Agreement, the Agency shall cause such oil pipeline to be removed or relocated from the Site, at no expense to the Developer. C. Relocation of Mobilehome Park Tenants; Affordable Housln and Replacement Housin Obli ations. Subject to the Developer's advance of funds pursuant to Paragraph II.Y above, the Agency agrees to perform all of the obligations on Agency's part to be performed under Section 201 of this Agreement and the approved L Relocation Assistance Plan for the Driftwood Mobilehome Park, including the Mobilehome Acquisition and Relocation Agreement attached thereto, as the same may ' be amended from time to time. In addition, and except L as specifically set forth in paragraph II.I of this Scope of Development, the Agency agrees to perform all of the obligations which the Developer would otherwise have under Article 927 of the Huntington Beach Ordinance Code and applicable provisions of State and local law relating to the "change of use" of the mobilehome park on the Developer Parcel and removal and relocation of the mobilehome tenants. Finally, the Agency shall be F L ATTACHMENT NO. 3 Page I8 of 20 08/15/88 FINAL L L L responsible for timely satisfying all requirements of L federal, state, and local law relating to planning for and construction of affordable housing and replacement housing which may be required as a result of the elimination of mobilehone sites on the Developer Parcel and the Pacific Mobilehome property and the development of the Site. LD. Demolition of Existing_ Beach Maintenance Facility. Prior to the scheduled date for the Disposition Transfer of the first Separate Development Parcel in the Residential Portion of the Site (Separate Development L Parcel No. 7) , the Agency shall demolish and clear from the Site the City beach maintenance facility. E. Easements and Permits. The Agency agrees to exercise reasonable diligence, at no expense to Agency (other than Agency overhead and payroll expenses) , to secure any and all permits (but not the payment of fees) +�- which may be required by any other governmental agency affected by such construction, development, or work, including without limitation M encroachment L permit(s) from the California Department of Transportation for any work within the right-of-way along the Beach Boulevard and Pacific Coast Highway Li frontages of the Site (such as curb cuts and the pedestrian overpass(es) ; (fi) approval from the California Department of Fish and Game and the United States Fish and Wildlife Service for the wetlands L. mitigation required for any identified wetlands on the Beach Boulevard Remnant Parcel; and (iii) approval of any coastal development pernit(s) required from the California Coastal Commission. F. Clean-Up of Hazardous Materials. In addition to its responsibilities under Paragraphs B and D above, prior v to the Disposition Transfer of each Separate Development Parcel, the Agency shall clean up and remove or cause to be removed therefrom all toxic and hazardous substances iW located on, under, or with respect to said parcel as required to place said parcel in compliance with all applicable federal, state, and local statutes, hw regulations, ordinances, and laws pertaining to hazardous and toxic substances; provided, however, that: (i) the Developer shall have the sole responsibility for clean-up and removal of any toxic or hazardous )w substances placed on, under, or with respect to any portion of the Developer Parcel by the lessee of the Developer Parcel or any officer, employee, or agent of L the Lessee since the date the Developer's predecessor- in-interest first acquired possession thereof pursuant LATTACHMENT NO. 3 Page 19 of 20 08/15/88 FINAL L L I �r to the Lease dated March 28, 1960, as recorded in the official Records of Orange County on January 9, 1961, in Book 5582 at page 203, and (ii) in no event shall the Agency be required to expend a cumulative riaxinum of more than Nine Hundred Thousand Dollars ($900, 000.00) in j„ 1988 Dollars for the clean-up and removal of toxic and hazardous substances on, under, or with respect to the Developer Parcel. The entire Agency financial contribution to the cost of clean-up and removal of toxic and hazardous substances shall be applied, as needed, to the various Separate Development Parcels in ' the order in which the Disposition Transfers occur, until such time as the Agency's maximum financial contribution has been fully expended. The Agency's $900,000.00 maximum financial contribution referenced L above shall increase on January 1, 1989, and on January 1st of each year thereafter in accordance with the annual percentage increases in the Consumer Price Index of Urban Wage Earners and Clerical workers published by �+ the United States Department of Labor, Bureau of Labor Statistics (All Items) . In the event that the Agency reasonably determines that the cost of cleaning up and removing toxic and hazardous materials from the Developer Parcel exceeds the Agency's maximun financial contribution, the Agency shall promptly so notify the Developer and if the Developer does not agree within `' sixty (60) days after receipt of such notice to assume the responsibility for payment of such excess costs, 4 either party may terminate this Agreement with respect L to such Separate Development Parcel in accordance with Sections 608 and 609. f L 6/112/065580-0001/002 L 3 L L ATTACHMENT Na. 3 Page 20 of 20 i 08/15/88 FINAL Exhibit 1 to ATTACHnNT NO. 3 BROJECT DESCRIPTION CQMMERM' PLANNED MAXIMUM_ALLOWED TOTAL BLDG.2 TOTAL BLDG.2 BQQMS FLOORS — .&BEA ROOMS FLOORS , AREA PHASE 1 FIRST CLASS HOTEL 300 13 256,000 0. 300 13 256,000 s_f. PHASE 2 TENNIS&HEALTH CENTER nja 2 25,000 st n/a 3 40,000 s f. -� PHASE 3 CONFERENCE HOTEL 500 is 340,000 st 600 17 481,200 s f. PHASE 4 ALL—SUITE HOTEL 250 15 250,600 0. 2S0 15 250,600 s.f. PHASE 5 RETAIL SHOPPING of a 3 7S,000 z.f. nfa 3 99,000 s f. PHASES LUXURY HOTEL 9 440, z.f. 12 610.30 ST TOTALS 1,450 1,386,600 s.f. 1,600 1,737,100 s.f. ' DISTRICT#9 MIWMUM FAR 3.5 3-S L EQUNALENT FAR' IA 1.7 L t PLANNEO _ MAXIMUM 8LLOWED„ V MULTIFAMILY RESIDEVIAL M units Itnib 1 PLANNED FIGURES PIER I LUFMTIOM AND DEVELOPER COMMITTMENT PURSi]AMT TO D.DJL MAXIMUM ALLOWED IS THE L. INCREASE OVER PLANNED PERIrfTTED BY THE D.OJL AND N THK EXTRLEHE r. 2 EXCLUWE OF PARIOMr.. 3 THE MAJONUM FLOOR AREA PFA D.LP.:TANDJ DS N S SI I W&F THE EQUIVALENT FAR ftMN Z THE TOTAL.BUILDING AREA 6. IN THE COLUMN ARGUE OMDED RY TM MAXIMUM FLOOR 3 THE CONCEPTUAL R£6IDEWnAL PLAN N PROVIDER FOR WORMATKMW PURPOSES ONLY. A iPECWK RESIDENTIAL SITE PLAN SUBJECT TO A CGWXTWIAL USE PERMIT SHALL.B&SURWTTED AT A LATER DATE Ld r W Exhibit 1 to ATTACHMENT NO. 3 r-._ r r- - r r r ♦I 56 1%% MOttr: rr+u coMCFrTUA� MoeM�MUMr . ALIGNED To ♦� � ACCOMMAT!THE SKM"Off"I W AMp A CE MTRAMD % � RE5MlffftMC*"TWMAWW"NSCCT10M•A•. , ♦ %� CONCEPTUAL RESIDENTIAL ♦ ;', PHASING EXHIBIT ♦ . �` ;\� �g %% .,Mtt Cj [lrrr( O ♦ 1n pal► a VV @W9 rMnK 8M KAr FM ♦♦♦� s wiiw"AND Itii oKi row wo yMMI MA M.MMIsm ow an's 7l IL mmumamsm logo( � to ♦ �. x Man so /womf ,,. ►. !RMM MR 1010 v w F Z rt a �� .� t' ♦ 1 N- H =_ + % rt ►- 7 ' 0 O worm NOW =MK m Sam. m m m 'm ii MM we on sw tAClFIC-COAST MIGMWAY_ . p .n�.rr n� r Ow"OL"G ur a m.r r��.►� oa.++�.yam rA.rn� M rp.w P AM WMIL 1 APPROXIMATE LAND AREAS: "TV: ACnjAL M W wrv4 P%%M POUM0AFM MAL It vMftm"IN COMMER0AL HI]AL- A,MAmpt I" r1w Am vwmK KAmp TO m ArmwfD aY n% RAMrMG COULM M FLM UWr TO ►AMACRA►+I 4100 CAA r* JEOV-U ARIA %Of TOTAL Kam AM %OF TOTAL AOM7tT0UM 7MC""AM. 6TWM LAMB PLU M=L0180 RAT101M AM c0@ffn mM YAr ALTf M joWvmT r4 toMC'I rrmL 1i0uw0w PS 940WK A 10 At 50% A 12 AC. 50% B 5 AL 25% a 5 AG 25% C -5 AC, -n% C A AC. 15% 20 At, 100% 24 At 10f]% I'lir MICTlYr MAYED c.'(YM'K)VV'rcw THEWATERFRONT. �r ATTACIDIENT NO. 4 SCHEDULE OF PERFOPUMAITCE Item of Time for Performance Performance 1. TASKS COMPLETED: 4 1. 1 city approves the Master Site On or before Effective Plan for Commercial Portion of Date. Site and the conditional use permit, coastal development permit, and tentative parcel map for the Phase 1 hotel (Section 203) . 1.2 Agency approves and executes Within thirty (30) days Agreement (the "Effective after the later of (i) Date") (Section 900 and intro- the date Developer ductory paragraph) . delivers executed Agree- ment to Agency and (ii) the L� date Item 1.1 above is completed. L 1.3 City and Agency enter into Within thirty (30) days City-Agency Agreement for after the later of (i) conveyance of Separate the date Developer Development Parcels from delivers executed Agree- City to Agency (Section 201.1) . ment to Agency and (ii) the date Item 1.1 above is completed. L 1.4 City and Developer enter Within thirty (30) days into amended Lease covering after the later of (i) Developer Parcel (Section the date Developer 201.7) . delivers executed Agree- ment to Agency and (ii) the date Item 1.1 above is completed. 1.5 City and Agency approve Within thirty (30) days Impact of Conversion Report after the later of (i) and Relocation Assistance the date Developer Plan for "change of use" of delivers executed Agree- the Driftwood Mobilehome ment to Agency and (ii) Park and relocation of the date Item 1.1 above tenants from the Driftwood is completed. Mobilehome Park (Attachment i. No. 3, paragraphs II.1 and �t ATTACHMENT N0. 4 Page I of 11 08/15/88 FINAL L Item of Time for Performance Performance i. 1. 6 Agency approves Signet Hotel On or before Effective Corporation as operator for Date. the Phase I hotel (Section 205) . 1.7 Agency approves Hilton Hotel On or before Effective Corporation as franchisor for Date. the Phase 1 hotel (Section V 205) . I.8 city and Developer enter Ordinance adopting Develop- into Development Agreement rent Agreement to be covering the Site and introduced on or before miscellaneous matters Effective Date; second related to development and reading (adoption) of it operation of improvements ordinance to occur within on the Site (Section 201.8) . three (3) weeks thereafter; ordinance to become effec- tive thirty (30) days after second reading. 1.9 City and Agency adopt Ordinances transfering from +r ordinances transfering from City to Agency authority to City to Agency authority to levy and collect transient levy and collect transient occupancy taxes to be intro- occupancy taxes securing (in duced on or before October part) Agency's payment 3, 1988 ; second reading obligations to Developer (adoption) of ordinances to under Method of Financing occur within three (3) weeks (Attachment No. 5) . thereafter; ordinances to become effective in accordance with law. 4. 2. TASKS TO BECOMPLETED_ AND CONDITIONS TO BE SATISFIED_ (OR WAIVED BY �APPROPRIATE �PARTY) PRIOR TO DISPOSITION TRANSFERS: 2. 1 Property Acquisition; Relocation of occupants; 1�. Demolition of Improvements; Clean-Up and Removal of Toxics. Ike 2.1.1 Developer delivers Six (6) months prior to six-month Notice of Phase scheduled date for the Closure to tenants of the Disposition Transfer(s) Driftwood Mobilehome Park of the Separate �+ (Section 201.3) . Development Parcel(s) on which said tenants reside and, as to those tenants required to be relocated to acco=odate the exten- sion of Walnut Avenue ATTACHMENT NO. 4 Page 2 of 11 08/15/88 FINAL L Item of Time for ' Performance Performance through the Site, no later than six (6) months prior to the schedule date for the Disposition Trans- fer(s) of the Separate v Development Parcel(s) to be developed in conjunc- tion with the extension of Walnut Avenue. 2.1.2 Developer exercises its Prior to the scheduled best efforts to terminate and date for the Disposition remove of record Exception Transfer(s) of the Nos. 8 , i3 , 14 , 15, 17, and 18 Separate Development listed in the Preliminary Parcel(s) to which said r.. Title Report for the Developer title exceptions relate. Parcel (Section 201.3) . 2.1.3 Agency exercises its For a period of not less best efforts to negotiate the than ninety (90) days acquisition and termination of after the Effective Date (i) all property interests/ of this Agreement. occupancies required for the Phase 1 commercial development (Separate Development Parcel No. 1) inconsistent with the "Approved Title Exceptions, " and (ii) all property interests/occupancies in that portion of the adjacent Pacific Mobilehome Park property Which must be acquired in order to accom- modate the planned extension of Walnut Avenue and required utilities through the Site (Section 201.2) . 2.1.4 (If applicable) within one hundred fifty i..+ Agency elects whether to (150) days after Effective acquire remaining unacquired Date of this Agreement. property interests/occupancies required for the Phase 1 commercial development (Separate Development Parcel No. 1) and Pacific Mobilehome Park property by exercise of its power of eminent domain and, if Agency elects to proceed, eminent domain action(s) filed (Section 201.4) . ATTACHMENT NO. 4 Page 3 of it 08/15/88 FINAL w Item of Time for Performance Performance 2.1.5 (If applicable) As soon as possible after Agency exercises best efforts commencement of eminent to obtain order(s) of prejudg- domain proceedings. ment possession in .action(s) to acquire unacquired property �. interests/occupancies required for the Phase 1 comr-ercial development (Separate Development Parcel No. 1) and Pacific riobilehome Park property, if requested by Developer, and to complete eminent domain proceedings (Section 201.4) . L 2.1.6 Agency acquires Separate Prior to scheduled date Development Parcel No. 1 from of Disposition Transfer the City pursuant to the City- for Separate Development LAgency Agreement (Section Parcel No. 1. 201.1) . 2. 1.7 Developer notifies After Developer receives �.. Agency of Developer's intention all discretionary develop-- to schedule Disposition nent permits (excluding Transfers for Separate final building plan/pernit Development Parcel Nos. 2-9 approval) required for (Sections 301 and 313) . development of the Separate Development Parcel (s) , and not later L than both (i) eight (8) months prior to the date Developer desires to schedule the Disposition Transfer and (ii) eight t (8) months prior to the IL applicable deadlines for conveyance set forth in Section 313. L2.1.8 Agency exercises reason- With respect to each able diligence to negotiate the Disposition Transfer, acquisition and termination of for a period which is the all property interests/ longer of the following occupancies required for the two periods: (i) sixty Phase 2-9 developments (60) days after Developer (Separate Development Parcel notifies Agency of Deve- Nos. 2-9) inconsistent with loper's intention to the "Approved Title Excep- schedule a Disposition tions" (Section 201.2) . Transfer in accordance L with paragraph 2.1.7 above, or (ii) for a period ending six (6) ATTACHMENT NO. 4 Page 4 of 11 O8/15/88 FINAL Item of Time for Performance Performance months prior to the scheduled date of the ` Disposition Transfer. 2 . 1.9 (If applicable) Within sixty (60) days Agency elects whether to after end of the Agency acquire remaining unacquied negotiation period (para- property interests/occupancies graph 2.1.8 above) . hi, by exercise of its power of eminent domain and, if Agency elects to proceed, eminent Ldomain action(s) filed (Section 201.4) . 2. 1.10 (If applicable) As soon as possible �.. Agency exercises best after cormencement of efforts to obtain order(s) eminent domain proceed- of prejudgment possession, ings. if requested by Developer, and to complete eminent domain proceedings (Section 201.4) . 2.1.11 Agency demolishes and Prior to scheduled date of clears existing beach mainten- Disposition Transfer of ance facility (Attachment No. Separate Development `, 3, Paragraph III.D) . Parcel No. 7. 2 . 1. 12 Agency cleans up and Prior to scheduled date L removes those toxic and of Disposition Transfer of hazardous substances on, applicable Separate under, and with respect to Development Parcel. each Separate Development Parcel to the extent of Agency's responsibility therefor (Section 312, Attachment No. III, Para- graph III) . 2.1.13 Agency acquires each Prior to scheduled date of �+ Separate Development Parcel Disposition Transfer of from the City pursuant to the applicable Separate City-Agency Agreement, with Development Parcel. title in the condition set forth in this Agreement , (Section 201. 1) . 2.2 Plan Submittals And Reviews: �. 2 .2.1 Developer prepares and At any time prior to the submits to Agency and City an date Developer desires to application for the discre- schedule a Disposition ik" ATTACHMENT NO. 4 Page 5 of it 08/15/88 FINAL 60 Iten of Time for F Performance Performance tionary development permits Transfer for such Separate (excluding final building Development Parcel. L plan/permits, construction (?tote: previously completed drawings, utility plans, and for Phase 1 hotel -- see encroachment permits) Item 1. 1 of this Schedule. ) required for development of Separate Development Parcel (Section 203) . 2.2.2 Agency approves (or Within forty-five (45) days disapproves) and exercises after receipt of complete ' reasonable diligence to cause application and supporting �. City to approve (or dis- documents, plans, and approve) Developer's drawings; provided, however, F discretionary development that in the event there is permits (Section 203) . an administrative appeal from any such approval, the time for performance of this 4 item shall be extended for an additional forty-five (45) days. L2.2.3 (If applicable) As soon as possible after Developer revises disapproved receipt of notice of , . portion(s) of plans or disapproval. drawings and resubmits to ON' City and/or Agency (Section 203) . 2.2.4 (if applicable) Agency Within thirty (30) days approves and exercises after receipt of revised reasonable diligence to cause plans or drawings (assuming City to approve Developer's required corrections and 'r revised plans or drawings changes have been made) . (Section 203) . �+ 2.2.5 Developer prepares and No later than one hundred submits final building plans twenty (120) days after the and construction drawings later of (i) the date on for public and private which Developer obtains the improvements to be construct- final discretionary deve- ed by Developer with respect lopment approval for the to Separate Development project from the City, Parcel (Section 203 ; Attach- Agency, or other govern- ment No. 3, Paragraphs II mental agency with jurisdic- and 311.A) . tion, or (ii) the date on �.. which Agency and Developer acquire all property interests/occupancies with respect to such Separate Development Parcel required f �+ ATTACHMENT NO. 4 Page 5 of 11 08/15/86 FINAL r J � Item of Time for Performance Performance L to enable the development to be constructed. 2 .2 .6 (If applicable) As soon as possible after Developer revises disapproved receipt of notice of portions of final building disapproval. plans and construction drawings and resub-mits to City (Section 203) . 2.3 Evidence Of Financing: L 2.3.1 Developer submits to No later than sixty (60) Agency evidence of Developer's days prior to the date financial capability to Developer desires to complete development of schedule a Disposition Separate Development Parcel Transfer. (Section 204) . 2.3.2 (If applicable) Within twenty (20) days Agency notifies Developer after receipt of Developer's what further information initial submittal (Item No. L. Agency reasonably requires 2.3.1) (or Developer's to determine whether or not submittal is deemed to approve Developer's complete) . evidence of financing (Section 204) . 2 .3.3 (If applicable) As soon as possible after v Developer delivers additional receipt of timely written information regarding finan- notice from Agency request- ! cial capability requested by ing additional information. ;r Agency (Section 204) . 2.3.4 Agency approves (or Within thirty (30) days disapproves) Developer's after Developer's regrsest evidence of financing for approval of financing is (Section 204) . accepted as complete (or is deemed complete) . 2.4 Approval Of Hotel operator(s) and Franchisor(s) (as to each Separate Development Parcel on which a hotel is to be L constructed) . 2.4.1 Developer submits to No later than ninety (90) Agency evidence that Developer days prior to the date on has binding agreement with which Developer desires to qualified hotel operator to schedule a Disposition manage hotel (Section 205) Transfer. (Note: pre- and that Developer has viously completed for binding agreement with Phase 1 hotel -- see qualified hotel franchisor Items 1.6 and 1.7 of this ATTACHMENT NO. 4 Page 7 of 11 08/15/88 FINAL r Item of Time for Performance Performance (Section 206) . Schedule. ) L 2.4 .2 (If applicable) Agency Within thirty (30) days notifies Developer what after receipt of Developer's further information Agency initial submittal (Item Vo. L reasonably requires to 2.4 .1 above) (or Developer's determine whether or not to submittal is deemed r approve hotel operator and/ complete) . or franchisor (Sections 205 and 206) . 2.4 .3 (If applicable) • As soon as possible after Developer delivers additional receipt of timely written information requested by notice from Agency Agency re hotel operator requesting additional 1 and/or franchisor information. (Sections 205 and 206) . 2.4.4 Agency approves (or Within forty--five (45) days disapproves) hotel operator after Developer's request and franchisor (Sections for approval of hotel 205 and 206) . operator and hotel fran- chisor is accepted as complete (or is deemed complete) . 5 3. DISPOSITION TRANSFERS ib" 3.1 Agency opens escrow Within ten (10) days after for Disposition Transfer receipt of written notice (Section 303) . from Developer and after all conditions precedent to the Disposition Transfer in Section 301 have been satisfied or waived by the L• party for whose benefit the conditions exist. 3.2 Agency and Developer Within thirty (30) days perform all acts required after opening of escrow. to be performed for the Disposition Transfer to occur; escrow closes (Section 303; Article III generally) . 3.3 Deadline for Dis osition Within the tines set Transfers. Last day for forth in Section 313. L Developer to close Disposi- tion Transfers on the Site (subject to extensions for LATTACHMENT NO. 4 Page S of 11 08/15/88 FINAL La Item of Time for Performance Performance L. force majuere and Agency defaults) (Section 313) . L 4 . TASKS TO BE COMPLETED BETWEEN DISPOSITION TRANSFERS A21D CERTIFICATES OF COMPLETION: 4 .1 Developer delivers Prior to City's issuance of evidence of insurance to building pernit(s) . Agency (Section 404) . 4.2 City issues building Not later than thirty (30) permits and encroachment days after Disposition permits for any public Transfer. improvements to be constructed in City right- of-way (Section 405) . 4 .3 Developer commences Within thirty (30) days 4.0 construction of Developer after City's issuance of improvements required for building permit(s) . Separate Development Parcel in question, plus public improvements which Developer is required to construct with respect to such parcel L (Section 403, Attachment No. III, paragraphs I and II) . 4.4 Developer submits to During course of Agency's Executive Director development, not more itemized statement(s) re (i) frequently than quarterly. costs incurred by the Deve- loper relating to rental. and sales discounts provided to tenants of the Driftwood Mobilehome Park relocated into the project and certain litiga- tion expenses relating to the "change of use" of the mobile-- home park, and (ii) costs of specified improvements (Attachment No. 3, Paragraphs I.r II.A.5-II.A.6 and II.I) . 4.5 Agency's Executive Within thirty (30) days Director approves (or dis- after receipt. approves) Developer's itemized cost statements (Attachment No. 3, Paragraphs II.A.6, II.I, and III.A) . �,.. ATTACHMENT NO. 4 Page 9 of It 08/15/88 FINAL W Iten of Time for Performance Performance 4 .6 Developer completes construc- Within thirty (30) months tion of public and private after commencement of improvements required with construction. respect to applicable Separate Development Parcel (Section 403 ; L Attachment No. 3) . 4.7 Agency issues Certificate Within thirty (30) days L of Completion for Separate after written request by Development Parcel (Section Developer (assuring work is 415) . satisfactorily cor:pleted) . 5. RESPONSIBILITIES OF THE PARTIES SUBSEQUENT TO CERTIFICATE(S) OF COMPLETION 5.1 Developer's obligations As set forth therein. subsequent to Certificate(s) of Completion (Article 5; Attachment No. 7, Paragraphs 2, 3, 4 (b) , and 6; Attachment No. 6) . 5.2 Agency obligation subse- As set forth therein. quent to Certificate(s) of V Completion (Attachment No. 3, paragraph III; Attachment No. 5; Attachment No. 6) . L bw Several of the items in this Schedule of Performance are based upon a date to be specified by the Developer as the date on which it desires to schedule a Disposition Transfer. It is understood w. that if the conditions to closing a Disposition Transfer have not been satisfied (or waived by the appropriate party) prior to that desired date, that Developer's right to close the Disposition w, Transfer shall not terminate or expire, and Developer shall be entitled to extend the time within which the Disposition Transfer shall occur (subject to the deadlines in Section 313 of this Agreement) . The right of Developer to so extend the time for a Disposition Transfer shall not excuse any material default by Agency hereunder in failing to timely perform its obligations required to be performed as condition(s) to closing a Disposition Transfer. It is further understood that the foregoing Schedule of Performance is subject to all of the terms and conditions set forth in the text of this Agreement. The summary of the iteris of performance and the times for performance in this Schedule of 1 ATTACHMENT NO. 4 Page 10 of 11 08/15/88 FINAL W W Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance, and the text of this Agreement, the text shall govern. i L W 6/112/065580-0001/008 �r F L W W W L Ir LW L W L LW ATTACHMENT No* 4 Page 11 of 11 08/15/88 FINAL L ATTACHMENT NO. 5 METHOD OF FINANCING 1. Purchase Price for Separate Development Parcels Within Residential Portion of the Site. L The Developer's purchase price for each Separate Developr.:ent Parcel in the Residential Portion of the Site shall depend upon (i) the number of dwelling units approved by the City/Agency for ' the Residential Portion, (ii) the number of dwelling units j,,., approved by the City/Agency for the Separate Development Parcel in question, and (iii) the year in which the Developer is prepared to close escrow on such Separate Development Parcel. The raximum number of dwelling units permitted on the Residential Portion shall not exceed eight hundred seventy-five (875) . Based upon that number of dwelling units being approved, the purchase price for each Separate Development Parcel in the Residential Portion of the Site shall be calculated as follows: (a) For the first four hundred thirty-eight (438) dwelling units: LYear In Which Developer Is Sales Price Per Prepared To Close Escrow Dwelling Unit (i.e. , Developer has satis- Approved for Said fied all conditions to Separate Development jr Agency's obligation to Parcel convey Separate Development Parcel in question or Agency has waived such conditions) 1988 $ 9,560 1989 10,330 2990 11, 160 1991 12,050 1992 13,010 1993 14,050 1994 15,170 k+ -1995 16,380 1996 17, 690 1997 19,110 1998 20,640 1999 22,290 2000 24,070 Ln L. ATTACHMENT NO. 5 Rage 1 of 18 f 08/15/88 FINAL L L ti 1. (b) For the next two hundred nineteen (219) dwelling units: Year In Which Developer Is Sales Price Per Iw Prepared To Close Escrow Dwelling Unit (i.e. , Developer has satis- Approved for Said fied all conditions to Separate Development Agency's obligation to Parcel convey Separate Development Parcel in question or Agency has waived such �+ conditions 1990 $ 7,530 1991 8 , 130 1992 8,780 1993 9,480 1994 10,240 1995 11,060 1996 11,940 1997 12,900 1998 13,930 f 2999 15,040 2000 16,240 2001 170,540 2002 18,940 2003 20,460 (c) For the next two hundred eighteen (218) dwelling units: Year In Which Developer Is Sales Price Per bw Prepared To Close Escrow Dwelling Unit (i.e. , Developer has satis- Approved for Said fied all conditions to Separate Development Agency's obligation to Parcel convey Separate Development Parcel in question or Agency has waived such conditions) �•• 1992 $ 4,520 1993 4,880 1994 5,270 1995 5,690 1996 6,140 f ATTACHMENT NO. 5 Page 2 of 18 08/15/88 FINAL W err L 1997 6,630 1998 7,160 1999 71730 2000 8,350 2001 9,020 L. 2002 9,740 2003 10,520 L Notwithstanding the foregoing, if the City/Agency approve fewer than eight hundred seventy-five (875) dwelling units for the entire Residential Portion of the Site, the numbers 438, 219, and 218 set forth in subparagraphs (a) , (b) , and (c) above, respectively, shall each be reduced by multiplying such numbers by a fraction in which the numerator equals the number of dwelling units actually approved by the City/Agency for the Residential Portion of the Site and in which the denominator is 875. If the close of escrow is delayed fron one year to the next due to a default by the Agency hereunder, the Developer's purchase price shall be calculated as though escrow had closed in the year in which the Developer had satisfied all conditions precedent to i, the Agency's - obligation to close escrow (or would have been prepared to satisfy such obligations had the Agency not so defaulted) . Within thirty (30) days prior to the close of each escrow for a Separate Development Parcel within the Residential Portion, the Agency and Developer shall execute and deliver to the Escrow Agent +w• a writing setting forth the amount of the purchase price therefor. 2. Developer Responsibilities. Except as otherwise expressly set forth in this Agreement, including without limitation Paragraphs 3, 4, 5, 6, and 10 hereinbelow, all costs, expenses, and indebtedness relating to development of the site shall be paid for by the Developer, and the Agency shall have no +r responsibility therefor. 3. Agency Responsibilities. Except as otherwise �., expressly set forth in this Agreement, including without limitation Paragraphs II.A.6(c) and II.I of the Scope of Development (Attachment No. 3) and Paragraphs 4, 5, and 6 below, the Agency shall be responsible for payment of only the following costs and expenses relating to the development of the Site: (a) All funding required to perform the "Agency's Ir.. Responsibilities" identified in Paragraph III of the Scope of Development (Attachment No. 3) ; and 6% *'r ATTACHMENT NO. 5 Page 3 of 18 08/15/88 FINAL w r w (b) All funding required to relocate the beach maintenance facility from the Site above the anount to be �, contributed for such purpose by the Developer pursuant to para- graph II.A.7 of the Scope of Development; and (c) The increnental costs of any oversized +^ utilities which Developer is required to construct, as set forth in Paragraph II.A.6(c) of the Scope of Development (Attachment No. 3) ; and (d) The costs incurred by the Developer to reabandon the existing abandoned oil wells on the Site, as set forth in paragraph II.A.6(d) of the Scope of Development; and (e) All funding required to acquire and terminate those property interests/occupancies in the Site and the Pacific �., Mobilehome Park property which are the Agency's responsibility under Sections 201.3 and 201.4 and Paragraph III.0 of the Scope of Development (Attachment No. 3) of this Agreement, including without limitation all costs and expenses incurred by the Agency and Developer in performing their obligations under the approved Relocation Assistance Plan for- the Driftwood Mobilehome Park and �f the Mobilehome Acquisition and Relocation Agreement attached �•+ thereto; and (f) Agency staff, payroll, and overhead expenses related to the Agency's performance of its obligations under this Agreement and its administration of this Agreement; and (g) Those litigation expenses specifically referenced as Agency's responsibilities under section 707. 4. Agency Payment of Portion of Property Tax Increment .r and Transient occupancy Tax. The amounts referenced in this paragraph 4 shall constitute an indebtedness of the Agency to the Developer to be repaid at the tines, from the sources of funds, for the purposes, and subject to all of the other terms and conditions set forth herein. (a) Payments. Commencing fifteen (15) days after the later of (i) the end of the first calendar quarter following the issuance of a final certificate of Completion for the Developer Improvements on Separate Development Parcel No. 1, or (ii) the commencement of construction (pursuant to a valid building permit) of the hotel on Separate Development Parcel No. 3, and continuing thereafter on the fifteenth (15th) day following the end of each calendar quarter until all sums set forth below are paid in full, the Agency shall pay to the Developer the sum of; LATTACHMENT NO. 5 Page 4 of 18 L08/15/88 FINAL fi L F F (i) Fifty percent (50%) of the "TOT" as that term is defined below, paid with respect to the hotel on Separate Development Parcel No. 1 in and for the ten (10) year period following the opening of such hotel for business, but in no event for any period after December 31, 2019; { (ii) Thirty-eight and one-half percent (38- 1/2%) of the "Property Tax Increment, " as that term is defined below, paid with respect to Separate Development Parcel 16W No. I in and for the period commencing on the Disposition Transfer for Separate Development Parcel Vo. 1 and terminating on the date that is ten (10) years following the issuance of a final Certificate of Completion for the ' Developer Inprovements thereon, but in no rr event for any period after December 31, 2009; and r (iii) The interest received by the City and/or Agency on the revenues referenced in subparagraphs (i) and (ii) immediately above from the date such revenues are L received by the City and/or Agency through the date of payment to the Developer, which interest shall be conclusively assumed for purposes of this Agreement to accrue at the "Apportionment Rate" calculated by the Controller of the State of California as the rate of earnings by the Surplus Money Investment Fund for each six-month period during the term of such payment obligation. L Commencing fifteen (15) days after the later of (i) the end of the first calendar quarter following the issuance of a final Certificate of Completion for the Developer Improvements on Separate Development Parcel No. 3, or (ii) the commencement of construction (pursuant to a valid building permit) of the hotel on Separate Development Parcel No. 4, and continuing thereafter on the fifteenth (15th) day following the end of each calendar quarter until all sums set forth below are paid in full, the Agency shall pay to the Developer the sum of; Iw (i) Fifty percent (50%) of the "TOT" as that term is defined below, paid with respect to the hotel, on Separate Development Parcel No. 3 in and for the ten (10) year 1.� ATTACHMENT ND, 5 Page 5 of 18 08/15/88 FINAL period following the opening of such hotel for business, but in no event for �. any period after December 31, 2019; (ii) Thirty-eight and one-half percent (38- 1/2%) of the "Property Tax increment," as boo that term is defined below, paid with respect to Separate Development Parcel No. 3 in and for the period commencing on LW the Disposition Transfer for Separate Development Parcel No. 3 and terminating + on the date that is ten (10) years following the issuance of a final Certificate of Completion for the Developer Improvements thereon, but in no event for any period after December 31, 2009 ; and (iii) The interest received by the City and/or Agency on the revenues referenced in subparagraphs (i) and (ii) ir.Lmediately above from the date such revenues are received by the City and/or Agency through the date of payment to the Developer, which interest shall be conclusively assumed for purposes of this 4" Agreement to accrue at the "Apportionment Rate" calculated by the Controller of the State of California as the rate of earnings by the Surplus Money Investment Fund for each six-month period during the term of such payment obligation. +" Commencing fifteen (15) days after the later of (i) the end of the first calendar quarter following the issuance of a final Certificate of Completion for the Developer Improvements on Separate Development Parcel No. 4 , or (ii) the commencement of construction (pursuant to a valid building permit) of the hotel on Separate Development Parcel No. 6, and continuing thereafter on the fifteenth (15th) day following the end of each calendar quarter until all sums set forth below are paid in full, the Agency shall pay to the Developer the sure of; (i) Fifty percent (50%) of the "TOT" as that term is defined below, paid with respect to the hotel on Separate Development Parcel No. 4 in and for the ten (10) year period following the opening of such hotel for business, but in no event for any period after December 31, 2019; ATTACHMENT NO. S Page 6 of 18 08/15/88 FINAL 1 (ii) Thirty-eight and one-half percent (38- 1/2%) of the "Property Tax Increment, " as that term is defined below, paid with respect to Separate Development Parcel ' No. 4 in and for the period commencing on �., the Disposition Transfer for Separate Development Parcel No. 4 and terminating E on the date that is ten (10) years following the issuance of a final Certificate of Cor.:pletion for the Developer Improvements thereon, but in no eve-it for any period after December 31, W 2009; and (fii) The interest received by the City and/or Agency on the revenues referenced in subparagraphs (i) and (ii) immediately above from the date such revenues are received by the City and/or Agency through the date of payment to the Developer, which interest shall be conclusively assumed for purposes of this Agreement to accrue at the "Apportionment Rate" calculated by the Controller of the State of California as the rate of earnings by the Surplus Money Investr;ent Fund for each six-month period during the term of such payment obligation. i.� Commencing fifteen (15) days after the end of the first calendar quarter following the issuance of a final Certificate of Completion for the Developer Improvements on Separate Development Parcel Nos. 2, 5, 6, 7, 8, and 9, and continuing thereafter on the fifteenth (15th) day following the end of each calendar quarter until all sums set forth below are paid in full, the Agency shall pay to the Developer the sum of: (i} As to Separate Development Parcel No. 6 only, fifty percent (50%) of the "TOT, " as that tern is defined below, paid with respect to the hotel on such Separate Development Parcel in and for the ten (10) year period following the opening of such hotel for business, but in no event for any period after December 31, 2019; i.. (ii) Thirty-eight and one-half percent (38- 1/2%) of the "Property Tax Increment," as that term is defined below, paid with respect to each such Separate Development Parcel in and for the period commencing ATTACHMENT NO. 5 Page 7 of 18 08/15/88 FINAL r 1 Ja. an the Disposition Transfer for each such Separate Development Parcel and terminating on the date that is ten (10) years following the issuance of a final Certificate of Completion for the Developer Improvements thereon, but in no event for any period after December 31, 2009; and r i.. (iii) The interest received by the City and/or Agency an the revenues referenced in subparagraphs (i) and (ii) immediately above from the date such revenues are received by the City and/or Agency through the date of payment to the Developer, which interest shall be +� conclusively assumed for purposes of this Agreement to accrue at the "Apportionment t Rate" calculated by the Controller of the yam, State of California as the rate of earnings by the Surplus Money Investment Fund for each six-month period during the r term of such payment obligation. Each payment required to be made as provided in this subparagraph (a) shall be in the full amount accrued through the end of the preceding calendar quarter. In addition, each payment shall be accompanied by a written statement from the Agency certifying (i) the total amount of "TOT" and "Property Tax Increment" received by the City and/or Agency during the preceding calendar quarter (or, with respect to the first payment due, since the Disposition Transfer) with respect to each Separate Development Parcel for which payment is being made, (ii) the date(s) on which such revenues were received, and (iii) the calculation of accrued interest on such amounts. (b) Definitions. As used herein, the following terms shall have the meanings ascribed: (i) "TOT" shall mean transient occupancy w taxes paid to the City or Agency with respect to a hotel or hotels to be ` constructed on the Site, pursuant to 6 California Revenue and Taxation Code Section 7280 et seq. , or successor statute, with such amounts determined on v an accrual basis, based upon the City's existing six percent (0) TOT rate as of the Effective Date of this Agreement, with the understanding that if the City �+ hereafter increases its TOT rate, the LATTACHMENT NO. 5 Page 8 of 18 08/15/88 FINAL Developer's fifty percent (50%) share shall continue to be calculated assuming, the existing six percent (6%) rate; and _ (ii) "Property Tax Increment" shall mean the amount of property tax revenues paid with respect to each Separate Development Parcel on the Site and allocated to and received by the Agency pursuant to California Health and Safety Code Section 33670 (b) or successor statute, plus any identifiable California state legislative subventions, supplements to, or substitutes for such revenues. Not by way of limitation of the foregoing, the term "Property Tax Increment" shall include (A) payments made to affected taxing agencies pursuant to California Health and Safety Code Section 33401, whether such payments are made by the Agency or directly by the County of Orange, (B) funds set aside or expended by the Agency pursuant to California Health and Safety Code Section 33334. 2 , and (C) the portion, if any, of the aforedescribed property tax revenues not available for payment to the Agency in a particular year because the Agency has not incurred indebtedness to collect such revenues. (c) Source of Payment. On or before the date specified in Item 1.9 of the Schedule of Performance (Attachment No. 4) , the Agency shall adopt an ordinance under California Revenue and Taxation Code Section 7280. 5 which ordinance authorizes the Agency to levy and/or collect a sufficient amount of transient occupancy taxes generated from the hotels to be developed on the Site to enable the Agency to timely satisfy its payment obligations to the Developer in' accordance with this Method of Financing. Said ordinance shall provide that, in the event the Agency fails at any time to make payments to the Developer in the full amounts required to be paid hereunder, and '-, such failure continues for a period of thiryt (30) days after written notice from Developer to the Agency, such ordinance shall automatically become operative. The Agency agrees to take all - actions necessary and appropriate to implement such ordinance in order to accomplish the parties' mutual objective of enabling the Agency to timely meet its financial obligations under this Method of Financing. Until Developer has been paid or reimbursed all amounts due from the Agency hereunder (or, as to the payments to be made under this Paragraph 4 only, any unpaid balance is ATTACHMENT NO. 5 Page 9 of 18 08/15/88 FINAL forgiven and discharged as provided herein) , the Agency shall not repeal, modify, or amend its transient occupancy tax ordinance in a manner that jeopardizes or impairs the Developer's right to receive payments in the amounts, at the times, and subject to the conditions set forth herein. The Agency further agrees to perform all obligations on its part to be performed (including without limitation the obligations set forth in California Health and Safety Code - Section 33675) which are a prerequisite to its right to collect and receive sufficient property tax revenues to enable Agency to timely perform its obligations to the Developer &W hereunder, and the Agency shall exercise reasonable diligence to timely enforce its rights to obtain such revenues for the benefit of the Developer. The sole source of payment of the indebtedness referenced in this paragraph 4 shall be (i) property tax revenues allocated and paid (or eligible to be paid) to the Agency from the + Site, (ii) transient occupancy taxes paid (or eligible to be paid) to the Agency with respect to the Site pursuant to the ordinance referenced above, and (iii) any other revenues lawfully available i. to the Agency which the Agency determines in its sole discretion are available for payment hereunder. In this regard, throughout the term of the Agency's payment obligation under this paragraph 4, the Agency hereby pledges to the Developer all property tax revenues from the Site and all transient occupancy taxes paid (or eligible to be paid) to the Agency pursuant to the above- referenced ordinance, as required to timely satisfy the Agency's payment obligations hereunder. The Agency further agrees, at Developer's expense, to prosecute a validating action pursuant to California Code of Civil Procedure Section 860 et sere . , to Ldiligently pursue such action to a final non-appealable judgment, and to exercise best efforts in such action to obtain a judgment validating the transient occupancy tax ordinance to be adopted by the Agency (and the corresponding ordinance to be adopted by the IW City) and the pledge of the transient occupancy taxes pledged to the Developer hereunder. Notwithstanding the foregoing, it is understood that the obligation and pledge referenced in this L, paragraph 4 shall be junior and subordinate to any bonded indebtedness of the Agency secured by property tax revenues, provided that the Agency hereby covenants that in establishing the principal amount of any such bonded indebtedness it will set aside and reserve for payment to the Developer one hundred percent (100%) of that portion of the property tax increment attributable to the Site until the entire indebtedness referenced in this W paragraph 4 is paid or the unpaid balance is forgiven and discharged as provided herein. The indebtedness referenced in this paragraph 4 shall not be an obligation or liability of the 4 city. ATTACHMENT NO. 5 Tags 10 of iB 08 f 15/88 FINAL i L a L (d) Allocation of Payments. For purposes of this Agreement, the installment payments required to be made by the Agency pursuant to this Paragraph 4 shall be allocated as follows: (i) The first installment payments made by the Agency to the Developer pursuant to L this paragraph 4 shall be allocated to repayment of a loan from the Developer to the Agency for the Developer's cost of L planning, designing, engineering, constructing, inspecting, and supervising the installation of those public ' improvements which are the Developer's �.. responsibility under the Scope of Development (Attachment No. 3) for which s the Developer is not to be reimbursed pursuant to paragraph 5 of this Method of Financing, including interest on amounts expended by the Developer for this ' purpose at the rate of seven percent (7%) per annum from the date costs are incurred until repaid in full. After the loan referenced in the preceding sentence has been paid in full, and after the close of escrow of each separate Development Parcel in the Residential Portion, the installment payments received with respect to each such Separate Development Parcel shall be allocated first to repayment of a loan from the Developer to the Agency in the amount of Three Dollars and Seventy Cents ($3.70) per square foot for each square foot of land area within each said Parcel i (excluding dedicated streets and public rights-of-way) , including interest thereon at the rate of seven percent (7%) w. per annum from the close of escrow until principal and interest are paid in full. (ii) The balance of the installment payments shall be deemed to be allocated to a portion of the Developer's rental obligations for the separate Development 6" Parcels in the Commercial Portion of the Site, Developer's costs for demolishing and clearing existing improvements on the Site, and extraordinary costs to be incurred by the Developer for site preparation work due to factors such as the high water table, the load bearing ATTACHMENT WO. 5 • Page 11 of 18 08/15/88 FINAL capacity of the soil, the need for extra drainage improvements due to the low elevation of the Site, and the high corrosivity of the soils. (e) Payee in Event of Assicinment. In the event �+ the Developer hereafter assigns its interest in any of the Separate Development Parcels in the Site, the payments required to be made by the Agency with respect to such Separate Development Parcels) pursuant to this paragraph 4 shall continue to be made to the assignor unless the Agency receives written notice from the assignor directing that payr,.-nts be made to the assignee. *� 5. Agency Reimbursement for Certain Costs Advanced b the Develop In addition to the indebtedness referenced in paragraph a above, the sum of the following amounts shall constitute an indebtedness of the Agency to the Developer: (i) all of the costs advanced, paid, and loaned by the Developer pursuant to Paragraph II.I of the Scope of Development (excepting 1 only the amount of any optional additional advances made by the Developer to effectuate the earlier-than-required relocation of tenants from the Driftwood Mobilehone Park, as provided therein) , (ii) any "excess" costs advanced or paid by the Developer pursuant �.. to Paragraph II.A(6) (a) and (b) of the Scope of Development (Attachment No. 3) , (111) all costs incurred by Developer with respect to the required improvements in the "spur" street and *dA Walnut Avenue rights-of-way pursuant to Paragraph II.A.5 of the Scope of Development (including all utilities to be located in the rights-of-way) , (iv) all costs incurred by the Developer with respect to the extension of the City domestic water line from its 4ho existing terminus at Olive and Third Streets to the Site pursuant to Paragraph II.A(6) (c) of the Scope of Development, and (v) all of the costs advanced by the Developer pursuant to Paragraph %W II.A.6(d) of the Scope of Development for reabandonment of the existing oil wells on the Site. The unpaid principal on said sum shall bear interest at the Developer's cost of funds (which shall be documented to the reasonable satisfaction of the Agency's Executive Director) and which shall in no event exceed the rate of twelve percent (12%) per annum, compounded annually, cormencing on the date the Developer advances, pays, or loans such costs, and W continuing until principal and interest are paid in full. Payment shall be credited first to interest due and then to reduce any unpaid principal. The Agency shall pay the aforesaid indebtedness at the times, in the amounts, and subject to the other terms and conditions set forth below: ATTACHMENT NO. 5 Page 12 of is 08/15/88 FINAL bw (i) The amount of each installment payment to be made by the Agency hereunder shall be calculated as the sum of the following revenues received (or eligible to be received) by the City and Agency: IM. (A) Fifty Percent (50%) of the "TOT, " as that terra is defined in Paragraph 4 (b) above, paid with respect to each hotel on the Site and received by the City or Agency following the opening of each such hotel for business; and L. (B) Thirty Eight and one-Half Percent (38-I/2%-) of the "Property Tax Increment from the Site, " as that term is defined L in paragraph 4 (b) above, paid with respect to each Separate Development Parcel on the Site and allocated to and received (or eligible to be received) by the Agency from and after the Disposition Transfer for such Separate Development Parcel. (ii) The sole source of payment of the indebtedness referenced in this paragraph 5 shall be (i) L property tax revenues allocated and paid to the Agency from the Site, (ii) transient occupancy taxes paid (or eligible to be paid) to the Agency with respect to the Site L pursuant to the transient occupancy tax ordinance to be adopted by the Agency pursuant to paragraph 4 (c) of this Method of Financing; and (iii) any other revenues lawfully available to the Agency which the Agency determines in its sole discretion are available for payment hereunder. In this regard, throughout the terra of the Agency's payment obligation under this paragraph 5, the Agency hereby pledges to the Developer all k� property tax revenues from the Site and all transient occupancy taxes paid (or eligible to be paid) to the Agency pursuant to the above- referenced ordinance, as required to timely satisfy the Agency's payment obligations hereunder. The Agency further agrees, at Developer's expense, to prosecute a validating action pursuant to California Code of Civil Procedure Section 860 et s�eg. , to diligently pursue such action to a f-final non-appealable judgment, and to exercise best efforts in such L ATTACHMENT NO* 5 Page 13 of 16 08/15/88 FINAL Iwr action to obtain a judgment validating the transient occupancy tax ordinance to be adopted by the Agency (and the corresponding ordinance to be adopted by the City) and the pledge of the transient occupancy taxes pledged to the Developer hereunder. The Agency further agrees to perform all obligations on its part to be performed (including without limitation the obligations set forth in California Health and Safety Code Section 33675) which are a prerequisite to its right to collect and receive sufficient property tax revenues and transient occupancy tax revenues to enable Agency to timely perform its obligations to the Developer hereunder, and the Agency shall exercise reasonable diligence to timely enforce its rights to obtain such revenues for the benefit of the. Developer. Agency agrees that until the indebtedness referenced in this paragraph 5 is paid in full, the Agency shall not amend, modify, or repeal the above-referenced transient occupancy tax ordinance, enter into any agreements, take any actions, or fail to take any actions which have the effect, directly or indirectly, of jeopardizing or impairing the Agency's ability to pay the amounts referenced in this paragraph 5 at the times such payments are due. Notwithstanding the foregoing, it is understood that the obligation and pledge referenced in this paragraph 5 shall be junior and subordinate to any bonded indebtedness of the Agency secured by property tax revenues, provided that the 4" Agency hereby covenants that in establishing the principal amount of any such bonded indebtedness it will set aside and reserve for payment to the Developer one hundred percent (1001) of that portion of the property tax increment attributable to the Site until the entire indebtedness referenced in this w' paragraph 5 is paid. The indebtedness referenced in this paragraph 5 shall not be an obligation or liability of the City, 60 (iii) The first installment payment due under this paragraph 5 shall be made fifteen (15) days following the end of the first calendar quarter following the issuance' of a final certificate of Completion for the Developer Improvements on the Separate Development W ATTACHMENT NO. 5 Page 14 of 18 08/15/68 FINAL iw �., Parcel from which the transient occupancy taxes and/or property tax revenues referenced in subparagraph (i) is being generated, and subsequent installment payments shall be made fifteen (15) days following the end of each calendar quarter of each year, with the amount of each payment equalling the amount of i6s revenues received (or eligible to be received) by the City and Agency under subparagraphs (i) (A) and (e) during such preceding payment 6W period, until all such amounts have been paid. (iv) In the event the Developer hereafter assigns Lod its interest in any of the Separate Development Parcels in the Site, the payments required to be made by the Agency with respect to such Separate Development Parcel(s) `* pursuant to this paragraph 5 shall continue to be made to the assignor unless the Agency receives written notice from the assignor directing that payments be made to the assignee. (v) In the event that, for any reason, the Agency + fails to timely make any of the installment payments required to be made with respect to any of the Separate Development Parcels within the Commercial Portion, the Developer (or, if the Developer has assigned its interest in such Parcel and in the payments to be received with respect to such Parcel, the assignee) , in addition to whatever other remedies it may have under its lease, shall be automatically entitled to a reduction or offset of rent r.+ equal to the amount so unpaid. b. Compensation to Developer for Lost Rental Income. yM The Agency agrees to compensate the Developer for lost rental income from tenants of the Driftwood Mobilehome Park who vacate the premises prior to the applicable phase of development pursuant to the Mobilehome Acquisition and Relocation Agreement, in accordance with and subject to the following provisions: (i) The Agency shall have no obligation to compensate the Developer for any lost rental . income from a tenant after the date that the Developer delivers to such tenant the required six-month "Notice of Phase Closure" (as that term is defined in the approved Relocation Assistance Plan) u ATTACHMENT NO. 5 Page 15 of 18 08/15/88 FINAL w i L In no event shall the Agency have any obligation to compensate the Developer for lost rental income accruing for the period commencing on and after January 1, 1997; and In order to qualify for such compensation, the Developer shall maintain the owner's improvements in the Driftwood Mobilehome Park (or portion 60 thereof) in a good and clean condition and in accordance with the Mobilehome Acquisition and Relocation Agreement, reasonable wear and tear excepted, and further excepting any demolition, clearance, and construction activity reasonably attributable to the Developer's contemplated development of the Site; and (iv) The compensation to be provided to the Developer hereunder shall be paid in the amount of rent that would otherwise be paid to the Developer and at the times that rent would otherwise be required to be paid (calculated in accordance with the limitations on rent authorized L� pursuant to the Mobilehome Acquisition and Relocation Agreerent) , and the Developer agrees to provide such documentation as may be reasonably required by the Agency's Executive Director to verify such matters. 60 7. Conditions to Agency Payment Obligations. (a) Notwithstanding any other provision of this Agreement to the contrary, the Agency's obligation to contribute the funds referenced in paragraph 4 is conditioned and dependent upon the Developer's performance of its obligations under the Agreement, and the Agency shall be entitled to withhold any of said funds between the time the Agency notifies the Developer that the Developer has committed a material default (assuming such a default in fact has occurred) , in accordance with Section 601 of the Agreement, and the time the Developer cures said default or commences and diligently proceeds to cure said default. Afterwards, however, assuming this Agreement has not been termi- Lnated, the Agency's obligation shall be reinstated and shall survive and any amounts withheld shall be paid. L I ATTACMIENT NO. 5 L Page 16 of 18 08/15/88 FINAL (b) The obligations of the Agency to rake avail- able those funds described in paragraphs 4 and 5 as to each LSeparate Development Parcel are conditioned and dependent upon the Developer's completion of construction of the Developer Improve- rents on such Separate Development Parcel. 61 8. PrepayMent. The Agency may prepay all or any portion of its obligation under paragraph 5 above at any tire without penalty. 6+ 9. Tax-Exempt Financing. To the extent that tax- exempt financing or taxable. financing is legally available, and Developer is eligible for such financing, the Agency shall 600 cooperate and shall exercise reasonable diligence to cause the City to cooperate in obtaining such financing for the benefit of • Developer (including any necessary allocations required under Federal, State, or local laws or regulations) ; provided, however, that all costs incurred to obtain such financing and all responsibility for repayment of any loans shall be with the Developer, and neither Agency nor city shall have any liability with respect to such matters. 10. Limited _ Obligation for Off-Site Improvements. Notwithstanding any other provision of this Agreement to the contrary, the Developer shall not be obligated to construct or pay or advance the costs for any off-site public improvements other than those improvements specifically referenced in Paragraph II.A.5, 6, and 7 of Attachment No. 3. 11. Books and Records. The Developer shall have the +� right at any time, upon seventy-two (72) hours after written notice to the Agency, to review the books and records of the City and Agency pertaining to the City's and Agency's entitlement to and receipt of TOT for the hotels on the Site and Property Tax increment from the Project Area. 12. Arbitration. In the event of any dispute between the Agency and the Developer regarding any of the financial obligations of either party as set forth or referenced in this Attachment No. 5, either party may elect to have the dispute resolved by arbitration conducted within the times and in the manner set forth in Section 611 of this Agreement. 13. Additional Remedy for Default. In the event that, for any reason, the Agency fails to timely make any of the installment payments required to be made to the Developer hereunder, in addition to whatever other remedies it may have, L shall be automatically entitled to a reduction or offset of any payments otherwise required to be made by the Developer to the Agency, including without limitation (i) rental payments under the L amended Lease with the City referenced in Section 201.7 and LATTACHMENT NO. 5 Page 17 of 18 08/15/88 FINAL L attached hereto as Attachment No. 6, (ii) rental payments with respect to any Separate Development Parcel in the Commercial Portion after the date of the Disposition Transfer thereof, pursuant to the new Lease to be entered into between the Agency and Developer referenced in Section 301 of this Agreement, (iii) the purchase price for any of the Separate Development Parcels in L the Residential Portion pursuant to paragraph 1 of this Attachment No. 5, and (iv) the loan to be made to the Agency pursuant to Paragraph 11.1 of the Scope of Development. The Developer shall notify the Agency in writing how it wishes any such permitted reduction or offset to be applied. The Developer shall further be entitled, upon written notice to the Agency, to assign its right to any such reduction or offset to any permitted assignee of Developer's interest with respect to the Site or any Separate Development Parcel thereof E 6/1.12/065580-0001/003 4 r W Ear W �ii L L ATTACSMEKT NO. 5 Page IS of 18 08/15/88 FINAL W 1�. LSECOND AMENDED AND RESTATED LEASE R by and between THE CITY OF HTJNTINCTON BEACH, A municipal corporation "Lessor" ' + and L ROBERT L. MAYER, ' as Trustee of the Robert L. Mayer Trust of 1962, dated June 22, 1982, as amended "Lessee" Ir. ' dated as of August 15, 1988 A L W 1 L t ATTACHMENT NO. b L 08/01/88 i TABLE OF CONTENTS Pace ARTICLE 1. PREMISES 'AND TERM 1.1 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 +.. 1 .2 Reservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3 Exceptions to Leasehold•Estate 5 1.4 Term of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.5 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 I.6 Possession of the Premises . . . . . . . . . . . . . . . . . . . . 7 1.7 Date of Lease and Legal Effect 7 1.8 Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . 7 1.9 Commencement Date for All Other Obligations . . . 7 1 . 10 Ownership of Improvements and Furnishings, Fixtures, Equipment and Personal Property; Lessee' s Duty to Surrender . . . . . . . . . . . . . . . . . . 7 1 .11 The DDA; Modification of DDA at Time of Disposition Transfers 10 2. 12 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . 12 ARTICLE II . RENT 2 . 1 Initial Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2 .2 Rent Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.3 Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.4 Place of Payment; Late Payments 16 2 .5 Lessor' s Right to Audit . . . . . . . . . . . . . . . . . . . . . . . 18 2.6 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.7 Rent Freeze . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . 19 ARTICLE III . LESSEE'S RIGHT OF FIRST REFUSAL TO PURCHASE PREMISES 3 . 1 Lessee' s Right of First Refusal to Purchase Premises . . . . . . . . . . . . . . . . . . . . . . . . 21 ARTICLE IV. [RESERVED) ARTICLE V. TAXES AND ASSESSMENTS 5.1 Lessee' s Obligation for Taxes and Assessments 24 ATTACHMENT 390. 6 i. 4 L Paae w ARTICLE VI . (RESERVED) 4w , ARTICLE VII . USE AND COMPLIANCE WITH LAW �. 7.1 Use of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 7.2 Grant of Uses; EaseMents . . . . . . . . . . . . . . . . . . . . . . 34 7.3 Non-Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 i. ARTICLE VIII. LESSOR COVENANT TO RESTRICT USE OF CITY BEACH PROPERTY 8. 2 Recitals. . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . 36 8.2 Restrictions on Development on City Beach 1 Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 8.3 . . . . . . . . . . . . . . . 40 8.4 Property to be Benefited by City's Covenant. . . 41 8.5 Covenants Run With The Land; Recordation of Memorandum of .Lease. . . . . . . . . . . . . . . . . . . . . . . . 42 �.+ ARTICLE IX. MAINTENANCE OF LEASED PREMISES 9.1 Lessee' s Obligations for Maintenance . . . . . . . . . . 43 L ARTICLE X. INSURANCE AND INDEMNITY *� 10.1 Lessee' s Insurance . . . . . . . . . . . . . . . 49 10.2 Covenant to Indemnify and Hold Harmless . . . . . . . 57 20.3 Exemption of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 10.4 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 59 ARTICLE XI. UTILITY CHARGES 22.1 Utility Charges 60 f . it ARTICLE XII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION t 12.1 Off-Set Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 12.2 Attornment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 12.3 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 L 12.4 No Subordination of Fee . . . . . . . . . . . . . . . . . . . . . . . 62 L ARTICLE XIII. ALTERATIONS AND ADDITIONS 13.1 Alterations and Additions . . . . . . . . . . . . . . . . . . . . . 63 ATTACHMENT NO. 6 ii. t i.. Pace ARTICLE XIV. CASUALTY LOSS AND RESTORATION 14.1 Non-Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 14.2 Repair of Damage 65 14.3 Continued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 66 6- 14.4 Deferral of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 14.5 Damage or Destruction in Last Years . . . . . . . . . . . 68 24. 6 Limitation on Lessee' s Obligation to Restore and Right to Terminate Lease . . . . . . . . . . . . . . . . 69 ARTICLE XV. EMINENT DOMAIN 15 .1 Condemnation of Premises 70 15.2 Partial Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . 70 25.3 Lessor' s and Lessee's Damages . . . . . . . . . . . . . . . . . 73 ARTICLE XVI. ASSIGNMENT AND SUBLETTING 16. 1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 16.2 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 +� 16.3 Lessor' s Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 16.4 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 } ARTICLE XVII . LEASEHOLD FINANCING: RIGHTS OF LEASEHOLD LENDER A" 17. 1 Mortgage of Lease . . . . . . . . . . . ... . . . . . . . . . . . . . . . . 82 17.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 17.3 Rights of Lender 83 17.4 Consent of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 w ARTICLE XVIII . DEFAULT 28.1 Events of Default 89 28.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Lr 18.3 Default by Lessor . . . . . . . . . . . . . . . . . . . . . . . . 95 18.4 Legal Expenses and Collection Costs . . . . . . . . . . . 95 LARTICLE XIX. HOLDIN3 OVER 19.1 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 { ARTICLE XX. IRESERVED) v 4i.. ATTACHMENT N0. 6 iii. , a 4rA �+ Pace LARTICLE XXI . [RESERVED] ARTICLE XXII . ACCESS BY LANDLORD , 22. 1 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 L ARTICLE XXIII. FURNITURE, FIXTURE AND EQUIPMENT FINANCING �. 23 . 1 FF&E Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 ARTICLE XXIV. TRANSFER OF LESSOR'S INTEREST r. 24.1 Transfer of Lessor' s Interest . . . . . . . . . . . . . . . . . 100 ARTICLE XXV. FORCE MAJEURE 25. 1 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 ARTICLE XXVI . MISCELLANEOUS 26.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .•. . . . . . . . . . . . 102 26.2 Notices . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 26.3 Relationship of Parties 103 , 26.4 Broker' s Commission 10" 26.5 Accord and Satisfaction . . . . . . . . . . . . . . . . . . . . . . . 104 26. 6 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 4. 26. 7 Remedies Cumulative 105 26.8 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10S 26.9 Effect of Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . 205 r, 26. 10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 106 26. 11 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 26. 12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 26. 13 Performance of Lessee' s Obligations . . . . . . . . . . . 107 26. 14 Quitclain Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 26. 15 Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 ' 26.16 Interest on Past-Due Obligations . . . . . . . . . . . . . . 108 26. 17 Execution of Lease; No Option . . . . . . . . . . . . . . . . . 108 26. 18 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 26.19 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 26.20 Controlling Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 26.21 Specific Performance . . . . . , . . . . . . . . . . . . . . . . 109 26.22 Survival of Indemnities and Warranties . . . . . . . . 109 R 26.23 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 k. LATTACHMENT NO. 6 L iv. Pace ARTICLE XXVII . ARBITRATION 27.1 Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 27.2 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 27.3 Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 27.4 Binding Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 27.5 Expert Testimony 113 27.6 Decision Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 it 27.7 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 ARTICLE XXVIII . REPRESENTATIONS BY LESSEE 28.1 Representations by Lessee . . . . . . . . . . . . . . . . . . . . . 115 r.� w.. R � I L ATTACHMENT NO. 6 L V. k I EXHIBIT A - Legal Description of Premises EXHIBIT B - Revisions to be blade to Lease at Time of Disposition Transfer ' EXHIBIT C - Legal Description of City Beach Property i.. .r 4 r ink IMr I ATTACHMENT NO. 6 vi. t i w w SECOND AMENDED AND RESTATED LEASE w THIS SECOND AMENDED AND RESTATED LEASE (the "Lease") is executed as of the 15th day of August, 1988 (the "Effective Date") , by and between THE CITY OF HUNTINOTON BEACH, E a municipal corporation ("Lessor") , and ROBERT L. MAYER, as a.. Trustee of the Robert L. Mayer Trust of 2982, dated June 22, i� 2982, as amended ( "Lessee") (collectively, the "Parties" ) , with reference to the following: A. Lessor owns that certain real property located w. generally on the north side of Pacific Coast Highway, between Huntington Street and Beach Boulevard, in the City of } Huntington Beach, County of Orange, State of California, and more particularly described on Exhibit "A" attached hereto and by this reference made a part hereof (the "Premises" ) . `. B. The Premises have previously been leased by Lessor pursuant to the following described instruments: 1. Lease dated March 28, 1960, as recorded in the Official Records of Orange County on January 9, 1961, in Book 5582 at Page 203; 2. Option dated January 2, 1962, as recorded in the Official Records of Orange County on January 17, 1962, in Book 5978 at Page 905; 4 ATTACHMENT NO. 6 3 . Amendment to Lease dated January 3, 1962 , as recorded in the Official Records of Orange County on January 17, 1962, in Book 5978 at Page 910; 4. Amendment to Lease dated January 22, 1963, as recorded in the Official Records of Orange County on February 1, 1963, in Book 6416 at Page 719; 5. Lease dated February 7, 1967, as recorded in the Official Records of Orange County on. February 10, 1967, in Book 8174 at Page 346; and 6. Amended and Restated Lease dated November 29, 1983, as referenced in the Memorandum( s) of Lease recorded in the Official Records of Orange County on December 14, 1983 as instrument no. 83-567981 and 83-567982 and on December 19, 1983 as instrument no. 83-574611 . C. Lessee now holds all of the Lessee' s interest in the Premises under the Amended and Restated Lease referenced in — Paragraph B. 6 above. D. Lessor and Lessee now desire to restate the Lease and amend it in certain respects. ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -2- 1. In consideration of the payments to be made hereunder and the covenants and agreements Contained herein, Lessor hereby agrees to lease to Lessee and Lessee hereby agrees to lease 4 from Lessor the real property hereinafter defined as the Premises upon the following terms and conditions: ARTICLE I . PREMISES AND TERFI 1 .1 Premises. Lessor hereby leases the Premises to Lessee, and Lessee hereby hires the Premises from Lessor. Any L and all buildings, structures and fixtures (other than trade fixtures, as defined in this Lease) attached to •the Premises, v and any utilities and related improvements (other than dedicated public improvements) made to the Premises, and any and all alterations, additions, and improvements thereto shall ' be deemed to be real property and shall hereafter be referred P P Y to as the "Improvements". +r 1.2 Reservation. Lessor reserves to itself, its successors and assigns, together with the right to grant and transfer all or a portion of the same, the following: (a) The non-exclusive right to enter upon the L Premises in accordance with any rights of Lessor set forth in this Lease; L w LATTACHMENT NO. 6 08/01/88_ . 0635n/2450/12 -3- 6o - (b) Any and all oil, oil rights, petroleum, minerals, mineral rights, natural gas rights, and other hydrocarbon substances by whatsoever name known, geothermal resources (as defined in California Public Resources Code, Section 6903) , and all products derived from any of the foregoing, that May be within or under the land, together with the perpetual right of drilling, mining, exploring, prospecting �+ and operating therefor and storing in and removing the same from the Premises or any other land, including the right to w. whipstock or directionally drill and mine fron lands other than 6, those conveyed hereby, oil or gas wells, tunnels and shafts into, through or across the subsurface of the Premises, and to k, bottor. such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines; without, however, 4 the right to enter, drill, mine, store, explore or operate on or through the surface or the upper 500 feet of the subsurface of the Premises; and (c) Any and all water, water rights or interests therein, no matter how acquired by Lessor, together with the L right and power to explore, drill, redrill, remove and store Lr the same from the Premises or to divert or otherwise utilize such water, water rights or interests on any other property #u owned or leased by Lessor, whether such water rights shall be riparian, overlying, appropriative, percolating, littoral, L ATTACHMENT 210. 6 08/01/88 0635n/2460/12 -4- L prescriptive, adjudicated, statutory or contractual; but without, however, any right to enter upon the surface of the Premises in the exercise of such rights and, provided further, that the exercise of any such rights by Lessor shall not result E in any damage or injury to the Improvements, including without 6* limitation an subsidence of all or any y part of the Improvements. LW 1.3 Exceptions to _Leasehold Estate. This Lease is made subject to: (a) . General and special taxes and assessments for the current fiscal tax year and all unpaid bonds L and/or assessments; provided, however, that the f L foregoing shall not be deemed to be a consent by Lessee to .any bonds or assessments; and 6+ (b) All covenants, conditions, .restrictions, reservations, rights, rights-of-way, easements and all other matters of record or apparent k" upon a visual inspection of the Premises affecting the Premises or the use thereof on the Effective Date. 1.4 Term of Lease. This Lease shall commence on August 15, 2988 (the "Term Commencement Date") , and shall 6W terminate on January 31, 2013, unless sooner terminated or extended as herein provided. For purposes of this Lease, the � P P rP L ATTACM ENT NO. 6 08/01/88 0635n/2460/12 -5- Lterm "Lease Year" shall mean a calendar year; except in the event when the Term corrrr.ences on a date other than January 1, W the first Lease Year shall be the period from such commencement date to the next succeeding December 31 and, further, if this L Lease terminates on a date other than December 31, the last 6, Lease Year shall be the period beginning on the January 1 following the last full Lease Year and ending on such termination date. W 1.5 Termination. Notwithstanding Section 1.4, the Terra. of L this Lease shall expire on December 31, 2010, as to •any property covered by this Lease which has not been "conveyed" to i+ Lessee by Lessor on or before December 31, 2004, pursuant to a 3 "Disposition Transfer", as set forth in Section 301 of the L "DDA" described in Section 1.11 below; provided, however, that in the event that any such Disposition Transfer is delayed past r. December 31, 2004, due to a default by the Agency under the DDA 6d or due to circumstances entitling Lessee to an extension of time under Section 703 of the DDA, the Term of this Lease as to the portion of such "Separate Development Parcel" (as defined in the DDA) included within the Premises that has not been so conveyed to Lessee shall be extended for the period of the delay (but in no event beyond January 31, 2013) . Nothing in this Lease is intended or shall be interpreted to limit or L affect Lessee' s or Lessor' s respective rights to specific performance under the DDA. L ATTACHMENT ,NO. b (18/O1/B8 L 063Sn/2460/12 -6- r L L1. 6 Possession of the Premises. Lessor shall be deemed to have delivered possession of the Premises to Lessee at the Tern Commencement Date. Lessee hereby acknowledges that it has viewed and is familiar with the condition of the Premises and accepts the Premises in an "as is" physical condition. Ln 1.7 Date of Lease and Legal Effect_. The terms, covenants L and conditions of this Lease shall become legally binding on the Effective Date. L 1.8 Rent Commencement Date. Lessee' s obligation to pay rent ( "Rent Commencement Date"-) shall commence on the Term L, Commencement Date. i L 1.9 Commencement Date for All Other Obligations. All other monetary obligations of Lessee including, but not limited rr to, the obligation to pay taxes and assessments, development fees, and any other sum of money or charges shall commence. as of the Rent Commencement Date. Lr 1.10 Ownership of Improvements and Furnishings, Fixtures, La EM ipment,.and Personal Property; Lessee' s Duty To Surrender. During the entire Term of this Lease, all Improvements and all furnishings, fixtures, equipment, and personal property that +� are made or placed in or on the Premises by Lessee, and all changes, alterations, improvements, and additions thereto, shall be owned by and considered as the property of Lessee and Lnot Lessor. ATTACHMENT 1+10. 6 08/01/88 L0635n/2460/12 -7- L At the expiration or earlier termination of the Term, Lessee shall surrender to Lessor the possession of the Premises, including the Improvements thereon, in good order, broom-clean, and in a clean, sanitary, and safe condition, L quality, and repair, and in accordance with this Lease. At E • such time, all of the Improvements (which tern is intended to exclude FF&E (as defined in this Lease) , personal property, and any signs containing a business name, trademark, symbol, logo, or design) that are made or placed in or on the Premises by i� Lessee, and all changes, alterations, improvements and additions thereto, shall be considered part of the real property of the Premises and shall remain on the Premises and L" become the property of Lessor. Lessee shall be entitled to remove any furnishings, equipment and personal property owned i�. or leased by Lessee, provided that such removal shall be completed within thirty ,(30) days after the expiration or earlier termination of the Term, provided that with respect to trade fixtures, at Lessor' s election, (i ) each trade fixture which is not subject to an encumbrance in connection With 4" financingthe acquisition thereof shall become the qu property of Lessor for the purchase price set forth below and shall not be w removed by Lessee, and (ii) each trade fixture which is subject LA to any encumbrance(s) in connection with financing the acquisition thereof may be purchased by Lessor as provided L below. L LATTACHMENT NO* 6 08/01/88 L0635n/2460/12 -8- L 1 • The price for each such trade fixture shall be Lessee' s depreciated cost based on the estimated useful life of the �. subject fixture as determined from Lessee' s books and calculated on a straight line basis. The election shall be exercised, if at all, by notice given not more than thirty (30) days nor less than one hundred twenty (120) days before the expiration of the Term; provided that, in the event of termination other than by normal expiration of the Tern, the notice may be given concurrently with or as a part of the notice of termination. At Lessor' s election, Lessor may i without notice offset against the purchase price any or all sums then due from Lessee to Lessor. Upon election of Lessor to purchase any such trade fixtures as aforesaid, Lessee shall Convey good and marketable title to each such trade fixture to Lessor free and clear of all liens and encumbrances of any kind whatsoever. For purposes of this Lease, trade fixtures shall include +� all machinery, partitions, furniture, furnishings, doors, bins, racks, floor coverings, lighting fixtures, gasoline pumps, water pumps, exterior and interior signs, and other equipment and personal property installed or placed in or on the Premises whether or not permanently attached to the real property, but shall not include elevators, radiators, boilers, or air conditioning equipment unless those items can be removed L without injury to the Improvements or to the Premises. L +� ATTACHMENT NO. 6 08/01/86 0635n/2460/12 -9- L Elevators, radiators, boilers and air conditioning equipment which cannot be removed without injury to the Improvements or to the Premises shall be considered part of the Improvements for purposes of this Lease. Lessee shall repair any damage• to the Improvements caused by the removal of any of Lessee's property from the Premises as permitted hereunder. In the event that Lessee elects to terminate this Lease as a result of casualty damage or destruction, in accordance with Sections 14.2(a) and 14.5, Lessor shall have the right, within thirty (30) days after receipt of Lessee' s notice of termination, to require Lessee to demolish the Improvements and clear them from the Premises, and in such event the Tern shall continue until such work is completed. All property that Lessee is required to surrender shall become Lessor's property at termination or expiration of this Lease. All property that Lessee is not required to surrender but that Lessee does abandon shall, at Lessor's i, election, become Lessor' s property thirty (30) days after termination or expiration. 1. 11 The City-Agency Agreement and the DDA; Modification of Lease at Time of Disposition Transfers. Lessor and the Huntington Beach Redevelopment Agency (the "Agency") intend to enter into a Purchase and Sale Agreement (the "City-Agency L Agreement") for the sale of the premises by Lessor to Agency. j , On August 15, 1988, the •Agency and Lessee entered into a 6. LATTACHMENT 140. 6 08/01/88 0635n/2460/12 -10- V t Disposition and Development Agreement ("DDA") with respect to the "Site" described therein, of which the Premises are a part. The City-Agency Agreement will be and the DDA is a public record on file in the office of the City Clerk of the it City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648, and reference is made to such agreements for further particulars. In general, the DDA contemplates the sale by the 4W Agency to Lessee of "Separate Development Parcels" (as defined in the DDA) within the "Residential Portion" (as defined in the DDA) of the "Site", and the leasing by the Agency to Lessee of "Separate Development Parcels" within the "Commercial Portion" (as defined in the DDA) of the "Site", pursuant to "Disposition 5 �,. Transfers" (as defined in the DDA) which will occur at the times, for the consideration, and based on the terms and conditions set forth in the DDA. The City-Agency Agreement contemplates the sale by Lessor to the Agency of Lessor' s interest in such Separate Development Parcels in time for Agency to convey the same to Lessee pursuant to the DDA. At the time Agency acquires City' s interest in the Site or any Ali Separate Development Parcel thereof, Agency shall be responsible for all of Lessor' s responsibilities hereunder; as bw used herein, the term "Lessor" shall include any successor to 4 the City' s interest in the Site or any portion thereof. At the time of each "Disposition Transfer" of a "Separate Development 6 Parcel" within the "Site" pursuant to the DDA, this Lease shall Lbe modified as set forth in Exhibit "B" hereto. Lessor and S L ATTACMONT NO. 6 06/01/88 0635n/2460/12 -11- e Lessee each agrees to cooperate and execute modified lease documents in accordance with Exhibit "B" and to execute all documents requested by the other to remove any prior and conflicting leases of record. It is understood and agreed that except as otherwise specifically set forth in this Lease, a breach or default by either party under the DDA shall not constitute a breach or default hereunder, and that a +w termination, in whole or part, of the DDA shall not terminate or Modify Lessor' s or Lessee' s rights or obligations hereunder, except as may be specifically set forth in Section 2.5 and Section 2.1, clause (b) , and elsewhere herein. 1. 12 Quiet Enjoyment. Subject to Sections 1.2 and 1.3 above, upon payment by Lessee of the rents provided herein, and upon the observance and performance of all of the covenants, terms and conditions on the part of Lessee to be performed hereunder, Lessor covenants and warrants that Lessee may peaceably and quietly hold and enjoy the Premises for the Term, without hindrance or interruption by Lessor or any person or entity claiming under or through Lessor. rr 1 ATTACHMENT .H0. 6 08/01/88 0635n/2460/12 -12- ARTICLE II . RENT 2. 1 Initial Rent. (a) Initial Rent. From the Rent CorLmencement Date W until the date set forth in (b) below. Lessee shall pay to Lessor an annual rent of Two Hundred Thousand Dollars s ($200,000) per Lease Year. Rent for any Lease Year less than a �+ full calendar year shall be prorated by multiplying the annual rent then in effect by a fraction in which the numerator equals the number of days in such Lease Year and in which the denominator equals 365. The rent shall be payable in quarterly installments equal to one-fourth (2/4th) of such annual rent I ,,. beginning on the Rent Co=encement Date. Each installment shall be payable in advance without demand upon the first day of the first month of each calendar quarter during the Term without deduction or offset in lawful money of the United States. The rent for any fractional part of a quarter following the Rent Commencement Date shall be prorated on a daily basis based on a ninety (90) day calendar quarter. (b) Adjustment of Initial Rent. Subject to Section 2.7 below, the initial rent shall be adjusted to an amount equal to rive Hundred Thousand Dollars ($500,000.00) per Lease Year on the earlier of the following dates: , ATTACHMENT Na. 5 oa�Ol�aa 0635n/2460/12 -13- (i) June 30, 1999, or t (ii) The date on which Lessee defaults under the 3 L DDA by failing to timely complete construction of the "Developer improvements" (as defined in the DDA) on any of the "Separate Development Parcels" which are the subject of ., a "Disposition Transfer", as provided in the DDA; provided, that in determining whether a default has occurred, Lessee shall be entitled to the benefits of Sections 601 and 703 of the DDA; and further provided that this subparagraph i� (ii) shall not apply to the extent that such default is Y an committed b entity other than Lessee ,.. Y person or Y hereunder. 2.2 Rent Increases. Subject to Section 2.7 below, the rent payable under this Lease shall be a minimum of -the rent then payable pursuant to Section 2.1 above increased as set forth in this Section 2.2. �.+ The annual rent required pursuant to Section 2.1 shall be adjusted upward as of July 1, 1994, and each January 1st thereafter as provided herein (the "Adjustment Dates" ) . The adjustment shall be calculated upon the basis of the United Staters Department of Labor, Bureau of Labor Statistics Consumer Price Index of Urban Wage Earners and Clerical Workers, Los E Angeles-Long Beach-Anaheim Average, all items (1967 = 100) (the "Index") . The Index published and in effect ninety (90) days ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -14- L n prior to July 1, 1994, shall be considered the "Base Year Index" . At each Adjustment Date, the rent otherwise due shall be adjusted by the percentage increase, if any, between the Base Year Index and the Index published and in effect ninety (90) days preceding the Adjustment Date. In no event shall the f L rent following an Adjustment Date be less than the rent in effect during the Lease Year innediately preceding such Adjustment Date notwithstanding the fact that the Index may, as i of some Adjustment Date, be less than the Index as of the Sol previous Adjustment Date or the Base Year Index. In addition, L the increase in rent pursuant to this Section 2.2 in any given five (5) Lease Year period shall not exceed twenty-five percent (25%) and the increase in rent from one Lease Year to the next shall not exceed ten percent (10%) . When the adjusted rent is determined, Lessor shall give Lessee written notice of same indicating how the new figure was computed. If at any Adjustment Date the Index shall not exist in the same format as L recited in this Section 2.2, Lessor and Lessee shall agree to I substitute any official index published by the Bureau of L Labor Statistics, or successor or similar governmental agency, as may then be in existence and which is most nearly equivalent to the Index. Should Lessor and Lessee be unable to mutually agree as to any such substitute index prior to the date such agreement is required in order to properly and timely comply with this paragraph, determination of the proper substitute index shall be by arbitration in accordance with Article XXVII . L L ATTACHMENT NO. 6 08/01/88 L0635n/2460/12 _ ' -15- r L 2 .3 Additional Pa . ents. Except as otherwise provided in this Lease, all sums of money or charges whatsoever required to L be paid by Lessee to Lessor under this Lease other than rent shall be due and payable ten (10) days after demand, without 16* any deductions or offset whatsoever. Lessee' s failure to pay :.. any such amounts or charges when due shall carry with it the same consequences as Lessee' s failure to pay rent and shall be hot deemed to be additional rent. Lessor shall have no obligation to bill or make demand upon Lessee for quarterly rent and such rent shall be delinquent if not received ,by Lessor on the date it is due. 2.4 Place of Payment; Late_ Paynents. Lessee agrees to pay the rental and other charges herein reserved to Lessor at the address specified in the notice provisions of this Lease payable to the City of Huntington Beach or to such other person and/or at such other place as Lessor may from time to time designate in writing. Any installment of rent or any additional charges or rent which shall not be paid within ten (10) days after the due date shall bear interest at the rate of three (3) percentage points above the discount rate of the Federal Reserve Bank of San Francisco (not to exceed the w,. maximum legal rate permitted by law) from the day which is ten (10) days after the due date until the day the rent is paid. In addition, with respect to any delinquent payment of rent or other sum due to Lessor (but to no other person or entity) j..r ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -16- hereunder not paid within the latter of five (5) days after i written notice from Lessor to Lessee and ten (10) days after �•» the due date, Lessee shall pay to Lessor as a late charge an additional payment equal to five percent (5%) of such delinquent payment. Following each second consecutive late payment of rent and/or additional charges after the latter of five (5) days after written notice from Lessor to Lessee and �. ten (10) days after the due date, Lessor shall have the option to require that beginning with the first payment of rent due following the date such second consecutive late payment was due, rent shall no longer be paid in quarterly installments but r� { shall be payable in annual installments in advance; provided, however, that in the event Lessor exercises such option to require annual installments of rent and additional charges in advance and thereafter Lessee is not delinquent in the making of any such annual installments for a period of five (5) years, after the fifth such consecutive annual installment is timely made, thereafter rent will again be payable quarterly in advance until such time as two consecutive late payments after the latter of five (5) days after written notice from Lessor to Lessee or ten (10) days after the due date again occur at which time Lessor shall again have the option to require annual installments as aforesaid. All payments shall be made in lawful money of the United States. All payments requiring i proration shall be prorated on the basis of a thirty (30) day month and a ninety (90) day quarter. w r L ATTACEMNT NO, i 08/01/88 0635n/2460/12 -17- L l 2 .5 Lessor' s Right to Audit. Lessor shall have the right at any time and from time to time upon reasonable notice to a Lessee, and at Lessor' s expense, to review and examine at the Premises the information contained in Lessee' s books, records, and federal and state income tax returns relating to the gross income and revenues derived from sales, rental of hotel roons, and services provided on the Premises (but not information relating to expenses or profits of the Project or information unrelated to the Project) for the sole and limited purpose of verifying whether Lessee and any sublessees, operators and concessionaires conducting business on the Premises -have properly reported and paid taxes all or a portion of which are �.. collected by or paid, directly or indirectly, to Lessor or the Agency (including without limitation sales taxes and transient occupancy taxes) relative to the conduct of such business(es) . In addition, and subject to the same limitations, Lessor shall r. have the right for any given period to have such limited information contained within Lessee' s books, records, and tax returns audited by a disinterested, reputable firm of certified it public accountants selected by Lessor at Lessor' s expense. Lessee shall, for a period of at least seven (7) years from L the end of each Lease Year, keep safe and Intact within the Premises or at Lessee' s offices located no more than fifty (50) miles from the Premises all of the books, records, tax return information and other data which are subject to Lessor' s review L ATTACHMENT-NO. 6 , 08/01/88 0635n/2460/12 -28- under this Section 2 . 5 and regularly kept by Lessee in the ordinary course of its business. All information obtained by Lessor in accordance with its rights under this Section 2 . 5 shall be treated as confidential by Lessor and its agents and accountants and shall not be disclosed except as required by law or as reasonably necessary to protect Lessor or to enforce Lessor' s rights and remedies and/or Lessee' s duties and obligations hereunder. 2 . 6 No Abatement of Rent. Except as expressly provided in Sections 14. 4 and 15 .2 of this Lease, Lessee shall not be entitled to any abatement, diminution, reduction, setoff or postponement of rent as a consequence of any inconvenience to, interruption of, cessation of or loss of Lessee' s use of the Premises or Improvements as a result of any reason whatsoever including, without limitation, any events or unavoidable delays described in Section 25 . 1 (unless same results from the improper or wrongful actions of Lessor) . 2 .7 Rent Freeze. Notwithstanding any other provision of this Lease to the contrary, provided that Lessee is not in material default hereunder or under the DDA (or is in the process of curing such default in accordance with this Lease or -' the DDA) , the Initial Rent set forth in Section 2 . 1(a) above shall not be adjusted pursuant to Sections 2 . 1(b) or 2 .2 in the event that Lessee does not complete a Disposition Transfer of a Separate Development Parcel pursuant to the DDA for any of the. following reasons: ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -19- L (a) The Agency has committed a material default under the DDA; or (b) The Agency has failed or refused to timely acquire and terminate all of the property interests/occupancies 6r in the Site or that portion of the Pacific Mobilehome Park property that must be acquired and terminated pursuant. to Sections 201 and 301 of the .DDA as a condition to the close of �.+ escrow for such Separate Development Parcel; or (c) Lessor or the Agency have failed or refused to &W timely approve any of the plans (including final building plans) for said Separate Development Parcel which are required to be approved pursuant to Sections 203 and 301 of the DDA as a v condition to the close of escrow for such Separate Development l Parcel, provided said plans are in full conformity with the DDA L and Lessee has exercised best efforts to obtain such approvals; or (d) The Agency has unreasonably failed or refused to timely approve Lessee' s evidence of financing commitments for the development of said Separate Development Parcel which financing commitments are required to be approved as a condition to the close of escrow pursuant to Sections 204 and 301 of the DDA, and Lessee has exercised best efforts to obtain such approval; or (e) The Agency has unreasonably failed or refused to L timely approve a hotel operator or hotel franchisor as to any Separate Development Parcel on which Lessee is otherwise L. L. ATTACHMENT N0. 6 08/01/88 L0635n/2460/12 -20- L Lrequired to construct a hotel, which approvals are required pursuant to Section 205, 206, and 301 of the DDA as a condition to the close of escrow for such Separate Development Parcel, and Lessee has exercised best efforts to obtain such approvals. I�. Nothing in this Section 2.7 is intended to limit or affect Lessee' s right to specific performance under the DDA. ARTICLE III . LESSEE'S RIGHT OF FIRST REFUSAL TO PURCHASE PREMISES L. 3 .1 Lessee' s Right of First Refusal to Purchase Premises. &W Between the Term Commencement Date and the expiration or termination of this Lease, and so long as Lessee is not in l L default hereunder (or is in the process of curing such a default), Lessor shall not sell, convey, transfer, or otherwise dispose of all or any portion of or any interest in the Premises (other than a pledge of any of its income under this Lease) until it shall first have offered such portion or interest to Lessee in the manner specified below: (a) Lessor shall deliver a notice (the "Notice") to Lessee stating (i) Lessor's bona fide intention to sell, f transfer or otherwise dispose of all or any portion of or any L. interest in the Premises, (ii) the portion or interest proposed L to be sold, transferred or otherwise disposed of (the "Offered L 1 L ATTACHMENT NO, 6 08/01/88 0635n/2460/12 -21- 4 • L Interest") , and (iii) the offering price and all other material terms for which Lessor proposes to sell, transfer, or otherwise dispose of the Offered Interest. (b) Within sixty (60) days after receipt of the i. Notice, Lessee or its permitted assignee may accept Lessor' s offer by delivering to Lessor a writing agreeing to purchase the Offered Interest on the terms offered by Lessor. Any such acceptance of Lessor' s offer shall be accompanied by a deposit equal to ten percent (10%) of the purchase price which deposit W shall be retained by Lessor as liquidated damages in the event Lthat the purchase is not completed due to a default by Lessee. In the alternative, Lessee may.within such period deliver a L counter-offer to Lessor. Such counter-offer shall be binding Lon Lessee and shall remain effective and may be accepted by Lessor for a period of one (1) year from the date of delivery L of the counter-offer to Lessor. In such event, Lessor shall accept or reject Lessee' s counter-offer within said one (1) Lyear period. During such one (1) year period, Lessor may entertain offers and counter-offers of third parties to purchase the Offered Interest. No such action shall be deemed to be a rejection of Lessee' s counter-offer. At any time during said one (1) year period, Lessor may accept offers of third parties so long as the purchase price for the Offered Interest is in excess of the price offered in Lessee' s L counter-offer and/or the terms of the third party offer are more favorable to Lessor than the terms of Lessee' s LM L ATTACSMENT NO. 6 08/01/88 L0635n/2460/12 -22- counter-offer. Acceptance by Lessor in writing of an offer or counter-offer of a third party to purchase the Offered Interest ` shall constitute a rejection of Lessee' s counter-offer. If Lessee accepts Lessor' s offer to sell the Offered Interest, or if Lessor accepts Lessee' s counter-offer to purchase, the parties shall consuirnate such purchase promptly in accordance L. therewith. (c) (i) If Lessee and Lessor do not enter into an agreement to purchase/sell the Offered Interest as set forth in subparagraph (b) above, or (ii) if Lessee and Lessor enter into such an agreement but Lessee fails to complete the purchase as Jr. set forth in subparagraph (b) above, Lessor may sell the Offered Interest to any person at any price and upon any terms, as Lessor shall determine, provided that such sale is consu n. ated within one (1) year of the date of the initial Notice to Lessee and provided further that in the event of i above, the purchase ( } p price for the 'Offered Interest, and the terms of the sale, shall be no less, or more favorable to L ' the purchaser, respectively, than the terms of any V counter-offer by Lessee. For purposes of comparing whether an offer by Lessee is more or less favorable than an offer by a + third party, any financed portion of the offered purchase price shall be discounted to present cash value using the prime lending rate of Wells Fargo Bank or comparable financial t institution. If such sale is not consummated within said one (2) year period, Lessor shall again be obligated to first offer } 08/01/88 ATTACM4ENT NO. 6 0635n/2460/12 -23- to sell the Offered Interest to Lessee as set forth in this } Section 3 . 1; provided, however, that Lessee' s rights under this �• Article III shall terminate and be of no further force or effect if Lessor and Lessee agree to a proposed sale to Lessee of an Offered Interest constituting ten percent (1001) or more of the gross useable area of the Premises and such sale is not consummated due to a default by Lessee of the terms of the written agreement of sale. In the event a g person or entity other than Lessee acquires all or any portion of or any interest in the Premises, such person or entity shall take title to such portion or interest subject to all of 'the tents and conditions of this Lease. ARTICLE IV. (RESERVED] ARTICLE V. TAXES AND ASSESSMENTS i L 5.3 Lessee' s Obligation for Taxes and Assessments. (a) Governmental Charges. In addition to the rents and other payments required to be paid under this Lease from the Term Commencement Date through the expiration or termination of this Lease, Lessee shall be responsible for, and agrees to pay, prior to delinquency, any and all taxes, assessments, installments of taxes, levies, fees and other goverrLmental charges of every kind or nature (hereinafter collectively called "taxes") levied or assessed by municipal, ATTACMONT .NO. 6 oa/o1/68 0635n/2460/12 -24- L county, state, federal or other taxing or assessing authorities or governmental agencies or entities upon, against or with 6-o respect to (i) the Improvements, or any portion thereof, (ii) the Premises, or any portion thereof, including without V limitation, Lessor' s fee interest in the Premises, (iii) all V fixtures, equipment and any other property of any kind owned by Lessee or placed, installed -or located within, upon or about y" the Premises for which Lessor might be assessed or which might become a lien on the Premises if not paid by Lessee, (iv) all alterations, additions and improvements of whatsoever kind or 1 nature, if any, Made to the Premises or the Improvements, (v) rentals or other charges payable by Lessee to Lessor (other V than state and federal income taxes applicable to Lessor) , and (vi ) any other interest in the Premises (including the L leasehold interest created by this Lease) , irrespective of whether any of the items described in clauses (i) through (vi) above are assessed as real or personal property, and i. irrespective of whether any of such items are assessed to or against Lessor or Lessee, or any other person. The foregoing obligations of Lessee shall not constitute a waiver of Lessee' s rights to contest taxes, etc, , as set forth in subparagraph (d) W below. If at any time during the Tern any of such taxes are not levied or assessed separately and directly to Lessee (for example, if the same are levied or assessed to Lessor as part of a larger tax parcel) , Lessee shall pay Lessee' s " proportionate share as determined below in (b) . Any and all L 3 L ATTACMMNT N0. 6 ' 08/01/88 0635n/2460/12 -25- L taxes and assessments and installments of taxes and assessments required to be paid by Lessee under this Lease shall be paid by �» Lessee before each such tax, assessment, or installment of tax or assessment becomes delinquent and a copy certified by Lessee Iwo under penalty of perjury of the official and original receipt for the payment of such tax, assessment, or installment shall promptly be given to Lessor. b Lessee' s Allocation. Lessee' s� ( ) proportionate share of all taxes levied or assessed against or with respect to the Premises or other matters described in Section 5. 1(a) above, excluding the Improvements, which are not separately assessed shall be that portion thereof which the number of square feet of the land area of the Premises bears to the total number of square feet of land area from time to time levied or assessed with the Premises or any other fair and equitable manner as mutually determined by Lessor and Lessee. Lessee' s share of taxes levied or assessed against or with respect to 4. the Improvements which are levied or assessed with other improvements levied or assessed with the Premises shall be 4• determined by Lessor and Lessee in a fair and equitable manner. Should Lessor and Lessee be unable to agree as described in this subparagraph (b) prior to the date such agreement is required in order to properly and timely comply with this subsection (b) and subsection (a) , determination of LW Lessee' s proportionate share shall be by arbitration in accordance with Article XXVII. The taxes payable by Lessee 1 ATTACMMNT NO e 6 08/01/88 0635n/2450/12 -26- l pursuant to this subsection (b) and subsection (a) which are levied or assessed for the fiscal tax year in which the Term #" commences and for the fiscal tax year in which the Term of this Lease ends, shall be prorated on the basis of a 30 day Month L and a 360 day year. Lessor agrees to cooperate with Lessee, at no cost to Lessor, to cause the Premises to be separately assessed by the County of Orange if at any time the Premises a are not so separately assessed. (c) Substitute Taxes. Should the United States of W America, State of California or any political subdivision thereof (other than the City of Huntington Beach) or any governmental authority having jurisdiction (by way of L� substitution for all or any part of the "taxes" otherwise required to be paid in whole or in part by Lessee pursuant to this Section 5. 1 or elsewhere in this Lease, or in addition thereto) either (i) impose a capital levy or a tax, assessment and/or surcharge of any kind or nature upon, against, in connection with or with respect to the rentals or other charges payable to Lessor by Lessee or other tenants, lessees, occupants, operators or concessionaires in or of the Premises and/or (ii) impose a tax or surcharge of any kind or nature upon, against or with respect to the parking areas or the number of parking spaces in the Premises, then, in any such case, such tax, assessment and/or surcharge shall be deemed to �. constitute a tax and/or assessment against the Premises and Lessee shall pay its proportionate share thereof pursuant to this subsection, as billed by Lessor. ATTACHMENT NO. 6 08J01/88 0635n/2460/12 -27- w (d) Contesting Taxes. Lessee shall have the right to contest, oppose, or object to the amount or validity of any tax, assessment, or other charge levied on or assessed against the Premises Cr any portion thereof; provided, however, that the contest, opposition, or objection riust be filed before the tax, assessment, or other charge at which it is directed becomes delinquent and written notice of the contest, opposition, or objection must be give to Lessor before the date the tax or assessment, or other charge becomes delinquent. No such contest, opposition, or objection shall be continued or maintained after the date the tax, assessment, or other charge at which it is directed becomes delinquent unless Lessee has �.. met one of the following conditions: (i) Paid such tax, assessment, or other charge under protest p prior to its becoming delinquent; (ii) Obtained and maintained a stay of all proceedings for enforcement and collection of the tax, assessment, or other charge by posting such bond or other matter required by law for such a stay; or (iii) Delivered to Lessor a goad and sufficient undertaking in a form reasonably acceptable to Lessor' s Executive Director, in an amount equal to one hundred twenty-five percent (225%) of the amount in controversy (inclusive of fines, interests, penalties, costs, and other expenses that may have accrued or been imposed thereon) and i issued by a surety company authorized to issue undertakings t L„ ATTACBMENT NO. 6 08/01/88 ' 0535n/2460/12 -28- L in California, conditioned on the payment by Lessee of the tax, assessment, or charge together with any fines, L interest, penalties, costs, and expenses that may have accrued or been imposed thereon within thirty (30) days after final determination of Lessee's contest, opposition, or objection to such tax, assessment, or other charge. V Lessor shall not be -required to join in any proceeding or contest brought by Lessee unless the provisions of any law requires that the proceeding or contest be brought by or in the name of Lessor or any owner of the Premises. In that case, Lessor shall join in the proceeding or contest or permit it to be brought in Lessor' s name but such action shall be without cost or other liability to Lessor and Lessee agrees to pay to L Lessor all costs incurred by Lessor in connection therewith. (e) Payment. Subject to Lessee' s rights under 4 subparagraph (c), sera, following each second consecutive delinquent payment of taxes required to be paid by Lessee -under this Section 5.1, Lessor shall have the right to elect to bill ..+ Lessee for any amount payable by Lessee under this Section 5.1 in periodic installments, in advance, from time to time, but not more often than quarterly, and thereafter Lessee' s failure to pay such amount to Lessor shall carry with it the same I�. consequences as Lessee' s failure to pay rent and shall be deemed to be additional rent. In such event, Lessor may so bill Lessee prior to Lessor' s receipt of assessment notices w ATTACSMENT NO. 6 os�ox�aa t 0635n/2460/12 -29 L and/or tax statements or bills covering any or all of the taxes payable by Lessee hereunder. In the event the amount of the taxes described in this Section 5. 1 for any fiscal tax year has not been made known to Lessor by the tax collector at the time of billing, Lessor shall have the right to estimate reasonably the amount thereof and to base its billing to Lessee upon said estimated amount, and in such event -Lessor agrees to adjust such billing when the actual amount of such taxes is made known to Lessor by the tax collector. In the event Lessor exercises such option to require Lessee to pay taxes to Lessor in advance (instead of directly to the taxing authority) and thereafter i Lessee is not delinquent in the making of any such installment payments for a period of five (5) years, after the fifth year Lessee shall again be entitled to make its tax payments directly to the taxing authority until such time as two consecutive delinquent payments again occur at which time Lessor shall again have the option to require periodic ..+ installment payments of taxes to Lessor as aforesaid. In the event Lessor collects tax payments from Lessee pursuant to this Section 5.1, Lessor shall promptly a such taxes p p y pay prior to delinquency. (f) Tax Returns And Statements. Lessee shall, as between Lessor and Lessee, have the duty of attending to, preparing, making, and filing any statement, return, report, or other instrument required or permitted by law in connection with the determination, equalization, reduction, or payment of r.+ LATTACHHENT .NO. 6 � 08/01/88 L 0635n/2460/12 -30- J Irr any taxes, assessments, or other charges that are or may be levied on or assessed against the Premises, or any portion thereof, or any interest therein, or the Improvements or other property on the Premises. Lessor shall cooperate with Lessee, at no cost to Lessor, as reasonably necessary for Lessee to comply with this subparagraph (f) , including providing information and documents in Lessor' s possession to Lessee and w+ executing necessary documents. (g) Indemnification. Lessee shall indemnify, defend and hold Lessor, the Premises, Lessor' s interest in the Premises, and any Improvements located on the Premises, free L and harmless from any liability, claim, loss, cost, expense or L damage resulting from any taxes, assessments, or other charges required by this Article to be paid by Lessee, any loss, cost, expense or damage, including without limitation attorneys' fees and court costs, incurred by Lessor or Lessee in connection r. with any such contest, and from all interests, penalties, and .. other sums imposed thereon and from any sales or other proceedings to enforce collection of any such taxes, assessments, or other charges. (h) Pa3M. ent By Lessor. Subject to Lessee' s rights L under subsection (d) , supra, should Lessee fail to pay within the time specified in this Article any taxes, assessments, or other charges required by this Article to be paid by Lessee, �. Lessor may pay, discharge, or adjust such tax, assessment, or other charge for the benefit of Lessee, but Lessor shall have S LW ATTACHMENT NO. 6 08/01/88 L 0635n/2460/12 -31- L L no obligation so to do. In such event, Lessee shall prorptly reimburse Lessor for the full amount incurred by Lessor in so paying, discharging, or adjusting such tax, assessment, or L other charge together with interest thereon at the rate required to be paid by Lessee for delinquent rent from the date i L of payment by Lessor until the date repayment is received by Lessor from Lessee. L ARTICLE VI . IRESERVED] two ARTICLE VII . USE AI-'D COMI LIANCE WITH LAW 7.1 Use of Premises. Subject to Lessee' s rights under the DDA and under the Development Agreement entered into between Lessee and Lessor on or about August 15, 11,188 (the "Development Agreement") , Lessee, at Lessee' s expense, shall promptly comply with all valid and 6W applicable present and future laws, ordinances, orders, rules, regulations and requirements of all governmental authorities L having jurisdiction of, or affecting or applicable to the Premises or Improvements or the cleanliness, safety, occupancy and use of the same, whether or not any such law, ordinance, �•+ order, rule, regulation or requirement is substantial, or foreseen or unforeseen, or ordinary or extraordinary or shall L necessitate structural changes of the Improvements or interfere LATTACHMENT NO. 6 08/01/88 L 0635n/2460/12 -32- t L with the use and enjoyment of the Premises; provided, that nothing in this Section 7.1 is intended to constitute a waiver by Lessee of its vested rights, if any, its rights, if any, to maintain a legal nonconforming use, or its rights under the DDA and the Development Agreement. If any governmental license or permit shall be required for the proper and lawful conduct of Lessee' s business or other activities carried on in the Premises, then Lessee, at its sole expense, shall duly procure + rr and thereafter maintain such license or permit, or cause such procurement and maintenance, and submit the same for inspection by Lessor. Lessor will cooperate with Lessee, at no cost to + Lessor, as may reasonably be necessary in order to assist W • Lessee in complying with this paragraph, including making appearances at hearings and executing documents. In addition, Lessee shall not commit or suffer to be w committed any waste upon the Premises or any nuisance or other act or thing which disturbs the quiet enjoyment of owners or occupants of property adjacent to the Premises; provided, however, that so long as the Improvements as constructed and maintained are in full compliance with the DDA and all permits and other requirements of law, no claim of breach of this paragraph may be made by Lessor based on a claim of nuisance. Ld In addition, Lessee shall not remove any of the Improvements from the Premises, nor waste, destroy or modify any L Improvements or the Premises, except as permitted by this Lease. + L ATTACHMENT NO. 6 08/01/88_ 0635n/2460/12 • -33- L7.2 Grant of Uses• Easements. Lessee may enter into agreements restricting use or granting easements over the A Premises, provided they are limited to the Term of this Lease or, in the case of restrictions or easements in favor of other "Separate Development Parcels" within the "Commercial Portion" of the "Site" (as those terms are defined in DDA) , provided they are limited to the term of the lease(s) for such other ., Separate Development Parcel(s) . Such restrictions and easements shall not adversely affect the determination of the Market value of the fee of the Premises or the market rental value of the Premises as set forth in Article II, and shall not W be inconsistent with any of the covenants, conditions, or 4 restrictions on Lessee' s use of the Premises as set forth r herein. Lessee must obtain Lessor' s prior written consent to any restrictions on the Premises, its use or its alienation, inconsistent with the foregoing. In addition, Lessee must also obtain Lessor' s prior written consent to certain assign:nents of Lessee' s interests in the Premises and this Lease, as more particularly set forth in Article XVI below. 7.3 Non-Discrimination. Lessee covenants for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, that 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, ., ATTACgM NT NO. 5 08/01/88 0635n/2460/12 -34- W religion, sex, martial status, age, national origin or ancestry in the subleasing of the Premises herein leased, nor shall the �- Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of sublessees of the Premises. In the event Lessee enters into contracts, leases, L subleases, or assignments with respect to any of its interest herein, Lessee shall include in such arrangements a nondiscrimination clause substantially conforming to the following: (a) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns and all persons claiming under or through him or her, that 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, age, national origin or ancestry in the subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or 1.+ herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of lessees of the premises. " ATTACHMENT NO. 6 06/01/88 0635n/2460/12 -35- (b) In contracts and assignments: "There shall be no discrimination against or segregation of any person or group of persons an account of race, color, creed, religion, sex, marital status, age, national origin or ancestry in the subleasing, transfer, use, occupancy, k1 tenure or enjoyment of the premises, nor shall the . . transferee (or assignee) himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of the premises. " - r+ ARTICLE VIII . LESSOR COVENANT TO t RESTRICT USE OF CITY BEACH PROPERTY �i. 8.1 Recitals. (a) Lessor is one of the owners in fee of that i certain real property located in the City of Huntington Beach, 1- . California, and bounded on the north by the right-of-way line for Pacific Coast Highway, on the east by Huntington Beach State Park, on the south by the mean high tide line of the Pacific Ocean, and on the west by an imaginary line extending southward from the westerly side of the intersection of Pacific Coast Highway and Huntington Street (hereinafter referred to as �+ the "City Beach Property") . The City Beach Property is raore particularly described in Exhibit "C" attached hereto and incorporated herein by this reference. ATTACHMENT WO. 6 08/01/88 � ' 0635n/2460/12 -36- 1 r (b) Pursuant to the DDA referenced in Section 2 . 11 E of this Lease, it is contemplated that Lessee will be +� constructing, operating, and maintaining on the Separate Development Parcels within the Co=ercial Portion of the Site i. ocean oriented visitor-serving cornercial facilities which are designed to take full advantage of the existing ocean views across Pacific Coast Highway. Lessee desires to obtain assurances from Lessor that such views will not be obstructed s during the term of the modified Leases to be entered Into between the Huntington Beach Redevelopment Agency and Leasee pursuant to Section 1. 11, Exhibit "B" hereto, and the DDA. 6W (c) Pursuant to the California Coastal Act of 1976, as amended (Public Resources Code Section 30000, et seg. ) , Lessor has prepared and the California Coastal Cor,Lmission has F &W certified a Local Coastal Plan (hereinafter the "LCP") for that portion of the City of Huntington Beach that is located within the Coastal Zone, including the City Beach Property. On January 19, 1981, the City Council of Lessor adopted Resolution No. 4954 adopting the LCP in the form of the Coastal Element of the City's Ceneral Plan; the LCP has subsequently been amended through the City Council's adoption of Resolution No. 5247 on August 2, 1982, Resolution No. 5267 on May 16, 1983, and W Resolution No. 5341 on January 3, 1984. The LCP is a public record, a copy of which is available for inspection at the office of the City Clerk at the City of Huntington Beach, 2000 Main Street, Huntington Beach, California 92648. The LCP requires "Preservation of as much beach sand area as possible in order to accommodate future levels of beach 08/01/88 ATTACHMENT NO. 6 4 0635n/2460/12 -37- ! attendance. " (LCP, Section 2.3 . ) The LCP further establishes as a policy the "increased numbers of hotel/motel rooms and restaurants in the Coastal Zone. " (Id, at Section 3.3 . ) The LCP designates the entire City Beach Property for recreational { +� use in which the "principal permitted uses are limited to open sand areas, beach related recreational activities, and under certain conditions, parking lots, concessions and camping. " (id, at Figure 9. 11 and Section 9.2.5. ) The LCP further "prohibit(s) development of permanent above-ground structures on the beach sand area" on the City Beach Property with the exception of lifeguard towers and other public safety w facilities, public restrooms and beach concession stands when 4 located immediately adjacent to paved parking -or access areas, fire rings, volleyball nets, bike trails, bike support �. facilities, and handicapped access. Finally, the LCP "prohibit(s) expansion of parking facilities that would result in the loss of recreational sand area . " ( id, at " Section 9.5.1. ) v (d) On October 10, 1983, the City Council of Lessor adopted Resolution No. 5308 a,b and c approving and adopting the Downtown Specific Plan (hereinafter the "Specific Plan") for the implementation of the LCP. The entire City Beach Property is located in District Eleven of the Specific Plan, LW which is designated for beach-related open space and L recreational uses. District Eleven "is intended to preserve and protect the sandy beach area within the (Downtown] Specific ice+ Plan boundaries while allowing parking and auxiliary L08 01 88 ATTACHMENT N0. 6 0635n/2460/12 -38- L t► 4 ► convenience uses. " (Specific Plan, Section 4. 13. ) Pursuant to the Specific Plan, the only uses and structures permitted on the City Beach Property are access facilities, basketball courts, beach concession stands at intervals no closer than one w thousand (1,000) feet and limited to two thousand five hundred (2,500) square feet per building,• bicycle and jogging trails 1 and support facilities, fire rings, lifeguard towers and other structures necessary for health or safety, paddleboard courts, surface parking lots or public transit facilities that will not result in the loss of recreational sand areas, provided that any tiered parking shall be designed so that the top of the structures including walls, etc. , are located a minimum of one f ' �+ foot below the maximum height of the adjacent bluff, park ► offices, playground equipment, public restrooms, public ► dressing rooms or showers, shoreline construction that may i alter natural shoreline process (such as groins, cliff w. retaining walls, pipelines, and outfalls that are designed to eliminate adverse impacts on local shoreline sand supply) , and volleyball net supports. (e) City and Lessee desire to ensure the long-tern maintenance of the City Beach Property for beach-related uses consistent with the LCP and Specific Plan, to promote the development and operation of high-quality visitor-serving f com:,nercial uses on the Premises, and to provide a long-term �+ source of revenue to the City to enhance the City' s Implementation of the LCP and Specific Plan or for other public purposes as determined by the City In its sole discretion. 08/01/88_ ATTACIMB NO. 6 0635n/2460/12 - - L a ` -bw 6.2 Restrictions on Development on City Beach Property. ti Lessor covenants not to construct or maintain or permit to be �- constructed or maintained any improvements or structures on the ! City Beach Property excepting only the following: access facilities, basketball courts, beach concession stands at h intervals no closer than one thousand (1,000) feet and limited to two thousand five hundre-? (2,500) square feet per building, �.• bicycle and jogging trails and support facilities, fire rings, lifeguard towers and other structures necessary for health or safety, paddleboard courts, parking lots and public transit facilities that will not result in the loss of recreational w. sand area and that will not extend above the existing grade of R the adjacent stretch of Pacific Coast Highway, park offices, playground equipment, public restrooms, public dressing rooms or showers, shoreline construction that may alter natural shoreline process (such as groins, cliff retaining walls, pipelines, and outfalls that are designed to eliminate adverse impacts on local shoreline sand supply) , volleyball net supports, and pedestrian overcrossing(s) of Pacific Coast Highway. 8.3 Paym_ents. In consideration of Lessor's agreement to restrict development on the City Beach Property as set forth herein, Lessee shall pay to Lessor the amounts set forth below: (a) For each Lease Year from 1989 through 2000, inclusive, the sum of Five Thousand Dollars ($5,000.00) per Lease Year, payable in advance on the first day of each such year. LATTACHMENT NO. 6 08/01/88 L0635n/2460/12 -40- I a (b) For each Lease Year from 2001 through 2013, inclusive, or the earlier termination of this Lease, the e sum of Ten Thousand Dollars ($10,000.00) per Lease Year, 1 payable in advance on the first day of each such year. 8.4 Property to be _Benefited _by Cit5L s_Covenant. The covenants set forth in Sections 8.2 and 8.3 are intended to burden and benefit the City Beach Property and the Premises. At such time that there is a Disposition Transfer of a Separate Development Parcel within the Residential Portion of the Site, pursuant to the DDA, the benefit and burden of this Agreement shall be removed from such Separate Development Parcel only. At such time 'that there is a Disposition Transfer of a Separate 1 Development Parcel within the Commercial Portion of the Site, pursuant to the DDA, the benefit and burden of this Agreement shall continue in effect with respect to such Separate Development Parcel. At -such time that the DDA is terminated, the benefit and burden of Sections 8.2 and 8.3 shall be removed from any portion of the Premises that has not been the subject of a Disposition Transfer. Accordingly, after all of the f Disposition Transfers contemplated in the DDA have occurred, the benefit and burden of this Agreement shall apply to all of the Separate Development Parcels within the Commercial Portion of the Site which have been the subject of Disposition Transfers (with the understanding that if for any reason a LO Separate Development Parcel within the Commercial Portion of the Site is not the subject of a Disposition Transfer, the L08/01/88 ATTACHMENT NO. 6 1 0635n/2460/12 -41- L r benefits accruing to the remaining Separate Development Parcels within the Commercial Portion of the Site which have been the subject of Disposition Transfers shall not be adversely affected) , and the benefit and burden of this Agreement shall not apply to any of the Separate Development Parcels within the 4 Residential Portion of the Site or any other portion of the Site. The City and Lessee agree to 'cooperate and execute all 400 documents that may be reasonably required in order to 1. effectuate this provision. 8.5 Covenants Run With The Land; Recordation of Memorandum of Lease. The parties intend that the covenants set forth in this Article VIII be enforceable as equitable servitudes and constitute covenants the burden of which shall run with the land and bind successive owners of the City Beach Property and ~ benefit assignees and sublessees of Lessee' s interest in the Premises and the Separate Development Parcels within the Commercial Portion of the Site, all within the contemplation and for the purposes set forth in Section 1470 of the California Civil Code. Immediately following the Effective Date of this Lease, Lessor shall cause a Memorandum of Lease which specifically references the restrictive covenant ' L contained within this Article VIII to be recorded against the City Beach Property. LATTACHRENT•N0. 6 . OSJOl/88 0635n/2460/12 -42- ARTICLE IX. MINT£NANCE OF LEASED PREMISES i.. 9. 1 Lessee' s Obligations for Maintenance. (a) Lessee' s Obligations. Subject to the application of Articles XIV and XV in the event, of casualty or condemnation, Lessee, at Lessee' s expense without cost to Lessor, shall keep and maintain in good order, condition, W quality, and repair (including replacement of parts and equipment and FF&E (as defined in this Lease) , and refurbishing of hotel guest rooms, if necessary) the Improvements and every part thereof and any and all appurtenances thereto wherever located, including, but without limitation, the interior and r� exterior surfaces of all exterior walls, roofs, the exterior and interior portions of all doors, door frames, door checks, trash enclosures, planters attached to the Improvements, other W entrances, windows, window frames, plate glass, storefronts, lobbys, signs, all plumbing and privately-maintained sewage and L other utility facilities serving the Premises, including free flow up to the main sewer line, fixtures, ventilation, heating v and air conditioning and electrical systems (whether or not I L4 located in the Improvements), sprinkler systems, floors and ceilings, and all other work performed by or on behalf of L Lessee, and all other repairs, replacements, renewals and restorations, interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and L unforeseen. When used in this Article, the term "repairs" LATTACHMENT NO. d 08/01/88 L* 0635n/2460/12 -43- L a shall include modifications, improvements, additions, deletions, alterations, replacements or renewals when necessary, and all such repairs made by Lessee shall be at ` least equal in quality and class to the original work. Lessee shall keep and maintain all portions of the Premises and Improvements and the sidewalks adjoining the same in a clean and orderly condition free of accumulation of dirt and rubbish. If Lessee wishes to make any repairs to the Improvements which result in a change in use of the s Improvements permitted by this Lease, or materially adversely �.• affect the value of the Premises or Improvements or 'rr,aterially change the external structure or appearance of the v Improvements, then Lessee shall submit to Lessor for its j approval documentation which describes the desired repairs, r including floor plans, building sections, building materials and components, samples of proposed exterior building materials, and the like, to the extent relevant to the particular repair. Lessor' s approval shall be given within a reasonable period of time not to exceed sixty (60) days after receipt by Lessor from Lessee of all necessary documents and information relating to such repairs, and shall not be unreasonably withheld provided that the proposed repair shall �+ not, in Lessor' s reasonable judgment, impair or diminish the value or structural integrity of the Improvements, have the LW likely result of diminishing the income or revenues of Lessee f L over the Term of the Lease, or not be in harmony with neighboring buildings. �» ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -44- �+ In addition to the foregoing, throughout the Term of ' this Lease and any extension hereof, Lessee shall keep, L maintain and operate the Premises and the Improvements in accordance with all valid and applicable laws of the State of California and in accordance with all valid and applicable directions, rules and regulations of health officers, fire marshalls, building inspectc's and other proper officials of the governmental agencies having jurisdiction, and insurance underwriters, and Lessee shall comply with all requirements of laws, ordinances, rules and regulations and otherwise affecting the Premises and the Improvements, all at the sole cost and expense of Lessee; provided that nothing in this Section 9.1 is intended to constitute a waiver by Lessee of its vested rights, if any, to Maintain a legal nonconforming use, or its rights two under the DDA and the Development Agreement. Furthermore, at any time prior to a Disposition Transfer pursuant to the DDA, Lessee may, at its option, and subject to complying with applicable legal requirements, demolish and clear any of the Improvements on the Premises as reasonably determined by Lessee to be necessary or appropriate to prepare for the development contemplated under the DDA. (b) Procedure For Resolution of Disputes Relatin ir. to Lessee' s Maintenance of the Premises. If at any time Lessee shall fail to comply with the requirements in Section 9.1(a) , w but not more frequently than once every twenty-four (24) months, Lessor shall be entitled to deliver written notice to w ATTACHKENT NO, 6 08/01/88 _ 0635n/2460/12 -•45- W Lessee (herein a 'Notice of Deficiency" ) stating that the Improvements and/or Premises are or are not in such condition and setting forth, in detail, the repairs and replacements, if F any, necessary to put the Improvements and/or the Preises in such condition as described above and/or stating that the F operation of the Improvements is or is not satisfactory and setting forth, in detail, the changes in operations, if any, i� necessary to put the operations into the manner described above. If Lessee disputes the need for any repairs, replacements or changes in operation referenced in Lessor' s w+ Notice of Deficiency, Lessee shall deliver written notice to Lessor of such dispute within thirty (30) days after delivery of Lessor' s notice and promptly after delivery thereof the dispute shall be submitted to arbitration as set forth in Article XXVII of this Lease. If the determination of the �., arbitrators requires any of the repairs,. replacements or - changes in operations set forth in Lessor' s notice, or if Lessee shall not have disputed the requirements set forth -in Lessor' s notice, Lessee shall make such repairs, replacements or changes in operation promptly and diligently. Lessee shall be required to correct any deficiencies in the maintenance or operations of the Premises and the Improvements within a L reasonable time exercising due diligence after notice by Lessor but in no event shall such time exceed twelve (12) months of L such notice, and during the period that Lessee is proceeding with such corrections it shall not be deemed to be in default hereunder. ATTACHMENT NO. 6 os/ol/es . 0635n/2460/12 -46- L L (c) Liens. Subject to the last sentence of this Section 9.1(c) , Lessee shall keep the Premises and the L Improvements free from any and all liens arising out of any work performed, materials furnished or obligations incurred by or for Lessee or others, or otherwise affecting the Premises or L Improvements, and agrees to cause to be discharged of record Lany mechanic' s or materialmen' s lien within twenty (20) days after the lien has been filed or within twenty (20) days after receipt of written request from Lessor, whichever shall be the sooner. Lessee shall give Lessor at least fifteen (25) days 6 written notice prior to commencing or causing or perinitting to be commenced any work on the Premises (whether prior or v subsequent to the commencement of the Term) the cost of which is in excess of $25,000, so that Lessor shall have reasonable W opportunity to file and post notices of non-responsibility for Lessee' s work. If Lessee fails to timely remove or bond for a lien as provided in this Section 9.1(c) , Lessee shall reimburse 6+ Lessor for any and all costs and expenses which may be incurred by Lessor by reason of the filing of any such liens and/or W removal of same, such reimbursement to be made within ten (10) days after receipt by Lessee from Lessor of a statement setting forth the amount of the costs and expenses. Lessee may contest �., any such lien provided Lessee has first secured and posted with Lessor a surety bond or bonds in the amount of one hundred and &.W twenty five percent (125%) of any such lien issued by an underwriter reasonably acceptable to Lessor securing payment of L ATTACHMENT N0. 6 08/01/88 kW 0635n/2460/12 -47- L such lien in the event Lessee' s contest thereof is unsuccessful or Lessee otherwise fails to have the lien removed of record timely. L (d) Lessor' s Substitute Performance. In the event Lessee fails, refuses or neglects to conmence and complete any L.. required repairs or maintenance within the times set forth in Section 9.1(a) or (b) , to remove or bond for any lien within L the times set forth in Section 9. 1(c) , to pay any cost or expense relating to such matters, or otherwise to perform any act or fulfill any obligation required of Lessee pursuant to L this Section.9. 1, Lessor may, but shall not be required to, make or complete any such repairs, remove such lien, and pay L such cost and expense of Lessee, and Lessee shall reimburse L Lessor for all costs and expenses of Lessor thereby incurred within ten (10) days after receipt by Lessee fron Lessor of a statement setting forth the amount of such costs and expenses which shall be deemed to be additional rent and subject to the same consequences as herein provided for failure to pay rent. If reasonably possible under the circumstances, Lessor shall give Lessee written notice ten (10) days prior to co=encement of any substitute performance. Any failure by Lessor to give such notice, however, shall not prejudice Lessor' s rights 6d hereunder or alter Lessee' s obligations hereunder. Lessor' s rights and remedies pursuant to this subsection (d) shall be in addition to any and all other rights and remedies provided under this Lease or at law. w 4 ATTACHRENT N0. 6 08/01/88 0635n/2460/12 -48- L a ' LE (e) Ownershin of Ire rovements. The Improvements, and any FF&E not covered by the definition of "Improvements", shall be owned by Lessee and, to the extent applicable, by L Lessee' s vendors and permitted sublessees and concessionaires, until expiration of the Lease Term, or the sooner termination Lof this Lease. However, Lessee shall not remove any of the Improvements from the Premises, nor waste, destroy or modify M any Improvements of the Premises, except as permitted by this Lease. Upon expiration or sooner termination of this Lease, all of the Improvements (which term is intended to exclude i.. FF&E, personal property, and any signs containing a business name, trademark, symbol, logo, or design) that are made or placed in or on the Premises by Lessee shall be considered part of the real property of the Premies and shall remain on the Premises and become the property of Lessor; Lessee shall have 69 the right to remove all other property which is not the property of Lessor, provided that such removal shall be 66 completed within thirty (30) days after the expiration or ' earlier termination of the Term. W L ARTICLE X. INSURANCE AND INDEMNITY r L10. 1 Lessee' s Insurance. L (a) Types. Lessee, at no cost and expense to Lessor, shall, commencing on the date Lessee is given access to the LPremises for any purpose, and during the Term, procure and keep 1 L ATTACHMENT NO. 6 08/01/B8_ 0635n/2460/12 -49- 1r W l in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Lessor and Lessee insurance policies meeting the minimum requirements set forth below or such greater requirements that are generally obtained from time to time for properties, ir:provements, activities, and operations similar to those on the Premises in the Southern California area: V (i) comprehensive general liability insurance with respect to the Premises and the operations of or on behalf of Lessee and all lessees, tenants, licensees, �.+ operators and concessionaires in, on or about the Premises in an amount not less than Five Million Dollars ~ ($5,000,000) per occurrance combined single limit bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in �. amount as Lessor may reasonably require from time to time but not more frequently than every 36 months; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the Index since the last requested adjustment in coverage. The insurance to be provided by Lessee may provide for a deductible or self-insured retention of not more than One Hundred Thousand Dollars ($100,000.00) , with such amount to increase at such times as Lessor may require increases in the policy limits as set forth above; provided that the percentage increase in the deductible or self-insured retention shall not exceed the percentage increase in the ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -50- 1 L Index since the last requested adjustment; and further provided that Lessee may maintain such higher deductibles irr or self-insured retention as shall be acceptable to the Executive Director of Lessor or his designee. In the event such insurance does provide for deductibles or self-insured L retention, Lessee agrees that .it will fully protect Lessor, its boards, officers, and employees in the same manner as j,,,,, these interests would have been protected had the policy or policies not contained the deductible or retention provisions. Coverage shall include but not be limited to, to the extent applicable to the type of business(es) and w operations on the Premises, personal injury liability (with standard exclusions for liability assumed under contracts and suits brought by employees deleted) , premises and operation, blanket contractual, cross liability, severability of interest, broad fora property damage, independent contractors, owned and non-owned automobile, garagekeeper' s liability, inkeeper' s liability, and dramshop and liquor liability coverage. Policies shall Jw include a provision (1) that coverage shall be primary as respects any loss or claim arising directly or indirectly out of the operations of Lessee or others, any policies carried by Lessor shall be excess and non-contributing with such policy or policies, and (2) that Lessor shall be an additional named insured under such policy or policies, and (3) containing cross liability and severability of interest L clauses providing that the insurance applies separately to i each insured except with respect to the limits of liability; L 08/01/88 ATTACHMENT NO. 6 0635n/2460/12 -51- L I i L (ii ) worker' s compensation coverage as required by law; (iii) with respect to improvements, alterations and the like required or permitted to be made by Lessee hereunder and under the DDA, contingent liability and L builder' s risk (course of construction) insurance; (iv) with respect to the Improvements, and L merchandise, stock, trade fixtures, furnishings, equipment I and other items of personal property located on or in the Premises, insurance against fire, peril of flood, extended �.. coverage, vandalism and malicious mischief, and 'such other additional perils, hazards- and risks as now are or may be included in standard "all risk" forms in general use in Orange County, California, with the standard form fire insuance coverage in an amount equal to not less than the i, full current actual replacement cost thereof, and the additional coverage provided by the "all risk" coverage in an amount not less that twenty-five percent (25%) of the full current actual replacement cost thereof. Lessor shall be an additional insured under such policy or policies and such insurance shall contain a replacement cost endorsement; L (v) boiler and machinery insurance coverage for L. all objects, including but not limited to boilers, pressure vessels, pressure piping and other major components or any L centralized heating, air conditioning and cooling systems; and f L ATTACHMENT M. 6 08/01/88 0635n/2460/12 -52- L (vi) comprehensive automobile liability insurance coverage for bodily injury (including death) and property damage which provides total limits of not less than five million dollars ($5, 000,000) combined single limit L occurrence applicable to all owned, non-owned and hired L vehicles. Subject to the next sentence below, Lessee shall further require its licensees, concessionaires and subtenants Lto maintain insurance at their own expense as follows: (i) liability insurance in substantially the same form as required of Lessee by this Section 10.1 of this Lease (with the amounts of coverage and deductible or •� self-insured retention as reasonably determined by Lessee) ; (ii) worker' s compensation insurance in f substantially the same form as required of -Lessee by this r . Section 10. 1 of this Lease; La (iii) Both policies of insurance required by (i ) L and (ii) above shall have the following endorsements, copies of which shall be provided to Lessee and to Lessor, if Lessor so requests: (aa) Inclusion of Lessor as an additional L named insured as respects this Lease; L (bb) Cross liability and severability of s interests clauses providing that the insurance apply L separately to each insured except with respect to the limits of liability; and L LATTACMUNT 240. 6 D8/01/88 L 0635n/2460/12 -53- is Yr (cc) Stipulation that the insurance is kw primary insurance and that neither the Lessor nor its Linsurers will be called upon to contribute to a loss, F Lessee may satisfy this requirement by providing such insurance i' coverage for its licensees, concessionaires, and/or subtenants under the insurance policies it is required to maintain L hereunder. L (b) Standard. All policies of insurance required to be carried by Lessee under this Lease shall be written by responsible and solvent insurance companies authorized to do I business in the State of California. Any such insurance L required of Lessee hereunder may be furnished by Lessee under F any blanket policy carried by it or under a separate policy t therefor. A copy of each paid-up policy evidencing such �+ insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required by this Section and containing provisions specified herein, shall be delivered L to Lessor prior to the date Lessee is given the right of possession of the Premises or as Lessor may otherwise require, and upon renewals, not less than thirty (30) days prior to the expiration of such coverage. Lessor may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Lessee hereunder. In no L event shall the limits of any policy be considered as limiting the liability of Lessee under this Lease. t �. ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -54- i �+ (c) Specific Provisions in Pali. Each policy evidencing insurance required to be carried by Lessee pursuant to this Article shall contain the following provisions or clauses: (i) a provision that the insurer will not cancel, or materially change the coverage provided by such policy a without first giving Lessor thirty (30) days' prior written notice; and f (ii) a waiver by the Lessee' s insurer of any right to subrogation against Lessor, its agents, employees or representatives which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Lessor, its agents, employees or representatives. (d) Landlord' s Substitute Performance. In the event that Lessee fails to procure, maintain and/or pay for at the times and for the durations specified in this Section 10. 1, any +M insurance required by this Section, or fails to carry insurance required by law or governmental regulation, Lessor may (but without obligation to do so) at any time or from time to time, after thirty (30) days written notice to Lessee, procure such insurance and pay the premiums therefor, in which event Lessee shall repay Lessor all sums so paid by Lessor together with Interest thereon as provided elsewhere herein, within ten (10) days following Lessor' s written demand to Lessee for such payment. '•' ATTACHMENT NO. 6 08/01/88 _ . 0635n/2460/12 -55- (e) Commercial Availability, Notwithstanding any other provision in this Lease to the contrary, Lessee' s obligation to procure and maintain insurance, and the coverage, � . terms, and conditions of such insurance, shall be conditioned upon the commercial availability of such insurance, coverage, terms, and conditions, at reasonable corL-nercial rates; L► provided, however, that the foregoing condition of commercial availability shall be inapplicable if the particular insurance coverage is not commercially available due to the wrongful acts �+ or omissions of Lessee, dangerous or hazardous activities of Lessee, or activities not contemplated by this Lease. If at any time during the term any of the insurance otherwise required pursuant to this Section 10. 1 is not so available, Lessee shall promptly so notify Lessor, and Lessor and Lessee j.. shall agree upon such changed, altered, or reduced insurance requirements as shall be reasonable under the circumstances, 'r provided that the insurance requirements' set forth herein shall again take effect at such tine as such insurance again becomes commercially available at reasonable commercial rates. In the event Lessor and Lessee are unable to agree on applicable insurance requirements, the matter shall be resolved by arbitration in accordance with the procedures set forth in Article M11 below. , ATTACHMENT NO. 6 OB/O1/BB 0635n/2460/12 -56- L j,. 10.2 Covenant to Indemnify and Hold Harmless. Lessee covenants to defend and indemnify Lessor, its officers, directors, partners, representatives, agents and employees, and successors and assigns, and save it and them harmless from and against any and all claims, actions, losses, damages, Lliability, costs and expenses, including attorneys' fees, in connection with the loss of •life, bodily injury and/or damage to property arising from or out of or in connection with any occurrence in, upon or at the Premises or Improvements, or the L occupancy or use by Lessee or any other person of the Premises or Improvements or any part thereof, or arising from or out of Lessee' s failure to comply with any provision of this Lease or otherwise occasioned wholly or in part by any act or omission of Lessee, its agents, representatives, contractors, employees, servants, customers, invitees, trespassers, guests, tenants, lessees, concessionaires, operators or licensees, or their customers or invitees, excepting only that the foregoing 1 . indemnification and hold harmless agreement shall not apply in the event of any uninsured willful or actively negligent L misconduct on the part of Lessor or any of its agents, representatives, or employees, or in the event any such claims, actions, losses, damages, liability, costs, or expenses arise out of a breach by Lessor of its obligations under this Lease. In case Lessor shall be made a party to any litigation commenced by or against Lessee, then Lessee shall protect, ! defend and hold Lessor harmless and shall pay all costs, L ! - L ATTACHMENT NO. 6 OB/01/88 0635n/2460/12 -57- L L, expenses and reasonable attorneys' fees incurred or paid by 1 . Lessor in connection with such litigation. Lessor may, at its L option, require Lessee to assume Lessor' s defense in any action covered by this Section through counsel selected by Lessee and reasonably satisfactory to Lessor. Lessee, as a material part L of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons in, upon or about the L Premises and Improvements from any cause whatsoever, and Lessee hereby waives all its claims in respect thereof against Lessor excepting only damage or injury arising out of (i) the uninsured willful or actively negligent misconduct of Lessor or any of its agents, representatives, or employees, or (ii) a L breach by Lessor of its obligations under this Lease. 10.3 Exemption of Lessor. Lessor shall not be liable for injury, loss or damage to person or property or loss of 6w - business which may be sustained by the person, goods, wares, merchandise or property of Lessee, its employees, invitees. or customers or any other tenant, licensee, lessee, guest, trespasser, operator, concessionaire or other person in or about the Premises or Improvements caused by or resulting from any cause whatsoever, including, but not limited to, acts of others, theft, fire, steam, flood, electricity, gas, or water or rain, which may leak or flow from or into any part of the Ld Premises, or Improvements, or from the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, L L ATTACSMENT -N4. 6 08/01/88 1 0635n/2460/12 -58- L L appliances, plumbing, air conditioning or lighting fixtures of the Improvements, whether the injury, loss or damage or loss of L business results from conditions arising upon the Premises or from other sources, except that the foregoing exemption of liability shall not apply (i) to Lessor in its capacity as a governmental agency (as distinguished f ron its capacity as the fee owner of the Premises) , to the extent that such liability Lwould otherwise exist in accordance with existing law, (ii) to the extent any injury, loss, or damage arises out of the L uninsured willful or actively negligent misconduct of Lessor or any of its agents, representatives, or employees, or (iii ) to L the extent any injury, loss, or damage arises out of a breach r . L by Lessor of its obligations under this Lease. Lessee shall give prompt notice to Lessor in case of any casualty losses in boa excess of five percent (5%) of the combined value of the Improvements, FF&E, and personal property on the Premises, and L . in the event of any lawsuits filed against Lessee arising out of Lessee' s occupancy or operations in which the amount in controversy exceeds One Hundred Thousand Dollars ($100,000) . �+ Lessor shall not be liable for any damages arising from any act or neglect of any other tenant, lessee, concessionaire, L licensee, invitee, guest, trespasser, operator or customer of L the Premises or Improvements. L 10.4 Waiver of Subrogation. Each party hereto does hereby waive, remise, release and discharge the other party hereto and any officer, director, shareholder, beneficiary, partner, C Lr ATTACHMENT NO. 6 08/01/88 L0635n/2460/12 -59- L I L agent, employee or representative of such other party, of and from any liability whatsoever hereafter arising from loss or damage for which insurance containing a waiver of subrogation is carried by the injured party under such insurance. Lessee shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease. L ARTICLE XI. UTILITY CHARGES rr ' 11 . 1 Utility Charges. Lessee shall pay all charges for i.. gas, water, sewer, electricity, telephone and other utility services used on or in the Premises and/or the Improvements during the Tern. If any such charges are not paid when due, Lessor may pay the same after giving Lessee ten (10) days prior written notice, and any amount so paid by Lessor shall 6. thereupon become due to Lessor from Lessee as - additional rent. This Section 11.1 is not intended to relieve Lessor from its 16' obligations with respect to the provision of utilities as set forth in Attachment Nos. 3 and 5 to the DDA. W L ARTICLE XII . OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION 12. 1 Off-Set Statement. The parties shall, at any time and from time to time upon not less than ten (10) days' prior i L ATTACHMENT NO. 6 08/01/86 0635n/2460/12 -60- Lwritten notice from the other party, execute, acknowledge and deliver to such requesting party a statement in writing (a) certifying that this Lease is unmodified and in full force and effect (or, if Modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the dates to which the rent and other charges are paid in advance, if any, without any offset or defense thereto (if such be the case) and (b) acknowledging that there are not, to such certifying party' s knowledge, any uncured defaults on the part of the requesting party hereunder, L or specifying the defaults if any are claimed. Any -such statement may be relied upon by any prospective purchaser or �+ encumbrancer of the Improvements, the Premises or of all or any portion of the real property of which the Premises are a part. L Lessee shall bear all costs with respect to any statements i requested of Lessor. ,�. 12.2 Attornment. In the event any proceedings are brought for the foreclosure of, or in the event of the conveyance by deed in lieu of foreclosure, or in the event of exercise of the power of sale under, any mortgage and/or deed of trust Made by Lessor, covering the Premises, or, subject to Article III, in the event Lessor sells, conveys or otherwise transfers its interest in the Premises, Lessee hereby attorns to, and covenants and agrees to execute an instrument in writing reasonably satisfactory to the new owner whereby Lessee attorns L to the successor in interest and recognizes the successor as Lthe Lessor under this �A dmmn NO. 6 08/01/88 L0635n/24t0/l2 -61- L L 12 .3 Subordination. Lessee agrees that this Lease shall, at the request of the Lessor, be subordinate to any mortgages or deeds of trust that may hereafter be placed upon the fee of 66 the Premises by Lessor and to any and all advances to be made 6& thereunder, and to the interest thereon, and all renewals, replacements and extensions thereof, provided the Mortgagees or beneficiaries named in said mortgages or trust deeds shall agree to recognize the interest of Lessee under this Lease in LN the event of foreclosure, in accordance with the terms of this Lease. Lessee also agrees that in the event Lessor and any mortgagee or beneficiary elect to have this Lease prior to such L. mortgage or deed of trust, and upon notification by Lessor or such mortgagee or beneficiary to Lessee to that effect, this Lease shall be deemed prior in lien to such mottgage or deed of trust, whether this Lease is dated prior to or subsequent to w the date of said mortgage or deed of trust. Lessee agrees that ild upon the request of Lessor, or any mortgagee or beneficiary, i Lessee shall execute whatever instruments may be required to carry out the intent of this Section. L+ , 12 .4 No Subordination of Fee. Lessor shall have no L obligation to encumber or otherwise subordinate its fee interest in the Premises. L t L 1 L ATTACHMENT NO. 6 08/02/88 L0635n/2460/12 -62- L LARTICLE XIII . ALTERATIONS AND ADDITIONS L13 . 1 Alterations and Additions. Without Lessor' s prior written consent, which consent may be withheld or granted in Lessor' s sole discretion, and except as permitted in the DDA, L including any of the development plans and approvals obtained by Lessee thereunder, and further except as set forth in &W Section 9. 1 of this Lease, Lessee shall not have the right to make changes or alterations in the Improvements or the 60 Premises, except on the following conditions: L (a) Lessee shall not make any alterations; whether structural or non-structural, which, when completed, will Lmaterially decrease the value of the Premises or the L Improvements, or convert any building into a structure which is not a complete, self-contained operating unit;. (b) Before the commencement of any work, Lessee shall pay the amount of any increased premiums on insurance policies provided for hereunder; (c) Lessor shall in no event be required to make any alterations, rebuilding, replacement, changes, additions or L improvements or repairs to the Premises or Improvements during the Term; and i L (d) All such changes, alterations, rebuilding, replacements, additions, improvements and repairs to the L Improvements made by Lessee shall be deemed to have attached to the realty and to have become the property of Lessor upon the v L ATTACHMENT NO. 6 08/01/88 L0635n/2460/12 -63- ., expiration of the Term or upon sooner termination of this Lease, to the same extent as with the original Improvements. " Lessee shall not remove any of such Improvements, as changed or altered, with the understanding that trade fixtures, furnishings, and personal property installed by Lessee or its i tenants or lessees shall not be classified as "Improvements" as that term is used herein and may be 'removed, provided that Lessee shall promptly repair any damage caused by such ' removal. Subject to the senior and prior rights of the owner(s) and persons or entities having a security interest in any of the trade fixtures, furnishings, and personal property } (if other than Lessee) , in no event, whether during the Term of this Lease or upon the expiration of this Lease, shall Lessee be entitled to remove any trade fixtures, furnishings, or personal property if Lessee is in default hereunder, except that during the Term of this Lease Lessee may remove trade fixtures, furnishings and items of personal property if the same are immediately replaced by trade fixtures, furnishings and items of personal property of like quality and value. ARTICLE XIV. CASUALTY LOSS AND RESTORATION W 14. 1 Non-Termination. Except as provided herein, no destruction or damage to the Improvements or the Premises by �+ fire, windstorm or other casualty whether insured or uninsured shall entitle Lessee to terminate this Lease. L,. ATTACHMENT -NO. 6 08/01/88 ' 0635n/2460/12 -64- i L L14.2 Repair of Damage. (a) Obligation to Repair Damage Due to Casualty Covered by Insurance. Subject to Section 24.5 below, if the Improvements shall be totally or partially destroyed or rendered wholly untenantable by fire or other casualty required to be insured against by Lessee, Lessee shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, irtmediately upon receipt of insurance proceeds, promptly and diligently commence the repair or replacement of the Improvements to substantially the same w condition as they are required to be maintained in under this Lease, whether or not the insurance proceeds are sufficient to cover the actual cost of restoration, and shall complete the same as soon as possible so that Lessee may continue in L occupancy. Subject to Section 25.1, in no event shall the replacement period exceed two (2) years from the date Lessee obtains insurance proceeds. Lessor shall cooperate with L Lessee, at no expense to Lessor, in obtaining any governmental permits required for the restoration. If, however, the then-existing laws of any other governmental agencies with jurisdiction over the Premises do not permit the restoration, Lessee may elect to terminate this Lease by giving notice to Ld Lessor (in which event Lessee will be entitled to all insurance proceeds) or Lessee may reconstruct such other improvements as W are consistent with applicable land use regulations and approved by the City, Lessor and the other governmental agency w or agencies with jurisdiction. L ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -65- R L S (b) Application of Insurance Proceeds. All insurance moneys recovered on account of damage or destruction, less the im cost, if any, of such recovery, shall be applied to the payment of the cost of repairing and replacing the improvements. Except as otherwise provided herein, if net available insurance monies shall be insufficient to pay the entire cost of such work, or if the damage or destruction shall be the result of a `, cause not required to be insured against, then Lessee shall bear the cost thereof in excess of the net available insurance monies. 14.3 Continued Operations. During any period of repair, Lessee shall continue, or cause the continuation of, the operation of the businesses on the Premises to the extent �- reasonably practicable fron the standpoint of prudent business management. However, irrespective of the continued operation of businesses during such period of repair, the rent payable hereunder shall not be deferred (except as provided under Section 14.4) and shall not be abated. Upon completion of such L.. repair and restoration Lessee shall promptly refixture and restock the Improvements, if necessary, substantially to the condition prior to the casualty ,y, or as otherwise required by this Lease, whichever is greater, and shall reopen for business, if closed by the casualty. Lessee shall cause all operators, lessees, tenants and other occupants to do likewise. L i� ATTACHMENT NO. 6 OB/01/88 0635n/2460/12 -66- �r 14.4 Deferral of Rent. There shall be no abatement or deferral of rent in connection with any damage or destruction + to the Improvements unless the casualty loss exceeds twenty-five percent (25%) of the gross useable area of the Premises. In such event, and only in such event, if Lessee suffers such a casualty loss due to circumstances that are not due to Lessee' s intentional .or negligent acts or omissions, the �. rent otherwise chargeable pursuant to Article II above shall be reduced temporarily by a fraction, the numerator of which is the total gross leaseable area of the Improvements from which business cannot be conducted during the period of the casualty loss and the denominator of which is the total gross leaseable &W area of the Improvements immediately prior to the casualty loss. The amount of the temporary reduction shall not be abated or excused but shall be deferred until the earlier of r (i) the date on which Lessee receives any payment of business interruption insurance proceeds, or (ii) • the date which is two (2) years subsequent to the date of the casualty loss. On. the earlier of such date, the amount of the deferred rent shall be paid to Lessor, together with interest from the date of the casualty to the date of payment at a rate equal to three (3) percentage points over the discount rate of the Federal Reserve L Bank of San Francisco (not to exceed the maximum legal rate permitted by law) . 3 L I F ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -67- 4 14.5 Damage or Destruction in Last Years or Due to Cause Not Required to Be Covered By Insurance. If either (i ) the Improvements are destroyed or substantially damaged by fire or casualty when ten (10) or fewer years remain in the Term, or (ii) the Improvements are destroyed or substantially damaged by a casualty which Lessee is not required to (and has not) insured against, then Lessee may cancel this Lease by written iV notice of election to Lessor within ninety (90) days after such substantial damage or destruction and the rents and other L charges payable by Lessee hereunder shall be payable through the termination date plus any additional time required for Lessee to comply with the requirements to remove the j,. Improvements and restore the Premises as required by this Lease. In such event all sums received by or due to Lessee on L account of insurance covering the Improvements shall be paid to Lessor except that the Premises shall be re-delivered to Lessor w after removal of the Improvements and debris, if requested by L Lessor within thirty (30) days after Lessee delivers to Lessor { its notice of termination, and the expense therefor shall be L paid out of the sums received or due on account of such insurance or by Lessee, if no insurance is available therefor. As used herein, {'substantial damage" within the last ten (10) L years of the Term shall mean damage or destruction, the reasonably estimated cost of repair of which is twenty-five �. percent (25%) or more of the rent payable during the remainder of the Term. As used herein, "substantial damage" caused by a b+ ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -68- L casualty not required to be (and not) covered by insurance shall mean damage or destruction which is twenty-five percent 4 (25%) or more of the replacement cost of the Improvements. In the event Lessee does not timely elect to cancel this Lease as set forth in the first sentence of this Section 14.5, Lessee shall promptly commence and complete the repair, rebuilding and refurnishing of the damaged or destroyed Improvements in accordance with Section 14.2: 14.6 Limitation on Lessee' s Obligation to Restore and Right t to Terminate Lease. Notwithstanding any other provision of this Lease to the contrary, prior to a Disposition Transfer, Lessee shall have no obligation under this Article XIV to seek or obtain insurance proceeds, to restore or repair the 6. Improvements, or to continue the operation of •the businesses on the Premises, and Lessee shall have no right to terminate this Lease because of any casualty loss; provided, however, that if V, Lessee elects after a casualty loss not to repair or restore the Improvements, Lessee shall notify Lessor in writing of such L election within a reasonable time, not to exceed one hundred twenty (120) days, after such casualty loss, and shall L thereafter diligently proceed to demolish and clear any Lremaining damaged portion of the Improvements from the Premises. In such event, all insurance proceeds (less L insurance proceeds spent to demolish and clear such remaining damaged portion of the Improvements) shall be paid to Lessee. L f L ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -69- L ARTICLE XV. EMINEN'T DOMAIN v 15.2 Condemnation of Premises. If the whole of Lessee' s interest in the Premises shall be taken by any public authority LO under the power of eminent domain or sold to public authority under threat or in lieu of such a taking, except for a taking for a temporary use, then the Term of this Lease shall cease as of the day possession shall be taken by such public authority, and the rent and other charges shall be paid up to that day L with a proportionate refund by Lessor of such rent and other charges as tray have been paid in advance for a period L subsequent to the date of the taking. 15.2 Partial Condemnation. (a) More Than 25% of Improvements. If more than twenty-five percent (25%) but less than all of Lessee' s interest in the Improvements shall be taken under eminent 4 domain, or sold to public authority under threat or in lieu of L such a taking, except for a taking for a temporary use, Lessee Lshall have the right either to terminate this Lease as of the day possession is taken by public authority or, to continue- in Lthe possession of the remainder of the Premises, upon notifying Lessor in writing of Lessee's intention within thirty (30) days L after the taking of possession by the condemnor. In the event Lessee elects to remain in possession, all of the terms herein 1.w provided shall continue in effect, except that as of the day I 08/OI./88 ATTACHMENT k0. 6 0635n/2460/12 -70- W L possession is taken by public authority, the rent shall be i reduced in proportion to the amount of the Improvements taken. L Thereafter, Lessee shall, at its own cost and expense, make all the necessary repairs or alterations to the Improvements, so as to constitute the remaining Improvements a complete architectural unit(s) , and Lessee, at Lessee' s sole cost, shall similarly act with respect to trade fixtures, furnishings and equipment. (b) 25%' or_Less of Improvements. Except for a taking for a temporary use (subparagraph (e) below) and a taking during the final ten (10) years of the tern (subparagraph (f) below) , if twenty-five percent (25%) or less of Lessee' s interest in the Improvements shall be taken, the Tern. shall cease, only on the part so taken, as of the day possession shall be taken by such public authority, and Lessee shall pay rent up to that day, with appropriate refund by Lessor of such rent as may have been paid in advance for a k.. period subsequent to the date of the taking in proportion to the amount of the subject Improvements taken, and thereafter V the rent shall be reduced in proportion to the amount of the subject Improvements taken. Lessee shall, at its expense, make all necessary repairs or alterations to the Improvements, so as Lto constitute the remaining Improvements a complete architectural unit(s) , and Lessee, at Lessee' s sole cost, shall L similarly act with respect to trade fixtures, furnishings and equipment. ATTACHMENT NO. 6 08/01/88 0635n/2460/12 -71- I L (c) Partial taking of the Premises exclusive of Improvements. In the event of a taking of less than all of W Lessee' s interest in that portion of the Premises exclusive of the Improvements, this Lease shall remain in full force and effect, and thereafter the rent shall be reduced in proportion W to the reduction in the fair rental value, if any, of the Premises. If Lessor and Lessee are unable to resolve a dispute L regarding such a reduction in the fair rental value of the r Premises within thirty (30) days after the taking of possession L by the condemnor, the dispute shall be resolved by arbitration conducted in accordance with Article XXVII and with •the qualifications of the appraisers/arbitrators and the determination of value to be generally as set forth in Section 2.2(a) . (d) Sale by Lessor. A sale by Lessor of its interest in the Premises to any authority having the power of eminent 4 domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for purposes of the Lallocation of damages under Section 15.3 but not for purposes of this Section 15.2. L (e) Temporary Taking. If there is a taking of La Lessee' s interest in the Premises and/or the Improvements for temporary use for a period not to exceed thirty (30) days, this L, Lease shall continue in full force and effect, and Lessee shall i. LATTACHMENT N0. 6 08/01/88 0635n/2460/12 -72- continue to comply with Lessee' s obligations under this Lease, except to the extent compliance shall be rendered impossible or impracticable by reason of this temporary taking. (f) Taking During Final Years of Term. If there is a total or partial taking of the Improvements during the final ten (10) years of the Term, then Lessee may terminate this Lease by written notice of election to Lessor delivered within thirty (30) days after the taking of possession by the condemnor, and after the termination date Lessee shall have no L further obligation to pay rent that would otherwise accrue after said date. 25 .3 Lessor' s and Lessee' s Dana es. All damages awarded for such taking under the power of eminent domain or proceeds from the sale under threat or in lieu of such a taking, whether for the whole or a part of the Premises, shall be divided anong Lessor, Lessee, Lender (as defined in Article XVII ) , and any other party holding an encumbrance on the Premises in accordance with the value of their respective estates. ARTICLE XVI . ASSIGNaNT AND SUBLETTING 3 16.1 As_ signnent. The qualifications and identity of Lessee are of particular concern to Lessor. it is because of those L qualifications and identity that Lessor has entered into this Lease with Lessee. Accordingly, Lessee shall not, except as ATTACHMENT NO. 5 08/01/88 0635n/2460/12 -73- I it Lpermitted in this Article XVI, assign all of any part of this Lease or any of Lessee' s rights hereunder without the prior L written approval of Lessor. No purported assignment in Lviolation of this Lease shall be valid or effective. Lessor agrees that it will not unreasonably withhold or condition such W approval provided that Lessee is not in default hereunder. In this regard, Lessor further agrees that in the event of a request by Lessee to assign Lessee' s interest in the Lease or i the Premises, Lessor shall grant such approval provided 1.r (i) such assignment is made to a responsible third party who will undertake Lessee' s responsibilities under this -Lease to use and develop the Premises, or portion thereof, in accordance with this Lease; (ii) if the assignment occurs prior to the issuance of a Certificate of Completion pursuant to Section 415 of the DDA that such third party shall demonstrate qualifications and experience with respect to the type of development proposed herein and in the DDA to assure the development and operation of the Improvements, or portion thereof, equal to or greater than the qualifications and �+ experience of Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended or LW successor Lessee; and (iii) such third party shall demonstrate sufficient financial resources or commitments to assure operation (and, if the assignment occurs prior to the issuance of a Certificate of Completion pursuant to Section 415 of the DDA, development) of the Premises, or portion thereof, in L LATTACHMENT N0. 6 08/01/88 0635n/2460/12 -74- W L accordance with this Lease. For purposes of clause (ii) above, Lessor shall approve the proposed assignee if the assignee demonstrates to Lessor reasonable satisfaction that it possesses the financial resources and abilities equivalent to or greater than Robert L. Mayer as at the date of this Lease, provided that the foregoing shall not be construed to imply that a proposed assignee with a net worth less than the net �. worth of Robert L. Mayer as at the date of this Lease shall not be an acceptable assignee. Lessor may grant or deny such approval to a third party not meeting any of the foregoing requirements in Lessor' s sole discretion. w For the proposed assignment to be effective, the ♦„ grantee, assignee or transferee must furnish Lessor with a written and fully executed and acknowledged assignment and assumption agreement, pursuant to which the grantee, assignee or transferee agrees to comply with and perform all the obligations of Lessee under this Lease. All of the foregoing documents shall be in form and substance acceptable to Lessor and its attorneys. The approval by Lessor of one assignment, �+ whether by operation of law or otherwise, shall not be deemed to be an approval by Lessor of any subsequent assignment. 4 Notwithstanding any other provision of this Lease to L the contrary, Lessor approval of an assignment of this Lease or any interest herein shall not be req•aired in connection with L any of the following: L V ATTACHMENT H0. 6 08/01/88 0635n/2460/12 -75- (a) Any transfer to any entity or entities in which either Lessee or Robert L. Mayer retains a minimum of fifty-one W percent (510%) of the ownership or beneficial interest and retains management control. (b) Transfers resulting from the death or Mental or �.+ physical incapacity of an individual. t (c) Transfers or assig.,Lments in trust for the benefit of a spouse, children, grandchildren, or other family members. (d) A transfer of Lessee' s interest in the Premises to a Lender approved by Lessor in accordance with this Article XVI, including a transfer at foreclosure (or• a conveyance thereof in lieu of a foreclosure) pursuant to a foreclosure thereof by a Lender. (e) The conveyance or dedication of any portion of L Lessee' s interest in the Premises to the City 4r other appropriate governmental agency, or the granting of easements or permits in accordance with this Lease to facilitate the w development or operation of the Premises or the development or operation of any of the other Separate Development Parcels" within the "Commercial Portion of the "Site" (as those terms are defined in the DDA) . (f) The leasing of any part or parts of a building or structure for occupancy, or entering into of any concession agreements, licenses, or other contracts in the normal course of owning and operating the Improvements on the Premises. R ATTACHMENT N0. 6 08/01/88 0642n/2460/12 -76- r L (g) A transfer of stock in a publicly held corporation or the transfer of the beneficial interest in any w publicly held partnership or real estate investment trust. L (h) The subdivision and conveyance of individual hotel units on the Premises solely for purposes of financing the development, maintenance, and/or operation of a hotel thereon, in accordance with. the DDA, provided that: (i) the subdivision of the Premises or portion thereof into commercial condominium units shall not allow the occupancy of hotel rooms 6d for any use other than as individual transient occupancy hotel rooms; and (ii) commercial condominium units shall not be subdivided or conveyed as a time-share, or time-share interest *A' in an individual hotel unit (as those terms are defined in California Business and Professions Code Section 11003 .5, as the same now exists or may hereafter be amended) , time-shares Land time-sharing arrangements being strictly prohibited hereby; provided, however, that it is understood and agreed that any 60 method of. financing allowing the owner of a condominium hotel unit to occupy such unit for a period or periods not to exceed L" the greater of two (2) weeks per year or ten percent (10%) of the number of days per year that the unit is occupied by hotel a. guests shall not be deemed to be a time-share arrangement. Lessee shall deliver written notice to Lessor requesting approval of any assignment requiring Lessor approval hereunder. such notice shall be accompanied by sufficient evidence regarding the proposed assignee' s development f L ATTACHMENT No. 6 08/01/88 0542n/2460/12 -77- L ti L qualifications and experience and its financial corLmitments and i resources to enable Lessor to evaluate the proposed assignee L, pursuant to the criteria set forth in the first paragraph of this Article XVI . Such information shall include, without limitation, a balance sheet of the proposed subtenant or assignee as of a date within ninety (90) days of the request for Lessor's consent and statements of income or profit and loss of the proposed subtenant or assignee for the two-year period preceding the request for Lessor' s consent, if the same be available (or such other similar information as shall be available at the time the request for approval of the assignment is made) , and a written statement in reasonable L detail as to the business and experience of the proposed subtenant or assignee during the five (5) years preceding the request for Lessor' s consent. ' Within thirty (30) days after the receipt of Lessee' s written notice requesting Lessor approval of an assignment, Lessor shall respond in writing by stating what further information, if any, Lessor reasonably requires in order to determine whether or not to approve the requested assig=ent. Upon receipt of such a timely response, Lessee shall promptly furnish to Lessor such further infornation as may be reasonably requested. Lessee' s request for approval of an assignment and delivery F 4 of necessary information for financing purposes shall be deemed complete twenty (20) days after Lessor' s receipt thereof and f �,. ATTACHMENT NO, 6 08/01/88 0642n/2460/12 .-78- L LLessee' s request for approval of an assignment and delivery of necessary information for all other types of assignment shall &^ be deemed complete thirty (30) days after Lessor' s receipt thereof if Lessor does not deny approval or if no timely response requesting further information regarding the proposed assignee is delivered to Lessee, or, if such a timely response requesting further information is received, on the date which is fifteen (15) days after the date that Lessee delivers such additional information to Lessor. Once Lessee' s request for a.. approval of an assignment has been accepted as complete or is deemed complete, Lessor shall not be entitled to demand additional information or to disapprove the assignment on the +r basis that Lessee has not furnished adequate or complete information. None of the foregoing shall restrict Lessor' s L rights to deny approval of any assignment not.found acceptable by Lessor pursuant to this Lease. Any assignment requiring V Lessor' s consent shall only be effective upon Lessor' s written . �., consent to such assignment. Lessor shall approve or disapprove any requested assignment for financing purposes requiring Lessor approval within thirty (30) days after Lessee' s request therefor is accepted as L complete or is deemed complete, and Lessor shall approve or disapprove any other type of requested assignment requiring Lessor approval within forty-five (45) days after Lessee' s r request therefor is accepted as complete or is deemed complete. Any disapproval shall be in writing and shall L specify the reasons for the disapproval and, if applicable, the L ATTACHMENT NO, 6 08/O1/88_ 0642n/2460/12 -79- L ` Irr . ° conditions required to be satisfied by Lessee in order to obtain approval. If Lessee' s initial notice requesting approval of an assignment for financing purposes (but not any other type of assignment) states that the assignment will be deemed approved unless rejected within the time required in this Lease, Lessor' s failure to timely disapprove the assig.-Lment shall be conclusively deemed to constitute an approval. No assignment of Lessee' s obligations with respect to the Premises, whether or not Lessor' s approval is required therefor (but specifically excluding those types of assignments identified in subparagraphs (d), (e) , and (f) , (g) , and (h) ) , " shall be effective unless and until the proposed assignee ° executes and delivers to Lessor an agreement in form reasonably L satisfactory to Lessor' s attorney assuming the .obligations of Lessee which have been assigned. Thereafter, the assignor shall remain responsible to Lessor for performance of the L+ obligations assumed by the assignee unless (i) Lessor releases the assignor in writing or (ii) all of the applicable requirements set forth in this Section 16.1 are fully satisfied and the assignor is not then in default under this Lease, in which event, assignor shall remain responsible to Lessor for �., performance of the obligations arising prior to the effective date of the assignment, and shall be released from any obligation or liability arising subsequent to the effective date of the assignment. ATTACHMENT NO. 6 oa/o1/8$ 0642n/2460/12 -80- if i� No consent or approval by Lessor of any assignment requiring Lessor' s approval shall constitute a further waiver of the provisions of this Article. 15.2 Bankruotc . It is acknowledged and agreed that this Lease is a lease of real property within the meaning of Subsection 365(b) (3) of the Bankruptcy Code, 11, U.S.C. To the extent not prohibited by provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seg. , including Section 365(f) (1) v thereof, Lessee on behalf of itself, creditors, administrators and assigns waives the applicability of Sections 541(c) and 365(e) of the Bankruptcy Code of 1978 unless the proposed a.+ assignee of the Trustee for the estate of the bankrupt meets Lessor' s standards for consent. Lessor has entered into this L Lease with Lessee in order to obtain for the benefit of the Premises the unique types of facilities, businesses, services and goods which Lessee can bring to the -Premises; the foregoing prohibition on assignment or subletting is expressly agreed to by Lessee in consideration of such fact. Any person or entity i to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease t on and after the date of such assign.^nent. Any such assignee shall upon demand execute and deliver to Lessor an instrument confirming such assumption. ATTACHMENT NO. 6 08/01/88 0642n/2460/12 -81- L 16.3 Lessor' s Fee. Lessee agrees to reimburse Lessor for Lessor' s reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested assignment, subletting, ' transfer, change of ownership r.. or hypothecation of this Lease or Lessee' s interest in and to the Premises, or any part thereof, which requires Lessor' s approval hereunder, in an amount not to exceed Two Thousand 60 Five Hundred Dollars ($2,500.00. ) for each such assignment (which amount shall be adjusted each year by the consumer price index rating for the most proximate location or an equivalent standard measure of general inflation) . i. 16.4 No Waiver. The acceptance by Lessor of any payment due hereunder from any other person shall not be deemed to be a waiver by Lessor of any provision of this Lease or to be a consent to any assignment or subletting. Consent by Lessor to one or more assign-meets of this Lease or' to one or more *„ sublettings of the Premises shall not operate as a waiver or estoppel to the future enforcement by Lessor of its rights +� pursuant to the provisions of this Lease. ARTICLE XVII. LEASEHOLD FINANCING: RIGHTS OF LEASEHOLD LENDER �.• 27.1 Mortgage of Lease. Lessee may only encumber the L leasehold estate created hereby in accordance with the requirements of this Article and Article XVI. L' ATTACHMENT NO. 6 08/01/88 } 0642n/2460/12 _-82- L i 17.2 Definitions. As used in this Lease, "Leasehold Mortgage" shall mean any mortgage, deed of trust, or other �- security instrument, including, without limitation, an assignment by Lessee of the rents, issues and profits from the Premises, which constitutes a lien on the estate created by L this Lease, and which has been approved or is deeMed approved by Lessor, and "Lender" :hall Mean the owner and holder of the Leasehold Mortgage. L 17.3 Rights_ of _Lender. Subject to prompt compliance by Lender with all obligations imposed on Lender by this Lease, during the continuance of any Leasehold Mortgage and until such LI time as the lien of any Leasehold Mortgage has been extinguished: L- (a) Lessor shall not agree to any mutual termination nor accept any surrender of this Lease, nor shall Lessor consent to any amendment or modification of this Lease which would have a material adverse effect on Lender, without the prior written consent of Lender. L (b) Notwithstanding any default by Lessee in the performance or observance of any agreement, covenant or L condition of this Lease on the part of Lessee to be performed .L or observed, Lessor shall have no right to terminate this Lease unless an event of default shall have occurred and be continuing, Lessor shall have given Lender written notice of such event of default, and Lender shall have failed to remedy L such default promptly or to acquire Lessee' s estate created L os/ol/se ATTACMUNT NO. 6 0642n/2460/12 -83- 6 it hereby or commence foreclosure or other appropriate proceedings in the nature thereof promptly and remedy such default promptly, all as set forth in, and within the time specified L by, this Section 17.3. (c) Lender shall have the right, but not the L obligation, at any time prior to termination of this Lease to pay all of the rents due hereunder, to effect any insurance, to pay any taxes and assessments, to make any repairs and improvements, to do any other act or thing required of Lessee hereunder, and to do any act or thing which may be necessary Land proper to be done in the performance and observance of the agreements, covenants, and conditions hereof to prevent L termination of this Lease. All payments so made and all things so done and performed by Lender shall be as effective to prevent a termination of this Lease as the same would have been if made, done, and performed by Lessee instead of by Lender. (d) Should any event of default under this Lease I� occur, Lender shall have sixty (60) days after receipt of. notice from Lessor setting forth the nature of such event of L default, and, if the default is such that possession of the Premises may be reasonably necessary to remedy the default, a reasonable time after the expiration of such sixty (60) day period within which to remedy such default, provided that (A) Lender shall have fully cured any default in the paynent of L any monetary obligations of Lessee under this Lease, including interest and late fees, within such sixty (60) day period and L L ATTACHMENT NO. 6 08/01/88 � O642n/2460/12 -84- i ,W shall continue to pay currently such monetary obligations as and when the same are due and (B) Lender shall have acquired Lessee' s estate in the Premises created hereby or cc-T.menced foreclosure or other appropriate proceedings in the nature w thereof within such period, or prior thereto, and is diligently prosecuting any such proceedings. All rights of Lessor to terminate this Lease as the result of the occurrence of any i.. such event of default shall be subject to, and conditioned upon, Lessor having first given Lender written notice of such v evert of default as aforesaid and Lender having failed to remedy such default or acquire Lessee' s estate in the Premises created hereby or cortmence foreclosure or other appropriate �.+ proceedings in the nature thereof, and diligently conclude such proceedings, as set forth in and Within the time specified by i this subparagraph (d) . } (e) Any event •of default under this Lease which by virtue of the nature thereof cannot be remedied by Lender shall be deemed to be remedied if (A) within sixty (60) days after receiving written notice from Lessor setting forth the nature L of such event of default, or prior thereto, Lender shall have acquired Lessee' s estate in the Premises created hereby or shall have commenced foreclosure or other appropriate L proceedings in the nature thereof, (B) Lender shall diligently I prosecute any such proceedings to completion, (C) Lender shall L have fully cured any default in the payment of any monetary obligations of Lessee hereunder, including interest and late 6W LATTACHMENT NO. 6 08/01/88 0642n/2460/12 -85- 1 fees, which do not require possession of the Premises within such sixty (60) day period and shall thereafter continue to faithfully perform all such monetary obligations which do not require possession of the Premises, and (D) after gaining possession of the Premises Lender performs all other obligations of Lessee hereunder as and when the same are due, including without limitation, curing said event of default. L In addition to the rights set forth in this subparagraph (e) , Lender shall have the option, to be exercised by written L notice to Lessor given within the aforesaid sixty (60) day period, to obtain a new lease of the Premises upon the �r. following terms and conditions: ., (i) Such new lease shall be effective as of the date of the termination of this Lease and shall be for the remainder of the Term of this Lease at the same rental and with the same terms; covenants and conditions as are set 61k forth herein, and Lender shall assume and be responsible for all obligations as lessee thereunder to the same extent, and subject to the same terms and conditions, as �+ Lessee is responsible hereunder; and L (ii ) In addition to paying all current rent under the new lease, Lender shall pay all unpaid rental (net of L any income Lessor may have received from the Premises during such period) due pursuant to Article II of this L Lease and any other outstanding charges and Lender shall cure all other defaults. under this Lease that reasonably i can be cured by Lender. s L ATTACHKENT NO. 6 08/01/88 L0642n/2460/12 . -86- �r In lieu of executing a new lease in Its own name, Lender shall have the right to designate a nominee which shall &d become a lessee under the new lease; provided that Lessor shall have the same right to approve (or disapprove) Lender' s nominee as set forth in Article XVI for Lessor' s approval (or w disapproval) of a proposed assignee of Lessee' s interest hereunder and all other conditions contained in (i) and (ii) above are met. (f) Subject to Section 16.2, if Lender is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or Insolvency proceeding involving Lessee from �+ commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, the times specified in subparagraphs (d) and (e) above for coramencing .or prosecuting such foreclosure or other proceedings shall be extended for the V period of such prohibition plus an additional period of sixty L (60) days thereafter; provided that Lender shall have fully Lcured any default in the payment of any monetary obligations of Lessee under this Lease and shall continue to pay currently such monetary obligations as and when the same fall due. L (g) Lessor shall mail or deliver to Lender a L duplicate copy of any and all notices of default which Lessor may from time to time give to or serve upon Lessee pursuant to L the provisions of this Lease, and such copy shall be mailed or delivered to Lender simultaneously with the mailing or delivery ATTACHMENT NO* 6 08/01/8B ' 0642n/2460/12 -87- W i.+ of the same to Lessee. No notice of default by Lessor to Lessee hereunder shall be deemed to have been given insofar as Lender' s rights under this Article XVII are concerned unless Land until a copy thereof shall have been mailed or delivered to Lender as herein set forth. Lessor shall use its best efforts L to comply with this subparagraph (g) but any failure to so comply shall not create any liability on the part of Lessor. (h) Subject to Section 16. 1(f) foreclosure of a ILLeasehold Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the LLeasehold Mortgage, or any conveyance of the estate -in the Premises created hereby from Lessee to Lender through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of Lessor or constitute a breach of any provision of or a default under this Lease, and upon such foreclosure, sale or conveyance Lessor shall recognize Lender as lessee hereunder. In the event �+ Lender becomes lessee under this Lease, Lender shall assume the obligations of Lessee under this Lease or such new lease only for the period of time that Lender remains lessee thereunder. 17.4 Consent of Lessor. In the event Lender requires any modification to the provisions of this Lease in order to secure its loan, Lessor Lagrees not to unreasonably withhold consent to such modification so long as such modification does not have an 6 adverse impact on any interest, right or remedy of Lessor L hereunder. ATTACHMENT NO. 6 08/01/88 0642n/2460/12 -88- iW G ARTICLE XVIII . DEFAULT 18. 1 Evens of Default. The word "default, " as used in this Section 18, shall mean and include any one or more of the following events or occurrences: (a) The failure by Lessee to make any payment of rent, or other payment required to be made by Lessee hereunder, as and when due and the continuance of such failure for a period of fifteen (15) days after Lessor shall have given Lessee written notice specifying the same; (b) ' The failure of Lessee to perform any term, 4 'condition, covenant or agreement of this Lease, excluding the payment of rent, and the continuation of such failure for a +W period of thirty (30) days after Lessor shall have given Lessee written notice specifying the same, or in the case of a situation in which the default cannot reasonably be cured within thirty (30) days, if Lessee shall not promptly, within thirty (30) days after receipt of such notice, commence to �.. remedy the situation by a means that can reasonably be expected to remedy the situation within a reasonable period of time, and diligently pursue the same to completion; (c) The abandonment by Lessee of the Premises or a substantial portion thereof; 1 4 f �+ ATTACHMENT H0. 6 08/01/88 0642n/2460/12 -89- F (d) Lessee' s (i ) application for, consent to, or suffering of, the appointment of a receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii ) making a general assignment for the benefit of creditors; (iii) being adjudged a bankrupt; (iv) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of an involuntary petition, the same is dismissed within thirty (30) days of such filing) ; or (v) suffering or permitting to continue unstayed and in effect for ten (10) consecutive days any attachment, levy, executio:: or seizure of all or a substantial portion of Lessee' s assets or i of Lessee' s interest in this Lease; (e) Any attempt to create tire share interests or w time-sharing arrangements in the Premises without Lessor' s written consent, except as specifically allowed in connection with a financing arrangement pursuant to Section 16. 1(h) . 18.2 Remedies. L (a) General. In the event of any default by Lessee, including the expiration of any applicable cure period Lessor may: (i) Terminate Lessee' s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender f possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee: ATTACHMENT N0, 6 08/01/88 0642n/2460/12 -g0- L 1 (aa) The worth at the time of award of the unpaid rent which had been earned at the time of termination; (bb) The worth at the time of award of the amount by which the unpaid rent which would have been R ' earned after termination until the time of award exceeds the amount of such loss that Lessee proves could have been reasonably avoided; (cc) The worth at the time of award of the amount by which the unpaid rent for the balance of the L Term after the time of award exceeds the amount of such loss that Lessee proves could be reasonably L avoided; and (dd) Any other amount deemed necessary L and/or allowable by applicable statute or decision to compensate Lessor for all the detriment proximately caused by Lessee' s failure to perform its obligations .. under this Lease or which, in the ordinary course •of events, would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting, expenses of restoring the Premises to the condition yr required hereunder (if applicable) , reasonable attorneys' fees,. and any other reasonable costs. The "worth at the time of award" of the amounts referred to in subparagraphs (aa) and (bb) above shall be LATTACHMENT N0. 5 08/01/88 _ L0642n/2490/12 -91- 1 �., computed by allowing interest at the rate equal to the then current discount rate of the Federal Reserve Board of San Francisco (as the same may change from time to tire) plus three percent (3%) (not to exceed the maximum Legal rate i.. permitted by law) from the dates such amounts accrued to Lessor until the date of payment by Lessee. The worth at the time of award of thz amount referred to in subparagraph (cc) above shall be computed by discounting such amount at two (2) percentage points above the discount rate of the Federal Reserve Sank of San Francisco at the time of award. (ii ) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. Such termination shall not relieve Lessee of any obligation hereunder which has accrued prior to the date of such termination. In the event of such termination, Lessor shall be entitled to recover from Lessee the amounts determined pursuant to paragraph (i) above. (b) Reasonable Rental. Value. In any action for unlawful detainer commenced by Lessor against Lessee by reason of any default hereunder, the reasonable rental value of the Premises for the period of the unlawful detainer shall be lw deemed to be the amount of rent and other charges reserved in this Lease for such period, unless Lessor or Lessee shall prove to the contrary by competent evidence. W ATTACHMENT N0. 6 08/01/88 0642n/2460/12 —92- (c) Cumulative Remedies. Except as may be specifically provided herein, the rights and remedies reserved i� to Lessor and Lessee herein, including those not specifically described, shall be cumulative and, except as provided by California statutory or decisional law in effect at the time, �+ either Lessor or Lessee may pursue any or all of such rights and remedies at the same time or otherwise. (d) Lessor' s Non-Waiver. No delay or omission of Lessor to exercise any right or remedy shall be construed as a waiver of any right or remedy or of any default by Lessee hereunder. The acceptance by Lessor of rent or any additional rent hereunder shall not be a waiver of any preceding breach or default by Lessee of any provision hereof, other than the F failure of Lessee to pay the particular rent accepted, regardless of Lessor' s knowledge of such preceding breach or default at the time of acceptance of such rent, or a waiver of Lessor' s right to exercise any remedy available to Lessor by *r virtue of such breach or default. The acceptance of any ! payment from a debtor in possession, a trustee, a receiver or any other person acting on behalf of Lessee or Lessee' s estate shall not waive or cure a default under Section 18.1(d) . (e) Lessor' s Reentry. Lessee hereby irrevocably �. consents to Lessor' s peaceable reentry, if Lessor so elects, to the Premises upon the occurrence of any of the events of default specified in Section 18.1 above, including the expiration of any applicable cure period. ATTACHMENT NO. 6 os/al/ss 0642n/2460/12 -93- (f) Lessee' s Breach. Even though Lessee has breached this Lease and abandoned the Premises, subject to Lessor' s obligation to act reasonably to mitigate its damages and to deduct from any amounts otherwise' owing by Lessee to Lessor as a result thereof, this Lease shall continue in effect for so long as Lessor does not terminate in writing in accordance with Section 18.2(a) (ii ) above Lessee' s right to possession and *+ Lessor may enforce all of its rights and remedies under this Lease, including the right to recover the rent as it becomes due. For purposes of Article XVIII, the following do not constitute a termination of Lessee' s right to possession: (i) Acts of maintenance or preservation or Lefforts to relet the Premises; (ii) The appointment of a receiver on the L initiative of Lessor to protect its interests under this Lease, (g) Lessor' s Advances. In the event of any default by Lessee in the payment of money, other than rent, or the performance of obligations required of Lessee under this Lease, and the expiration of any period expressly provided for herein for Lessee to cure said default after the delivery of notice by 4 Lessor, then in addition to the other remedies herein granted to Lessor, Lessor may, but shall not be obligated to do so, and without waiving or releasing Lessee from any obligations of �+ this Lease, make any payment and perform any other act on Lessee' s part to be made or performed as provided in this ATTACH4ENT•N0. 6 08/01/88 0642n/2460/12 -94- L Lease. All sums paid by Lessor and all necessary incidental costs, together with interest thereon at the rate of three (3) L percentage points above the discount rate of the Federal v Reserve Bank of San Francisco (not to exceed the maximum legal rate permitted by law) , from the date of the pay. ent by Lessor shall be payable by Lessee to Lessor on demand. The sums shall be deemed to be additional rent and subject to the same L consequences as herein provided for failure to pay rent. L 18.3 Default_ by Lessor. Lessor shall not be deemed to be LI� - in default in the performance of any obligation reVired to be performed by it hereunder unless and until it has failed to perform such obligation within thirty (30) days after written L notice by Lessee to Lessor specifying in reasonable detail the nature and extent of any such failure; provided, however, that LO if the nature of Lessor'- s obligation is such that more than Lthirty (30) days are required for its performance, then Lessor shall not be deemed to be in default if it shall cormence such f performance within such thirty (30) day period and thereafter 4 diligently prosecutes the same to completion. 18.4 Legal Expenses and Collection_Costs. If either party L incurs any expense, including actual costs of collection, reasonable attorneys' fees, expenses of discovery, preparation for litigation, expert witness fees and litigation expenses and costs, in connection with any action or proceeding instituted R ATTACHMENT NO, 6 08/01/88 0642n/2460/12 -95- A Lby either party by reason of any default or alleged default of Lthe other party hereunder, the party prevailing in such action or proceeding shall be entitled to recover its reasonable L expenses from the other party. For purposes of this provision, in any unlawful detainer or other action or proceeding M.+ instituted by Lessor based upon any default or alleged default by Lessee hereunder, Lessor shall be deemed the prevailing W party if (a) judgment is entered in favor of Lessor or (b) prior to trial or judgment Lessee shall pay the rent and 6W charges claimed by Lessor, or eliminate the condition(s), cease the act(s) or otherwise cure the onission(s) claimed by Lessor to constitute a default by Lessee hereunder. a L ARTICLE XIX. HOLDING OVER w 19. 1 Holding Over. This Lease shall terminate and become null and void without further notice upon the expiration of the Term herein specified, and any holding over by Lessee after. such expiration shall not constitute a renewal or' extension hereof or give Lessee any rights under this Lease, except when in writing signed by both parties hereto or as otherwise herein provided. If Lessee shall hold over for any period after the 5 expiration of the Term, Lessor may, at its option, treat Lessee as a tenant at Will commencing on the first (1st) day following the expiration of this Lease and subject to all of the terms and conditions herein contained, except that the annual rental iko LATTACHMENT NO. 6 08/01/88 0642n/2460/12 -96- L �► shall be one hundred fifty percent (150%) of the annual rental applicable at the date of expiration and the rent shall be payable quarterly in advance even though the tenancy is at will. If Lessee fails to surrender the Premises upon the expiration of this Lease, Lessee shall indemnify, defend and �.. hold Lessor harmless from all loss, cost, damage, claim or liability, including without limitation, any claims made by any succeeding tenant founded on or resulting from such failure to surrender. Acceptance by Lessor of rent after such expiration or earlier termination shall not constitute a consent to a holdover hereunder or result in a renewal of this Lease. The foregoing provisions of this Section are in addition to and do not affect Lessor' s right of reentry or any other rights of Lessor hereunder or as otherwise provided by law. ARTICLE XX. [RESERVED] ARTICLE XXI . [RESERVED) ARTICLE XXII . ACCESS BY LANDLORD 22 .1 Right of Entry. Lessor and those agents, contractors, W servants and employees of Lessor who are identified in writing to Lessee shall have the right, after reasonable notice to Lessee, to enter the Premises during normal business hours (a) L to examine the Premises or for the purpose of performing any obligation of Lessor or exercising any right or remedy reserved W LATTACM ENT 140. 6 08/01/88 L0642n/2460/12 -97- L ', to Lessor in this Lease; (b) to exhibit the Premises to v prospective purchasers, mortgagees or lessees of Lessor' s L interest therein; (c) to make such repairs as Lessor tray be entitled to make after a default by Lessee under Article IX above; and (d) to take all materials into and upon the Premises that tray be required in connection 'with such repairs, provided that any such entry shall be performed in a manner which minimizes to the maximum feasible extent any disruption of Lessee' s business operations. If Lessor exercises its rights of entry in compliance with this Article XXII, such entry shall not constitute a constructive or actual eviction of Lessee, in ` L whole or in part, and the rent shall not abate while any such repairs are being made. If, during the last month of the Term, L Lessee shall have removed all or substantially all of Lessee' s .. property therefrom, Lessor may immediately enter and alter, renovate and redecorate the Premises without elimination or abatement of rent and without other compensation and such ' action shall have no effect upon this Lease. Nothing herein contained, however, shall be deemed or construed to impose upon Lessor any obligation, responsibility or liability whatsoever for the care, supervision or repair of the Premises. 4r - L u L08 01 88 ATTACHMENT NO. 6 ' i 0642n/2460/12 -98- �r } f L �,. ARTICLE XXIII . FURNITURE, FIXTURE AND EQUIPMENT FINA14CING 23 . 1 FF&E Financing. It is contemplated that during the Term of this Lease, Lessee shall place or cause the placement from time to time of furniture, fixtures and equipment (collectively "FF&E" ) on the Premises which shall be subject to lease and/or purchase financing encumbrances (collectively "FF&E Financing" ) . Prior to Lessee having the right to place any FF&E an the Premises subject to FF&E Financing, Lessee shall be required to deliver to Lessor written notice of any such proposed FF&E Financing at least 60 days prior to the creation of such FF&E Financing, together with documentation in reasonable detail so that Lessor may review and approve or L. disapprove, in Lessor' s reasonable discretion, the FF&E Financing. Such information shall include, but not be limited to, the following: (i) a complete description of the FF&E; (ii) �. the lease term, rent payments and security deposits required in connection with any leasing of FF&E; (iii) the purchase price, terms of payment and conditions of any purchase or loan in connection with purchasing of FF&E; and (iv) copies of all relevant documents to be executed between Lessee and the lender, seller or lessor of the particular FF&E in question. For a period of thirty (30) days following receipt by Lessor of i6w the notice from Lessee together with all of the information required above, Lessor may approve or disapprove such FF&E L" ATTACHMENT N0. 6 08/02/88 0642n/2460/12 -99- EE! L 1 Financing by written notice to Lessee. Lessor' s approval of any such FF&E Financing shall not be unreasonably withheld. In the event Lessor reasonably objects to all or a portion of such 1 L FF&E Financing, Lessor shall within said 30-day period give Lessee written notice of its objection, detailing the reasons therefor. In such event, Lessee shall be prohibited from entering into such FF&E Financing but Lessee nay submit to Lessor such response to Lessor' s objections and/or revisions to the terms and conditions of the FF&E Financing in order to satisfy Lessor' s objections thereto. Any such newly submitted w+ information shall again be subject to Lessor' s 30-day right to review and reasonably object thereto. Lessor' s failure to timelyobject within said 30-day ob j y period to any such proposed FF&E Financing for which proper notice has been given by Lessee to Lessor shall constitute approval of the particular FF&E Financing in question and no further approval by Lessor for such FF&E Financing shall be required. Lessor' s rights hereunder shall not be construed as requiring Lessor to ' participate in any way in any such FF&E Financing nor shall approval by Lessor of any such FF&E Financing obligate Lessor in any manner. L+ ARTICLE XXIV. TRANSFER OF LESSOR'S INTEREST LW 24.1 Transfer of Lessor' s Interest. Subject to Lessee' s rights under Article III above, in the event of any transfer or 6.0 transfers of Lessor' s interest in the Premises, the transferor L ATTACHMENT NO. 6 OS/O1/88 L 0642n/2460/12 -100- L Lshall, upon written notice to Lessee, be automatically relieved of any and all obligations on the part of the transferor (as 4W Lessor) accruing from and after the date of such transfer, except that the City of Huntington Beach shall rer►ain responsible for performance of its obligations under Article VIII above restricting the use of the City Beach Property. The transferee shall be deemed, without further act or agreement, to have assumed and agreed to carry out any and all of the covenants and obligations of Lessor and be entitled to any W rights or benefits conferred upon Lessor under this Lease. It is specifically understood that the Huntington Beach- Redevelopment Agency may cease to function prior to the a . L expiration of the Term and that in such event, the City of LHuntington Beach, as the successor in interest to the Redevelopment Agency, would automatically assume all of the Redevelopment Agency' s obligations hereunder and be entitled to all of the Redevelopment Agency' s rights and benefits hereunder. Notwithstanding the foregoing, no such transfer of Lessor' s interest in the Premises shall relieve the City of Huntington Beach of its obligations under the Development Agreement or the Huntington Beach Redevelopment Agency of its obligations under the DDA. Iw L L ATTACHMENT N0. 6 08/01/88 L0642n/2460/12 -101- L r L ARTICLE XXV. FORCE MAJ£URE i I L 25. 1 Force Majeure. In the event the performance by either party of any of its obligations hereunder is delayed by reason , of the act or neglect of the other party, act of Cod, stormy or ho inclement weather, strike, labor dispute, boycott, lockout or other like defensive action by such party, inability to obtain L labor or materials, govern.-►ental restrictions, riot, insurrection, war, catastrophe, casualty, act of the public enemy, or any other cause, whether similar or dissimilar, 60 beyond the reasonable control of the party from whom such performance is due ( "unavoidable delays") , the period for the L cormencement or completion thereof shall be extended for a period equal to the period during which performance is so delayed. ARTICLE XXVI . MISCELLANEOUS 26.1 Waiver. The waiver by either Lessor or Lessee of any breach of any term, condition or covenant contained herein shall not be deemed a waiver of such term, condition or covenant or any subsequent breach of the sane or any other term, condition or covenant contained herein. w } L LATTACHMENT NO. 6 08/01/88 0642n/2460/12 -102- L t 26.2 Notices. All notices, demands or other writings to be riade, given or sent hereunder, or which may be so given or made w or sent by either Lessor or Lessee to the other shall be dee:aed- k" to have been given when in writing and personally delivered or if mailed on the third (3rd) day after being deposited in the L United States mail, certified or registered, postage prepaid, and addressed to the respec1zve parties at their addresses set forth below: L If to Lessor: The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92646 Iw Attention: City Administrator ' With a copy to: Gail C. Hutton L City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 w If to Lessee: RLM Properties, Ltd. 660 Newport Center Drive, Suite 1050 P. 0. Box 6680 Newport Beach, CA 92658-8680 ' Attention: Robert L. Mayer With a copy to: Jeffrey M. Odernan, Esq. Rutan & Tucker 621 Anton Boulevard, Suite 1400 r,.. Costa Mesa, CA 92626 26.3 Relationship of Parties. Nothing contained herein shall be deemed or construed by the parties hereto, nor by any 4 third party, as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method ATTACMIENT NO. 6 08/Oi/88_ 0642n/2460/12 r -103- f `' of computation of rent, nor any other provision contained herein, nor any acts of the parties herein, shall be deemed to create any relationship between the parties hereto other than &W the relationship of Lessor and Lessee. L 26.4 Broker' s Commission. Lessor and Lessee each warrants to the other that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease. Lessor and Lessee each agree (as "Indemnitor") to indemnify and defend the other party and hold the other party *r harmless from all liabilities arising from any clain by any broker or finder allegedly representing the Indennitor, f - including, without limitation, the cost of attorneys' fees and costs in connection therewith. Such agreement shall survive the termination of this Lease. 26.5 Accord and Satisfaction. No payment by Lessee or receipt by Lessor of a lesser amount than the rent or other charges herein stipulated shall be deemed to be other than on account of the earliest due stipulated rent or other charges, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent or other L charges be deemed an accord and satisfaction, and Lessor shall accept such check or payment without prejudice to Lessor' s w right to recover the balance of such rent or other charges or pursue any other remedy in this Lease provided. L ATTACMENT NO. 6 1 08/01/88 L 0642n/2460/12 -104- R V 26. 6 Time of Essence. Time is hereby expressly declared to be of the essence of this Lease and of each and every term, covenant and condition hereof which relates to a date or period I�. of time. t L. 26.7 Remedies Cumulative. The remedies herein given to • Lessor and Lessee shall be cumulative and are given without a.. impairing any other rights or remedies given Lessor and Lessee *A* by statute or law now existing or hereafter enacted, and the exercise of any one (1) remedy by Lessor or Lessee shall not exclude the exercise of any other remedy. 26.8 Construction. The language in all parts of this Lease „ shall in all respects be construed as a whole, according to its fair Meaning, and not strictly for or against either Lessor or Lessee. The article headings in this Lease are for convenience only and are not to be construed as a part of the Lease or in any way limiting or amplifying the provisions hereof. r 26.9 Effect of Invalidity. If any term or provision of �.+ this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of its terms and provisions to persons and circumstances other than those to which it has been held invalid or unenforceable , shall not be affected thereby, and each term and provision of ATTACHMENT 390. 6 08/01/88 L 0642n/2460/12 -205- T 1 �r „ this Lease shall be valid and enforceable to the fullest extent permitted by law. No acquisition by Lessor of all or any of the interest of Lessee in or to the Premises or the Improvements, and no acquisition by Lessee of all or any interest of Lessor in or to the Premises shall constitute or L work a merger of the respective interest, unless expressly P P Y provided for. - - 26. 10 Successors and Assigns. This Lease and the covenants and conditions contained herein shall be binding upon and inure to the benefit of and shall apply to the successors and assigns of Lessor and to the permitted successors and assigns of + Lessee, and all references in this Lease to "Lessee" or f "Lessor" shall be deemed to refer to and include all permitted successors and assigns of such party. W 26.11 Consents. Except as expressly provided in this Lease, 4, where the consent or approval of Lessor or Lessee is required in this Lease, such consent or approval will not -be unreasonably withheld, conditioned, or delayed, nor will the party giving such consent require the payment of any consideration for the giving thereof, except as expressly L provided otherwise in this Lease. L 26. 12 Entire Agreement. This Lease and the exhibits hereto contain the entire agreement of Lessor and Lessee with respect to the matters covered hereby, and no other agreement, L ATTACHMENT -NO* 6 08/01/88 L0642n/2460/12 -106- a.. statement of promise made by either Lessor or Lessee which is not contained herein, shall be valid or binding. No prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose. No provision L of this Lease may be amended or added to except by an agreement in writing signed by Lessor and Lessee. 26. 13 Performance of Lessor' s Obligations. Whenever in this Lease it is provided that Lessor is obligated to perform any act, such act shall be deemed performed by Lessor if it causes i the due performance thereof by any other party. 26. 14 uitclain Deed. At the expiration or earlier 3 termination of this Lease, Lessee shall execute, acknowledge *' and deliver to Lessor, within five (5) days after written demand from Lessor to Lessee, any quitclaim deed or other document required by Lessor or any reputable title company to remove the cloud of this Lease from the title to the real property which is the subject of this Lease. 26. 15 Number and Gender. Whenever the singular or plural is used in this Lease and when required by the context, the same shall include the plural, and the singular, respectively, and the masculine gender shall include the feminine and neuter genders, and the word "person" shall include corporation, firm, partnership or association. 1 .► ATTACKKENT NO. 6 08/01/88 0642n/2460/12 -107- w+ 26. 16 Interest on Past-Due Obligations. Any amount due from Lessee to Lessor hereunder which is not paid when due r. (including, without limitation, amounts due as reimbursement to L Lessor for costs incurred by Lessor in performing obligations of Lessee hereunder upon Lessee' s failure to so perform) shall bear interest at the rate of three (3) percentage points above the discount rate of the FeCeral Reserve Bank of San Francisco (not to exceed the maximum legal rate permitted by law) , from the date due until paid, unless otherwise specifically provided herein, but the payment of the interest shall not excuse or cure any default by Lessee under this Lease. 26. 17 Execution of Lease; No Option. The submission of this Lease to Lessee shall be for examination purposes only, and does not and shall not constitute a reservation of or option for Lessee to lease, or otherwise create any interest by Lessee in the Premises. Execution of this Lease by Lessee and return f �+ to Lessor shall not be binding upon Lessor notwithstanding• any t time interval, until Lessor has in fact executed and delivered this Lease to Lessee. 26. 18 Corporate Authority. Each individual executing this Lease on behalf of a corporation, partnership or other entity or organization, represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, partnership, entity or organization and that this ATTACHMENT NO. 6 08/02/88 0642n/2460/12 -108- r I F +� Lease is binding upon same in accordance with its terms, Lessee shall, at Lessor' s request, deliver a certified copy of a partnership resolution or certificate authorizing or f evidencing such execution. i.. 26. 19 [Reserved) *AO 26.20 ControllingLaw. This Lease shall be governed by and construed in accordance with the laws of the State of California. 26.21 Specific Performance. Nothing contained in this Lease shall be construed as or shall have the effect of abridging the right of either Lessor or Lessee to obtain specific performance of any and all of the covenants or obligations. of the other i L party under this Lease. , 26.22 Survival of Indemnities and Warranties. The obligations of the indemnifying party under each and every indemnification and hold harmless provision contained in this Lease shall survive the expiration or earlier termination of this Lease to and until the last to occur of (a) the last date I �.. permitted by law for the bringing of any claim or action with f respect to which indemnification may be claimed by the indemnified party against the indemnifying party under such provision or (b) the date on which any claim or action for L r L ATTACHMENT NO. 6 r 08/ol/tee L 0642n/2460/12 -109- which indemnification may be claimed under such provision is fully and finally resolved, and, if applicable, any compromise thereof or judgment or award thereon is paid in full by the indemnifying party and the indemnified party is reimbursed by the indemnifying pasty for any amounts paid by the indemnified �., party in compromise thereof or upon judgment or award thereon and in defense of such action or claim, including reasonable attorneys' fees incurred. The representations, warranties, and Lcovenants of the parties contained herein shall survive the termination of this Lease without regard to any investigation made by the parties. 26.23 Memorandum of Lease. Should either Lessor or Lessee require, the parties shall execute a short fora Memorandum- of Lease for recording purposes setting forth the- Term Commencement Date and the termination date in a form reasonably acceptable to both parties. I i ARTICLE XKVII . ARBITRATION L 27.1 Cosn-nencement. Disputed issues arising between Lr Lessor and Lessee under this Lease shall be resolved by L arbitration pursuant to this Article XXVII if, and only if, this Lease specifically provides for resolution of such disputed issue by arbitration. Notwithstanding any other provision of this Lease to the contrary, if the parties are L. ATTACHMENT NO. 6 08/01/88 0642n/2460/12 -120- L L involved in a dispute subject to resolution by arbitration, a E party who in good faith maintains such dispute shall not be L deemed to be in default under this Lease until the final arbitration decision is rendered, as provided in this Article XXVII and, in the event such party is the losing party, such L party fails to cure any default within the tines specifically set forth herein or, if no such time is specified within a 6" reasonable time. A party desiring to initiate a permitted arbitration under this Lease shall give notice to the other party specifying (i ) the matter to be arbitrated, (ii) the v Section of this Lease permitting the arbitration, and (iii) the name and address of the person designated to act as arbitrator, +� which person shall be qualified to act as arbitrator in accordance with the provisions of Section 27.3. Within fifteen (15) days after receipt of such notice, the second party shall F give notice to the first party specifying the name and address of the person designated to act as arbitrator on the second L party' s behalf who shall be qualified to act as arbitrator. in accordance with the provisions of Section 27.3. -If the second L party fails to give notice to the first party of the appointment of the second party' s arbitrator within the required period, the appointment of the second arbitrator shall i„ be made by application to the court in the same manner as provided in Section 27.2 for the appointment of a third arbitrator in a case where the two arbitrators appointed by the parties, or the parties, are unable to agree on the appointment of the third arbitrator. �-' ATTACHMENT W0. 6 08/01/88 0642n/2460/12 -111- 27.2 Procedure. The arbitrators chosen in accordance with the provisions of Section 27. 1 shall promptly meet to attempt to resolve the disputed matter. If the two arbitrators are unable to agree upon the question at issue within thirty (30) days after the second arbitrator is appointed, they shall then have fifteen (15) days jointly to appoint a third arbitrator who shall be qualified to act as arbitrator in accordance with the provisions of Section. 27.3. If the two arbitrators are unable to agree upon a third arbitrator within such fifteen. (15) day period, Lessor and Lessee shall then have an additional fifteen (15) days to select together the 'third arbitrator. If Lessor and Lessee are unable to agree upon the 1- third arbitrator within the required period, either Lessor or Lessee by giving prior notice to the other party, shall have i� thirty (30) days to request the Presiding Judge of the Superior Court for the County of Orange, State of California, to appoint as the third arbitrator an impartial person qualified to act as L, arbitrator in accordance with the provisions of Section 27.3, and the other party shall not raise any question as to the v judge' s full power and jurisdiction to entertain the application and make the appointment. The three (3) arbitrators shall decide the dispute (if it has not previously been resolved) by following the procedure set forth in Section 27. 6. L ATTACHMENT 'NO. 6 oa/a�/aa 0642n/2460/12 -112- L +a 27 .3 2ualifications. The arbitrators shall be chosen from, a class of disinterested experts qualified by training and experience to resolve the particular issue in dispute in an informed and efficient manner. 606 V 27.4 Binding Decision. In the event of the failure, refusal or inability of any arbitrator to act, he shall appoint his successor;, . provided, however, that any successor to the third arbitrator shall be appointed in the same manner as the third arbitrator is to be appointed. The arbitrators shall, if possible, render a written decision within fifteen (15) days after the appointment of the third arbitrator. A decision in which any two arbitrators concur shall in all cases be binding and conclusive upon the parties. Each party shall pay the fees and expenses of its arbitrator and both shall share the fees ` and expenses of the third arbitrator, if any. Each party shall pay the fees and expenses of its attorneys and any witnesses it L nay call. 27.5 Expert Testimony. The arbitrators shall have the right to consult experts and competent authorities skilled in the matters under arbitration, but any such Consultation shall be made in the presence of both parties with full right to cross-examine. The arbitrators shall give a counterpart copy L" of their written decision to each party. The arbitrators shall i have no power to modify the provisions of this Lease (although ka LATTACHMENT N0. 6 ` 08/01/88 L 0642n/2460/12 -113- w the arbitrators shall not be prohibited from considering written agreements and other evidence of the intent and L.. purposes of this Lease) , and the jurisdiction of the arbitrators is limited accordingly. 1rr 27.6 Decision Procedure. Where an issue cannot be resolved by agreement between any two arbitrators, or by settlement between the parties during the course of arbitration, the issue shall be resolved by the three arbitrators in accordance with W the following procedure. The arbitrator selected by each of the parties shall prepare a written proposed resolution of the dispute and the treasons therefor and give counterpart copies to each party and each of the other arbitrators, with the third arbitrator arranging for a simultaneous exchange of these proposed resolutions. The third arbitrator shall select which of the two proposed resolutions riost closely approximates his determination of the issue. The third arbitrator shall have no �+ right to propose a middle ground or any modification of either of the two proposed resolutions. The resolution which the third arbitrator selects shall constitute the decision of the arbitrators and shall be final and binding upon the parties. L 27.7 Enforcement. The judgment or the award rendered in any arbitration initiated and conducted in accordance with this L Article XXVII may be entered as a judgment in any court of Icompetent jurisdiction and shall be final and binding upon the LATTACHMENT N0. 6 ! 08/01/88 0642n/2460/12 -114- parties. The arbitration shall be conducted and determined at any location in the City or in Orange County, upon which the parties agree, in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association or its successor except to the extent such rules are modified as set forth in this Article XXVII . w ARTICLE XXVIII . REPRESENTATIONS BY LESSEE i 28. 1 Representations by Lessee. The financial statements and tax returns and other information submitted and •certified € to by Lessee as a true, accurate and up-to-date representation L.► to its financial condition including, without limitation, all F of its assets, liabilities, intone and sources of income, have been prepared, certified and submitted to Lessor as an inducement and consideration to Lessor to enter into this Lease - agreement with Lessee. Said statements are represented and warranted by Lessee to be true, accurate and correct and to 1 accurately and fully reflect Lessee' s true financial condition L as of the date of execution of this Lease by Lessee. 4 �+ ATTACHMENT N0. 6 08/O1/88_ ,; 0642n/2460/12 -I15- Ir. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. "LESSOR" "LESSEE" THE CITY OF HUNTINOTON BEACH THE ROBERT L. MAYER TRUST OF 1982 By: By: Mayor Robert L. Mayer, Trustee Attest: 4 City Clerk L Approved As to Fora.: i., Special Counsel i L L L f f LATTACHMENT NO. 6 08/01/88 L 0642n/2460/12 -116- t EXHIBIT DESCRIPTION OF PREMISES The land referred to in this lease is situated in the State of California, County of Orange, City of Huntington Beach, and is described as follows: THAT PORTION OF SECTION 14 , TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF THE � . NORTHEAST QUARTER OF SAID SECTION; THENCE WESTERLY 111.91 FEET ALONG THE NORTH LINE OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION TO A POINT ON THE WESTERLY LINE OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA IN BOOK 6168, PAGE 667 OF OFFICIAL RECORDS, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE SOUTH 3 !r. DEGREES 29' 43" WEST 593.12 FEET; THENCE SOUTH 25 DEG. 32' 14" WEST 386.94 FEET; THENCE SOUTH 11 DEG. 44 ' 36" EAST 771.48 FEET; THENCE SOUTH 78 DEG. 15' 24" WEST 82.75 FEET TO THE NORTHWESTERLY RIGHT OF WAY LINE OF PACIFIC COAST HIGHWAY, AS DESCRIBED IN BOOK 455, PAGE 400 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY; THENCE ALONG SAID NORTH- EASTERLY RIGHT OF WAY LINE, NORTH 52 DEG. 05' 09" WEST 2409.77 FEET TO THE SOUTHEASTERLY RIGHT OF WAY LINE OF HUNTINGTON AVENUE, 60.00 FEET IN WIDTH AS NOW LAID OUT; THENCE ALONG SAID SOUTHEASTERLY RIGHT OF WAY LINE, NORTH 37 DEG. 54 ' 51" EAST 299.35 FEET TO AN ANGLE POINT; THENCE NORTH 0 DEG. 17 ' 36" EAST 20.44 FEET ALONG THE EAST RIGHT OF WAY LINE OF HUNTINGTON AVENUE, 60.00 FEET IN WIDTH AS NOW LAID OUT, TO THE NORTH LINE OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION; THENCE EASTERLY 1844 .00 FEET ALONG SAID NORTH LINE TO THE TRUE POINT OF BEGINNING. EXCEPT THAT PORTION THEREOF DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTH LINE OF SAID LAND, NORTH 89 DEG. 43 ' EAST 690.00 FEET FROM THE CENTER LINE OF SAID HUNTINGSTON AVENUE; THENCE NORTH 69 DEG. 43 # EAST 200.00 FEET; THENCE SOUTH 0 DEG. 17 ' EAST 150.00 FEET; THENCE SOUTH 89 DEC. 43 ' WEST 200,00 FEET; THENCE NORTH O DEG. 17 ' WEST 150.00 FEET TO THE POINT OF BEGINNING. PARCEL 2: 1 THAT PORTION OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BALSAS, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE SHOWN AS HAVING A DISTANCE OF 92.98 FEET ON THE STATE HIGHWAY MAP (ABANDONMENT) FILED DUNE 25, 1966 IN STATE HIGHWAY MAP BOOK 41 PAGES 29 AND 30, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE NORTH 59 DEG. 15' 30" WEST 72.30 FEET ALONG SAID �+ EXHIBIT "Alf to Attachment No. 6 Page 1 of 3 e a f COURSE TO THE BEGINNING OF A CURVE CONCAVE EASTERLY, HAVING A RADIUS OF 27.00 FEET; THENCE NORTHWESTERLY AND NORTHEASTERLY 45.79 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 97 DEG. 10' 21" TO A LINE PARALLEL WITH AND SOUTHEASTERLY 47.00 FEET FROM THE CENTER LINE OF HUNTINGTON AVENUE; THENCE NORTH 37 DEG. 54 ' 51" EAST 150.01 FEET ALONG SAID PARALLEL LINE; THENCE SOUTH 52 DEG. 05' 09" EAST 133.00 FEET; THENCE SOUTH 37 DEG. 54 ' 51" WEST 139.28 FEET; THENCE SOUTH 2 E DEG. 46 ' 13" EAST 30.54 TO A POINT ON A NON-TANGENT CURVE CONCAVE J� SOUTHWESTERLY, HAVING RADIUS OF 1250.00 FEET; THENCE NORTHWESTERLY 51.09 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2. DEG. 20' 30" TO THE POINT OF BEGINNING. EXCEPT THAT PORTION THEREOF INCLUDED WITHIN PARCEL 1. w 1 L } L ESHIBIT "All to attachment No. 6 Pago 2 of 3 ti 60 ASS.,R W. 148 -02 148-01 /'= 400 �- 114 - 15 _ (NAMPSHIREI BOULEVARD 1� __ r..r ��•f r J.O!A +/ Z L N R.S. IT-is c� I L X . W j 29 W Mew YING rN r ••' 64 7000 4SU ar ° �p L 27 NOTE — ASSESSOR'S BLOCK 8 ASSESSOR'S MAP PARCEL NUMBERS BOOK 24 PAGE 25 L SHOWN 1N CIRCLES COUNTY OF ORANGE EXHIBIT "All to Attachment No. 6 LPage 3 of 3 i.r REVISIO_NS TO BE MADE TO LEASE AT TIME OF DISPOSITION TRANSFERS At the time of each "Disposition Transfer" of a i "Separate Development Parcel" within the "Site" pursuant to W Section 301 of the Disposition and Development Agreement entered into between the Redevelopment Agency of the City of Huntington Beach ("Agency") and Lessee on or about August 15, L 1988, as the same may be amended from time to tine (hereinafter the ''DDA") , this Lease shall be modified as set forth in this Exhibit "B" . The modifications listed below under the heading "original Lease" shall apply to the revised +� Lease document covering the balance of the "Developer Parcel" that has not been the subject of a Disposition Transfer. The modifications listed below under the heading "New Lease" shall apply to the new Lease to be executed by Lessor and Lessee covering each Separate Development Parcel within the "Commercial Portion" of the Site which is the subject of a Disposition Transfer. Lessor and Lessee agree to cooperate and execute modified and new leases in accordance with Section 1.11 of this Lease and this Exhibit "B," and to execute all documents required to remove any prior and L conflicting leases of record. The amendments to the provi- sions of the Original Lease and New Lease(s) are set forth below. The provisions not specifically discussed below shall be retained in the Original Lease and incorporated verbatim into the New Lease(s) . L 1. Title Page, Introductory Paragraph, and Signature. Block. A. Original Lease. Unchanged. B. Nero, Lease. Name of Lessor to be changed from "City F of Huntington Beach" to Redevelopment Agency of the L City of Huntington Beach, " and signature lines for �" Mayor and City Clerk to be changed to "Chairman" and "Secretary, " respectively. Date on title page and "Effective Date" in introductory paragraph to .. be the date of the Disposition Transfer for the Separate Development Parcel in question, from Section 1.11 of this Lease. L 2. Section 1.1. A. original Lease. Description of "Premises" in Exhibit "A" to be modified to delete that portion of the Developer Parcel that has been the subject L of a Disposition Transfer to Developer. EXHIBIT O'B" to Attachment No. 6 i' Page 1 of 24 08/15/88 FINAL rr �+ B. New Lease. Description of the "Prenises" in Exhibit "A" to include the Separate Development Parcel in question. L.. 3 . Section 1.3. A. Original Lease, Unchanged. B. New Lease. Revise Section 1.3 to read as follows: 1.3 Exceptions to Leasehold _ Estate. This Lease issrade subject to: (a) General and special taxes and assessments for the current fiscal tax year and all unpaid bonds and/or assessments; �+ provided, however, that the foregoing shall not be deemed to be a consent by Lessee to any bonds or assessments and, provided further, that to the extent that any portion of the "Beach Boulevard Remnant Parcel" as defined in the DDA, is included within the Premises under this Lease, such portion of the Premises shall not be subject to any tax or bond lien or assessment; and ,. (b) All of the "Approved Title Exceptions" applicable to the Premises which are identified in Section 201.1 of the DDA. L. 4. Section 1.4. i. A. Original Lease. Unchanged. B. New Lease. Term Commencement Date 'to be the date of the Disposition Transfer for the Separate Development Parcel in question. Termination Date to be December 31, 2086. Delete the words "or extended" in the first sentence. L 5. Section 1.5. LW A. original Lease, Unchanged. L B. New Lease. Delete. LEXHIBIT "BU to Attachment No. 6 Page 2 of 24 L08/15/88 FINAL r i Section 1.6. A. OriginaZ__Lease. Unchanged. lw B. New Lease. Put a comra after the words "condition of the Premises and" and add the following clause; "except as provided in Section 312 of the DDA and the Scope of Development (Attachment No. 3) thereto, ". 7 . . Section 1.10. A. original Lease. Unchanged. B. New Lease. In each New Lease for a Separate Development Parcel on which a hotel is to be ++ constructed and operated, change the phrase "in good order" in the first sentence of Section 1.10 to read as follows: "In first-class condition and ;r good order. " In addition, add the following paragraph at the end of Section 1.10: Notwithstanding the foregoing, upon Lessor's written election, delivered to Lessee no later than one (1) year prior to the expiration of the Term, Lessee shall demolish the ,.. Improvements, remove all debris, and leave the Premises in a clean, level condition. In the r event Lessee is so obligated to demolish the Improvements and clear them from the Premises, Lessee shall have a reasonable period after the expiration of the Term, not to exceed ninety (90) days, to complete such work, and during such period the public liability insurance and indemnity provisions of Article X of this Lease (but no other provisions, including without limitation Article II) shall remain in full force and effect. 8. Section 1.11. A. Ori inal Lease. Unchanged. L, B. New Lease. Delete. 9. Section 2.1. A. original Lease. The $200,000 rental figure in Section r2.1(a)� and the $500,000 rental figure in EXHIBIT ItB11 to Attachment No. 6 Page 3 of 24 08/15/88 FINAL v Section 2. 1 (b) shall be adjusted by multiplying each said figure by a fraction in which the numerator equals the total square footage of the �., surface of the land in the "Commercial Portion" of the Site (as that tern is defined in the DDA, and net of land dedicated or reserved for public � rights-of-way and excluding the Separate Development Parcel being conveyed at such time) that has not been conveyed to the Developer pursuant to a Disposition Transfer and in which the �w denominator equals the total square footage of the surface of the land in the Commercial Portion of the Site (net -of land dedicated or reserved for public rights-of-way) . The numbers to be used in the formula set forth above shall be determined by a survey conducted by a licensed land surveyor retained by Lessee, subject to Lessons prior written approval, which approval shall not be unreasonably withheld. Lessee shall exercise reasonable diligence to cause the survey to be completed no later than thirty (30) days prior to the Term Commencement Date. Lessor and Lessee shall each pay fifty percent (50%) of the cost of the survey. B. New Lease. The $200, 000 rental figure in Section 2.1(a) and the $500,000 rental figure in Section �. 2.1(b) shall be adjusted by multiplying each said figure by a fraction in which the numerator equals the total square footage of the surface of the land in the Premises (net of land dedicated or reserved for public rights-of-way) and in which the denominator equals the total square footage of the surface of the land in the Commercial Portion of the Site (net of land dedicated or reserved for public rights-of-way) . In addition, in the second to last sentence of Section 2.1(a) , the following LW words shall be inserted after the words "deduction or offset": " (except as permitted pursuant to Attachment No. 5 of the DDA) ". In addition, in Section 2.1(b) , the word "earlier" shall be replaced with the word "earliest", subparagraph (ii) shall be deleted, and the following subparagraphs shall be added: i.r (ii) The date on which the City of Huntington Beach issues its Certificate of L Occupancy for the business(es) to be conducted on the Premises, or (iii) The date which is three (3) years after the Rent Commencement Date. t L. EXHIBIT RIB'S to Attachment NO. 6 Page 4 of 24 ti 08/15/88 FINAL L r „ 10. Section 2.2 (a) . A. Original Lease. Unchanged. B. New Lease. Revise the first sentence to read as follows: The Annual Rent required pursuant to Section 2.1 above and 2.2 (b) below shall be adjusted upward each January 1st through the Tern of this Lease (the "Adjustment Dates") as provided herein. 11. Section -2.2 (b) . A. Original Lease. Not applicable. w B. New Lease. Add a new subparagraph (b) to read as follows: *" (b) Market Value Rent Adjustments. The Annual Rent payable pursuant to Sections 2.1 and 2.2 shall be adjusted on the January 1st L following the end of the 24th, 44th, 64th, and, if applicable, the 84th full Lease Year during the Tern (the "Revaluation Dates") to &d an amount equal to the then-current "Fair Rental Value" of the Prenises, as determined in accordance with this section 2.2 (b) . L The "Fair Rental Value" of the Premises as of any Revaluation Date shall be equal to the product derived by multiplying the "Market L Value of the Fee" of the Prenises as of the applicable Revaluation Date times the "Market } Rental Value" of the Premises as of such date. L As used herein, the "Market Value of the Fee" of the Premises on any Revaluation Date shall be the then-current Market Value of the �. Fee Interest in the land constituting the Premises (and not the rental value therefor) under the actual facts and circumstances L existing as of the Revaluation Date. On the Revaluation Date occurring at the end of the 24th and . 44th, and, if applicable, the 84th L full Lease Years, the "Market Value of the Fee" of the Premises shall be determined in accordance with: the then-current and actual use being made of the Premises as permitted or required by this Lease and without assuming EXHIBIT "BIN to Attachment No. 6 '~ Page 5 of 24 08/15/88 FINAL L 60 any change of use for which any private or governmental permission would be required or any change in use whether or not permitted by the terms of this Lease and without regard to any residual value for any future uses; the existing actual Improvements on the Premises (but not the value thereof) , except that the �., improvements shall be assumed to be in the physical condition and operated in the manner required in section 9.1(a) below; all encumbrances affecting the Premises, including but not limited to, the DDA and all then- existing taxes, assessments, covenants, conditions, restrictions, rights-of-way, L liens, and easements; and the encumbrance of the Premises by this Lease and all covenants, conditions, limitations, and restrictions contained herein. The "Market Value of the Fee" of the Premises as of the Revaluation Date occurring at the end of the 64th full Lease Year shall be determined in accordance �+ with the then-existing highest and best use of the Premises; consistent with principles of eminent domain, and otherwise in accordance with the preceding sentence; provided, however, that if Lessee has expended in excess of fifty percent (50%) of the then-current full replacement value of the Improvements on the Premises (exclusive of furnishings, fixture, and equipment) at any time between the end of the 30th full Lease Year and said • Revaluation Date, the "Market Value of the Fee" of the Premises shall be determined in accordance with the preceding sentence and not with reference to the highest and best use of the Premises. f As used herein, the "Market Rental Value" �-+ of the Premises as of any Revaluation Date shall be equal to the then-current average annual percentage return obtained by owners of �,. land for land similar to the Premises, which shall in no event be less than six percent (6%) nor more than fifteen percent (15%) . The L determination of the "Market Rental Value" of the Premises shall also take into consideration all of the factors required to be taken into consideration in determining the �. "Market Value of the Fee" of the Premises as of the applicable Revaluation Date, in accordance with the preceding paragraph. L EXHIBIT "B" to Attachment No. 6 Page 6 of 24 08/15/88 FINAL Notwithstanding any other provision in this Section 2.2 (b) to the contrary, the Annual Rent derived under this Section 2.2 (b) shall not result in a rent less than the rent �+ payable immediately prior to the applicable Revaluation Date (except that if the rent has been only temporarily abated, deferred, or reduced, in whole or in part, as a result of danage, destruction, or condemnation, such adjustment to the Annual Rent shall not result in a rent less than the rent payable immediately prior to the temporary abatement, deferral, or reduction; this exception shall not, however, cause any cessation of an �.. abatement, deferral, or reduction then in effect) . The adjusted rent determined as provided in this Section 2.2 (b) shall be paid as provided in Section 2.1(a) above. No later than six (6) months prior to each Revaluation Date during the Tern of this Lease, Lessor and Lessee shall meet and endeavor to agree upon the "Fair Rental Value" of the Premises, in accordance with the provisions set forth herein. If for any reason Lessor and Lessee are unable to agree upon the "Fair Rental Value" of the Premises on or before ninety (90) days prior to a Revaluation Date, then such Fair Rental Value �. shall be determined by arbitration conducted within the times, and in the manner, set forth below: (i) On or before seventy-five (75) days prior to the applicable Revaluation Date, Lessor and Lessee shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the American Institute of Real Estate Appraisers or any successor thereto or the Society of Real Estate Appraisers, or any successor thereto (or in the event the American Institute or Society of Real Estate Appraisers or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate L, qualifications to appraise co=ercial real estate set forth immediately below) , with at least ten (10) years professional experience in Southern California in EXHIBIT "B" to Attachment No. 6 Page 7 of 24 l 08/15/88 FINAL 4 T appraising land and irlprovements similar to the Premises. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to any of the L parties hereto, or their successors. The cost of the Services performed by such appraiser shall be borne equally by the parties. The single appraiser jointly L appointed by the parties shall determine the Market Value of the Fee of the Premises, the Market Rental Value of the Premises, and the Fair Rental Value of the Premises in the manner herein specified and shall render his or her appraisal within sixty (60) days after said appraiser has been selected. (fi) Failing the joint action of y.. Lessor and Lessee within seventy-five (75) days prior to the applicable Revaluation Date, Lessor and Lessee shall each, within an additional fifteen (15) days, separately at its own cost designate an appraiser meeting the qualifications stated in subparagraph (i) I.. above. If two appraisers are appointed and they concur on the Market Value of the Fee of the Premises and the Market Rental Value of the Premises in the manner hereinabove specified, the Fair Rental Value determined by them shall be the Fair Rental Value of the Premises for ►� purposes of determining the adjustment in rent pursuant to the formula set forth above. If the appraisers do not concur, and the difference between the respective higher and lower determinations of Fair Rental Value is an amount less than ten percent (10%) of the amount of the higher determination of the Fair Rental Value, the mean average of the two determinations shall be the Fair Rental LW Value of the Premises for purposes of determining the adjustment in rent pursuant to the formula set forth above. The two appraisers shall render their respective appraisals within sixty (60) days after they have been selected. If L the difference - between the two determinations exceeds the amount LEXHIBIT I'D" to Attachment No. 6 Page 8 of 24 08/15/88 FINAL �.d specified above, the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in subparagraph (i) above, and if they are unable to agree on a third appraiser, either of the parties to this Lease, by giving fifteen (15) days notice to the other party, May apply to the presiding judge of the superior Court of orange County to select a third appraiser who meets the qualifications set forth in subparagraph (i) above. The third appraiser, however selected, shall be a person who has not acted in any capacity too for either party. Within fifteen (15) days from the date of the selection of the third appraiser, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Market Value of the Fee of the +�+ Premises and the Market Rental Value of the Premises. The third appraiser shall review all such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Market Value of the Fee of the Premises and the Market Rental 6" Value of the Premises are the most reasonable determinations under the criteria set forth above and elsewhere in iw this Lease. The third appraiser shall not be permitted to make any other independent determination of the Market 6d Value of the Fee of the Premises or the Market Rental Value of the Premises. The appraiser's determinations found by the third appraiser to be the most reasonable determinations shall be the Market Value of the Fee of the Premises and the Market Rental Value of the Premises for purposes L of determining the adjustment in rent pursuant to the formula set forth above. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser. The expenses related to the selection and services of the third appraiser shall be shared equally by Lessor and Lessee. (iii) The Fair Rental Value established under this Section 2.2 (b) EXHIBIT 11811 to Attachment No. 6 Page 9 of 24 08/15/86 FINAL r shall be binding and conclusive on the parties for purposes of determining the adjustment in rent pursuant to the formula set forth above. If for any reason a Fair Rental Value is not established under this Section 2.2 (b) , no party may avail itself of a Fair Rental Value more favorable to such party than the value determined by the appraiser appointed by such party. (iv) Each appraiser shall certify that he or she has personally inspected the Premises and Improvements and all +� properties used as comparisons, that he or she has no past, present or contemplated future interest in the Premises, the Improvements or the "Site" (as defined in the DDA) , or any part thereof, that the compensation to be received by him or her from any source for making the appraisal is solely in accordance with this Lease, that he or she has followed the instructions as set forth in this Section 2.2(b) for valuing the Premises and Improvements as of the applicable Revaluation Date, that neither his or her employment to make the appraisal nor his or her compensation therefor is contingent upon reporting a predetermined value or values, or a value or values within a predetermined range of values, that he or she has had at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the Premises, that he or she is a member of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers or respective successors thereto and that his or her appraisal was prepared in conformity with the standards of professional practice of the Institute or Society or successor thereto. a.. L w EXHIBIT 11B11 to Attachment No. 6 Page 10 of 24 08/15/88 FINAL 12. Section 2.3. A. Original Lease. Unchanged. a ' B. New Lease. Replace the period at the end of the first sentence with a comma followed by the following words: " (except as permitted pursuant to Attachment No. 5 of the DDA) . " 13. Section 2.4 . A. Original Lease. Unchanged. H. New Lease. In the first sentence, replace the phrase "City of Huntington Beach" with "Huntington Beach Redevelopment Agency." 14 . Section 2 .5. L A. Original Lease. Unchanged. B. flew Lease. Add the following at the end of the �. first paragraph in Section 2.5: In addition, Lessor shall have the right, for a period not to exceed five (5) Lease Years prior to each of the Revaluation Dates specified in Section 2.2 (b) above, upon reasonable notice to Lessee, and at Lessor's expense, to review and examine at the Premises the information contained in Lessee's books, records, and federal and state income tax 6, returns relating to income, revenues, and expenses of the Project (but not any information unrelated to the Project) for the sole and limited purpose of determining the natters referenced in Section 2.2 (b) . In addition, and subject to the same limitations, ' Lessor shall have the right during such L limited period to have such portion of Lessee's books, records, and tax returns audited by a disinterested, reputable firm of certified public accountants selected by Lessor at Lessor's expense. L Lk r , EXHIBIT 11B11 to Attachment No. 6 Page 11 of 24 08/15/88 FINAL 1 too i 15. Section 2.7. A. Original Lease. Unchanged. + B. New Lease. Delete. 16. Section 3.1. A. Original Lease. Unchanged. too B. New Lease. Revise the third sentence in paragraph (c) of Section 3.1 to read in its entirety as follows: If such sale is not consummated within said one (1) year period, Lessor shall again be L obligated to first offer to sell the offered Interest to Lessee as set forth in this Section 3.1. 17 . Article VI. A. Original Lease. Unchanged. B. New Lease. Add a new Article VI, entitled $'CONSTRUCTION OF IMPROVEMENTS; EFFECT AND DURATION L' OF COVENANTS IN DDA" to read as follows: Lessor and Lessee shall each construct or j., cause to be constructed those improvements on and adjacent to the Premises which are required to be constructed by each of them in accordance with, within the tires, and subject to the terms and conditions set forth in the DDA (including, without limitation, Article IV j thereof (commencing with Section 400) , the J� "Scope of Development" (Attachment No. 3) , and the "Schedule of Performance" (Attachment No. 4) ) • W Subsequent to Lessee's completion of all improvements which are its responsibility and ' Lessor's issuance of its certificate of Completion with respect to the Developer Improvements on the Premises, in accordance with Section 415 of the DDA, Lessee shall have L, no further obligations under the aforesaid provisions of the DDA. t EXHIBIT #1B11 to Attachment No. 6 Page 12 of 24 08/15/88 FINAL tlrr 1 6 18. Section 7.1. A. Original _Lease. Unchanged. B. New Lease. In each New Lease for a Separate Development Parcel on which a hotel is to be constructed and operated, add the following as a new first paragraph in Section 7.1: During the term of this Lease, Lessee shall not use or suffer to be used the Premises other than as a hotel without Lessor's prior written consent. Uses normally incidental to a hotel use, including without 16L limitation a restaurant, cocktail lounge, cleaning and laundry service, banquet and catering facilities, meeting rooms, gift shop, k" magazine stand, barber or beauty shop, travel agency, airline ticket office, automobile rental operation, and recreational facilities, shall also be permitted. In addition, in each New Lease for a separate ' Development Parcel on which - retail commercial and office uses are to be developed, add the following as a new first paragraph in Section 7.1: r. During the term of this Lease, Lessee shall not use or suffer to be used the Premises other than for commercial retail and office uses in accordance with the applicable bad zoning regulations of the City of Huntington Beach in effect as of the Effective Date of the DDA, or such additional uses as may be permitted from time to time by changes in such zoning regulations. Any other use of the + Premises shall require Lessor's prior written ]lam consent. In addition, in the New Lease for the Separate Development Parcel on which the recreation/tennis/ r health and fitness facility is to be operated, add the following as a new first paragraph in Section t : L* During the term of this Lease, Lessee Shall not use or suffer to be used the Premises other than for commercial recreational uses, including without limitation a tennis club or facilities, health 7 and fitness facilities, a swimming pool or pools, exercise/weight training rooms, sauna, 9 EXHIBIT I'D" to lkttachment No. 6 Page 13 of 24 08/15/88 FINAL it spa, and similar facilities. The Premises shall not be used for other uses without Lessor's prior written consent. in addition to the foregoing, in the event that any of the Separate Development Parcels include a combination of the uses identified above, the new W. first paragraph in Section 7.1 shall be revised appropriately to reference all of the permitted uses. In addition, add the following as a new second paragraph in Section 7.1: Lessee agrees during the entire Terra to operate the Improvements and to conduct its business at all times in a first class and reputable manner and to cause all subtenants, operators, concessionaires, and other } occupants of the Improvements and Premises to do likewise. Failure by Lessee, or any such other person, so to operate• shall entitle Lessor, in addition to other remedies provided in this Lease, to seek any mandatory injunctive relief to which Lessor may be entitled. In addition, in each New Lease for a Separate Development Parcel on which a hotel is to be constructed and operated, add the following language to the end of the second paragraph in �+ Section 7.1: Not by way of limitation of the foregoing, the hotel to be operated by Lessee on the Premises shall be operated as a "First-Class Hotel." f As used herein, the term "First-Class Hotel" shall mean that, subject to any limitations imposed by the physical structure and configuration of the Improvements as initially constructed or changed or altered as permitted herein, the Improvements shall be maintained and the hotel shall be operated in a manner at least comparable to the standard of quality for "first-class" hotels operated and maintained from time to time by any of the following hotel companies: Hilton, Sheraton, Marriott, Radisson, Hyatt, Guest Quarters, L Ramada, or any subsidiaries thereof, in the Southern California area. The designation "first-class" is intended to reflect the highest standard of hotel operation other than L EXHIBIT "B" to Attachment No. S Page 14 of 24 08/15/88 FINAL L f r.. R deluxe, luxury or resort hotels. It is recognized that not all services and facilities available in one first-class hotel will necessarily be provided by all first- class hotels, but that the composite of service and facilities provided by each first-class hotel will cause the same to be b4 deemed to constitute a first-class hotel. Lessor and/or Lessee nay request additions or deletions to such list, subject to the reasonable approval of the other party; ."" provided, however, in no event shall there be fewer than five (5) hotel companies on such list at any one tire. 19. Section 7. 6. A. Original Lease. Unchanged. ' B. New Lease. Add a new Section 7.6 to one of the New Leases for a hotel project, with the specific lease to be selected by Developer, to read in its entirety as follows; ilia 7.6 Concession at City Beach. During the term of this Lease, not less than ninety (90) days prior to the expiration, renewal, or extension of the lease/concession agreement between the City and the lessee/concessionaire for the concession located at the City beach across Pacific Coast Highway from the Premises, Lessor shall notify Lessee and provide the opportunity for Lessee to submit a proposal to the City for the continued operation of said concession. Nothing in this Section 7.6 shall be deemed as a prejudgment 7 by the City or Lessor of the merits of any �- proposal that Lessee might elect to submit. It is understood that any such proposal would be required to preserve or enhance the existing type and quality of services now available to the general public as well as to serve hotel guests. w 20. Section 8.2. �,. A. Original Lease. Unchanged. B. New Lease. Revise paragraph (b) to read as follows: EXHIBIT nB" to Attachment No. 6 �+ Page 15 of 24 08/15/88 FINAL Lessee will be constructing, operating, and maintaining on the Premises ocean- oriented, visitor-serving commercial facilities which are designed to take full advantage of the existing ocean views across Pacific Coast Highway. Lessee desires to ' obtain assurances fron Lessor that such views I. will not be obstructed during the term of this Lease. r 21. Section 8.3. ' A. on inal Lease. At the time of each Disposition Transfer of a Separate Development Parcel in the Commercial Portion, the $5,000.00 figure in Section 8.3 (a) shall be reduced by one-sixth ($833.33) and the $10,000.00 figure in Section 8.3 (b) shall be reduced by one-sixth ($1,666.66) , such that after the final (i.e. , the sixth) Disposition Transfer of a Separate Development Parcel in the Commercial b. Portion, the entire payment obligation has been transferred to and allocated among such Separate i Development Parcels in accordance with Paragraph B below. B. New Lease. The $5,000.00 figure in Section 8.3 (a) shall be changed to "Eight Hundred Thirty-Three Dollars and Thirty-Three Cents ($833.33) " and the $10,000.00 figure in Section 8.3 (b) shall be ' changed to "One Thousand Six Hundred Sixty-Six �.• Dollars and Sixty-Six Cents ($1,666. 66) . " In addition, add a new Section 8.3 (c) to read in its entirety as follows: (c) For each Lease Year from 2014 to 2086, inclusive, or the earlier termination of this L Lease, the sum of One Thousand Six Hundred Sixty-Six Dollars and Sixty-Six Cents ($1,666.66) per year adjusted upward as of January 11 2014, and each January 1st „ thereafter as provided herein (the "Adjustment Dates") , with such sum payable in advance on the first day of each such year. The annual adjustment shall be calculated upon the basis of the United States Department of Labor, Bureau of Labor Statistics Consumer Price ` Index of Urban Wage Earners and Clerical Workers, Los Angeles-Long Beach--Anaheim Average, All Items (1967 - 100) (the "Index") . The Index published and in effect ninety (90) days prior to the twenty-fifth (25th) EXHIBIT BIB$' to Attachment No. 6 Page 16 of 24 08/15/88 FINAL f anniversary of the Effective Date shall be considered the "Base Year Index." At each Adjustment Date, the consideration otherwise due shall be adjusted by the percentage increase, -if any, between the Base Year Index and the Index published and in effect ninety (90) days preceding the Adjustment Date. In no event shall the consideration payable on any Adjustment Date be less than the consideration required to be paid during the year immediately preceding such Adjustment Date notwithstanding the fact that the Index may, as of some Adjustment Date, be less than the Index as of the previous Adjustment Date �.. or the Base Year Index. When the amount of the adjusted consideration is determined, and at least thirty (30) days prior to the date payment for the next year is due, Lessor shall give Lessee written notice of the amount of the adjusted consideration indicating how the new figure was computed. If at any Adjustment �+ Date the Index shall not exist in the same format as recited herein, Lessor and Lessee shall agree to substitute any official index v published by the Bureau of Labor Statistics, or successor or similar governmental agency, as nay then be in existence and which is most S nearly equivalent to the Index. Should Lessor and Lessee be unable to mutually agree as to any such substitute index prior to the date such agreement is required in order to properly and timely comply with this paragraph 8.3, determination of the proper substitute index shall be by arbitration conducted in accordance with the then-prevailing commercial arbitration rules of the American Arbitration Association or its successor. F V 22. Section 8.4 A. original Lease. Unchanged. B. - New Lease. Delete all but the first sentence. R EXHIBIT nB" to Attachment No. 6 �+ Page 27 of 24 08/15/88 FINAL w i 23 . Section 6.5. A. Original Lease. Unchanged. *� B. New Lease. Delete the phrase 'sand the Separate Development Parcels within the Commercial Portion + of the Site." 24 . Section 9.1. A. Original-Lease. Unchanged. ' B. New Lease. In the first sentence of Section Ir. 9.1(a) , change the phrase "shall keep and maintain in good order, condition, quality, and repair" to i "shall keep and maintain in first-class condition and appearance and in good first-class order, condition, quality, and repair." In addition, after the first sentence, add the following sentence: As used in this Section 9.1(a) , the phrase "first-class condition" with respect to the boo Premises and Improvements shall mean that the original Improvements constructed pursuant to the DOA (as referenced in Article VI above) , as the same may have been altered or expanded pursuant to this Lease or reconstructed as a result of a casualty or condemnation as permitted by this Lease, shall be kept in first-class repair, quality, and physical condition and appearance, and that the Ir,:provements are of at least comparable quality and value (computed in 1988 Dollars) of the original Improvements as altered, expanded, or reconstructed as described above. In addition, add the following sentence after the first sentence in Section 9.1(b) : In addition to the foregoing, on or before the end of the 25th, 50th, and 75th full Lease Years, Lessor shall inspect the Premises and the Improvements to determine whether Lessee is in compliance with the requirements of this Section 9.1 and, if Lessee is not in compliance, Lessor shall be entitled to deliver to Lessee a Notice of Deficiency. EXHIBIT nB" to Attachment No. 6 �- Page 18 of 24 08/15/88 FINAL t Ls `.N N In addition, in the last sentence of Section 9.1(b) , change the time period of "twelve (12) " months to "twenty-four (24) " months. 25. Section 10.1. 1 +.• A. original Lease. Unchanged. B. New Lease. In Section 10.1(a) , delete the word two "and" at the end of paragraph (v) , substitute a semi-colon for the period at the end of paragraph (vi) and add tte word "and" after the semi-colon, r and add a new paragraph (vii) to read as follows: (vii) Business interruption or loss of i income and rents insurance in amounts i, reasonably satisfactory to Lessor but in no event less than an amount sufficient to cover all rent payable under this Lease and Lessee's fixed operating expenses, both for a period of twelve (12) months from the date of any insured loss. In Section 10.1(b) , delete the period after the word "California" at the end of the first sentence t and add the words: "and having a policyholder's rating of 'A' (excellent) or better, and a 16* financial rating of 'X' or better, in 'Best's Insurance Reports -- Fire and Casualty. " In addition, add a new paragraph (iii) to Section 10.1(c) to read as follows: r %, (iii) To the extent obtainable, a provision to the effect that any amounts payable by virtue of business interruption, Loss of earnings, or loss of rents shall be computed and stated separately in any settlement entered into by the insurer under the policy. 26. Section 14.6. A. original Lease. Unchanged. B. New Lease. Delete. L I EXHIBIT t1B11 to Attachment Ho. 6 Page 19 of 24 08/15/88 FINAL r W r ,w 27 . Section 16.1. A. Original Lease. Unchanged. B. New Lease. In each New Lease for a hotel project, add the following at the end of the first full paragraph: It is understood that Lessee's entering into a ranagement contract or contracts and a franchise agreement or agreements shall not be classified as an assignment for purposes of this Lease; Lessor's right to review and ' approve the hotel operator(s) and �» franchisor(s) shall be as set forth in Article XX below. In addition, in each New Lease for a hotel project., substitute a cor.ma for the period at the end of subparagraph (f) and add the following: provided that all requirements of Article XX have been met. 28. Section 18.1. A. OriSinal_Lease. Unchanged. B. New Lease. In each New Lease for a hotel project, add the following subparagraph (f) to the end of +.� Section 18.1: (f) Lessee's failure to operate and raaintain the Improvements and/or Premises as a "First-Class Hotel," as that term is defined t in Section 7.2 above, after receiving a Notice of Deficiency from Lessor under Section 9 .1 16* and the expiration of any applicable period to correct such deficiency as provided herein. 29. Section 18.5. A. orig_inal , Lease. Unchanged. B. New Lease. Add a new Section 18.5, entitled "No i cross-Defaults," to read in its entirety as w follows: 1 18.5 No Cross-Defaults. Except as otherwise specifically set forth in this EXHIBIT OMBN to Attachment No. 6 low Page 20 of 24 OB/15/88 FINAL Lease, a breach or default by either party *' under the Disposition and Development Agreement ("DDA") entered into between Lessor and Lessee on or about August 15, 1988, as the �+ same may have been amended from time to time, shall not constitute a breach or default hereunder, and a termination, in whole or imp part, of the DDA shall not terminate or modify Lessor's or Lessee's rights or obligations hereunder, except as may be specifically set forth in Section 1.5 and Section 2 .1, clause taw (b) , and elsewhere herein. 30. Article XX. A. original Lease. Unchanged. B. New Lease. Add to each New Lease on which a hotel s to be constructed a new Section 20.1, entitled "Operating Agreement," and a new Section 20.2, entitled "Franchise Agreement," to read in their entirety as follows: 20.1 Operating Agreement. Prior to the Effective Date of this Lease, Lessor has approved the identity of the proposed operator of the hotel pursuant to Section 205 of the boo DDA. If at any time during the Terra of this Lease, Lessee shall desire to have the hotel managed or operated by an entity other than the one so approved by Lessor, Lessee shall submit such matter to Lessor for Lessor's approval. Within thirty (30) days after receipt of Lessee's request for approval of a hotel f operator, Lessor shall respond in writing by 1w stating what further information, if any, Lessor reasonably requires in order to 5 determine whether or not to approve such hotel W operator. Upon receipt of such a timely response, Lessee shall promptly furnish to Lessor such further inforrtiation as may be reasonably requested. Lessee's request for approval of a hotel operator shall be deemed complete thirty (30) days after Lessor's receipt thereof, if no timely response requesting further information is delivered to Lessee, or, if such a timely response requesting further information is EXHIBIT "B" to Attachment No. 5 �.. Page 21 of 24 08/15/88 FINAL 4 r° received, on the date that Lessee delivers such additional information to Lessor (provided that Lessee's additional information is responsive to Lessor's request) . Once ' Lessee's request for approval of a hotel operator has been accepted as complete or is deemed complete, Lessor shall not be entitled to denand additional information or to disapprove the request on the basis that Lessee has not furnished adequate or complete information. { Lessor shall approve or disapprove each proposed hotel operator within forty-five (45) �• days after Lessee's request for such approval is accepted as complete or is deemed complete. j Approval will not be unreasonably withheld and v shall be given if Lessee demonstrates that the proposed operator is a capable, competent, and z experienced operator of "First-Class Hotels" similar in quality, size, and type as required �+ to be maintained on the Premises pursuant to this Lease. If Lessor shall disapprove a ► hotel operator, Lessor shall do so by written notice to Lessee stating the reasons for such disapproval. 1 Notwithstanding� any other provision of this Lease to the contrary, in the event that Lessee meets the qualifications set forth s above for an approved hotel operator, nothing in this Lease shall be interpreted to prevent Lessee from operating and rianaging the hotel itself. 20.2 Franchise Agreement. Prior to the Effective Date of this Lease, Lessor has approved the identity of the proposed �+ franchisor of the hotel pursuant to Section 206 of the DDA. If at any time during the Term of this Lease, Lessee shall desire to enter into a franchise agreement with any entity other than the franchisor so approved by Lessor, Lessee shall submit such matter to W Lessor for Lessor's approval. Within thirty (30) days after receipt of Lessee's request for approval of a hotel franchisor, Lessor shall respond in writing by stating what further information, if any, Lessor reasonably requires in order to determine whether or not to approve such hotel f EXHIBIT "BU to Attachment No. 6 %W Page 22 of 24 08/15/S8 FINAL franchisor. Upon receipt of such a timely response, Lessee shall promptly furnish to Lessor such further information as nay be reasonably requested. Lessor's request for approval of a hotel franchisor shall be deemed complete thirty (30) days after Lessor's receipt thereof, if no timely response requesting further 1 information is delivered to Lessee, or, if such a timely response requesting further kw information is received, on the date that Lessee delivers such additional information to r Lessor (provided that Lessee's additional information is responsive to Lessor's request) . Once Lessee's request for approval of a hotel franchisor has been accepted as complete or is deemed complete, Lessor shall not be entitled to demand additional information or to disapprove the request on `. the basis that Lessee has not furnished w adequate or complete information. E Lessor shall approve or disapprove each such proposed hotel franchisor within forty- five (45) days after Lessee's request for such approval is accepted as complete or is deemed complete. Approval will not be unreasonably withheld and shall be given if Lessee demonstrates that the proposed franchisor is a capable, competent, and experienced franchisor of "First-Class Hotels" similar in quality, size, and type as set forth in Section 9.1(b) above. If Lessor shall disapprove a proposed hotel franchisor, Lessor shall do so by written notice to Lessee stating the reasons for such disapproval. �+ Notwithstanding any other provision of this Lease to the contrary, in the event Lessee meets the qualifications set forth above for an approved hotel franchisor, nothing in this Lease shall be interpreted to prevent Lessee from operating and managing the hotel itself (without a franchise agreement with some other entity) . 1 EXHIBIT "B" to Attachment No. b 6 Page 23 of 24 08/15/88 FINAL a wF 31. Exhibit "B." A. Ori inal Lease. Unchanged. i B. New Lease. Delete. 4 1 6/112/065580-0001/007 i.. 4 0 W !r i W �Y# LA EXHIBIT 11811 to Attachment No. 6 Page 24 of 24 08/15/88 FINAL I 4 87310 0911116 R 002 T•ICOR TITLE INSURANCE COMPANY OF CALIF'ORNIA 1 DESCRIPTION: k L THAT PORTION OF FRACTIONAL SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, SAN + BERNARDINO VASE AND MERIDIAN, IN RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTO�E BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51 , PAGE 14 OF' MISCELLANEOUS MAP':, IN THE: OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS : v rr COMMENCING AT THE MOST SOUTHEASTERLY TERMINUS OF THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF HUNTINGTON AVENUE, AS DESCRIBED IN THAT CERTAIN AMENDMENT TO LEASE, RECORDED IN BOOK 5978, PAGE 910, OFFICIAL RECORDS, (SAID ' RIGHT-OF-WAY LINE CITED IN SAID AMENDMENT TO LEASE AS NORTH 37 DECREES 54 MINUTES Si SECONDS EAST 299.35 FEET) ; THENCE SOUTHWESTERLY ALONG A PROLONGATION OF SAID RIGHT-OF-WAY LINE TO THE POINT OF INTERSECTION WITH THE NORTHEASTERLY LINE OF' THAT STRIA' OF LAND DESCRIBED IN THAT CERTAIN INDENTURE, +r RECORDED IN BOOB, 139, PAGE 9 OF DEEDS, RECORDS OF SAID COUNTY, SAID POINT OF INTERSECTION BEING THE TRUE: POINT OF BEGINNING; THENCE CONTINUING { SOUTHWESTERLY ALONG SAID PROLONGATION OF SAID RIGHT-OF-WAY LINE TO A POINT OF INTERSECTION WITH THE LINE OF ORDINARY HIGH TIDE OF THE PACIFIC OCEAN; THENCE SOUTHEASTERLY ALONG SAID ORDINARY HIGH TIDE LINE TO A POINT OF INTERSECTION WITH THE EASTERLY LINE OF SAID SECTION 14; THENCE NORTHERLY ALONG SAID EASTERLY LINE OF SAID SECTION 14 TO A POINT OF INTERSECTION WITH THE "r SOUTHWESTERLY LINE OF A STRIP OF LAND DESCRIBED IN THAT CERTAIN CORPORATION GRANT DEED, RECORDED IN BOOK 259, PAGE 213 OF DEEDS, RECORDS OF SAID COUNTY, (SAID SOUTHWESTERLY LINE CITED IN SAID DEED AS NORTH 53 DEGREES 06 MINUTES WEST 2579.28 FEET, MORE OR LESS) ; THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE TO THE MOST SOUTHERLY SOUTHEASTERLY CORNER OF A PIECE OF PARCEL OF LAND DESCRIBED IN THAT CERTAIN INDENTURE, RECORDED IN BOOK 506, PAGE 448 OF OFFICIAL RECORDS; THENCE ALONG THE SOUTHERLY LINE THEREOF NORTH 68 DEGREES 56 MINUTES WEST 193.98 FEET TO THE POINT OF INTERSECTION WITH THE NORTHEASTERLY LINE OF THAT STRIP OF LAND DESCRIBED IN THAT CERTAIN INDENTURE RECORDED IN BOOK 139, PAGE 9 OF DEEDS, RECORDS OF SAID COUNTY] THENCE NORTHWESTERLY ALONG SAID NORTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF INTEREST IN THE MINERALS AND MINERAL w ORES OF EVERY KIND AND CHARACTER NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON, WITHIN, OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE AND REMOVE THE SASE, AND TO MAKE SUCH USE OF SAID LAND io BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH AND OTHER USE THEREOF, WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING, OR SINKING OF WELLS, SHAFTS OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATIONS AND EASEMENTS, PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL OR SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM SOUTHERN PACIFIC COMPANY, A DELAWARE CORPORATION, RECORDED NOVEMBER 7, L 1968. EXHIBIT "C" to Attachment No. 6 Page 1 of 3 r 87310 0911116 R 002 TICOR TITLE INSURANCE COMPANY OF CALIFORNIA L SAID DEED F'ROVIDES: IN THE EXERCISE OF SAID RESERVED EASEMENTS, MINERAL RIGHTS AND RESERVATIONS, SAID GRANTOR MAY POOL SAID LANDS WITH OTHER LANDS. THE RIGHTS OF GRANTOR SHALL INCLUDE, BUI SHALL IN NO WAY HE LIMITED TO, ALL SUBTERRANEAN RiGH'fS NECESSARY, INCIDENTAL, OR CONVENIENT TO THE FULL EXERCISE OF' THE RIGHTS RESERVED BY GRANTOR BELOW FIVE HUNDRED (500) FEET OF THE SURFACE OF SAID LAND AND SHALL INCLUDE THE FIGHT TO DRILL AND MAINTAIN WELL HOLES ! THROUGH THE SAID LAND BELOW FIVE HUNDRED (500) FEET FROM THE SURFACE THEREOF' FOR THE PURF'OSE OF REMOVING OIL, GAS, AND OTHER HYDROCARBON SUBSTANCES FROM OTHER LANDS WHETHER SUCH OTHER LANDS BE. ADJACENT, CONTIGUOUS OR DISTANT FROM SAID LANDS. V Vr 4 IW �wr F W tiA �rr 4.0 V { �.r EXHIBIT "C" to Attachment No. 6 Page 2 of 3 4 C _ `�i J � Il..'r��_.sue �..�.�•.€_�� / .,r 1"4rt � 1 Crr 1 a ! ! W rt +s._ IN rrwv K�.r rot eMd KI +... ti M ,��ws irer0 L.).fr I RC/SFpMAO 8 S .SU,oPL&WEWTAL COJ��p NQ 3 .OWo E 57 JW Jf s O b IMs Is nut a survey of the land, but is compiled tar lritormatlon only, nOt is it 8 part dt lhh foport \ pr policy to which it may be attached. There wtIt be no UaWity assumed as for " acturecy of the acreage it shown. ' ATTACH14ENT t:O. 7 FORM OF DEED Recording Requested by: when Recorded Return to and Mail Tax Statements to: V V GRANT DEED For a valuable consideration receipt of which is hereby v acknowledged, The REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, of the State of California, herein called "Grantor", hereby grants to ROBERT L. k.AYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, t as amended, herein called "Grantee", the certain real property located in the City of Huntington Beach, County of Orange, herein- after referred to as "Property", described in Exhibit A attached hereto and incorporated herein. 1. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor in oil, gas, hydro- carbon substances and minerals of every kind and character lying more than 500 feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Property lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and produc- tion of oil, gas, hydrocarbon substances, or minerals from said Property or other lands, but without, however, any right to use 60 either the surface of the Property or any portion thereof within 500 feet of the surface for any purpose or purposes whatsoever. 2. Said Property is conveyed in accordance with and 4' subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach and amended by Ordinance No. 2634, and a Disposi- LW tion and Development Agreement entered into between Grantor and Grantee dated August 15, 1988 (the "Agreement") , a copy of which is on file with the Grantor at its offices as a public record and which is incorporated herein by reference. Any amendments to the } ATTACHMENT NO. 7 �+ page 1 of 6 08/15/88 FINAL L i.. Redevelopment Plan which change the uses or development permitted on the Property, or otherwise change any of the restrictions or controls that apply to the Property, shall require the written �' consent of Grantee. 3. The Grantee shall devote the Property only to the .+ development permitted and the uses specified in the applicable provisions of the Redevelopment Plan and this Grant Deed, which- ever document is more restrictive. 4. The Property is conveyed to Grantee for considera- tion determined in accordanc=. with the uses permitted. Therefore, Grantee hereby covenants and agrees for itself, its successors, +� its assigns, and every successor in interest to the Property that the Grantee, such successors and such assigns, shall develop, maintain, and use the Property only as follows: (a) Grantee shall develop the Property as required by the Agreement. (b) Grantee shall maintain the improvements on the Property and shall keep the Property free from any accumulation of Z debris or waste materials. Grantee shall also maintain the required landscaping in a healthy condition. If, at any time, Grantee fails to maintain the said landscaping, and said condition is not corrected after expiration of fifteen (15) days from the date of written notice from the Grantor, the Grantor may perform the necessary mainte- nance and Grantee shall pay such costs as are reasonably incurred 60 for such maintenance. Grantor shall be responsible for maintaining L all improvements and landscaping in the public rights-of-way on and adjacent to the Property. L 5. Prior to recordation of a Certificate of Completion issued by the Grantor for the improvements to be constructed on the Property, in accordance with Section 415 of the Agreement, Grantee shall not make any sale, transfer, conveyance, or L assignment of the Property or any part thereof or any interest therein except in accordance with Section 107 of the Agreement. L6. The Grantee agrees for itself and any successor in interest not to discriminate upon the basis of race, color, creed or national origin in the sale, lease, or rental or in the use or occupancy of the Property hereby conveyed or any part thereof. L Grantee 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, national origin or I ATTACHMENT NO. 7 Page 2 of 6 08/15/88 FINAL L i E L ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the Grantee itself L 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, sub-tenants, sublessees, or vendees L in the Property. The foregoing covenants shall run with the land. 7. -No violation or breach of the covenants, condi- L tions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by paragraph 5 of this Grant Deed and section *� 107 of the Agreement; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. L 8. All covenants contained in this Grant .Deed shall be �' covenants running with the land. The covenants contained in the Agreement and in paragraph 5 herein and Grantee's obligation to develop the improvements on the Property as referenced in �., paragraph s (a) of this Grant Deed shall terminate and shall become null and void upon recordation of a Certificate of Completion issued by the Grantor for the Property, as required in accordance with Section 415 of the Agreement. Grantee's covenants regarding the permitted uses on the Property, as set forth in Paragraph 3 of this Grant Deed, shall remain in effect until September 20, 2017 (the term of the Redevelopment Plan) , and shall terminate and be w of no further force and effect after said date. Grantee's obligation to maintain the improvements constructed and the landscaping installed, as provided in paragraph 4 (b) , shall continue in effect for a period of thirty (30) years after the date of recordation of a Certificate of completion issued by Grantor, and shall terminate and be of no further force or effect at the expiration of said thirty (30) year period. Every covenant contained in this Grant Deed against discrimination contained in paragraph 6 of this Grant Deed shall remain in perpetuity. L 9. All covenants without regard to technical classifi- cation or designation shall be binding for the benefit of the Grantor, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of land or interest therein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. 1 ATTACHMENT NO. 7 `r Page -3 of 6 08/15/88 FINAL L } 10. Both before and after recordation of a Certificate of Cor.:pletion, both Grantor, its successors and assigns, and Grantee and the successors and assigns of Grantee in and to all or any part of the fee title to the Property shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easer.:ents or restrictions contained in this Grant Deed without the consent of any tenant, lessee, ease- ment holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. The covenants contained in this Grant Deed, without regard to technical classification shall not benefit or be enforceable by any owner of any other real property, or any person or entity having any interest in any other such L realty. 11. The covenants contained in this Grant Deed shall be 6. construed as covenants running with the land and not as conditions which Might result in forfeiture of title. IN WITNESS WHEREOF, the Grantor and Grantee have caused 6+ this instrument to be executed on their behalf by their respective officers hereunto duly authorized, this day of , 198_. 4 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By L ATTEST: City Clerk The Grantee consents to the foregoing covenants which kw shall run with the land. THE ROBERT L. MAYER TRUST OF 1982 i (Grantee) L � By Robert L. Mayer, Trustee 6/112/065580-0001/004 L a ATTACHMENT NO. 7 +� Page 4 of 6 08/15/88 FINAL L STATE OF CALIFORNIA ) Ss. COUNTY OF ) +.• On this day of , in the year 198 before me, the under is gned, a Notary Public in and for said State, personally appeared , known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument as the SS (Insert title of the officer) (name of public corporation, agency or political subdivison) and acknowledged to me that the L (public corporation, agency executed it. or political subdivision) L Signature of Notary Public r Name typed or printed L L L L L L IL LATTACHMENT NO. 7 Page 5 of 6 08/15/88 FINAL r� EXHIBIT A `r LEGAL DESCRIPTION OF THE PROPERTY W (To Be Inserted] 6. L 4 L 1 W L L 1 L L ATTACHMENT Me 7 L Page 6 of 6 08/15/88 FINAL L I LForm No 1342119821 ALTA Mum La"guagt COMANW.t$ e V t L A Af E First American Title Insurance Company INFORMATION L= The Title Insurance Commitment is a legal contract between you and the company. It is issued to show the basis on which we will Issue a Title Insurance Policy to you.The Policy will Insure you against certain risks to the land title, subject to the limitations shown in the Policy, The Company will give you a sample of the Policy form, if you ask The Commitment is based on the land title as of the Commitment Date. Any changes In the land title or the transaction may affect the Commitment and the Policy. The Commitment Is subject to its Requirements, Exceptions and Conditions, v THIS INFORMATION IS NOT PART OF THE TITLE INSURANCE COMMITMENT. TABLE OF CONTENTS Page r AGREEMENT TO ISSUE POLICY 1 SCHEDULE A 1. Commitment Date 2 2. Policies to be Issued Amounts and Proposed Insureds 2 L 3. Interest in the Land and Owner 2 4. Description of the Land 2 W SCHEDULE 13-1 — Requirements 3 r L SCHEDULE B-2 — Exceptions 4 CONDITIONS other side of 1 L � YOU SHOULD READ THE COMMITMENT VERY CAREFULLY. LIf you have any questions about the Commitment,please contact the issuing office. j L ATTACHMENT NO. S Page 1 of 1S fog Na 13A3(19 21 ALTA Pula LSf%u&Ooo Commdmfnl f Irr L L COMMITMENT FOR TITLE INSURANCE ISSUED BY First American Title Insurance Company ... , L AGREEMENT TO ISSUE POLICY We spree to Issue a policy to you according to the terms of this Commitment. When we show the policy amount and your name as the proposed Insured In Schedule A.this Commitment becomes effective as of the Com- but mitment Dale shown In Schedule A If the Requirements shown in this Commitment have not been met within six months after the Commitment Date, our obligation under this Commitment will end. Also, our obligation under this Commitment will end when the Policy is Issued and then our obligation to you will be under the Policy. f Our obligation under this Commitment is limited by the following: The Provisions In Schedule A The Requirements In Schedule B-1. 1 The Exceptions In Schedule B-2. LThe Conditions on the other side of this page 1. t This Commitment is not valid without SCHEDULE A and Sections 1 and 2 of SCHEDULE B. 4 L First American Title Insurance Company L BY PRESIDENT F ATTEST C.3 - �. SECRETARY 13Y UNTERSIGNED ' ATTACHMENT NO. 8 ., Page 2 of 18 Page ! i ' ALTA PLAIN G--14SS792 " LANGUAGE COMMITMENT �- REI (RLM PROPERTIES, LTD. ) SCHEDULE A 1 . COMMITMENT DATE , DECEMBER 8# 1986 AT 7130 A.M. 2. POLICY OR POLICIES TO BE ISSUED, POLICY AMOUNT ' (A) OWNERS POLICY, ALTA �• $(TO BE DETERMINED) PROPOSED INSUREDI (TO BE DETERMINED) . F (6) LOAN POLICY, ALTA $(TO BE DETERMINED) PROPOSED INSURED, �,. (TO BE DETERMINED) . 3. A LEASEHOLD INTEREST IN THE LAND DESCRIBED IN THIS COMMITMENT IS OWNED, AT THE COMMITMENT DATE1 BY �+ A LEASEHOLD ESTATE CREATED BY AND AMENDED AND RESTATED LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND RLM PROPERTIESs LTD. 3 ' DATED NOVEMBER 29# 1983# MEMORANDUM OF LEASES BEING RECORDED L DECEMBER 141 1983 AS INSTRUMENT NUMBERS 83-5679B1 AND B3-5679B2 OF OFFICIAL RECORDS# AND RECORDED DECEMBER 191 1983 AS INSTRUMENT NO. 83-574611 OF OFFICIAL RECORDS. L 4. THE LAND REFERRED TO IN THIS COMMITMENT IS DESCRIBED AS FOLLOWS: ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA) COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH# DESCRIBED AS FOLLOWS, L' THAT PORTION OF SECTION 141 TOWNSHIP 6 SOUTH, RANGE 11 WEST# IN THE RANCHO LAS SOLSAS# AS PER MAP RECORDED IN BOOK S11 PAGE 14 OF MISCELLANEOUS MAPS 1N THE OFFICE OF THE COUNTY RECORDER L OF SAID COUNTY, DESCRIBED AS FOLLOWS, PAGE 2 ATTACHMENT NO. 8 Page 3 of 18 �SZ 1► oilr It- ALTA PLAIN OR-145579Z LANGUAGE COMMITMENT BEGINNING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF i„ THE NORTHEAST QUARTER OF SAID SECTION; THENCE WESTERLY 111 .91 FEET ALONG THE NORTH LINE OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION TO A POINT ON THE WESTERLY LINE OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA IN BOOK 61681 PAGE 667 OF OFFICIAL RECORDSP SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE SOUTH 3 DEGREES 29' 43" WEST 593. 12 FEET ; THENCE SOUTH 25 DEG. 32' 14" WEST 386.94 FEET; THENCE ..+ SOUTH 11 DEG. 44' 36" EAST 771 .4E FEET; THENCE SOUTH 78 DEG. 15' 24" WEST 82.75 FEET TO THE NORTHWESTERLY RIGHT OF WAY LIN- OF' PACIFIC COAST HIGHWAY. AS DESCRIBED IN BOOK 455. PAGE 400 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY; THENCE ALONG SAID NORTH- EASTERLY RIGHT OF WAY LINE: NORTH 52 DEG. 05' 09" WEST 2407.77 FEET TO THE SOUTHEASTERLY RIGHT OF WAY LINE OF HUNTINGTON AVENUE, ' 60.00 FEET IN WIDTH AS NOW LAID OUT; THENCE ALONG SAID SOUTHEASTERLY RIGHT OF WAY LINES NORTH 37 DEG. S41 51" EAST 299.35 FEET TO AN ANGLE POINT; THENCE NORTH 0 DEG. 17' 36" EAST 2D.44 FEET ALONG THE EAST RIGHT OF WAY LINE OF HUNTINGTON AVENUEP 60 .D0 FEET IN WIDTH AS NOW LAID OUTS TO THE NORTH LINE of THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION; THENCE EASTERLY 1844 .0d FEET ALONG SAID NORTH LINEE TO THE TRUE POINT OF BEGINNING. ` EXCEPT THAT PORTION THEREOF DESCRIBED AS FOLLOUSs BEGINNING AT A POINT ON THE NORTH LINE OF SAID LAND( NORTH fig DEG. 43' EAST 690.00 FEET FROM THE EAST LINE OF SAID HUNTINGTON AVENUE; �• THENCE NORTH 69 DEG. 43' EAST 200.00 FEET ; THENCE SOUTH D DEG. 17' EAST 150 .00 FEET; THENCE SOUTH 89 DEG. 43' WEST 200.00 FEET;. THENCE NORTH 0 DEG. 17' WEST 150.00 FEET TO THE POINT OF BEGINNING. PARCEL 21 THAT PORTION OF SECTION 14, TOWNSHIP 6 SOUTH* RANGE 11 WESTP IN THE RANCHO LAS BOLSAS, DESCRIBED AS FOLLOWS, BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE SHOWN �.+ AS HAVING A DISTANCE OF 92.9E FEET ON THE STATE HIGHWAY MAP (ABANDONMENT) FILED JUNE 25P 1966 IN STATE HIGHWAY MAP BOOK 4, PAGES 29 AND 301 IN THE OFFICE OF THE COUNTY RECORDER OF .r AID COUNTY; THENCE NORTH 59 DEG. 15' 30" WEST 72.30 FEET ALONG SAID COURSE TO THE BEGINNING OF A CURVE CONCAVE EASTERLYP HAVING A RADIUS OF 27.00 FEET; THENCE NORTHWESTERLY AND NORTHEASTERLY 45.79 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 97 DEG. 10' 21" TO A LINE PARALLEL WITH AND SOUTHEASTERLY 47.00 FEET FROM THE CENTER LINE OF HUNTINGTON AVENUE; THENCE NORTH 37 DEG. 54' 51" EAST 150 .01 FEET ALONG SAID PARALLEL LINE; THENCE SOUTH �.. 52 DEG. 05' D9" EAST 133.00 FEET; THENCE SOUTH 37 DEG. 54' 51" PAGE 3 ATTACHMENT NO. $ Page 4 of 1B A %IER �c , ` 4 L. `ALTA PLAIN OR-14S5792 LANGUAGE COMMITMENT WEST 139.2B FEET; THENCE SOUTH 2 DEG. 46' 13" EAST 30.54 TO A POINT ON A NON-TANGENT CURVE CONCAVE SOUTHWESTERLY, HAVING2 RADIUS OF 125C.00 FEET; THENCE NORTHWESTERLY 51 .09 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2. DEG. 20' 300 TO THE POINT OF BEGINNING. „ EXCEPT THAT PORTION THEREOF INCLUDED WITHIN PARCEL 1 . Ld bee L w W , PAGE 4 ATTACHMENT N0. 8 Page 5 of 18 r ASK Af�1 � Rlr . 7 14 Oka E 4 �l\ C. ALTA PLAIN OR-145579Z LANGUAGE COMMITMENT SCHEDULE B — SECTION 1 REQUIREMENTS 16* THE FOLLOWING REQUIREMENTS MUST BE MET, (A) PAY THE AGREED AMOUNTS FOR THE INTEREST IN THE LAND AND/OR THE MORTGAGE TO BE INSURED, (8) PAY US THE PREMIUMSs FEES AND CHARGES FOR THE POLICY. (C) DOCUMENTS SATISFACTORY TO US CREATING THE INTEREST IN THE LAND AND/OR THE MORTGAGE TO BE INSURED MUST BE SIGNED, L DELIVERED AND RECORDED. (D) YOU MUST TELL US IN WRITING THE NAME OF ANYONE NOT REFERRED TO IN THIS COMMITMENT WHO WILL GET AN INTEREST IN THE LAND OR WHO WILL MAKE A LOAN ON THE LAND . WE MAY THEN MAKE ADDITIONAL REQUIREMENTS OR EXCEPTIONS. (E) RELEASE(S) OR RECONVEYANCE(S) OF ITEM(S) 8, 14: 17 AND 1B. L (F) OTHER — THE COMPANY WILL REQUIRE THAT THE DEEDS OF TRUST SHOWN IN ITEM #8 AND 14 BE RECONVEYED DUE TO THE FACT THAT THE FUTURE BENEFICIARY UNDER THE SAME AS ROBERT L. MAYER, THE GENERAL PARTN=R OF THE PARTNERSHIP OF RLM PROPERTIES, LTO. p A CALIFORNIA LIMITED PARTNERSHIP DUE TO THE MERGE OF THE BENEFICIARY AND THE LESSEE. I (G) YOU MUST GIVE US THE FOLLOWING INFORMATION, X 1 . ANY OFF RECORD LEASES, SURVEYS, ETC. X 2. STATEMENT(S) OF IDENTITY] ALL PARTIES. �. 3. OTHER — L PAGE 5 I 1 ATTACHMENT NO. 8 Page 6 of 18 r it C . ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT SCHEDULE B - SECTION 7 ' EXCEPTIONS ANY POLICY WE ISSUE WILL HAVE THE FOLLOWING EXCEPTIONS UNLESS THEY ARE TAKEN CARE OF TO OUR SATISFACTION, PART 1 1 . TAXES OR ASSESSMENTS WHICH ARE NOT SHOWN AS EXISTING LIENS BY THE RECORDS OF ANY TAXING AUTHORITY THAT LEVIES TAXES `r OR ASSESSMENTS ON REAL PROPERTY OR BY THE PUBLIC RECORDS. j 2. ANY FACTS# RIGHTS: INTERESTS OR CLAIMS WHICH ARE NOT SHOWN +�* BY THE PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY AN INSPECTION OF THE: LAND OR BY MAKING INQUIRY OF PERSONS IN POSSESSION THEREOF. 3. EASEMENTS, LIENS OR ENCUMBRANCES, OR CLAIMS THEREOF, WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS. 4. DISCREPANCIESt CONFLICTS IN BOUNDARY LINESs SHORTAGE IN AREAL ENCROACHMENTS OR ANY OTHER FACTS WHICH A CORRECT ' SURVEY WOULD DISCLOSE, AND WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS. S. UNPATENTED MINING CLAIMS, RESERVATIONS OR EXCEPTIONS IN PATENTS OR IN ACTS AUTHORIZING THE ISSUANCE THEREOF; do WATER RIGHTS, CLAIMS. OR TITLE TO WATER# WHETHER OR NOT THE MATTERS EXCEPTED UNDER (A) # (B) # OR (C) ARE SHOWN BY THE PUBLIC RECORDS. 6. ANY LIENS OR RIGHT TO A LIEN, FOR SERVICESP LABOR OR MATERIAL THERETOFORE OR HEREAFTER FURNISHED, IMPOSED BY LAW AND 6+ NOT SHOWN BY THE PUBLIC RECORDS. t ABOVE EXCEPTIONS (1 - 6) WILL BE ELIMINATED IN AN ALTA EXTENDED L COVERAGE POLICY. L PART Ili . . 1 . GENERAL AND SPECIAL TAXES FOR THE FISCAL YEAR 1986-1987. FIRST INSTALLMENT, $(NO TAX DUE) . SECOND INSTALLMENT, S(NO TAX DUE) . PAGE 6 ATTACHMENT NO. 8 Page 7 of 18 1r TEA cl ! ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT CODE AREA= D4-035. A. P . NOS . s 024-250-64 AND 024-250-74. 2. THE LIEN OF SUPPLEMENTAL TAXES ASSESSED PURSUANT TO CHAPTER 3.S COMMENCING WITH SECTION 75 OF THE CALIFORNIA REVENUE AND TAXATION CODE. 3. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED OCTOBER 13, 1950 IN BOOK 20B7p PAGE 385 OF OFFICIAL RECORDS FOR, A DRAINAGE DISTRICT PIPE LINE AND INCIDENTAL �.. PURPOSES. OVERs A STRIP OF LAND 20 FEET IN WIDTH, THE CENTERLINE OF WHICH IS DESCRIBED AS FOLLOWS. BEGINNING AT A POINT IN TH EAST LINE OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WESTr SAN BERNARDINO MERIDIAN, SAID POINT BEING - LOCATED 1986.00 FEET SOUTH OF THE NORTHEAST CORNER OF SAID SECTION 14; RUNNING THENCE WEST 945.00 FEET ALONG A LINE PARALLEL TO THE NORTH LINE OF SAID SECTION 14 ; THENCE NORTH 666 FEET, MORE OR LESSP ALONG A LINE PARALLEL TO THE SAID EAST LINE OF SECTION 14 TO A POINT IN THE NORTH LINE OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 14 ; THENCE SIDELINES OF SAID STRIP BEING PROLONGED AND/OR SHORTENED TO MAKE A FULL 20.00-FOOT WIDE EASEMENT. Lw 4. AN EASEMENT OVER A PORTION OF SAID LAND FOR PIPE LINES FOR f THE TRANSPORTATION OF OIL, PETROLEUM, GAS, GASOLINE, WATER, L OR OTHER SUBSTANCESi ALONG AND ACROSS TH STRIP OF ALNO DESCRIBED IN AN AGREEMENT DATED DECEMBER 199 1955, EXECUTED BY THE. CITY E OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AND WILSHIRE OIL 6 COMPANY OF CALIFORNIA# A NEW MEXICO CORPORATION# UPON THE TERMS, COVENANTS AND CONDITIONS THEREIN CONTAINED, RECORDED APRIL 3, 1956 IN BOOK 3460, PAGE 516 OF OFFICIAL RECORDS. BY AN INSTRUMENT DATED APRIL 16, 1956, BY AND- BETWEEN SAID PARTIES, RECORDED MAY 2, 1956 IN BOOK 3494, PAGE 250 OF OFFICIAL RECORDS, THE DESCRIPTION OF THE EASEMENT LAST ABOVE REFERRED TO WAS AMENDED L TO READ AS FOLLOWS, A STRIP OF LAND 10 .FEET IN WIDTH, LOCATED IN THE EAST ONE—HALF L OF FRACTIONAL SECTION 141 TOWNSHIP 6 SOUTH, RANGE 11 WEST, SAN BERNARDINO MERIDIAN, AND BEING 5 FOOT ON EITHER SIDE OF THE FOLLOWING DESCRIBED CENTERLINE, L" BEGINNING AT A POINT ON THE EASTERLY LINE OF SAID SECTION 14, SAID POINT BEING 2615 FEET SOUTHERLY OF THE NORTHEAST �CORNER { OF SAID SECTION 14; THENCE WESTERLY ON A LINE WHICH HAS A COURSE OF SOUTH 89 DEG. 16J WEST 50 FEET TO A POINT, SAID POINT BEING PAGE 7 L ATTACHMENT NO. 8 Page 8 of 18 Jlr 4 5•t A �i E R f c ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT THE TRUE P01NT OF BEGINNING OF THIS DESCRIPTION; THENCE WESTERLY ON A LINE WHICH HAS A COURSE OF SOUTH B9 DEG, 16' WEST 50 FEET TO A POINT OF BEGINNING OF THIS DESCRIPTION; THENCE WESTERLY ON A LINE WHICH HAS A COURSE OF SOUTH 89 DEG. WEST 45 FEET TO Ll A POINT; THENCE NORTHERLY AND PARALLEL TO THE EASTERLY LINE R OF SAID SECTION 14s A DISTANCE OF 263.27 FEET; THENCE WESTERLY ON A LINE WHICH HAS A COURSE OF SOUTH 89 DEG. 16' WEST 364 .43 L TO A POINT; THENCE SOUTHWESTERLY ON A LINE WHICH HAS A COURSE OF SOUTH 36 DEG. 54 ' WEST TO THE LINE OF ORDINARY HIGH TIDE OF THE PACIFIC OCEAN. TOGETHER WITH THE NECESSARY RIGHTS OF EGRESS AND INGRESS OVER THE REMAINDER OF SAID LAND AND OTHER LANDS "A MAY BE NECESSARY FOR ENJOYMENT OF THE RIGHT THEREIN GRANTED, PROVIDED THAT THE GRANTEE AGREES TO INDEMNIFY CITY FOR ALL DAMAGES CITY MAY SUFFER FROM GRANTEE'S ENTRY ON ANY �+ CITY'S ADJOINING LANDS". S. AN EASEMENT FOR INGRESS AND EGRESS AND PIPELINES, OVER THE NORTH 30 FEET OF THAT PORTION OF SAID LAND WHICH LIES BETWEEN THE EASTERLY RIGHT OF WAY LINE OF HUNTINGTON AVENUES 60 FEET IN WIDTH AS NOW LAID OUT, AND THE WESTERLY LINE OF THE LAND DESCRIBED AS THE FIRST EXCEPTION TO THE LAND DESCRIBED THEREIN, AS EXCEPTED IN THE AMENDMENT OF LEASE RECORDED JANUARY 171 1562 IN BOOK 59781 PAGE 910 OF OFFICIAL RECORDS. 6. A WAIVER OF ANY CLAIMS FOR DAMAGES BY REASON OF THE LOCATIONP CONSTRUCTION, LANDSCAPING OR MAINTENANCE OF A HIGHWAY OR FREEWAY CONTIGUOUS THERETO, IN FAVOR OF THE STATE OF CALIFORNIAj AS CONTAINED IN AN INSTRUMENT RECORDED IN BOOK 6168s PAGE 667 OF OFFICIAL RECORDS. r 7. THE FACT THAT THE OWNERSHIP OF SAID LAND DOES NOT INCLUDE ANY RIGHTS OF INGRESS OR EGRESS TO OR FROM THE HIGHWAY ANO/OR FREEWAY ADJACENT TO SAID LAND. �+ SAID RIGHTS HAVE BEEN RELINQUISHED TO THE STATE OF CALIFORNIA BY DEED RECORDED IN BOOK 6166s PAGE 667 OF OFFICIAL RECORDS. B. A DEED OF TRUST, COVERING THE LEASEHOLD ESTATE CREATED BY SAID LEASE, TO SECURE AN INDEBTEDNESS OF $84DpD0D.DDs RECORDED FEBRUARY Is 3963 IN BOOK 64161 PAGE 707 OF OFFICIAL RECORDS. DATED, JANUARY 28's 1963. TRUST_OR, HUNTINGTON DRIFTW000s INC. , A CORPORATION, AND RICHARD SINCLAIR AND H. JACK HANNA. TRUSTEE, VEROUGO SERVICE CORPORATION, A CORPORATION. �•+ BENEFICIARY, GLENDALE FEDERAL SAVINGS AND LOAN ASSOCIATION► A CORPORATION. PAGE 8 ATTACHMENT NO. 8 Page 9 of 18 jw A161ER C ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT �. NOTE 11 SAID DEED OF TRUST ALSO SECURES AN ADDITIONAL ADVANCE EVIDENCED BY A NOTE FOR $613t00D .00. DATE OF NOTE, MARCH Ili 1964. EXECUTED BYt HUNTINGTON DRIFTWOOD, INC. , A CORPORATION. NOTE 2s A PARTIAL RECONVEYANCE OF SAID DEED OF TRUST, COVERING A PORTION OF SAID LAND WAS RECORDED IN BOOK 80201 PAGE 73 OF OFFICIAL RECORDS. NOTE 31 THE BENEFICIAL INTEREST UNDER SAID DEED OF TRUST WAS ASSIGNED BY ASSIGNMENT RECORDED FEBRUARY 8, 1980 IN BOOK 13498t PAGE 902 OF OFFICIAL RECORDS► AS INSTRUMENT NO. 11984 , TO ROBERT L. MAYERP A MARRIED MAN AS HIS SOLE AND SEPARATE PROPERTY ("MAYER" ) . NOTE 4t THE LIEN OR CHARGE OF SAID DEED OF TRUST WAS SUBORDINATED TO THE LINE OR CHARGE OF THE DEED OF TRUST SHOWN AS ITEM P17 BY AN INSTRUMENT RECORDED DECEMBER 16t 1983 AS INSTRUMENT NO. 4. 83-57D225 OF OFFICIAL RECORDS. 9. THE FACT THAT THE OWNERSHIP OF SAID LAND DOES NOT INCLUDE M. ANY RIGHTS OF INGRESS OR EGRESS TO OR FROM THE FREEWAY OVER THE EASTERLY AND SOUTHEASTERLY LINES OF THE LAND DESCRIBED IN THE DIRECTOR'S DEED RECORDED JULY 169 1963 IN BOOK 6632, PAGE 551 OF OFFICIAL RECORDS. SAID RIGHTS HAVE BEEN RELINQUISHED TO THE STATE OF CALIFORNIA IN THE ABOVE MENTIONED DEED. 1D. AN EASEMENT FOR EITHER OR BOTH POLE LINES, CONDUITS AND INCIDENTAL PURPOSESP AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 7159, PAGE 385 OF OFFICIAL RECORDS. OVER, SEVEN STRIPS OF LAN09 EACH 4 FEET 1N WIDTH, THE CENTERLINES OF SAID SEVEN STRIPS BEING MORE PART- ICULARLY DESCRIBED AS FOLLOWSt STRIP NO. 1 = BEGINNING AT A POINT IN THE NORTHERLY LINE OF THE ABOVE DESCRIBED PROPERTY, DISTANT NORTH 89 DEG. 43' EAST 900 FEET FROM THE WESTERLY TERMINUS OF SAID NORTHERLY LINE; THENCE SOUTH D DEG. 17' EAST 12.5 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT "A" ; THENCE CONTINUING SOUTH 0 DEG. 17' EAST 62.5 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT 08" ; THENCE SOUTH 89 DEG. 43' WEST 27 FEET; j THENCE SOUTH D DEG. 17' EAST 91 FEET; THENCE SOUTH 89 DEG. 43' �• WEST 53 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT "C"; THENCE CONTINUING SOUTH 89 DEC. 431 WEST 150 FEET. PAGE 9 ATTACHMENT NO. 8 Page 10 of 1A Lw AMER fC '4 -ALTA PLAIN OR-14S5792 LANGUAGE COMMITMENT STRIP NO. 2t BEGINNING AT THE AFOREMENTIONED POINT PA" ; THENCE NORTH 89 DEG. 43' W EAST, PARALLEL WITH SAID NORTHERLY LINE OF SAID PROPERTY] 926 FEET, MORE OR LESS, TO A POINT DISTANT SOUTH 89 DEG. 43' WEST 16 FEET FROM THAT CERTAIN COURSE IN THE EASTERLY LINE OF SAID PROPERTY HAVING A BEARING OF -SOUTH 3 DEG. 29' 43" WEST AND A LENGTH OF 539. 12 FEET; THENCE SOUTH 3 DEG. 29' 43" WEST 580 .62 FEET; THENCE SOUTH 25 DEG. 32' 14" WEST 386.94 FEET; THENCE SOUTH 11 DEG. 441 36" EAST 110 FEET. STRIP NO. 3t BEGINNING AT THE AFOREMENTIONED P01NT OB" ; THENCE SOUTH 36 DEG. EAST 90 FEET; THENCE NORTH 89 DEG. 43' EAST 720 FEET TO A POINT HEREIN- AFTER REFERRED TO AS POINT "D"; THENCE SOUTH 3 DEG. 29' 43" WEST 390 FEET; THENCE SOUTH 25 DEG. 32' 14" WEST 420 FEET. STRIP NO. 41 ibw BEGINNING AT THE AFOREMENTIONED POINT "D" ; THENCE NORTH 3 DEG. 29' 43" EAST 45 FEET. L, STRIP NO. St BEGINNING AT THE AFOREMENTIONED POINT "C"; THENCE SOUTH 0 DEG. 17' EAST 55 FEET; THENCE SOUTH 30 DEG. WEST 43 FEET; THENCE SOUTH Lw 44 DEG. EAST 640 FEET; THENCE SOUTH 4 DEG. WEST 83 FEET; THENCE SOUTH 4 DEG. WEST 83 FEET; THENCE SOUTH 46 DEG. EAST I55 FEET; THENCE SOUTH 46 DEG. WEST 50 FEET ; THENCE SOUTH 23 DEG. EAST lw 102 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT "E" ; THENCE SOUTH 29 DEG. EAST 110 FEET. L STRIP NO. 63 BEGINNING AT THE AFOREMENTIONED POINT "E" ; THENCE SOUTH 64 DEG. WEST 135 FEET; THENCE SOUTH 4B DEC. WEST 35 FEET; THENCE SOUTH 37 L DEG. WEST 120 FEET. STRIP NO. 71 BEGINNING AGAIN AT THE AFOREMENTIONED POINT "E" ; THENCE NORTH 70 DEG. EAST 48 FEET; THENCE NORTH 80 DEG. EAST 125 FEET. 11 . ANY EXISTING EASEMENT AND FRANCHIS RIGHT► AFFECTING THAT PORTION OF SAID LAND WITHIN THE LINES OF SUPERSEDED STATE HIGHWAY NOW ABANDONED, TO MAINTAIN, OPERATE, REPLACEt REMOVEt RENEW � AND ENLARGE THE EXISTING PUBLIC FACILITIES, NAMELY THE LINES PAGE 10 L ATTACHMENT NO. 8 Page 11 of 18 A Af E R Lie ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT OF THE SOUTHERN CALIFORNIA WATER COMPANY, AND FACILITIES - INCIDENTAL THERETO, INCLUDING ACCESS TO PROTECT THE PROPERTY FROM ALL HAZARDS IN, UPON AND OVER THE HIGHWAY HEREWITH ABANDONED, AS RESERVED i, IN THE ABANDONMENT RECORDED OCTOBER 5, 1966 IN BOOK 8067, PAGE 778 OF OFFICIAL RECORDS. 12. ANY EASEMENT FOR PIPE LINES AND INCIDENTAL PURPOSES, AFFECTING PARCEL 2, IN FAVOR OF SOUTHERN CALIFORNIA WATER COMPANY, AS DISCLOSED BY A LEASE OF A PORTION OF SUPERSEDED STATE HIGHWAY, DATED FEBRUARY 7, 1967, EXECUTED BY CITY OF HUNTINGTON BEACH, �. AS LESSOR, AND BY HUNTINGTON DRIFTWOOD, INC . , AS LESSEE, RECORDED FEBRUARY 10, 1967 IN BOOK 81741 PAGE 346 OF OFFICIAL RECORDS. 13. A SUBLEASE OF A PORTION OF PARCEL 1 AND ALL OF PARCEL 21 OF THE TERM AND UPON TERMS, CONDITIONS AND COVENANTS PROVIDED f IN LEASES TO ATLATIC RICHFIELD COMPANY RECORDED APRIL 24, 1970 IN BOOK 92720 .PAGES 666 AND 668 OF OFFICIAL RECORDS. v 14. A DEED OF TRUST, COVERING THE LEASEHOLD ESTATE CREATED j BY SAID LEASE, TO SECURE AN INDEBTEDNESS OF $6BD,D48.78, RECORDED Jbw SEPTEMBER Is 1970 IN BOOK 93911 PAGE 748 OF OFFICIAL RECORDS. DATED= AUGUST 27, 1970. TRUSTOR : HUNTINGTON LTD, , A LIMITED PARTNERSHIP ; ROBERT 6w T. MORRIS AND JACDUELINE M. MORRIS, HUSBAND AND WIFE; HAROLD F. GRISWOLD AND MARY JANE GRISWOLD, HUSBAND AND WIFE; DONALD F. WICKHAM AN KATHLEEN WICKHAM, HUSBAND AND WIFE; AND JOHN E. COLE, AN UNMARRIED MAN. TRUSTEE= TITLE INSURANCE AND TRUST COMPANY, A CALIFORNIA CORPORATION. L BENEFICIARY) CALIFORNIA ELECTRIC CONSTRUCTION CO. , A CORPORATION. NOTE 1 = THE BENEFICIAL INTEREST UNDER SAID DEED OF TRUST BY MESNE ASSIGNMENTS OF RECORD HAS BEEN ASSIGNED TO ROBERT L. MAYER. NOTE 21 THE LINE OR CHARGE OF SAID DEED OF TRUST WAS SUBORDINATED TO THE LIEN OR CHARGE OF THE DEED OF TRUST SHOWN AS ITEM #17 L BY AN INSTRUMENT RECORDED DECEMBER 171 1953 AS INSTRUMENT NO. 83-570225 OF OFFICIAL RECORDS. v 15. AN UNRECORDED SUBLEASE OF LAUNDRY ROOM OR ROOMS, DATED MARCH 7, 1980 BETWEEN RLM PROPERTIES, LTD. , AN WEB SERVICE CO. , INC. , UPON ITS TERMS AND CONDITIONS, A MEMORANDUM OF LEASE BEING RECORDED JUNE 9, 19BO IN BOOK 13629p PAGE 982 OF OFFICIAL RECORDS. 16. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND RECORDED IN BOOK 1031 PAGES 28 AND 29 OF RECORD OF SURVEYS. PAGE 11 L ATTACHMENT NO. 8 Page 12 of 18 `✓ter���.�• �.«`1•�� }ALTA PLAIN OR-1455792 LANGUAGE COMMITMENT f V 17. A DEED OF TRUST, (COVERING THE LEASEHOLD ESTATE CREATED BY SAID LEASE) , TO SECURE AN INDEBTEDNESS OF S5#D00#000.00p RECORDED DECEMBER 161 1983 OF OFFICIAL RECORDS# AS INSTRUMENT NO. 83-57OZ223. DATED, NOVEMBER 1B# 1983. TRUSTORs RLM PROPERTIES# LT©. # A CALIFORNIA LIMITED PARTNER— SHIP . TRUSTEE# AMERICAN SECURITIES COMPANY# A CORPORATION. ' BENEFICIARY, WELLS FARGO BANK# N. A. # A NATIONAL BANKING ASSOCIA- TION. NOTE# AN INSTRUMENT MODIFIES THE TERMS OF SAID DEED OF TRUST yr AS THEREIN PROVIDEDP RECORDED# MARCH 291 1985 AS INSTRUMENT NO. 85-112117 OF OFFICIAL RECORDS. EXECUTED BY3 RLM PROPERTIE5i LTD. , A CALIFORNIA LIMITED PART— NERSHIP. 18. AN ASSIGNMENT OF ALL BENTS# ROYALTIES, ISSUES AND PROFITS �., ACCRUING FROM SAID LAND# AS ADDITIONAL SECURITY FOR THE PAYMENT OF THE INDEBTEDNESS SECURED BY THE DEED OF TRUST SHOWN IN ITEM 17. RECORDED# DECEMBER 16# 1983 AS INSTRUMENT NO. 83-570224 OF OFFICIAL RECORDS. EXECUTED BY, RLM PROPERTIES# LTD. # A CALIFORNIA LIMITED PARTNERSHIP. �+ TO# WELLS FARGO BANK, NATIONAL ASSOCIATION. 19. 233 RENTAL LEASE AGREEMENTS AS DISCLOSED BY AN INSTRUMENT L ENTITLED "ASSIGNMENT OF LESSOR'S INTEREST 1N LEASES" IN AN INSTRUMENT RECORDED DECEMBER 161 1983 AS INSTRUMENT NO. 83-570224 OF OFFICIAL RECORDS. 20. THIS REPORT IS PREPARATORY TO THE ISSUANCE OF AN ALTA POLICY OF TITLE INSURANCE. WE HAVE NO KNOWLEDGE OF ANY FACT WHICH WOULD PRECLUDE THE ISSUANCE OF SAID ALTA POLICY WITH INDORSEMENTS �- 100 ANO 116 ATTACHED. THERE IS LOCATED ON SAID LAND COMMERCIAL IMPROVEMENTS KNOWN AS 21042 PACIFIC COSTA HIGHWAY, HUNTINGTON BEACH# CALIFORNIA. MTT#HA PLATS (CC&R'S# IF ANY) ENCLOSED. PAGE 12 ATTACHMENT NO. 8 Page 13 of 18 I iv ST r► �sEA �c tr �� it \\\.�trati 1/1�•� *ALTA PLAIN OR-�455792 LANGUAGE COMMITMENT v NOTE is ACCORDING TO THE PUBLIC RECORDS, THERE HAVE BEEN NO L ASSIGNMENTS OF THE LEASEHOLD DESCRIBED IN THE REPORT RECORDED WITHIN A PERIOD OF SIX MONTHS TO THE DATE OF THIS REPORT: EXCEPT AS FOLLOWS, NONE. NOTE 2s PREMIUM CHARGED FOR TITLE POLICY WILL BE BASE RATE. L w L f and 1 L L L PAGE 13 ATTACHMENT NO. 8 L Page 14 of 18 POR E.112, SE. 1/4,SEC.!I, r6S.,R.II W. 24—25 rsr-34 POR. E.1/2,1SEC.14,r 6S.,R.I/W. . e 4 rst-35 ILJ roe-02 rae-ol 1•.,00 UL rr4 - l5 ' lWACN (�elvfen�nwlEAU/IWGJ � /-�'� . • 0aAC, + 23 .�� r� V or ••t/ t Pat MI-V T♦ 1 W • o � H 4.1 rw 9 o in - N a a+ t,,Mst ., 4.. .rdijimation Only aw is Not a Pm. 22 3 Q 29 O w �i 27 MAhCN 1948 NOTE -ASSESSOR'S BLOCK A ASSESSOR'S MAP PARCU NUMBERS PPOKts PA6E Z%l SHOWN AN &R"s COUNTY OF ORANGE S AwL�, NOTICE ". Sections 12413 and 12413.5 of the California Insurance Code become effective on .January 1,1985.This new law requires that any title insurance company,underwritten title company or controlled escrow company handling funds In an escrow or subescrow capacity must have all cash, checks and drafts representing disbursements to be made by it deposited into its escrow depository bank account before recording your transaction. When checks (including cashier's, certified and travelers checks), share drafts and money orders are drawn on or Issued by an office of a financial Institution located outside the state of California orwhen any draft(other than a share draft)Is deposited into or sub- mitted for collection to First American Title Company's escrow depository bank account, there may be a substantial delay In the closing of your transaction or the disbursement of funds to be made by First American Title Company. To avoid any delay necessitated by this new law please consider the following: 1. Use checks, share drafts or money orders drawn on or issued by offices of financial institutions located within the state of California. i 2. Require thewire transferof the fundsfrom the office of the financial Institution located L outside the state of California to First American's escrow depository bank account, e 1 3. Avoid using drafts. L If you have any questions about the effect of this new law on your escrow please con- tact your local First American Title Company office. i w f { i ATTACHMENT NO. 8 Page 16 of 18 Form 1152 (11184) i fo.m 1299•0(1.78) ` A w f Sup41*T/n1 a C, First American Title Insurance Company 114 EAST FIFTH STREET, (P. O. BOX 267)SANTA ANA.CALIFORNIA 92702•(714)558-3211 1w January 23, 1987 a,w Fabert Mayer Corp 660 Newport Center Drive Suite 1050 ?XnjxLrt Beach, CA 92658-8680 Attn: Shaw:i Millbern �+ Your No. City of Huntingtc n Beach Our No. 1455792-1lr D as of r g, 1� at 7.30 a.m. Mack T. Zhc raS III TITLE OFFI evV SUPPLEMENTAL COMMITMENT The above numbered commitment (including any supplements or amendments thereto) Is hereby modified andfor supplemented in order to reflect the following additional items relating to the issuance of a policy of title insurance as follows: i ITEM F SCHEDULE B HAS BEEN Ax=IDID TO READ AS FOLLAIS: (F) OTI-ER - THE CCtTANY WILL FLO IFE THAT THE DEEDS OF TRUST SHCx N IN TTEM 48 ANM 14 BF PECCrIVEYED DUE TO THE FACT THAT THE ACTUAL B %=CIARY Ut:Lr4t THE SAME IS ROB= L. MAYER, THE CORAL PAMIER OF THE PAMMRSHIP OF FILM PRa'F TIES, LTD., A CALIFORNIA I.IlKITED PAFaT,1, 2n IP DUE TO THE MERGE OF THE BENEFICIAFCC AND THE LESSEE. ITEM #17 SCHEDULE B PART II HAS BEER AMENDED TO RFAD AS FOLIC4S: #17 A DEED OF TAIST r (COVERING THE 1 ASEHOLD ESTATE CREATED BY SAID'1EASE) , TO SDCUFZB AN INDF.BT =S C>F $5000,000.00, F=F= DEMMM 16, 1983 Cr OFFICIAL F,DCORDS, AS INSTF UM.'r NO. B3-570223. DATED: NOVEMM R 18, 1983. TRUST R: RIM PRCPMIFS, LTD., A CALIFORNIA IMUTED PARZTMRSHIP. TRUSTEE: AXNERICAN SECURITIES CCMPA%"I, A CORPORATICN. BElMFICIARY: V= FARGO BANK, N.A., A NATIaML BANM G ASSOCIATION. ATTACHMENT NO. 8 Page 17 of 18 A Mtlgj t �� C First American Title Insurance Compan3� 114 EAST FIFTH STREET, (P.0.BOX 2671 SANTA ANA,CALIF ORN1A 97702 •(714)558 3211 \ Iej� Fisch 27, 1987 F 5UPPLBIEN'TAL REPORT Pcbert Mayer Corp. Our No. 1455792 660 Nc.Wrt Center Drive 11050 Newport Beach, CA Your No. City of Hmtingt,on L. Attn: Shaw-n Millbern Beach & Rllri Properties Supplementing our original report relative to the above numbered escrow and tick ordtT,wt wish to advise you of the following: Vesting amended to read as follows: Taws amended as follows: 4 X Ocher: Itm #13 is hereby eliminated. 4w , w TITLE OFFICER ATTACHMENT NO. 8 toe:tSf•o) Page 18 of 18 f ' L f L Recording Requested By: When Recorded Return to and Mail Tax Statements to: W f w DEVELOPMENT AGREEMENT t.r By and Between V ' THE CITY OF HUNTINGTON BEACH and ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended iM. , • L L L t i + ATTACHMENT NO. 9 08/15/88 FINAL r TABLE OF CONTENTS P gee Section 1. Development of the Site 9 A. General: Developer's Right to Develop; City's Right to Regulate Development . . . . . . 9 r B. Permitted Development On and Uses of the Site; Permits and Approvals Required . . . . . . 9 4" C. City Review of Developer's Plans and Related Documents 11 t D. Scope of Development . . . . . . . . . . . . . . . . . . . . . . . 13 (1) Architectural and Design . . . . . . . . . . . . . . 13 (2) Developer's Responsibilities . . . . . . . . . . 14 a. Developer's Improvements . . . . . . . . . . 14 w (1) Commercial Portion . . . . . . . . . . . 15 (2)' Residential Portion . . . . . . . . . . 16 (3) Parking and Reciprocal 4 Parking Agreements. . . . . . . . . . . . 17 (4) Miscellaneous Site Improvements 18 (5) Walnut Avenue Extension and the "Spur" Street . . . . . . . . . . . . 18 (6) Miscellaneous Public Improvements . . . . . . . . . . . . . . . . . 20 b. Setbacks . . . . . . . . . . . . . . . . . . . . . . . . . . 22 c. Building Construction . . . . . . . . . . . . . 23 d. Signs 23 e. Screening 23 f. Landscaping 24 g. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . 24 h. Vehicular Access . . . . . . . . . . . . . . . . . . 25 E. Permitted Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (1) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (2) Alcoholic Beverage Sales and Consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (3) Dancing and Live Entertainment . . . . . . . . 26 L F. Phasing of Development . . . . . . . . . . . . . . . . . . . . . 26 ' G. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Iwo H. Cost of Development . . . . . . . . . . . . . . . . . . . . . . . . 30 L f i) L08/15/88 FINAL w i il* I. Applicable Ordinances, Regulations, Rules, and Official Policies . . . . . . . . . . . . . . . . . . . . . . 30 it J. Other Governmental Agency Permits . . . . . . . . . . 32 i K. Transient occupancy Tax Ordinances . . . . . . . . . 33 r i L section 2. Annual Review of Developer's Compliance With A reenent; Default; Remedies; Termination 34 A. Annual Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 B. Defaults--General . . . . . . . . . . . . . . . . . . . . . . . . . . 35 C. Enforced Delay; Extension of Times of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 V D. Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 E. Applicable Law and Attorneys Fees . . . . . . . . . 38 w F. Inaction Not a Waiver of Default . . . . . . . . . . . 39 w G. No Cross-Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 39 LSection 3. General Provisions . . . . . . . . . . . . . . . . . . . . . 40 A. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 LB. No Joint Venture or Partnership . . . . . . . . . . . . 40 M . C. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 L D. Amendment of Agreement . . . . . . . . . . . . . . . . . . . . . 41 E. Terra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 bo F. Cooperation in the Event of Legal Challenge 43 i L G. Enforceability of Agreement . . . . . . . . . . . . . . . . 45 H. Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 I. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 i L 08/15/88 FINAL L Igo Iv n J. Cooperation; Execution of Documents . . . . . . . . 47 w+ K. Justifiable Reliance . . . . . . . . . . . . . . . . . . . . . . . 47 i L. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 M. Entire Agreement; Waivers . . . . . . . . . . . . . . . . . . 49 N. Effective Date 5o W EXHIBITS A Site Map B Legal Description C Technical Site Plan, Project Description, and Site Statistics (Approved Master Plan for Comercial Portion of Site and Conceptual Site Plan for Residential Portion of Site) D Conceptual Residential Phasing Exhibit L E Approved Title Exceptions f L I F L L V f S M V 08/15/68 FINAL , M �r f DEVELOPMENT AGREEMENT BY AND BETWEEN ' THE CITY OF HUNTINGTON BEACH AND ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into by and between ROBERT L. MAYER, as Trustee of the . Robert L. Mayer Trust of 1982 , dated June 22, 1982, as amended 3 (hereinafter "Developer") , and the CITY OF HUNTINGTON BEACH, a municipal corporation (hereinafter "City") , pursuant to the authority of Sections 65864 through 65869.5 of the Government V ' Code of the State of California (the "Development Agreement Statute") . 9 rr R E C I T A L S: , A. To strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of 4 the State of California adopted the Development Agreement Statute, which statute authorizes the City to enter into a 4' development agreement with any person having a legal or equitable interest in real property for the purpose of establishing certain development rights in the property which is the subject of a development project application. , Pursuant to the authorization set forth in California Govern- v r ATTACHMENT NO* 9 Page 1 of 51 06/15/88 FINAL r rent Code section 65864 et seq. , the City Council adopted Resolution No. 5390 on June 18, 1984, establishing procedures and requirements for consideration of Development Agreements. B. Pursuant to the California Community Redevelopment F ' Law (California Health and Safety Code Section 33000 et seq.) , the City Council has previously adopted Ordinance Nos. �+ 2578 and 2634 establishing a Redevelopment Plan for the Main-Pier Redevelopment Project Area (the "Redevelopment Project Area") . The purpose of the Redevelopment Plan is to r eliminate blight and redevelop the Redevelopment Project , Area. Pursuant to Section 3.1 of the Redevelopment Plan, the City is committed to aiding and cooperating with the Redevelopment Agency of the City of Huntington Beach (the "A enc " g y ) to carry out the Redevelopment Plan. { C. The purpose of this Agreement is to establish v development rights and obligations in certain real property i (the "Site") situated within the Redevelopment Project Area, t to assist in the Agency's implementation of the Redevelopment Plan, to provide a secure means of financing needed public improvements, to provide additional visitor-serving facili- ties, employment opportunities, and housing and to generate substantial additional revenues to the City and Agency to enable them to maintain and improve vital public services L provided to the citizens of Huntington Beach. i Ld LATTACHMENT NO. 9 Page 2 of Si 08/15/88 FINAL L L D. The Site is that portion of the Redevelopment L Project Area so designated on the "Site Map" and more particularly described in the "Legal Description" which are attached hereto as Exhibits "A" and "B" , respectively, and incorporated herein by this reference. The Site includes the "Developer Parcel, " the "City Beach Maintenance Facility 4 Parcel, " and the "Beach Boulevard Remnant Parcel, " which are each so designated on the Site Map. �. E. on or before the Effective Date of this Agreement, Developer and the Agency will be entering into a Disposition ti and Development Agreement (the "DDA") , which DDA provides for the disposition of the Site to Developer and its development as an integrated, multi-phased commercial and residential complex (the "Project") . The DDA will be a public record on file in the office of the City Clerk of the City. Unless L otherwise specifically set forth herein, all of the defined terms in this Agreement shall have the same meanings as such W terms have in the DDA. F. As of the Effective Date of this Agreement, the city owns fee simple title to the Site. Developer is the L present lessee of that portion of the Site consisting of the Developer Parcel, pursuant to the terms of that certain L Second Amended and Restated Lease ("Existing Lease") between the City and Developer dated on or about August 15, 1988, and expiring on or about January 31, 2013. After the Effective L LATTACHMENT NO. 9 Page 3 of 51 08/15/88 FINAL L LI rr Date of this Agreement, the Agency and City will be entering into a Purchase and Sale Agreement (the "City-Agency Agreement") pursuant to which the City will convey to the Agency all of the City's right, title, and interest in and to the various "Separate Development Parcels" within the Site (as that term is defined below) , including all improvements 4 thereon which are owned by the City, excepting only certain reserved City interests in oil, gas, hydrocarbon substances, V and mineral and water rights, all as more particularly described in the City-Agency Agreement and the DDA. Such conveyances shall occur in time for the "Disposition Transfers" of such Separate Development Parcels v from Agency to Developer -- transfers of fee title to that �. portion of the Site to be developed for residential uses (the "Residential Portion") and transfers of new and revised leases with respect to that portion of the site to be developed with commercial uses (the "Commercial Portion") , all as set forth in the DDA. V G. Prior to and as a condition to each Disposition Transfer, the Developer will be required to obtain City approval of the following specific land use approvals and building and construction permits (the "Approvals") to the extent applicable to each Separate Development Parcel to be so transferred: (i) a "Master Site Plan" for the Separate Development Parcels in the Commercial Portion; (ii) a L ATTACHMENT N0. 9 Page 4 of 51 L 08/15/88 F114AL L "Conceptual Plan" for the Separate Development Parcels in the Residential Portion; (iii) a conditional use permit or permits and a coastal development permit or permits for each phase; (iv) a "special permit" for any requested deviations L from normal development standards and requirements; (v) a parcel or tract map for the consolidations/divisions of the �+ existing parcels within the Site to create the various Separate Development Parcels; (vi) approval of the "change of W use" of the existing nobilehome park on the Developer Parcel L (including without limitation the removal of the "M-H Overlay Zone" therefrom, the approval of the Impact of Conversion Report, and the approval of a Relocation Assistance Plan) ; (vii) as to the Separate Development Parcel(s) on which an identified wetlands is located, approval of wetlands mitigation in accordance with the Coastal Element of the City's General Plan and the Downtown Specific Plan; (viii) Z. final building plan/permit approval for the Developer Improvements on a Separate Development Parcel and approval of 1 �+ the plans and specifications or construction drawings for any public improvements to be constructed by the Developer within public rights-of-way; and (ix) an encroachment permit or permits for work to be undertaken by the Developer in public rights-of--way. As of the Effective Date of this Agreement, �.. the following Approvals will have been issued: (i) approval of the Master Site Plan for the Commercial Portion (which L LATTACHMENT NO. 9 Page 5 Of 51 L08/15/88 FINAL consists of the applicable portions of the "Technical Site Plan, Project Description and Site Statistics" which is attached to this Agreement as Exhibit "C") ; (ii) approval of the "change of use" of the existing mobilehome park on the f Developer Parcel (including without limitation the removal of the "M-H Overlay Zone" therefrom [ZC No. 87-7] and approval of the Impact of Conversion Report and Relocation Assistance Plan therefor) ; (iii) the conditional use permit (CUP L No. 87-7) and coastal development permit (CDP No. 87-7) for L the Phase 1 hotel; (iv) approval of any "special permits" for deviation from normal development standards or requirements Lfor the Phase 1 hotel; and (v) the tentative tract rap (TT No. 13045) for the Phase 1 hotel. In addition, as of the Effective Date of this Agreement, the City has adopted a Precise Plan of Alignment for Walnut Avenue through the Site consistent with the Approvals so granted. The balance of the aforesaid Approvals have not been issued. H. Insofar as the California Environmental Quality Act (Public Resources Sections 21000 et sere . , (CEQA) ) is concern- ed, the Project is a part of the area included within the W Downtown Specific Plan which was adopted by the City Council L on July 18, 1983. Environmental Impact Report 82-2 prepared for the Downtown Specific Plan considered generally the i 6w impacts of the land uses proposed by the Project. In addition, the City, as lead agency for the Project, prepared LN LATTACHMENT NO. 9 Page 6 of 51 L08/15/88 FINAL W I a Supplement to Environmental Impact Report 82-2 for the Project. Prior to the Effective Date of this Agreement, the City has certified the Supplement -to Environmental Impact Report 82-2, adopted certain mitigation measures with respect to the Project, and made certain findings with respect thereto, all as required by CEQA. The City has fully +� considered the environmental impacts of the Project and the Supplement to EIR 82-2 prior to approving the Project. 1. On June 22, 1988, the City Planning Co=- ission, the advisory agency for purposes of development agreement review pursuant to Government Code § 65867, held a duly-noticed i L public hearing regarding this Agreement and, at the con- clusion of the hearing, and after considering the evidence and argument submitted by the City staff, the Developer, and all interested parties, adopted its Resolution No. 1400 recommending that the City Council approve this Agreement. *, J. On August 15, 1988, the City Council held a duly- noticed public hearing regarding this Agreement, and Lconsidered the recommendation of the Planning Commission and the evidence and argument submitted by the City staff, the 64 Developer, and all interested parties. K. Development of the Project on the site in accordance with this Agreement and the Approvals is in Laccordance with the policies and goals set forth in the + City's General Plan and Downtown Specific Plan. L LATTACHMENT NO. 9 Page 7 of 51 08/15/88 FINAL L F L. L. For the reasons recited herein, the parties hereto L' have determined that the Project is a development for which a Development Agreement is appropriate. This Agreement will eliminate uncertainty in planning for and secure the orderly development of the Project, assure progressive installation of necessary public improvements, provide for public services L appropriate to each stage of development of the Project, ensure attainment of the maximum effective utilization of L resources within the City, generate substantial revenues needed by the City and Agency to maintain and expand vital public services for the benefit of all citizens of the City, 5 L and otherwise achieve the important public goals and purposes for which the Development Agreement Statute was enacted. In `r exchange for these benefits to the City, the city has deter- mined that it is appropriate that the Developer receive the L assurance that it may proceed with the Project in accordance with the terms and conditions of this Agreement and the City's existing ordinances, resolutions, regulations, rules, L+ and official policies as of the Effective Date of this Agreement. L i L LATTACHMENT NO. 9 Page 8 of 51 L08/15/8s FINAL V C O V E N A N T S: Section 1. Development of the Site. A. General: Developer's Right to Develop; v Cit 's _Right to Regulate Develo rent. Developer shall have the right to proceed with the Project on the Site in i.. accordance with the terms and conditions of this Agreement, and City shall have the right to regulate development of the site in accordance with the terms and conditions of this Agreement and all City ordinances, regulations, rules, and official policies in force as of the Effective Date of this Agreement. B. Permitted Development On and Uses of the Site; Permits and Approvals Required. The City shall permit the Project to be developed on the Site in accordance with the terms and conditions set forth in this Agreement (including, without limitation, Section 1.0 and 1.I below) and the Approvals referenced in Recital G above. The permitted uses of the Site, the density and intensity of use, the maximum height, bulk and size of proposed buildings, provisions for L reservation or dedication of land for public purposes, the location and design of public improvements, the uses to be permitted on the Separate Development Parcels, and all other L. terms and conditions of development applicable to the Site shall be those set forth in this Agreement, the Master Site ATTACHMENT NO. 9 Page 9 of 51 08/15/88 FINAL L r a.. Plan for the Commercial Portion of the Site, the conditional Luse permit, coastal development permit, and tentative tract map to be approved for the Phase I hotel prior to or L concurrently with the Effective Date of this Agreerent, the t approved "change of use" of the existing nobilehome park on LA the Developer Parcel p (including without limitation the ' approved Impact of Conversion Report and Relocation V Assistance Plan) , all of the other terms and conditions of 1 L this Agreement (including without limitation, and to the 3 extent not superseded by the specific provisions hereof, all 6" applicable City ordinances, regulations, rules, and official policies in force as of the Effective Date of this Agreement) , and the development plans and permits to be f secured by the Developer after the Effective Date of this E r Agreement, as referenced in Recital G above. Notwithstanding �.. the foregoing, the City recognizes that Developer may request approval of plans or permits which differ from the Approvals previously granted and the specific provisions of the Scope of Development (section 1.D below) based upon refinements in planning or changes in market or financial feasibility between the Effective Date of this Agreement and the time of actual development, provided that such plans shall in all L events be consistent with the Downtown Specific Plan and r other General Plan and zoning requirements applicable to the L+ Site as of the Effective Date of this Agreement. The City L ATTACHMENT NO. 9 Page 10 of 51 08/15/88 FIVAL L agrees to act reasonably in reviewing any such proposed change(s) based upon legitimate land use planning concerns. in the event of any inconsistency between the approved plans and this Agreement, the approved plans shall govern. With specific regard to the Residential Portion of the Site, the Developer and City each recognize that the +� Developer is required to obtain Planning Commission approval r of a Conceptual Site Plan for the Residential Portion prior to approval of any conditional use permit for residential development, in accordance with section 4.20.02 of the Downtown Specific Plan. The Developer and City hereby agree that the portion of the Technical Site Plan, Project Description, and Site Statistics attached hereto as Exhibit t "C" applicable to the Residential Portion of the Site is provided by the Developer for informational purposes only to allow the City to analyze the nature of the planned 1 development of the Residential Portion. The City agrees to cooperate with the Developer in �+ issuing encroachment permits reasonably required by the Developer for any construction to be undertaken by the Developer in City rights-of-way. C. City Review of Developer's Plans and Related Documents. The City agrees to promptly commence and dili- gently proceed to complete the review of all of Developer's applications for development and building permits and ATTACHMENT NO. 9 Page 11 of 51 ' 08/15/88 FINAL t approvals. The City's evaluation of such matters shall be +� conducted in accordance with City ordinances, regulations, rules, and official policies in force as of the Effective Date of this Agreement. During the preparation of all drawings, plans, and related documents, staff of the city and Developer shall hold regular progress meetings as needed to coordinate the preparation and review of such items. The staff of the City and Developer shall communicate and consult informally as frequently as is necessary to ensure that the formal submittal of any documents to the City can receive prompt and speedy attention. Upon the Developer's request , and payment of all City costs therefor, the City may retain a contract plan checker or checkers to enable the City to expedite the processing and review of final building plans and construction drawings. L No plan, permit, or approval required for the j development of the Project shall be revoked or subsequently disapproved once issued by the City provided that the development is consistent with the plan, permit, or approval. Any disapproval by the City shall state in writing the reasons for disapproval. , If Developer desires to mace any substantial change in any of the plans after their approval by the City, Developer shall submit the proposed change to the City for . approval. The processing, review, and approval of any such ATTACHMENT NO. 9 Page 12 of 51 08/15/88 FINAL lw r.M revised submittal shall be subject to the same provisions as +�. are set forth above for the initial submittal. D. Scope of Development. The Project shall be planned, designed, and constructed in accordance with this Section Z.D. (1) Architectural and Design. The Commercial Portion and the Residential Portion of the Site shall be designed and developed as integrated complexes in which the buildings will have architectural excellence, both individually, as iw well as in the context of the total commercial complex and residential complex, respectively. The architecture and design of each phase of the i Project shall be subject to the city's normal Design Review Board approval process. The improvements to be constructed on the site shall be of high architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed. The shape, scale of volume, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancement to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within ATTACHMENT NO. 9 Page 13 of 51 08/15/88 FINAL k W r v the Redevelopment Project Area. The Developer's L. plans, drawings, and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the 4 Developer Improvements. The open spaces between buildings where they f,. exist shall be designed, landscaped and developed with the same degree of excellence. The total " development shall be in conformity with ' the j Redevelopment Plan for the Redevelopment Project Area. (2) Developer's Responsibilities. a. Developer Improvements. Subject to &- all of the other provisions of this Agreement, the Developer agrees to develop and construct, or cause L the development and construction of the r improvements (herein the "Developer Improvements") defined below, or such additional size, intensity, �w and character of improvements as may be permitted and approved under applicable land use regulations of the City and Agency. L The Site will be developed in six (6) commercial phases and three (3) residential phases. The boundaries between and among the phases of development shall be generally consistent with the 1 L f L ATTACHMENT 140. 9 Page 14 of 51 08/15/88 FINAL i Iw phasing plan included in Exhibit "C. " It is understood that phases may be developed concurrently, subject to the limitations set forth in Section 1.F of this Agreement. The six (6) commercial phases and the three (3) residential phases are described in Exhibit "C" and are :. described generally below. (1) Commercial Portion. The L Developer Improvements on the Commercial Portion of the Site shall include: L (a) Phase 1; Separate �Devel,opZ L rent Parcel No. 1: A maximum 300-room first- class hotel on an approximately 3.6 acre parcel. L (b) Phase 2; Separate Develop- vent Parcel No. 2: A recreation/tennis/health L and fitness facility, including a swimming a pool, exercise/weight training room, sauna, and spa on an approximately 3.5 acre parcel. (c) Phase 3 ; Se arate Develop- rent Parcel No. 3: A first-class hotel With conference facilities, with a maxinum of 500 rooms, located on an approximately 2.9 acre parcel. L LATTACHMENT NO. 9 Page 15 of 51 08/15/88 FINAL L Jr �r Y.r ' (d) Phase 4 ; Se arate Develo - `� vent Parcel No. 4: An all-suite hotel with a maximum of 250 rooms, located on an approximately 1.2 acre parcel. Ir (e) Phase 5; Se arate Develo - ment Parcel No. 5: A specialty retail center i on an approximately 3.8 acre parcel, with approximately 75,000 square feet of improvements. (f) Phase 6; Separate Develop- rent Parcel No. 6: A luxury hotel with a �. maximum of 400 rooms, located on an approximately 5 acre parcel. (2) Residential Portion. The i Developer Improvements on the Residential Portion of the Site shall be phased in general conformity with the "Conceptual Residential Phasing Exhibit" attached hereto as Exhibit I'D" and shall include: kbo (a) Phase 1; Separate Develop- rent Parcel No. 7: Approximately one-half (1/2) of the residential units to be L constructed on the Residential Portion (438, based upon the maximum development of 875 Lresidential units contemplated in the Supplement to EIR 82-2) . u LATTACHMENT NC. 9 Page 15 of 51 � 08/15/88 FINAL L LW (b) Phase 2 ; Separate Develop- ment Parcel No. 8: Approximately one-fourth (1/4) of the residential units to be constructed on the Residential Portion (219, based upon the maximum development of 875 residential units contemplated in the �.+ Supplement to EIR 82-2) . (c) Phase 3 ; Separate_ Develop- ment Parcel No. 9 : Approximately one-fourth (1/4) of the residential units to be constructed on the Residential Portion (21B, f based upon the maximum development of 875 residential units contemplated in the Supplement to EIR 82-2) . (3) Parking and Reciprocal Parking Agreements. The Developer shall provide all off- LW street parking required pursuant to the applicable provisions of the Huntington Beach ordinance Code L (the "Code") , including any permitted modifications, per the approved plans. The City L has agreed that the parking for the Phase 1 hotel L (including guest rooms, lounges, meeting rooms, R ball rooms, and guest-serving retail uses) shall be L+ determined on the basis of the City's parking requirement for hotels of 1.1 parking spaces per L i L ATTACHMEIM NO., 9 Page 17 of 51 08/15/88 FINAL guest room, pursuant to Article 9606(a) (H) of the Code. If the City determines after the Phase 1 hotel is completed and operating that the parking is not adequate, the Developer agrees to cure such deficiency by providing additional parking (above the Code requirement) in the subsequent commercial phase or phases. The City and Developer agree to address such parking deficiency by obligating such kw subsequent connercial phase or phases to provide joint-use or shared parking for the benefit of the Phase 1 hotel. Parking for the other hotels F L planned for the Commercial Portion (Phases 3, 4 , and 6) may be handled in the same manner. Parking L deficiencies nay not be cured by providing additional parking along the beach side of Pacific Coast Highway. (4) Miscellaneous Site 122rove- rents. The Developer shall provide all landscaping, open areas, driveways, and other incidental on-Site improvements required for each L Separate Development Parcel as development occurs, L in accordance with the approved plans. (5) Walnut Avenue Extension and the L "Spur" Street. Walnut Avenue shall be extended through the Site consistent with the Precise Plan L, L ATTACHMENT NO. 9 Page 18 of 51 L08/15/88 FINAL W L of Alignment for Walnut Avenue previously approved by the City. The north-south connector street between commercial Phases 3 and 4 (the "spur" street) shall extend across a portion of the Site, from Pacific Coast Highway to Walnut Avenue, between the Phase 3 commercial development (Separate Development Parcel No. 3) and the Phase 4 commercial development (Separate Development Parcel ;- No. 4) , as shown on the approved Master Plan for the Commercial Portion. L Walnut Avenue and the spur street R shall each consist of approximately 80 feet of pavement, including the landscaped median strip, L within 90 feet of right-of-way and shall include (i) traffic signalization at the intersections of L Huntington/Walnut, Walnut/"spur" street, Walnut/ Beach, and "spur" street/PCH, (ii) median landscaping and perimeter landscaping designed to L enhance the quality and aesthetic character of the Developer's development on the Site, and (iii) all Lof the curbs, gutters, sidewalks, street lights, bus benches, storm drains, utilities, parkway landscaping, and other required improvements in the fi L street right-of-way. L 3 L ATTACHMENT NO. 9 Page 19 of 51 08/15/88 FINAL L The extension of Walnut Avenue shall be phased as follows: (i) the first phase shall be the stub-in from Huntington Street to the area L adjacent to the rear of the Phase I hotel (Separate Development Parcel 110. 1) , and shall be accomplished prior to completion of the Phase 1 hotel; and (ii) the balance of the construction i.r shall be accomplished by the completion of the L Phase 3 comm.ercial development (Separate y Development Parcel No." 3) . L (6) Miscellaneous Public Inprove- vents. The Developer shall be responsible for the V following limited and specific off-site public improvements and site work: (a) A pedestrian overcrossing L of Pacific Coast Highway in the general L location of the Phase 3 commercial development (Separate Development Parcel No. 3) , if Lincorporated into the approved plans (and Cal F Trans provides its approval) . Said overcros- L. sing shall be in conformity with the City,'s existing Downtown Design Guidelines and CalTrans minimum design standards as described in Section 7-105 of the State of California L. LATTACHMENT No. 9 Page ZO of 51 08/15/88 FINAL L W Highway Design Manual (using pedestrian-only +� design standards) . (b) At the Developer"s option (and assuming all necessary governmental approvals are obtained) , an additional pedestrian overcrossing of Pacific Coast 6W Highway in the general location of the Phase 5 commercial development (Separate Development Parcel No. 5) , with said overcrossing to be consistent with the overcrossing referenced in subparagraph (a) and in conformity with the Le engineering and design standards referenced therein. L (c) The following additional public improvements: (i) any street widening .L+ required around the perimeter of the Site; L (ii) curbs, gutters, sidewalks, street lights, street furniture, and landscaping within L public rights-of-way on the Site; (iii) signalization improvements or modifications at L the intersections of Beach/PCH and PCH/ L Huntington Street; (iv) extension of the City domestic water line from its existing terminus Lat Olive and Third Streets to the Site; and (v) extension of all other utilities required i La LATTACHMENT N0. 9 Page 21 of 51 L08/15/88 FINAL �w for development of the Project from their existing locations at the perimeter of the Site across the public rights-of-way on or adjacent to the Site and each Separate ` Development Parcel thereof. rr (d) In connection with the preparation of each Separate Development Parcel for construction of the Developer r. Improvements, the Developer shall reabandon • any existing abandoned oil wells on such L parcel to the then-current standards of the California Division of Oil and Gas. (e) After the Developer satisfactorily completes each of the public improvements required to be constructed in accordance with this Agreement, such improvements shall be accepted by the City or L Agency. The City shall maintain such L« improvements at no expense to the Developer, and the Developer shall have no responsibility f therefor, except that the Developer shall maintain at its sole expense the sidewalk and 4 landscaping behind the curb. b. Setbacks. Minimum building and parking setbacks shall be in accordance with the L ATTACHMENT NO. 9 Page 22 of 51 L08/15/88 FINAL Jr 6d applicable existing provisions of the Huntington w, Beach Ordinance Code. c. Building Construction. Buildings shall be constructed in accordance with the applicable existing provisions of the Huntington w Beach Ordinance Code and the approved final building plans. d. Signs. Signs shall be in accordance L. with the applicable existing provisions of the Huntington Beach Ordinance Code and, more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the ar exterior of the improvements unless such signs and signing have been submitted to and approved by the Planning Commission. Developer shall submit for i6w approval by the Planning Commission and shall implement a Planned Signage Program with respect to a. all signage on the site prior to the installation of any signs. e. Screening. All outdoor storage of materials or equipment shall be enclosed or screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by the L City/Agency staff and applicable existing provisions of the Huntington Beach Ordinance Code. L LATTACHMENT NO. 9 Page 23 of 51 08/15/88 FINAL V �r r� f. Landscaping. The Developer shall provide all landscaping and irrigation required on the Site, including the landscaping and irrigation 4 within the public rights-of-ways on or adjacent to the Site, in accordance with the approved landscape plans. The Developer shall maintain all landscaping on the Site behind the curb. After v satisfactory installation of the median landscaping .. and irrigation systems within the public rights- of-way on the Site in connection with the development of each Separate Development Parcel, the City shall accept such improvements and maintain the same at no expense to the Developer, F and the Developer shall have no further responsibility therefor. g. Utilities. The Developer agrees to extend all utilities required for the development, use and maintenance of the improvements on the Site LO from the locations to which such utilities will be brought pursuant to Section I.G below to the r private improvements to be located on each applicable Separate Development Parcel. L All utilities on the Site shall be located underground. w LATTACHHENT No. 9 Page 24 of 51 L 08/15/88 FINAL h. vehicular Access. The number and location of vehicular driveways and curb breaks r shall be in accordance with the approved plans. L E. Permitted Uses. (1) General. After completion of construc- tion on each Separate Development Parcel, the Developer (and permitted successors and assigns) shall be entitled to use too and occupy the site in accordance with the development approvals referenced in Recital G and Section 1.B of this Agreenent and otherwise in accordance with all applicable L existing provisions of the Huntington Beach Ordinance Code. (2) Alcoholic Beverage Sales and Consumption. The hotels to be developed in the Commercial Portion of the Site (including the restaurants, lounges, and similar accessory uses located within such hotels) shall be permitted �• to sell alcoholic beverages for on-premises consumption, subject to the Developer's obtaining the necessary liquor license(s) from the California Department of Alcohol and Beverage Control ("ABC") . The City recognizes that restaurants and other commercial uses located elsewhere within the Commercial Portion of the Site nay require permission for the sale of alcoholic beverages for on- premises consumption as well, and the City agrees that such uses shall be permitted subject to the City's reasonable review of location, type of use, and other similar land-use , 1 i ATTACHMENT NO. 9 �.+ Page 25 of 51 08/15/88 FINAL w consideraticns and economic factors to assure a continued high--quality Project that is compatible with neighboring residential and commercial uses. (3) Dancing and Live Entertainr.:ent. The f hotels to be developed in the Co=ercial Portion of the site (including the restaurants, lounges, and similar accessory w uses located within such hotels) shall be permitted to 1 provide live entertainment and dancing in accordance with the City's ordinances, regulations, rules, and official policies + in force as of the Effective Date of this Agreement. The City recognizes that restaurants and other commercial uses located elsewhere within the Commercial Portion of the Site ray require permission for live entertainment and/or dancing 1,0 as well, and the City agrees that such uses shall be permitted subject to the City's reasonable review of location, type of use, and other similar factors to assure a continued high-quality Project that is compatible with neighboring residential and commercial uses. F. Phasing of _ Developnent. Notwithstanding any other provisions of this Agreement to the contrary, without +� the City's written consent, which consent may be withheld in the City's sole and absolute discretion, the time, order, and L phasing of the development of the Separate Development W Parcels within the Site shall be consistent with the following requirements and limitations: L ATTACHMENT N0. 9 Page 26 of 51 Oe/15/88 FINAL L L r • } 4 • (i) Within the Commercial Portion of the I ' +�. Site, the order of development shall be as follows: Phase 1, Phase 2, Phase 3, Ole Phase 4, Phase 5, and Phase 6 (Separate Development Parcel Nos. 1-6) (as such phases are described in Section 1.D above) . (ii) Within the: Residential Portion of the Site, the order of development shall be as follows: Phase 1, Phase 2, and Phase 3 (Separate Development Parcel Nos. 7-9) (as such phases are described in Section 1.D above) . �- (iii) The commencement of construction of the Phase 1 residential development (Separate L Development Parcel No. 7) shall occur no E earlier than the demolition of the Huntington Beach Inn and the commencement S #., of construction of the Phase 3 commercial development (Separate Development Parcel No. 3) . (iv) The commencement of construction of the Phase 2 residential development (Separate F Development Parcel No. 8) shall occur no earlier than the commencement of a. ATTACHMENT NO. 9 Page 27 of 51 r 08/15/88 FINAL r lr. construction of the Phase 4 commercial v development (Separate Development Parcel F No. 4) . (v) The commencement of construction of the Phase 3 residential development (Separate Development Parcel No. 9) shall occur no earlier than the commencement of construction of the Phase 6 commercial development (Separate Development Parcel No. 6) . This Section 1.F shall be interpreted consistently ' with Section 1.D above. The timing and phasing of development shall be further restricted as set forth in the DDA. During the term of this Agreement, no tioratorium or other ordinance, regulation, rule, or official policy limiting or conditioning the rate, timing, or sequencing of development of the Site (including without limitation any t ordinance, regulation, rule, or official policy which purports to limit or condition the rate, timing, or sequencing of development based upon levels of service on t roadways, roadway capacities, capacities of drainage facilities, capacity of sewer facilities, provision of emergency service, or similar matters) shall apply to the Site. F ATTACHMENT NO. 9 Page 28 of 51 08/15/88 FINAL f L G. Utilities. The City represents that, with the exception of the domestic water line referenced below, all utilities (including sanitary serer, gas, electrical, story; r drainage, telephone, and cable TV) are available at the perimeter of the Site and that the capacities of such utilities are and shall remain at all times sufficient to adequately service the construction, operation, and maintenance of the improvements contemplated for the Site, 3 V provided that the Project is developed in accordance with the phasing schedule set forth in Section l.F and Exhibit t'C." The Developer agrees to extend the City domestic water line bw from its existing terminus at olive and Third Streets to the Site. In general, the line shall be extended to Walnut i+ Avenue and thence along Walnut Avenue (including the planned extension thereof east of Huntington Street) to the Site, with the precise alignment as determined by the City. Within sixty (60) days after the Effective Date of this Agreement, the City shall establish a precise alignment for the water t L line and provide the Developer with all engineering requirements and specifications for the water line and all information available to the Cityregarding g g the physical Lconditions along the proposed alignment that are pertinent to construction. The Developer shall prepare plans and specifications for the water line and submit the same to the City for approval no later than the date on which the 5 ' LATTACHMENT NO. 9 Page 29 of 51 08/15/88 FINAL L i Developer submits its final building plans for the Phase 1 hotel, provided that the city understands that the Developer at its option may submit the utility plans and commence w construction of the water line in advance of the submittal of plans and commencement of construction of the Phase 1 hotel. The City shall review and approve the plans and .r specifications for the water line in the same manner as set forth in Section 1.0 above for the review of final building L. plans and construction drawings. H. Cost of Development. The Developer shall be responsible for all costs of developing the Project, excepting only those costs which have been expressly assumed by the City under this Agreement or by the Agency under the DDA. I. Applicable Ordinances Re ulations Rules and official Policies. The City's ordinances, regulations, rules, and official policies governing permitted uses of the Site, and the development, density, intensity of use, design, t improvement, construction and building standards, occupancy, levels of service of traffic improvements and traffic mitigation requirements, police, fire, and paramedic protection, drainage protection and flood control, park 1.w standards, restrictions (if any) on the timing, sequence, and phasing of development, and all other City land use requirements applicable to the Site and the Project shall be W ATTACHMENT VO. 9 Page 30 of 51 ti 08/15/88 FINAL 1 �rr those ordinances, regulations, rules, and official policies w, in force as of the Effective Date of this Agreement. Any amendment to said ordinances, regulations, rules, or official policies after the Effective Date of this Agreement shall not be applicable to the Site or the Project without Developer's w prior written consent. This Section shall not preclude the application to the Site or the Project of changes in City laws, ordinances, regulations, rules, or policies, the terms of which are reasonably required for public health or safety reasons or L changes which are specifically mandated and required by changes in state or federal laws or regulations, as provided for in Government Code Section 65869.5. tat This Section shall not be construed to limit the I authority of the City to require Developer to pay the L applicable processing and development fees and charges for F land use approvals, building permits and other similar L permits and entitlements which are in force and effect on a L uniform city-wide basis at the time such fees are due, subject only to the following: (i) The Developer shall not be responsible Lfor paying any new or increased fee or charge to provide or contribute to L improvements or services not required to be provided or contributed to by the L L ATTACHMENT Na. 9 Page 31 of 51 L08/15/88 FINAL L fEE L Developer under the City's ordinances, L regulations, rules, and official policies in force as of the Effective Date of this Agreement; and (ii) The amount of any increased fee or charge r.. after the Effective Date of this �., Agreement shall not exceed the increase in the reasonable cost of providing the improvement or service for which the fee or charge is imposed. J. Other Governmental Agency Permits. The City agrees to assist the Developer and Agency, at no cost or expense to the City (other than overhead and employee staff tine) , in securing any and all permits (but not the payment of fees) which may be required by any other governmental w agency affected by such construction, development, or work, r . 1 including without limitation (i) encroachment permit(s) from �+ the California Department of Transportation for any work t within the right-of-way along the Beach Boulevard and Pacific Coast Highway frontages of the Site (such as curb cuts and the pedestrian overpasses)); (ii) approval from the California Department of Fish and Game and United States Fish and Wildlife Service for the wetlands mitigation required for V, any identified wetlands on the Beach Boulevard Remnant f L ATTACHMEM! NO. 9 Page 32 of 51 08/15/88 FINAL kr kw Parcel; and (iii) approval of any coastal development permit(s) required from the California Coastal Commission. K. Transient Occupancy Tax ordinances. Prior to b" the Effective Date of this Agreement, the City and Agency have each adopted ordinances under California Revenue and V Taxation Code Section 7280.5 which ordinances in effect L transfer from the City to the Agency the authority to levy and/or collect a sufficient amount of transient occupancy 60 taxes generated from the hotels on the site to enable the Agency to timely satisfy its payment obligations to the 6* Developer in accordance with the DDA. said ordinances 'L provide that, in the event that the Agency fails at any time to Make payments to the Developer in the full amounts L required to be paid in accordance with the DDA, and such failure continues for a period of thirty (30) days after written notice from Developer, such ordinances shall L automatically become operative. The City agrees to take all actions necessary and appropriate to implement such ordinances in order to accomplish the parties' mutual objective of enabling the Agency to timely meet its financial obligations under the DDA. Until the Developer has been paid or reimbursed all amounts due from the Agency under the DDA (or, as to the payments to be made under Paragraph 4 only of Attachment 11o. 5 to the DDA, any unpaid balance is forgiven and discharged as provided therein) , the City shall not w t ATTACHMENT h'D. 9 Page 33 of 51 08/15/88 FINAL W L repeal, modify, or amend the City ordinance on this subject in a manner that jeopardizes or impairs the Developer's right to receive payments in the amounts, at the times, and subject w. to the conditions set forth in the DDA. Section 2. Annual Review of Developer's Corpliance With Agreement; Default; Remedies; Termination. A. Annual Review. In accordance with Government Code Section 65865.1, the City shall periodically review w, whether Developer is proceeding in good faith to comply with this Agreement. Reviews shall be conducted annually, with the first such review to occur within twelve (12) months after the Effective Date and the last such review to occur no later than the final expiration date referenced in clauses L (i) , (ii) , and (iii) of Section 3.E below. The City shall begin the review proceeding by L giving notice to Developer that the City intends to undertake a periodic review of the Agreement. The notice shall be delivered to Developer at least thirty (30) days in advance La of the time at which the natter will be considered by the Planning Commission. L The Planning Commission shall conduct a public hearing and shall determine on the basis of the evidence L presented at the hearing whether or not Developer has, for the period under review, complied with the terms and L conditions of the Agreement. At the conclusion of the public L ATTACHMENT N0. 9 U Page 34 of 51 08/15/88 FINAL L hearing, the Planning Cormission shall either find that L Developer has complied with the Agreement or, if it finds to the contrary, make its recorutendation in writing to the City Council regarding the appropriate action, if any, to be taken. The City Council shall consider the recommendation of the Planning Commission and, if the City Council determines on the basis of the evidence that the Developer has not complied with the terms and conditions of this Agreement, the r. City shall have such remedies for default as are set forth in Section 2.B below. A City Council determination that Developer has not complied with any of the terms or conditions of this Agreement shall be a final administrative determination of such matter, but shall not be conclusive in any subsequent judicial action and Developer does not waive any of its rights or defenses with respect thereto. L` Failure of the City to timely conduct a periodic review pursuant to this Section 2.A shall not in any manner invalidate this Agreement, nor shall any such failure in any way diminish, impede, or abrogate the rights and privileges of the Developer hereunder or the obligations of the City hereunder or the obligations of the Agency under the DDA. B. Defaults --General. Subject to extensions of L time by mutual consent in writing or as set forth in section 2.0 below, failure or delay by either party to perform any term or provision of this Agreement shall constitute a 4 ATTACHMENT NO. 9 Page 35 of 51 oa/ls/as FINAL w L default under this Agreement. In the event of an alleged +� default or breach of any terns or conditions of this Agreement, the party alleging such default or breach shall give the other party not less than thirty (30) days notice in t writing specifying the nature of the alleged default and the L manner in which said default may be satisfactorily cured. L During any such 30-day period, the party charged shall not be considered in default. If the nature of the default in question is such that it cannot reasonably be cured within such 30-day period, the commencement of the cure within such L time period and the diligent prosecution to completion of the cure shall be deemed a cure within such period. Subject to the foregoing, after notice and L expiration of the 30-day period without cure, the non- defaulting party, at its option, ray institute legal proceedings pursuant to this Agreement and/or give notice of intent to terminate the Agreement. Any action by the City to terminate this Agreement shall be in accordance with Govern- W rent Code Sections 65865, 65867, and 65868 and Section 7 of City Council Resolution No. 5390. Evidence of default may also arise in the course of a regularly scheduled periodic review of this Agreement pursuant to Government Code Section 65865.1, as described in Section 2.A above. If City determines that Developer is in , default following the completion of the normally scheduled L LATTACHMENT 140. 9 Page 36 of 51 L 08/15/88 FINAL periodic review (and assuming that such a default does in i fact exist) , the City shall give Developer not less than thirty (30) days' notice in writing specifying the nature of the alleged default and the canner in which said default clay ' be satisfactorily cured. During any such 30-day period Developer shall not be considered in default. If the nature t of the default in question is such that it cannot reasonably be cured within such 30-day period, the commencement of the r.. cure within such time period and the diligent prosecution to completion of the cure shall be deemed a cure within such period. If the default is not so cured, the City, at its option, nay institute legal proceedings pursuant to this Agreement and/or give notice of intent to terminate this Agreement, as provided in the preceding paragraph above. C. Enforced Delay; Extension of Times of Perforr.�ance. In addition to specific p provisions of this ' Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to any causes beyond the reasonable control and without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay only and shall commence to run from the comnencenent of the cause, and shall commence upon notice by the party claiming such r ATTACHMENT 140. 9 Page 37 of 51 08/15/88 FIVAL W extension, which shall be delivered within thirty (30) days after commencement of the cause. D. Legal Actions. In addition to any other rights or remedies and subject to the restrictions in v Paragraph A above, either party nay institute legal action to F cure, correct, or remedy any default, to recover damages for 1.. any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions nust be w instituted in the Superior Court of the County of orange, State of California, in an appropriate municipal court in that county, or in the Federal Court in the Central District of California. Notwithstanding the foregoing, the City and Developer agree that, subject to the provisions of Paragraphs F B and C above, the City's sole and exclusive remedy for a t default by the Developer in failing to timely close a Disposition Transfer as to a Separate Development Parcel shall be to terminate this Agreement with respect to such portions of the Site as to which the DDA is terminated in 1 �+ accordance with the provisions of the DDA; provided, that a } termination of this Agreement shall not limit or restrict the L Agency's remedies for default under the DDA. E. Applicable Law and Attorney's Fees. This Agreement shall be construed in accordance with the laws of the State of California. Should legal action be brought by either party for breach of this Agreement or to enforce any ATTACHMENT NO. 4 Page 38 of 51 08/15/88 FINAL Ir err �Yd provision, the prevailing party in such action shall be entitled to reasonable attorney's fees, court costs, and such other costs as may be fixed by the court. F. Inaction Not a Waiver of Default. Any failure or delay by a party in asserting any of its rights and W remedies as to any default shall not operate as a waiver of r any default or of any such rights or remedies, or deprive such party of its right to institute and maintain any actions i" or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. G. No Cross-Defaults. Subsequent to either a Disposition Transfer of a particular Separate Development Parcel or an assignment by Developer of its interest in such 11 Separate Development Parcel to an assignee permitted under the DDA and Section 3.A below, no default by the Developer or a permitted assignee as to any other portion of the Site shall be deemed a default by the Developer or a permitted assignee with respect to said Separate Development Parcel and no default by the Developer or a permitted assignee with respect to said Separate Development Parcel shall be deemed a default hereunder as to any other portion of the Site; provided, that nothing in this Section 2.G shall be interpreted to entitle the Developer to proceed with any ]w phase of development prior to or in violation of the phasing schedule set forth in Section I.F above. L LATTACHMENT NO. 9 Page 39 of 51 L08/15/88 FINAL I.r it Section 3. General Provisions. A. Assignment. Developer shall have the right to assign its rights and obligations under this Agreement, the Site, the Developer Parcel, or Separate Development Parcels } only to a person or persons or entity or entities to which r� Developer is permitted to assign and has assigned the DDA, the Site, the Developer Parcel, or a Separate Development Parcel or Parcels, as applicable, as provided in the DDA. As used herein, the term "Developer" includes Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended, and any permitted assignee of or successor to any of its rights, powers, and responsibilities hereunder. 4 B. No_Joint_Venture or Partnership. City and Developer mutually deny any intention to force a joint venture i or partnership, and agree that nothing contained herein or in ' any document executed in connection herewith shall be construed as making City and Developer joint venturers or partners. C. Covenants. The provisions of this Agree- rent shall constitute covenants which shall run with the land comprising the Site, and the benefits and burdens hereof shall bind and inure to all successors in interest to the parties hereto. Not by way of limitation of the foregoing, upon the termination of this Agreement with respect to any ATTACHMENT NO. 9 Page 40 of 51 08/15/88 FINAL Iw portion of the Site that is not the subject of a Disposition { Transfer to Developer, the Agency shall succeed to any and all rights of Developer hereunder. Within ten (10) days after the Effective Date of this Agreement, the City shall cause a copy of the Agreement to be recorded against the Site, in accordance with Government Code Section 65868.5. E D. Amendment of Agreement. This Agreement may be amended from time to time by r,utual consent of the City and f Developer in accordance with the provisions of Government Code Sections 65867 and 65868 and pursuant to the procedures L set forth in City Council Resolution No. 5390. a E. Term. The terns of this Agreement shall. k 60 commence upon the Effective Date and shall expire upon the earliest of the following dates: (i) As to each Separate Development Parcel within the Site which is the subject of a Disposition LTransfer to Developer, the date on which the Agency issues its Certificate of Completion t for the Developer Improvements to be L constructed on and with respect to said L parcel; or As to any portion of the Site that is not the Y subject of a Disposition Transfer to Developer (and except as provided in Section III.0 L above) , the earlier of (a) the termination of L I ATTACHMENT NO. 9 4 Page 41 of 51 08/15/88 FINAL L the DDA with respect to such portion of the Site, or (b) December 31, 2010; or ,r. (iii) Such earlier date that this Agreement may be terminated in accordance with Section 2 above. notwithstanding clause (i) above, as to each Separate Development Parcel within the Site which is the subject of a Disposition Transfer to Developer, the following specific two Sections of this Agreement shall continue in effect after the date on which the Agency issues its Certificate of Completion and shall not expire or terminate until the following dates, 6+ provided that the Developer is not in default of its obligations hereunder: ir. (iv) With respect to Section l.E ("Uses") , until December 31, 2087. (v) With respect to Section I.L ("Transient r �. Occupancy ordinances") , until the Developer has been paid or reimbursed all amounts due from the Agency under the DDA. upon the expiration or termination of this Agree- rent for any reason as to the Site or any portion thereof, the City and Developer agree to cooperate and execute any document reasonably requested by the other party to remove this Agreement of record as to the Site or applicable portion L thereof. It is understood that a termination of this Agreement shall not constitute a termination of the DDA, the ATTACHMENT NO. 9 Page 42 of 51 08/15/88 FINAL L Existing Lease, or any other agreement to which Developer and City or Developer and Agency may be parties; the termination of such other agreements being governed by the provisions of those agreements themselves. F. Cooperation in the Event of Legal Challenge. �. In the event of any legal action instituted by any third party challenging the validity or enforceability of any provision of this Agreement, or any of the City0s Approvals for the Project (including but not limited to approval of the w "change of use" of the existing mobilehome park on the Developer Parcel, relocation of the tenants therefrom, and the Relocation Assistance Plan) , or the Mobilehome Acquisition and Relocation Agreement dated September 19, 1988, by and among the Agency, . Developer, the Driftwood Beach 6a club Mobile Homeowner's Association, Inc. , and individual V nobilehome owners or tenants, or any other action by either party in performing hereunder or under the aforementioned Relocation Assistance Plan or Mobilehome Acquisition and Relocation Agreement, as the same may be amended from time to time, the parties hereby agree to cooperate in defending said action as set forth in this Section 2.F. The City shall have the right, but not the obli- gation, to defend any such action; provided, that without the Developer's prior written consent, which consent shall not be unreasonably withheld, City shall not allow any default or ATTACHMENT No. 9 Lr Page 4 3 .of 51 08/15/88 FINAL 4 �r+ L judgment to be taken against it and shall not enter into any settlement or compromise of any claim which has the effect, directly or indirectly, of prohibiting, preventing, delaying, or further conditioning or impairing the Developer's develop- ment, use, or maintenance of any portion of the Site or impairing any of the Developer's rights hereunder or under the DDA. In addition, City shall provide reasonable assistance to Developer in defending any such action, such +' assistance to- include (i) making available upon reasonable ' notice, and at no cost to Developer, City officials and a. employees who are or may be witnesses in such action, and W (ii) provision of other information within the custody or control of City that is relevant to the subject matter of the u.. action. Developer shall have the obligation to defend any such action; provided, however, that this obligation to defend shall not be effective if and to the extent that w Developer determines in its reasonable discretion that such action is meritorious or that the interests of the parties f justify a compromise or a settlement of such action. In this regard, Developer's obligation and right to defend shall include the right to hire (subject to approval by the City) u attorneys and experts necessary to defend, the right to process and settle reasonable claims, the right to enter into reasonable settlement agreements and pay amounts as required y., ATTACHMENT NO. 9 Page 44 of 51 08/15/88 FINAL F i.+ by the te=.s of such settlement agreements, and the right to pay any �udgnents assessed against Developer, Agency, or City. If Developer defends any such action, as set forth ,o, above, it shall indemnify and hold harmless Agency and City from and against any claims, losses, liabilities, or damages assessed or awarded against either of them by way of judgment, settlement, or stipulation, but not including any rM litigation expenses or attorney's fees incurred by either city or Agency in defending said action as set forth hereinabove or in the DDA. Notwithstanding any other provision of this Agreement to the contrary, all costs and expenses incurred by Developer in defending any litigation arising out of the processing, approval, and/or implementa- tion of the "change of use" of the existing mobilehome park on the Developer Parcel, the relocation of the occupants of such mobilehome park, and payments to or for. the benefit of } such persons shall be reimbursable pursuant to the DDA. In the event any such litigation involves other claims or issues, the reimbursement due to the Developer shall be a fair proration based upon the percentage of time and expense LW allocable to those claims and issues for which the Developer is entitled to reimbursement and those claims and issues for which the Developer is not entitled to reimbursement. G. Enforceability of Agreement. The City and Developer agree that unless this Agreement is amended or s ATTACHMEKT N0. 9 Page 45 of 51 08/15/88 FINAL w M. terminated pursuant to the provisions of this Agreement, this Agreement shall be enforceable by either party hereto notwithstanding any change hereafter in any applicable General Plan, Redevelopment Plan, Specific Plan, zoning 6. ordinance, subdivision ordinance or any other land use ordinance or building ordinance, resolution, or regulation, rule, or policy adopted by City. H. Findings. 1. City hereby finds and determines that execution of this Agreement is in the best interest of the public health, safety, and general welfare and the provisions of this Agreement are consistent with the City"s General 46d Plan. Except as specifically provided in the DDA, 2. City further finds, based upon all L information made available to the City prior to or concur- rently with the execution of this Agreement, that there are L no City ordinances, regulations, rules, or official policies i.a in force as of the Effective Date of this Agreement that would prohibit or prevent the full completion and occupancy of the Project described herein. I. Seyerability. If any term, provision, cove- nant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, unless the rights and obligations of ATTACHMENT No. 9 L Page 46 of 51 08/15/88 FINAL L v the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. 4pi J. Cooperation; Execution of Documents. Each party shall execute and deliver to the other all such other ,V further instruments and documents as may be necessary to y„ carry out this Agreement in order to provide and secure to the other party the full and complete enjoyment of its rights 6d and privileges hereunder. 1 K. Justifiable Reliance. City and Developer each acknowledge that, in investing its time, money, and expertise for the development of the Project, it will be reasonably and justifiably relying upon the other party's covenants contain- ed in this Agreement, and those specifically articulated in the DDA. City further acknowledges that the Project is and L shall be considered a single integrated development project, and that the Developer's development of each component of the W Project is dependent upon its right to complete and occupy f W each other component, and that the economic viability of each component of the Project is and shall be dependent upon the Developer's right to complete and occupy each other component and upon the City's full performance of its obligations under this Development Agreement. i L. Notices. Any notice or communication hereunder between City or Developer shall be in writing, and may be given either personally or by registered or certified mail, ATTACHMENT NO. 9 � Page 47 of 51 08/15/$8 FINAL Ilrr return receipt requested. If given by. registered or certi- fied mail, the same shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addresses designated below as the party to whoa notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If personally delivered, a notice shall �. be deemed to have been given when delivered to the party to whom it is addressed. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or com-runication shall be given. Such notices or cortimunications shall be given to the parties at their addresses set forth below: If to City: City Administrator City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Copy to: City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 �r ATTACHMENT NO. 9 Page 48 of 51 08/15/88 FINAL W If to Developer: L. Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982 c/o The Robert Mayer Corporation 660 Newport Center Drive, Suite 1050 Newport Beach, CA 92660 Copy to: Jeffrey M. Oderman, Esq. Rutan & Tucker 611 Anton, Suite 1400 Costa Mesa, CA 92626 �+ M. Entire Agreement; Waivers. This Agreement is executed in two duplicate originals, each of which is deemed to be an original.. This Agreement consists of fifty-one (51) pages and five (5) exhibits which constitute the entire understanding and agreement of the parties. This Agreement 6w .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, excepting only the iw DDA, the Existing Lease, the new and revised Leases to be Lentered into with respect to Separate Development Parcels in the Commercial Portion, and any other agreements referenced L4 herein. All waivers of the provisions of this. Agreement shall be in writing and signed by the appropriate authorities t L of the City and Developer, and all amendments hereto must be L ATTACHMENT NO. 9 Page 49 of 51 08/15/88 FINAL A" in writing and signed by the appropriate authorities of the � City and Developer. N. Effective Date. The Effective Date of this Agreement shall be the date that the City ordinance adopting this Agreement becomes effective, which date shall be thirty 4-1 (30) days after the City Council meeting at which such ordinance is adopted. L �.. ATTEST: CITY OF HUNTINGTON BEACH, a municipal corporation By: By: Its: City Clerk Its: Mayor L THE ROBERT L. MAYER TRUST OF 6d 1982 1 La By: Its: Trustee L Approved as to Form: LCity Attorney L L 6/112/065580-0001/009 L ATTACHMENT NO. 9 Page 50 of 51 08/15/88 FINAL L STATE OF CALIFORNIA ) } ss. k. COUNTY OF ORANGE } On this day of 1988, before me, the undersigned, a Notary Public in and for said State, person- ally appeared I, personally known to re(or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended, the entity therein named, and acknowledged to me that he executed the within instrument. WITNESS ny hand and official seal. i. Notary Public I� L STATE OF CALIFORNIA ) ss. L COUNTY OF ORANGE } f L On this day of , 1988, before me, the undersigned, a Notary Publ c in and for said State, person- ally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument as the Mayor of the CITY OF HUNTINGTON BEACH, the public entity therein named, and acknowledged to me that such entity executed the within instrument. WITNESS my hand and official seal. f Notary Public ,. ATTACHMENT NO. 9 Page 51 of 51 08/15/88 FINAL i EXHIBIT "A" O� s� {0 CITY BEACH MAINTENANCE FACILITY 9 'h4'll'�. � 141-Sh PO.b. ��I•gz �h�•o7'��'w i. ni a1'01'O4' n z°Z� s, L, e Z1"�00' . . L•4h'1'!' �•IZgc.o�' L•bl•�b' a.. � [�1o0'lg'Ztl•r�• �� DEVELOPER PARCEL o f lot � , 05• J 06 ac �+ Q BEACH BOULEVARD REMNANT PARCEL PREPARED BY: I i VU5 O� �1.\Iti.i�w�.r lf.i��• :r W10..l�hL plis 12,14)�++l oss i4 EXHIBIT "A" a JCNOnu i EXHIBIT "B" LEGAL DESC:nXV'T=ON L ALL THAT CERTAIN LAND IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THAT PORTION OF SECTION 14, TOWNSHIP 6 SOUTH RANGE 11 WEST IN THE RANCHO LOS BOLSAS, AS PER MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF A LINE THAT IS PARALLEL WITH AND 50.00 FEET WEST OF THE EAST LINE OF SAID SECTION 14 WITH THE NORTH LINE OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION; THENCE SOUTH 0' 44 ' 22" EAST 2820.36 FEET ALONG SAID PARALLEL LINE TO THE NORTH LINE OF THE LAND DESCRIBED IN BOOK 2351, PAGE 5 OF . OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTH 74' 34' 12" WEST 45.01 FEET ALONG SAID NORTH LINE TO THE NORTHEAST LINE OF THE LAND DESCRIBED AS PARCEL 2 IN BOOK 826, PAGE 379, SAID OFFICIAL RECORDS; THENCE NORTH 53' 05' 49" WEST 172.33 FEET ALONG SAID • NORTHEAST LINE TO THE WEST LINE OF THE LAND DESCRIBED IN BOOK 261, PAGE 41 OF DEEDS, RECORDS OF SAID COUNTY; THENCE NORTH 0' 44' 22' WEST 12.63 FEET ALONG SAID WEST LINE TO THE NORTHEASTERLY RIGHT OF WAY LINE OF PACIFIC COAST HIGHWAY AS DESCRIBED IN BOOK 455, PAGE 400 OF SAID OFFICIAL RECORDS; THENCE NORTH 53. 05' 49" WEST 2242.93 FEET ALONG SAID NORTHEAST LINE TO THE EAST LINE OF THE LAND DESCRIBED IN BOOK 13500, PAGE 1394 OF SAID OFFICIAL RECORDS; THENCE ALONG THE BOUNDARY OF SAID LAND THE FOLLOWING COURSES; SOUTH 3. 46' 53" EAST 5.78 FEET TO A POINT ON A NON-TANGENT i 1250.00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHWESTERLY A RADIAL TO SAID POINT BEARS NORTH 32'' 06' 11" EAST; NORTHWESTERLY 51.48 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2' 21' 34"; NORTH 60' 15' 23" WEST 71.94 FEET; NORTHERLY 45.79 FEET ALONG A 27.00 FOOT RADIUS CURVE THAT IS CONCAVE EASTERLY THROUGH A CENTRAL ANGLE OF 97. 09' 340; NORTH 36' 54' 11" EAST 141.92 FEET TO THE NORTHEAST LINE OF THE LAND DESCRIBED AS PARCEL 1 IN BOOK 8020, PAGE 73 OF SAID OFFICIAL RECORDS; THENCE NORTH 53' 05' 49" WEST 17.00 FEET ALONG SAID NORTHEAST LINE TO SOUTHEAST RIGHT OF WAY LINE OF HUNTINGTON AVENUE 60.00 FEET IN WIDTH; THENCE NORTH 36' 54' 11" EAST 147.95 FEET ALONG SAID RIGHT OF WAY LINE TO AN ANGLE POINT THEREIN; THENCE NORTH 0' 42' 59' WEST 21.81 FEET ALONG SAID RIGHT OF WAY TO THE NORTH LINE OF SAID SOUTH HALF; THENCE NORTH 89' 42' 58" EAST 1905.70 FEET TO THE POINT OF BEGINNING. (tiARRIS E. COUTCHIE, L.S. 11 EXPIRATION DATE: JUNE 30, 2988 LANDCOWTCHE i.�. LG-0222 EXHIBIT "B" (p,► H0. 331a Q �., 134.1201 eQF CaL�� r— r - r r ir r r Approved 6122188 i,op0000cn THE\VATER- -F- RONT, t� x x M COMMERCIAL MASTER SITE PLAN N H ri Pursuant to Downtown Speciriic Plan Section 4.11.02 r�- r r r r r - r---- r- r-- r - t-- r r . r -- r Approved 6122188 Page 1 of 12 OF x • •,.. s , .1 . !' • i "'r ... .-. *%*I !s s •• " S .� PI �. .�.��. A i. 40 .a 694m f Pa f *fir t, a N .• H .. _ —�'��. -- `— .t'i; ��� -� . -�}= -w����x �► —�'•n,eLw;ill.•w _r+:,■t�?9 40❑ 1115maw Aml A. ri r orris t wait 11 wSSt III arArt i? VEMV arrrt?i POST CtASa rotas 1114171&AA COOPCOerCr w?n rcL-HeTt 9 RA Aroowoa P&AtA aV/ruT IKML ?tool&Corn?A oAatloc ATONCTWOt - aw THEWATERFRONT, Approved 12�2i88 Location: Phase Descriptions: The Wale&& t is a master-planned mired-use de- veloprseat encompassing approximately 44 acres PAasa It Flyd-Cass Ilolad nae 3:Carrkrmea lfotd PhW S. "an 9.epptat flora located on the Wand side a(PA165C Coast Ifighway The SM phase w iS1 consist of a hr*dasa hotel of The third phase will consist of a conference hotel of The fifth phase swill consist o(a seta it shopping plaza 6etvreen Huntington Street and Beach Boulevard in approximately 300 Fuest mom on an approxi- amasienumof5Wtueatroomsooansrlwmimatcly ofs maximum o(75.CM sq.fL located organ approxi. the City of Huntington Beach. The projected Is mately 338 sere site and win include: 29 we site and will include: rmattly 3.91 not site and win Include: located within the Main-Pier Rodevclopmc,,t Pro} i reatattrsat 3 restaurants Restaurants ectAmsoftheQty,w4costaW Dowmto"Spe iSe 1 deiicatmenhaack shop 1 calertal"meot lounge Specialty retail shopont facilities Plan District 0-1;and Didrict d9.The two sisirid I entertainment lounge 2lahby kwrttes Outdoor plaza areas are separated by the tuturo etttentieq of Walnut I lobby lounge conference,mooring and ballroom facilities Avenue through the site, tweeting and baltrooat futilities clerical end conference support xtvka Both above-grade and suMerranean parking facili- car rental and travel assistance office car rental and travel assistance orrice tkswill provide signiftcantapportunilkit for recipro- The object of this Commercial Master Site Plan is gihhundry shop gift/sundry shop and alter related specialty re- cal parking agreements between the retail sh"nt District i9sutrounded bylluotingion Street,Pacific fitnessAw"iae room tail boutiques plaza and the other fscilities of the project. Carat Highway,Beach Boulmid,and the future awimmi%Pod-V&and outdoesptazs fitneadeserciseroonf extension of Walnut Avenue. swimming pool,spa and outdoor plaza Project Description: lti.ae 21 rams ace+llea111s Ceaeer Phase 4: All-sulta 1la d Mae Q t=ury flaw The second phase will consist of a tennis and health The toroth phase will consist of an all-suite hotel of t he sixth and final phase of the Commercial Master 1 tenter on sot sppraaimately 3.48 sae site and will approximately 250 rues[ rooms on an appeoxi- Site plan will consiat of a luxury hotel of a maximum The eo soercial portion o(TIM Waterfront cocoas- Include: matey 1.22 acre site and will include: cf 4W guest rooms located on an approximately 5.04 loam approximately 20.03 net saes andwill consist 1 reasursat acre site and will include: otsis ph""cotaistint of four hotels,o tennis and 1 ne 9 tennis courts 1 lounge 2 restaurants t Isealth center and one retail shopping plate. The 25 meter lap pod and spa car renal and travel assistance office I entertainment lounge 1 pharea Wig be developed in numerical order moving teanLt practice alley with hall machine GrnessAturdse rmtm I Io6[ry kwnae from west got"alomt PaciGecow HwM aybepn- dubftowe and health tenter of s maximum of indoor poor neeliat and ballroom facilities ring at Huntington Street and ending at Beads 25.000 W.n, that will include locker rooms, or rental and travel assistance office Boulevard Although coestrvcted in phase;it h learns pro a wlAports t:Whing store, smack gifthundry shop and other related specialty retail iareerdradWtTbe Waterfront sltsltbe was ideredu dK4&i ebar,eventetubroomwithcocktailbar boutiques a single Integrated developmoal projecL overlooking the tennis courts.and personal care fitncs:reae rtise roars Aa dacxibed rand illustrated is greater detail herein, services such as massage,facials,salon,sauna swimming pod,spa and outdoor phis andhydrdherapy. WalautAvcoue willbe constructed hwn Huntington Strew to Brach Boulevard and a linoar park called The faeilitywill be open 10 the public and a Ice may the ONdfre Promenade"slant Padfit Cost Ifigh- be charged for its use. The facility will be co*- way will proW& a pedestrian link between each strutted over subterranean parking and.except for Phase.Afttlanally,two pedestrian overpossesovet parking required tot the public's sue of the tennis Pacific Carat Highway will Provide a dissect link be- and health center,that parking will be subjed to tween the project and the beach. reciprocat parking agreements for the use of the conference hotel and other facilities of the project. r _.aw r-- r-- r r--- r— r--- r_ _ r r _ �... �. r_. �- r r r - iseApproved 6f22J8a Page 3 of 12 Addidosal F"tums: A ji n►tm Development. Derr oppodlunities: Open Space: Each hotel will contain the amenities and support The buildings shall eonfornn to the maximum enve• As illustrated in this muter site plan.the high-rise Open space areas are indicated on the illustraiion services normallycontained within hotels oftheeate- lopes of guest room count,buildinfsquarefootstes buildings are oriented perpendicular to Pacific entitled"OpenSpace"urntsinedherein. Inorderto furies described and as ■ n ..A feature of such (excluding parkingXheigha.and twlk as indicated Chart lti`hwarand widely separated tosllawabutr create asmuch open space aspocihle roost parking at Web the restaursnts,lounges and banquet opera- on the illustration ealitled "Building daniviewoproonivnitiealmmthcupperfkwnorthe the pc*ct*ill be Placed InsubterTaneangan=es , Boos will serve alcoholic beverages for oo-site rase- Bulk"eoatained herein, future residential devekyount to the north(Resi- below finish grade.As a result,the open space areas sumptions and will provide lire totertainmeot and dential Vistrict e'fs•b). Additionally the public will include those public, landscaped areas above dancing. Plaza areas bt the hotels.the tennis center and the subterranean Parkin Esragea provided that those ictsil shopping Pfau are located above the level of public areas do not exceed on elevation of one foot Pacific Coast Ilifhway to provide unobstructed vertical for every threereethotironul from the top of Archatectttrsl Desijo: rIMMI of Development: views towards theses. curb of Pacific Coast llighway. The subterranean garages urAkmcath these landscaped open space All portions of the pmjed shift carry a McdiletTo- areas shall not hecomideredusitemverage,Seethe Timing of development will be Influenced by mar- nesn architectural style and &hall conform to the ket cortdtionsbut isestimaled u follows VehicubrAccess: typical section at the Pacific Promenade shown on UCMtrxiural guidelines of the Downtown Specific the previously retetenced iSusiralian. Plan. r Ash phase of the project shall be dedgaed so Rase 1: BrN Cuss Hadd All vehicular &emss will be latra Irm Walnut that the buildings will have architectural eaerllenoe Ccntatractioo is planned go oanmence in the fall of Avenue.the connector street.Huntington Street boar Individually as well as is the eomest of a total 190andbecompletedinthegwineoft9n VYslaui and Beady Boulevard. No vehicular ocan will be Integrated devckVa cot. It is Intended flue tech taken from Pacific Coast Highway to avoid trarGe building follow a consistent program of colas`de• cal ft e��extended from truntington Street to Impacts on the highway and to avfde uninter- t!7 eastern�of tl►t Phase 1 site. P g ry M X tails.estedorfmiahesAM[hematicekments such as ruptcd pedestrian circulation along the `Pacific Htile roofs,udred windows and balconies oriented Phaaa 2:TmWs and Health Center Promenade"linear Park. to towards theses so that each building is related eo and Cornp kilon in 199L Phase 2 is planned to be car H an enhancement deach other.The"arpaeeareas cpacted concurrently with phase 3. 4-3 sha11 be designed,landscaped and conuructed with Pedestrian Circulation: the &amme dqx" of exatlence and atcWteetwal rMK3e conkr*wtelfotd t'y �7• Completion in MI Extension of Walnut Avenue The Pr*d$?'all Provide Public pedestrian links and connector street to Pacific Coast Meovay between each phase via the-Pacific Promenade" linear park fronting Pacific Coast Irighway and Sijrxaje: Phased,:All-Sake Hold Beach Boulevard and a public sidewalk on Walnut Completion in 1994. Avenue gad Huntington Street. Additionally,two A cohmive signage props wQ1 be adopted for the pedestrian overl;%sms over Fscific Coast highway Project that will torrttoi all signafe at the site. The Phase S. Rda Show@g Ptasa will be provided that will provide a direct acccu sigsuge will be designed to reflect the Integrated Comptelion 1996, between the prefect and the beach. Lastly, two nature of all the rham of the projed and to blend pedestrian paths through the project will link the aesthetically with the amhitedure of the project. Phase k Luxury Ifotel future residential development to the rrorth(Resi- CanPlelioa MAL dential p61M 0") with the pedestrian over- passcs over>'acific(;oast Highway:Sct the iflustra- tion entitled`PuNie Imp+tovement r---- r--_ r r r- �- r r Approved 622/88 Page 4 of 12 Public impregements: Areas Reserved for Public Use: Reciprocal Agreements: Public Improvements are ty indicatedon the illustra- The areas reserved for public use arc indiaatcd on tine entitled "Public improvements" contained the illustration entitled"Areas Reserved for Public Publie.4ccess: herein and include: Use"toolaincil herein. Reciprocal public access casements will be provided The Pacific Prornensda and surrounding public to allow lxsblic acne"to each phase of the prnjees via Pacirk PA naerrado. Pedestrian Overpasses: streets and sidewalks to the p"*ct shall remain the Pacific Promenade and from the beach via the open to the public at a$ times The pedestrian pedestrian overpasses over pacir+c Coast Highway. 71e`PaeiPcPromenade"Is&minimum50footwWa Two pedestrian overpasses over Pacific Coast ItIgh. OvcrpassesoverPacilkCoast Highway and the pe- landecaped liinest park nkong Pacific Coast Ilighway way will provide■direct connection between the deariaa paths between the future residential and and beach Boulevard with lush landscaping and a project&Wtbebeschtorlhe mutual bent rat ofvisi- the Overpasses shall remain open to The public sub. LandscapeMaintenaace: meandering sidewalk` This will provide a way to ton to the project,the residents of the future resi• le'ct to the operating hoursof the public beach.The physically and thematiaily,link each phase of The dentialto the north(Residential District#8b)and Tennis and s[call h Center%hall remain"a to the Reciprocal landscape maintenooce agreements will Waterfront'scomtmereiatportion,providing toinvit- Ihebew.vwta, public suhjecttorcasansble hours ofnperationan i 'he provided between each phase of the project to ing pedestrian connectioe throughout the pr*cL a fee for its use. ensure consistent,qualitycareofan landscaped aft as 71he Pacific Promenade w4I include occasional scat- including building setback areas,the Pacific Prome- Ing■rcas,bendwM fountains,etc,to create unique T#&,&and HeahA Center: Rode:and areaswithin the strset tight of wys. and differing lAcOteraaean-ittspired pedestrian eavirvnmentsooenenedbypiasasmcbesaudeourt- The knnis and health center as described ptevi- M yards,Thesidewalkwillbesnovedawartromthecurb ously is a public recreational opportunity benefit- Parking. X floe for safety and to provide a ttaore interesting ling alivisiton and reddentsofthtOty0 lunting- caperience walking withie boa f cwk It Is to a landscaped am tle- H ongnix+ed that there is an opportunity for to rated to provide a better view of the beach. Direct shareduse otparking facilities stT he Waterfrontdue HoaQtrbetwrea the beach and the Pacific Promenade is provided by the pedestrian overpasseaover Pacific to the close proxim ity and variable demands of each �,�114 wa , Misesllaneotn: phase of the project. Thcrcicre,reripmal parking y agreements will be provided between the phases to 0 other public Improvementsprovided by the project altow the most c(rKient use of the parking facilifies M indwk the tstenskA of Walnut Avenue and the provided at the project. In the event that a puking Patk to Ptahm Residential: connector street including sidewalks and land• defile"is experienced in the operation of a phase saped median strips,enhanced hardscape and sig. of the project,additional parking will be provided in Two pedestrian pathways will provide a convenient nage monumenistion at ley intersections, but a subsequent phase. link betweee tM future teaidential and the Peden- benches and turnoutsasrequiredbyorangeCounty trian overpaNM encouraging a safe transit to the Transit District, and occeleratkWdeeclerst'son beads. lanes onto Pacific Coast I1lghway. r r^ r- r- - r r- r- r r r r r- r- - Approved 6122188 Page 5 of 12 m� 10 1� �o �r 1•� 4 r Z x ° ° --- - cMICLCQxsi HIGHWA -- /NAII 1 L/NASI M w.r. om..r p"Aaw NI "All IV L}NAZI v .........a...fa ►IfA=[ rl PWI rLAa{up+R young b Mft= AIL4 w w n 1Rro Nom afrOaN KA" ren wor X .......... I� y --3 0 rirwwr or �o..� «.•.«. r�..� ....... •fir�f 7 tmdu rlfasi i r"WIL ill&" IwA1L Y mAll N Ir S?[LASS"O++L rifwm!A60 w alm COwr+a1.KL IIO++L AIL•6I411 arO++L 9000194 PWA lulwa+worn tlwfla I"aafG S+aa+t+ual COMMERCIAL MASTER SITE PLAN - - --r -.. ilolrsrnuctuac -oM11L'r...- �w�S1I£C•nly y�Vmtml r f � � o 00"s L"I or&A. Ma soot Approved 6122188 st—aro�r Wurl.slalo.uw lwM ham r"i= Page b of 12 A ) ow II mma luLX 111/ 9-011 MIT I1M•m asa ALL d 1 Von I IMSAJayatl w I NAsJ I/dls/'11161•#ISC own l0•Ii N�•�A• M 0 rs J w•• •`� trlrucn,wrs Nr1 a►+IIri7ft s NI wm,L 11 . 8411Il1 orwS OPOW M 1 rs J F-k"4% Aw1A•Ia Aw • -twoJ rlra• I.•1 lialm J y �O G� �4 ♦9 WAV •' '•. TE 8 C IF _ •ice ..� CIFJ"0A-l-ll HI(lHWA - M P"Asa I L PKAaf k ►11As!Itl 4L/•IAst IV ' L 1MAt[Y I'MAte VI x 011161 C Aft 010"L •!N•Aa AID 1lALfll cal"Ps 11wCE IIam ALL-Oust'h01/L d111rIr a FUJA ♦•s1/Is worn r�y CENT" rAA■NAa•1•uCTkM/ toa ^r J _ saw" MIAIN�^ yr-- AV7o F..� rift �„I�aI A=, r..r� sa • • a i i • ... • ,..EUASt.! .b4SL/. ltld�^ 11J67[�[ �Y .1116SLYl fNlff CLASS 110112 110•NK AND WAIIM C010FI11AC1 worn ALL-WTI wClll }IOwI•N(/LAIA 141Na•"arfl Ca"ItI ►MI.11.s1AUC1NAl BUILDING BULK r t--- - r r--- �. _ r r, r r Approved 6122188 Page 7 of 11 �t�tttttt0 VIEW OPPORWMMES FROM UPPER fLOORSOF FUTURE HESIDfryTIAL . . VIEW OPPORTUNmES FROM WALNUT AVENUE 0 VIEW OPPORTVNMES FROM el. 0 PUBLIC PLAZAS ♦+A0 �a°t r able ow l " M AGIF] AST IGHWA �w L rlusc M iL►disc IV rlrasc V` ............. w ►11Af! y1 rM/T CL"S 901% n.w■a 1�ELHL comwalcm wum #"-our"kvma FL"A NOT■l I I _ IJaY■A •��RwW L■INCTuma A gas wa r..w + j►i 11i/11 Fes^ 2tliSC! rtLlii�l rN.sf�� �tli>,�111, �1< nfeSLX1 F1151 CLASS Nona 116 6 nr0/9M111 C400011109CM Np11L ILL•fu111 N011L CMG■LA[• 1Ya1A11 N0111 C14164 ►uar.G SmK111■1 VIEW OPPORTUNITIES DENOTES PUBLIC OPFN S PACE AMEH"Y Approved 6122f88 'DENOTES OTHER PUBLIC OPEN SPACE � Page 8 of 12 �y e ;.�• DENOTES MISCELLANEOUS OPEN SPACE c� OG 0"""na PLAZAS,POOL AAus OF !� 6 x 7111E E � •w,,. i A ••r. '• ..ry,l r,, — - --- - - CiFfG :0A0 HIGHWAY— --- PrlAss I seA84 N ......... r 4 ++� tNAtR IV .wasR r PNAs1[ 1h nor caW worm ram w 1t�arll A Gow"WoN wart AIL-OuM rota em1orm"PLAZA LUXLX V i i APLcawmwC rwM tn X PACIFIC PAOMMADE WMIG111N ORAM I FT.KRTIC4 TO PACIFIC PROMENADE x f ,r. , 3 n.NOF1120WAL UK /10 6ito pIRrMpP/;t! H .,L •raANaeww rIDE7rAI1(WfrN LOW . AW*WQ WALL AfNICESSAllY nCURB � � 1yw1�w��rrrn aw w n • awasv L— —_ _ J rKl+uWM400 roc! J11 r L A �� ► I' rACWICCOASTWOkWAY *nrrarWs: glow a K t 14L POSE MA SILO OAAtW PAPM100% ' a• stiigor +r�+'� rr • 11r YANOATO"LANOSCAP040VTP, Nor CCN:IOEAco As WE COVTAA09 I TYPICAL SECTION AT PACIFIC PROMENADE OPEN SPACE . f---- r - r -- f r--- r-- - r r r r E r r e "arm rut aE'NdQs a n7MNOtns As meauWEO wALNUFAVENUE•PtMLW sroEMALks Approved 6122188 61O1M-WCOtMT n%AMWOISTWT aLANDseAPEOMEDLANaThP Page 9 of 12 r?W"A WALTN CM"O►EN TO PUNIX ITAEET•.PUWAXsItfEM MA9 a :s TO Sa r.CLt7aNON/a a"MIN C[M[ �CAMO MEOIANsTPW stcEITPAAH PATH CUN/LECTI PtRtJnE PEOE fTgll41 PATH CONHECTs PUTVNs MEIIDENnU TO OVEMPAss MESa7CMT1AL TO OVEMPASS A. �9 a s _ W cc . t Q A.. ;1• C. . , F L • _ X ACIFIC_Cfl Tj"IGHWA HMass 1 rNAs L PMast MT L"Am IV PHASE tT PHASE try PINT CLAM BOOM TPy TM Coww"•l Nam #4L-0W"MaISL apmwo"PLOA LUMUNT OTIM TIME F�f H n � [HNANC[OHA�DSCAPEa PEDESTR"OVEn►Ass FW"WCTDHAPWWA►E A 4MQM+MarA=Ll11ATIOM/OECELtRAT" sOONr►49 a/OM MEMTAT" LANES AS REOUOW D aT CAL.TwANS sIOHAOE MOIRM[NTATIOII A[IrIGPROYEHAD!r-mi 1wmsw%nm ►EOESTFSAMOMEMASS ENNANCEOMAROSCA Ea LANOSCA►tO LINEAA PARK MRTH MEAMMAW3 910NA0E 660M ME NTATIOH 64W W ALX•OPEN TO PtM C MA O&WO AWOL SLOP[1 PT.VEF=AL TO 7 PT.HOAftONTAL VAFAOUSENHANCEDOULW CAMStATSNOOFAX" A atNCHES.CONNECTI TO ALL COHMtOCIAL • "NOPERVIES.IoKt)tsTftm aKwAsstsa PUBLIC IMPROVEMENTS TO KDE 51MAN PATHS TO Pt1TtMtE MESIDENTML v - r -- r-- r - r - - r - V r_ r r-.._ r- r It r r- r- r i ♦�,� � ♦x. MOTE: T1ts COMCf/TW1l RoIRtDMT Is AIKM[D TO � ♦ t�i � ♦ A(CC1aa00A7E THE fatIR SIRFEI EMTRTAMOACERTRAWFO -0 �, �l RLUXMTIAL REC01FATtOM AAMWTT RI SECTION M•. , �, ♦ �' � CONCEPTUAL RESIDENTIAL ��`� '`;�r-��.� j �,♦ PHASING EMIDIT Rq.r a1R Ply is L I ;. ��l(_ ,. O♦, 5�� ONA MOVE: 7r A/i•MrtIAL SOWN naM It ♦ ' 1 t.� _ t�7 I Vl= 6] �♦ �` rniiieAolr��wwuirorii roa op �trnr�r ,�rta�rM�rr�W �f_/`''/}�'(� �� 'go�rl�r" � �j �'\ ` ti 1, ra ��warlxr J d� A 1 .♦ W now rRw� VRs.wtrr ��/ M post _ = rt��RRM rrRi err RRT�. - rR�Rr Owl r�rMrrwn t'• _PACIFIC C0A5 IGIITPAY� t �+ rwr uAaa rarer nor rr�awr Car.rw ram ratrw r� wr'ra+aArA � �..�..A uwce.+a ua�w APPROXIMATE rUr1 I)AREAS: FATE: ACTIML RtSIDfMTLAL NMS[OOlR1OARKE Mril RE oETER1Er+FD rT �41y.�i1Y`.l __ RESIDENTIA- A WSTER 9M IFAM AMO ""WOOL /CAM(y TO RE AM-OWO W TW KANewMG CoMbalk lW PVff% TO PARACRART E TRn OF TW 112mi{ M' m Ir AMT _Qf TOTAL DOIRMT0IY01 WWFK PL M. OTWIt uMQ RAWwHK CO"WERA.TIOIR aA* A !0 Ai. 50 s A 12 K 501E COMSTRARM MATALTFR WWVf"T THE COMCf► UM ROUMDAAIES S w"' 11 5 At 25% a 6 pc. 25% c _5 or 35 K C j AC 35% 20 At. 100% 21 At 100% �IA� �11 1tit I%4A1.11 11W51 `I`i',V 1110. TH WATERF]UNT. _�; .',`.• r r.__ r - r r r - r- ._ r- r r- r r r = r r r- r Approved 6122188 pCoESTiMArf PATH iEM&AiKAmcc[M PEDESTRUIM ATM Page 10 of 12 rftm n TURE RnrDEMTIAL MOTE: PARttMQ snow,EI[CEPT FROM FUTURE RESMkTIAL TO rEDEETRtAII OYERPASi As REQUIRED FOR TEMIIIS TO PEDESTpAM OVERPASS �;kq, A HEALTH CPMR•fS NOT y� FOR PUMM PURP07E8. y �o - - a AVENM O frl Y •5'. W ' V `1r�'fti L • • .• .wry :r ' Aff 1. •. E�'• i � � '•� J MIAER ►MAs[ /HAS!W IffASEIY ►NASE r ►MAso Pont IA W gM1R "Pam"a"a r"V" Oon+ar m mrm ALL-um 80"ft rrarrw fLll1 lY■II.T rrorri .AARMIi.rsucT1Mf td H H C? - �pE$Tf�tAM 4YEfiPASg Q�QE�IPo'U�]CEF��►�$ �����9��+�� AREAS RESERVED FOR PUBLIC PURPOSES E r r �- - !`--' - - f- - r - �-- r- - C C f C [ Approved 6122188 Page 11 of 12 COMMERCIAL MASTER S[M MAN SUMMARY S STATISTICS L OAA1KtSRL�td ovrEn TOTAL fMAG ALREACE: TOTAL CRM; ft n fIL EIC Aura TOTAL W. M 01 ac PHASE 1 n"T c"HOTEL US 1I rA,8M a I. P1i►�IE 1: ISO sc PHAN!TINGS A HCALTH CW" ova ! Is.*" at. r IAM E 344 � PHASE i COIi[l1EMCE NOTEL im Is Won at "'MI: 200 m M1AM 0: I n at "ANA Att-SUAT HOTEL as Is lf0,000 a f. P"Am 1: M aL PI1Astf METAL$HOPP= nia S Mus tL rHASE fc 1¢1 at. f IUSE i UDLWf NOTE; • In a c TOTAL MCT: Id 0'1 as TOTALS 1.411 f,sm."0 s! Ai1DCJITION: PIROX OPEN SPACE AMEM M. 451 aL us % OTHER PUKX OPEM SPACE: 334 ac 169 % DISTRICT#i MAXMW FAIL 1.5 M SCELLANCOL6 OPEN SPACE: LU aK I f % TOTAL OPEN SPACE-, 11,06 ae SS! % FAR OURDSK COVERAGE: Fes a(. is* x STREETS.QMWWATS A►AMWQ 241 IL iT• % M ' I?MAL UNJU a A WA IN UM M AAa IMMA M aP ItIM . 3 flla aUla--ROM ARG PR OlP.UA11MMM I/kI{I AN I V. r4Iii M 1 Ala A[]ITA"r4U*FT AN WT D/All-WATTO TTRTTIT 4WkWWt COaW[CTaf rMET 1'3 AMD AL""MAWWMVp UU&A►Or L&WA 00►A(r I[COMI-4."AT. i s HCIM11 FOR 010FADUM PWAM W SHOW/°OR 8001WATMAt HlalOC t /41 AIT TO OOOWTOM 8MCNIC NAAI 019MAT M� 9W144Lai/YFMI [IAPOW(A AAf Al7Cy0 a4 A CULAAA1bT LLAL 1[R/L.La wM /1MITM11� IM4 h(4C!-Lr1(4K /A.URIA WNWY An U"cll 1011a1OR*&"IwAII As LALa•FyTC/la h1Afl L EASPAd 0 A/MIA+. ' r I OF�flK IOTAL h7aCK OMYE HALT ACWIC N Mr xT 00 aWI TM MWWF yy WT�MS. DT, I M YCPMUIG-ro-MARU 42AM[MLLawa aF"I A 1(IIMi(AUGWX a AMO NIA►!11 (E YI[A 0► aa/10 Meal//.iALA11lrp rl HIA3[ /MID&UK0Wa"a01MAhall R OMN V*.CAAAE PAT)atlyl l+wC C("M"& AI A Ai LIA I I N[AIA111 XM OA I/t/SUM[Meow" {(14 IOTAL OI[41►►1 aa.(W.0(VA%MA AND Vi i.l%0"AWATa a►AAAAK SLKJ41LT tAmix ICT%c*IMx TOTAL YI Ull ARE& a ao[r tone aLAT I107 A(b�ly Ta afJli4dlf Approved 6/22/88 SITE ��=`BCE rage 12 or 12 P41ASE 1 PH43E] PfiillE S LQHfEmamom liQWUMOMMA t11i�K!t: 1 at "wm 1: I" ac PRW L. 111 is A11DCAlT10N: ALLOCATION- ALLOCAT10Fk Pt1it1C OPETi 1PA Ct Ar1AEMITT t fa as 1 t t % PUBLIC OPEN SPAM ANTrWrtl i Ss aL t t t % PUN)C OPEW SPACE AAIETRTT: i M : 11• % OTI11771 PGetJC OPE11 SPACE tst aL ".T % OTM PtMM OM SPACE: i a x n 1 % OTHER►RIKX OPE11 SPACE_ toy at X 1 % NlSCAlAK0W OPEN SPACE: tX a, A % IarlCELIAIIEOU10m SPACE: lu K % luscu1AMEOm Ong SPACE: "1 a� 12 11 TorAt aPtx rAOEs 1.58 aL 44.1 % TOTAL OPEII WAMr S IM ai. K t % Tf1TAL OPEN tPXZ. 1.14 at tt i % aUI mwK COVERAGE: I." DL 41.11 % SLKMW COM A4E: t,is .c St t % BUILDING COVERwA-. t 12 K 1 % STAEE"M DIWEWVS A PAWOWG _" aL L X STWAI-n,DWVMYS A PAI MIQ JW sti ju % STREETS,WWWA"A PARIQNTM1 Ln aL 131 % TOTAL NET lITE ARfAt !y as !M i % TOTAL MET SITE APED i n aL 1 to i % TOTAL NET SITE AREA 11f as 1004 % { UNIMANDmemmang u1LwTEL =uRyligt PHASE t 240 aL "AM t: 1]? +c PRAM is IN ?C Aug"TIOIA ALLOCATION: ALLOCATION: x PJUX OPEN SPACE A11[11 W 144 DI M t X PUBLIC OPEN SPACE AiaEMRT i 1• aL 164 % PUBLIC OP[N SPACE AWWTY: 134 ac m S % H OTHE1)/VBtJC OPEII fPA[E: •Ot an i{ % OTHER PUBLIC OPEN SPACE: t a OL 1 t 1 % OT11EE PURR O►EN WALE: 40 aL of % MK(ELLI:NtOIR OQEII SPACE: ac % I 1 MISCELLANEOUS OPEN SPACE: im aL " X MaCIM AMEOW OPEN SPACE: Ln at I" % H TOTAL OP[N NACl: 164 aL tt t X TOTAL OPEN SPA": IN AC 414 % TOTAL OPEN SPACE: 361 is sit % r f ItUBDBUC OpVFJIAAI: i iR ac 11! Mf"KD COVEIG GE A Si s 41.1 % BUILDING COVERNZ. 114 ac, 424 %] % VM EM DWVEWV3 A PAt0000f. $B1 aL 1.1 % S INEEETS,DWWM VS A PAAtOMG: Ul ac LU % STREETS,DWVEWATS A PXWUCL In W. m % TOTAL MET SITE AREJL' 1 Z EC 1006 % TOTAL NET SITE AffA 904 NL 1 Ot i % MQTii: M ACINACE FIOI0fi AR!/1fT OF ALL DIWATIA iTTdM OKUM lC CAMUSCTOR UIM UO AC[MlIATIOWNCTUTAT011 VA"am P&L*IL COW WARMI. t rCtWn FOR IMDWIMW Fwtui AM f/MI FOR 0/Ei1IMIOM W Pl v ftm rL wu,lr M90.MT(%w WlCkI It PLAA Offrwy/k DCVLLOhIC Ill SlAMIAAF)&ME MM1AD ON A CUAaAATM UOTfa IiAM LUX. 14,01 A.TM 01Wf-b'CCJIK 0wwUi WoWM AM wuuT TO I.Io+ADA+IEIEri M IALM hTTtA1L PIIM�a OL KifO w 0E7AdL 1 POWAU CF-wwwo—PFfam PLMI DiTax.M NwtaFEIPYF ITANONUNk Up TO Im OF Tm TaT#A/11.1C Wfu P"I AA4 Mf[1 iT .H Af.ly CMt Fi IMC1O.CD n" OWNK AM O.1MTUI u .E Cl V CA[1OAA.IL. A NL TEM CiUG~i AND .Al TN A*al it at*.a*10 CP I.A i F.11�j,U PI MOM f I MO ISM M W""W*AS.OTM A PUP ON M MKA M T A-D 5—C)Iti COWS RoV DWA AA61.K•ISS A P*li 113f15tpf iMA�EM I tKANg i I,1 all" f"IlA 1 1M aftm EPALP.MAtA�MC wvt.A".a 1 SOW TICIEMA"0 Is"ADO DUi TO 01clum a l i..l EXHIBIT "E" Approved Title Exceptions E The "Approved Title Exceptions" for the Site and each Separate Development Parcel thereof, as applicable, shall include: V 1. The City's interest in oil, gas, hydrocarbon substances, and minerals of every kind and character lying. more than 500 feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Site Lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from said Site or from other lands, but without, however: any L right to use either the surface of the Site or any - portion thereof within 500 feet of the surface for any purpose or purposes whatever. I�r 2. Any and all water, water rights or interests therein, no matter how acquired by the City, together with the right and power to explore, drill, redrill, remove, and store the same from the Site or to divert or otherwise utilise such water, water rights, or interests on any other property owned or leased by the City, whether such water rights shall be riparian, overlying, appropriative, percolating, littoral, prescriptive, adjudicated, statutory, or contractual; but without, however, any right to enter upon the surface of the Site in the exercise of such rights and, provided further, that the exercise of any such rights by the City shall not result in any damage or injury to any improvements constructed on the Site, including without limitation any subsidence of all or any part of the Developer Improvements to be constructed pursuant to this Agreement. 3. Exception Nos. 1 (as to then-current taxes and assessments) , 2, 5, 7, and 9 in Schedule B, Section 2, Part Ii of that certain Commitment for Title Insurance dated December 8, 1986, as supplemented on January 23, 1987, and March 27, 1987, issued by First American Title Insurance Company covering the Developer Parcel (OR-1455792) . + 4. Such other exceptions to title as hereafter may be mutually approved by the Agency and Developer. EXHIBIT "E" 416 FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT By and Between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended THIS FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (the "First Amendment") is entered into this 17th day of June , 1491 (the "Effective Date") , by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ROBERT L. MAYERS, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended (the "Developer") . The Agency and Developer hereby agree as follows: $ E I A L Z A. On or about August 15, 1988, the Agency and Developer entered into a Disposition and Development Agreement (the "DDA") . B. Paragraph 5 of Attachment No. 5 of the DDA provides, in part, for a schedule for repayment of certain indebtedness of the Agency to Developer which schedule the parties now desire to revise. ��, (� 1. Subparagraph (iii) of Paragraph 5 of Attachment No. 5 (at pages 14-15) shall be revised to read as follows: "The first installment payment due under this Paragraph 5 with respect to the hotel on Separate Development Parcel No. 1 shall be made on July 1 1991 and subsequent installment payments with respect to the hotel on Separate Development Parcel No. 1 shall be made fifteen (15) days following the end of each succeeding calendar quarter of each year. The first installment payment due under this Paragraph 5 with respect to all other Separate Development Parcels shall be made fifteen (15) days following the end of the first calendar quarter following the issuance of a final Certificate of Completion for the Developer Improvements - on said parcel(s) from which the transient occupancy taxes and/or property tax revenues referenced in subparagraph (i) are being generated, and subsequent installment payments shall be made fifteen (15) days following the end of each calendar quarter of each year. The amount of each payment shall equal the amount of revenues received (or eligible to be received) by the City and Agency under subparagraphs (i) (A) and (8) during such preceding payment period, until all such amounts have been paid. " -l- -7 fit I 2. Except as amended herein, the DDA shall remain in effect in accordance with its terms. REDEVELOPMENT AGENCY OF THE CI� OF TINGTON EACH By: a an ATTEST: �t ' Agency Secretary_ APPROVED AS TO FORM: INITIATED AND APPROVED AS TO CONTENT Agency Special Counsel Deputy City Administrator/ Redevelopment REVIEWED AND APPROVED APPROVED: AS TO FORM: City Attorney/Agency City Administrator Attorney b-aq+gf Executive Director ROBERT L. MAYER, as Trustee of the ROBERT L. MAYER TRUST OF 1982, dated June 22, 1982, as amended By: ROBERT L. MA -2- SECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT By and Among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22 , 1982, as amended t THIS SECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (the "Second Amendment") is entered into this 1st day of August, 1991 (the "Effective Date") , by and among the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") , ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer") , and WATERFRONT CONSTRUCTION NO. 1, a California limited partner- ship ("Waterfront") (collectively, the "Parties") . RECITALS; A. On or about August 15, 1988, the Agency and Mayer entered into a Disposition and Development Agreement (the "Original DDA") . I B. On or about April 10, 1989, Mayer, Waterfront, and certain affiliated entities entered into an Assignment and Assumption . Agreement pursuant to which Mayer assigned to Waterfront and Waterfront assumed (through a series of assignments to the affiliated entities) all of Mayer's right, title, and interest in and to that portion of the "Site" described in the Original DDA as "Separate Development Parcel No. 1." 8/5/91 C. On or about June 17, 1991, the Agency and Mayer entered into a First Amendment to Disposition and Development Agreement (the "First Amendment") . The Original DDA and the First Amendment are collectively referred to herein as the "Existing DDA.11 Waterfront has executed a document consent- ing to the First Amendment. D. Attachment No. 5 (the "Method of Financing") of the Existing DDA sets forth the method of financing the Parties' obligations under the Existing DDA. The Parties desire to amend the Method of Financing as set forth in this Second Amendment. E. On or about November 7, 1988, the Agency approved an Investment Letter and Agreement (the "Investment Letter") with Mayer and issued a bond designated as Agency's Taxable Tax Allocation Bond, Issue A of 1988 (the "Bond") implementing certain provisions - of . Attachment No. 5 of the Existing DDA. On or about August 1, 1989, Mayer executed the Investment Letter. F. Mayer and Waterfront have requested the approval of the Agency to the assignment of certain payment rights of Mayer and/or Waterfront under paragraphs 4 and 5 of Attach- ment No. 5 of the Existing DDA, as amended by this Second Amendment, to provide for the issuance by First California Capital Markets Group, Inc. ("First California") , of the $6, 100, 000 Certificates of Participation evidencing propor- tionate interests of the owners thereof in the above- referenced payments to be made by the Agency to First -2- California. In furtherance thereof, Mayer, Waterfront, and First California have entered into that certain Assignment Agreement dated August 1, 1991 (the "Assignment Agreement") , and Mayer, Waterfront, First California, and the Agency have entered into that certain Consent to Assignment dated as of August 1, 1991 (the "Consent to Assignment") . The payment obligations of the Agency under the provisions of Attachment No. 5 of the Existing DDA, referred to above, which had previously been evidenced by the Bond, will, pursuant to the .Assignment Agreement, be assigned by Mayer and Waterfront to First California and by First California to First Trust National Association, as Trustee for the Certificates of Participation. Consequently, the Parties agree that it is now necessary to cancel the Bond. The . parties .desire to modify in the DDA certain provisions affording to the Agency a right to credit or offset against amounts to be paid by it to the Developer amounts owed by the Developer to the Agency, subject to certain limitations. In connection with the cancellation of the Bond, Mayer and Waterfront represent and warrant to the Agency that, since the date of issuance of the Bond, no person or entity has acquired any legal or equitable interest in the Bond. The Parties agree that, henceforth, all rights and obligations of the Parties with respect to the payment obligations of the Agency relating to paragraph 4 and paragraph 5 of Attachment No. 5 of the Existing DDA shall be as set forth in the Existing DDA, as amended by this Second -3- Amendment, and in the Assignment Agreement and Consent to Assignment. A G R E E M E N T: Based on the foregoing Recitals, which the Parties hereby acknowledge to be true and correct and incorporate into this Agreement, and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by all Parties, the Parties hereby agree as follows: 1. The Parties acknowledge that the principal amount of all of the costs to be incurred by Waterfront and Developer with respect to Phase 1 which costs Agency is obligated to pay and reimburse pursuant to Paragraph 5 of Attachment No. 5 of the Existing DDA (the "Phase 1 Paragraph 5 Costs") have been incurred prior to the Effective Date of this Second Amendment, and that the total of the Phase 1 Paragraph 5 Costs equals the sum of Five Million six Hundred Sixty Thousand Three Hundred Sixty-Eight Dollars ($5,660,368.00) , plus accrued interest on said sum from and after September 30, 1990, until paid. The Parties further acknowledge that on June 21, 2991, Agency paid Waterfront the amount of Two Hundred Thirty-Three Thousand Eight Hundred Fifty-Eight and 79/100 Dollars ($233,858.79) to be applied toward accrued interest on the Phase 1 Paragraph 5 Costs. -4- 2. The second line in Section 610 of the Existing DDA shall be revised to read as follows: " . . . 313 above and Paragraph 7(c)-(e) of Attachment No. 5 (the 'Method of Financing') , but notwithstanding any other provision of this . . . ." 3. The sentence beginning on the 23rd line of the first paragraph in Paragraph 5 of Attachment No. 5 of the Existing DDA shall be revised to read as follows: "The unpaid principal on said sum shall bear interest at the rate of ten percent (10%) per annum, compounded monthly, commencing, as to Phase 1, on October 1, 1990, and, as to Phases 2-9, on the date the Developer advances, pays, or loans such costs, and continuing, as to all phases, until principal and interest are paid in full." 4. A new paragraph (f) , entitled "No Offsets as to Separate. Development Parcel No. 1 During Term of Assignment Agreement, " shall be added at the end of Paragraph 4 of Attachment No. 5 of the Existing DDA, to read in its entirety as follows: "Agency shall not suspend, postpone, modify, or alter the payment of, nor claim any credits or offsets (collectively, "Offsets") against that portion of the indebtedness set forth in this Paragraph 4 relating to Separate Development Parcel No. 1 for any reason whatsoever, including without -5- � limitation a default by Developer under the DDA or a default by Waterfront Construction No. 1 (or its successor(s)-in-interest) under the Lease covering Separate Development Parcel No. 1, until the earlier of (i) the "Repurchase Date" referenced in Paragraph 8 of that certain Assignment Agreement dated August 1, 1991 (the "Assignment Agreement") , entered into by and between Developer, Waterfront Construction No. 1, a California limited partner- ship, and First California Capital Markets Group, Inc. , and the close of the "Repurchase Escrow" referenced in Paragraph 9 of the Assignment Agreement, or (ii) the "Calculation Date" refer- enced in Paragraph 8(c) of the Assignment Agreement (if applicable) , after which such Offsets may be applied to the extent permitted under Paragraph 7 of this Attachment No. 5. " 5. A new subparagraph (vi) shall be added at the end of Paragraph 5 of Attachment No. 5 of the Existing DDA to read in its entirety as follows: "Agency shall not suspend, postpone, modify, or alter the payment of, nor claim any credits or offsets (collectively, "Offsets") against the indebtedness set forth in this Paragraph 5 for any reason whatsoever, including without limitation a default by Mayer under the DDA or a default by Waterfront under the Lease covering Separate Development Parcel No. 1, until the earlier of (i) the "Repurchase Date" referenced in Paragraph 8 of that certain Assignment Agreement dated August 1, 1991 (the "Assignment Agreement") , entered into by and between Developer, Waterfront Construction No. 1, a California limited partnership, and First California Capital Markets Croup, Inc. , and the close of the "Repurchase Escrow" referenced in Paragraph 9 of the Assignment Agreement, or (ii) the "Calculation Date" referenced in Paragraph 8(c) of the Assignment Agreement (if applicable) , after which such offsets may be applied to the extent permitted under Paragraph 7 of this Attachment No. 5." 6. Paragraph 6 of Attachment No. 5 of the Existing DDA (at pages 15-16) shall be deleted. Notwithstanding any other provision of the Existing DDA to the contrary, the Agency shall have no obligation to compensate Mayer or Waterfront for lost rental income from tenants of the Driftwood ' Mobilehome Park who vacate the premises prior to the applicable phase of development. 7. Paragraph 7 (a) of Attachment No. 5 of the Existing DDA shall be deleted. Paragraph 7(b) shall be relettered as Paragraph 7(a) . New paragraphs 7 (b) -(e) shall be added to read as follows: " (b) Except as expressly set forth in Paragraph 4 (f) and Paragraph 5(vi) of this -7- Attachment No. 5, Agency shall have the right to withhold, set off, deduct, or reduce any sums otherwise due to Developer pursuant to Paragraphs 4 and 5 with respect to any Separate Development Parcel within the Site to the extent reasonably required by Agency to compensate itself for any damages, claims, losses, or liabilities Agency sustains arising out of any breach of lease by Developer (including any successor or assign of the original developer) pertaining to such Separate Development Parcel (but not any other Separate Development Parcel) , including but not limited to a breach or default in• the payment of rent (or any amounts deemed rent) , taxes and assessments, utility charges, insurance, or costs of maintenance of the leased premises. . (c) Notwithstanding any other provision of this Agreement to the contrary, the Agency*s obligation to contribute the funds referenced in paragraph 4 as to Separate Development Parcel No. 1 (Phase 1) is conditioned and dependent upon the Developer's performance of its obligations to timely proceed with construction of the second hotel and related improvements on Separate Develop- ment Parcel No. 2 (Phase 2) , and, if the Developer commits a material default with respect to the construction of the second hotel on Separate -8- Development Parcel No. 2, the Agency shall be entitled to withhold any of said funds between the time the Agency notifies the Developer of such default, in accordance with Section 601 of the Agreement, and the time the Developer cures said default or commences and diligently proceeds to cure said default. After such default is cured, however, and assuming this Agreement has not been terminated with respect to Separate Development Parcel No. 2, the Agency's obligation to contribute the funds referenced in paragraph 4 as to Separate Development Parcel No. 1 shall be reinstated and shall survive and any amounts withheld shall be paid. After the Agency issues the Certificate of Completion for the second hotel and related improvements on Separate Development Parcel No. 2 and said hotel opens for business to the general public, Agency's right to withhold any funds referenced in paragraph 4 as to Separate Develop- ment Parcel No. 1 shall terminate. (d) Notwithstanding any other provision of this Agreement to the contrary, the Agency's obligation to contribute the funds referenced in paragraph 4 as to Separate Development Parcel No. 2 (Phase 2) is conditioned and dependent upon the Developer's performance of its obligations to timely proceed with construction of the third hotel -9- and related improvements on separate Development Parcel No. 4 (Phase 4) , and, if the Developer commits a material default with respect to the construction of the third hotel on Separate Development Parcel No. 4, the Agency shall be entitled to withhold any of said funds between the time the Agency notifies the Developer of such default, in accordance with Section 601 of the Agreement, and the time the Developer cures said default or commences and diligently proceeds to cure said default. After Such default is cured, however, and assuming this Agreement has not been terminated with respect to Separate Development Parcel No. 4, the Agency's obligation' to contribute the funds referenced in paragraph 4 as to Separate Development Parcel No. 2 shall be reinstated and shall survive and any amounts withheld shall be paid. After the Agency issues its Certificate of Completion for the third hotel and related improve- ments on Separate Development Parcel No. 4 and said hotel opens for business to the general public, Agency's right to withhold any funds referenced in paragraph 4 as to Separate Development Parcel No. 2 shall terminate. (e) Notwithstanding any other provision of this Agreement to the contrary, the Agency's obligation to contribute the funds referenced in _10- paragraph 4 as to Separate Development Parcel No. 4 (Phase 4) is conditioned and dependent upon the Developer's performance of its obligations to timely proceed with construction of the fourth hotel and related improvements on Separate Develop- ment Parcel No. 6 (Phase 6) , and, if the Developer commits a material default• with respect to the construction of the fourth hotel on Separate Development Parcel No. 6, the Agency shall be entitled to withhold any of said funds between the time the Agency notifies the Developer of such default, in accordance with Section 601 of the Agreement, and the time the Developer cures said default or commences and diligently proceeds to cure said default. After such default is cured, however, and assuming this Agreement has not been terminated with respect to Separate Development Parcel No. 6, the Agency's obligation to contribute the funds referenced in paragraph 4 as to Separate Development Parcel No. 4 shall be reinstated and shall survive and any amounts withheld shall be paid. After the Agency issues its Certificate of Completion for the fourth hotel and related improvements on Separate Development Parcel No. 6 and said hotel opens for business to the general public, Agency's right to withhold any funds I -11- referenced in paragraph 4 as to Separate Develop- ment Parcel No. 4 shall terminate." 8. Concurrently with and as a condition to the close of escrow referenced in Paragraph 4 of the Assignment Agreement (i.e. , on the "Purchase Date") , Mayer and Waterfront shall be jointly and severally responsible for payment to Agency of the sum of Thirty Thousand Dollars ($30, 000.00) to compensate Agency for all of its costs incurred in negotiating, preparing, and reviewing this Second Amendment, the Assignment Agreement, the Consent to Assign- ment, the Investment Letter, the Preliminary Limited Offering Memorandum and Limited offering Memorandum prepared with respect to First California's remarketing of the rights to be assigned to it under the Assignment Agreement, and related documents. 9. The Parties agree that, from and after the date hereof, the Bond is cancelled and is henceforth null, void, and of no effect. The Parties each agree to destroy or cancel any originally-executed instrument embodying the Bond in their possession. Any Party breaching such covenant (the "Indemnitor") further agrees to indemnify, defend, and hold harmless any other Party (the "Indemniteet') from and against any and all claims, liabilities, damages, and losses, including litigation expenses and attorney's fees, incurred by the Indemnitee arising out of such breach by the Indemnitor. -12- 10. Mayer acknowledges that Agency is exploring the possibility of issuing bonds (the "Agency Bonds") to finance certain of Agency's obligations under Attachment No. 3 (the "Scope of Development") and Attachment No. 5 (the "Method of Financing") to the Existing DDA (as amended by this Second Amendment) . Agency and Mayer are currently negotiating with respect to a possible further amendment of the DDA which would provide, inter alia,. for the issuance and sale of the Agency Bonds at or about the time of the Disposition Transfer for Separate Development Parcel No. 2 (Phase 2) , which Agency Bonds would be secured in part by a first pledge of the remaining unpaid balance of the "Phase 1 Paragraph 4 Indebtedness" and the "Phase 1 Paragraph 5 Costs" which Mayer and waterfront are assigning to First California under the Assignment Agreement. Agency makes no representation what- soever to Mayer or Waterfront regarding Agency's willingness to enter into a further amendment to the DDA, regarding the terms of any such amendment, or regarding the issuance of the Agency Bonds. Agency has expressed concern, however, 'that by entering into this Second Amendment and the Consent to Assignment, Agency could be prevented from issuing the Agency Bonds and performing certain of its obligations under the Existing DDA, as amended by this Second An-endment, if, for whatever reason, Mayer or Waterfront fail or refuse to repurchase the then-remaining unpaid balance of the "Phase 1 Paragraph 4 Indebtedness" and the "Phase 1 Paragraph 5 Costs" by the time of the Disposition Transfer for Separate -13- Development Parcel No. 2 . Accordingly, to induce Agency to enter into this Second Amendment and the Consent to Assignment, Mayer and Waterfront hereby agree that, notwithstanding any other provision of the Existing DDA (as amended by this Second Amendment) to the contrary, Agency shall not be in default under the Existing DDA, as amended by this Second Amendment, and Mayer and Waterfront hereby release Agency from the obligation to pay for and perform any of its obligations pertaining to Separate Development Parcels 2--9 which are referenced in Paragraph 3 of the Method of Financing (including without limitation its obligation with respect to the acquisition and relocation of the Driftwood Mobilehome Park pursuant to the DDA and the Mobilehome Acquisition and Relocation Agreement dated as of Septem- ber 26, 1988) if, for whatever reason, Mayer or Waterfront (or its or their permitted assignee(s) ) fail or refuse to repurchase the then-remaining balance of the t'Phase 1 Paragraph 4 Indebtedness" and the "Phase 1 Paragraph 5 Costs, " as referenced in Paragraphs 8 and 9 of the Assignment Agreement, on or before the date for the Disposition Transfer of Separate Development Parcel No. 2. 11. Mayer and Waterfront hereby stipulate and agree that, as of the Effective Date of this Second Amendment, the Agency is not in default of any of its obligations with respect to separate Development Parcel No. '1 (Phase 1) under either the Existing DDA, as amended by this Second Amendment, or the Phase 1 Lease and no circumstances exist which, with -14- the passage of time or the giving of notice, would result in such a default. Mayer and Waterfront further agree that, concurrently with and as a condition to the close of escrow referenced in Paragraph 4 of the Assignment Agreement (i.e. , on the "Purchase Date") , Mayer and Waterfront shall execute an estoppel certificate in favor of the Agency in a form reasonably satisfactory to Agency's counsel making such stipulation and agreement as of the Purchase Date. 12. Pursuant to Paragraph 4 (e) of the Assignment Agreement, Waterfront is obligated to deposit into the escrow provided for therein two (2) trust deeds encumbering Mayer's leasehold interest in the Site (excluding Phase 1) , as more particularly set forth in the Assignment Agreement. As further consideration to Agency for its approval and execution of this Second Amendment and the Consent to Assignment, Mayer covenants that, except for those mortgages and encumbrances contemplated in Paragraph 4 (e) of the Assignment Agreement, Mayer shall not further mortgage or encumber its leasehold interest in the Site (excluding Phase 1) prior to the earlier of the "Repurchase Date" referenced in Paragraph 8 of the Assignment Agreement or the "Calculation Date" referenced in Paragraph 8(c) of the Assignment Agreement (if applicable) . -15-- 13. Except as amended herein, the Existing DDA shall remain in effect in accordance with its terms. REDEVELOPMENT AGENCY OF THE CITY O UNTINGTON BEACH By. Cha rrsan ATTEST: 0� S�w jwk Agency SsonataXy Civet APPROVED AS TO F M: INITI � A ROVED AS TO CON T Agency Special Co 7,61 13eputy Ci m n s ato REVIEWED AND APPROVED APPROVED: AS TO FORM: C ty Attorney/Agenc ty Adminilstra-toir/ExecutXve &ttorney Director ROBERT L. MAYER, as Trustee of the ROBERT L. MAYER TRUST OF 1982, dated June 22, 1982, as amended By. • ROBERT L. MAY OJ [signatures continued on next page] -16- WATERFRONT CONSTRUCTION NO. It a California limited partner- ship By: The Waterfront, Inc. , a California corporation, General Partner By: •►• Rob rt L. Mayer Chairman of the oard and Chief Financial Officer By: • Stepheh K. Bone President 9/112/065580-0001/144 -17- THIRD AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT By and Among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended, and WATERFRONT CONSTRUCTION NO. 1, a California limited partnership THIS THIRD AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (the "Third Amendment") is entered into this IG T1r day of March, 1992 (the "Effective Date") , by and among the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") , ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Developer") , and WATERFRONT CONSTRUCTION NO. 1, a California limited partnership ("Waterfront") (collectively, the "Parties") . R E C I T A L S: A. On or about August 15, 1988, the Agency and Developer entered into a Disposition and Development Agree- ment (the "Original DDA") . B. On or about April 10, 1989, Developer, Waterfront, and certain affiliated entities entered into an Assignment and Assumption Agreement pursuant to which Developer assigned to waterfront and Waterfront assumed (through a series of assignments to the affiliated entities) all of Developer's right, title, and interest in and to that portion of the -1- ly 3/6/92 , _` "Site" described in the Original DDA as "Separate Development Parcel No. 1." C. On or about June 17, 1991, the Agency and Developer entered into a First Amendment to Disposition and Development Agreement (the "First Amendment") . Waterfront has executed a document consenting to the First Amendment. On or about August 1, 1991, the Agency, Developer, and Waterfront entered into a Second Amendment to Disposition and Development Agreement (the "Second Amendment") . The Original DDA, the First Amendment, and the Second Amendment are collectively referred to herein as the "Existing DDA. " D. The Parties desire to amend the Existing DDA as set forth in this Third Amendment. A G R E E M E N Ti Based on the foregoing Recitals, which the Parties here- by acknowledge to be true and correct and incorporate into this Third Amendment, and for good and valuable considera- tion, the receipt and sufficiency of which is acknowledged by all Parties, the Parties hereby agree as follows: 1. All defined terms in this Third Amendment shall have the same meaning as such terms have in the Existing DDA, except as may be expressly provided herein. 2. On or about January 31, 1992, Developer, Water- front, Robert L. Mayer, individually, and First California Capital Markets Group, Inc. ("First California") , entered -2- into a Release of Rights under Second Amendment to Disposi- tion and Development Agreement, Assignment Agreement, and Consent to Assignment (the 'Release") , a true and correct copy of which has been provided to Agency. The Parties hereto acknowledge that all rights of First California under the Existing DDA and under the Assignment Agreement and the Consent to Assignment referred to Recital F of the Second Amendment have terminated, been reassigned to Developer and/or Waterfront, as applicable, and are of no further force or effect, all as set forth in the Release. Developer and Waterfront covenant to Agency that they will timely and faithfully make the payments to First California that are required to be made in accordance with Paragraph 3 of the Release and will indemnify, defend, and hold harmless Agency with respect to any claim or cause of action against Agency in connection with such Release. 3. On or before March 31, 1992, Agency shall exercise best efforts to issue or cause the Huntington Beach Public Financing Authority (the "Authority") , a joint powers autho- rity in which Agency is a member, to issue and sell bonds (the 111992 Revenue Bonds") secured by Agency's pledge of property tax increment revenues. Insofar as the portion of the 1992 Revenue Bonds allocated to Developer and Waterfront is concerned, the 1992 Revenue Bonds shall be sized based upon Eighty Percent (80%) of the property tax increment revenues allocated and paid to Agency from Separate Develop- ment Parcel No. 1 (the Waterfront Hilton) and a thirty (30) -3- year amortization schedule. If the Agency or the Authority, as the case ray be, determines in its reasonable discretion to include in the 1992 Revenue Bonds a refunding of the Authority's outstanding 1988 Revenue Bonds (Series A) ("Refunding Issue") , Agency will use its best efforts to insure that the portion of the net proceeds from the 1992 Revenue Bonds allocated and available for payment to Developer and Waterfront hereunder shall be in the sure of Four Million Three Hundred Thousand Dollars ($4 ,300, 000) . If the Agency or the Authority, as the case may be, determines in its reasonable discretion to not refund the outstanding 1988 Revenue Bonds (Series A) at this time, Agency or the Authority, as the case may be, will use its best efforts to issue and sell the 1992 Revenue Bonds as a "stand-alone" issue sized in the manner described in the second sentence of this Paragraph 3 ("Stand Alone Issue") in which event the net proceeds of the Stand Alone Issue allocated and available for payment to Waterfront hereunder shall be the actual net proceeds not to exceed Four Million Three Hundred Thousand Dollars ($4,300,000.00) but not less than Four Million Two Hundred Twenty-Five Thousand Dollars ($4 ,225, 000.00) . Agency shall pay or cause Authority to pay to Waterfront or order the entire net proceeds allocated to Waterfront hereunder at the closing in full payment of the amounts heretofore advanced by Developer pursuant to Paragraph 5 of Attachment No. 5 of the Existing DDA (the "Phase 1 Paragraph 5 Costs") , including accrued interest thereon. The Parties acknowledge -4- that, pursuant to Paragraph I of the Second Amendment, the outstanding principal balance of the Phase 1 Paragraph 5 Costs and accrued interest as of March 31, 1992 (the projected outside closing date for the 1992 Revenue Bonds) , would be approximately Six Million Two Hundred Seventy-Five Thousand Dollars ($6,275,000.00) . In the event that for any reason the Agency or the Authority, as the case may be, fails to issue and sell the 1992 Revenue Bonds on or before April 30, 1992, or is unable to achieve net proceeds to Developer and Waterfront of $4 . 3 million in the case of the Refunding Issue or $4 .225 million in the case of the Stand Alone Issue, any of the Parties shall have the right to terminate this Third Amendment by delivery of written notice to the other Parties and none of the Parties shall have any rights or obligations with respect to the others except as to Paragraphs 1, 2, 9, and 10 hereof which shall survive such termination and remain in full force and effect. 4. Agency shall pay and reimburse to Waterfront all accrued "Property Tax Increment" and interest thereon that is owed to Waterfront under Paragraph 5 of Attachment No. 5 of the Existing DDA (based on 38-1/2% of the Property Tax Increment from Separate Development Parcel No. 1) for the period commencing on April 28, 1989 (the date of the Disposi- tion Transfer for said parcel) through the closing date of the 1992 Revenue Bonds, less any portion of such amount previously paid. For purposes of this Paragraph 4 , the term -5- "Property Tax Increment" shall have the meaning ascribed in Paragraph 4 (b) (ii) of Attachment No. 5 of the Existing DDA; provided, however, that Property Tax Increment shall be calculated based only on property taxes and possessory interest taxes actually paid pursuant to the tax bills for Separate Development Parcel No. 1 through the joint consoli- dated secured tax bill for the 1991-1992 fiscal year (first installment delinquent after December 10, 1991: $224,880.18; second installment delinquent after April 10, 1992: $224,880. 18) , including any portion of the delinquent penalties and interest paid pursuant to such tax bill that may be allocated and paid to Agency and included within Property Tax Increment, but not including any supplemental or other property tax bills applicable to Separate Development Parcel No. 1 after the date of such tax bill. The date of Agency's payment of that portion of such accrued Property Tax Increment held by Agency and owing to Waterfront on the Effective Date of this Third Amendment shall be made at the closing of the 1992 Revenue Bonds. The date of Agency's payment of that portion of such accrued Property Tax Increment attributable to tax payments made by Waterfront pursuant to the joint consolidated secured tax bill for the 1991-1992 fiscal year (first and second installments) shall be made within ten (10) days after Agency's receipt of same from the County of Orange. The portion of such Property Tax Increment attributable to tax payments made by Waterfront pursuant to the second installment of taxes for the 1991-1992 -6- fiscal year shall be prorated by dividing the number of days in the period covered by the second installment occurring on and before the closing date of the 1992 Revenue Bonds by 182 (the total number of days in the period covered by the second installment) . Thus, for example, if the 1992 Revenue Bonds were to close on March 31, 1992, Waterfront's pro rata share of the non-delinquent portion of Property Tax Increment attributable to the second installment of taxes for the 1991-1992 fiscal year would be calculated as follows: 38-1/2% x 911 x $224 ,880.18 $43,289.43 1822 l 91 days from January 1, 1992, through closing date of 1992 Revenue Bonds on March 31, 1992 2 182 days from January 1, 1992, through June 30, 1992 Property Tax Increment attributable to tax payments made by Waterfront pursuant to the joint consolidated secured tax bill for the 1991-1992 fiscal year (first and second install- ments) shall be deemed to have "accrued" prior to the closing date of the 1992 Revenue Bonds even if Waterfront does not actually pay the first or second installment of such taxes until a later date; provided, however, that in no event shall this Third Amendment be interpreted to require Agency to pay accrued Property Tax Increment to Waterfront prior to Agency's actual receipt of taxes upon which Agency's payment is based. In addition, Agency shall pay and reimburse to Waterfront all accrued "TOT" (as that term is defined in -7- Paragraph 4 (b) (i) of Attachment No. 5 of the Existing DDA) and interest thereon that is owed to Waterfront under Paragraph 5 of Attachment No. 5 of the Existing DDA from the Waterfront Hilton located on Separate Development Parcel No. 1 (based on 50% of the 5$ TOT rate in effect on the date Agency and Developer entered into the Original DDA) for the period commencing on the date said hotel opened for business (on or about July 17, 1990) through December 31, 1991, less any portion of such amount previously paid. The date of such payments shall be in accordance with the Existing DDA. TOT shall be deemed to have "accrued" on the date the hotel guest pays the same, regardless of the date payment is made by Waterfront to City; provided, however, that in no event shall this Third Amendment be interpreted to require Agency to pay accrued TOT to Waterfront prior to Waterfront's actual payment of the taxes upon which Agency's TOT payment is based. 5. Agency shall pay to Dai-Ichi Kangyo Bank ("Bank") , on Waterfront's behalf, the sum of: (i) That portion of the accrued transient occu- pancy taxes ("TOT") paid to the City of Huntington Beach or Agency with respect to the hotel on Separate Development Parcel No. 1 represented by the six percent (6%) TOT rate in effect on the date Agency and Developer entered into the Original DDA for the period commencing on the date said hotel opened for -8- business (on or about July 17, 1990) through December 31, 1992, less the sum of (A) the portion of such amount previously paid by Agency to Waterfront pursuant to Paragraph 5 of Attachment No. 5 of the Existing DDA and (B) any additional portion of such amount required to be paid by Agency to Waterfront pursuant to Paragraph 4 of this Third Amend- ment; with the understanding that TOT shall be deemed to have "accrued" on the date payment is made by such hotel guest to Waterfront, regardless of the date payment is made by Waterfront to City; provided, however, that in no event shall this Third Amendment be interpreted to require Agency to pay accrued TOT to Bank, on Waterfront's behalf, prior to City's or Agency's actual receipt of the taxes upon which Agency's TOT payment is based; and Thirty-eight and one-half percent (38-1/2%) of the accrued Property Tax Increment with respect to Separate Development Parcel No. 1 for the period commencing on April 28, 1989 (the date of the Disposition Transfer for said parcel) , through the closing date of the 2992 Revenue Bonds, with the calculation of such amount made in accordance with the first -9- paragraph of Paragraph 4 of this Third Amend- ment; (iii) Interest on the unpaid principal balance of the revenues referenced in subparagraphs (i) and (ii) immediately above from the date such revenues are received by the City and/or Agency through the date of payment to Bank, on Developer's behalf, at the rate of ten percent (10%) per annum, compounded monthly. Notwithstanding the foregoing, it is understood that in no event shall this Third Amendment be interpreted to require Agency to pay accrued TOT or Property Tax Increment (or interest thereon) to Bank prior to Waterfront's payment of the TOT taxes and/or possessory interest or other property taxes upon which Agency's payment is based. Agency's first payment under this Paragraph 5 shall be made on April 15, 1992, or fifteen (15) days after the closing date on the 1992 Revenue Bonds, whichever occurs later. Thereafter, payments shall continue to be made on the fifteenth (15th) day following the end of each calendar quar- ter through the calendar quarter ending December 31, 1992, or until all accrued amounts are paid as provided herein. Each quarterly payment shall be calculated on the amount of TOT and possessory interest or other property taxes paid by Waterfront and received by City or Agency, as applicable, through the end of the preceding calendar quarter. -10- 6. The sale of the 1992 Revenue Bonds and application of the net proceeds thereof as provided in Paragraph 3 and Agency's payments in accordance with Paragraphs 4-5 herein shall be in lieu of and shall constitute a full and final settlement, payment, and discharge of all of Agency's payment obligations, including interest thereon, under Paragraphs 4 and 5 of the Existing DDA with respect to Separate Develop- ment Parcel No. 1 (the Waterfront Hilton) , including without limitation payment of the "Phase Z Paragraph 5 Costs" refer- enced in Paragraph 1 of the Second Amendment. Without a further amendment of the Existing DDA and this Third Amendment, Agency shall have no obligation to pay to or for the benefit of Developer or Waterfront any TOT with respect to Separate Development Parcel No. 1 accruing on or after January 1, 1993. 7. Waterfront covenants that concurrently with distri- bution of the net proceeds of the 1992 Revenue Bonds in accordance with Paragraph 3 of this Third Amendment, Water- front shall cause an amount equal to such net proceeds to be paid to Bank (or otherwise in a manner acceptable to Agency's Executive Director and the City Attorney) for the following Limited purposes: (i) Settlement of litigation and claims arising out of construction of the Waterfront Hilton, including the following: Waterfront Construc- tion #1 v. J. A. Jones Construction Company, et al. and related cross-action, Orange County -11- Superior Court Case No. 657682 ; R & D Fire Protection Company, Inc. v. J. A. Jones Con- struction Company, et al . , Orange County Superior Court Case No. 674606; E.F. Brady Company,_ Inc. v. J.A. Jones Construction Company, et al. , Orange County Superior Court Case No. 647630; and, SASCO Electric v. J.A. Jones Construction Com2any, et al. , Orange County Superior Court Case No. 654338; and (ii) Deposit of the balance of the net proceeds of the 1992 Revenue Bonds with Bank for interest reserve purposes under the Credit Agreement dated as of March 31, 1989, between Waterfront and Bank, as the same may have been amended or may hereafter be amended from time to time. 8. In addition to the termination provisions set forth in Paragraph 3 hereof, Agency may terminate this Third Amend- ment upon written notice to Developer and Waterfront if, prior to the closing of the 1992 Revenue Bonds, and in no event later than April 30, 1992, the following conditions are not satisfied (or waived by Agency in its sole and absolute discretion) : (i) Waterfront delivers to the City Attorney of a fully executed modification to the afore- described Credit Agreement between Waterfront and Bank and/or related documents which pro- vide for extension of the maturity date on -12- Waterfront's construction loan to a date no earlier than December 31, 1992, and Bank's approval of Waterfront's payments provided for in Paragraph 7 herein, including the amount of the interest reserve to be provided to Bank; and (ii) Bank approves this Third Amendment and releases any right, title, and interest that it might otherwise have in any revenues pay- able by Agency with respect to Separate Development Parcel No. 1 under Paragraphs 4 and 5 of Attachment No. 5 of the Existing DDA and Paragraph 1 of the Second Amendment (excepting such right, title, and interest that Bank may have in the revenues payable in accordance with Paragraphs 3-5 of this Third Amendment) , with the fora and content of such release being subject to the reasonable approval of the City Attorney. Agency agrees to act reasonably and to cooperate with Developer and Waterfront in reviewing, approving, and execu- ting any documents required to accomplish the purposes of this Paragraph 8. In the event that Agency terminates this Third Amendment pursuant to this Paragraph 8, none of the parties shall have any rights or obligations with respect to the others except as to Paragraphs 1, 2, 9, and 10 hereof which shall survive such ternination and remain in full force -13- and effect. Subject to Agency's rights of termination, in no event shall Developer's or Waterfront's failure to satisfy either of the foregoing conditions constitute a default by Developer or Waterfront hereunder. 9. Paragraph 7 (b) of Attachment No. 5 of the Existing DDA is hereby amended by deleting the following words in the introductory clause: "Except as expressly set forth in Para- graph 4 (f) and Paragraph 5 (vi) of this Attachment No. 5, 11. Paragraph 7(c) of Attachment No. 5 of the Existing DDA is hereby deleted and Paragraphs 7 (d) and (e) are hereby re- lettered as Paragraphs 7 (c) and (d) , respectively. 10. Paragraphs 1 and 7 of the Second Amendment are superseded by this Third Amendment. Paragraphs 2, 4 , 5, 8, 10, and 12 and the second sentence of Paragraph 11 of the Second Amendment are hereby deleted in their entirety. -14- 11. Except as amended herein, the Existing DDA shall remain in effect in accordance with its terms. REDEVELOPMENT AGENCY OF THE CITY 01 7NGTON /EEEAAACH By: ATTEST: r (Agency Secretary APPROVED AS TO FORM: INITIATED AND APPROVED AS TO V�P" CONTENT a Agency Special CorupFel Deputy City Administrator REVIEWED AND APPROVED APPROVED: AS TO FORM: AAF v - - -- Ci ttor ey/Agenc ty City Administrator/ cutave A"tor ney k 3k_j V Director ROBERT L. MAYER, as Trustee of the ROBERT L. MAYER TRUST OF 1982, dated June 22, 1982, as amended 17 By: ROBERT L. MA ER [signatures continued on next page] -15- r WATERFRONT CONSTRUCTION 110. 1, a California limited partner- ship By: The Waterfront, Inc. , a California corporation, General Partner By: C/ Robert- L. aye- r Chairman of the oard and Chief Financial Officer By. . Stepherl K. Bone President 9/112/065580-0001/166 -16- FOURTH AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT By and Among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended, and WATERFRONT CONSTRUCTION NO. 1 a California limited partnership THIS FOURTH AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (the "Fourth Amendment") is entered into thisa o � day of April, 1992, by and among the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") , ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Developer") , and WATERFRONT CONSTRUCTION N0. 1, a California limited partnership ("Waterfront") (collectively, the "Parties") . RRC .II & Lfi: A. On or about August 15, 1988, the Agency and Developer entered into a Disposition and Development Agreement (the "Original DDA") . B. On or about April 10, 1989, Developer, Waterfront, and certain affiliated entities entered into an Assignment and Assumption Agreement pursuant to which Developer assigned to Waterfront and Waterfront assumed (through a series of assignments to the affiliated entities) all of Developer's right, title, and interest in and to that portion of the "Site" described in the Original DDA as "Separate Development Parcel No. 1." C. On or about June 17, 1991, the Agency and Developer entered into a First Amendment to Disposition and Development Agreement (the "First Amendment") . Waterfront has executed a document consenting to the First Amendment. On or about August 1, 1991, the Agency, Developer, and Waterfront entered into a Second Amendment to Disposition and Development Agreement (the "Second Amendment") . D. On or about March 16, 1992, the Agency, Developer, and Waterfront entered into a Third Amendment to Disposition and Development Agreement (the "Third Amendment") . E. Pursuant to Section 7(1) of the Third Amendment, Waterfront covenanted .to pay the proceeds of the 1992 Revenue Bonds (as defined in the Third Amendment) to Dai-Ichi Kangyo Bank, a portion of which is for the purpose of settlement of litigation and claims arising out of the construction of the 04-16-92 03710/2460-57 - 2 - Waterfront Hilton, thereby facilitating the restructuring and satisfaction of certain financial commitments among the Parties. F. It has now been determined by the Parties that the actual settlement of the litigation set forth in Section 7(i) of the Third Amendment is not essential for restructuring of the various financial obligations among the Parties as provided for in the Third Amendment in that Chicago Title Company will, upon the deposit into escrow account number 98-622525-4 of the sum of not less than $1,526,000 (the "Escrow Account") issue an. ALTA extended coverage policy (together with CLTA endorsements) assuring the priority of the Agency's fee simple interest in Separate Development Parcel No. 1 (the "Policy") and the priority of the lien of Dai-Ichi Kangyo Bank's loan. G. The Parties now desire to provide for the implementation of the Third Amendment as set forth below. The Parties hereby agree to amend the Third Amendment as follows: 5ECj1QN 1. The parties hereby agree that the net proceeds of the 1992 Revenue Bonds should be $4,300,000. 04-16-92 0371Q/2460-57 - 3 - ,UCILCN_2. As an alternative to the "Settlement of litigation and claims arising out of construction of the Waterfront Hilton" as provided in Section 7(1) of the Third Amendment, the Agency shall permit Waterfront to pay to Dai-Ichi Kangyo Bank a portion of the net proceeds of the 1992 Revenue Bonds for the purpose of depositing those proceeds into the Escrow Account in an amount sufficient to cause Chicago Title Company to issue the Policy. The Policy shall not list any of the litigation set forth in Section 7(1) of the Third Amendment as Exceptions and Exclusions and must assure the validity of the Agency•s fee, simple interest in Separate Development Parcel No. I to the satisfaction of the Agency Executive Director and the City Attorney in their sole and absolute discretion. SECTS 1. Developer and Waterfront hereby agree to defend, indemnify and hold Agency and City of Huntington Beach harmless with respect to any claim or cause of action arising out of the construction of the Waterfront Hilton ("Construction Litigation-) . ✓In addition, Developer and Waterfront hereby covenant to pay any final judgment with respect to the Construction Litigation in excess of the Escrow Amount within 60 days after entry of such final Judgment. In the event the final judgment in the Construction Litigation is less than the Escrow Amount, the difference shall be deposited with Dai-Ichi Kangyo Bank for disbursement in accordance with the Credit Agreement. 04-16-92 03710/2460-57 - 4 - SECTION 4 . Except as provided herein, the Original DDA, First Amendment, Second Amendment and Third Amendment shall remain in effect in accordance with their respective terms, conditions and covenants. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By. airman ATTEST: 7- Agency Seeretery APPROVED AS TO F JD" 40N ENT 1 , 4-0 Agency Special Counsel Deputy City Ad inistra r REVIEWED AND APPROVED APPROVED: AS TO FORM: 02 Ciy,Attorney/Agency Attorney City Administrator! ecutive V-1117, ¢_�� _ yZ Director ROBERT L. MAYER, as Trustee of the ROBERT L. MAYER TRUST OF 1982, dated June 22, 1982, as amended By: �- RO ERT L. MAYER [SIGNATURES CONTINUED ON PAGE 6] 04-16-92 0371Q/2460-57 - 5 - WATERFRONT CONSTRUCTION NO. 1, a California limited partnership By: The Waterfront, Inc. , a California corporation General Partner By: Robert L. May Chairman of the eoard and Chief Financial Officer • `� J' • By. Stephen K. Bone President 04-16-92 0371Q/2460-57 - 6 - GUARANTY Dated as of August 1, 1991 ROBERT L. MAYER, for himself in his individual capacity ("Mayer" ) , WATERFRONT CONSTRUCTION fl, a California limited partnership ("Waterfront" ) , and WATERFRONT PARTNERS, a California general partnership (collectively, the "Guarantors") , in order to induce THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency" ) to approve and enter into ( i) the Second Amendment to Disposition and Development Agreement dated August 1, 1991, by and among the Agency, Robert L. Mayer, as Trustee of The Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended (the "Mayer Trust") and Waterfront, and (ii) the Consent to Assignment dated August 1, 1991, entered into by and among the Agency, the Mayer Trust Waterfront, and First California Capital Markets Group, Inc. ("First California" ) , hereby uncondition- ally and irrevocably guarantee, as a continuing obligation, timely performance of the Obligations set forth herein in accordance with the following terms: 1. Definitions. Unless the context otherwise requires, all terms defined, and all rules of interpretation applicable in the Disposition and Development Agreement and the Phase 1 Lease have the same meanings and application in this Guaranty. When used in this Guaranty: "Additional Guaranty" means that certain Guaranty of even date herewith executed by the Mayer Trust. "Additional Guaranty Deeds of Trust" mean that certain Deed of Trust (Agency Deed of Trust No. 1) and that certain Deed of Trust (Agency Deed of Trust No. 2) of even date herewith executed by the Mayer Trust as trustor in favor of the Agency as beneficiary, securing the Additional Guaranty. "Assignment Agreement" means that certain Assign- ment Agreement dated as of August 1, 1991, entered into by and among the Mayer Trust, Waterfront, and First California, as the same may be amended from time to time. "Consent to Assignment" means that certain Consent to Assignment dated as of August 1, 1991, entered into by and among the Agency, the Mayer Trust, Waterfront, and First California. 2/223/065580-0001/42 8/23/91 "Disposition and Development Agreement" means that certain Disposition and Development Agreement dated August 15, 1988, entered into by and between the Agency and the Mayer Trust, as the same has heretofore been amended and may be amended from time to time in the future. "Obligations" means, at any time and from time to time during the term of this Guaranty, all of the following: ( i) Waterfront's timely payment of rent, payment of insurance premiums, payment of utility charges, and performance of its other financial obligations under the Phase 1 Lease referenced herein, as and to the extent required in the Phase 1 Lease; and (ii) The indemnification obligations of the Mayer Trust and Waterfront in favor of Agency as set forth in Paragraph 12 of the Consent to Assignment; and (iii) Reimbursement to the Agency for any and all losses, claims, damages, liabilities, or expenses, joint or several, to which Agency may become subject under any statute or at law or in equity or otherwise (including without limitation any legal or other expenses incurred by Agency in connection with investigating any claims against it and defending any actions) , insofar as such losses, claims, damages, liabilities, or expenses arise out of or are based upon, directly or indirectly, the issuance by First California or its assignees of Certi- ficates of Participation in the "Payment Rights" (as defined in the Assignment Agreement) , but excluding therefrom payments lawfully due from the Agency to First California or its assignees under the Disposition and Development Agreement. "Obligor" shall have the meaning ascribed in Paragraph 3 herein. "Phase 1 Lease" means that certain lease dated as of April 28, 1989, entered into by and between the Agency, as Lessor, and Waterfront, as Lessee, as the same may be amended from time to time. i -2- "Waterfront" means the lessee under the Phase 1 Lease, including Waterfront and any successor-in-interest to its leasehold estate under the Phase 1 Lease. 2. Guaranty. (a) The liability of the Guarantors shall commence as of August 1, 1991, and, subject to the provisions of Section 2(b) below, this Guaranty is an absolute, uncondi- tional, irrevocable and continuing guaranty for the full and punctual payment and performance of the Obligations (and not of their collectibility only) , irrespective of the validity, legality, genuineness, regularity or enforceability of the Obligations or any other circumstances that might otherwise constitute a legal or equitable discharge of a surety or guarantor, and this Guaranty is not conditioned upon any requirement that the Agency first attempt to collect any of the Obligations from Waterfront or from the Mayer Trust under the Additional Guaranty or otherwise or resort to any security for the Additional Guaranty or other means of obtaining payment of any of the Obligations; provided however that the aggregate total liability of the Guarantors pursuant to this Guaranty and of the Mayer Trust under the Additional Guaranty shall not exceed Ten Million Dollars ($10,000,000.00) . (b) The liability of the Guarantors under this Guaranty and of the Mayer Trust under the Additional Guaranty shall be terminated and this Guaranty shall be of no further force and effect upon the earlier of ( i ) the "Repurchase Date" referenced in Paragraph 8(a) of the Assignment Agreement and the close of the "Repurchase Escrow" referenced in Paragraph 9 of the Assignment Agreement, or (ii) the "Calculation Date" referenced in Paragraph 8(c) of the Assignment Agreement (if applicable) . Notwithstanding the foregoing termination of the liability of the Guarantors hereunder and of the Mayer Trust under the Additional Guaranty, the agreements and covenants of Guarantors under Sections 4 and 9 hereof shall survive such termination. 3. Agency's Freedom to Deal with the Mayer Trust_ aterfront and Other Persons. The Agency shall have complete discretion, without giving notice to or obtaining the consent of any of the Guarantors or of the Mayer Trust under the Additional Guaranty, to deal with the Mayer Trust, Waterfront and with each other person that now is or after the date hereof becomes liable in any manner for any of the Obligations (hereinafter, collectively, the "Obligor") , in such manner as the Agency shall decide and, accordingly, the Guarantors grant to the Agency full authority, in its sole -3- discretion, whether before or after termination of this Guaranty, to do any or all of the following, without limiting the generality of the foregoing: extend credit, make loans and afford other financial accommodation to the Obligor at such times, in such amounts and on such terms as the Agency may approve; vary the terms of, alter, compromise, accelerate, or grant extensions or renewals of the time or manner of payment of any present or future Obligations of the Obligor to the Agency; assign or transfer this Guaranty or any other instrument evidencing or securing the Obligations in whole or in part; vary, exchange, release or discharge, wholly or partially, the Obligor or any other guarantor of the Obligations; compromise or make any settlement or other arrangement with the Obligor or any other guarantor; and, if the Obligations are now or hereafter secured, exchanged, substituted, or released in part or in full the security given for the payment and performance of the Obligations. This Guaranty shall be in addition to any other guaranty or security for the Obligations, including without limitation, the Additional Guaranty and the Additional Guaranty Deeds of Trust, and shall not be prejudiced or rendered unenforceable by the invalidity of any such other guaranty or security. 4. No_Duty of AgCncy to Advise. The Guarantors assume responsibility for being and keeping informed of the finan- cial condition of the Obligor and of all other circumstances bearing upon the risk of nonpayment of the Obligations and agree that the Agency shall have no duty to advise the Guarantors of information regarding any condition or circum- stance or any change in any condition or circumstance. The Guarantors acknowledge that the Agency has not made any representation to the Guarantors concerning the financial condition of the Obligor. 5. Unenforceability of Obligations_ Against_ Obligor. If for any reason the Obligor has no legal existence or is under no legal obligation to discharge any of the Obligations undertaken or purported to be undertaken by it or on its behalf, or if any of the moneys included in the Obligations cannot be recovered in full from the Obligor by operation of law or for any other reason, this Guaranty shall nevertheless be binding on the Guarantors to the same extent as if the Guarantors at all times prior to demand by the Agency for payment hereunder had been, and at the time of such demand were, the principal debtor on all such Obligations. 6. Demands For Payment. Demands by the Agency for payment hereunder may be made on any number of occasions. Each demand shall be in writing (with reasonable detail) and shall be effective as to each Guarantor when handed to such -4- Guarantor, or if given by mail, after it is placed in the mail addressed to each of the Guarantors ' addresses on the signature page hereof. A dated statement signed by an officer of the Agency of the amount of the Obligations at the time owing to the Agency by the Obligor shall be prima facie evidence thereof (absent manifest error) as between the Guarantors and the Agency in any legal proceedings against the Guarantors in connection with this Guaranty. 7. Guarantors ' Agreement to Pay. If claim is ever made upon the Agency for repayment of any amount or amounts received by the Agency in payment of any of the Obligations and the Agency repays all or part of such amount, then, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing the Obligations, the Guarantors shall be and shall remain liable to the Agency for the amount so repaid to the same extent as if such amount had never originally been received by the Agency. Interest shall accrue on all sums not paid by the Guarantors to the Agency after demand at a rate of ten percent (10%) per annum. 8. Changes Affecting Obligor or Guarantors. This Guaranty shall remain in full force and effect, notwith- standing any change in the name, membership, constitution, or place of formation of the Obligor or any change of the Obligor into another form of business entity. 9. Waivers by -Guarantors. The Guarantors waive any right to require the Agency to proceed against the Obligor or any other person at any time or to proceed against or exhaust any security held by the Agency or granted for any of the Obligations or to pursue any other remedy whatsoever at any time, including without limitation, the Additional Guaranty and the Additional Guaranty Deeds of Trust. The Guarantors further waive, to the fullest extent permitted by law, all defenses that at any time may be available to them or the Obligor by virtue of any statute of limitations. The Guarantors waive any right to raise as a defense to the enforcement of this Guaranty any defense arising by reason of any disability or other defense of the Obligor or by reason of the cessation from any cause whatsoever of the liabilities of the Obligor and further waive the right to interpose any counterclaim or setoff of any nature. The Guarantors also waive all rights of subrogation against the Obligor until all of the Obligations have been satisfied in full. The Guarantors further waive notice of default by the Obligor , notice of acceptance of this Guaranty, presentments, notices of protest and notices of every kind and nature including those of any action or nonaction on the part of the Obligor or the Agency. The Guarantors waive any defense based upon -5- an election of remedies by the Agency including, without limitation, any election to proceed by judicial or nonjudicial foreclosure or by deed in lieu thereof, or any election of remedies that destroys or otherwise impairs the subrogation rights of the Guarantors or the rights of the Guarantors to proceed against the Obligor for reimbursement, or both (including without limitation California Code of Civil Procedure Sections 580a, 580b, 580d, and 726) . The Guarantors further waive all rights and benefits which might otherwise be available to the Guarantors under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433. 10 . Oral Modificatisn, etc. _Prohibited. This Guaranty constitutes the final understanding of the Agency and the Guarantors. No provision of this Guaranty may be modified, waived, discharged, or terminated except by a written agreement signed by the Agency and the Guarantors expressly referring to the relevant provision of this Guaranty. No such waiver shall extend to or affect any Obligations not expressly waived unless specifically so stated but instead shall be effective only in the specific instance and for the specific purpose for which given. No course of dealing or delay or omission on the part of the Agency in exercising any right shall operate as a waiver. 11. Restriction on Other Guarantees. During the term of this Guaranty, the Guarantors covenant and agree that they shall not execute any other guarantees in favor of any third party or parties, excluding only guarantees with maximum face amounts (excluding interest, penalties, and collection costs) as follows: (i) a guaranty not to exceed the sum of Two Hundred Fifty-Seven Thousand Dollars ($257 ,000.00) in favor of J.A. Jones Construction Company or related entity (the contractor on the Phase 1 hotel) , (ii) a guaranty not to exceed the sum of One Million Five Hundred Thousand Dollars ($1,500,000.00) in favor of Dai Ichi Kangyo Bank Ltd. or related entity (the construction lender on the Phase 1 hotel) , and (iii) a guaranty not to exceed the sum of Two Million One Hundred Fifty Thousand Dollars ($2,150,000.00) in favor of Western Bank or other leasehold mortgagee loaning funds for pre-development and development costs authorized under the Disposition and Development Agreement. 12. Representations and - Warranties. Each Guarantor hereby represents and warrants to the Agency as follows: (a) Due Capacity. The execution, delivery, and performance of this Guaranty are within the Guarantor 's legal capacity, do not contravene any law or contractual restric- -6- tion binding on or affecting the Guarantor, and do not result in or require the creation of any lien upon or with respect to the Guarantor 's properties. (b) Governmental APRrovals. No authorization, approval, or other action by, and no notice to or filing with any governmental authority or regulatory body is required for the due execution, delivery, and performance by the Guarantor of this Guaranty, other than as provided herein. (c) Binding Effect. This Guaranty is the legal, valid, and binding obligation of the Guarantor enforceable against the Guarantor in accordance with the terms hereof. (d) Litigation. There is no pending or threatened action or proceeding affecting the Guarantor before any court, governmental agency, or arbitrator that may materially adversely affect the financial condition of the Guarantor or the ability of the Guarantor to perform his obligations under this Guaranty, other than as previously disclosed in writing to the Agency. The foregoing representations and warranties are material, shall survive the Agency's acceptance of this Guaranty and shall continue so long as this Guaranty remains in force. The Agency shall be entitled to rely on such representations and warranties, whenever the Agency sees fit to grant time, credit, or accommodations to the Obligor. 13. Attorneys ' Fees and Legal Proceedings. If any Guarantor fails to perform any duties hereunder, breaches any warranties, or is otherwise liable to the Agency (herein, collectively, the "defaults") , such Guarantor promises to pay all costs of collection and reasonable attorneys' fees actually incurred by the Agency on account of such defaults, whether or not suit is filed, including all attorneys' fees and costs incurred by the Agency in any bankruptcy or judicial or nonjudicial foreclosure proceeding. This Guaranty is governed by, and shall be construed in accordance with, the laws of the State of California. Each Guarantor consents to the personal jurisdiction of any state or federal court located in Orange County, California. 14. Successors and Assigns. This Guaranty shall be binding on the Guarantors and their personal representatives. -7- IN WITNESS WHEREOF, each Guarantor has executed and delivered this Guaranty as of the date first above written. DATED: August 1, 1991 L. ROBERT . MAYE "Mayer" WATERFRONT PARTNERS, a California general partnership By: v - ,✓ Ro `rt L. Mayer, W7rrustee of the Robert L. Mayer Ti fist of 1982, dated June 22, 1982, as amended, General Partner By: Stephen . Bone, as Trustee of the Bone Trust of November 30, 1988, General Partner By: - Patricia I . Bone, as Trustee of the Bone Trust of November 30, 1988, General Partner WATERFRONT CONSTRUCTION #1, a California limited partnership By: THE WATERFRONT, INC. , a California corporation, General Partner B y• &&L22&U,- Robert L. Mayek Chairman of the Board and Chief Financial Officer (Signatures continued on following page) -8- By• Stephen Bone President "Waterfront" Address for all Guarantors: c/o The Robert L. Mayer Corporation 660 Newport Center Drive, Suite 1050 Newport Beach, California 92660 Telephone: (714) 759-8091 Telecopier : (714) 720-1017 E 1 -9- CONSENT TO ASSIGNMENT This Consent is entered into as of the 1st day of August, 1991, by and among The Redevelopment Agency of the City of Huntington Beach, a public agency (the "Agency") , Waterfront Construction No. 1, a California limited partnership ("Waterfront") , Robert L. Mayer, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer") , and First California Capital Markets Group, Inc. , a California corporation ("First California") , with reference to the following: R E C I T A L S A. Mayer and the Redevelopment Agency of the City of Huntington Beach, California (the "Agency") are parties to that certain ❑isposition and Development Agreement dated August 15, 1988 (the "DDA") , providing for the development of certain real property (the "Site") located within the City of Huntington Beach, California. B. Mayer and the City of Huntington Beach, California (the "City") are parties to that certain Development Agreement dated August 15, 1988 (the "Development Agreement") concerning the development of the Site. C. Mayer and the City were parties to that certain Second Amended and Restated Lease dated August 15, ' 1988 (the "Site Lease") setting forth the terms of Mayer's lease of a portion of the Site from the City. D. Pursuant to the Assignment and Assumption Agreement executed on April. 10, 1989 between Mayer, Waterfront, Waterfront Partners, a California General Partnership, and a tenancy in common comprised of Mayer, Stephen Bone and Patricia Bone (the "Tenancy in Common") , certain of Mayer's rights under the DDA, under the Development Agreement, under the Second Amended Lease and in and to certain permits and other development rights, were assigned by Mayer to Waterfront Partners, by Waterfront Partners to the Tenancy in Common, and finally by the Tenancy in Common to Waterfront. Under the terms of the Assignment and Assumption Agreement, Mayer remains responsible to the Agency for performance of the obligations assumed by Waterfront thereunder. The rights assigned to Waterfront pursuant to the Assignment and Assumption Agreement are limited to that portion of the Site referred to as Separate Development Parcel No. 1, and which shall be referred to in this Agreement as "Phase I," and include an assignment of Mayer's right to receive payment of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs, as those terms are described below. A2083.508 1 E. Mayer and the Agency are parties to that certain Third Amended and Restated Lease dated April 28, 1989 (the "Third Amended Lease") setting forth the terms of Mayer's lease of a portion of the Site from the Agency. F. Waterfront and the Agency are parties to that certain Lease dated as of April 28, 1989 (the "Phase 1 Lease") , providing for Waterfront's lease of Phase 1. Waterfront has completed the construction of a 293-room hotel on Phase 1, and the hotel is currently operated by a majority-owned entity of Robert L. Mayer. The Third Amended Lease and the Phase 1 Lease superseded the Second Amended Lease. G. Paragraph 5 of Attachment No. 5 to the DDA (the Method of Financing) provides for the Agency's reimbursement to Mayer of certain costs totalling $5,660,368 as of September 30, 1990, plus interest thereon at a rate that has been set at ten percent (10%) per annum, compounded monthly (the "Phase 1 Paragraph 5 Costs") , which costs were all of the costs advanced and incurred by Mayer and Waterfront in connection with the development of Phase 1. On June 21, 1991, the Agency made a payment to Waterfront in the amount of Two Hundred Thirty--Three Thousand Eight Hundred Fifty Eight and 79/100 Dollars ($233,858 .79) (the "First Payment") to be applied towards accrued interest on the Phase 1 Paragraph 5 Costs. Accordingly, all calculations made under this Agreement of the repayment of the Phase 1 Paragraph 5 costs shall take into account the amount of the First Payment. H. Paragraph 4 of Attachment No. 5 to the DDA provides for the Agency's payment to Mayer, beginning upon commencement of construction of Phase 2 of the Site, of certain transient occupancy taxes paid to the City or Agency and certain incremental property taxes paid and allocated to the Agency in connection with Phase 1 (the "Phase 1 Paragraph 4 Indebtedness") . As used herein, the terms "Phase 1 Paragraph 5 Costs" and "Phase 1 Paragraph 4 Indebtedness" shall not include any costs that the Agency pays or reimburses to Developer pursuant to Paragraph 4 and Paragraph 5, respectively, of the Method of Financing, as the same now exists or may be amended hereafter, with respect to any other parcel within the Site other than Phase 1. The Phase 1 Paragraph 4 Indebtedness which the Agency may become obligated to pay pursuant to the DDA, and the Phase 1 Paragraph 5 Costs, shall at times be referred to herein as the "Payment Rights. " I. Mayer and the Agency are parties to that certain First Amendment to Disposition and Development Agreement dated June 17, 1991, amending the commencement date of the Agency's payment of the Phase 1 Paragraph 5 Costs. A2083.508 2 I 1 J. Waterfront has represented to the Agency that the proceeds received by Waterfront from First California under the Assignment will be expended by Waterfront solely for purposes related to the development of the Site. X. Waterfront, Bayer and First California wish to enter into an assignment agreement (the "Assignment Agreement") pursuant to which Mayer and Waterfront will make an absolute assignment ("the Assignment") to First California of the right to receive all payments from the Agency of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs, subject to certain repurchase rights and reassignment provisions and obligations that are set forth in the Assignment Agreement, and the Agency wishes to consent to the Assignment under the terms set forth herein. CONSENT ITOW, THEREFORE, in consideration of the mutual covenants and acknowledgements set forth herein and in order to cooperate and assist Mayer and Waterfront in meeting their private financing cbligations with respect to the development of the Site as provided in the DDA, Mayer, the Agency, First California and Waterfront agree as follows: 1. The Agency consents to the Assignment and hereafter agrees to make, when due, all payments of the Payment Rights under the Assignment to First California, or, at First California's election, to the trust (the "Trust") established pursuant to the Trust Agreement described below, as provided under the DDA. The Agency acknowledges the terms of Paragraph 3 of this consent and agrees that it shall neither suspend, postpone, modify or alter the payment of, nor claim any credits or offsets against, the Phase 1 Paragraph 4 Indebtedness or the Phase 1 paragraph 5 Costs for any reason whatsoever, including without limitation a default by Mayer under the DDA or a default by Waterfront under the Phase 1 Lease, until such time, if any, as either Waterfront reacquires the right to receive the then- remaining balance of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs, or the balance of such rights are otherwise reassigned to Waterfront, as provided in the Assignment Agreement. 2. The Agency, Waterfront and Mayer acknowledge that the total Phase 1 Paragraph 5 Costs payable in connection with the development of Phase 1, including accrued interest, is $5,660,368 and that such sum shall accrue interest after September 30, 1990 at the rate of Ten Percent (10%) per annum, compounded monthly, until paid in full and that on June 21, 1991, the Agency made a payment to Waterfront in the amount of Two Hundred Thirty Three Thousand Eight Hundred Fifty Eight and 79/100 Dollars A2083 .508 3 ($233,858.79) to be applied towards accrued interest on the Phase I Paragraph 5 Costs. No other payments of the Phase 1 Paragraph 5 Costs have been made prior to the date of this Consent. 3. Mayer and Waterfront hereby waive any and all offset rights, including without limitation all offset rights set forth in the DDA and the Phase 1 Lease, that could be claimed by Mayer or Waterfront in the event of a default by the Agency in the Agency's obligation to pay the Phase 1 Paragraph 4 Indebtedness or the Phase 1 Paragraph 5 Costs when due. Such waiver shall be effective until such time, if any, as either Waterfront reacquires the right to receive the then-remaining balance of the Phase 1 Paragraph 4 Indebtedness and the Phase l Paragraph 5 Costs, or the balance of such rights are otherwise reassigned to Waterfront, as provided in the Assignment Agreement. 4 . Mayer, Waterfront and the Agency hereby acknowledge and agree that (a) all conditions to the Agency's obligation to commence the payment of the Phase 1 Paragraph 5 Costs have been satisfied, (b) the repayment obligations set forth in Paragraph 4 and 5 of Attachment No. 5 to the DDA remain in full force and effect, and except as modified pursuant to the First Amendment to Disposition and Development Agreement dated as of June 17, 1991, and the Second Amendment to Disposition and Development Agreement dated as of August 1, 1991, the DDA has not been modified or amended, and (c) the Agency, Waterfront and Mayer shall not enter Into any further amendment or modification of the DDA that would alter, modify, subordinate, suspend or postpone in any way the payment by the Agency of the Phase 1 Paragraph 4 Indebtedness or Phase 1 Paragraph 5 Costs when due without First California's prior written consent, which consent may be granted or withheld by First California in First California's sole and absolute discretion, provided that this Paragraph (4) (c) shall not limit the right of the Agency, Waterfront and Mayer to amend the DDA without First California's consent upon either the reassignment of the entire outstanding balance of the Phase 1 Paragraph 5 Costs and the Phase 1 Paragraph 4 Indebtedness to Waterfront or Mayer, or upon the Agency's payment in full, including accrued interest through the date of such payment, of the Phase 1 Paragraph 5 Costs. 5. Mayer, the Agency and Waterfront hereby agree and acknowledge that the Assignment shall consist solely of the right to receive payment of the Phase 1 Paragraph 4 Indebtedness which may become payable by the Agency under the DDA and the Phase 1 Paragraph 5 Costs, plus interest, and the right to receive the information described in Paragraph 7 below. First California has not assumed, nor is it intended that First California assume, any payment or performance obligations of Mayer or Waterfront whatsoever, including without limitation any obligations of Mayer under the DDA or of Waterfront under the Phase 1 Lease. A2083.508 4 6. Mayer, the Agency and Waterfront hereby agree and acknowledge that First California shall have the obligation, upon the issuance of the Certificates hereinafter described, to assign the Payment Rights to First Trust, N.A. , or such other, comparable institution trustee or such other assignee meeting the requirements set forth in Paragraph 8, 9, and 15 of the Assignment, as trustee for the trust (the "Trust") that shall issue $6.1 Million in Certificates of Participation evidencing proportionate interests in the Payment Rights. Such permitted assignment may include, without limitation an assignment under which First California would reserve the right to act on behalf of First California's assignee with respect to the approval of any amendments to the DDA that are proposed pursuant to Paragraph 4 hereof. In the event of such an assignment, the Trustee, on behalf of the holders of the Certificates, shall have all of the rights of First California as stated in this Consent, and the Agency shall thereafter make all payments of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs, plus interest thereon, directly to the Trustee at the address provided to the Agency by the Trustee. If for any reason First California does not make such an assignment to the Trust prior to October 1, 1991, but only in such event, this Consent shall expire and no longer be of any force or effect. 7 . The Agency hereby agrees to provide to First California, with copies to Waterfront, all accountings, statements and certifications required of the Agency under the DDA with respect to the receipt of transient occupancy taxes and property tax increments in connection with Phase 1, and agrees further that First California shall have all audit rights granted to Mayer under the DDA with respect to the payment of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs. Waterfront agrees to provide Agency with all accountings, statements and certificates relating to or forming the basis of Waterfront's collection of transient occupancy taxes on Phase 1. B. The Assignment is intended to be absolute and not an assignment for security. 9. If any action or proceeding should be brought to enforce the terms of this Consent, the prevailing party in such action or proceeding shall be entitled to recover its costs and fees, including attorneys' fees, from the opposing party in such proceeding. 10. This Consent shall be enforced under and construed in accordance with the laws of the State of California. 11. Amendments to this Consent shall be effective only if in a writing signed by the parties hereto. A2083.508 5 12. First California, Waterfront and Mayer, jointly and severally, agree to indemnify, defend and hold harmless the Agency and the City of Huntington Beach (the "City") and any nember, officer, official, employee or agent of the Agency and the City against any and all losses, claims, damages, liabilities or expenses to which any such indemnified party may becone subject under any statue or at law or in equity or otherwise, and will reimburse any such indemnified party for any legal or other expenses incurred by it in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon (1) an allegation or determination of noncompliance by any party with federal securities laws or the securities laws of any state in connection with the issuance, sale or delivery of the $6,100,000 Certificates of Participation evidencing proportionate interests of the owners thereof in certain payments to be made by the Redevelopment Agency of the City of Huntington Beach (the "Certificates") , or (2) any allegation or determination that any amount paid in respect of the Certificates or the Payment Rights are not excludable from gross income of any holder or any recipient thereof under the laws of the United States or of any state or that the Certificates should have been registered under the Securities Act of 1933 or that the Trust Agreement by and between First California and First Trust, N.A. , as Trustee (the "Trust Agreement") should have been qualified under the Trust Indenture Act of 1939, or (3) any allegation or determination that there occurred any untrue statement or alleged untrue statement of a material fact in the Preliminary Limited Offering Memorandum or Limited offering Memorandum prepared in connection with the sale of the Certificates or the omission or alleged omission in the Preliminary Limited Offering Memorandum or Limited offering temorandum of a material fact necessary to make not misleading statements in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum (except for information set forth in Appendix C or the financial statements of the Agency as set forth as Appendix D thereof) relating to the Certificates, or in any other material or information offered or made available to any purchaser of the Certificates. The Agency and the City make no representation that any information supplied by them to any other party to the transactions described herein is relevant for disclosure or use for any purpose. 13 . The parties acknowledge that neither the City nor the Agency has made any representation regarding the exclusion from gross income for federal or state income taxation purposes of any amounts received in respect of the Payment Rights or the Certificates. The parties acknowledge that neither the City nor the Agency has made any representation regarding compliance with federal or state securities laws in connection with the offering of the Certificates or otherwise in connection with the transactions described in the Trust Agreement and DDA. The A2083 .508 6 parties agree that any future distributions or resales of the certificates by First California or by any entity under First California's control shall be made only in compliance with the federal securities laws and the securities laws of any applicable state. 14. Waterfront hereby represents to the Agency that the proceeds received by Waterfront from First California under the Assignment shall be expended by Waterfront solely for purposes related to the development of the Site, including without limitation the funding of an approximately $3.5 million interest reserve required by Dai-Ichi Kangyo Bank, the lender for Phase 1. IN WITNESS WHEREOF, the undersigned have entered into this Consent as of the date first above written. ROBERT L. MAYER, Trustee of THE ROBERT MAYER TRUST OF 1982, Dated June 22, 1982, as amended By: Robert 'Mayer FIRST CALIFORNIA CAPITAL MARKETS GROUP, INC. , a California corporation By: Arch V ZeXick, Controller WATERFRONT CONSTRUCTION NO. 1, a California limited partnership By: The Waterfront Inc. , a California corporation, general partner By: ' o ert ayer rman B (CW.6. Steph n K. Bone, Pres t REDEVELOPMENT AGENCY OF THE CITY HUNTINGTON BEACH By: Prman Cha ATTEST: A2083.508 7 ATTEST: Agen y APPROVED AS TO F APP E O OtITENT Age h cy spec uns 61 Deputy City/ ty A m n strato REVIEWED AUD APPROVED APPROVED: AS TO FOPM: c ty ttorney/Agency /: Acln n s ratorfExecut ve Attorney V`- Director A2083 .508 8 ESTOPPEL CERTIFICATE (Waterfront Phase 1 Lease) This Estoppel Certificate is made as of this 1st day of August, 1991, by ROBERT L. MAYER, as Trustee of the Robert L. Mayer .Trust of 1982, dated June 22, 1982, as amended ("Mayer") , and WATERFRONT CONSTRUCTION NO. 1, a California limited partnership ("Waterfront") , in favor of the REDEVE- LOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency ("Agency") . R E C I T A L S: A. On or about August 15, 1988, the Agency and Mayer entered into a Disposition and Development Agreement (the "Original DDA") . On or about June 17, 1991, the Agency and Mayer entered into a First Amendment to Disposition and Development Agreement (the "First Amendment") , and on or about August 1, 1991, the Agency, Mayer, and Waterfront entered into a Second Amendment to Disposition and Develop- ment Agreement (the "Second Amendment") . The Original DDA, the First Amendment, and the Second Amendment are collec- tively referred to herein as the "DDA. " B. On or about April 10, 1989, Mayer, Waterfront, and certain affiliated entities entered into an Assignment and Assumption Agreement pursuant to which Mayer assigned to Waterfront and Waterfront assumed (through a series of assignments to the affiliated entities) all of Mayer's right, title, and interest in and to that portion of the "Site" described in the DDA as "Separate Development Parcel No. 1" or "Phase 1" (hereinafter "Phase 111) . C. On or about April 28, 1989, the Agency and Water- front entered into a lease (the "Phase 1 Lease") pursuant to which the Agency leased Phase 1 to Waterfront. D. On or about August 1, 19910 Mayer, Waterfront, and First California Capital Markets Group, Inc. ("First Califor- nia") , entered into an Assignment Agreement pursuant to which Mayer and Waterfront agreed to assign to First California certain payirent rights (the "Payment Rights") owing by Agency under Paragraphs 4 and 5 of Attachment No. 5 (the "Method of Financing") to the DDA, all as more particularly set forth therein. On or about August 1, 1991, the Agency, Mayer, Waterfront, and First California entered into a Consent to Assignment pursuant to which the Agency consented to assign- ment of the Payment Rights to First California under the Assignment Agreement, as more particularly set forth in the Consent to Assignment. . E. Pursuant to Paragraph 11 of the Second Amendment, Mayer and Waterfront are required, as a condition to the close of escrow referenced in Paragraph 4 of the Assignment Agreement (i.e. , on the "Purchase Date") , to execute an estoppel certificate in favor of the Agency setting forth the stipulations and agreements referenced herein. This Estoppel Certificate is intended to satisfy the requirements of Paragraph 11 of the Second Amendment. S T I P Q L A T I 0 N A N D A G R E E M E N T: Based upon the foregoing Recitals, and in consideration of the Agency's approval and execution of the Second Amend- ment and the Consent to Assignment, Mayer and Waterfront hereby stipulate and agree as follows: 1. As of the Purchase Date referenced in Paragraph 4 of the Assignment Agreement, the Agency is not in default of any of its obligations with respect to Phase 1 under either the DDA or the Phase 1 Lease and no circumstances exist which, with the passage of -tire or the giving of notice, would result in such a default. 2. This Agreement shall inure to the benefit of the Agency and its successors and assigns and shall be binding upon Mayer and Waterfront and their successors and assigns. ROBERT L. MAYER, as Trustee of the ROBERT L. MAYER TRUST OF 1982, dated June 22, 1982, as amended By: RO' ERT L. MAYER WATERFRONT CONSTRUCTION NO. 1, a California limited partner- ship By: The Waterfront, Inc. , a California corporation, General Partner By. • Robert L. Mayer Chairman of the Board and Chief Fina cial OM By: L�e 1 Stephen . Bone President _2_ 9/112/065580-0001/151 ASSIGNMENT AGREEMENT This Assignment Agreement ("Agreement") is entered into as of the 1st day of August, 1991, between Robert L. Mayer, Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer") , Waterfront Construction No. 1, a California limited partnership ("Waterfront") , First California Capital Markets Group, Inc. ("First California") and, with respect to Paragraph 6 (c) hereof, Robert L. Mayer, individually, with reference to the following: R E C I T A L S A. Mayer and the Redevelopment Agency of the City of Huntington Beach, California (the "Agency") are parties to that certain Disposition and Development Agreement dated August 15, 1988 (the "DDA") , providing for the development of certain real property (the "Site") located within the City•of Huntington Beach, California. B. Mayer and the City of Huntington Beach, California (the "City") are parties to that certain Development Agreement dated August 15, 1988 (the "Development Agreement") concerning the development of the Site. C. Mayer and the City were parties to 'that certain Second Amended and Restated Lease dated August 15, 1988 (the "Site. Lease") setting forth the terms of Mayer's lease of a portion of the Site from the City. D. Pursuant to the Assignnent and Assumption Agreement exbcuted on April 10, 1989 between Mayer, Waterfront, Waterfront Partners, a California General Partnership, and a tenancy in common comprised of Mayer, Stephen Bone and Patricia Bone (the "Tenancy in Common") , certain of Mayer's rights under the DDA, under the Development Agreement, under the Second Amended Lease and in and -to certain permits and other development rights, were assigned by Mayer to Waterfront Partners, by Waterfront Partners to the Tenancy in Common, and finally by the Tenancy in common to Waterfront. Under the terms of the Assignment and Assumption Agreement, Mayer remains responsible to the Agency for performance of the obligations assumed by Waterfront thereunder. The rights assigned to Waterfront pursuant to the Assignment and Assumption Agreement are limited to that portion of the Site referred to as Separate Development Parcel No. 1, and which shall be referred to in this Agreement as "Phase 1," and include an assignment of Mayer's right to receive payment of the Phase I Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs. B949-505 1 r r E. Mayer and the Agency are parties to that certain Third Amended and Restated Lease dated April 28, 1989 (the "Third Amended Lease") setting forth the terms of Mayer's lease of a portion of the Site from the Agency. F. Waterfront and the Agency are parties to that certain Lease dated as of April 28, 1989 (the "Phase 1 Lease") , providing for Waterfront's lease of Phase 1. Waterfront has completed the construction of a 293-room hotel on Phase 1, and the hotel is currently operated by a majority-owned entity of Robert L. Mayer. The Third Amended Lease and the Phase 1 Lease superseded the Second Amended Lease. G. Paragraph 5 of Attachment No. 5 to the DDA (the Method of Financing) provides for the Agency's reimbursement to Mayer of certain costs totalling $5,660,368 as of September 30, 1990, plus interest thereon at a rate that has been set at ten percent (10%) per annum, compounded monthly (the "Phase 1 Paragraph 5 Costs") , which costs were all of the costs advanced and incurred by Mayer and Waterfront in connection with the development of Phase 1. On June 21, 1991, the Agency made a payment to Waterfront in the amount of Two Hundred Thirty-Three Thousand Eight Hundred Fifty Eight and 79/100 Dollars ($233,658.79) (the "First Payment") to be applied towards accrued interest on the Phase 1 Paragraph 5 Costs. Accordingly, all calculations made under this Agreement of the repayment of the Phase 1 Paragraph 5 costs shall take into account the amount of the First Payment. H. Paragraph 4 of Attachment No. 5 to the DDA provides for the Agency's payment to Mayer of certain transient occupancy taxes paid to the City or Agency and certain incremental property taxes paid and allocated to the Agency in connection with Phase 1 upon the commencement of Phase 2 of the Project (as defined in the DDA) (the "Phase 1 Paragraph 4 Indebtedness") . As used herein, the terms "Phase 1 Paragraph 5 Costs" and "Phase 1 Paragraph 4 Indebtedness" shall not include any costs that the Agency pays or reimburses to Developer pursuant to Paragraph 4 and Paragraph 5, respectively, of the Method of Financing, as the sane now exists or may be amended hereafter, with respect to any other parcel within the Site other than Phase 1. I. Mayer and the Agency are parties to that certain First Amendment to Disposition and Development Agreement dated June 17, 1991, amending the commencement date of the Agency's payment of the Phase 1 Paragraph 5 Costs. J. First California wishes to acquire from Waterfront and Waterfront wishes to make an absolute assignment ("the Assignment") to First California of the right to receive all payments made by the Agency of the Phase 1 Paragraph 4 Indebtedness and the Phase I Paragraph 5 Costs, under the terms B949--505 2 set forth herein. Mayer wishes to consent and become a party to the Assignment. ASSIGNMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, Mayer, Waterfront and First California agree as follows: 1. Assignment. First California agrees to acquire from Waterfront and Waterfront agrees to assign to First California (or to any permitted assignee) , the right to receive all payments by the Agency of the Phase 1 Paragraph 4 Indebtedness and the Phase 1 Paragraph 5 Costs, plus interest thereon, (collectively referred to herein as the "Payment Rights') , subject only to Waterfront's repurchase rights and the reassignment provisions and obligations set forth in Paragraphs 8 and 9 hereof. 2. The Eurcbase Pgice. The purchase price paid by First California to Waterfront for the Payment Rights (the "Purchase Price") shall be the sum stated in that certain Purchase Price Memorandum between Waterfront and First California of even date herewith. The Purchase Price shall be paid by First California to Waterfront on the Purchase Date in the form of wire transfer, cashier's check, or other readily available funds, as reasonably determined by First California. 3 . The Purchase Date. The Payment Rights shall be assigned to First California on the date (the "Purchase Date") selected by First California that is between thirty (30) and thirty-five (35) days after the date of First California's written notice to Waterfront that First California has approved its review of the Payment Rights, as such notice is described in Paragraph 10 below. 4 . Esprow. At least ten (10) days prior to the Purchase Date, First California and Waterfront shall open an escrow with a title company, bank or other independent, insured, financially-sound escrow company selected by First California, for the purpose of facilitating the closing of the Assignment. No later than five (5) days prior to the Purchase Date, First California and waterfront shall execute and deliver to the escrow holder joint escrow instructions consistent with this Agreement. In the event that First California and Waterfront are unable to agree upon the terms of such joint instructions, this Paragraph 4 trill constitute the joint escrow instructions of First California and Waterfront. The parties agree and acknowledge that separate escrow instructions relating to the Agency shall be executed prior to the Closing Date. The escrow holder shall be instructed B949-505 3 r r as follows: (a) on or before the Purchase Date, First California shall deposit into the escrow funds in the form and in' the amount described in Paragraph 2 -of this Agreement. (b) On or before the Purchase Date, First California and Waterfront shall each execute this Agreement and deposit two (2) fully executed originals of this Agreement into the escrow. (c) on or before the Purchase Date, First California, Waterfront and Mayer shall execute, and Waterfront shall exercise its best efforts to have the Agency execute, four (4) originals of the Consent to Assignment in the form attached hereto as Exhibit A, which originals shall be deposited into the escrow prior to the Purchase Date. (d) On or before. the Purchase Date, Waterfront shall deposit into the escrow, in a form acceptable to First California, executed originals of (i) any reconveyances, terminations or any other releases reasonably required by First California in order to satisfy the conditions to the Assignment, (ii) any acknowledgements or certifications required to confirm the representations and warranties set forth in Paragraph 6(e) of this Agreement, and (iii) any notices or memoranda of the Assignment as may be required by First California. (e) On or before the Purchase Date, Waterfront shall deposit into the escrow, in a form acceptable to the Agency, two original, executed trust deeds encumbering Mayer's leasehold interest in the Site excluding Phase 1, the first of which shall secure an indebtedness of $3 Million and shall be subject only to a prior leasehold deed of trust in the amount of $2, 150, 000. 00 and the second of which shall secure an indebtedness of $7 Million, and shall be subject only to three prior leasehold deeds of trust in a total. amount of $10, 150, 000. 00. (f) The costs of the escrow shall be shared equally by Waterfront and First California, and each party shall deposit into escrow readily available funds in the amount of each party's share of such costs prior to the Purchase Date. (g) on the Purchase Date, provided that the documents and funds described in Paragraphs 4 (a)-(e) above have been deposited into escrow, the escrow holder shall be instructed to release to Dai Ichi Kangyo Bank Ltd. the sum of $3,500,000, to release to Waterfront funds in the amount of the balance of the Purchase Price less expenses and other closing costs to be paid by Waterfront hereunder, deliver one executed original of the Consent to Assignment to Mayer, First California, Waterfront and B949-505 4 the Agency, release an executed original of the Assignment Agreement to Mayer, Waterfront and First California, record and/or file, as appropriate, any releases, terminations or reconveyances required by First California and record and/or file, as appropriate, any notices or memoranda of the Assignment as may be required by First California. (h) If either party shall fail to make the deposits into escrow as and when required herein, in addition to any other rights and remedies that may be available to the other party to this Agreement, such other party may elect to terminate the escrow upon notice to the escrow holder, in which case all funds and documents shall immediately be returned to the party that had originally deposited such funds and documents into the escrow and the escrow shall thereafter terminate. 5. u e o um a . Mayer, Waterfront and First California shall enter into any further documentation reasonably required to effect the Assignment. Any such additional documentation shall be in a form and substance reasonably satisfactory to First California, Waterfront and Mayer and shall otherwise be on terms consistent with this Agreement. 6. Eenresentationg. Mayer and Waterfront hereby make the following representations and warranties to First California, which, subject to the Agency's making the agreement set forth in Paragraph 11(d) below and further subject to Mayer's and Waterfront obtaining a reconveyance of the security interest or other lien previously granted to Dai Ichi Kangyo Bank Ltd. , shall be effective commencing on the Purchase Date and shall continue in effect for as long as First California or any assignee of or successor to First California retains any interest in the Payment Rights: (a) The Assignment and Assumption Agreement has been delivered to and accepted by the Agency, and Waterfront holds all right, title and interest in and to the Payment Rights free of any and all encumbrances, claims, liens, demands, actions, or security or other interests, including without limitation any security interest or other lien granted to Dai Ichi Kangyo Bank Ltd. (b) The rights of First California in the Payment Rights are and shall be superior and prior to the rights of any and all third parties in the Payment Rights, regardless of Whether any competing interests are created, or are alleged to have been created, voluntarily or involuntarily. (c) Mayer, Waterfront and Robert L. Mayer hereby indemnify and hold First California harmless from and against any and all claims, judgments, demands or actions of any party claiming rights or interests in the Payment Rights or which seek B949-505 5 r to invalidate, alter, subordinate or modify the Assignment, the amount of the Payment Rights or the terms upon which the Payment Rights are paid to First California or its assignee, regardless of whether any such claims, demands or actions exist as of the Purchase Date or arise or are asserted thereafter. (d) Mayer and Waterfront have performed and shall perform any and all obligations and conditions precedent to the obligation of the Agency to commence the payment of the Phase 1 Paragraph 5 costs, and shall use reasonable diligence, subject to prudent business practice, prevailing market conditions, availability of financing and events of force majeure, to satisfy all conditions to the Agency's obligations to corunence and to continue the payment of the Phase 1 Paragraph 4 Indebtedness. (e) Waterfront is a duly and validly organized limited partnership in good standing under the laws of the State of California. The execution and delivery by Waterfront of this Assignment, the Purchase Price Memorandum of even date herewith and the consent to Assignment of even date herewith, and the compliance by Waterfront with the terms and conditions of this Assignment, have been duly and validly authorized by all necessary partnership action. Neither the execution and delivery by Waterfront of the foregoing agreements; the consur.mation of the transactions contemplated thereunder nor compliance with the terms and conditions thereof, will ccnflict with or result in a breach or default under any indenture, mortgage, .lease, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument to which Waterfront is now a party, or any judgment, order, writ, injunction, decree or demand of any court, arbitrator or governmental agency, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon the property or assets of Waterfront. Waterfront is not in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing an indebtedness of Waterfront. (f) As trustee, Robert L. Mayer has full and complete power and authority to enter into this Agreement on behalf of The Robert L. Mayer Trust of 1982, Dated June 22, 1982, as amended, and Mayer has full power and authority to enter into this Agreement and discharge its obligations hereunder. 7. &eeimbursement of Fees. Waterfront agrees to reimburse First California for one-half (1/2) of the legal fees incurred by First California in connection with the assignment of the Payment Rights to First California and the documentation of such assignment, but in no event shall Waterfront's share of such fees exceed $20,000.00. B949-505 6 r 8. Pepurchase-Rictlit., First California hereby grants to Waterfront the right to repurchase the then-remaining balance of the Payment Rights as of the Repurchase Date, on the terms and conditions described in this Paragraph S. (a) The date (the "Repurchase Date") upon which Waterfront shall be entitled to reacquire (the "Repurchase") the then-remaining balance of the Payment Rights shall be a date selected by Waterfront in a written notice given to First California. The Repurchase Date selected by Waterfront, in case of a Repurchase made in connection with the issuance by the Agency of bonds, notes or any other evidence of indebtedness to be issued and sold by the Agency in order to finance or refinance any of the Agency's obligations under the DDA (collectively, the "Agency Bonds") , shall be no less than thirty-five (35) nor more than one hundred eighty (180) days after the date of such notice, and in the case of any other Repurchase shall be no less than thirty-five (35) nor more than forty-five (45) days after the date of such notice, but in no event shall such notice specify a date that is earlier than the first to occur of the following; (i) two (2) years after the date of this Agreement, or (ii) thirty (30) days prior to the first issuance by the Agency of Agency Bonds. (b) The purchase price (the "Repurchase Price") payable by Waterfront for the balance of the Payment Rights remaining on the Repurchase Date shall be calculated as (i) the amount of the Phase 1 Paragraph 5 Costs plus accrued interest as of June 30, 1991, minus (ii) the total payments of the Payment Rights-, including payments of the Phase I Paragraph 4 Indebtedness, if any, the Phase 1 Paragraph 5 Costs and interest on the Phase I Paragraph 5 Costs, made by the Agency and received by First California or its assignee during the .period (the "Calculation Period") that commences on June 30, 1990 and ends on the Repurchase Date, plus (III) all interest accruing on the unpaid balance of the Phase 1 Paragraph 5 Costs during the . Calculation Period, regardless of whether such accrued interest has been paid during the Calculation Period. The amount of the First Payment shall be considered in determining the amount of the Phase 1 Paragraph 5 Costs as of June 30, 1990 pursuant to subparagraph 8 (b) (i) above, but shall not be considered in determining the payments made by the Agency during the Calculation Period pursuant to subparagraph 8 (b) (ii) above. By way of illustration only, assuming that the Phase 1 Paragraph 5 Costs, plus accrued interest, equals Six Million Dollars ($6,000, 000) on June 30, 1990, if the Agency makes total payments of the Payment Rights (including both the Phase 1 Paragraph 4 Indebtedness, the Phase 1 Paragraph 5 Costs and interest on the Phase 1 Paragraph 5 Costs) to First California or its assignee during the Calculation Period of one Million Dollars ($1,000,000) and assuming interest totalling Six Hundred Thousand Dollars ($600, 000) accrues on the outstanding balance of the Phase 1 B949-505 7 r Paragraph 5 Costs during the Calculation Period, the Repurchase Price would be Five Million six Hundred Thousand Dollars ($5,6o0,000) , calculated as $6,000,000 minus $1,000,000 plus $600,000. Waterfront and First California hereby agree and acknowledge that, for purposes of calculating the Repurchase Price, the amount of any payments of the Phase 1 Paragraph 4 Indebtedness received by First California or its assignee phall not reduce the balance of the Phase 1 Paragraph 5 Costs for purposes of calculating interest accruals on the outstanding balance of the Phase 1 Paragraph 5 Costs, which interest shall accrue as calculated by the Agency under the DDA at the rate of Ten Percent (10%) per annum, compounded monthly, but all payments of the Phase 1 Paragraph 4 Indebtedness received by First California or its assignee shall be considered, as set forth in Paragraph 8(b) (ii) above, without interest, in calculating the . Repurchase Price. (c) Notwithstanding anything in this Paragraph 8 to the contrary, if at any time (the "Calculation Date") after the date of this Agreement, First California or its assignee - shall have received total payments of the Payment Rights in a total amount equal to the amount of the Phase 1 Paragraph 5 Costs plus interest on the outstanding balance of the Phase I Paragraph 5 Costs at the rate of Ten Percent (10%) per annum, compounded nonthly, from September 30, 1990 through the Calculation Date, the then-remaining balance of the Payment Rights shall be immediately reassigned to Waterfront. Such reassignment shall occur automatically on the Calculation Date without the necessity of any further action, authorization or approvals of First California or its assignee, and without the payment by Waterfront of any additional consideration therefor. (d) Waterfront's repurchase of the remaining balance of the Payment Rights as of the Repurchase Date shall have no effect whatsoever upon any payments of the Payment Rights made to First California or First California's assignee prior to the Repurchase Date. (e) First California and its assignee agree to hold in trust and to immediately turn over to Waterfront any payments of the Payment Rights incorrectly made to First California or its assignee after either the Repurchase of the Payment Rights by Waterfront pursuant to this Paragraph 8, or after the date upon which the reassignment described in Paragraph 8 (c) above occurs. (f) At no time prior to the Repurchase Date shall First California or any subsequent assignee enter iTito or consent to any amendment or modification of the DDA or any suspension, Postponement, alteration, acceleration or cancellation of the Paynent Rights without-Waterfront's prior written consent, which consent Waterfront may withhold in its sole and absolute 8949-505 8 discretion. Any such amendment, modification, alteration, acceleration or cancellation without Waterfront's prior written consent shall be void and of no force or effect. Notwithstanding the foregoing, First California or any subsequent assignee may enter into or consent to any such amendment, modification, alteration, acceleration or cancellation without Waterfront's consent at anytime after the later to occur of (i) two years after the date of this Agreement, and (ii) the cessation of the payment of either transient occupancy taxes or incremental property taxes upon which the Payment Rights are based for a continuous period of ninety (90) days after First California gives notice of such cessation to Waterfront, Such ninety (90) day notice period shall be tolled during any period of time during which Waterfront challenges or contests, in good faith, the amounts of transient occupancy taxes or incremental property taxes due, provided that Waterfront diligently prosecutes such contest or challenge or completion. This Paragraph 8 (f) shall not be construed as modifying Waterfront's obligation to make payments of transient occupancy taxes or incremental property taxes under the DDA. 9 . Repurchase Escrow. At least ten (10) days prior to the Repurchase Date, Waterfront and First California shall open an escrow with a title company, bank or other independent, insured, financially-sound escrow conpany selected by Waterfront, for the purpose of facilitating the closing of the Repurchase. No later than five (5) days prior to the Repurchase Date, Waterfront and First California shall execute and deliver to the escrow holder joint escrow instructions consistent with this Agreement. In the event that Waterfront and First California are unable to agree to the terms of such joint instructions, this Paragraph 9 will constitute the joint escrow instructions of Waterfront and First California. The escrow holder shall be Instructed as follows: (a) Prior to the Repurchase Date, Waterfront shall deposit into the escrow readily-available funds in the amount of the Repurchase Price. (b) Prior to the Repurchase Date, First California shall deposit into the escrow, in a form reasonably acceptable to waterfront, any assignnents, reconveyances, terminations or any other releases that shall be reasonably required to effect the reassignment to Waterfront. (c) The costs of the Repurchase Escrow shall be shared equally by First California and Waterfront, and readily available funds in the amount of each party's share of such costs shall be deposited into the escrow prior to the Repurchase Date. (d) At such time as the documents and funds described in Paragraphs 9 (a) -(c) above have been deposited into B949-505 9 r r escrow, the escrow holder shall be instructed to release the funds in the amount of the Repurchase Price to First California and release the originals of the documentation required pursuant to Paragraph 9 (b) to the appropriate parties. (e) If either party shall fail to make the deposits into escrow as and when required herein, in addition to any other rights and remedies that nay be available to the other party to this Agreement, such other party may elect to terminate the escrow upon notice to the escrow holder, in which case all funds and documents shall immediately be returned to the party that had originally deposited the funds and each of the documents into the escrow and the escrow shall thereafter terminate. (f) First California agrees to enter into such . further documentation as reasonably required by the Agency in order for the Agency to recognize the reassignment of the then-remaining balance of the Payment Rights to Waterfront. 10. geview. of Payment Rights. First California shall have the right to conduct, in its sole and absolute discretion and for its sole benefit, a due diligence review of the Payment Rights. First California's review may include, without limitation, the following! (a) Written verification from Mayer, Waterfront and the Agency of the amount and status of the Payment Rights and the status of the development under the DDA; (b) Confirmation from the Agency or its duly authorized agent that the Agency will enter into the consent to Assignment; (c)_ The Agency's confirmation that the unpaid balance of the Phase 1 Paragraph 5 Costs shall accrue interest at the rate of Ten Percent (10%) per annum, compounded monthly; (d) Confirmation that there will be no prior, competing interests in the• Payment Rights on the Purchase Date; and (e) The marketability of the Payment Rights by First California. Ho later than August 12, 1991, First California shall notify Waterfront in writing of either First California's approval or disapproval, in its sole discretion, of its review of the Payment Rights. If First California disapproves, this Agreement shall terminate and neither party shall have any further obligations hereunder. If First California approves, the Purchase Date shall be established as between thirty (30) and thirty-five (35) days after the date of First California's notice, as described in B949-505 10 r Paragraph 3 hereof. The failure of First California to give either notice of approval or disapproval on or before August 12, 1991 shall be deemed a disapproval of First California's review of the Payment Rights. 11. Conditions to-Assignment. The following shall be conditions to First California's obligation to complete the Assignment on the Purchase Date: (a) Neither Mayer nor Waterfront shall be in breach of the representations and warranties set forth in Paragraph 6 hereof; (b) Mayer, Waterfront, and the Agency shall have signed and delivered the Consent to Assignment into escrow prior to the Purchase Date; (c) neither Mayer nor Waterfront shall be in default under this Agreement or the DDA and Waterfront shall not be in default under the Phase 1 Lease; and (d) The Agency shall have agreed that the amount of the Phase 1 Paragraph 5 Costs as of the Purchase Date shall be the sum of $5, 660, 368 plus interest thereon at the rate of Ten Percent (10%) per annum compounded monthly from September 300 1990, and shall acknowledge the amount of the First Payment. Upon the failure of any of the above-described conditions, as determined by First California in First California's sole discretion, First California, in addition to any other legal or equitable remedies that may be available, may elect to terminate this Agreement; provided, however, that in the event that the Agency refuses to sign and deliver the Consent to Assignment referencbd in Paragraph 11(b) above or the Agency refuses to make the agreement set forth in Paragraph 11(d) above, First California 's sole remedy in either case shall be to terminate this Agreement prior to the Purchase Date. 22. Xttorneys+ Fees. if any action or proceeding shall be brought to interpret or enforce the terms of this Agreement, the prevailing party in such action shall be entitled to recover its attorneys ' fees and costs from the other party. 13, Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 14. Cooperation. The parties hereto shall cooperate by executing any and all documents reasonably necessary to complete the Assignment and providing such information and documentation reasonably required by the other party to this Agreement. B949-505 ll r 4 15. gurther Assigament. First California may elect, in its sole discretion, to further assign the right to receive the Payment Rights to a trust, the trustee of which is First Trust, H.A. or another comparable institutional trustee (as reasonably determined by the Agency, First California and Waterfront) , solely for purposes of issuance of the $6,100,000 Certificates of Participation evidencing interests of the holders thereof in the Payment Rights. In event of such an assignment, First California's assignee shall have all of the rights and shall assume all of the obligations of First California hereunder, including the reassignment obligations set forth in Paragraph 8 hereof. This Agreement shall be binding upon and shall inure to the benefit of First California and Waterfront and their respective heirs, successors and assigns. Upon the assignment of the Payment Rights by First California to an assignee of First California, such assignee shall have the right to reassign the Payment Rights, subject to Paragraph 8 hereof, provided that such reassignment shall not take place earlier than two (2) years after the date of this Agreement. 16. Notices. Any notices given hereunder shall be in writing, hand delivered or sent via overnight courier or U.S. Mail, postage prepaid, addressed as follows: To Waterfront, Robert L. Mayer or Mayer: The Robert Mayer Corporation 660 Newport .Center Drive, Suite 1050 P. O. Box 8680 Newport Beach, CA 92658-8680 To First California: First California Capital Markets Group, Inc. 50 California Street, Suite 3200 San Francisco, CA 94111 Attn: Utilities Department/Benjamin H, Levine With a copy to: First California Capital Markets Group, Inc. 200 Oceangate, Suite 1500 Long Beach, CA 90802 Such notices shall be effective when received if hand delivered, the day after shipping if sent via overnight courier or three (3) clays after mailing if sent by U.S. mail. Either party may change its address for notices by a written notice to the other party as provided herein. B949-505 12 17. Entire Agreements Amendments. This Agreement, together with the Purchase Price Memorandum, the Consent to Assignment and the exhibits and schedules thereto, embodies the entire understanding of the parties relating to the assignment by Mayer and Waterfront to First California of the Payment Rights. 18. Exhibits and _schedu Ss. Each exhibit and schedule delivered pursuant to or referenced in this Agreement constitutes an integral part of, and is incorporated into, this Agreement. 19. Headinass _Pronouns. The descriptive headings of the Paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons, firm or firms, corporation or corporations may require. 20. CounterysIrts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other party hereof. 21. gevsrability. If any article, section, subsection or provision of this Agreement, or the application of such section, subsection or provision is held invalid,,'- the remainder of this Agreement and the application of such .section, subsection or provision to' persons or circumstances other than those to which it is held invalid shall not be affected thereby. 22. hmendrents. This Agreement may be amended only in writing, signed by the parties hereto. 23 . Time. Time is of the essence of this Agreement. 24. Recitals. The recitals set forth above are true and correct and are incorporated into this Agreement as though fully set forth herein. IN WITNESS WHEREOF, the undersigned have executed this Assignment Agreement of the date first above written. FIRST CALIFORNIA CAPITAL MARKETS GROUP, INC. , a California corporation BY: Arch V Zel ck, Controller B949-505 13 ' r ROBERT L. MAYER, Trustee of the ROBERT L. MAYER TRUST OF 19821 Dated June 22, 1982, as amended By: • Robert-L. Mayer WATERFRONT CONSTRUCTION NO. 1, a California limited partnership By: The Waterfront, Inc. , a California corporation, General Partner By: .Robert L. Mayer, a rman of The Board B • � Y• Steph n K. Bone, President ROBERT L. MAYER �. B949-505 14