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HomeMy WebLinkAboutCIM/Huntington LLC - aka CIM Group, LLC - 2008-10-20Missing or Incorrect Data? Visit prolien.com/fix - Reference Number: 549818 PRELIMINARY 20 DAY NOTICE 549818 IN ACCORDANCE WITH SECTIONS 8200 et seq., and 9300 et seq., CALIFORNIA CIVIL CODE, THIS IS NOT REFLECTION OF THE INTEGRITY OF ANY CONTRACTOR OR SUBCONTRACTOR. This is Not a Lien. This is a notice required to be sent by State law to inform you of our involvement on a construction project. NOTICE TO: Property Owner Diamondrock HB Tenant,LLC. C/O BKC Service Corporation 54944 Luther Ln, #720 Dallas, Texas 75225 CITY OF HUNTINGTON BEACH - JOHN FLYNN CITY CLERK 2000 MAIN ST Huntington Beach, CA 92648-2702 Direct Contractor ELEMENTS HOSPITALITY 655 FRONT ST STE 3 LYNDEN, WA 98264-1900 Construction Lender (if applicable) Requested NOTICE FROM: Claimant walls to cover 5624 Darien ct Riverside, California 92505 Telephone: 760-668-3210 YOU ARE HEREBY NOTIFIED THAT the CLAIMANT has furnished or will be furnishing labor, services, equipment, or materials, of the following general description: wallpaper glue, primer and mood Services contracted for by Hiring Party: ELEMENTS HOSPITALITY 655 FRONT ST STE 3 LYN DEN, WA 98264-1900 An estimate of the total price of the labor, services, equipment or material furnished or to be furnished is: $52,784.00 Property Address where labor, services, equipment, or materials are furnished or to be furnished ("Property"): 500 Pacific Coast Highway Huntington Beach, California 92648 County: Orange County Project Name / No (if any): Kimpton Shorebreak Hotel Important Notice on Reverse / Following Page CD 9307110011700899319508 NOTICE TO PROPERTY OWNER EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL, if the person or firm that has given you this notice is not paid in full for labor, service, equipment, or material provided or to be provided to your construction project, a lien may lead to loss of all or part of your property. You may wish to protect yourself against this by (1) requiring your contractor to provide a signed release by the person or firm that has given you this notice before making payment to your contractor, or (2) any other method that is appropriate under the circumstances. This notice is required by law to be served by the undersigned as a statement of your legal rights. This notice is not intended to reflect upon the financial condition of the contractor or the person employed by you on the construction project. If you record a notice of cessation or completion of your construction project, you must within 10 days after recording, send a copy of the notice of completion to your contractor and the person or firm that has given you this notice. The notice must be sent by registered or certified mail. Failure to send the notice will extend the deadline to record a claim of lien. You are not required to send the notice if you are a residential homeowner of a dwelling containing four or fewer units. CLAIMANT walls to cover Signed by Albert Quintrall Its duly authorized and disclosed agent �ignPci on jantjaT 18, 2017 Important Information Request On Reverse / Following Page IMPORTANT: INFORMATION REQUEST PURSUANT TO §8208 This request is made on behalf of walls to cover. This party has or will furnish labor and/or materials to the construction project identified in the enclosed preliminary notice. These services are furnished at the request of ELEMENTS HOSPITALITY. If the property owner and/or construction lender and/or general contractor are not identified in enclosed notice, or if either are incorrectly identified, please accept this notice as a formal request tc the direct contractor pursuant to §8208, and all other recipients, to deliver (i) The name and address of the owner; and / or (ii) The name and address of the general contractor, and / or( iii) The name and address of the construction lender, if any; as the case may be, to the Notifying Party at the following address: walls to cover c/o Prolien Services,. LLC 5353 Mission Center Road Suite 202 San Diego, California 92108 CLAIMANT walls to cover Signed by Albert Quintrall Its duly authorized and disclosed agent Signed on January 18, 2017 Employee Trust Funds (and Laborers) If applicable, and pursuant to §8208 (b) of the California Civil Code, the following is a list of the Employee Trust Funds (described in subdivision (b) of Section 8024) and/or laborers to which payments are due. UH ` ! Dept. ID ED 15-04 Page 1 of 2 f Meeting Date: 2/2/2015 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 2/2/2015 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Ken Domer, Assistant City Manager Kellee Fritzal, Deputy Director, Business Development SUBJECT: Adopt City Council Resolution No. 2015-02 Approving Two Proposed Assignments and an Amendment Related to The Strand Project Disposition and Development Agreement with CIM/Huntington, LLC Statement of Issue: The City Council is requested to approve the assignment of The Strand and approve an amendment to the Declaration of Covenants, Conditions and Restrictions, and Reciprocal Easement Agreement (CCR'S). Financial Impact: None. Recommended Action: A) Adopt Resolution No. 2015-02, "A Resolution of the City of Huntington Beach, California Approving Two Proposed Assignments and an Amendment Related Thereto Pertaining to the Strand Project Disposition and Development Agreement with CIM/Huntington, LLC; and B) Authorize the Mayor, City Manager and City Clerk to execute all related documents. Alternative Action(s): Do not approve the Assignments and direct staff accordingly. Analysis: The former Redevelopment Agency .(Agency) and CIM entered into a Disposition and Development Agreement (DDA) on June 17, 1999. The DDA set forth the development of a hotel with approximately 115 — 130 rooms and 135,000 square feet of commercial space. The Agency contributed both the land and excess project costs. The DDA was subsequently amended with six Implementation Agreements. The changes to the project included: increased number of hotel rooms (157 rooms), a boutique hotel in lieu of a business hotel, increased parking, land leases, and Agency assistance. As part of the Agreements, CIM was allowed to create commercial condominiums for the site. The Strand currently consists of a separate commercial condominium for the City -owned parking structure. Since The Strand opened in May 2009, CIM has been operating the project (both commercial retail/office and hotel). However, CIM notified the City and Successor Agency of the decision to create separate condominium plans and sell the property to two separate entities — Item 6. - I HH -94- Dept. ID ED 15-04 Page 2 of 2 Meeting Date: 2/2/2015 retail/office and hotel. Due to sale to separate owners, the CCR's need to be amended, placing the retail/office owner as the designated property manager. The retail/office proposed assignment would be to Cypress Equities, which was founded in 1995. Cypress Equities has developed and acquired more than 18 million square feet and their current portfolio is over 10 million square feet with a primary focus on retail and mixed -use properties. Cypress Equities currently owns and operates a premier portfolio of high quality assets valued at more than $1.2 billion, consisting of a variety of retail, office and residential real estate properties. Their current acquisition fund is a $400 Million discretionary equity fund exclusively focused on acquiring retail real estate within the continental US. This fund has already closed on seven acquisitions totaling approximately $500 Million since June 2013. There is currently over $200 Million remaining in this fund to allocate to future acquisitions (The Strand being one of these). The hotel portion is proposed to be assigned to DiamondRock Hospitality Company. DiamondRock operates as a real estate investment trust and owns a portfolio of 27 premium hotels and resorts containing over 11,000 guest rooms in the aggregate, concentrated in key gateway cities and destination resorts throughout North America and the U.S. Virgin Islands. DiamondRock's vision is to be the premier allocator of capital in the lodging industry with the goal of delivering above average shareholder returns across the full lodging cycle. Each of DiamondRock's hotels and resorts is managed by a third party. Most are operated under a brand owned by one of the leading global lodging brand companies (MarriottTM, StarwoodTM or Hilton TM) . DiamondRock's plan is to maintain the Shorebreak name and theme of the hotel and that Kimpton Hotels manage the hotel. The Transfer Agreements and amended CCR's were approved by the Successor Agency on November 17, 2014, approved by the Oversight Board on November 24, 2014, and by the State Department of Finance on January 9, 2015. The City Council is requested to approve the assignment of the Office/Retail Parcel and the assignment of the Hotel Parcel. The City Council is also requested to approve the CC&Rs Amendment. Environmental Status: Not applicable Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): Resolution No. 2015-02, "A Resolution of the City of Huntington Beach, California, Approving Two Proposed Assignments and an Amendment Related Thereto Pertaining to the Strand Project Disposition and Development Agreement with CIM/Huntington, LLC" xB -95- Item 6. - 2 RESOLUTION NO. 2015-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING TWO PROPOSED ASSIGNMENTS AND AN AMENDMENT RELATED THERETO PERTAINING TO THE STRAND PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT WITH CIM/HUNTINGTON, LLC WHEREAS, the former Redevelopment Agency of the City of Huntington Beach ("Redevelopment Agency") was a redevelopment agency in the City of Huntington Beach ("City"), duly created pursuant to the California Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code) ("Redevelopment Law"); and In furtherance of the Redevelopment Law, the Redevelopment Agency entered into that certain Disposition and Development Agreement by and between the Redevelopment Agency and CIM Group, LLC dated June 17, 1999, which Disposition and Development Agreement was supplemented by that certain [First] Implementation Agreement entered into between the Redevelopment Agency and CIM Group, LLC dated April 6, 2000; that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001, that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC, CIM Group, LLC's successor -in -interest, dated October 30, 2002, that certain Fourth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of September 15, 2003, that certain Fifth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of July 19, 2004 and certain Sixth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of November 3, 2008 (collectively, the "DDA"); and The DDA pertains to the development more commonly known as The Strand located in the City of Huntington Beach. The Strand includes retail and office space, a luxury boutique hotel (The Shorebreak Hotel, operated by Joie de Vivre), and a subterranean parking garage owned by the City; and Assembly Bill No. XI 26 (2011-2012 1" Ex. Sess.) ("AB 26") was signed by the Governor of California on June 28, 2011, making certain changes to the Redevelopment Law and to the California Health and Safety Code ("H&S Code"); and Pursuant to AB 26, as modified by the California Supreme Court on December 29, 2011 by its decision in California Redevelopment Association v. Matosantos, all California redevelopment agencies, including the Redevelopment Agency, were dissolved on February 1, 2012; and The City Council of the City elected for the City to serve as the successor agency to the Redevelopment Agency ("Successor Agency"); and 15-4563/116385.doc Reso. 2015-02 On June 27, 2012, the Legislature passed and the Governor signed Assembly Bill No. 1484 ("AB 1484", Chapter 26, Statutes 2012); and AB 26 and AB 1484, as further amended, are collectively referred to herein as the "Dissolution Act". The Successor Agency succeeded to all of the interest of the Redevelopment Agency as successor agency pursuant to the Dissolution Act; and H&S Code Section 34179 of the Dissolution Act establishes a seven (7) member local entity with respect to each successor agency and such entity is titled the "oversight board." The oversight board has been established for the Successor Agency (hereinafter referred to as the "Oversight Board"); and CIM/Huntington, LLC ("Owner") is intending to record two condominium plans that subdivide the office/retail/hotel components of The Strand project into the following air rights parcels: (a) in one condominium plan, a boutique hotel consisting of approximately 144,015 square feet of space (the "Hotel Parcel'); and (b) in a second condominium plan, a condominium unit that includes approximately 41,159 square feet of office improvements (the "Office Parcel') and a condominium unit that includes approximately 74,366 square feet of retail improvements (the "Retail Parcel'); and Owner is proposing to sell its interests in the Office Parcel and Retail Parcel to CAPREF STRAND, LLC, a Delaware limited liability company, and CAPREF STRAND TRS, LLC, a Delaware limited liability company, jointly and severally (collectively, the "Office/Retail Assignee"). Owner (or CIM/HUNTINGTON HOTEL, L.P., a Delaware limited partnership, an anticipated successor -in -interest to the Hotel Parcel as permitted by the DDA) is proposing to sell its interests in the Hotel Parcel to DIAMONDROCK ACQUISITION, LLC, a Delaware limited liability company ("Hotel Assignee"); and In connection with the sale of the Office Parcel, Retail Parcel and Hotel Parcel, City staff and Owner have negotiated three proposed agreements; namely, (a) a Termination Agreement by and among Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 (collectively, "Cracchiolo'), Owner, and the Successor Agency ("Termination Agreement"); (b) an Amendment of Declaration of Covenants, Conditions & Restrictions and Reciprocal Easement Agreement by and among the City, the Successor Agency, Cracchiolo, and Owner ("CC&Rs Amendment"); and (c) a Second Amendment to Agreement Containing Covenants Affecting Real Property by and between the Successor Agency, CIM/HUNTINGTON HOTEL, L.P., a California limited partnership, and Owner ("Second Amendment to Agreement Containing Covenants"). The Termination Agreement releases the Successor Agency, the Redevelopment Agency, and the City from liability with respect to a Ground Lease and Sublease entered into in connection with the DDA and The Strand project. The CC&Rs Amendment is necessary to make certain clarifications due to the proposed sale of the Office Parcel, Retail Parcel and Hotel Parcel. The Second Amendment to Agreement Containing Covenants was contemplated in the DDA as set forth in Section 3 of the Fifth Implementation Agreement to the DDA to reflect separate ownership of the Hotel Parcel and the balance of the Site (as defined in the DDA). The Termination 15-4563/116385.doc 2 Reso. 2015-02 Agreement, the CC&Rs Amendment, and the Second Amendment to Agreement Containing Covenants may be collectively referred to herein as the "Transfer Agreements"; and The Transfer Agreements were approved by the Successor Agency on November 17, 2014, approved by the Oversight Board on November 24, 2014 and by the State Department of Finance on January 9, 2015; and All of the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. The above recitals are true and correct and are a substantive part of this Resolution. 2. The City Council hereby approves of an assignment of the Office Parcel and Retail Parcel to Office/Retail Assignee, subject to the approval by the Successor Agency's Executive Director of any entity formation agreements and documents (or changes therein) related to the sale, as well as the agreements and documents effectuating the sale; and further subject to the approval by the Successor Agency's Executive Director of a written assignment and assumption agreement whereby Office/Retail Assignee assumes the rights and obligations transferred by Owner and agrees to keep and perform all covenants, conditions and provisions of the DDA and related agreements which are applicable to the rights acquired. 3. The City Council hereby approves of an assignment of the Hotel Parcel to Hotel Assignee, subject to the approval by the Successor Agency's Executive Director of any entity formation agreements and documents (or changes therein) related to the sale, as well as the agreements and documents effectuating the sale; and further subject to the approval by the Successor Agency's Executive Director of a written assignment and assumption agreement whereby Office/Retail Assignee assumes the rights and obligations transferred by Owner and agrees to keep and perform all covenants, conditions and provisions of the DDA and related agreements which are applicable to the rights acquired. 4. The City Council hereby approves of the CC&Rs Amendment in the form submitted to the City Council. 5. The City Manager, or designee, is hereby authorized and directed to: (a) make non -substantive changes and amendments to the CC&Rs Amendment deemed necessary and as approved by the City Manager and the City Attorney; and (b) take such other actions and execute such other documents as are necessary to effectuate the intent of this Resolution on behalf of the City. 6. City staff is hereby authorized to execute and record such documents and instruments and to do any and all other things which they may deem necessary or advisable to effectuate the intent of this Resolution and any such actions previously taken are hereby ratified. 15-4563/116385.doc 3 Reso. 2015-02 7. The adoption of this Resolution is not intended to and shall not constitute a waiver of any constitutional, legal or equitable rights that the City Council may have to challenge, through any administrative or judicial proceedings, the effectiveness and/or legality of all or any portion of the Dissolution Act, any determinations rendered or actions or omissions to act by any public agency or government entity or division in the implementation of the Dissolution Act, and any and all related legal and factual issues, and the City Council expressly reserves any and all rights, privileges, and defenses available under law and equity. 8. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council declares that its City Council would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution. 9. This Resolution shall take effect upon the date of its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 2nd day of February , 2015. Mayor REVIE ND APPROVED: APPROV D S TO FORM: City er City Attorney) My INITIATED AND APPROVED: / 2 Deputy Director of Development 15-4563/116385.doc 4 �L i RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CIM/Huntington, LLC 6922 Hollywood Blvd., 91h Floor Los Angeles, CA 90028 Attention: General Counsel AMENDMENT OF DECLARATION OF COVENANTS, CONDITIONS & RESTRICTIONS AND GRANT OF RECIPROCAL, EASEMENTS (CIM-Huntington Beach) AMENDMENT OF DECLARATION OF COVENANTS, CONDITIONS & RESTRICTIONS AND RECIPROCAL. EASEMENT AGREEMENT (CIM-Huntington Beach) This Amendment of Declaration of Covenants, Conditions & Restrictions and Reciprocal Easement Agreement ("Amendment") is made and entered into as of the recordation hereof (the "Effective Date"), by the City of Huntington Beach, a municipal corporation ("City"), the Successor Agency to the Redevelopment Agency of the City of Huntington Beach (the "Successor Agency"), Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 (collectively, "Cracchiolo") and CIM/Huntington LLC, a California limited liability company ("Developer") (collectively, the "Parties"), with respect to real property located in Orange County, California described on Exhibit A attached hereto, comprised of the Parking Parcel, the Retail Parcel and the Hotel Parcel (as defined in the Original Declaration as defined below). RECITALS A. The City, Cracchiolo, Developer and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), the Successor Agency's predecessor in interest, entered into that certain Declaration of Covenants, Conditions & Restrictions and Reciprocal Easement Agreement recorded as Instrument No. 2009000047214 on February 3, 2009 in the Official Records of Orange County, California (the "Original Declaration"). The Parties now desire to amend the Original Declaration in the manner set forth below. Capitalized terms not otherwise defined herein shall have the same definitions as set forth in the Original Declaration. B. The Parties acknowledge that (i) Developer and other Owners are subject to other instruments conferring rights upon Successor Agency or the City and/or obligations on Developer and/or the other Owners, including without limitation the Fifth Street Public Access Easement, the Maintenance License Agreement, the Operating Agreement and the Agreement Containing Covenants Affecting Real Property, and the DDA, and pursuant to Section 12.2 of the Original Declaration, nothing contained herein shall serve to limit the Parties' obligations as contained in and for the terms of such agreements, and (ii) nothing contained in this Declaration shall limit the City's police powers or shall allow Developer or any Owner to fail to comply with any applicable City code or ordinance. C. Immediately after the recordation of this Amendment, Developer is recording two condominium plans relating to the Retail Parcel and the Hotel Parcel. -1- CIM HB CCRs Amendment 1. Modifications to Amendments. The following definitions shall replace in "their entirety the corresponding definitions contained in the Original Declaration: 1.1 "Manager" means the person or entity responsible pursuant to the terms hereof for maintenance of the Common Areas and performance of all other obligations specifically allocated to the "Manager" hereunder. Manager may employ a person or entity to perform management functions in the Project, and in so doing may assign and delegate to such person or entity all or a portion of Manager's rights and obligations under this Declaration (and, subject to any limitations thereon set forth in Article II below, may include the reasonable costs of compensating any agents, contractors or professional managers engaged to perform such functions in the Common Area Expenses); provided however, that Manager shall remain responsible for the performance of such obligations by such person or entity. The Manager shall initially be Developer or any successor -in -interest to all (but not less than all) of Developer's Interest in the Parcel 1 of the Retail Parcel ("Retail Parcel I"), provided, however, that Retail Parcel 1 Owner's rights and obligations as Manager shall be deemed assigned to the Property Owners Association (or, with the consent of the City, a Condominium Association) upon formation thereof on the terms set forth in Article 13 below. Notwithstanding the foregoing, with respect to the City and the Agency only, Developer and Developer's successor -in -interest to Developer's Interest in Retail Parcel 1 shall remain obligated to perform any obligation of Manager hereunder to the extent not performed by the Property Owner's Association or designated Condominium Association (and the Parties to this Declaration authorize such performance by Developer or Developer's successor -in -interest), provided that any such successive holder of Developer's Interest in Retail Parcel 1 shall be relieved of any liability for such performance upon the transfer of such holder's interest in Retail Parcel 1 and any transferee of such holder's interest shall be deemed to have assumed such obligation from and after the effective date of such transfer. 1.2 "Master Parcel Owner" shall mean the Retail Parcel 1 Owner. Notwithstanding the foregoing, there shall be no voting, consent or approval rights hereunder appurtenant to ownership of the Master Parcel nor shall any person or entity holding title to the Master Parcel by virtue thereof be deemed an "Owner" for purposes of exercising any voting or consent rights appurtenant to ownership of a Parcel hereunder. 1.3 "Parcelization Amendment" shall mean this Amendment. 1.4 "Proportionate Share" means (i) with respect to the Class A Common Area Expenses, the total Floor Area within all buildings within a Parcel (excluding the Master Parcel), divided by the total Floor Area within all buildings within the Project (excluding the Master Parcel), provided that with respect to Class A Common Area Expenses that relate to maintenance, repair or restoration costs, "Proportionate Share" shall be calculated so that the Proportionate Share of the Retail Parcel Owner shall be 5 1 % and the Proportionate Share of the -2- CIM HB CCRs Amendment Hotel Parcel Owner shall be 49%, and (ii) with respect to the Class B Common Area Expenses, the Proportionate Share of the Retail Parcel Owner shall be 51 % and the Proportionate Share of the Hotel Parcel Owner shall be 49%." 2. Modification of Section 16.26. Section 16.26 of the Original Declaration shall be deleted and the following substituted in its place: " 16.26 Authority of Successor Agency Executive Director to Act for Successor Ate. Except as otherwise expressly provided in this Declaration, any consent, approval or other instrument described in this Declaration may be granted, given or executed by the Successor Agency Executive Director or designee on behalf of the Successor Agency and the Successor Agency Executive Director or designee shall be authorized to take any other action on behalf of the Successor Agency without the need for further authorization from the Successor Agency; provided, however that, notwithstanding the foregoing, the Successor Agency Executive Director or designee may, in his or her sole discretion, refer to the Successor Agency any item for which the Successor Agency Executive Director or designee has authority to act hereunder." 3. Agreement to Mold Hotel Units by One Owner. Developer hereby covenants, on behalf of itself and all future owners of the individual condominium units within the Hotel Parcel, that all such units shall be owned by the same owner(s) (provided that ownership by tenants -in -common of such units shall not violate the foregoing covenant). 4. ]Limitation of Amendment. Except as expressly set forth in this Amendment, the Original Declaration shall remain in full force and effect. [signatures on following pages] -3- CIM HB CCRs Amendment IN WITNESS WHEREOF, the Parties hereto have executed this Declaration as of the date first written above. SUCCESSOR AGENCY TO THE CITY OF HUNTINGTON BEACH, a HUNTINGTON' BEACH municipal corporation of the State of REDEVELOPMENT AGENCY, a public body California corporate and politic to Chairperson ATTEST: By: Agency Clerk APPROVED AS TO FORM: M Agency Counsel APPROVED AS TO FORM: BY: Kane Ballmer & Berkman Successor Agency Special Counsel INITIATED AND APPROVED: By: Deputy Executive Director L-62 EM Executive Director -4- CIM HB CcRs Amendment M Mayor ATTEST: By: City Clerk APPROVED AS TO FORM: M City Attorney INITIATED AND APPROVED: By: Deputy Director of Business Development REVIEWED AND APPROVED, By: City Manager APPROVED AS TO FORM Item 6. - 11 HB -104- "Developer" CIM/Huntington, LLC, a California limited liability company By: Name: Title: "Cracchiolo" Salvator W. Cracchiolo, trustee for the Declaration of Trust dated June 12, 1979 Dolores L. Cracchiolo, trustee for the Declaration of Trust dated June 12, 1979 Barbara F. Cracchiolo, trustee of the Cracchiolo Family Trust dated March 28, 2003 Salvator W. Cracchiolo, trustee of the Cracchiolo Family Trust dated March 28, 2003 -5- CIM HB CCRs Amendment Res. No. 2015-02 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a Regular meeting thereof held on February 2, 2015 by the following vote: AYES: Posey, O'Connell, Katapodis, Hardy, Sullivan, Delgleize, Peterson NOES: None ABSENT: None ABSTAIN: None Shari L. Freidenrich, CPA, CCMT, CPFA, CPFIM City Treasurer P.O. Box 190 Huntington Beach, CA 92648-0190 www.surfeity-hb.org city.treasurer@surfcity-hb.org Phone: (714) 536-5200 Fax: (714) 374-1603 Office ®f the City Treasurer Accounts Receivable, Cashiering, Collections, Disbursements, Investments CERTIFIED MAIL November 24, 2009 Arch Insurance Company c/o Natalie Burkhart 135 N. Los Robles Ave, Suite 825 Pasadena, CA 91101 To Whom it May Concern: This is to inform you the City of Huntington Beach City Council approved the release of the following bonds on November 3, 2008: Tract # 16406 Monument Bond No. SU5008088 We are releasing this bond and have enclosed a copy of the bond for your files. We have also enclosed a copy of the City Council Action approving the release of the above -referenced bond. If you have any questions regarding this matter, please contact me at (714) 536-5200. Sincerely, Shari L. Freidenrich, CPA, CCMT, CFMA, CPFIM City Treasurer Enclosures cc: CIM Group 6922 Hollywood Blvd., Ninth Floor Hollywood, CA 90028 Bob Milani, Senior Civil Engineer (no attachments) Joan Flynn, City_ Clerk (no attachments) Joyce Zacks, Deputy City Treasurer (no attachments) Charter Mission: Ensure safe and timely receipt, deposit, collection, investment and disbursement of public funds. TO: FROM DATE: CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION Patty Esparza, Deputy City Clerk Steven Bogart, Acting Principal Civil Engineer November 19, 2009 SUBJECT: Release of Monument Bond for the Strand (Tract 16406) In compliance with Request for Council/Redevelopment Agency Number ED 08-48 (approved by City Council on November 3, 2008), please notice that: 1. The City Engineer authorizes the release of Monument Bond No. SU5008088. Please notify the Developer (contact info listed below) of this action. In addition, please instruct the City Treasurer to notify the Surety, Arch Insurance Company, of the release of said bond. The following is pertinent contact information for the related parties: DEVELOPER: CIM Group, 6922 Hollywood Blvd., Ninth Floor, Hollywood, CA 90028 SUBDIVIDER: CIM/Huntington, LLC 6922 Hollywood Blvd., Ninth Floor, Hollywood, CA 90028 SURETY: Arch Insurance (c/o Natalie Burkhart) 135 N. Los Robles Ave. Suite 825, Pasadena, Ca. 91101 Attachments: 1. Copy of Monument Bond (SU5008088) for Tract 16406 ti"1 �,.�.i ,� ozrhls Fr;ic; ( �h �,l' Mein,, to ('a (.: _k lit�t _,;z i�jnd I �h.�St;� i 1 '_- 00.dL Shari L. Freidenrich, CPA, CCMT, CPFA, CPFIM City Treasurer P.O. Box 190 Huntington Beach, CA 92648-0190 www.surfcity-hb.org city.treasurer@surfcity-hb.org Phone: (714) 536-5200 Fax: (714)374-1603 Office ®f the City Treasurer Accounts Receivable, Cashiering, Collections, Disbursements, Investments CERTIFIED MAIL September 2, 2009 Arch Insurance Company c/o Natalie Burkhart 135 N. Los Robles Ave, Suite 825 Pasadena, CA 91101 To Whom it May Concern: This is to inform you the City of Huntington Beach City Council approved the release of the following bonds on November 3, 2008: Tract # 16406 Labor and Material Bond No. SU5008087 Faithful Performance Bond No. SUS008087 We are releasing this bond and have enclosed a copy of the bonds for your files. We have also enclosed a copy of the City Council Action approving the release of the above -referenced bond. If you have any questions regarding this matter, please contact me at (714) 536-5200. Sincerely, Shari L. Freidenrich, CPA, CCMT, CFMA, CPFIM City Treasurer Enclosures cc: CIM Group 6922 Hollywood Blvd., Ninth Floor Hollywood, CA 90028 Bob Milani, Senior Civil Engineer (no attachments) Joan -Flynn; City _C_l_erk.(no .attachments) 1 Joyce Zacks, Deputy City Treasurer (no attachments) Charter Mission: Ensure safe and timely receipt, deposit, collection, investment and disbursement of public funds. � v,,,r .-.ww'° v�.-.E.ri`-'4-.;^_.�u-v..w....,.u,...,✓ '..`..�.�..:..-. v....w-.+.,;;�^,=,,.... ...�,=��;,W�-`"''.'��'"'r �...-...-,�.iL.--.'.+:�.:-<r�..i"��?. - RECEIVED BY:-, g CITY CLERK RECEIPT COPY Return DUPLICATE to `k%.I, f ' City Clerk's Office (Name) t after signing/dating oc1 (Date) 7CITY �_ OF HUNTINGTON BEACH_ TO: Shari Freideenrich, City Treasurer FROM: Ttl Cz- 0. tx, DATE: K/.,13 16 7 SUBJECT: Bond Acceptance have received the bonds for Faithful Performance Bond No. Labor and Material Bond No. Monument Bond No. Maintenance Bond No. . � Z Z -- (Company Name) Guarantee and Warranty Bond No. .-5U -."SAC. G 70 t 7 f I Re: Tract No. 16 CC No. MSC No. Approved A)-/�u/,�Vr A enda Item No. Pp9 (Council Approval Date) City Clerk Vault No. #27 g1followup/bondletter.doc CITY OF HUNTINGTON BEACH o_► TO: DATE: INTERDEPARTMENTAL COMMUNICATION Patty Esparza, Deputy City Clerk Bob Milani, Senior Civil Engineer &* August 10, 2009 SUBJECT: Acceptance of Public Improvements and Release of Bonds for the Strand (Tract 16406) In compliance with Request for Council/Redevelopment Agency Number ED 08-48 (approved by City Council on November 3, 2008), please notice that: 1. The City Engineer has signed the Acceptance of Public Improvements Form (attached) for the subject tract and authorizes the City Clerk to record said form with the County of Orange Recorder. '7 ✓2. The City Engineer accepts the Guarantee and Warranty Bond (SU5008087-A) for the subject tract. Please file this bond with the City Treasurer. �'//o e/lj,1vy j ,�-'3. The City Engineer authorizes the release of Faithful Performance/Labor and Materials Bond No. SU5008087. Please notify the Developer (contact info listed below) of this action. hi addition, please instruct the City Treasurer to notify the Surety, Arch Insurance Company, of the release of said bond. r ,ate � *'P � � �'< `.`' �' . p1 197 The following is pertinent contact information for the related parties: DEVELOPER: CIM Group, 6922 Hollywood Blvd., Ninth Floor, Hollywood, CA 90028 SUBDIVIDER: CIM/Huntington, LLC 6922 Hollywood Blvd., Ninth Floor, Hollywood, CA 90028 SURETY: Arch Insurance (c/o Natalie Burkhart) 135 N. Los Robles Ave. Suite 825, Pasadena, Ca. 91101 Upon the City Clerk's- receipt of the recorded copy, please. forwarda copy :of the recorded Acceptance of Public Improvements Form to: 1. HB Public'Works Department, Attn: Steve Bogart Attachments: 1. Acceptance of Public Improvements form for Tract 16406 2. Original Guarantee & Warranty Bond (SU5008087-A) for Tract 16406 3. Copy of Faithful Performance/Labor Material Bond (SU5008087) for Tract 16406 G:\Engineering Division\DEVELOPMENnTraet Bonds\Tract 16406\Memo to City Clerk (bond release).doc ATTACHMENT #1 il Recording requested by, and when recorded return to: Joan Flynn, City Clerk Office of the City Clerk CITY OF HUNTINGTON BEACH P.O. Box 190 — 2000 Main Street Huntington Beach, Ca. 92648 Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 111111111111111111111111111111111111111111111111111111111111111111111111111 NO FEE 2009000442243 09:23am 08/17/09 100 286 A04 1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 C1/>7 _ � S74 (Space above this line for Recorder's use only) ACCEPTANCE OF PUBLIC IMPROVEMENTS (Huntington Beach Zoning and Subdivision Ordinance Section 255.22) PLEASE TAKE NOTICE THAT on August 10th 2009, the City Engineer considered the subdivision improvements described below, and found them to have been completed satisfactory and accepted, as limited by Huntington Beach Zoning and Subdivision Ordinance Section 255.22(A), the improvements for public use. Further, the public improvements for the subdivision(s) have been dedicated to the City of Huntington Beach-, as -described -on -Final Map -No. 16406. - - - Public improvements constructed consist of: a. The domestic water system and appurtenances per the Improvement Plans for this Tract. b. The sewer system and appurtenances per the Improvement Plans for this Tract. c. The storm drain system and appurtenances per the Improvement Plans for this Tract. d. Curb, gutter, paving and sidewalk within 5th Street, 6th Street, Walnut Avenue and the Main Street/ El Don Alley per the Improvement Plans for this Tract. The Foregoing instrument is the City Clerk's Original Document Reflecting City Council Action Taken at the November 3, 2008 City Council Meeting Submitted for Recordation by the Orange County Recorder. Attest August 12, 2009 L City Clerk and Ex-officio Clerk of the City Council of the City of Huntington Beach, California BY f ,2liuty v CITE.' HUN INGTON BEACH This dw nent Is solely for the hakxm of the Ck of Huntington as contempWedunder B City n ineer Govwnffmnt code Sec. 6103 and Y Y g should b s recorded frees of charge. City Attorney (,�,j p pr1 / a� City ®f Huntington Beach 2000 Main Street o Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK August 12, 2009 Tom Daly O. C. Clerk — Recorder 12 Civic Center Plaza, Rm. 101 Santa Ana, CA 92701-4057 Attn: Document Examiner Enclosed please find Acceptance of Public Improvements for domestic water system and appurtenances, sewer system and appurtenances, storm drain system and appurtenances, curbs, gutters, paving and sidewalks within 5th Street, 6th Street, Walnut Avenue and the Main Street/El Don Alley per the Improvement Plans for Tract 16406 to be recorded and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. Please return a conformed copy of the acceptance when recorded to this office in the enclosed self-addressed stamped envelope. oan L. Flynn, CIVIC City Clerk JF:pe Enclosure Sister UrWa Wu Iic�Vi a`�cer��;d`lUew Zealand (Telephone: 714-536-5227) ATTACHMENT RECEIVED BY: (Name) (Date) CITY CLERK RECEIPT COPY Return DUPLICATE to City Clerk's Office after signing/dating CITY OF HU NTI GTON BEACH INTERDEPARTMENTAL COMMUNICATION TO: Shari Freidenrich, City Treasurer FROM:CLt4X,.SP DATE: 013 A) SUBJECT: Bond Acceptance I have received the bonds for Faithful Performance Bond No. Labor and Material Bond No. Monument Bond No. Maintenance Bond No. X-A.- 1---Z)A) (Company Name) Guarantee and Warranty Bond No. ice[ .�'�t� ro f 7 " A Re: Tract No. CC No. MSC No. Zaly�Approved /17) /916 r-� Agenda Item No. (Council App oval Date) City Clerk Vault No. #27 g1followup/bondletter.doc BOND NO. SU5008087-A Premium included with Performance Bond F WHEREAS, CIM/Huntington, LLC , as a Principal, and Arch Insurance Company , a corporation organized under the laws of the State of Missouri and duly authorized to do business in the State of California, as Surety, are held and firmly bound unto the City of Huntington Beach, California, as Obligee, in the penal sum of One Hundred Seventy Five Thousand Six Hundred Forty Nine and NO/000 dollars ($175,649.00) , representing 10 percent of the contract price entered into between the Principal and Obligee, to which payment well and truly to be made we do bind ourselves, and each of our heirs, executors, administrators, successors and assigns jointly and severally. WHEREAS, the said Principal entered into a contract with said Obligee, dated July 29, 2004 for work described as follows: The Strand for Tract 16406 Offsite Utilities (Water, Sewer and Storm Drain), Streets, Traffic and Landscape Improvements and Street Improvements on PCH WHEREAS, said contract provides that the Principal will furnish a bond conditioned to guarantee and warrant for the period of one year after completion of the work and acceptance thereof by the Obligee, against all defects in workmanship and materials during said one-year period. WHEREAS, said work has been completed, and accepted by Obligee on August 10. 2009 NOW, THEREFORE, the Principal and Surety, jointly and severally shall indemnify the Obligee for all loss that the Obligee may sustain by reason of any defective materials or workmanship, which become apparent during the period of one year from and after date of completion of work and acceptance thereof by Obligee. In witness whereof, this instrument has been duly executed by the principal and surety above named, on May 7 2009. CIM/Huntington, LLC , as Principal By See attached SIGNATURE PAGE By Arch Insurance Company , as Surety By J ce Herrin, Attorney -in -Fact APPROVED To 1-. T i, City At ,° c.r C�€�•1�{pr� SIGNATURE PAGE Attached to and made part of: BOND #SU5008087 Dated: May 7, 2009 PRINCIPAL: CINVIfuntington, LLC, a California limited liability company BY: CIN4 Urban Real Estates Fund, L.P., a Delaware limited partnership, sole member By: CIM Urban Fund GP, LLC, a California limited liability company, its general partner BY: Nicholas V. Morosoff Secretary Pi CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of On before me,j Date I Here InsetLUfte and Title of the Offi personalty appeared AlIC-17D14 S Y 1--kf ,oser Nam(s) bf Signer(s) Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person] whose namey subscribed to the within instrument and ac nowledged to me that qcao/acity(i,94, e/th/j executed the same in&i�iht)pfr authorized and that bpyor Utignature(�on the instrument the person(the entity upon behalf of which the person06 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signatt�+�� Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: QY4/ t 1,e- a,2'6 &-_�,el Document Date Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name://4&/_4 S NIT 9S ❑ Individual Corporate -Officer — Title(s). ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact a ❑ Trustee Top of thumb here ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Signer's Nat ❑ Individual ❑ Corporate Officer — Title(s): _ ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: ,RIGHT THUMBPRINT OF SIGNER of thumb here I L State of California County of Los Angeles On May 7, 2009 before me, Tracy Aston, Notary Public, personally appeared _Joyce Herrin , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/am subscribed to the within instrument and acknowledged to me that he/she/they executed the same in b4s/her/the* authorized capacity(ies), and that by his/her/the-ir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Otto -TRACY ASTON Commission # 1739959 .® Notary Public - California Los Angeles County WComm F0esNby15,2011 Tracy Aston Know All Men By These Presents: That the Arch Insurance Company, a corporation organized and existing under the laws of the State of Missouri, having its principal office in Kansas City, Missouri (hereinafter referred to as the "Company") does hereby appoint KD Conrad, C.K. Nakamura, Joyce Herrin, Tom Branigan, Edward C. Spector, Marina Tapia, Lisa L. Thornton, Maria Pena, E.S. Albrecht, Jr., Tracy Aston, Simone Gerhard, Michael R. Mayberry, Brenda Wong and Noemi Quiroz of Los Angeles, CA (EACH) its true and lawful Attomey(s)-in-Fact, to make, execute, seal, and deliver from the date of issuance of this power for and on its behalf as surety, and as its act and deed: Any and all bonds and undertakings EXCEPTION: NO AUTHORITY is granted to make, execute, seal and deliver bonds or undertakings that guarantee the payment or collection of any promissory note, check, draft or letter of credit. This authority does not permit the same obligation to be split into two or more bonds in order to bring each such bond within the dollar limit of authority as set forth. herein. The Company may revoke this appointment at any time. The execution of such bonds and undertakings in pursuance of these. -presents shall be as binding upon the said Company as fully and amply to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office in Kansas City, Missouri. This Power of Attorney is executed by authority of resolutions adopted by unanimous consent of the Board of Directors of the. Company on March 3, 2003, true and accurate copies of which are hereinafter set forth and are hereby certified to by the undersigned Secretary as being in full force and effect: "VOTED, That the Chairman of the Board, the President, or any Vice President, or their appointees designated in writing and filed with the Secretary, or the Secretary shall have the power and authority to appoint agents and attomeys-in-fact, and to authorize them to execute on behalf of the Company, and attach the seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings, obligatory in the nature thereof, and any such officers of the Company may appoint agents for acceptance of process." This Power of Attorney is signed, sealed and certified by facsimile under and by authority of the following resolution adopted by the unanimous consent of the Board of Directors of the Company on March 3, 2003: VOTED, That the signature of the Chairman of the Board, the President, or any Vice President, or their appointees designated in writing and filed with the Secretary, and the signature of the Secretary, the seal of the Company, and certifications by the Secretary, may be affixed by facsimile on any power of attorney or bond executed pursuant to the resolution adopted by the Board of Directors on March 3, 2003, and any such power so executed, sealed and certified with respect to any bond or undertaking to which it is attached, shall continue to be valid and binding upon the Company. OOML0013 00 03 03 Page 1 of 2 Printed in U.S.A. In Testimony Whereof, the Company has caused this instrument to be signed and its corporate seal to be affixed by their authorized officers, this 1st day of May , 20 08 Arch Insurance Company Attested and Certified �€► Ce CMPOMT9 SiAI 1971 r Aissouri Martin J. Nil , Secretary STATE OF PENNSYLVANIA SS COUNTY OF PHILADELPHIA SS I, Brian C. Kuhn, a Notary Public, do hereby certify that Martin J. Nilsen and J. Michael Pete personally known to me to be the same persons whose names are respectively as Secretary and Vice President of the Arch Insurance Company, a Corporation organized and existing under the laws of the State of Missouri, subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that they being thereunto duly authorized signed, sealed with the corporate seal and delivered the said instrument as the free and voluntary act of said corporation and as their own free and voluntary acts for the uses and purposes therein set t70M0YtONWF�1i'18 OF MVIdSYIAAIVIA LNKiIARtOSEAL �Brian. Kuhn;�Notary�Pubric��� Brian il Kni�a, Notary Public M commission expires 12-06-2011 Philadelphia, Philadelphia County Y xpCERTIFICATION mission ezpi es December 06,1011 1, Martin J. Nilsen, Secretary of the Arch Insurance Company; do hereby certify that the attached Power of Attorney -dated May 1, 2008 on behalf of the person(s) as listed above is a true and correct copy and that the same has been in full force and effect since the date thereof and is in full force and effect on the date of this certificate; and I do further certify that the said J. Michael Pete, who executed the Power of Attorney as Vice President, was on the date of execution of the attached Power of Attorney the duly elected Vice President of the Arch Insurance Company. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and a ed the corpo s I of the Arch Insurance Company on this 7 th day of May , 20 09 Martin J. Nil , Secretary This Power of Attorney limits the acts of those named therein to the bonds and undertakings specifically named therein and they have no authority to bind the Company except in the manner and to the extent herein stated. PLEASE SEND ALL CLAIM INQUIRIES RELATING TO THIS BOND TO THE FOLLOWING ADDRESS: Arch Contractors & Developers Group 135 N. Robles Ave., Ste. 825 Pasadena, CA 91101 OOMLOO13 00 03 03 Page 2 of 2 oIm Printed in U.S.A. Company Profile Pagel of 2 Company Profile Company Search Company Search Results Company Information Old Company Names Agent for Service Reference Information NAIC Group List Lines of Business Financial Statements PDF's Annual Statements Quarterly Statements CA Supplements Company Complaint Company Performance & Comparison Data Company Enforcement Action Composite Complaints Studies Additional Info Find A Company Representative In Your Area View Financial Disclaimer COMPANY PROFILE Company Information ARCH INSURANCE COMPANY 300 PLAZA 3 JERSEY CITY, NJ 07311-1 800-821-5546 Old Company Names Effective Date FIRST AMERICAN INSURANCE COMPANY 01/05/1987 FIRST AMERICAN INSURANCE COMPANY DBA AMERICAN FIRST 11/06/2002 INSURANCE COMPANY back to top Agent For Service JERE KEPRIOS C/O CT CORPORATION SYSTEM 818 WEST SEVENTH ST LOS ANGELES CA 90017 back to top Reference Information NAIC #: 11150 California Company ID #: 3005-6 Date Authorized in California: 07/19/1985 License Status: UNLIMITED -NORMAL Company Type: Property & Casualty State of Domicile: MissOURI back to top NAIC Group List NAIC Group #: 1279 Arch Ins Grp back to top Lines Of Business The company is authorized to transact business within these lines of insurance. For an explanation of any of these terms, please refer to the glossary. AIRCRAFT AUTOMOBILE BOILER AND MACHINERY BURGLARY COMMON CARRIER LIABILITY http://interactive.web.insurance.ca.gov/companyprofile/companyprofile?event=companyPr... 5/11 /2009 ATTACHMENT #3 City of Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERIC JOAN L. FLYNN CITY CLERK August 13, 2009 CIM Group 6922 Hollywood Blvd. Ninth Floor Hollywood, CA 90028 Re: Release of the Bond for Tract No. 16406 (The Strand) In compliance with Request for Council/Redevelopment Agency Number ED 08-48 (approved by City Council on November 3, 2008), please note that: 1. The City Engineer has signed the Acceptance of Public Improvements form for the subject tract and authorizes the City Clerk to record said form with the County of Orange Recorder. 2. The City Engineer accepts the Guarantee and Warranty Bond (SU5008087-A) for the subject tract, and is filing with the City Treasurer. 3. The City Engineer authorizes the release of Faithful Performance/Labor and Materials Bond No. SU5008087, and instructed the City Clerk to notify the developer, and the City Treasurer to notify the Surety, Arch Insurance Company, of the release of said bond. Sincerely, Ag J an L. Flynn, CMC City Clerk JF:pe cc: City Treasurer's office Sister qt/Q&Apjj9cJ,4J44A goW!oAjaqetA4(a* Zealand (Telephone: 714-536-5227 ) This Document was electronically recorded by City of Huntington Beach Recorded at the request of City of Huntington Beach When Recorded Mail to: City of Huntington Beach P.O. Box 190 2000 Main St. Huntington Beach, CA 92648 Attn: Joan Flynn, City Clerk Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 111111111111111111111111111111111111111111111111111111111111 NO FEE 2010000242354 12:56pm 05/24/10 93 401 G02 13 0.00 0.00 0.00 0.00 36.00 0.00 0.00 0.00 APN:The Strand Parking Structure/ 155 5th St. Space above this line for Recorder's Use EXEMPT FROM RECORDING FEE PER GOVT. CODE 61903 AMENDED AND RESTATED GRANT DEED THIS GRANT DEED IS RECORDED TO CORRECT THE NAME OF GRANTOR AND MAKE CERTAIN CONFORMING CHANGES IN THAT CERTAIN GRANT DEED RECORDED AS DOCUMENT NUMBER 2009000384593 ON JULY 17, 2009 IN THE OFFICIAL RECORDS OF ORANGE COUNTY. For a valuable consideration, receipt of which is hereby acknowledged, CIM/HUNTINGTON, LLC, a California limited liability company, as to an undivided 95.495% tenancy in common interest, and Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 as to an undivided 4.505% tenancy in common interest (collectively, "GRANTOR"), hereby grant(s) to THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION ("GRANTEE"), the real property described in the legal description attached hereto as Exhibit A and incorporated herein by this reference (the "Property"), in accordance with and subject to the covenants, conditions, and restrictions set forth in this Grant Deed. Grantor and Grantee agree that there shall be no discrimination against or segregation of any persons, or group of persons, on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. Grantor and Grantee agree that all deeds, leases or contracts for the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or improvements thereon, or any portion thereof, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The Grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, 06-682/33853 that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." Notwithstanding the paragraph, with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall also apply to the above paragraph. 2. 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, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the 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 segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." Notwithstanding the above paragraph, with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the above paragraph. 3. The foregoing provisions shall be incorporated into any contracts relating to interests in the Property and the contracts shall further provide that the foregoing provisions shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 4. This Grant Deed shall not merge with any other agreement between Grantor and Grantee. 06-682/33853 2 IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized as of the dates shown below. CIM/Huntington, LLC, Dated as of May 14, 2009 a California limited liability company By CIM Urban Real Estate Fund, L.P., sole member, By CIM Urban Fund, GP, LLC, its general p er By: Nicholas V. Morosoff Secretary 06-682/33853 jr Salvator W. Cracc iofo, stee for the Declaration of Trust dated June 12, 1979 olores L. Cracchiolo, trustee for the De rati n of Tru t dated June 12, 1979 04JI Barbara F. Cracchiolo, trustee o the Cracchiolo Family Trust dated March 28, 2003 .� Z ator W. Cracchiolo, trustee of the Cracchiolo Family Trust dated March 28, 2003 DEED CERTIFICATION — CITY OF HUNTINGTON BEACH This is to certify that the interest in real property conveyed by the Grant Deed dated May 14 , 2009 from CIM/Huntington, LLC, a California limited liability company, to the CITY OF HUNTINGTON BEACH is hereby accepted by the undersigned officer or agent on behalf of the City Council of the City of Huntington Beach pursuant to the authority conferred by Resolution No. 3537 of the City Council of Huntington Beach adopted on August 7, 1972, and the grantee consents to the recordation thereof by its duly authorized officer. CITY OF HUNTINGTON BEACH Dated May 17, 2010 ti B !� JOA,P4 FLYNN, CMC CITY CLERK 06-682/33853 4 APPROVED AS TO FORM: JENNIFER CGRATH, City Attorney /Deputy City Attorney This Document is solely for the official business of the City of Huntington Beach, as contemplated under Government Code Section 6103 and should be recorded free of charge. Tax Exempt Government Agency CITY OF HUNTINGTON BEACH Joan Flynn, City Clerk CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA COUNTY OF LOS ANGELES On May 4, 2010, before me, Lory Ann Apilado, a Notary Public, personally appeared Nicholas V. Morosoff who proved to me on the basis of satisfactory evidence to be the person{} whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/s'% executed the same in his/hen4heir authorized capacity(ies)-, and that by his/hegtht4 signature(s) on the instrument the person{-s)or the entity upon behalf of which the persons) -acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. By: - " K Lory nn A ilado, Notary Public SEAL LORY ANN APILADO Commission # 1834030 a =�e Notary Public • California Z 'P f Los Angeles County My Comm. Expires Jan 29, 2013 STATE OF CALIFORNIA ) ss. COUNTY OFF ) /x` Onbefore mey�,(here insert name and title of the officer), ersonally appeareW ('1i .+�f�(insert name(s) of signer(s)) who proved to me on the basis of satisfactory evidence to be the person whose name�ar-e subscribed to the within instrument and acknowledged to me thatoslic/44ey executed the same it /he 4heir authorized capacity(ie�, and that by(5/� signatures on the instrument the perso*11 or the entity upon behalf of which the person(nacted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA ) ss. COUNTY OFF ) CATHERINE KEiI Commission # 1873290 Notary Public - Calliornia Orange County s MY Comm. Expires Jan 13, 2014 � - On W :7? �� before me � ���� d,�'�:.�✓ here insert name and title of the office , pe sonally appearedZ2giz-'vim (insert name(s) of signer(s)) who proved to me on the basis of satisfactory evidence to be the person , 3whose nam subscribed to the within instrument and acknowledged to me that hg/ . /they executed the same in ' he their authorized capacity(ieand that by leis/der hem signature'on the instrument the persons , or the entity upon behalf of which the person(octed, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. CATHERINE KERVIPAN Commission # 1873290 _ •o Notary Public - California K.y Orange County My Comm. Ex ires Jan 13, 2014 Signat 06-682/33853 5 STATE OF CALIFORNIA ) ss. COUNTY OF ) On A i " o before me, rr97'�,"�rQ (here i7ert name and title of the officer), personally appeared ,ins C , (insert name(s) of signer(s)) who proved to me on the basis of satisfactory evidence to be the person/+whose name.4)G4*& subscribed to the within instrument and acknowledged to me that hell l&y executed the same in .his die— their authorized capacity(ies 1 and that by his/ er her signatureX on the instrument the persory(5"), or the entity upon beha f of which the personv acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal Signature ea STATE OF CALIFORNIA ) ss. COUNTY OF�►�r= ) rA951GATHERiNE KERN Commission 1873290 is LIk Notarry Public - California Orange County Comm. ires Jan 13, 20 44 .� ° On hr ��`� before me, r i�ric�a,u', (here rli�sert name and title of the officer)4personally appeared_S4e.,,#,-,L k . (insert name(s) of signer(s)) who proved to me on the basis of satisfactory evidence to be the person(g)whose name rs w subscribed to the within instrument and acknowledged to me thane ey executed the same in hi her-4keir authorized capacity(ie and that byZ i . - fir signatures) on the instrument the perso (s), or the entity upon behalf of which the person(s)' acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signat�'—'�{ al) 06-682/33853 0 CATHERiNE KERWiN Commission * 1873290 HMary Public = California orange County Comm. res Jan 13 2014 LEGAL DESCRIPTION 06-682/33853 EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCELI: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41 "37'10" EAST 124.55 FEET; THENCE, NORTH 48.21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET TO THE POINT OF BEGINNING; THENCE, ALONG THE FOLLOWING 10 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 °38'08" EAST, 148.50 FEET; 3- SOUTH 48"21'52" EAST, 77.00 FEET; 4- SOUTH 64°5617" EAST,19.30 FEET; 5- SOUTH 48°21'52" EAST, 30.00 FEET,- 6- NORTH 41"38'08" EAST 182.00 FEET; 7- SOUTH 48.21'52" EAST 275.00 FEET; 8- SOUTH 41'38"08" WEST 211.58 FEET; 9- NORTH 48"21'52" WEST 63.67 FEET; 10- SOUTH 41 °38'08" WEST 124.42 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE ELEVATION 25.66 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW ELEVATION 9.00 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1,18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 2.37 ACRES (103,331 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. 1 j EXHIBIT " 1 ®F 4 1 155 STH STREET LAM) SG� Exp. 6/30/09 4L No. 6034 � J►�9� OF CA�-4 TAIT & ASSOCIATES INC. Engineering Surveying Environmental PARKCENTER ORM SANTA ANA, CALIFORNIA WOS TEL(M)SG"200 EXHIBIT"A-1 ' LEGAL DESCRIPTION - PARKING PARCEL PARCEL 2: THAT PORTION OF LOT 1 OF TRACT NO.16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41*37'10" EAST 124.55 FEET; THENCE, NORTH 48°21'62" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET; THENCE, ALONG THE FOLLOWING 14 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41"38'08" EAST, 148.50 FEET TO THE POINT OF BEGINNING; 3- NORTH 48"21'52" WEST, 15.93 FEET TO A POINT OF THE NORTHWESTERLY LINE OF SAID LOT 1; 4- NORTH 41-37'11" EAST, ALONG SAID NORTHWESTERLY LINE, 40.75 FEET; 5- SOUTH 48°21'52" EAST, 15.93 FEET; 6- NORTH 41n38VW EAST, 2.00 FEET; 7- SOUTH 48°21'52" EAST, 43.83 FEET; 8- SOUTH 59*W03" EAST, 52.82 FEET; 9- SOUTH 77-0919" EAST, 21.11 FEET; 10- SOUTH 48°21'25" EAST, 11.26 FEET; 11- SOUTH 41°38'08" WEST, 67.17 FEET; 12- NORTH 48"21'52" WEST, 30.00 FEET; 13- NORTH 64°55'17" WEST, 19.30 FEET; 14- NORTH 48°21'52" WEST, 77.00 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE AND BETWEEN AN ELEVATION OF 38.79 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 26.33 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW AND BETWEEN AN ELEVATION OF 30.46 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 12 AND AN ELEVATION OF 18.00 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 0.15 ACRES (6,550 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. MtCHAEL SIMO P..S. 6034 REGISTRATION EXPIRES 6130/09 Exp. 6/30/09 No. 6034 ibAfE OF CAL SHEET EXHIBIT "A -'I" a �� TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 2 CIF 4 155 STH STREET 701 FARM r} SANT CAUF01M 9M5 uflllTlitrTrt6}QCArtJ rA , `' ) -__--•�- - SIXTH NW'LY LINE LOT 1 TRACT i O. 16406 PER N41 37'11'E 40.50' N48'21'52'W 58' 2:$3:.-I 1 w r,y N iv rn _.NE'kY RrJWILiNE�' f °�� �~~ JQD � N'LY LIMIT OF ' co" PACIR6 GOAS HsIVY -' v - N INGRESS -EGRESS PfR RY y - RAMP w 19.3b': "�- SE'LY LINE PARCEL 2 $pa 5Z oto �-/ ( y i J JTERIQI S1D : -OF; ` - N•4i "3f3'b8"E` t $2.00' - Z. LL_�- a PARIf{N"SUC / a ,�-i ` Y>�ALL`ZT)1},'tNaERfk3�t Sit7E''�F.% a Q a rn �' �ARCEL o_ _ 3 "' PR. LOT 1 'Wget (s1 0 ;r; :.' TRACT NO. 1 6406. M.M. 870j47-50 -' PAD EtEV�-25,86` AV4 88 v LJ vtSNCF- n w .t1PP)f PSG Pastica j Q LO (!fl,�QOR' EL6 AnOti Us- fH LotIPR b e4EL.ARj4iJG. P'ARS;Et-) �O r - L)MIA fS • UPPER I IEVx 38 I9:. 1311E !!l6Y-Ifs-# RAR(Et 2 Ln 2 -� 58• 2.83' 1-16. 3° QW n `-SEkT LU E OF'PA�t2 t �(NAV6 $$) c' �. Q (5 TcriAN(' QtAR}tt g_fLEVA IOfYf `L1M41S 0( L( :�ELE .V k,46' (W TK''NYAY LINE OF'pARCEL. � k- i LI �v~i `S4i`38 d8" '24 :.' oUj 124.55'(Rt) INiER(M.-SIDE OF' \N41'37'10"E 12' :' - PAFtKHIG.5TF3tfC7id12£.' -P.O.C. PARCEL 1 'ems' 1Au. i 30' MOST SE' aY LINE LOOTJ AND PARCEL 2 ,.}}2}6406 )?Eft R1 S4Y 3$ t58" 21.1.5$' _ ALLEY�� N 0 30 60 120 -- NW'LY LINE PARCEL 2 (W FEED NOTE: SEE SHEET 4 OF 4 FOR LINE TABLE DATA, LEGEND, BASIS OF BEARINGS, BENCHMARK INFORMATION AND 1 inch = 60 ft. SURVEYOR'S NOTES SHEET EXHIBIT "A-1" �"-'°°� TAIT & ASSOCIATES INC. THE STRAND - PARYWiG GARAGE Engineering Surveying Environmental 3 ®F 4, 155 STH STREET 701 PARII(CENTER DRIVE, SANTA ANA, CALIFORNIA 92705 ttt)P1TlldGTON BEACH, CA TEL. (714) W041200 LEGEND: P.0.6. — POINT OF BEGINNING P.O.C. — POINT OF COMMENCEMENT (R1) — RECORD DATA PER TRACT NO. 16406 M.M. 870/47-50 PARKING PARCEL DESCRIBED IN 1,. EXHIBIT "A-1" PARCEL t PARKING PARCEL DESCRIBED IN r EXHIBIT "A-1" PARCEL 2 BASIS Of BEARINGS: — BOUNDARY LOT 1 TRACT NO. 16406 M.M. 870/47-50 INTERIOR SIDE OF PARKING PARCEL WALL BEARINGS HEREON ARE BASED ON THE BEARINGS BETWEEN O.C_S. HORIZONTAL CONTROL STATION CPS 5019 AND STATION CPS 5034R1 BEING NORTH 33'33'25" WEST PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR_ BENCHMARK: BENCHMARK ID: STANDARD 1—RM2 DESCRIBED BY OCS 2002: FOUND 3 3/4" OCS ALUMINUM BENCHMARK STAMPED "STANDARD—I—RM2" SET IN AN ORANGE COUNTY SURVEYOR WELL MONUMENT. MONUMENT IS LOCATED IN THE SOUTHWEST CORNER OF THE INTERSECTION OF PACIFIC COAST HIGHWAY AND 12TH STREET, 27 FT. NORTHEASTERLY OF THE BIKE PATH ALONG THE BLUFF AND 66.3 FT. SOUTHWEST OF THE CENTERLINE OF THE SOUTHBOUND LANES ALONG PCH 6.6 FT. SOUTHEAST OF THE PROLONGATION OF THE CENTERLINE OF 12TH STREET. MONUMENT IS SET 1.0 FT. BELOW GROUND SURFACE. ELEVATION: 30.817 FEET (NAVD 88, 1995 ADJUSTMENT) SURVEYOWS NOTES: 1. THE EXHIBITS GENERATED HEREIN ARE FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. 2_ A CONCRETE WALL THICKNESS OF 1 FOOT (12 INCHES) WAS USED ALONG THE ENTIRE PERIMETER OF THE SUBTERRANEAN PARKING STRUCTURE. AND MAY VARY, 3_ THE LIMITS OF THE UPPER AND LOWER LEVEL ELEVATIONS SHOWN HEREIN WERE TAKEN FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. LINE TABLE DATA LINE I BEARING DISTANCE Lt I N48`21'52"W 4.7D' L2 S48'21'52"E 43.83' L3 S59`00'03"E 52.82' L4 S7709'19"E 21.11' L5 548`21'52"E 1 t .25 SHEET EXHIBIT "A-1 4. TAM & ASSOCIATES INC. THE STRAND - PARKING GARAGE Englneertng Sunreyiag Environmental 4 0 F 4, 155 5TH STREET T01 PAIME MR DRIVE, SWA AN& CAt.1F0f*M 927135 e....erw I TEL.(714)ft' "8M CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of 5e- 1 On�1' J7i Xolo before me, 1� � Date Here Insert Name an of the Officer personally appeared T'�� - q7­4, Name(s) of Signer(s) � ROBIN LU6AR Commission * 1741857 Notary Public - California Orange County MyCQlVM6 PkftApr26.2011 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) iqdare subscribed to the within instrument and acknowledged to me that /they executed the same in /their authorized capacity(ies), and that by h eOheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand nd offgj�icial seal. Signatur Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: ram" , 7a/V Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): — El Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT -THUMBPRINT OF SIGNM _ - ' Top of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: If >!o7 -- RIGHTTHUMBPRINTi OF SIGNER`. p . of thumb here ©2007National Notary Association- 9350DeSoto Ave.,PO.Box2402-Chatsworth, CA91313-2402-www.NationalNotaryorg Item#5907 Reorder: Call Toll -Free 1-800-876-6827 - PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street - 2nd Floor City Clerk's Office Huntington Beach, CA 92648 TITLE OF DOCUMENT: Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE 2009000384593 02:46pm 07/17/09 116 8 G02 9 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 AMENDED AND RESTATED GRANT DEED Re -recorded to provide full Legal Description for The Strand Public Parking Structure 155 - 5th Street (Exhibit A) Instrument No. 2009000277797, recorded June.1, 2009 SLc� OR (;X6 460'1" ) /^ ZegE:� &9�61A��-7— THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording tee applies) Recorded at the request of City of Huntington Beach When Recorded Mail to: City of Huntington Beach P.O. Box 190 2000 Main St. Huntington Beach, CA 92648 Attn: Joan Flvnn. City Clerk [Exempt From Filing Fees Pursuant Government Code § 6103] APN: The Strand Public Parking Structure 155 - 5th Street Space above this line for Recorder's Use AMENDED AND RESTATED GRANT DEED. For a valuable consideration, receipt of which is hereby acknowledged, CHWHUNTINGTON, LLC, a California limited liability company ("GRANTOR"), hereby grant(s) to THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION ("GRANTEE"), the real described in the legal description attached hereto as Exhibit A and incorporated herein by this reference (the "Property"), in accordance with and subject to the covenants, conditions, and restrictions set forth in this Grant Deed. Grantor and Grantee agree that there shall be no discrimination against or segregation of any persons, or group of persons, on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. Grantor and Grantee agree that all deeds, leases or contracts for the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or improvements thereon, or any portion thereof, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The Participant herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: 06-682/33853 That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 3. In contracts: "there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease,. sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 4. This Grant Deed shall not merge with any other agreement between Grantor and Grantee. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized as of the dates shown below. CIM/Huntington, LLC, a California limited liability company By CIM Urban Real Estate Fund, L.P., sole member, By CIM Urban Fund, GP, LLC, its general ner By. �JoCI�/as �-/ /ld6KZ/y Print name DEED CERTIFICATION — CITY OF HUNTINGTON BEACH This is to certify that the interest in real property conveyed by the Grant Deed dated July 02, 2009 from CIM/Huntington, LLC, a California limited liability company, to the CITY OF HUNTINGTON BEACH is hereby accepted by the undersigned officer or agent on behalf of the City Council of the City of Huntington Beach pursuant to the authority conferred by Resolution No. 3537 of the City Council of Huntington Beach adopted on August 7, 1972, and the grantee consents to the recordation thereof by its duly authorized officer. CITY OF HUNTINGTON CITY Dated Datedkg ,� Ogoq APPROVED AS TO FORM: JENNIFER MCGRATH, City Attro v- ByQ1 ssistant eputy City Attorney . This Document is solely for the official business of the City of Huntington Beach, as contemplated under Government Code Section 6103 and should be recorded free of charge. Tax Exempt Government Agency CITY OF HUNTINGTON BEACH Joan Flynn, Cityflgrk Is MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE Joan Flynn, City Clerk, City of Huntington Beach P.O. Box 190/2000 Main St., Huntington Beach, CA 92648 06-682/33853 2 STATE OF CALIFORNIA ) ) ss. COUNTY OFL-d'S G% 'Y- ) Op before ert name and title of the officer), ersonally appeare %%s '/ 4-r )Q-, ,-P (insertname0 of signer who proved to me on the basis of satisfactory evidence to be the person whose nameA9i subscribed to the within instrument and acknowledged to me that �sh/the/ executed the same in &Y, /th� authorized capacityO, and that by r/th signatureVon the instrument the person(4, or the entity upon behalf of which the person'} acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. r Signature (Seal) EMSE o� er Commisaiaa ! ISM79 Notary Pubk - Cahbft Los Ang" ft tqy a 1 100-001 Notary Form EXHIBIT A LEGAL DESCRIPTION 06-682/33853 EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCELI: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41 "3T10" EAST 124.55 FEET; THENCE, NORTH 48*21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET TO THE POINT OF BEGINNING; THENCE, ALONG THE FOLLOWING 10 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41"38'08" EAST, 148.50 FEET; 3- SOUTH 48`21'52" EAST, 77.00 FEET; 4- SOUTH 64*55117" EAST, 19.30 FEET; 5- SOUTH 48*21 *52" EAST, 30.00 FEET; 6- NORTH 41 °38'08- EAST 182.00 FEET, 7- SOUTH 48*21'52" EAST 275.00 FEET; 8- SOUTH 41'38"08" WEST 211.58 FEET; 9- NORTH 48°21'52" WEST 63.67 FEET; 10- SOUTH 41 °38'08" WEST 124.42 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE ELEVATION 25.66 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW ELEVATION 9.00 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 2.37 ACRES (103,331 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. NANO MICHAEL SIMO P.L.S. 6034 �\y REGISTRATION EXPIRES 6/30/09 Exp. 6/30/09 NO. 6034 ///"2 4,108 TE �CA�/ SHEET EXHIBIT "A-1" �� TAR & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 1 O F 4 1 155 STH STREET 701 PARMENTER DRW- SMITA AN& CAUFORNIA W705 lIIIWTiWf-Tf%Ll0CAf4J f•A I TEL.(714)$60-8200 EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCEL 2: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41 *37'10" EAST 124.55 FEET; THENCE, NORTH 48"21'62" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET; THENCE, ALONG THE FOLLOWING 14 COURSES AND DISTANCES: 1- NORTH 48`21'52' WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41.38'08" EAST, 148.50 FEET TO. THE POINT OF BEGINNING; 3- NORTH 48*21'52" WEST, 15.93 FEET TO A POINT OF THE NORTHWESTERLY LINE OF SAID LOT 1; 4- NORTH 41 "3T11" EAST, ALONG SAID NORTHWESTERLY LINE, 40.75 FEET; 5- SOUTH 48"21'52" EAST, 15.93 FEET; 6- NORTH 41 `38'08" EAST, 2.00 FEET; 7- SOUTH 48°21'52" EAST, 43.83 FEET; 8- SOUTH 59"00'03" EAST, 52.82 FEET; 9- SOUTH 77'09'19" EAST, 21.11 FEET; 10- SOUTH 48"21'25" EAST, 11.25 FEET; 11- SOUTH 41°38'08" WEST, 57.17 FEET; 12- NORTH 48`21'52" WEST, 30.00 FEET, 13- NORTH 64*55'17" WEST, 19.30 FEET; 14- NORTH 48'21'52" WEST, 77.00 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE AND BETWEEN AN ELEVATION OF 38.79 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 26.33 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW AND BETWEEN AN ELEVATION OF 30.46 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 18.00 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 0.15 ACRES (6,550 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. 4 � MICHAEL SIMO , P. S. 6034 REGISTRATION EXPIRES 6/30/09 LAND LS7'QG Exp. 6/30/09 No. 6034 \OFCAL� SHEET EXHIBIT "A-1" �� TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 2 OF 1155 STH STREET 701 PARKCENTER ORM, SANTA ANA, CAUFORNIA 92705 HUNTINGTON BEACH, CA R T — I ZHAI '1 ->IKLLI — — NWLY LINE LOT 1 TRACT O. 16406 PER R1 NW LY LINE PARCEL 2 o N N4137'11 "E 40.50' N48'21'52"w 15.93' I �i 58 2:$ NE1Y Rr%W.1INE�' - - � N'LY LIMIT OF ' BACI6t1; COAS-f HWY : .rr - `^ INGRESS -EGRESS CA PER. Rl•-* RAMP I _ ` i 9, ,0'' SE'LY LINE PARCEL 2 Li _•Q� ' . 0 568'21'52"E :' o. O a V z It�TERIEIR S1�Dj`: OF: ` N•4i-3�'bB:E ` 1{y2.00' _ PAR?<INO"-S I`(UMRP •' ,. :` c� 1pFAl1:'(Tlcr�) ,.'':r`IN7'i`Rtt a ,. 1?ARC_ EL 1,-': '-FARIUNG s UR URE _ P O R . LOT Uj o 40 TRACT NO. 1 6406.--' _ M.M. 870 47-50: � L� N N. - _ /. _ 0 w z uo z Z Z' N6TES: ` :: , 90 Ld 3 - OFA01`91 / VEL .EtEv,>_ 25,66' �Navg sel: : , g Q > I In �CCIAR nl�i IN: ifPPFft LE L,PARtCIKG PAttC Lj ' �.rr Q - • OF-LO�S£Vfl,'ELEY=998' (NaW .88) : : N (.- `' ��F1ED,FiOoR"ELEt/aTiOFi 06 Tif., _gCtFIt %e ELVARj4P1G•P"ARCEl) . 1- La ( o LiMIfS.9� IIPPEtLfIEV� 36:79': t1N ii1E NM�LY. tIN-OF RARC£i 2.di W J - ;'26.�3` QN'•THE`SE'L"f LINE QF'FA�CEL:2r(NAV� $8) _ - :cv � Q 58 2.8 (SiRMt T9-`RA1P C1:6%q CE,.•ELEV60J#, . : LlfjltiS OF` LQi4ER.ElEV-60,A�' Q E'�NVY UMf 0_F'PA@CEL :2 do P,9.8,- PAJ2CEL' 1 18 Q9' Utl ttiC- S Y LMIE OF pARCEL,2(NAM 8$) z Ll : G`siREEX TO1tAYp FINISHE9`SURfAfE`ELEVATION) `SMfi 38%08"lAi ]'14 2' : 124.55'(R1) 1NTER1013•'S10E OF \ N4l'37'l0"E 12' P-ARKAG.STRUCT..WkE. iv VKAtI (TYP) \—P.O.C. PARCEL 1 - �:'� '` 30' ,•( N. = M05T,SE•'LY LINE LOT .Y - AND PARCEL 2 I 06 •Tf2A 00t6406 PER RI Z. ` _ . .� �S4i'38-(S8"11i 211.58' ALLEY—� N 0 30 60 120 (IN FEET) NOTE: SEE SHEET 4 OF 4 FOR LINE TABLE DATA. LEGEND, BASIS OF BEARINGS. BENCHMARK INFORMATION AND l inch = 60 ft. SURVEYOR'S NOTES SHEET EXHIBIT "A-1" TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental M PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 3 OF 4 155 5TH STREETHUNTINGTON BEACH, CA TEL p14y 560 8200 LEGEND: P.O.B. - POINT OF BEGINNING P.O.C. - POINT OF COMMENCEMENT (R1) - RECORD DATA PER TRACT NO. 16406 M.M. 870/47-50 PARKING PARCEL DESCRIBED IN ' EXHIBIT "A-1" PARCEL 1 - PARKING PARCEL DESCRIBED IN EXHIBIT "A-1" PARCEL 2 BASIS OF BEARINGS: ------- - BOUNDARY LOT 1 TRACT NO. 16406 M.M. 870/47-50 - INTERIOR SIDE OF PARKING PARCEL WALL BEARINGS HEREON ARE BASED ON THE BEARINGS BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS 5019 AND STATION GPS 5034RI BEING NORTH 33'33'25" WEST PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR. BENCHMARK: BENCHMARK 10: STANDARD 1-RM2 DESCRIBED BY OCS 2002: FOUND 3 3/4" OCS ALUMINUM BENCHMARK STAMPED "STANDARD- I -RM2" SET IN AN ORANGE COUNTY SURVEYOR WELL MONUMENT. MONUMENT IS LOCATED IN THE SOUTHWEST CORNER OF THE INTERSECTION OF PACIFIC COAST HIGHWAY AND 12TH STREET, 27 FT. NORTHEASTERLY OF THE BIKE PATH ALONG THE BLUFF AND 66.3 FT. SOUTHWEST OF THE CENTERLINE OF THE SOUTHBOUND LANES ALONG PCH 6.6 FT. SOUTHEAST OF THE PROLONGATION OF THE CENTERLINE OF 12TH STREET. MONUMENT IS SET 1.0 FT. BELOW GROUND SURFACE. ELEVATION: 30.817 FEET (NAVD 88, 1995 ADJUSTMENT) SURVEYOR'S NOTES: 1. THE EXHIBITS GENERATED HEREIN ARE FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. 2. A CONCRETE WALL THICKNESS OF 1 FOOT (12 INCHES) WAS USED ALONG THE ENTIRE PERIMETER OF THE SUBTERRANEAN PARKING STRUCTURE, AND MAY VARY. 3. THE LIMITS OF THE UPPER AND LOWER LEVEL ELEVATIONS SHOWN HEREIN WERE TAKEN FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR, LINE TABLE DATA LINE BEARING DISTANCE LI N48'21'52'"W 4.70' L2 S48'21'52"E 43.83' L3 S59'00'03"E 52.82' L4 S77'09'19"E 21.11' LS S48'21'52"E 1 11.25' SHEET EXHIBIT "A-1 �-RN TAM & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 4 O F 4 155 STH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 Ht1NTINGTON BEACH, CA ::j TEL (714) 560-8200 � tapNIN6rp,�B``> 6��0UNT1 Jennifer McGrath City Attorney July 1, 2009 John Given, Principal OFFICE OF CITY ATTORNEY P.O. Box 190 2000 Main Street Huntington Beach, California Telephone: (714)536-5555 Facsimile: (714) 374-1590 Matt Fragner, General Counsel CIM Group, Inc. 6922 Hollywood Blvd. Ninth Floor Los Angeles, CA 90028 Re: Amended and Restated Grant Deed Dear Gentlemen: Paul D'Alessandro, Assistant City Attorney Scott Field, Assistant City Attorney Neal Moore, Sr. Deputy City Attorney 92648 Lennie Mulvihill, Sr. Deputy City Attorney John Fujii, Sr. Deputy City Attorney Daniel K Ohl, Deputy City Attorney Sarah Sutton, Deputy City Attorney Mike Vigliotta, Deputy City Attorney On June 1, 2009, the enclosed Grant Deed was recorded in the Office of the Orange County Clerk/Recorder as Instrument 2009000277797. As you know, the Grant Deed transferred the parking parcel to the City of Huntington Beach. Upon review of the recorded Grant Deed, the City Clerk noted two deficiencies. First, the City Clerk failed to certify the Deed, and second, the legal description was incomplete. Accordingly, our office has prepared the enclosed Amended and Restated Grant Deed for execution by CIM/Huntington LLC. At your earliest convenience, please cause the Amended and Restated Grant Deed to be executed and returned to my attention at the earliest possible date so the same may be immediately recorded with the Orange County Clerk/Recorder's Office. If you have any questions or comments, please do not hesitate to contact me. cerely LEONIE MULVIHILL Sr. Deputy City Attorney Attachment: Amended and Restated Grant Deed 06-682/35817 City of Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK July 14, 2009 Re -Recording Requested by: Joan L. Flynn, City Clerk City of Huntington Beach When recorded return to: Joan L. Flynn, City of Huntington Beach City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Grant Deed Recorded on 6101/09 as instrument #2009000277797. This Document is being re -recorded to provide a full Legal Description (Exhibit A) for The Strand Public Parking Structure, located at 155 — 5ch Street. jip4j Jo L. Flynn, CIVIC City Clerk City of Huntington Beach Sister Cios�lo"rijo,e(�apand�t`ai�a�Cere `New Zealand (Telephone: 714-536-5227 ) Recorded at the request of City of Huntington Beach When Recorded Mail to: City of Huntington Beach P.O. Box 190 2000 Main St. Huntington Beach, CA 92648 Attn: Joan Flynn, City Clerk APN: S72e&)o 114,4 r4sC�C/�tJ 6 �t�i2uc /ss - .s-7-a` S7 . ,,O X C70,e _ -7&1 +s 7-0 r,Vls . 6DCXZ� C7'J7' S� Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIlillllllllllllllllillilllillllllllllllllllilllllllllllllllllllilllllilliNO FEE 2009000277797 09:44am 06/01 /09 116 8 G02 5 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Space above this line for Recorder's Use f xF I,Kpf %row► Ae-evi&1 , Fee per 6OVt lP 103 GRANT DEED For a valuable consideration, receipt of which is hereby acknowledged, CIM/HUNTINGTON, LLC, a California limited liability company ("GRANTOR"), I\ hereby grant(s) to THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION ("GRANTEE"), the real described in the legal description attached hereto as Exhibit A and incorporated herein by this reference (the "Property"), in accordance with and subject to the covenants, conditions, and restrictions set forth in this Grant Deed. Grantor and Grantee agree that there shall be no discrimination against or segregation of any persons, or group of persons, on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. Grantor and Grantee agree that all deeds, leases or contracts for the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or improvements thereon, or any portion thereof, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The Participant herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: 06-682/33853 That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, national origin, sex, sexual orientation, marital status, creed, religion, disability, age, or any other protected classification in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 3. In contracts: "there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." This Grant Deed shall not merge with any other agreement between Grantor and Grantee. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized as of the dates shown below. CIM/Huntington, LLC, Dated: May 14, 2009 a California limited liability company By CIM Urban Real Estate Fund, L.P., sole member, By CIM Urban Fund, GP, LLC, its general p ne� By: Nicholas V. morosoff Secretary DEED CERTIFICATION — CITY OF HUNTINGTON BEACH This is to certify that the interest in real property conveyed by the Grant Deed dated from CIM/Huntington, LLC, a California limited liability company, to the CITY OF HUNTINGTON BEACH is hereby accepted by the undersigned officer or agent on behalf of the City Council of the City of Huntington Beach pursuant to the authority conferred by Resolution No. 3537 of the City Council of Huntington Beach adopted on August 7, 1972, and the grantee consents to the recordation thereof by its duly authorized officer. CITY OF HUNTINGTON BEACH Dated By: JOAN FLYNN, CMC CITY CLERK u APPROVED AS TO FORM: JENNIFER MCGRATH, City Atto ey I ^ I By:— VVV`� Vl VV[-- Assistant /Deputy City Attorney S . 1 $ . U9 This Document is solely for the official business of the City of Huntington Beach, as contemplated under Government Code Section 6103 and should be recorded free of charge. Tax Exempt Government Agency CITY OF HUNTINGTON BEACH Joan Flynn, City Clerk By: Joan Flynn, City Clerk MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE Joan Flynn, City Clerk, City of Huntington Beach P.O. Box 190/2000 Main St Huntington Beach CA 92648 06-682/33853 2 EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCEL1: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41 "37'10" EAST 124.55 FEET; THENCE, NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET TO THE POINT OF BEGINNING; THENCE, ALONG THE FOLLOWING 10 COURSES AND DISTANCES: 1- NORTH 48"21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 "38'08" EAST, 148.50 FEET; 3- SOUTH 48"21'52" EAST, 77.00 FEET; 4- SOUTH 64"5617" EAST, 19.30 FEET; 5- SOUTH 48'21'52" EAST, 30.00 FEET; 6- NORTH 41 "38V8" EAST 182.00 FEET; 7- SOUTH 48"21'52" EAST 275.00 FEET; 8- SOUTH 41'38"08" WEST 211.58 FEET; 9- NORTH 48"21'52" WEST 63.67 FEET; 10- SOUTH 41 "38'08" WEST 124.42 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE ELEVATION 25.66 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW ELEVATION 9.00 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS 'COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 2.37 ACRES (103,331 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. MICHAEL SIMO P.L.S. 6034 REGISTRATION EXPIRES 6130/09 4 1,- & ATE 'y o J Exp. 6/30/09 'jo * No. 6034 ��9rF OF. CALF SHEET EXHIBIT "A-1 TAIT & ASSOCIATES INC. Engineering Surveying Environmental THE STRAND - PARKING GARAGE 1 1 OF 4 155 5TH STREET 701 PARKCENTER DRIVE, SANTA ANA, CAUFORNIA 12705 I HUNTINGTON BEACH, CA TEL (714) 504200 06-682/33853 STATE OF CALIFORNIA ) SS. COUNTY OFLoE bs 0nAAEz .{- /y 2ooq before me`�r'r` ` � (here insert name and title of the officer); personally appearedN/ChoAs Y. Moroso (insert name( f of signer) who proved to me on the basis of satisfactory evidence to be the person whose name�� subscribed to the within instrument and acknowledged to me thatd %�Xe/ Vy executed the same in d0hp'/th;if authorized capacity(i/), and that bygii /h/r/their signature(V on the instrument the persona j, or the entity upon behalf of which the personVacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Q!C����' w���•i�111r Signature (Seal) DENISE DEL REY Commission 0 1*M?9 Notary Pudic - CMb Ma i STATE OF CALIFORNIA ) Los Angeles Cowdy SS. wt_ - MCW . Ex res Apr 9, 2013 COUNTY OF ) On before me, (here insert name and title of the officer), personally appeared (insert name(s) of signer(s)) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 06-682/33853 4 Interdepartmental Memo TO: Honorable Mayor and City Council Members FROM: Fred A. Wilson, City Administrat Stanley Smalewitz, Economic De�2pment Director DATE: March 2, 2009 SUBJECT: CIM/The Strand Pre -payment Agenda Item As stated in the Agency Report, Staff spoke to Marchell Hilliard, Bank of America, Senior Vice President of Commercial Loans regarding the status of the CIM financing. According to Ms. Hilliard, the bank has finished the due diligence and has preliminarily approved the financing. The bank does need to have the final formal sign off by the loan committee. Ms. Hilliard stated that due to the current financial conditions, everything is moving slowly and they are re -verifying all loans. The bank loan committee will meet within the next few weeks to authorize the loan. According to Bank of America, the loan will be finalized by the end of the Bank's first quarter (March 30th). Staff and Ms. Hilliard will continue to communicate during the next few weeks to ensure there are not new issues and the loan is authorized. _� / 1) / _� 10) CIM late communications loan -1- 3/2/2009 10:00:00 AM Council/Agency Meeting Held: �, 1 Deferred/Continued to: AA roYed� Conditionall�ovee�l"a ❑Denie �,Sot.�-;3° City le k's�Signate CouncilMeeting Date: 3/2/2009 Department ID Number: 09-14 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman and Redevelopme en y Members SUBMITTED BY: Fred A. Wilson, Executive Director PREPARED BY: Stanley Smalewitz, Deputy Executive Director SUBJECT: Approval of CIM Pre-payment/The Strand Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: On November 3, 2008, the City Council/Redevelopment Agency approved the Sixth Implementation Agreement to the Disposition and Development Agreement (DDA) with CIM/Huntington LLC (CIM) for the Development of The Strand. On January 20, 2009, the City Council/Redevelopment Agency approved financing for CIM for The Strand. Pursuant to the DDA, the Agency has financial obligations to The Strand and is requesting authority to prepay certain obligations, up to $950,000. In exchange for prepayment, CIM has agreed to purchase and install the needed public safety radio antennas for the parking structure. Funding Source: Adequate funds are budgeted in account number 40780101.88010. Recommended Agency Action: Motion to: Authorize the Executive Director to waive certain conditions precedent to the Agency's payment of an amount not to exceed $950,000 dollars under the Sixth Implementation Agreement provided that the Executive Director and CIM have executed a written agreement that has been approved to form by the City Attorney, committing CIM to purchase and install police/fire radio antennas within the Strand Parking Structure at a cost not to exceed $70,000. REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: 09-14 Alternative Action(s): (1) Do not approve the prepayment of funds; or (2) Direct staff to re -negotiate the pre -payment of Agency funds. Analysis: The Redevelopment Agency is a party to a Disposition and Development Agreement (DDA) dated as of July 17, 1999, with CIM for the redevelopment of several parcels in the downtown Huntington Beach. The DDA has been the subject of several implementation agreements, and the mixed -use development consisting of retail, restaurant, and hotel use is close to completion. Several stores are now open including Forever 21, Active Ride, RA Sushi, CVS and Ripcurl. On January 20, 2009, the City Council/Redevelopment Agency approved a loan agreement between CIM and Bank of America for construction ("bridge") financing for the development. Currently, due to the market conditions, Bank of America can not immediately provide the financing. Staff spoke to Marchell Hilliard, Bank of America, Senior Vice President of Commercial Loans regarding the status of the CIM financing. This pre -payment will allow the construction to continue until the financing is secured without a delay in opening the hotel. Under the terms of the Sixth Implementation Agreement, development of a full -service boutique hotel in lieu of the previously approved limited -service hotel concept will provide for an increase in the transient occupancy tax (TOT) to the City. The Agency approved a one- time investment of $2.4 million which is attributed to hotel upgrades to assist in a higher daily rate. CIM has to meet several conditions precedent to payment: • Completion Date shall have occurred; • Developer curing any default on the obligations; • Fee Title and Acceptance of the Parking Structure by the City; • Declaration of Covenants, Conditions and Restrictions recorded on the site; • First Amendment to Agreement Affecting Real Property must be recorded; • Operating Agreement for Parking Structure recorded on site; and • Grant of License and Agreement Regarding Maintenance and Landscaping and Public Improvements recorded. CIM has met several of the obligations; however, the completion date has not occurred and the Parking Structure has not been accepted by the City. Based upon the current national economic condition, CIM does not feel they will be able to obtain financing. Therefore, it is recommended that the City provide an advance of the money owed to the hotel. In return for the prepayment of the loan, CIM will purchase and install the public safety radio antennas that are required for underground parking structures (not to exceed $70,000). Without the antennas, the public safety radios do not work as required. -2- 2/24/200911:40 AM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: 09-14 Strategic Plan Goal: L-4: Create an environment that promotes tourism to increase revenues to support community services and transform the City's economy into a destination economy. Environmental Status: Not Applicable Attachment(s): -3- 212412009 11:27 AM ATTACHMENT #1 SECOND REVISED ATTACHMENT NO. 8 SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS (a) The following definitions shall apply to this Second Revised Attachment No. 8: (1) "Acquisition Costs" shall have the meaning ascribed to such term in Section 201.2 of the Agreement. Developer shall be responsible for the payment of all Acquisition Costs and relocation costs subject only to payment by Agency to Developer of the Agency Obligation and accrued interest as required herein. (2) "Agency Shortfall Reimbursement' shall mean an amount payable to Developer pursuant to paragraph (e)(8) below in any year, solely from Surplus Agency Revenues, if any, actually received by the Agency in that year, equal to the amount, if any, that total Developer Shortfalls in prior years exceed total Agency Shortfall Reimbursements made in prior years. (3) "Agreement' as used herein shall mean that certain Disposition and Development Agreement by and between Agency and Developer, as implemented by the First, Second, Third, Fourth, Fifth and Sixth Implementation Agreements, to which this Second Revised Attachment No. 8 is a part. (4) "Boutique Hotel" as used herein shall mean an intimate, luxurious, unique destination hotel which provides an exceptional and personalized level of accommodation, services and facilities, including, but not limited to the following attributes: (i) equivalent to Upper Upscale Chain hotel, as defined by Smith Travel Research, as reasonably determined by the Agency Executive Director; (ii) furnished in a themed, stylish and/or inspirational manner; (iii) fitted with telephone, wi-fi Internet connection, plasma or LCD televisions (or other television modes having very high quality) and cable/pay televisions; (iv) twenty-four (24) hour hotel staff and guest services; (v) on -site fine dining facilities; and (vi) bars and lounges open to the general public. (5) "City" as used herein shalt mean the City of Huntington Beach. (6) "Commencement of Hotel Operations" as used herein shall mean that certain point in time when Developer has received a written approval from the Agency of a hotel management agreement pursuant to Section 402 of the Agreement, issuance by City of a certificate of occupancy for the Boutique Hotel (issuance of a temporary certificate of occupancy will not satisfy the requirement of a certificate of occupancy), and such hotel is fully open for business to the general public as a Boutique Hotel, including, but not limited to fully opening for business to the general public all associated restaurant and banquet facilities. (7) "Completion Date" as used herein shall mean the date on which (i) a final certificate of occupancy is issued by the City for the public parking facilities and the City has issued final approval of all Shell Building permits and all Interior Improvements permits for the Boutique Hotel; or (ii) a final certificate of occupancy is issued by the City for the public parking SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 1 Attachment 8.v5a(Sept. 18, 2008) facilities and a final certificate of occupancy is issued by the City for the Boutique Hotel and seventy-five percent (75%) of the net retail space is leased; or (iii) the Release of Construction Covenants to be issued by Agency pursuant to the Agreement with respect to the improvements to be constructed by Developer on or in connection with the Site is recorded in the Official Records of Orange County. The term "Shell Building" includes, but is not limited to, the building envelope, foundation, walls and roof. The term "Interior Improvements" includes, but is not limited to, detailed interiors, restrooms and finishes. (8) "Developer Shortfall" shall mean the amount, if any, that (i) the payment made by Agency to Developer in any year on account of the Agency Obligation pursuant to paragraph (e)(2) below, is less than (ii) the amount that would be sufficient to fully amortize the Agency Obligation, plus interest, over a 25-year period commencing with the Completion Date based upon the amortization schedule then in effect pursuant to paragraph (e)(6) below. (9) "Net Tax Increment' as used herein shall mean the total ad valorem property tax increment revenue allocated to and received by Agency pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount attributable by the Orange County Assessor solely to the Merged Redevelopment Project, but specifically excluding therefrom all of the following: (a) the percentage of tax increment revenues from the Merged Redevelopment Project that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law for low- and moderate -income housing purposes; and (b) the percentage of tax increment revenues from the Merged Redevelopment Project that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements (including any and all agreements entered into prior to the Agreement by the Agency and such governmental entities implementing the tax sharing/pass-through agreements); and (c) the percentage of tax increment revenues in the Merged Redevelopment Project which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 et seq. of the Community Redevelopment Law, as amended from time to time; and (d) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter - approved indebtedness; and (e) charges for County administrative charges, fees or costs for the Merged Redevelopment Project. (10) "Project Costs" as used herein shall have the meaning ascribed to such term in Section 216 of the Agreement. a .. (11) "Surplus Agency Revenues" shall mean the excess, if any, in any year of (i) revenues required by paragraph (e)(2) below to be available for payment from Agency to Developer on account of the Agency Obligation, over (ii) the amount actually required to be paid in that year by Agency to Developer by said paragraph (the amount that would be sufficient to fully amortize the Agency Obligation, plus interest, over the amortization period and schedule SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 2 Attachment 8.v5a(Sept. 18, 2008) then in effect pursuant to paragraph (e)(6) below, to the extent of the availability of such ear- marked funds). (12) All capitalized terms not defined in this Second Revised Attachment No. 8 shall have the meanings ascribed to such terms elsewhere in this Agreement. (b) Subject to all of the terms and conditions of the Agreement (including, without limitation, the provisions of paragraph (e) below limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the principal amount payable by the Agency to Developer under this Second Revised Attachment No. 8 shall be the sum of: (1) Seven Million Nine Hundred Thousand Dollars ($7,900,000), which is inclusive of any and all relocation costs required to be paid by Agency and all Acquisition Costs advanced to the Agency by Developer or paid to third party property owners or tenants by Developer as lease payments or other lease obligations or otherwise, pursuant to the First Implementation Agreement and Sublease or otherwise, ,plus (2) Nine Hundred Fifty Thousand Dollars ($950,000), which is Thirty -Eight Thousand Dollars ($38,000) for each of the twenty-five (25) additional parking spaces that the Developer is maintaining, repairing and operating on the Site above and beyond the four hundred eleven (411) parking spaces required by the City to be located in the public parking facility in connection with the development of the Site ("Additional Parking Reimbursement"), less (3) An amount equal to seventy-five percent (75%) of the amount if any by which Project Costs, as approved by the Agency after the Completion Date based upon the Certified Project Cost Statement approved by the Agency pursuant to Section 216(d) of the Agreement, are less than forty-six million dollars ($46,000,000); plus (4) An amount equal to the Agency Upgrade Assistance to be paid pursuant to paragraph (k) below. (c) The obligations of the Agency under paragraphs (b)(1), (b)(2) and (b)(3) above (collectively the "Agency Obligation") represents reimbursement to Developer for construction and installation of public infrastructure within dedicated public rights -of -way and the public parking facilities, clearance of existing improvements on the portion of the Site located within dedicated public rights -of -way and publicly owned public parking facility area, excavation, grading and other activities necessary to prepare said public rights -of -way and public parking facility area for development of said public infrastructure and public parking facilities, and acquisition and relocation costs in connection therewith. In no event shall Developer be entitled to payment or reimbursement from Agency for any "construction, alteration, demolition, or repair work" (as said phrase is defined in Labor Code Section 1720 (a)) other than for said public infrastructure and public parking facilities which are to be constructed and installed by Developer within dedicated public rights -of -way and publicly owned public parking facility area. SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 3 Attachment8.v5a(Sept. 18, 2008) (d) The Agency Obligation shall bear interest from the Completion Date until the date of repayment by Agency to Developer hereunder as follows (A) fixed at seven percent (7%) simple interest per annum as to the Seven Million Nine Hundred Thousand Dollar ($7,900,000) Agency payment obligation set forth in paragraphs (b)(1) and (b)(3); and (B) fixed at ten percent (10%) simple interest per annum as to the Nine Hundred Fifty Thousand Dollars ($950,000) Additional Parking Reimbursement set forth in paragraph (b)(2). (e) The Agency Obligation shall be a special and limited obligation payable to Developer solely from Net Tax Increment from the Merged Redevelopment Project. The Agency shall have no obligation to pay any amounts to Developer pursuant to this Second Revised Attachment No. 8 except as follows: satisfied: (1) The following conditions precedent to each payment hereunder shall be (A) The Completion Date shall have occurred; (B) Developer shall have theretofore cured any default as to any of its obligations under this Agreement or the Agreement Containing Covenants Affecting Real Property (as amended) or the Grant Deed; (C) Fee title to the public parking facilities constructed by Developer (which may be a condominium unit containing the public parking facilities) shall have been conveyed to the City of Huntington Beach prior to the first payment of the Agency Obligation, such fee title to be in marketable condition subject only to the documents to be recorded pursuant to the Agreement, matters required by the City and easements necessary for the improvements and other matters reasonably approved in writing by the Agency and the City; (D) Developer, the Agency and the City shall have agreed upon, executed and recorded a set of covenants, conditions and restrictions to be recorded against the Site, conforming in form and substance to the Declaration of Covenants, Conditions & Restrictions & Reciprocal Easement Agreement attached to the Sixth Implementation Agreement covering maintenance, repair, restoration and assessments, which shall be senior to any financing instruments or other liens; (E) Developer and the Agency shall have agreed upon, executed and recorded the First Amendment to Agreement Affecting Real Property to be recorded against the Site conforming in form and substance to the First Amendment to Agreement Affecting Real Property attached to the Sixth Implementation Agreement; (F) Developer and the City shall have agreed upon, executed and recorded an operating agreement for the public parking facilities to be recorded against the Site conforming in form and substance to the Operating Agreement attached to the Sixth Implementation Agreement; SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 4 Attachment 8.0a(Sept. 18, 2008) (G) Developer and the City shall have agreed upon, executed and recorded the Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements to be recorded against the Site conforming in form and substance to the Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements attached to the Sixth Implementation Agreement; and (H) The City shall have accepted the public parking facilities in accordance with Section 255.22 of the City of Huntington Beach Zoning and Subdivision Ordinance. As a condition precedent to the City's acceptance of the public parking facilities, Developer shall assign to the City (in form reasonably acceptable to the City Attorney, the City's Community Services Director, and the City's Director of Public Works) all of the Developer's rights in any warranties, guarantees, maintenance obligations or other contingent obligations of third persons with respect to the public parking facilities. (2) Subject to all of the terms and conditions of this Agreement, including without limitation paragraph 0) below, on or prior to September 30 of each year, beginning with the first September 30 which follows the Completion Date, and continuing until the Agency Obligation (and any accrued interest thereon) has been paid in full, the Agency shall pay to Developer an amount equal to such portion of Net Tax Increment from the Merged Redevelopment Project received by the Agency during the prior Agency fiscal year that is sufficient to repay the Agency Obligation, plus interest, within a twenty-five (25) year amortization period commencing with the Completion Date. Agency hereby covenants to refrain from taking any action which would diminish or impair in any way its receipt (and subsequent payment of the Agency Obligation and interest thereon) of Net Tax Increment from the Merged Redevelopment Project. (3) Reserved (4) Reserved (5) Reserved (6) The annual sum of Net Tax Increment from the Merged Redevelopment Project "that is sufficient to repay the Agency Obligation, plus interest, within a twenty-five (25) year amortization period commencing with the Completion Date," as provided for in subparagraph (2) of this paragraph (e), shall be recalculated prior to each September 30 during the 25-year amortization period to account for all of the following: (A) prepayments of Agency's obligations pursuant to paragraph (f) of this Second Revised Attachment No. 8; and (B) any Developer Shortfalls; and (C) any Agency Shortfall Reimbursements paid to Developer. In making such calculation,the amortization period shall be reduced to equal the time between the effective date of such calculation and the date the 25-year period for the original amortization period expires. (7) Any amount of the Agency Obligation, including accrued and unpaid interest, that remains unpaid for any reason whatsoever on the twenty-fifth anniversary of the SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 5 Attachment 8 v5a(Sept. 18, 2008) Completion Date, after application of all funds required to be paid to Developer by this Second Revised Attachment No. 8, shall be forgiven by Developer and shalt no longer be owed to Developer nor be considered an indebtedness of the Agency. (8) The Agency shall pay to Developer any Agency Shortfall Reimbursement that may be due in any year, if any, concurrently with the payment required by paragraph (e) (2) above, which Agency Shortfall Reimbursement payments shall be credited in favor of Agency against the Agency Obligation. (f) The Agency's obligations hereunder may be prepaid by the Agency, in whole or in part, at any time and from time to time without penalty. (g) The parties acknowledge and agree that nothing in this Sixth Implementation Agreement is intended to change nor does change in any way the requirements in Section 318 of the Agreement pertaining to the Release of Construction Covenants. (h) The Agency's obligation to pay Net Tax Increment from the Merged Redevelopment Project in accordance with this Second Revised Attachment No. 8 shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith, provided that the Agency determines at the time of issuance of any such future bonds, based upon a report obtained by the Agency from its financial consultant, that such issuance and indebtedness will not materially and adversely affect the Agency's ability to perform its obligations under this Second Revised Attachment No. 8. The Agency shall give Developer a copy of any such report within fifteen (15) days after the Agency's receipt of such report. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of ,participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Net Tax Increment from the Merged Redevelopment Project to Developer under this Second Revised Attachment No. 8 is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 33671.5 of the Community Redevelopment Law. (i) This Second Revised Attachment No. 8 is part of the Agreement and is subject to all of the terms and conditions thereof. 0) The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts owed by Developer to the Agency, including without limitation amounts payable by Developer to the Agency pursuant to Section 701 of the Agreement, against amounts payable by the Agency under this Second Revised Attachment No. 8; provided, however, that no amount shall be set off by Agency unless either (X) determined by final judgment to be owing to Agency, or (Y) in the case of amounts owed to Agency pursuant to Section 701 of this Agreement, such set off amount does not exceed the amount paid to Agency for the Operating Year which precedes the date of the set off. (k) The Agency shall pay to Developer a one time lump sum payment of Two Million Four Hundred Thousand Dollars ($2,400,000) within sixty (60) days of Commencement of Hotel SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 6 Attachment 8.0a(Sept. 18, 2008 ) Operations of a Boutique Hotel on the Site to provide Developer with assistance in upgrading the Boutique Hotel; provided however that no such payment shalt be made unless and until the conditions precedent set forth in paragraph (e)(1) are satisfied (the "Agency Upgrade Assistance"). SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 7 Attachment 8.v5a(Sept. 18, 2008) 12, INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of CIM Pre-Payment/The Strand COUNCIL MEETING DATE: March 2, 2009 RCA ATTACHMENTS STATUS ` Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Ap licable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FOR MISSING. ATTACHMENTS EXPLANATION FOR RETURN OF ITEM RCA Author: Fritzal 1519 BOND NO. SU5008088 PREMIUM $200.00 '.Project.,- The St.: and MONUMENT BOND KNOW ALL MEN BY THESE PRESENTS: THAT CIM/Huntington, LLC . as Subdivider of Tract No. 16406 in the City of Huntington Beach, County of Orange, State of California, has submitted to said City a Final Map of said tract containing an engineer's or surveyor's certificate stating that all final monuments will be set in the positions indicated on or before the date specified in said certificate: That said CIM/Huntington, LLC (Subdivider) as principal, and Arch Insurance Company as surety, hereby guarantee to the City of Huntington Beachthe payment of the cost of setting all such monuments within or in connection with said tract, as are not already set prior to the recording of said Final Map, in accordance with said map and said certificate up to but not in excess of the sum of Ten Thousand and N6/100----------- $ 10, 000.00 in which sum we are held and firmly bound to the City of Huntington Beach, all in accordance with and subject to the terms, conditions and provisions of Article 9, Chapter 4 of the Government Code of the State of California. IN WITNESS WHEREOF, we have executed this instrument this 11 th day of August .419 2004" CIM/Huntington, LLC , as Principal By: see attached SIGNATURE PAGE By: Arch Insurance Company , as Surety f -� By:. By: Maria Pena, Attorney-in=Fact 8092.01 .a; . STATE OF CALIFORNIA } l��S �q2�25 } SS COUNTY OF C�f�6E 1 ON PuUSt,'2iun4 ,BEFORE ME; R� LnulS-2 Beck A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED Nicholas V . bro5oif , PERSONALLY KNOWN TO ME ( } TO BE THE PERSON&WHOSE N ES ME S ARE SUBSCRIBED TO THE ITHIN INSTRUMENT AND ACKNOWLEDG 0 ME THAT EXECUTED THE SA!N AUTHORIZED CAPACITIES; AND THAT BY T SIGNATURES ON THE INSTRUMENT THE PERSON87 OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS -ACTED, EXECUTED THE INSTRUMENT. WITNESS MY N SIGNATURE _ NOTARY PUB IC IN AND FOR SAID STATE (�flrne1 tM41m (deck (NAME PRINTED) MY PR INCIPAL PLACE OF BUSINESS IS IN Lt?S f� COUNTY MY COMMISSION EXPIRES same �ews� Ica Caetmb6lnn 0147020 NeE.WCOmm. Notary pwft • coftmb STATE OF CALIFORNIA } LmAnge*s Cow ty .SS FA*05 Feb 14.2M } COUNTY OF ORANGE } ON , BEFORE ME, - A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE NOTARY PUBLIC IN AND FOR SAID STATE (NAME PRINTED) MY PRINCIPAL PLACE OF BUSINESS IS IN COUNTY MY COMMISSION EXPIRES 8092.01 CALIFORNIA, PU'RPaSE ACKN0WILEDG"MENT State of California County of Los Angeles On August 11, 2004 before me, Jovice M. Herrin, Notary Public, personally appeared Maria Pena, personally known to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. JOYCE M. HERRIN N COMM.#1323695 = NOTARY PUBLIC • CALIFORNIA = LOS ANGELES COUNTY N my Comm. Expires OCI. 4. 2005 g 1,4 J yce M. Herrin POWER OF ATTORNEY Know All Men By These Presents: That the Arch insurance Company, a corporation organized and existing under the laws of the State of Missouri, having its principal office in Kansas City, Missouri (hereinafter referred to as the "Company") does hereby appoint KID Conrad, C.K. Nakamura, Joyce Herrin, Tom Branigan, Edward C. Spector, Marina Tapia, Clarice Lee, Richard E. Bigley, Lisa L. Thornton, Maria Pena, E. S. Albrecht Jr., Tracy Aston, Betty Walker and Brenda Wong of Los Angeles, CA (EACH) its true and lawful Attomey(s�ln-Fact, to make, execute, seal, and deliver from the date of issuance of this power for and on its behalf as surety, and as its act and deed: Any and all bonds and undertakings EXCEPTiON::NO AUTHORITY Is granted to make, execute, seal and deliver bonds or undertakings that guarantee the payment or collection of any promissory note, check, draft or letter of credit. This authority does not permit the same obligation to be split into two or more bonds in order to bring each such bond within the dollar limit of authority as set forth herein. The Company may revoke this appointment at any time. The execution of such bonds and undertakings in pursuance of these presents shall be as binding upon the said Company as fully and amply to all Intents and purposes, as if the same had been duly executed and acknowledged by its regularty elected officers at its principal office in Kansas City, Missouri. This Power of Attorney is executed by authority of resolutions adopted by unanimous consent of the Board of Directors of the Company on March 3, 2003, true and accurate copies of which are hereinafter set forth and are hereby certified to by the undersigned Secretary as being In full force and effect: "VOTED, That the Chairman of the Hoard, the President, or any Vice President, or their appointees designated In writing and filed with the Secretary, or the Secretary shall have the power and authority10 appoint agents and attorneys -in -fact, and to authorize them to execute on behalf of the Company, and attach the seal of the Company thereto, bonds and undertakings, secognizances, oontracts of Indemnity and other writings, obligatory in the ndture thereof, and any such of liters. of the Company may appoint agents for acceptanae_of process This Power of Attorney is signed, sealed• and certified by facsimile under and by authority of the following resolution adopted by the unanimous consent of the Board of Directors of the Company on March 3, 2003: VOTED, That the signature of the Chairman of the Board, the President, or any Vice President, or their appointees designated in writing and filed with the Secretary, and, the signature of the Secretary, the seal of the Company, and certifications by the Secretary, may be affixed by facsimile on any power of attorney or bond executed pursuant to the resolution adopted by the Board of Directors on March 3, 2003, and any such power so executed, sealed and certified with respect to any bond or undertaking to which it is attached, shall continue to be valid and binding upon the Company. .Arch, Insurance Group IMPORTANT NOTICE CONCERNING THE TERRORISM RISK INSURANCE ACT OF 2002 The Terrorism Risk insurance Act of 2092 establishes a mechanism by which the federal govemMe nt will shorts, with the insurance industry, in losses arising out of "acts of terrorism" certified as such by the Secretary of the Treasury. "certifled acts of termdsnl" are defined.as events that cause more than $5 millions: in losses And: 1. Are violent ordarerous.toemart IPfe� property, orthe infrastructure; 2. Result in damage within,the 1,1611ted States, an a United States mission, or to a United -States atrexaft or . vessel: and 3. Are committed by Pnrajyk;uals; 8dimg 00 btl W' of foreign persons or interests, as part of ail eftottto 0Q.6 the civilian pgpuliWoo of the United 8tstes or to Influence the policies or condiidt of title -(Putrid fttai Government. The Act specifies that coveme-tor'bortiffed acts of tenodw must be made available. in commercial propedy and casualty policies of insur9h* and it requires insurers to disclose any applicable prey nium t:hMM alto the federal share of oompeasaitoo. We are ttl Ung these disclosures in strict compliance with ttte AcL Disclosure of Avaliabitity of Coverage for Terrorism Losses Coverage for lasses resulting, from "oodi ied acts of tarrorism" is being made available to you ,o.n terms,, amounts, and limitations generally oppiicable to losses resulting from perils other than am of terrorism. DWosure ofFe'dami Steam of Compensation for Terrorism Leases The federal govemmeftt WIN pay a 90% sham of an insurer's terrorism losses once the Insurer tm.sgftw a significant aggregate anftuel dediii:11W. For'terrodsm losses occurring in 2002, that deditiA.i@ is 1% of the Insurer's 2001 direct "Med Oiierhium. Pryor R)Sses occurring in 2003, 2004 acid M. , the sitttUal 10Wrer deductibles arc 7%,10% and I51(0 of the prior year's detect earned premium, respectively. The. Act provides that neither insurers northe federal government are responsible for losses associated with "oartffied afns.of temoitsm once aggregate annual insured losses oxceW $140 billion. Disclosure of TieTwrlsm Insurance Prendum Your Bond premium chargo W "tettifwd-acts Of t8ttvntsm"coverage is $ 0. SR 80 37 (Ed.11 02) 0 i '� page 1 of 1 pttrrted in U.S,A, PRINCIPAL: SIGNATURE PAGE CHA/Huntington, LLC, a California limited liability company by: CIM Urban Real Estates Fund, L.P., a Delaware limited partnership, sole member by: CIM Urban Fund GP, LLC a California limited liability company, its general partner' By: Nicholas V. Morosoff General Counsel and Secretary "ROVED AS TO FORM DER MaGRATH, CityAttotory Q10� .�5�• - :tton ty City Attomey 9(9 Ck 0 CALIFORN[A ALL-PURPOSE ACKNOUVLEDGMENT State of California County of Los Angeles On August 11, 2004 before me, Joyce M. Herrin, Notary Public, personally appeared Maria Pena, personally known to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. �., JOYCE W HERRIN y ' ` C0MM.41T323695 I M ' m I NOTARY PUBLIC • CALIFORNIA i LOB ANOELES COUNTY My Comm. EXPIMS Oct. F / Joyce M-Herrin POWER OF ATTORNEY Know All Men By These Presents: That the Arch Insurance Company, a corporation organized and existing under the laws of the State of Missouri, having its principal office in Kansas City, Missouri (hereinafter referred to as the "Company") does hereby appoint KD Conrad, C.K. Nakamura, Joyce Herrin, Tom Branigan, Edward C. Spector, Marina Tapia, Clarice Lee, Richard E. Bigley, Lisa L. Thornton, Maria Pena, E. S. Albrecht Jr., Tracy Aston, Betty Walker and Brenda Wong of Los Angeles, CA (EACH) its true and lawful Attomey(sym-Pact, to make, execute, seal, and deliver from the date of issuance of this power for and on its behalf as surety, and as its act and deed: Any and all bonds and undertakings EXCEPTION: NO AUTHORITY is granted to make, execute, seal and deliver bonds or undertakings that guarantee the Payment or collection of any promissory note, check, draft or letter of credit. This authority does not permit the same obligation to be split into two or more bonds in order to bring each such bond within the dollar limit of authority as set forth herein. The Company may revoke this appointment at any time. The execution of such bonds and undertakings in pursuance of these presents shall be as binding upon the said Company as .fully and amply to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal oftke in Kansas City, Missouri. This Power of Attorney is executed by authority of resolutions adopted by unanimous consent of the Board of Directors of the Company on March 3, 2003, true and accurate copies of which are hereinafter set forth and are hereby certified to by the undersigned Secretary as being in full force and effect: "VOTED, That the Chairman of the Board, the President, or any Vice President, or their appointees designated in writing and filed with the Secretary, or the Secretary shall have the power and authority to appoint agents and attomeys-€n-fact, and to authorize them to execute on behalf of the Company, and attach the seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings, obligatory In the nature thereof, and any such officers. of the Company may appoint agents for aoceptance_ofprocess " This Power of Attorney is signed, sealed and certified by facsimile under and by authority of the following resolution adopted by the unanimous consent of the Board of Directors of the Company on March 3, 2003: VOTED, That the signature of the Chairman of the Board, the President, or any Vice President, or their appointees designated In writing and filed with the Secretary, and- the signature of the Secretary, the seal of the Company, and certifications by the Secretary, may be affixed by facsimile on any power of attorney or bond executed pursuant to the resolution adopted by the Board of Directors on March 3, 2003, and any such power so executed, sealed and certified with respect to any bond or undertaking to which it is attached, shall continue to be valid and binding upon the Company. OOML0013 00 03 03 Page 1 of 2 'Printed In U.S.A. BOND NO. SU5008087 PREMIUM 90.00 FAITHFUL PERFORMANCE BOND WHEREAS, the City Council of the City of Huntington Beach, State of California, and CIM/Huntington, LLC (hereinafter designated as "principal") have entered Into an agreement whereby principal agrees to install and complete designated public improvementsh said agreement, dated July 29, 2004 4&xxx . , and identified as project The Strand for . Is hereby referred to and made a part hereof; and Tract 16406 WHEREAS, said principal is required under the terns of said agreement to furnish a bond for the faithful performance of said agreement. Now, therefor, we, the principal and Arch Insurance Company as surety, are held and firmly bound unto the City of Huntington Beach, hereinafter called 'City'. the penal One Milli.dn.Seven Hundred Fifty -Nine sum of Thousand Four Hundred Eighty -Nine and No/100--dollarS ($ 1, 759, 489.00 lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these. presents: The condition of thus obligation is such that if the above bounded principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenant, condition and provisions in the said agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless "City", its officers, agents and employees, as therein stipulated, then Oils obligation shall become null and void; otherwise it shall be and. remain in full force and. effect. As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees; including reasonable attorney's fees incurred by " City in successfully enforcing such's7bligation, all to be taxed as costs and included In any judgment rendered. The surety hereby stipulates and agrees that no charge, extension of lime, alteration or addition to the terms. of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations on this bond, and it does hereby waive notice of any change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications. In witness whereof, this instrument has been duty executed by the principal and surely above named, on August 11 2004 CIM/Huntington, LLC , as Principal By, .see attached SIGNATURE PAGE By Arch Insurance Company , as Surety By Maria Pena, Attorney -in -Fact PRINCIPAL: SIGNATURE PAGE CEWMuntiugton, LLC, a California limited liability company by: CIM Urban Real Estates Fund, L.P., a Delaware limited partnership, sole member by: CIM Urban Fund GP, LLC a California limited liability company, its general partner Nicholas V. Morosoff General Counsel and Secretary s APPROVED AS TO FORM RJEWER MGRATH, City A%,,ws , Sutton ty Attorneyf� (t'50 fz' S�iu7�Q rCe�G{ STATE OF CALIFORNIA ) Los Amellos) SS COUNTY OF ORANGE ) ON (-}IkM4 17 I2ooq BEFORE ME, RPM $ L-014 15.2 I3ec l< A NOTARY PUBLIC IN AND FOR"SAID STATE, PERSONALLY APPEARED - 1 cholaS MU►�asaFf ' PERSONALLY KNOWN TO ME 70 BE THE PERSONS WH��E£ SUBSCRIBED TO TH�;,�,I-AtUTHORiZED CAPACITIES, ACKNOWLEDGE TO ME EXECUTED THE SAME IN gEiR AND THAT BY SIGNATURE&ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS -ACTED, EXECUTED THE INSTRUMENT. WITNESS MY SIGNATURE NOTARY PUPCINUDFOR SAID STATE K17�{ 4 L41410 P32Ck (NAME PRINTED) STATE OF CALIFORNIA ) ) Ss COUNTY OF ORANGE . ) MY PRINCIPAL PLACE OF BUSINESS IS IN _ bg ml a,4-2S COUNTY MY COMMISSION EXPIRES 1:?-b1'149 1% ZUag '' ON = mW CammWron # 1470260 Los Angeles County NN Comm. EVkn Feb 14.2W8 2 ON BEFORE ME, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED _! AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY. THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE _ MY PRINCIPAL PLACE OF BUSINESS IS NOTARY PUBLIC IN AND FOR SAID STATE IN COUNTY (NAME PRINTED) MY COMMISSION EXPIRES _ _ 8075 3 BOND NO. SU5008087 PREMIUM Included LABOR AND MATERIAL BOND WHEREAS, the City Council of the City.of Huntington Beach, State of California, and _ �.. .----------------- CIM/Huntington, LL'C (hereinafter.designated as "Principal") have entered into an agreement whereby principal agrees to install and complete designated public improvements, which said agreement, dated July 11, 1004 xxxx . and Identified as project The Strand forTract 16406 , is hereby referred to and made a part hereof, and WHEREAS, under the terms of said agreement, principal Is required before entering upon the performance of the work, to file a good and sufficient payment bond with the City of Huntington Beach to secure the claims to which reference is made In Title 15 ( commencing with Section 3082) of Part 4 of Division 3 of Civil Code of the State of California. Now, therefore, said principal and the undersigned as corporate surety, are held firmly bound unto the City of Huntington Beach and all contraclors, subcontractors, laborers, materialmen and other persons employed in the performance of the aforesaid agreement and referred to in the aforesaid Eight Hundred Seventy -Nine Thousand Seven Code of 041 Procedures In the sum of Hundred Forty-Five'and No/100------------ -- dollars ($ 819,741.00 ), for materials fumished or labor thereon of any Idnd, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in. an mount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys fees, incurred by "City" in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered. It is hereby expressly stipulated and agreed that this bond shall Insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civd Code, so as to give a right of action to them or their assigns in any suit brought upon this bond. Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full fbtce and effect The surety hereby stipulates and agrees that no change, extension of tirne, alteration or addition to the terms of said agreement or the specifications accompanying the same shag in any manner 9090 - affect its obligation on this bond, and it does hereby waive notice of any such change, extension, alteration or addition. In witness whereof, this instrument has been fully executed by the principal and surety above named, on August 11 $Il 2004 CIM/Huntington, UX as Principal By, see attached SIGNATURE PAGE By . Arch Insurance Company as Surety By. Maria Pena, Attorney -in -Fact STATE OF CALIFORNIA ) Los An fk� SS COUNTY OF GW44 ' ) ON AytdN' I21'Uaq BEFORE ME, R-M,4 LOU1,Se Uc,k A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED - J1(,hn) AS V • MOro5p(( PERSONALLY KNOWN TOME TO BE THE PERSON& WHOSE N/�ME3 SUBSCRIBED TO TH$ 1Nf IINNSTRUUMM �ANIITIE� ACKNOXEDG2 TO NJE THAT EXECUTED THE SAME IN AND THAT BY �tGNATURE&ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF VIMI H THE PERSON&ACTED, EXECUTED THE INSTRUMENT. WITNESS D SIGNATUR MY PRINCIPAL P CE OF BUSINESS IS NOTARY PU LIC AND FOR -SAID STATE IN OS ilk—O S . COUNTY RAO klvse &0� - (NAME PRINTED) MY COMMISSION EXPIRES�'�, STATE OF CALIFORNIA ) awe aEac ) SS ` COMWOW # 147oM68 wotary p d C - caubmia COUNTY OF ORANGE } Loa Ang0a county ' l6,MVC0mm.-b0wFQbl4.20G8f ON _ -- —BEFORE ME, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE NOTARY PUBLIC IN AND FOR SAID STATE (NAME PRINTED) 8090.01 MY PRINCIPAL PLACE OF BUSINESS IS IN COUNTY MY COMMISSION EXPIRES 9096 SIGNATURE PAGE PRINCIPAL: CEYMuntington, LLC, a California limited liability company by: CIM Urban Real Estates Fund, L.P., a Delaware limited partnership, sole member by: CIM Urban Fund GP, LLC a California limited liability company, its general partner By: 1 Nicholas V. Morosaff General Counsel and Secretary ^VFD AS TO FORM I FER MCGRATH, City Attomay crab Sutton ty City Attonvq CaT6*hvl- PiCa re 51 CALIFORNIA ALL W� PU`I POSE AGKNOOMENT State of California County of Los Angeles On August jy 2pp4 before me, Joyce M. Herrin, Notary Public, personally appeared Maria Pena, personally known to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. JOYCE M. HERRIN N COMM. #1323695 91 2 ,I NOTARY PUBLIC • CALIFORNIA I LOS ANGELES COUNTY N My Comm. Explres CCr� oyce M. Herrin POWER OF ATTORNEY Know All Men By These Presents: That the Arch Insurance Company, a corporation organized and existing under the laws of the State of Missouri, having Its principal office In Kansas City, Missouri (hereinafter referred to as the "Company") does hereby appoint KD Conrad, C.K. Nakamura, Joyce Herrin, Tom Branigan, Edward C. Spector, Marina Tapia, Clarice Lee, Richard E. Bigley, Lisa L. Thornton, Maria Pena, E. S. Albrecht Jr., Tracy Aston, Betty Walker and Brenda Wong of Los Angeles, CA (EACH) Its true and lawful Aftomey(s}in-Fact, to make, execute, seal, and deliver from the date of issuance of this power for and on its behalf as surety, and as its act and deed: Any and all bonds and undertakings EXCEPTION: NO AUTHORITY Is granted to make, execute, seal and deliver bonds or undertakings that guarantee .the payment or collection of any promissory note, check, draft or letter of credit. This authority does not permit the same obligation to be split into two or more bonds In order to bring each such bond within the dollar limit of authority as set forth herein. The Company may revoke this appointment at any time. The execution of such bonds and' undertakings in pursuance of these presents shall be as binding upon the said Comt any as.fully and amply to all hitents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office In Kansas City, Missouri. This Power of Attorney is executed by authority of resolutions adopted by unanimous consent of the Board of Directors of the Company on March 3, 2003, true and accurate copies of which are hereinafter set forth and are hereby certified to by the undersigned Secretary as being In full force and effect: "VOTED, That the Chairman of the Board, the President, or any Vice President, or their appointees designated in writing and fled with the Secretary, or the Secretary shall have the power and authority to appoint agents and attomeys:m-fact, and to authorize them to execute on behalf of the Company, and attach the seal of the Company thereto, bonds and undertakings. recognizances, contracts of indemnity and other writings, obligatory to the nature thereof, and any such ufifiCers. of the Company may appoint agents for ac csptancemf.)rocess " This Power of Attorney is signed, sealed and certified by facsimile under and by authority of the following resolution adopted by the unanimous consent of the Board of Directors of the Company on March 3, 2003: VOTED, That the signature of the Chairman of the Board, the President, or any Vice President, or their appointees ddsignated In writing and filed with the Secretary, and the signature of the Secretary, the seal of the Company, and cartifimtions by the Secretary, may be affixed by facsimile on any power of attorney or bond executed pursuant to the resolution adopted by the Board .of Directors on March 3, 2003, and any such power so executed, sealed and certified with respect to any bond or undertaking to which It is attached, shall continue to be valid and binding upon the Company. OOMLOO13 00 03,03 Page t of 2 Printed in U.S.A. In Testimony Whereof, the Company has caused this Instrument to be signed and its corporate seal to be affixed by their authorized officers, this 11 th day of March, 2003. Arch Insurance Company Attested and Certified STATE OF CONNECTICUT SS COUNTY OF FAIRFIELD SS Melissa B. Gilligan, a Notary Public, do hereby certify that Thomas P. Luckstone and Joseph S. Label[ personally known to me to be the same persons whose names are respectively as Vice President and Corporate Secretary of the Arch Insurance Company, a Corporation organized and existing under the laws.of the State .of Missouri, subscribed to the foregoing Instrument, appeared before me this day In person and severally acknowledged that they being thereurdo duly authorized signed, sealed with the corporate seal and delivered the said instrument as the free and voluntary act of said corporation and as their own free and voluntary acts for the uses and purposes therein set forth. Ma11 w4 �w.8w IL rmurryy6p!�+�bw v lie CERTIFICATION I. Joseph S. Labell, Corporate Secretary of the Arch Insurance Company, do hereby certify that the attached Power of Attorney dated March 11, 2003 on behalf of the person(s) as listed above Is a true and correct copy and that the same has been In full force and effect since the date thereof and Is in full fore and effect on the date of this certificate; and t do further certify that the said Thomas P. Luckstone, who executed the Power of Attomey as Vice President, was on the date of execution of the attached Power of Attorney the duly elected Vice President of the Arch Insurance Company. IM TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed the corporate seal of the Arch Insurance Company on this 11 th day of August , 20_Q4,. r LabWI,.Garport SGI=tW This Power of Attorney limits the acts of those named therein to the bonds and undertakings specifically named therein and they have no authority to bind the Company except in the manner and to the extent herein stated. Home Office: Kansas City, MO 00ML0013 00 03 03 Page 2 of 2 n Sant 901 Printed in U.S.A. J.d Insurance Group IMPORTANT NOTICE CONCERNING THE TERRORISM RISK INSURANCE ACT OF 2002 The Terrorism Risk Insurance Act of 2002 establishes a mechanism which the federal goverptherit.vritl share, with the insurance industry, in losses arising out of "acts of terrorism" certified as such by the �$ecretary of the Treasury. "Certified acts of terrndsm" are defined as events that cause more than $5 million: in losses and: 1. Are violent ordangetoos.to.tr maltlifg; pmpaity, or the Infrastructure, 2. Result in damage within..tfte UhRed States, on a United States mission, or to a United atafes aircraft or vessel, and 3. Are committed by lodly(tfiralsi acting oq behW of foreign persons or interests, as part of sh efToti'to ccierce the civilian populiltiofi of the tlnifed' States or to influence the policies or conduct of the Unt ed tides Government. The Act specifies that coveragolOr "der#lfied acts of terrorism" must be made avallabte.ln. commetoiai Arai erty and casualty policies of insm9nee, and it requires Insurers to disclose any applicable preiultim charges ertd the federal share of compensation. we are matahg ttrese disclosures in strict compliance with tI Al t L1iscla6uri3+6f A4001111ty of Coverage for Terrorism Losses Coverage for losses resulting. from "certified acts of terrorism" is being made available to you on temts, amounts, and ('imitation generally applicable to losses resulting from perils other than ads of terrorism. Oisclosvire,of'Faddratshare of Compensation for Terrorism Loses The federal goverirment will pay a 90% shams of an insumes terrorism losses once the Insurer has .sa'tisfied a significant aggregate annual dedircIib1b. f=or temxlsm losses occurring in 2002, that dediicti'pio is 11% of the Insurer's 2001 direct settled piemiurri. Por lossio ocrxrrdng in 2003, 2004 and 2005, the artiitraf Insurer deductibles are 7%,10% and 15% offfte;ufor year's direct earned premium, respectively. The. Act provides that neither insurers nordre federal government are tssponsible for losses associated with *certified acts.ofteirortsril" once aggregate annual #reared losses axoeed $100 billion. Disclosure of Terrorism insurance Premium Your Bond premium charge for "OW. Wd acts of t sm" coverage is $ Q. SR 80 37 (Ed.1102) Page 1 of 1 Printed in U.S.A. CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION To: Honorable Mayor and City Counci tubers Via: Fred A. Wilson, City Administra From: Stanley Smalewitz, Economic De pment Director and Travis K. Hopkins, PE, Director of Public Works Date: October 28, 2008 Subject: ADDITIONAL COMMUNICATION ITEM 8 FOR NOVEMBER 3, 2008 CITY COUNCIL MEETING — PUBLIC HEARING APPROVAL OF SIXTH IMPLEMENTATION AGREEMENT WITH CIM/HUNTINGTON, LLC ADDITIONAL RECOMMENDED ACTIONS Statement of Issue: To implement the Disposition and Development Agreement (DDA) between the Redevelopment Agency ("Agency") and CIM/Huntington, LLC ("Developer") and as required by the Conditions of Approval for Tentative Tract Map No. 16406, the Agency and City must approve an Operating Agreement for The Strand Public Parking Structure and Declaration of Covenants, Conditions & Restrictions ("CC&R'S") and Grant of Reciprocal Easements (CIM- Huntington Beach) for The Strand. Additional Recommended Action: City Council Motion to: 1) Authorize the City Administrator to sign the Operating Agreement for The Strand Public Parking Structure once the City Attorney has approved to form. 2) Approve the Declaration of Covenants, Conditions & Restrictions and Grant of Reciprocal Easements and authorize execution by the City Administrator once the City Attorney has approved to form and direct the City Clerk to record the Declaration of Covenants, Conditions & Restrictions and Grant of Reciprocal Easements with the County of Orange Clerk -Recorder. 3) Authorize and direct the City Engineer to accept the public improvements upon the completion of the public improvements for Tract 16406 parking garage and instruct the Page 1 of 4 City Clerk to record the "Certificate of Acceptance of Public Improvements" with the County of Orange Clerk -Recorder. 4) Direct the City Engineer to release the Faithful Performance/Labor and Material Bonds No. SU5008087 pursuant to California Government Code Section No. 66499.7(a) upon the completion of the public improvements for Tract 16406; 5) Direct the City Engineer to release the Monument Bond No. SU500808 pursuant to California Government Code Section No. 66499.7(a) upon the completion of the public improvements for Tract 16406; 6) The City Engineer is directed to accept the Guarantee and Warranty Bond, the security furnished for guarantee and warranty of improvements, and instruct the City Clerk to file the bond with the City Treasurer upon the completion of the public improvements for Tract 16406; 7) Instruct the City Clerk to notify the developer, CIM/Huntington, LLC, of the action and the City Treasurer to notify the surety, Arch Insurance Company, of the release of the bonds upon the completion of the public improvements for Tract 16406. Alternative Actions: 1) Approve a modified version of the Operating Agreement for The Strand Public Parking Structure and CCR's; or 2) Direct staff to renegotiate the terms of the Operating Agreement and CCR's; or 3) Deny the Operating Agreement and CCR's. Analysis: The Public Hearing that was scheduled on October 20, 2008, for the adoption of the Sixth Implementation Agreement was postponed to finalize the negotiations on the Operating Agreement for The Strand Public Parking Structure and the CCRs. The intent was to complete the negotiations for these two documents and have them signed for the City Council meeting on November 3, 2008. These documents are close to being finalized; however, they will not be completed in time to submit the City Council Request for Action (RCA). To ensure the timely opening of The Strand, it is recommended that authority to be delegated to the City Administrator to execute these documents on behalf of the City after the City Attorney has approved these documents as to form. Operating Agreement for The Strand Public Parking Structure The City will own the public parking parcel at The Strand. The Developer will maintain and operate the public parking structure consistent with the DDA CC&Rs, License and Agreement Regarding Maintenance, Agreement Containing Covenants and Parking Management Plan to Page 2 of 4 provide adequate public parking. In addition, the City Council will be asked to set hourly overnight and valet parking rates. The valet will be available for both hotel guests and the public. The operation of the parking structure will be paid through the operating revenues. If the revenues do not adequately cover the expenditures, the Developer is responsible for the shortfall. In addition, if the City Council does increase the parking rates for The Strand parking above the rates for the Main Promenade parking structure, then the City and Developer will split the increased revenue 50/50. The City and Developer will meet quarterly to ensure that the parking structure is operating efficiently. The City will review and approve both the Developer's agreement with a parking contractor and parking structure budget on an annual basis. The Operating Agreement allows for the creation of a marketing plan, such as vending machines and/or advertising/marketing within the parking structure. Declaration of Covenants, Conditions & Restrictions and Grant of Reciprocal Easements On October 21, 2002, the City Council conditionally approved Tentative Tract Map No. 16406, Conditional. Use Permit No. 99-45 with Special Permits No. 02-06, and Coastal Development Permit No. 99-16 for The Strand project.. The conditions of approval for Tract Map No. 16406 required the Developer to submit CC&R's in recordable form prior to recordation of the map. On June 20, 2005, Final Tract Map No. 16406 for The Strand project was approved by the City Council along with the acceptance of dedication, improvements and bonds. The CC&R's were executed by CIM in 2005, but they were not recorded, due to the City reviewing the potential condominizing of the property and the creation of a parking parcel. The current CC&R's define the City owned parking parcel and sets forth the revised maintenance responsibilities. The Declaration of Covenants, Conditions & Restrictions and Grant of Reciprocal Easements establishes reciprocal easements and sets forth certain associated rights and agreements relating to the common use, maintenance and operation of the parking parcel, retail project and hotel project. Acceptance of Public Improvements The City Engineer shall determine upon completion of the public improvements required by Tentative Tract Map No. 16406, Conditional Use Permit No. 99-45 with Special Permits No. 02- 06, and Coastal Development Permit No. 99-16, that the improvements have been constructed in substantial compliance with the approved plans and specifications. Upon recordation of the "Acceptance of Public Improvements", the Developer is requesting release of the Faithful Performance/Labor and Material and Monument Bonds, pursuant to California Government Code Section 66499.7(a). Public improvements consist of street improvements on 6th Street, Walnut Avenue and the Main Street/El Don Alley (including curb, gutter, sidewalk and paving), water and sewer systems and appurtenances as shown on the Improvement Plans for the project, and storm drain facilities as shown on the Improvement Page 3 of 4 Plans for the project. Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements (Landscaping License Agreement) (Exhibit 5 of Sixth Implementation Agreement) Conditional Use Permit No. 99-45 requires the Developer to provide the Landscape Maintenance Agreement for the maintenance of landscaping and embellished hardscape improvements and other Public Works improvements in the public right-of-way areas along Pacific Coast Highway, Sixth Street, Walnut Avenue, Fifth Street which transverses the site, and a section of the public alley within the developed site between Fifth Street and Main Street. The Landscape Maintenance Agreement insures continual maintenance of improvements installed within the public right-of-way adjacent to and within the development. The agreement delineates obligations with respect to the maintenance and replacement of landscaping, hardscape and other improvements. In general, CIM/ Huntington, LLC ("CIM") is responsible for the maintenance, repair and replacement of all installed landscaping and decorative hardscape within the improvement area. Maintenance includes, but is not limited to, removal of graffiti, paint, stickers, wax and other materials. Landscaping is to be maintained in accordance with the Arboricultural and Landscape Standards and Specifications issued by the Department of Public Works. Any damaged hardscape or landscape must be repaired promptly and replaced as per the original City approved Improvement Plans. Page 4 of 4 • J� CITY OF HUNTINGTON BEACH Interdepartmental Communication TO: JOAN FLYNN, City Clerk PATTY ESPARZA, Senior Deputy City Clerk FROM: JENNIFER McGRATH, City Attorney DATE: January 7, 2009 SUBJECT: CIM/THE STRAND/OPERATING AGREEMENT FOR THE STRAND PUBLIC PARKING STRUCTURE ENTERED INTO AS OF NOVEMBER 25, 2008 The attached Operating Agreement for The Strand Public Parking Structure was approved by City Council on November 3, 2008 and has been fully executed. Pursuant to the Sixth Implementation Agreement between the Redevelopment Agency and CIM/Huntington LLC, also approved on November 3, 2008, it is necessary to record the Operating Agreement with the Orange County Clerk/Recorder's Office. To that end, we have prepared the attached face page required for recordation, and appropriate notarization forms. Also attached are notary signatures for CIM. At your earliest convenience, please arrange for notarization of the City signatures and return the entire document to our office so we may hand deliver it to the Orange County Clerk/Recorder's Office for recordation as soon as possible. If you have any questions or comments, please do not hesitate to contact Leonie Mulvihill at X5620. JENNIFER McGRATH City Attorney 06-682.001.001 /29785 PLEASE COMPLETE THIS INFORMATION RECORD-ING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of.Huntington Beach Attn: Joan L. Flynn City Clerk's Office P. 0. Box 190 Huntington. Beach, CA 92648 Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIHill Hill IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE 200900001838312:47pm 01/15/09 1208 A 12 42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 F TITLE OF DOCUMENT: OPERATING AGREEMENT FOR THE STRAND PUBLIC PARKING STRUCTURE This document is shy for the official bustnow of the City of Huntington Beach, as contemplaWd under Grnromrnent Code Sec. 6103 and should be recordea free of chare. THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) OPERATING AGREEMENT FOR THE STRAND PUBLIC PARKING STRUCTURE THIS OPERATING AGREEMENT ("Agreement") is entered into as of November 25 , 2008, between the CITY OF HUNTINGTON BEACH, a California charter city ("City"), and CIM/Huntington, LLC, a California limited liability company ("Operator"), as approved by City Council of City of Huntington Beach at its meeting held on November 3 2008. Recitals: A. City will be the owner of a certain parking structure (the "Public Parking Structure") and the underlying parking parcel to be constructed on the site identified in Exhibit "A" hereto, which City desires to utilize for public parking purposes. B. The Public Parking Structure and certain other off -site improvements are being financed in part with public funds. C. City desires that Operator maintain and operate the Public Parking Structure and Parking Parcel consistent with the CC&Rs, License and Agreement Regarding Maintenance, Agreement Containing Covenants and Parking Management Plan, all as defined below, for the public purpose of City to provide adequate public parking. D. City and Operator wish to set forth their agreement as to the operation of the Public Parking Structure. Agreement: In consideration of the foregoing recitals and for other consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Definitions. i) A enc means the Redevelopment Agency of the City of Huntington Beach. ii) Agreement Containing Covenants means that certain Agreement Containing Covenants Affecting Real Property previously recorded against the Project Site on June 25, 2004 as Instrument No. 2004000580586, as amended by that First Amendment to Agreement Containing Covenants Affecting Real Property, as may be amended from time to time. iii) CC&R's means the Declaration of Covenants, Conditions and Restrictions and Reciprocal Easement Agreement dated as of November 3 , 2008, executed by City, Agency, Salvator W. Cracchiolo, as Trustee of the Cracchiolo S.W. & D.L. Trust A & C, successor -in -interest to Frank M. Cracchiolo, Trustee for the Revocable Trust dated June 12, 1979, and Salvator W. and Barbara F. Cracchiolo, (collectively, "Cracchiolo") and Operator. 1 OPERATING AGREEMENT vl8 iv) City means City of Huntington Beach, a California charter city. v) DDA means collectively the Disposition and Development Agreement entered into by and between Operator's predecessor -in -interest and Agency dated June 17, 1999, as amended pursuant to the [First] Implementation Agreement to the Disposition and Development Agreement dated April 6, 2000, as amended by the Second Implementation Agreement to the Disposition and Development Agreement dated March 5, 2001, as amended by the Third Implementation Agreement to the Disposition and Development Agreement (the "Fourth Implementation Agreement") dated September 15, 2003, as amended by the Fifth Implementation Agreement to the Disposition and Development Agreement dated July 19, 2004, and as amended by the Sixth Implementation Agreement to the Disposition and Development Agreement dated November 3 , 2008. vi) License and Agreement Reg Maintenance means that certain Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements entered into by and between City and Operator dated November 3 , 2008. vii) Hotel Parcel means that portion of the Project Site on which the Hotel Project is being developed as shown on the Site Plan. viii) Hotel Project means the approximately 157 room hotel being developed on the Hotel Parcel. ix) Maintenance Expense means any cost, expense or fee not included within the definition of Operating Expenses listed in Section 6 hereof, including, without limitation, capital repair and replacement and maintenance and repair costs. x) Merged Redevelopment Project means as set forth in Section 102 of the xi) Net Operating Income means Operating Income less Operating Expenses. xii) Operating Expenses are defined in Section 6 hereto. xiii) Operating Income means all fees, charges, and receipts from the operation of the Public Parking Structure deposited into the Parking Revenue — Strand Account (but specifically excluding any revenues received in connection with City's use of the Public Parking Structure as described in Section 2.4, below [including, without limitation, any vending machine or other incidental revenues, and any revenues from advertising or other promotions at the Public Parking Structure]). xiv) Parking Parcel means that certain parcel of real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described in Exhibit "A" attached hereto. xv) Parking Revenue — Strand Account means a separate account established by the City which shall be used for the deposit of revenue on a daily basis of all Operating Income. 2 OPERATING AGREEMENT vl8 xvi) Parcel or Parcels means the Parking Parcel, Hotel Parcel and the Retail Parcel, or any of them, as applicable. xvii)Parkin Management Plan means that certain Parking Management Plan relating to the Public Parking Structure approved by City Planning Department on June 17 , 2008, which may be amended from time to time following approval by the City Planning Department and subject to review and written approval of the Agency Executive Director or designee. xviii) Party or Parties means City and Operator, or either of them, as applicable. xix) Project means the Retail Parcel, the Hotel Parcel, the Parking Parcel and the Public Parking Structure, and the improvements therein. xx) Project t Site means the real property described on Exhibit `B" attached hereto and incorporated herein by reference of which Operator currently owns a 95.495% tenancy-m- common interest and Cracchiolo owns a 4.505% tenancy -in -common interest, owning together 100% of the fee interest in the Project Site. xxi) Retail Parcel means that portion of the Project Site on which the Retail Project is being developed as shown on the Site Plan. xxii)Retail Project means the three -level, 98,000 square foot retail/office project being developed on the Retail Parcel. xxiii) Shared Parking Revenues means that portion of the Operating Income which is derived only from parking and valet fees generated by the Public Parking Structure from City -approved parking rates in excess of established City -approved parking rates in City of Huntington Beach Main Street public parking structure, but shall exclude those revenues defined in Section 2.3(b). xxiv) Site Plan means the Site Plan attached hereto as Exhibit "C" and incorporated herein by reference showing the configuration of the Project. Section 2. Operation and Use. 2.1 General Operation. City authorizes Operator to operate the Public Parking Structure, and Operator agrees, at Operator's sole cost and expense, to operate and use the Public Parking Structure in accordance with all of the terms and conditions of this Agreement. Operator shall only use, or pen -nit the use of, the Public Parking Structure for the purpose of vehicular parking and vehicular and pedestrian ingress and egress, and for no other use or purpose. Operator and City acknowledge and agree that the use of the Public Parking Structure is to provide adequate public parking for City. Operator acknowledges that the Public Parking Structure and the parking spaces therein are part of City's "Shared Parking Plan", as may be amended or superseded from time to time. Except to the extent permitted by any City -approved valet parking plan set forth in the City -approved Parking Management Plan, parking spaces shall not be reserved in way by any means. During all hours of operation for the Public Parking 3 OPERATING AGREEMENT vl8 Structure as set forth in Section 11 hereof, Operator shall make the Public Parking Structure available to members of the general public. Such availability shall be without preference or priority for any class of persons over any other class of persons. At all times, Operator shall post signs acceptable to Operator and City designating the Public Parking Structure as "public parking." Operator acknowledges that the Public Parking Structure shall be used for unrestricted public parking (subject to reasonable limitations as to the type of vehicles permitted in the garage and further subject to any City -approved valet parking plan set forth in the City -approved Parking Management Plan), and shall be clearly identified as such. 2.2 Maintenance and Repair; Compliance with Law. Operator shall, at Operator's sole cost and expense (subject to Section 7, below), (a) manage, repair, reconstruct and operate the Public Parking Structure and Public Parking Parcel, (b) employ sufficient personnel for the operation of the Public Parking Structure, (c) maintain accounting records of all revenues and expenses related to the management, repair, reconstruction, and operation of the Public Parking Structure and Parking Parcel, and (d) periodically consult, as requested by City, with City regarding such management, reconstruction, repair, and operation. Operator agrees, at Operator's sole cost and expense, to comply with all statutes, ordinances, rules, orders, regulations of federal, state, county and city governments regulating the use by and operation of Operator of the Public Parking Structure and Parking Parcel. Operator further agrees, at Operator's sole cost and expense, to manage, repair, reconstruct and operate the Public Parking Structure and Parking Parcel in a manner consistent with and to the standards set forth in the CC&R's, the Agreement Containing Covenants, and the Parking Management Plan. Operator shall not use or knowingly permit the use of the Public Parking Structure or Parking Parcel in any manner that will create or tend to create a nuisance. The hours of operation for the Public Parking Structure are set forth in Section 11 hereof. 2.3 Valet Parking; Payment for Hotel Guests. a. Subject to any City -approved valet parking plan set forth in the City -approved Parking Management Plan, during the term of this Agreement, Operator shall have the sole right to operate valet parking in the Public Parking Structure. Operator and City shall meet and confer at least every 90 days to enable efficient operation of both the valet and other parking uses of the Public Parking Structure. Members of the public and Hotel Project guests shall have the right to equally access and use the valet parking in the Public Parking Structure. b. In the event a Public Parking Structure patron is a guest of the Hotel Project and is charged for use of the Public Parking Structure on his or her hotel bill, then Operator shall deposit (or cause the operator of the Hotel Project to deposit) into the Parking Revenue — Strand Account, as Operating Income, both of the following for such patron: (1) for each 24-hour period or fraction thereof the then City -approved maximum daily rate or overnight public rate (if applicable) for the Public Parking Structure; and (ii) for each 24-hour period or fraction thereof fifty percent (50%) of the difference between (A) the amount charged to such hotel guest by the hotel; and (B) the then City -approved maximum daily rate or overnight public rate (if applicable) for the Public Parking Structure. 4 OPERATING AGREEMENT v18 C. All other monies received from any patrons of the Public Parking Structure (including hotel guests) shall be deposited into the Parking Revenue - Strand Account pursuant to Section 7, below. d. The payments required under this Section 2.3 shall be made on a monthly basis no later than the tenth (10t") day of each month for the prior month's use of the Public Parking Structure which gives rise to the payment. Such payments shall be sent together with a detailed statement to the City Treasurer and to the Director of Economic Development detailing the calculation for such payments and shall include such reasonable information as may be requested by the City Treasurer and/or the Director of Economic Development. Such payments shall not be included in Shared Parking Revenue. 2.4 Non -Parking Uses. Nothing herein shall prohibit or limit City from using portions of the Public Parking Structure that are not parking areas or areas needed for pedestrian or vehicular access for reasonable, commercial uses (including, without limitation, the use of vending machines or other commercial purposes) so long as such use does not materially interfere with the use of the Public Parking Structure as public parking. The City shall be responsible for the costs of installation, maintenance, repair and removal of any equipment required for the Non -Parking Uses. To the extent such uses create additional costs for insurance, utility services, janitorial services and supplies, or security and such costs can be determined and/or apportioned by the Operator, said costs shall be paid by the City. Prior to installation of said non -parking uses, the City shall confer with the Operator and obtain Operator's written consent, which shall not be unreasonably withheld, conditioned or delayed provided the City presents a plan consistent with this Section. City and Operator agree to jointly develop, for future City Council consideration, a marketing plan for advertising in the Public Parking Structure for both the parking and non -parking areas of the Public Parking Structure. The marketing plan would address the cost of capital improvements, maintenance and repair, payment of expenses, and distribution of income between the parties hereto. Section 3. Maintenance of Public Parking Structure and Parking Parcel. Consistent with the provisions and standards set forth in the CC&R's, the Agreement Containing Covenants, and the Parking Management Plan, Operator covenants and warrants it will (x) at Operator's sole cost and expense, pay for capital repair, replacement and improvements to the Public Parking Structure, (y) at Operator's sole cost and expense, maintain, reconstruct, and repair, or cause to be maintained, reconstructed, and repaired, the Public Parking Structure and the Parking Parcel in good order, condition and repair. Without limiting the foregoing and only to the extent not inconsistent with and/or to the standards set forth in the CC&R's, the Agreement Containing Covenants and the Parking Management Plan, Operator hereby agrees to maintain, repair, reconstruct and operate in accordance with the practices generally prevailing in the operation of structured parking adjacent to other retail and hospitality facilities located in Southern California similar in character to those located on the Retail Parcel and Hotel Parcel, and shall at all times perform the services set forth in Exhibit "D" attached hereto as frequently as reasonably required for the Public Parking Structure and Parking Parcel to satisfy such standard of maintenance, repair, reconstruction, and operation and remain in good order, condition and repair (the "Operating Standard"). 5 OPERATING AGREEMENT vIS Section 4. Rates. City shall have the sole power to establish parking rates and charges (including, day/overnight and self-parking/valet) for the use of the Public Parking Structure at all times, and parking rates shall be established by resolution of City Council. Operator may recommend to City, from time to time, revisions to the rates to be charged for the Public Parking Structure. The Parties agree that such recommendations shall in all circumstances be subject to approval by City and shall be consistent with the use and operation of the Public Parking Structure as public parking. Nothing in this Agreement shall be intended to require, or shall require, City to approve any such recommendations, however the City Administrator shall within thirty (30) days of receipt of such recommendation advise the Operator of City Administrator's recommendation to approve or deny. In the event such recommendation to revise rates is approved by City, City shall advise Operator in writing of any changes to the Public Parking Structure rates at least 30 days prior to the date any such change becomes effective. Final determination of rates and charges for the Public Parking Structure shall be made by City Council. Operator acknowledges and agrees that any change in the parking rate structure (including, without limitation, a change to the validation or valet programs) would have to be implemented in accordance with and pursuant to all applicable laws, ordinances, rules, regulations, permits, authorizations, orders and requirements of all federal, state, county and municipal governments, and the departments, bureaus, agencies or commissions thereof. Section 5. Operator's Employees. All of Operator's employees and the employees of any subcontractor of Operator that operates the Public Parking Structure as provided in Section 23 hereof, shall, at all times while on duty at the Public Parking Structure, wear standard uniforms, conduct themselves with exemplary demeanor, be courteous and polite to the public and not engage in any raucous or offensive conduct. Operator shall be the sole judge, using reasonable discretion, as to whether the conduct of the employees of Operator meets the requirements hereof. Operator shall immediately take all steps necessary to eliminate any condition complained of. Any laborers or employees engaged by Operator shall not be the employees of City and City shall in no way be liable for the payment of any wages or benefits to any such laborers or employees. Any such laborers or employees shall in no way be third party beneficiaries of this Agreement. Section 6. Operatin,2 Fee and OperatinI4 Expenses. Solely to the extent there is Net Operating Income, City shall pay to Operator as its operating fee for each full month of the term of this Agreement, a fee of $1,500, such amount to be increased on each annual anniversary of the Commencement Date of this Agreement by a percentage increase agreed to by City and Operator as reflective of the percentage increase during the preceding year in the Consumer Price Index -Urban Wage Earners and Clerical Workers (West Urban, All Items, Base 1982-84 = 100) as published by the United States Department of Labor, Bureau of Labor Statistics. For the first partial month of operation of the Public Parking Structure, the operating fee shall be prorated from the first day of operation to the last day of the month. City shall have no obligation to pay the operating fee to the extent Net Operating Income is insufficient to pay such amount. 6 OPERATING AGREEMENT v18 Solely to the extent there is Operating Income, Operating Income may be used to pay for those reasonable expenses and costs incurred by Operator for the operation of the Public Parking Structure (including valet parking) and contained in the City -approved Project Budget (defined below) or costs of installation, maintenance, repair and removal of any equipment required for City non -parking uses that cannot be reasonably and fairly determined and apportioned by the Operator, or additional costs for insurance, utility services, janitorial services and supplies, or security that cannot be reasonably and fairly determined and apportioned by the Operator, as more particularly set forth in Section 2.4 above (collectively, the "Operating Expenses"). City shall have no obligation to pay for or reimburse any Operating Expenses to the extent Operating Income is insufficient to pay such amount and any shortfall shall be paid by the Owners (as defined in the CC&Rs) of the Retail Parcel and Hotel Parcel as part of Class B Common Area Expenses (as defined in the CC&Rs). Operating Expenses shall include only the following and only to the extent any cost, fee or expense is incurred solely for the operation of the Public Parking Structure as documented to the reasonable satisfaction of the City Administrator or his/her designee and is contained in the City -approved Project Budget (or costs of installation, maintenance, repair and removal of any equipment required for City non -parking uses that cannot be reasonably and fairly determined and apportioned by the Operator, or additional costs for insurance, utility services, janitorial services and supplies, or security that cannot be reasonably and fairly determined and apportioned by the Operator, as more particularly set forth in Section 2.4 above): subcontractor fees and expenses, salaries and wages, health insurance, uniforms, security guard service, supplies, signs, utilities, public liability insurance, garage keepers liability and other insurance (including, but not limited to, insurance required by Section 14 of this Agreement), Class A Common Area Expenses (as more particularly described and defined in the CC&Rs), and any other necessary and reasonable costs related to the operation of the Public Parking Structure by Operator and/or any subcontractor thereof, provided, that all Operating Expenses must be reasonable, not duplicative (e.g., in the event Operator engages a subcontractor as described in Section 23 hereof), and must be provided as operation costs in a City -approved Project Budget as set forth below. Payroll taxes, workers' compensation insurance and sick leave pay shall be reimbursed at the percentage of gross payroll as may be determined by Operator in accordance with applicable state and federal laws. Operating Expenses shall not include any other costs, fees or expenses, including without limitation, costs, fees or expenses related to repair and replacement (including repair, restoration and reconstruction) obligations of Operator in Section 402 of the DDA, in the CCR's or herein or any of Operator's general overhead expense which shall include, but shall not be limited to: i) Administrative and related costs and expenses incurred in the operation of the Public Parking Structure or the other operations of Operator, as they are incurred in the general management of the affairs of Operator generally, including the monitoring of the operation and management of Operator; ii) Maintenance of the general books and records of Operator; iii) Office supplies and equipment used by Operator which are not used exclusively for the Public Parking Structure; 7 OPERATING AGREEMENT vl8 iv) Postal, telephone and travel expense which are not directly related to the management of the Public Parking Structure; v) The cost of any managers or supervisors who are not employed at the Public Parking Structure on a full time basis; and vi) Capital repairs necessary to continue operation of the Public Parking Structure. Notwithstanding any other provision hereof, Operating Expenses shall not include, and in no event shall City be liable for payment of, any operator or management fee of any subcontractor of Operator hereunder, but such limitation on liability of City shall not prevent or in any way restrict Operator from using or assigning all or a portion of its operator fee described in the first sentence of this Section 6 for such purpose. Section 7. Operatine Income. (a) Prior to the first date of operation of the Public Parking Structure, City shall establish the Parking Revenue — Strand Account. No revenues from the Parking Revenue — Strand Account shall be commingled with any other City accounts, provided however that Operator acknowledges and agrees that funds deposited in and separately accounted for by the City as the Parking Revenue — Strand Account may be deposited into a City bank account which contains deposits from other separately accounted for City accounts. City shall be the sole signatories on the Parking Revenue — Strand Account used for the deposit of funds. City shall have the option to change the bank where the Parking Revenue — Strand Account is held at any time upon written notice to Operator. (b) On a daily basis, Operator shall deposit (and shall cause any subcontractor to deposit) all Operating Income into the Parking Revenue — Strand Account. In the event a Public Parking Structure patron is a hotel guest at the Hotel Project but is not charged for use of the Public Parking Structure on his or her hotel bill or a Public Parking Structure patron is not a hotel guest at the Hotel Project, then Operating Income shall include any monies received by the Operator or any subcontractor from any such patron. Operator shall maintain (and cause any subcontractor to maintain) records of all revenues so received and deposited. Within ten (10) days after the end of each month, Operator shall submit to the City Treasurer and the Director of Economic Development a reasonably detailed written statement containing such reasonable information as may be requested by the City Treasurer and/or the Director of Economic Development (including, without limitation, a subcontractor monthly statement of income and expense, if applicable). (c) Funds in the Parking Revenue — Strand Account shall only be used as follows: l . First, monies deposited in the Parking Revenue — Strand Account shall be used for the payment of Operating Expenses. Subject to the following sentence, on the last Friday of each and every successive month of the term of this Agreement, only from monies deposited in the Parking Revenue — Strand Account and from no other source of funds, the City 8 OPERATING AGREEMENT v18 shall advance to Operator, solely for payment of Operating Expenses, the amount estimated by Operator for Operating Expenses for the following month as set forth in the then current City - approved Project Budget. Until there are sufficient funds in the Parking Revenue — Strand Account to make such advance, Operator shall be responsible for paying all Operating Expenses from Operator's own funds. To the extent the Operator pays any Operating Expenses from Operator's own funds, the City acknowledges and agrees that Operator shall be reimbursed over time for such payment(s) to the extent there is sufficient Net Operating Income after the two retentions required by this subsection 1. Within ten (10) days after the end of each month, Operator shall submit to the City Treasurer and the Director of Economic Development a reasonably detailed written statement of the Operating Expenses incurred during such preceding month and indicating those which have been paid, together with such reasonable information as may be requested by the City Treasurer and/or the Director of Economic Development. To the extent any such monthly detailed written statement discloses an overpayment to Operator from the City's advance of Operating Expenses for such month, City shall have the right, at its sole option, to either (X) reduce the next month's advance in an amount equal to such overpayment; or (Y) to request that Operator reimburse the City for such overpaid amount within ten (10) days following written request from the City; or (Z) any combination of (X) and (Y). No other funds of City shall be available to pay for the operation of the Public Parking Structure. City shall retain in the Parking Revenue — Strand Account: (a) an amount sufficient for all incurred but unpaid Operating Expenses; plus (b) an additional retention in the amount of Fifty Thousand Dollars ($50,000.00), which amount may be subject to adjustment as agreed to in writing between the Operator and the City. 2. Second, on the last Friday of each and every successive month of the term of this Agreement, to the extent there is sufficient Net Operating Income after the two retentions and payments required by subsection 1, above, City shall use monies deposited in the Parking Revenue — Strand Account to pay Operator the monthly operating fee set forth in Section 6 hereof owed for the prior month; 3. Third, to the extent there is Net Operating Income after the two retentions and payments required by subsection 1, above, and payment of the monthly operating fees, every ninety (90) days the City shall perform an initial calculation of the Shared Parking Revenues actually received for the previous ninety (90) days and deposited into the Parking Revenue — Strand Account. Following such initial calculation, the City shall: (a) disburse/transfer to City's general fund the balance of funds in the Parking Revenue — Strand Account minus fifty percent (50%) of any Shared Parking Revenues actually received for the previous ninety (90) days and deposited into the Parking Revenue — Strand Account as initially calculated by the City; and (b) disburse to Operator at the same time as Operator's then next monthly advance as set forth in subsection 1., above, fifty percent (50%) of any Shared Parking Revenues actually received for the previous ninety (90) days and deposited into the Parking Revenue — Strand Account as initially calculated by the City. Such quarterly disbursements shall only be made to the extent there is Net Operating Income on a cumulative basis during the applicable calendar year after the two retentions and payments required by subsection 1, above, and payment of the monthly operating fees for the portion of the calendar year involved. 9 OPERATING AGREEMENT v 18 At the end of each calendar year the City shall perform a final calculation of (i) the Shared Parking Revenues actually received for the previous calendar year and deposited into the Parking Revenue — Strand Account; (ii) the amount if any of quarterly disbursements made pursuant to the immediately preceding paragraph; and (iii) the extent to which there is Net Operating Income after the two retentions and payments required by subsection 1, above, and payment of the monthly operating fees for the calendar year involved. To the extent there has been an under -disbursement of Shared Parking Revenues from such quarterly disbursements based upon such final calculations, the deficit shall be added as an additional credit to the next quarterly disbursement(s) of Shared Parking Revenues for the next calendar year or years until such deficit is fully credited. To the extent there has been an over -disbursement of Shared Parking Revenues from such quarterly disbursement(s) based upon such final calculations, the excess shall be deducted as a debit to the next quarterly disbursements of Shared Parking Revenues for the next calendar year or years until such excess is fully debited. The following is an illustrative example for calculating the fifty percent (50%) share of the Shared Parking Revenues between City and Operator: if the daily rate for a space in the City of Huntington Beach Main Street public parking structure is nine dollars ($9.00) per day, per space, and the rate in the Public Parking Structure is eleven dollars ($11.00) per day, per space, then (i) City will keep all parking revenue proceeds up to nine dollars ($9.00) and (ii) Operator and City will equally split the two dollars ($2.00) per space, per day differential above the base. If the rate per space at the Public Parking Structure is at the same or below the rate charged at the City of Huntington Beach Main Street public parking structure, then Operator shall not share any of the parking revenue derived from parking fees generated by the Public Parking Structure. The fifty percent (50%) share of the Shared Parking Revenues shall apply to both daily rates and overnight rates. Not less than every ninety (90) days, City and Operator shall meet and confer to review Operating Income and Operating Expenses. (d) Any other revenues received by the Operator (or subcontractor) (including, without limitation, any revenues received in connection with City's use of the Public Parking Structure as described in Section 2.4, above) shall be forwarded by the Operator to the City promptly as such funds are received. The Operator shall maintain records of all such revenues so received, and forwarded to the City. Within ten (10) days after the end of each month, Operator shall submit to the City Treasurer and the Director of Economic Development a reasonably detailed written statement regarding any such revenue containing such reasonable information as may be requested by the City Treasurer and/or the Director of Economic Development. Section 8. Reserved. Section 9. Accounting and Budget. Operator shall maintain (and shall cause any subcontractor to maintain), for a period of five (5) years, Operator's (and subcontractor's) books and records pertaining to this Agreement. All income and expenses shall be accounted for in accordance with recognized accounting practices. Operator hereby agrees that City shall have the right at all reasonable times to inspect, copy and audit in a mutually agreeable location in Orange County, California, Operator's and subcontractor's books and records pertaining to this 10 OPERATING AGREEMENT v18 Agreement. In the event an audit discloses an overbilling against and/or underpayment to City in excess of the greater of: (X) five percent (5%) of the then current City -approved Project Budget or (Y) $5,000.00, Operator hereby agrees that it shall, within thirty (30) days following written request therefor, reimburse City for the reasonable cost of such audit plus the amount which has been overbilled and/or underpaid. In the event an audit discloses an overbilling against and/or underpayment to City in an amount less than the greater of: (X) five percent (5%) of the then current City -approved Project Budget or (Y) $5,000.00, Operator agrees that it shall, within thirty (30) days following written request therefor, reimburse City for the amount which has been overbilled and/or underpaid. Upon completion of the Public Parking Structure and annually on each May 15 thereafter during the term of this Agreement, Operator shall submit to the City Treasurer and the Director of Economic Development a proposed budget for the operation of the Public Parking Structure. Such proposed budget shall set forth the projected income and expenses (the "Proposed Budget"). Operator shall include in the Proposed Budget a schedule of maintenance, repair and replacement for the Public Parking Structure and the estimated cost thereof. Each Proposed Budget shall include both an annual aggregate budget for the Public Parking Structure and monthly budgets for each calendar month during the applicable fiscal year covered by the Proposed Budget. Each Proposed Budget shall be submitted in a form reasonably acceptable to the City Treasurer and the Director of Economic Development. Each Proposed Budget shall be for planning and information purposes only and shall not be deemed to be binding upon either Operator or City. Each such annual Proposed Budget, prior to adoption and implementation by Operator, shall be approved by City Council. Any budget so approved by City shall become the budget for the ensuing fiscal year and shall form the basis on which Operating Expenses are incurred in that fiscal year. If the budget is not approved, then the budget effective in the prior fiscal year shall govern the Operating Expenses of the Public Parking Structure plus 5% for all noncapital items until a new budget is agreed upon by City and Operator. The budget for any fiscal year may only be amended in writing, subject to the written approval of City Administrator or his/her designee. Operator shall not incur any Operating Expenses which are in excess of five percent (5%) of the annual amount allocated for that particular Operating Expense line item in the budget, unless Operator has obtained the prior written approval of the City Administrator (or his or her designee), such approval not to be unreasonably withheld or delayed, or such increased expenditure is otherwise authorized by this Agreement. All financial statements submitted pursuant to this Agreement shall be certified as fairly representing the Public Parking Structure's financial condition. Section 10. Term of Agreement. This Agreement shall commence on the day the Public Parking Structure is open for parking by the general public and City has issued a certificate of occupancy (temporary or final) for the Public Parking Structure (the "Commencement Date"), and shall terminate on the earliest of (a) the date on which neither City nor Agency owns the Public Parking Structure, (b) the date which is twenty-five (25) years after the Commencement Date, or (c) termination by City pursuant to Section 17, below. 11 OPERATING AGREEMENT v18 Notwithstanding the foregoing, upon any the termination of this Agreement pursuant to clause (b) above, this Agreement may be extended for an additional twenty-five (25) years upon the mutual written agreement of City and Operator. Section 11. hours of Operation. The entire Public Parking Structure (including valet and non -valet areas) shall remain open and accessible to the public for parking and retrieval of vehicles no fewer hours than both the City of Huntington Beach Main Street public parking structure and the hours which are consistent with the City -approved Parking Management Plan (e.g., if the City -approved Parking Management Plan permits hotel guests to retrieve their vehicles 24 hours a day, then the Public Parking Structure shall remain open and accessible 24 hours a day, seven (7) days a week (including all holidays), three hundred sixty-five (365) days a year), unless otherwise agreed to in writing by Operator and City. Section 12. Security of Facility. Operator, on behalf of City, shall also be responsible for providing security, at Operator's sole cost and expense, upon or about the Public Parking Structure and Parking Parcel through a subcontract with a licensed security company (City agrees to accept any security company selected by Operator in good faith that is providing security services for other improvements in the area of the Public Parking Structure, and such security service expenses for the Public Parking Structure shall be billed as an Operating Expense (if and to the extent it satisfies the requirements for an "Operating Expense" on a pro rata basis from other improvements in the area of the Public Parking Structure as noted in Section 6, above). The security company and the contract must be reasonably approved in writing by City and the company so employed must agree to hold Operator and City harmless with respect to its activities; provided no such security company shall be obligated to indemnify City against claims or damages from criminal acts of third parties unless such security company provides the Operator with such an indemnity. Operator shall be responsible for securing access to and from the facilities in accordance with written operating policies and procedures to be mutually agreed upon from time to time by Operator and City and Operator shall be responsible for monitoring the security service contract as to hours worked and level of service. Section 13. Indemnification. Operator expressly agrees to defend, protect, indemnify and hold harmless City and Agency and their respective officers, agents, elected and appointed officials, employees and volunteers free and harmless from and against any and all claims, demands, damages, expenses, losses, judgments or liability of any kind or nature whatsoever which City and Agency, and their respective officers, agents, elected and appointed officials, employees and volunteers may sustain or incur or which may be imposed upon them or any of them arising out of or resulting from: (a) the alleged acts or omissions of Operator, its officers, agents, subcontractors or employees in any manner connected with this Agreement; (b) the occupancy, use, rnisuse or neglect of the Public Parking Structure and/or Parking Parcel by Operator, its officers, agents, employees, and/or subcontractors; (c) the condition of the Public Parking Structure and/or Parking Parcel caused by Operator, its officers, agents, employees, and/or subcontractors; and/or (d) the operations conducted by or on behalf of Operator with regard to the Public Parking Structure and/or Parking Parcel. Operator agrees to defend at its own cost, expense and risk all such claims or legal actions that may be instituted against either City and Agency (provided City and Agency have timely tendered a request for a defense to Operator), and Operator agrees to pay any settlement entered into with Operator's consent and 12 OPERATING AGREEMENT vl8 satisfy any final judgment that may be rendered against Operator, City, Agency or any other party indemnified by Operator hereunder which are alleged to have resulted from or to be connected with this Agreement. Notwithstanding the foregoing, in no event shall Operator or any such subcontractor be obligated to indemnify City or Agency to the extent of their respective intentional misconduct or gross negligence. Section 14. Insurance. (a) Insurance. Prior to the first date on which the Public Parking Structure is open for public parking, Operator, or a subcontractor of Operator, shall procure and maintain insurance as set forth in this Section, which insurance shall be considered an Operating Expense for purposes of Section 4 above, and shall remain in effect for the duration of this Agreement, including any extensions, renewals, or holding over thereof, from insurance companies that are admitted to write insurance in the State of California or from authorized nonadmitted insurers that have ratings of or equivalent to an A:VIIl by A.M. Best Company. Operator shall pay the premium on all insurance required herein in a prompt and timely manner. Operator acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Operator covenants that it shall comply with such provisions prior to the commencement of this Agreement. Operator shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Operator shall require all sub -contractors to provide such workers' compensation and employers' liability insurance for all of the sub -contractors' employees. Operator shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Operator shall similarly require all sub -contractors to waive subrogation. The requirements hereunder for insurance coverage shall not diminish Operator's obligations to defend, hold harmless and indemnify set forth in this Agreement. (b) lnsurance Limits. Operator hereby covenants and agrees to all times maintain (1) commercial general liability insurance and (ii) "all-risk" casualty insurance in connection with the operation of the Public Parking Structure and/or Parking Parcel. Except as may otherwise be prohibited by law, City, Agency, their respective employees, officers, and agents shall be named as an additional insured on all such liability insurance policies and, solely for purposes of performing its obligations to construct the Public Parking Structure, on such casualty insurance policy. Such insurance shall with respect to liability insurance include: (1) coverage for any accident resulting in personal injury to or death of any person and consequential damages arising therefrom in an amount not less than Five Million Dollars ($5,000,000) per occurrence; and (ii) excess limits under a commercial umbrella liability policy of not less than Twenty Five Million Dollar ($25,000,000) per occurrence. Such insurance shall with respect to property/casualty insurance include: comprehensive property damage insurance in an amount equal to the greater of (A) Twelve Million Dollars ($12,000,000), or (B) the full replacement value of the Public Parking Structure. All such policies shall (i) be issued by a financially reasonable insurance 13 OPERATING AGREEMENT v 18 company or companies having a rating of not less than A-VIII in Best's Key Rating Guide, (ii) provide that the same .may not be canceled without at least thirty (30) days prior written notice being given to City by the insurer, and (iii) contain a waiver of subrogation provision for the benefit of City. Operator shall furnish to City and Agency evidence that such insurance is in full force and effect. (c) Subcontractors. So long as a subcontractor of Operator maintains insurance in compliance with the provisions of this Section, Operator shall not be required to obtain such insurance (except to the extent required by applicable law, such as worker's compensation insurance as described in this Section 14 above). (d) Self-insurance and Deductibles. Any self-insurance program, self -insured retention or deductible must be reasonably approved separately in writing by City and shall protect City, Agency and their respective officers, employees, and agents in the same manner and to the same extent as they would have been protected had the policy or policies not contained such self-insurance or deductible provisions. Operator shall be responsible for any and all deductibles and/or self -insured retention, without reimbursement from City or Agency. (e) Cancellation: Severability of Interests: Primary and Noncontributing. Each insurance required hereunder shall be endorsed to provide as follows: (i) that coverage shall not be voided, canceled or changed by either party except without thirty (30) days prior written notice to City, (ii) that the insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability; and (iii) and that coverage shall be primary and not contributing to any other insurance or self-insurance maintained by City, Agency and their respective officers, employees, or agents. (f) Delivery of Insurance Documentation. Prior to the commencement of public parking in the Public Parking Structure, Operator shall deliver to City and Agency certificates of insurance and the endorsements required hereunder for approval as to sufficiency and form, including the certificates of insurance and endorsements of any subcontractor to Operator. The certificates and endorsements for each insurance policy shall contain the original signature of a person authorized by that insurer to bind coverage on its behalf. In addition, Operator shall, at least fifteen (15) days prior to expiration of such policies, furnish City and Agency with evidence of renewals. City and Agency reserve the right to require complete certified copies of all said policies at any time. City and Agency, or their respective representatives, shall have the right to demand the original or a copy of any or all of the policies of insurance required in this Agreement. (g) No Limitation of Liability. Such insurance as required herein shall not be deemed to limit Operator's liability relating to performance under this Agreement. The procuring of insurance shall not be construed as a limitation on liability or as full performance of the indemnification and hold harmless provisions of this Agreement. Operator understands and agrees that, notwithstanding any insurance, Operator's obligation to defend, indemnify, and hold City and Agency, and their respective officials, agents, and employees harmless hereunder is for the full and total amount of any damage, injuries, loss, expense, costs, or liabilities caused by the condition of the Public Parking Structure and/or Parking Parcel or in any manner connected with or attributed to the acts or omissions of Operator, its officers, employees, agents, or 14 OPERATING AGREEMENT v 18 subcontractors, or the operations conducted by or on behalf of Operator, or Operator's use, misuse, or neglect of the Public Parking Structure and/or Parking Parcel, all as more particularly provided in Section 13 above. (h) Books and Records. Operator agrees to make available to City all books, records, and other information relating to the insurance coverage required by this Agreement during normal business hours. (i) Amendments to the Insurance Provisions. (i) Not more frequently than every year, if in the reasonable opinion of City's Risk Manager or designee, based on practices in other publicly owned parking Public Parking Structures at or adjacent to large retail facilities in Southern California, the amount or scope of the foregoing insurance coverages is not adequate, Operator shall, to the extent any additionally required coverage is available at commercially reasonable rates, amend its insurance coverage and/or, if applicable, require its subcontractors to amend their insurance coverage, as reasonably required by City's Risk Manager or designee. (ii) Any modification or waiver of the insurance requirements herein shall be made only with the written approval of the City's Risk Manager or designee. Section 15. Assignment. Operator covenants that it will not assign, transfer, convey, sublet, sell, mortgage, pledge, or encumber this Agreement or any rights of Operator under this Agreement, whether voluntary or by operation of law, provided that no such consent shall be required for an assignment by Operator to an entity which is the owner of the Retail Parcel or the Hotel Parcel which has been approved by Agency in accordance with the terms of the DDA. Section 16. Surrender of Possession. Upon termination of this Agreement, any improvements constructed or installed at the Public Parking Structure shall remain the property of the then owner of the Public Parking Structure, and Operator shall surrender to such owner the Public Parking Structure in good order, condition and repair consistent with the maintenance and repair and restoration provisions herein, the CC&R's, the Agreement Containing Covenants, and the Parking Management Plan. Operator will be required to remove all personal property prior to the termination of this Agreement unless other arrangements are made with and approved by the then owner of the Public Parking Structure. Operator agrees that City will have, without prior notice, the right to sell or otherwise dispose of any personal property belonging to Operator which has been left at the Public Parking Structure for more than ten (10) days after Operator has vacated the Public Parking Structure. Section 17. Defaults of Operator; Remedies Upon Default. Operator agrees that: (a) If Operator shall be in default in the payment of any sum due from it to City pursuant to this Agreement for ten (10) days after written demand shall have been made therefor by City; or 15 OPERATING AGREEMENT v18 (b) If Operator shall neglect, violate, be in default under, or fail to perform or observe any of the other covenants, agreements, terms or conditions contained in this Agreement on its part to be performed and shall not have remedied, or commenced action which will promptly remedy same which action is thereafter diligently pursued, within thirty (30) days after written notice thereof given by City, or if such violation or default cannot reasonably be remedied in such period and such cure is commenced within said 30-day period and Operator continues to diligently prosecute to completion such cure, such longer period as is reasonably required to effect such cure but not to exceed one hundred twenty (120) days, unless the notice states that the violation or default is an urgent matter relating to public health and safety in which case Operator shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time but not to exceed forty-eight (48) hours; or (c) If Operator shall fail to operate the premises for any five (5) calendar day period, subject to damage by casualty or other force majeure events; then at the option of City, (x) without limiting any legal remedies available to City at law or in equity, this Agreement and the term hereof shall, upon the date specified in a written notice given by City to Operator setting forth the nature of such default, breach, matter, or condition, be terminated and City may recover possession of the Public Parking Structure, or (y) City may keep this Agreement in effect and pursue all legal remedies available to City at law or in equity, including, without limitation, specific performance, and, in addition, City shall have the right (but not the obligation) to cure, or cause the cure of, such default, breach, matter or condition, and Operator shall be responsible for payment of all reasonable costs incurred by City related thereto. Within ten (10) days following written request therefor from City, Operator agrees to reimburse City all actual costs and expenses incurred by or on behalf of City relative to curing, or causing the cure of, any such default, breach, matter or condition. Any amounts not paid to City within said 10-day period shall accrue interest at the at the lesser of (1) the "prime" lending rate of Bank of America or (2) maximum rate then allowed by law until paid. Section 18. independent Contractor. It is expressly acknowledged that Operator shall be an independent contractor with respect to all services performed under this Agreement and Operator agrees to and accepts full and exclusive liability for the payment of any and all contributions or taxes for social security, unemployment insurance, or old age retirement benefits, pensions, or annuities now or later imposed under any state or federal law which are measured by the wages, salaries, or other remuneration paid to persons employed by Operator on work performed under the terms of this Agreement, and further agrees to obey all rules and regulations which are now, or later may be, issued or promulgated under these respective laws by any duly authorized state or federal officials; and Operator shall indemnify and save harmless City from any such contributions or taxes or liability therefor. Section 19. Property Rip_hts, Access to the Public ParkinIZ Structure. No property rights in the Public Parking Structure, or right of possession thereof, are granted by this Agreement. However, and in accordance with California Revenue and Taxation Code Section 107.6(a), City advises Operator that by entering into this Agreement, a possessory interest subject to property taxes may be created, and Operator or other party in whom the possessory interest is vested may be subject to the payment of property taxes levied on such interest. 16 OPERATING AGREEMENT v18 Notwithstanding the foregoing, it is the intent of City and Operator that this Agreement shall in no way create a possessory interest of Operator in the Public Parking Structure for purposes of possessory interest taxes under California Revenue and Taxation Code Section 107.6(a) and that any interest conveyed hereunder not be subject to any possessory interest, ad valorem or any other similar tax imposed by the State or any other governmental entity. Operator agrees that any authorized representative of City shall have the right at all reasonable times to enter upon and to examine and inspect the Public Parking Structure. Operator further agrees that any such authorized representative shall have such rights of access to the Public Parking Structure as may be reasonably necessary to cause the proper operation, maintenance and repair of the Public Parking Structure in the event of failure by Operator to perform its obligations hereunder. Section 20. Remedies Will Be Cumulative. All rights and remedies of City enumerated will be cumulative and none will exclude any other right or remedy allowed by law. Likewise, the exercise by City of any remedy provided or allowed by law will not be to the exclusion of any other remedy. Section 21. Limitation of City Liability. Any and all monetary obligations of City under this Agreement shall be payable solely from any Operating Income derived by City from the Public Parking Structure. Section 22. Waiver. One or more waivers of any covenant, term or condition of this Agreement by either party will not be construed by the other party as a waiver of subsequent breach of the same covenant, term or condition. The consent or approval of either party to or of any act by the other party of a nature requiring consent or approval will not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. Section 23. Subcontracts. Operator shall have the right to engage a subcontractor to conduct the physical operation, maintenance and repair of the Public Parking Structure. Any such entity shall be subject to the prior written approval of City, such approval not to be unreasonably withheld or delayed, provided that City may base its approval or denial, in part, on the financial condition of the subcontractor. Section 24. Anti -Discrimination. Operator agrees that this Agreement is made and accepted on and subject to the following conditions: That there will be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, national origin, sex, sexual orientation, AIDS, AIDS -related condition, age, marital status, disability or handicap, or Vietnam Era veteran status in the leasing, subleasing, transferring, use, occupancy, hiring, employment, tenure or enjoyment of the Public Parking Structure, nor will Operator or any person claiming under or through it establish or permit any practice or practices of discrimination or segregation with reference to the Public Parking Structure. Section 25. Attorneys' Fees. In the event that either party fails to comply with any of the terms of this Agreement and the other party commences legal proceedings to enforce any of 17 OPERATING AGREEMENT v18 the terms of this Agreement, the prevailing party in any such suit will receive from the other attorneys' fees including applicable court costs. Section 26. Notices. Any and all notices to be given under this Agreement or required by law to be served on either of the parties may be given by first-class mail deposited in the United States mail, postage prepaid, addressed as follows: To City: City of Huntington Beach P.O. Box 190 2900 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development With a copy to: City of Huntington Beach P.O. Box 190 2000 Main Street Huntington Beach, CA 92648 Attention: City Attorney To Operator: CIM Group 6922 Hollywood Blvd., 9th Floor Hollywood, CA 90028 Attention: General Counsel With copy to: Fragner Seifert Pace & Winograd, LLP 300 S. Grand Ave, 14th FL Los Angeles, California 90071 Attention: Matthew Fragner Any notices may be personally served on the party to be given notice. Any notice served by means of the United States mail will be effective three (3) business days from the date of mailing. Section 27. Execution. This Agreement may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Agreement. Section 28. Validity. If any one or more of the terms, provisions, promises, covenants, conditions or option provisions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reasons whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants, conditions, and option provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. Section 29. Amendments; City Approval. This Agreement may only be amended in writing executed by both of the parties hereto. Except as otherwise expressly provided in this Agreement and only to the extent permitted by applicable law, rule or regulation, approvals 18 OPERATING AGREEMENT v18 required of City (including any amendments to this Agreement) may be granted by the written approval of the City Administrator or designee. Notwithstanding the foregoing, the City Administrator or designee may, in his or her sole discretion, refer to the City Council any item requiring City approval. Section 30. Entire Agreement. It is understood that there are no oral agreements between the parties affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. [remainder of page left intentionally blank] [signatures on following pages] 19 OPERATING AGREEMENT vI8 OPERATOR: CIM/Huntington, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L. P sole member, By: CIM Urban Fund, GP, LLC, its general partner Date: V, 2,LM By: f , Name: Nicholas oro soff KVIT Title: Secretary Date: V., By: Name: -&4vc u` Y oL-ct Title: v P [remainder of page left intentionally blank] [signature on following pages] 20 OPERATING AGREEMENT v18 (execution) Adr ij > { M l 1", ALL-PURPOSE A Yak J'rA)',s O`> 6, r1 , �a3 �S;-" '\.. .zu �R�t za .zJ sa..�S!� .�a�. �a.!'�S��S..�J �s'��aS<a�C�?'H� �aa:�C...' �.C.4aC�..:'.. _ A3.. a aC��a'....:✓3a.,aa<... .tea'<a State of California County of � s O bi before me,I,_&iS'& Aboy' f l r e Here Inse G me and Title of the Officer personally appeared /�ji CG't0 �Gt S V /t_mkyC01�� Name(s) of Sig r(s) DENISE DEL REY Commission # 1548472 OlMy Notary Public - California Los Angeles County Comm. Expires Jan 29, 2009 Place Notary Seal Above who proved to me on the basis of!,sqtisfactory evidence to be the person whose name i e subscribed to the within instr�finent and a wledged to me that Qhg!(acity( e/tI` executed the e i is �/tf�r authorized i s '), and that b i/ r err signaturnfon the instrument the person olhe entity upon behalf of which the person a ted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Sign Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Docu Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): — ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT" Or thumb here Number of Pages: Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): _ ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT i•fi. OF SIGNER -, , �, ... ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 CALIFORNIA•ACKNOWLEDGMENT ti�.S✓'�. ��> .�S,al.?.0 s�.',�5!s�.,�v��.,_.�JT �za.�>'�.s�.'�:�.-�.'S;a4!�S!•jgc�.�.-��� A .a Ste.. �� as�S�q�.�.'.y,.�-'c,:�g,F,S�::!�.�--�.'.�.-; �.'S�,.-'�.' State of California County of ZK 41/ O d efore me, X)y� DE Ue Here Insert NV And Title of the Officer /- . . / A personally appeared DENISE DEL REY Commission # 1548472 Z , -r Notary Pubpc - California Los Angeles county tiN Comm. Expires Jon 29, 2009 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person whose name 1 - e subscribed to the within instruent and ac nk owledaed to me that caee/tj�ey executed the same i i /lr/tf,%ir authorized city(i?s), and that by is r/t it signature($) on the instrument the persona), or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signat-rL Signature of Notary P l(c` OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document Date: Number of Pages: Signer(s) Other Than Named Above: A )1 C ��4 S �� % IC.V012G) Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact • ❑ Trustee Top of thumb here ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT TH UMBPRINT OF SIGNER .. of thumb here ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 ATTEST: City r 28683 CITY OF T GTON BEACH By: Cityffxi4istrator 21 VED AS TO FORM: ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On January 14, 2009 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Fred Wilson who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. L. E ZA cam # 18") 79 WMay Kbee • capwft 4bMV Conan. EXPUMAug4. (Notary Signature)' EXHIBIT A LEGAL DESCRIPTION OF PARKING PARCEL. [behind this page] EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCEL 1: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41'37'10" EAST 124.55 FEET; THENCE, NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET TO THE POINT OF BEGINNING; THENCE, ALONG THE FOLLOWING 10 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 °38'08" EAST, 148.50 FEET; 3- SOUTH 48°21'52" EAST, 77.00 FEET; 4- SOUTH 64'55'17" EAST, 19.30 FEET; 5- SOUTH 48'21'52" EAST, 30.00 FEET; 6- NORTH 41 °38'08" EAST 182.00 FEET; 7- SOUTH 48°21'52" EAST 275.00 FEET; 8- SOUTH 41'38"08" WEST 211.58 FEET; 9- NORTH 48021'52" WEST 63.67 FEET; 10- SOUTH 41 °38'08" WEST 124.42 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE ELEVATION 25.66 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW ELEVATION 9.00 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 2.37 ACRES (103,331 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. MICHAEL SIMO P.L.S. 6034 REGISTRATION EXPIRES 6/30/09 ATE SAND S�\ V�v� \G�p,1iL S� G�.4 o J Exp. 6/30/09 1;0 No. 6034 \DECAL/ SHEET EXHIBIT "A-V �­F TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 1 ®F 4, 155 5TH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 HUNTINGTON BEACH, CA TEL. (714) 560-8200 EXHIBIT "Ar-1" LEGAL DESCRIPTION - PARKING PARCEL PARCEL 2: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41 °37'10" EAST 124.55 FEET; THENCE, NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET; THENCE, ALONG THE FOLLOWING 14 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 °38'08" EAST, 148.50 FEET TO THE POINT OF BEGINNING; 3- NORTH 48°21'52" WEST, 15.93 FEET TO A POINT OF THE NORTHWESTERLY LINE OF SAID LOT 1; 4- NORTH 41'37'11" EAST, ALONG SAID NORTHWESTERLY LINE, 40.75 FEET; 5- SOUTH 48°21'52" EAST, 15.93 FEET; 6- NORTH 41 °38'08" EAST, 2.00 FEET; 7- SOUTH 48°21'52" EAST, 43.83 FEET,- 8- SOUTH 59°00'03" EAST, 52.82 FEET; 9- SOUTH 77'09'19" EAST, 21.11 FEET; 10- SOUTH 48°21'25" EAST, 11.25 FEET; 11- SOUTH 41°38'08" WEST, 57.17 FEET; 12- NORTH 48°21'52" WEST, 30.00 FEET; 13- NORTH 64'55'17" WEST, 19.30 FEET; 14- NORTH 48°21'52" WEST, 77.00 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE AND BETWEEN AN ELEVATION OF 38.79 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 26.33 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW AND BETWEEN AN ELEVATION OF 30.46 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 18.00 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 0.15 ACRES (6,550 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF MICHAEL SIMO , P. .S. 6034 REGISTRATION EXPIRES 6/30/09 'D LAND � 2 0 J Exp. 6/30/09 * No. 6034 k�x9�F DATE OF CALF SHEET EXHIBIT "A-1" �� TAIT � ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 2 ®F 4 155 5TH STREET 701 PARKCENTER DEL. , SANTA 200 , CALIFORNIA 92705 HUNTINGTON BEACH, CA 2 F- V) Q O U w 0 1 JIAIh JIKLLI NW'LY LINE LOT 1 TRACT o O. 16406 PER R1 NW'tY LINE PARCEL 2 N4137'11 "E 40.50' N48'21'52"W 15.93' N41'3$'0&''E .,148:50'1 -� 58' 2:t3',..'P.0:B PARCEL 2 w w o J� COO O O CV (V NE LY R/W LINE ° ^ �� - N'LY LIMIT OF ' a0 1� PACIFICOAS1 HWY . d r� 1 INGRESS -EGRESS PER Rt, '� -� z- RAMP r S64'S5'T!*'E'' "19.3b' SE'LY LINE PARCEL 2 a-Q o S48'21 51 E — co 30.00' N IN.TERLOR .SIDE OF,, N41 38'08'E 182.00' v ; PARKING STRUCTURE WALL­ZTYP) PARC1N.TERLOR .SLOE OF PARKINr; STRUCTURE _ WALL (-TYP)' POR. LOT 1 o..' TRACT NO. 16406 w N M.M. 870/47-50 . z ao NOTES, > z PARCEL -T 00 .t1MIT,S"OF, TJPPE� LEVEL ELEV- ' 25.66' (NAVD '88),. Oo (CLEARANCE'ELEVATION�IN -UPPER LE"VEL ,PARKING PARCEL) �r 'LIMITS OF'LOW'ER LEVEL-E1_EY'9.00' (N.AVD" 88) 'N (FINISHED FLOOR`ELEVATION OF"1HE`LOWER LEVEL PARKING PARCEL) wI PARCEL 2: - LI,MITS,OF UPPER."ELEV= 3&.79'..ON THE NW'LY LINE, -OF PARCEL 2 ,& 26;33' ON' THE`SE'LY LINE OF'PARCEL.-2(NAVD 88)�' 58' (STREET TO RAMP CLEARANCE ELEVATION) Ln LIMI fS OF` LOWER, -ELEV,=30. 46' ON THE NVY LINE OF PARCEL .2" &. P,D.$.: PARCEL 1 ,'18.Q0' ON THE SE'LY LINE'- OE -PARCEL .2(NAVD 88-) L1� �, (STREET TO 'RAMP FINISHED'SURFACE" ELEVATION) .- S4.1"38'08" 124.42' 124.55'(R1) N41'37'10"E 12' P.O.C. PARCEL 1 AND PARCEL 2 30 60 120 (IN FEET) 1 inch = 60 ft, INTERIOR, SIDE OF 3; PARKING G. STRUCTURE WALL=ITYP) ab MOST SE'LY LINE LOT "-1 TRACT NO. 1,6406 PER R1 \ �S41 38.08 UV 211.58 ALLEY N 1w o_ 30 NOTE: SEE SHEET 4 OF 4 FOR LINE TABLE DATA, LEGEND, BASIS OF BEARINGS, BENCHMARK INFORMATION AND SURVEYOR'S NOTES SHEET EXHIBIT "A-V �� TAIT ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 3 OF 4 155 5TH STREET 701 PARKCENTER DRIVE, (7 ANTA Op, CALIFORNIA 92701 _L 5 HUNTINGTON BEACH, CA LEGEND: P.O.B. - POINT OF BEGINNING P.O.C. - POINT OF COMMENCEMENT (R1) - RECORD DATA PER TRACT NO. 16406 M.M. 870/47-50 PARKING PARCEL DESCRIBED IN EXHIBIT "A-1" PARCEL 1 - PARKING PARCEL DESCRIBED IN EXHIBIT "A-1" PARCEL 2 BOUNDARY LOT 1 TRACT NO, 16406 M.M. 870/47-50 - INTERIOR SIDE OF PARKING PARCEL WALL BASIS OF BEARINGS: BEARINGS HEREON ARE BASED ON THE BEARINGS BETWEEN O.C.S. HORIZONTAL CONTROL STATION CPS 5019 AND STATION CPS 5034R1 BEING NORTH 33`33'25" WEST PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR. BENCHMARK: BENCHMARK ID: STANDARD 1-RM2 DESCRIBED BY OCS 2002: FOUND 3 3/4" OCS ALUMINUM BENCHMARK STAMPED "STANDARD-I-RM2" SET IN AN ORANGE COUNTY SURVEYOR WELL MONUMENT. MONUMENT IS LOCATED IN THE SOUTHWEST CORNER OF THE INTERSECTION OF PACIFIC COAST HIGHWAY AND 12TH STREET, 27 FT. NORTHEASTERLY OF THE BIKE PATH ALONG THE BLUFF AND 66.3 FT. SOUTHWEST OF THE CENTERLINE OF THE SOUTHBOUND LANES ALONG PCH 6.6 FT. SOUTHEAST OF THE PROLONGATION OF THE CENTERLINE OF 12TH STREET, MONUMENT IS SET 1.0 FT. BELOW GROUND SURFACE. ELEVATION: 30.817 FEET (NAVD 88, 1995 ADJUSTMENT) SURVEYOR'S NOTES: 1. THE EXHIBITS GENERATED HEREIN ARE FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. 2. A CONCRETE WALL THICKNESS OF 1 FOOT (12 INCHES) WAS USED ALONG THE ENTIRE PERIMETER OF THE SUBTERRANEAN PARKING STRUCTURE, AND MAY VARY. 3. THE LIMITS OF THE UPPER AND LOWER LEVEL ELEVATIONS SHOWN HEREIN WERE TAKEN FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. LINE TABLE DATA LINE BEARING DISTANCE L1 N48`21'52"W 4.70' 12 S48°21'52"E 43.83' L3 S59`00'03"E 52.82' 14 S77°09'19"E 21.11' LS I S48'21'52"E 11.25' SHEET EXHIBIT "A-9 #.. TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 4 ®F ,4 155 5TH STREET 701 PARKCENTER DRIVE, (7 ANTA8 NA, CALIFORNIA 92705 HUNTINGTON BEACH, CA ta"46,1111 ol l LEGAL DESCRIPTION OF PROJECT SITE [behind this page] EXHIBIT "B" All that real property in the City of Huntington Beach, County of Orange, State of California described as follows: Being Lot I of Tract No. 16406 in Book 870, Pages 47 through 50, Inclusive of Miscellaneous Maps, Records of Orange County, California. Exhibit "B,el page I F 910 50 SHEET a OF a EASEMENT NOTE: V U/U\CT �\\I!Oe 16406 (ALL OF TENTATIVE IT RACT TRACT NO. 16406) QA A 65' wIOE EASEMENT AND 2a' WCE EASEMENT FOR DRAINADE, UTILITY, PEDESTRIAN AND VE}11CUUR IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA NUMBER OF LOTS: I PURPOSES DEOIGTEO TO THE PUBUC HEREON. FOR CONDOMINIUM PURPOSES D +D BD tt0 Iso AREA o 255 ACRES GROSS LATE OF SURVEY' MARCH 2O03 MICHAEL SIMON, P.L.S. 6034 TAIT do ASSOCIATES, INC. 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I� Y N0 io-S]!OY Or I rG 0A 37b/1-J P .10.00' L-lI x n[i IVYE DO ND ArPR 11 -1 lKi o Y X aE THE swE no. T ccvr[o. HmXlxc IV. laR s FAP<NCO rOUND NORYHG. I, ABusKD M IxTFRSECIIO" OF rRaL$IXTN 3 OF MC E[Ni[E AV.of VIA NVT AVETOY NE CE1 TLlI Ax9 rIAUIUf AwrM NE <[uTuuvE a „GN. oFrxYL mositus. oF'1'li I Y„ _ 31 ;ux r oPARCEL MAP ND. 91-236I 6611 L6�t` . 5[�L ]/]s PALH 270/ 3 s.00' "Onc cOKlcT H- owl-o , I n -!I Y I - I YLY (bR. loi a 10 $ I i 4II I Y01 YLIT, OT (NOT, NM BYOB17o BB THE 1— NERLON.6paMsw lY IAAC61 TD 11. b0' I TO. IYT. v NO R6. cOB. IGCl/RD i--• u0'PLY LOT T 4,43 vs.0 a iooa ur.iaQiromp j— Nar11'uw ss9s'• w wr-1o. G+Ple'0 ioo.ls' I u u, y3s fp' wrr3,'s3w ue.u• [UsPao'11 ikis.LY,, No Rrr, Ar ssrsoysw 1.i,' 8 S � 'R PACIFIC _-COAST HIGHWAY (Y('Qk) - "101 w,Txacmnl9a,NnYuxcwsr. - - - - - No, o-ve5m, o.e. uo Nltr w+(a rw 5, (coxsTnurnoN coRERLnq Nor si,Cmlm xarl,'l3lr c]l.OL• SEFAGIm 1--o xq— CST. \\ IN 1EOF-,I1M ,MC ar/LY rso[o-`04 OF TN[ CortrnuxE SURVEY PACIFIC COAST HIGHWAY (PCH) O Y WA L OF rAc" COAST N"T. ONLY ONC nE rp. I"CALTMA* Tt[ 10 o»p, EXHIBIT C SITE PLAN [behind this page] II ALLEY 2 1 s e WALNUT AVENUE n.a 15 __�-__ _ wee'swlnosr°xE _-- _ ----_9----- -- -__--- _�-- xolL Wre]'NIGN GATE. 3J5' � E1mlw A STOP TO 10 EB4Nl f`I ft, I6--0 3O 3fiL /(, f 3 E ETERS MB.1EKTLDWMEfiS METERS As GG k METII o � G-0 Yr ' ' '@ TO f6,t1N I III. ,.,I r 51 G roa' BLLvm NOT A PART r r° M'OLETi%1'IgPERiT' • 1555TH STREET 1605TMHST EET ¢ R i aHBt I gg i ea o n i0 tl0' ax sEas O euw -- 1 I ! NOT Pc PA TA t w .(I c cw IINk GE'tlUILUPK; Ptl F 1 I E.] YID IDCK 1 — - 1- DRIVEWAY_. TORE" I I W I __ i ¢ a<a'_Jul.MAINSTREETCONNECTOR _ _ 1 I "' LDnmxc AREA .li NOH. BLDGB iyt I L-1 Lev "' I,'. _HAF�PTDFARRINGBECONI— _ _ ( If: � ❑' •'• I - MT RF NE L I ¢nG<Row 150 STP STREET r I I -1 ' pR'vENTEPG I - - - ®-- - --a- I 1 IETE � ❑ I Ll I L LAw- t' 1 x aFivE °-�as i I I � i i i i " ALLEY ' ❑ (j"1 L— I I -' II II 111111/11 EEi FASE EM EA.ENENEE �� .• ___ — � NOT A PART � E1Eenn cou a cuE i (FINISH ELOOR=t29.]0J 11 YINs' BLDG E � ', � L D.N. 1Gb' BLDG C1205TH STRET ^ 1555TN STREET GLR J NO APART 1 to f r.. (gxlsH LORetas.oa) I e00 SE BACK 'I - , U AINO" ..::. do 1 LN f] Rf [8 4'i 11 1 d015 E I -------------------------------------------------------------- m : : r I I : : r : I -------------------------------- - - -- -------------------------------------------------------- --------------------- - � t • y��my1RR ff\\ss rr � -------------------------------------------------_1-1-L_il_IJ_I._- 1..•C_1.----^ EXHIBIT D STANDARDS OF MAINTENANCE During the term of the Agreement and any extensions hereof, Operator shall: 1. Clean and maintain all surfaces of the Public Parking Structure and keep such surfaces level and evenly covered with the type of surfacing material originally installed thereon, or such substitute thereof as shall be equal thereto in quality, appearance and durability; 2. Remove all papers, debris, filth and refuse from the Public Parking Structure and wash or thoroughly sweep paved areas; 3. Remove trash from trash receptacles and clean trash receptacles; 4. Clean, maintain, repair and replace entrance, exit and directional signs, traffic control signage, markers and lights into and with the Public Parking Structure, 5. Keep the parking areas, stairways, elevators and other portions of the Public Parking Structure well -lit from dusk each day until dawn at least during the applicable hours of operation of the Public Parking Structure, and clean, relamp and reballast all lighting fixtures; 6. Maintain, repair and replace striping and curbing; 7. Maintain and replace as necessary the landscaping surrounding the Public Parking Structure; 8. Maintain and repair the Public Parking Structure, as needed; 9. Repaint and refinish all painted and finished surfaces; 10. Clean, maintain and repair all stairs, stairwells and stairwell doors within the ',-Iublic Parking Structure; 11. Clean, maintain, repair and operate all elevators; 12. Maintain, repair and replace, if needed, all mechanical, electrical and utility facilities and systems that are a part of or serve the Public Parking Structure, including, without limitation, sprinkler and fire control systems, parking revenue control equipment, parking access control equipment, security systems and equipment, mechanical venting systems, lighting and emergency lighting systems, rollup doors and traffic barriers; 13. Making all repairs, improvements or alterations required to comply with applicable laws; 14. Except to the extent maintained by a utility company, maintain the Utility Facilities located within the Public Parking Structure, other than those which are owned by Operator or are exclusively serving the Retail Parcel pursuant to the Operator Utilities Easement; 15. Obtain and maintain the public liability insurance and property/casualty insurance required in the Operating Agreement; and 16. Provide, or cause to be provided, reasonable security services within the Public Parking Structure. 17. Without limiting any obligation in any other agreement, comply with all maintenance and management standards applicable to the Public Parking Structure and the Parking Parcel set forth in the Agreement Containing Covenants, License and Agreement Regarding Maintenance, and CC&R's. POLICY NUMBER: GL 4572297 COMMERCIAL GENERAL LIABILITY CG 20 26 1185 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person or Organization: City of Huntington Beach, its elected or appointed officials, agents, officers, and employees; Redevelopment Agency of the City of Huntington Beach, its elected or appointed officials, agents, officers, and employees. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section 11) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. CG 20 26 11 85 © Insurance Services Office, Inc.,1984 APPROVED AS TO FORM: o� MAk,kkV____.IIt2Sloi JENNIFER McGRATH, City Attomey Form r 8BFti NS (Rev. May 1, IWZ) x LENDER'S LOSS PAYABLE ENDORSEMENT ). Loss or damage, if any, under this policy, shall be paid to the Payee named on the first page of this policy, its successors and assigns. hereinafter referred to as "the Lender," in whatever form or capacity its interests maLy appear and whether said interest be vested in said Lender in its individual or in its disclosed or undisclosed fiduciary or representative capacity, or other wise, or vested in a nominee or trustee of said Lender. 2. The insurance under this policy, or any rider or endorsement attached thereto, as to the interest only of the Lender, its successors and assigns, shalt not be invalidated nor suspended: (a) by any error, omission, or change respecting the owner- ship, description, possession, or location of the subject of the insurance or the interest therein, or the title thereto: (b) by the commencement of foreclosure proceedings or the giving of notice of sale of any of the property covered by this policy by vir- tue of any mortgage or trust deed: (c) by any breach of warranty, act, omission, neglect, or non-compliance with any of the provisions of this policy, including any and all riders now or hereafter attached thereto, by the named insured, the borrower, mortgagor. trustor, vendee, owner, tenant, warehouseman, custodian, occupant, or by the agents of either or any of them or by the happening of any event permitted by them or either of them, or their agents, or which they failed to prevent, whether occurring before or after the attachment of this endorsement, or whether before or after a foss, which under the provisions of this policy of insurance or of any rider or endorsement attached thereto would invalidate or suspend the insurance as to the named insured, excluding herefrom, however, any acts or omissions of the Lender while exercising active control and management of the properly. 3. in the event of failure of the insured to pay any premium or additional premium which shall be or become due under the terms of this policy or on account of any change in occupancy or increase in hazard not permitted by this policy, this Company agrees to give written notice to the Lender of such non-payment of premium after sixty (60) days from and within one hundred and twenty (1201 clays after due date of such premium and it is a condition of the continuance of the rights of the Lender hereunder that the Lender when so notified in writing by this Company of the failure of the insured to pay such premium shall pay or cause to be paid the premium due within ten (10) days following receipt of the Company's demand in writing therefore. if the Lender, shall decline to pay said premium or additional premium, the rights of the Lender under this Lender's Loss Payable Endorsement snail not be terminated before ten (10) days after receipt of said written notice by the Lender. 4, Whenever this Company shall pay to the Lender any sum for loss or damage under this policy and shall claim that as to the insured no liability therefore exists, this Company, at its option, may pay to the Lender the whole principal sum and in- terest and other indebtedness due or to become due from the insured, whether secured or unsecured, {with refund of all in- terest not accrued), and this Company, to the extent of such payment, shall thereupon receive a full assignment and transfer, without recourse, of the debt and all rights and securities held as ccliateraf thereto. S. If there be any other insurance upon the within described property. this Company shall be liable under this policy as to the Lender for the prcporon of such loss or damage that the sum hereby insured bears to the entire insurance of similar character on said property under policies held by, payable to and expressly consented to by the Lender. Any Contribution Clause included in any Fallen Building Clause `Vaiver or any Elxtended Coverage Endorsement attached to this contract of in- surance is hereby nullified, and also any Contribution Clause in any other endorsement or rider attached to this contract of in- surance is hereby nullified except Contribution Clauses for the compiiance with which the insured has received reduction in the rate charged or has :ecaived ex.ension of the coverage to include hazards, other than fire and conpliance with such Con- tribution Clause is made a part of the consideration for insuring such other hazards- The Lender upon the payment to it of the full amount of its claim, will subrogate this Company (pro rata with all other insurers contributing to said payments to ail of the Lender's rights of co:�rnbution under said other insurance). 6. This Company reserves the right ,r) cancel this policy at any time, as provided by its terms, but in such case this policy shall continue in force for the benefit of the Lender far ten t10) days after written noticed of such cancellation is received by the Lender and shall then cease_ 7. This policy shall remain in full force and effect as to the interest of the Lender for a period of ten (10) days after its expira- tion unless an acceptable policy in renewal thereof with loss thereunder payable to the Lender in accordance with the terms of this Lender's Loss Payable 'Endorsement, shall have been issued by some insurance company and accepted by the Lender. &. Should legal title to and beneficial ownership of any of it:e propery covered under this policy become vested in the Lender or its agents-, insurance under this policy shall continue for the term thereof far the benefit of the Lender but, in such event, any privileges granted by this Lender's Loss Payable Endorsement which are not also granted the insured under the terms and conditions of this policy andi ar under other riders or endorsements anachad thereto shall not apply to the insurance hereunder as respects such property, 9. All notices herein provided to be given by the Company to the Lender in connection with this policy and this Lender's Loss Payable Endorsement shall be mailed to or de:ivered to the Lender at its office or branch described 'on the first Gage of the policy - Approved: Board of Fire Underwriters of the Pacific. California Bankers' Association, Committee on insurance ®`q ®.p� A COR6rar �r�� >.G DATE(MM/DD/YYYY) 11/25/2008 PRODUCER Aon Risk Insurance Services West, Inc. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY Los "An el es CA Office AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS 707 Wilshire Boulevard CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE suite 2600 COVERAGE AFFORDED BY THE POLICIES BELOW. Los Angeles CA 90017-0460 USA PHONE- 866 283-7122 FAX- 847 953-5390 INSURERS AFFORDING COVERAGE NAIC # INSURED INSURER A: Insurance Company of the State of PA 19429 CIM Group, Inc. 6922 Hollywood Blvd INSURERB: National Union Fire Ins Co of Pittsburgh 19445 INSURER C: Suite #900 LOS Angeles CA 90028 USA INSURER D: INSURER E: .:. .., . SIR .a`o :.les ,R:r.-��r�tt t.3o Ian ��ICIsiS THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS- LIMITS SHOWN ARE AS REQUESTED INSR LTR ADD' INSR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE 1).4TE(MM\DD\YY) POLICY EXPIRATION DATE(NIM)DD\YY) LIMITS B GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY GL4572297 11/23/08 11/23/09 EACH OCCURRENCE $1,000,000 DAMAGE TO RENTED $1,000,000 CLAIMS MADE OCCUR PREMISES (Ea occurence) _ MED EXP (Any one person) $15 sOO6 PERSONAL & ADV INJURY $1,000,000 ❑ GENERAL AGGREGATE $2,000,000 GENT, AGGREGATE LIMIT .APPLIES PER: ❑ POLICY ❑ PRO- ECT LJ Luc PRODUCTS - COMP./OP AGG $2,000,000 AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT ANY AUTO (Ea accident) ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTOS ( Per person) HIRED AUTOS BODILY INJURY NON OWNED AUTOS (Peraccident) PROPERTY DAMAGE _ (Per accident) GARAGE LIABILITY AUTO ONLY - EA ACCIDENT ANY AUFO OTHER THAN E.4 ACC e At ONLY - AGG B EXCESS !UMBRELLA LIABILITY BE9834468 11 j23/08 11/ EACH OCCURRENCE , OCCUR ❑ CLAIMSMADE AGGREGATE $2S,000,000 DEDUCTIBLE X RETENTION $10,000 A A N'ORKERS CON1PENSATI0N AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER, ME MBER EXCLUDED, WC 4 665 workers' COMP. CA WC3426659 Workers' COMP. ADS 1, Ol 08 01/01/08 01/01/09 y, WC STATU- OTH- TORY LIMITS ER _ E-I EACH ACCIDENT $1,000,000 E.L. DISEASE -EA EMPLOYEE $1,000,000 Ifyes,des ,be under SPECIAL PRO%ISIONS E.T. DISEASE-POLICYLIMIT $1,050,000 bdl OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/A'EHICLESiEXCLUSIONS :ADDED BY ENDORSEMENT: SPECI AL PROA ISIONS Named Insured Includes: CIM/Huntington, LLC Location: The strand parking structure, 155 Fifth Street, Huntington Beach. City of Huntington Beach is added as an Additional insured as required by written contract. umbrella includes per CE�t�:I�'TC.4TE•C�OI�>�lR �= = CANCELLATION city Of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION Attn: City RiN Manager DATE THEREOF_ THE ISSUING INSURER WILL ENDEAVOR TO MAIL. P.O. BOX 190 Huntington Beach CA 92648 USA 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL. IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER. ITS AGENTS OR REPRESENTATIVES AUl"HORIZED REPRESENTATIVE fd-TG ACURb 35` 2Q01108 ' = CORD CORPORATION 1988 O1_1Kk& Wl_. t (Lsto9 JENNIFER McGRATH, �;ry , , Attachment to AC®RD Certificate for cIM Group, Inc. The terms, conditions and provisions noted below are hereby attached to the captioned certificate as additional description of the coverage afforded by the insurer(s). This attachment does not contain all terms, conditions, coverages or exclusions contained in the policy. INSURED CIM Group, Inc. 6922 Hollywood Blvd Suite #900 Los Angeles CA 90028 USA ADDITIONAL POLICIES INSURER INSURER INSURER INSURER INSURER If a policy below does not include limit information, refer to the corresponding policy on the ACORD certificate form for policy limits. INSR LTR ADD' INSRD TYPE OF INSURANCE POLICY NUMBER POLICY DESCRIPTION POLICY EFFECTIVE DATE POLICY EXPIRATION DATE LIMITS DESCRIPTION OF OPERATIONSLOCATION&VEHICLES EXCLUSIONS ADDED R1 ENDORSF%IFNT SPECIAL PROVISIONS location limit. Cancellation Provision shown herein is subject to shorter or longer time periods depending on the jurisdiction of, and reason for, the cancellation. Certificate No : 570031766886 ACORD,. EVIDENCE OF COMMERCIAL PROPERTY INSURANCE DATE (MM DD YYYY) 11/25/2008 I THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY. PRODUCER NAME, CONTACT PHONE (866) 283-712Z NAIC NO: 19437 COMPANY NAME AND ADDRESS PERSON AND ADDRESS ac No Exf : a C,No: (847) 953-5390 Lexington Insurance Company E-MAIL 777 S. Figueroa Street AD E Aon Risk Insurance Services West, Inc- Los Angeles CA 90017 USA Los Angeles CA Office 707 wilshire Boulevard Suite 2600 Los Angeles CA 90017-0460 USA IF MULTIPLE COMPANIES, COMPLETE SEPARATE FORM FOR EACH CODE: SUB CODE: AGENCY 570000016789 CUSTOMER ID #: NAMED INSURED AND ADDRESS CIM Group Inc. LOAN NUMBER POLICY NUMBER 6922 Hollywood Blvd 5467367 Suite #900 EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL LOS Angeles CA 90028 USA 11/23/2008 11/23/2009 TERMINATED IF CHECKED ADDITIONAL NAMED INSURED(S) THIS REPLACES PRIOR EVIDENCE DATED I'KUF'tKI T IN FUKNIAI IUN (Use aaamonai SneetS IT more Space IS requlrea) LOCATION/DESCRIPTION _ocation: The Strand parking structure, 155 Fifth Street, Huntington Beach. 'rIVFRAr,F INFORMATION CAI IRF nr I OSR FnRM I I RABIC I I RROAn I X ISPECIAL I 1OTFFR COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE: $500,000,000 DED: $25,000 YES NO BUSINESS INCOME / RENTAL VALUE X If YES, LIMIT: Included X Actual Loss Sustained # of months: BLANKET COVERAGE X If YES, indicate amount of. insurance on properties identified above: $ 500, 000 , 000 TERRORISM COVERAGE x Attach signed Disclosure Notice / DEC IS COVERAGE PROVIDED FOR "CERTIFIED ACTS" ONLY? X If YES, SUB LIMIT: $400, 000 , 000 DED: IS COVERAGE A STAND ALONE POLICY? If YES, LIMIT: DED: DOES COVERAGE INCLUDE DOMESTIC TERRORISM? X If YES, SUB LIMIT included DED: COVERAGE FOR MOLD If YES, LIMIT: DED: MOLD EXCLUSION ( If "YES", specify organization's form used) X LX9S12 (08102) REPLACEMENT COST X AGREED AMOUNT x COINSURANCE X If YES, 0% EQUIPMENT BREAKDOWN (if Applicable) X If YES, LIMIT: $100,000,000 DED $25,000 LAW AND ORDINANCE - Coverage for loss to undamaged portion of building X If YES, LIMIT: $500,000, 000 DED: -Demolition Costs incr cost of construction X it YES, LIMIT: $25,000,000 DED: - Incr. Cost of Construction If YES, LIMIT: DED: EARTHQUAKE (If Applicable) If YES, LIMIT: DED: FLOOD (if Applicable) X If YES, LIMIT: $100,000,000 DED- WIND / HAIL (If Separate Policy) If YES, LIMIT DED PERMISSION TO WAIVE SUBROGATION PRIOR TO LOSS x REMARKS - Including Special Conditions (Use additional sheets it more space Is requires) Named Insured Includes: CIM/Huntington, LLC; Replacement Cost value: $32,610,000- Policy includes a business interruption extension of indemnity for 18 months. wind is an included peril unless excluded. Terrorism Coverage Includes Certified Acts and Domestic Terrorism. EN M CANCELLATION THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE 61-1 COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW. ADDITIONAL INTEREST NAME AND ADDRESS City of Huntington Beach Attn: City Risk Manager P.O. Box 190 Huntington Beach CA 92648 USA MORTGAGEE LOSS PAYEE ACORD 28 (2003/10) LENDER AUTHORIZED REPRESENTATIVE )ADDRESS Ir'9� sm JO'nn Jnarita�ra c%t� ifu7�rJnu �'` © ACORD CORPORATION 2003 JENNIFER MCGRATY, Cit � l tforne, �x Copy Not (,,, j pared with Original RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CIM/Huntington, LLC 6922 Hollywood Blvd., 9ch Floor Los Angeles, CA 90028 Attention: General Counsel Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 111111111111111111111111111111111111111111111111111111111111111111111111111 NO FEE 200900004721412:04pm 02/03/09 106 32 D02 85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 DECLARATION OF COVENANTS, CONDITIONS & RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS (CIM-Huntington Beach) 5233-50262\ 805943.8 TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS; ADDITIONAL COVENANTS .................................................. 3 ARTICLE IA. DEVELOPER'S PROJECT................................................................................. 13 ARTICLE2 COMMON AREA............................................................................................... 14 ARTICLE 3 COVENANTS AS TO REPAIR, MAINTENANCE, ALTERATIONS AND RESTORATION........................................................................................ 18 ARTICLE4 EASEMENTS...................................................................................................... 23 ARTICLE 5 TAXES AND ASSESSMENTS.......................................................................... 29 ARTICLE 6 USE CONTROLS AND RESTRICTIONS......................................................... 29 ARTICLE7 INSURANCE...................................................................................................... 31 ARTICLE 7A.CUP REQUIRED PROVISIONS........................................................................ 36 ARTICLE 8 INDEMNIFICATION; LIMITATION OF LIABILITY ..................................... 38 ARTICLE 9 EMINENT DOMAIN.......................................................................................... 38 ARTICLE 1.0 ENFORCEMENT OF AGREEMENT; RIGHT TO CURE DEFAULT ............ 39 ARTICLE 11 MORTGAGEE PROTECTION.......................................................................... 41 ARTICLE 12 NO LIMIT ON POLICE POWERS; RELATIONSHIP TO OTHER DOCUMENTS.................................................................................................... 41 ARTICLE 13 PROPERTY OWNERS ASSOCIATION........................................................... 42 ARTICLE 14 TERM AND TERMINATION OF DECLARATION ........................................ 46 ARTICLE 15 OPERATING AGREEMENT............................................................................. 46 ARTICLE16 GENERAL...........................................................................................................47 i 5233-50262\ 805943.8 DECLARATION OF COVENANTS, CONDITIONS & RESTRICTIONS AND RECIPROCAL EASEMENT AGREEMENT (CIM-Huntington Beach) This Declaration of Covenants, Conditions & Restrictions and Reciprocal Easement Agreement ("Declaration") is made and entered into as of the recordation hereof (the "Effective Date"), by the City of Huntington Beach, a municipal corporation ("City"), the Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic (the "Agency"), Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 ( collectively, "Cracchiolo") and CIM/Huntington LLC, a California limited liability company ("Developer") (collectively, "the Parties"), with respect to real property located in Orange County, California to be developed into a mixed -use project. This Declaration is made in compliance with the conditions of approval for Huntington Beach Tentative Tract Map No. 16406, Conditional Use Permit No. 99-45 with Special Permits No. 02-06 and Coastal Development Permit No. 99-16 (collectively, the "Conditions of Approval"). RECITALS A. Developer and Cracchiolo are each holders of a tenancy -in -common interest in the real property described on Exhibit "A" attached hereto (the "Project Site"). Developer owns a 95.495% (such 95.495% interest sometimes referred to as the "Majority Interest") and Cracchiolo owns a 4.505% tenancy -in -common interest in the Project Site (such 4.505% interest sometimes referred to as the "Minority Interest"), owning together 100% of the fee interest in the Project Site. B. Cracchiolo's entire possessory interest in and to the Project Site vests in Developer through one or more ground leases. Developer's tenancy -in -common interest and its leasehold interests are sometimes collectively referred to herein as "Developer's Interest." C. Developer is developing an integrated mixed -use development (the "Project") on the Project Site, consisting of a two level subterranean garage (the "Parking Structure"), a three level, 98,000 square foot retail/office project (the "Retail Project"), and a 149 room hotel project (the "Hotel Project"), which together with the buildings, improvements and operations thereon is referred to herein as the "Project", which Project is shown on the Site Plan attached hereto as Exhibit `B," showing the planned configuration of the Project ("Site Plan"). -1- CIM HB CCRs Execution 5233-50262\ 80594 D. Developer and Cracchiolo shall convey to the City all of their right, title and interest (fee and leasehold) in a portion of the Project Site as more particularly described in Exhibit "A- 1" attached hereto (the "Parking Parcel"). Pursuant to Section 66428(a)(2) of the California Government Code, such conveyance shall be exempt from the mapping requirements of the California Subdivision Map Act (Cal. Gov. Code §§66425 et. al). Following conveyance of the Parking Parcel to the City, neither Developer nor Cracchiolo shall have any interest in the Parking Parcel. Developer anticipates that Developer's Interest in other portions of the Project Site may be further conveyed to an affiliate of Developer or to a Condominium Association (as defined in Section 1.20 below) formed for purposes of managing the operation of such portion of Developer's Project. E. Following conveyance of the Parking Parcel to the City, Developer further intends to record one or more condominium plans against all portions of the Project Site other than the Parking Parcel (the "31) Parcelization") as necessary to create on such remaining portions separate condominium interests and appurtenant common areas, all in accordance with (i) Section 66427(e) of the California Government Code, (ii) the Conditions of Approval (as defined in Section 1.19 below) and (iii) the provisions of Article 1 A below. F. The parties acknowledge that (i) Developer and other Owners are subject to other instruments conferring rights upon Agency or the City and/or obligations on Developer and/or the other Owners, including without limitation the Fifth Street Public Access Easement, the Maintenance License Agreement, the Operating Agreement and the Agreement Containing Covenants Affecting Real Property, and the DDA (all as defined in Article 1 below), and pursuant to Section 12.2, nothing contained herein shall serve to limit the parties' obligations as contained in and for the terms of such agreements, and (ii) nothing contained in this Declaration shall limit the City's police powers or shall allow Developer or any Owner to fail to comply with any applicable City code or ordinance. G. The parties now, desire to enter into this Declaration to establish certain reciprocal easements and to set forth certain associated rights and agreements relating to common use, maintenance and operation of the Parking Structure, the Retail Project and the Hotel Project. The Parties hereto intend that this Agreement be a covenant running with the land pursuant to Section 1468 of the California Civil Code as well as an agreement between adjoining landowners regarding maintenance of reciprocal easements pursuant to Section 845 of the California Civil Code. The Parties further intend that the California Davis -Stirling Common Interest Development Act (§§1350, et seq., of Civil Code) (the "Davis -Stirling Act") shall not be applicable to this Declaration or to any relationship between the Parties or any other future Owner(s) of the Parking Parcel, the Hotel Parcel or the Retail Parcel arising hereunder; provided, however, that the foregoing shall not be deemed to preclude the creation of a common -interest project or the application of the Davis -Stirling Act thereto (i) from and after the formation of a -2- CIM HB CCRs Execution 5233-50262\80594 Property Owners Association as contemplated in Article 13 or (ii) as to any portion of Developer's Project from and after the 3D Parcelization as contemplated in Article I below. NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows: ARTICLE 1. DEFINITIONS; ADDITIONAL COVENANTS The following terms have the following definitions: 1.1 "Agreement Containing_ Covenants Affecting Real Property" means that certain Agreement Containing Covenants Affecting Real Property previously recorded against the Project Site on June 25, 2004 as Instrument No. 2004000580586, as amended by that First Amendment to Agreement Containing Covenants Affecting Real Property recorded on or about the date hereof, and as may be amended from time to time. 1.2 "Applicable Law" or "Applicable Laws" means any federal, state or local statute, rule, regulation, requirement, initiative, ordinance, action or policy, and common law. 1.3 "Approved Plans" means the final construction drawings and plans for the applicable improvements approved by the City of Huntington Beach. 1.4 "Articles" shall mean the articles of incorporation of the Property Owners Association, as the same may be amended, modified, supplemented or replaced from time to time in accordance with its terms. 1.5 "Award" or "Awards" is defined in Section 9.1. 1.6 "Board" shall mean the board of directors of the Property Owners Association. 1.7 `Building Area" means the portions of the Project designated as "building area" on the Site Plan, except that while a building exists within the Project Site, then the exterior walls of the building shall delimit the "Building Area". 1.8 `Bylaws" shall mean the bylaws of the Property Owners Association, as the same may be amended, modified, supplemented or replaced from time to time in accordance with its terms. 1.9 "Casualty" means damage to an Improvement in the Project resulting from an event such as fire, earthquake or unusual weather causing sudden damage, thefts, riots, vandalism or terrorism. -3- CIM HB CCRs Execution 5233-50262180594 1.10 "Class A Common Area" means the stairways and elevators and associated lobbies located within the Parking Structure and other portions of the Project Site that are intended for the common use of Owners and Permittees of the Project (but only to the extent designated as "Class A Common Area" on the Site Plan attached hereto as Exhibit "B"). 1.11 "Class A Common Area Expenses" means the costs and expenses necessary for the operation and maintenance of the Class A Common Area, as reasonably allocated and determined by the Manager in accordance with this Declaration. The parties acknowledge that the City's responsibility for Class A Common Area Expenses shall extend only to operating costs for such Class A Common Area Expenses (not including maintenance, repair or restoration costs, but including without limitation janitorial and utility costs and fees), and the City shall only be obligated to pay for such operating costs out of Operating Income generated by the Parking Structure. 1.12 "Class B Common Area" means the driveways, sidewalks, open space areas and public and reciprocal access easements located within the Project Site that are intended for the common use of Owners and Permittees of the Project (but only to the extent shown as "Class B Common Area" on the Site Plan attached hereto as Exhibit "B"), and the landscaping, irrigation, and drainage facilities associated with such elements as well as the street lighting, lighted crosswalks and appurtenances located within the Fifth Street Public Access Easement. 1.13 "Class B Common Area Expenses" means the costs and expenses necessary for the operation and maintenance of the Class B Common Area, including those incurred pursuant to the Maintenance License Agreement and Water Quality Management Plan as reasonably allocated and determined by the Manager in accordance with this Declaration, as well as any expenses or capital costs related to the Parking Parcel or Parking Structure that are not covered by Operating Income generated by the Parking Structure. 1.14 "Common Area" means the Class A Common Area and the Class B Common Area, collectively. 1.15 "Common Area Expenses" means the Class A Common Area Expenses and the Class B Common Area Expenses, collectively. 1.16 "Common Area Rules" is defined in Section 4.1. 1.17 "Complete" or "Completed" means when (a) all of the work shown on applicable plans has been fully performed in accordance with such plans and the architect has issued a certificate to such effect; (b) the work has been accepted as complete, after all necessary final inspections, by all Governmental Authorities having jurisdiction, and all necessary occupancy permits have been issued; (c) the work shown in the City -approved plans is fully operational and may be used in the conduct of the operations of the Project; and (d) all debris, construction -4- CfM HB CCRs Execution 5233-50262\80594 materials and equipment associated with the construction of the Project has been removed from the Project Site. 1.18 "Component' or "Components" means (i) any wall, column, floor, ceiling, footing, foundation or other vertical or horizontal Improvement that separates a Parcel from another Parcel or separates any Improvement which is located on one Parcel, but which an Owner or occupant of another Parcel has the right to use pursuant to the Declaration, from the remainder of the Parcel on which such Improvement is located; and (ii) all or any portion of any elevator shaft, stairway, trash chute, dumpster pad, vault, loading dock, air shaft, mechanical shaft, duct, pipe, line, main, conduit, flue or other equipment, fixture or apparatus, to the extent that the same is located on one. Parcel, but which is intended for the use or benefit of an Owner or occupant of another Parcel or which an Owner or occupant of another Parcel has the right to use pursuant to the Declaration. 1.19 "Conditions of Approval" means the Findings and Conditions of Approval for Tentative Tract Map No. 16406/Conditional Use Permit No. 99-45 with Special Permits No. 02- 06/Coastal Development Permit No. 99-16 dated October 21, 2002. 1.20 "Condominium Association" means any association of the owners of separate condominium interests within Developer's Project (or any portion thereof) formed for purposes of managing such portion of Developer's Project. Such Condominium Association may be established as either (i) a California nonprofit mutual benefit corporation under Cal. Corp. Code Sections 7110 et. seq. or (ii) a non-profit unincorporated association under Cal. Corp. Code Sections 18000 et. seq. 1.21 "Contest" is defined in Section 5.2. 1.22 "Contesting Owner" is defined in Section 5.2. 1.23 "DDA" means that certain Disposition and Development Agreement dated June 17, 1999, which was supplemented by that certain [First] Implementation Agreement entered into between the Agency and CIM Group, LLC dated April 6, 2000; that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001; that certain Third Implementation Agreement entered into between the Agency and Developer dated October 30, 2002; that certain Fourth Implementation Agreement entered into between Agency and Developer dated September 15, 2003; that certain Fifth Implementation Agreement entered into between Agency and Developer dated July 19, 2004; and that certain Sixth Implementation Agreement entered into between Agency and Developer dated A[W. 3, 2008. 1.24 "Default" is defined in Section 10.2. -5- CIM HB CCRs Execution 5233-50262\ 80594 1.25 "Default Rate" means the lesser of (i) two percent (2%) per annum plus the prime rate from time to time published in the Money Rates section of the Wall Street Journal, or (ii) the highest interest rate permitted under Applicable Law. 1.26 "Defaulting Owner" is an Owner who has been declared to be in Default pursuant to this Declaration. 1.27 "Delinquency Date" is defined in Section 5.3. 1.28 "Developer's Interest" is defined in Recital B. 1.29 Developer's Project" means the Retail Project and the Hotel Project and associated Improvements and operations but expressly excludes the Parking Parcel. 1.30 "Effective Date" means the date this Declaration is recorded. 1.31 "Environmental Damages" means any claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement or judgment, of whatever kind or nature, including, without limitation, reasonable attorneys' fees and disbursements and consultants' fees, any of which are incurred at any time as a result of the existence of Hazardous Materials in quantities requiring remediation upon, about or beneath the Project Site or migrating or threatening to migrate to or from the Project Site or the existence of a violation of Environmental Requirements pertaining to the Project Site, regardless of whether the existence of such Hazardous Materials or the violation of Environmental Requirements arose prior to conveyance of the Project Site to Developer (including without limitation the conveyance of the leasehold under the Cracchiolo Ground Lease), or operation of the Project Site, and including without limitation: (a) Damages for personal injury, or injury to property or natural resources occurring upon or off of the Project Site, including, without limitation, lost profits, the cost of demolition and rebuilding of the Project Site, or any portion of the Project Site, and interest and penalties; (b) Fees incurred for the services of attorneys, consultants, contractors, experts, laboratories and all other costs incurred in connection with the investigation or remediation of such Hazardous Materials or violation of Environmental Requirements including, but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remediation, removal, response, abatement, containment, closure, restoration or monitoring work required by any Governmental Authority, or otherwise expended in connection with such conditions, and including without limitation, any attorneys' fees, costs and expenses incurred in enforcing this Declaration or collecting any sums due hereunder; and -6- CIM H3 CCRs Execution 5233-50262\80594 (c) Liability to any third person or Governmental Authority to indemnify such person or Governmental Authority for costs expended in connection with the items referenced in the immediately preceding Subsection. 1.32 "Environmental Requirements" means all applicable present and future Applicable Laws, all applicable requirements of all Governmental Authorities, all applicable judicial, administrative and regulatory decrees, judgments and orders relating to the protection of the environment, including, but not limited to, those relating to Hazardous Materials. 1.33 "Expense Year" means each calendar year in which any portion of the Term falls, through and including the calendar year in which the Term expires. 1.34 "Fifth Street Public Access Easement" means that certain public access easement along Fifth Street set forth in the Tract Map. 1.35 "Floor Area" means the total floor area of a building, measured to the exterior faces of exterior walls and to the center of shared walls. Floor Area shall not include any mechanical penthouse, mezzanine area not used for retail sales, loading dock, darkstop, upper levels of any multiple -deck storage area, truck parking or unloading areas, trash storage areas or sidewalk area. 1.36 "Force Majeure" means those events described in Section 16.16. 1.37 "Governing Instruments" shall mean and refer collectively to the Articles, Bylaws and this Declaration. 1.38 "Governmental Authority" means any governmental authority, agency, department, district, commission, board or instrumentality of the United States,.the State of California or any political subdivision thereof having jurisdiction over the Project Site, including the City of Huntington Beach and County of Orange. 1.39 "Grantee" means the Owner receiving the benefits of any of the easements described in Article 4. 1.40 "Grantor" means the Owner granting any of the easements described in Article 4. 1.41 "Hazardous Materials" shall include, without limitation, gasoline, diesel fuel, petroleum products, polychlorinated biphenyls, asbestos, urea formaldehyde, foam insulation, radon gas, or any substance: (a) The presence of which requires investigation, notification or remediation under any Applicable Law; or -7- CIM HB CCRs Execution 5233-50262\80594 (b) Which is or becomes defined as a "hazardous waste," "hazardous substance," pollutant or contaminant under any Applicable Law, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Sections 9601 et seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.); or (c) Which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any Governmental Authority; or (d) The presence of which on the Project Site causes or threatens to cause a nuisance upon the Project Site or to adjacent properties or poses or threatens to pose a hazard to the health or safety of persons on or about the Project Site, or any portion thereof. (e) Hazardous Materials shall not include products typically used at or sold from a retail shopping center (e.g., cleaning products, office supplies) if the same exist merely in small amounts that do not require remediation and do not pose a hazard to the health or safety of persons on or about the Project Site. 1.42 "Hotel Improvements" means the Improvements made to the Hotel Parcel. 1.43 "Hotel Parcel" means that portion of the Project Site on which the Hotel Project will be developed as shown on the Site Plan. 1.44 "Hotel Parcel Owner" means the Owner of the Hotel Parcel. 1.45 "Hotel Project" means the approximately 149 room hotel to be developed on the Hotel Parcel. 1.46 "Improvements" means: (a) the improvements to be built on the Project Site depicted in the Site Plan attached as Exhibit "B" or otherwise built in accordance with this Declaration, and (b) all public on -site and off -site improvements required to be constructed as conditions of City land use permits and approvals including but not limited to the Conditions of Approval. 1.47 "Insurance Schedule" shall mean the Insurance Schedule attached hereto as Exhibit D with such changes or modifications thereto as may be approved from time to time in writing by the City, the Agency and the Owners. CIM HB CCRs Execution 5233-50262180594 I *48 "Insurance Trustee" means a bank or trust company qualified under the laws of the State of California and reasonably approved by the Owners and all Mortgagees to take custody and handle disposition of the insurance Proceeds pursuant to the terms of Section 7.4 and any separate agreement between the Owners with respect to such Proceeds. 1.49 "Insurance Trust Threshold Amount" is defined in Section 7.4.1. 1.50 "Maintenance License Agreement" shall mean that certain Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements recorded concurrently herewith that provides for maintenance, among other areas, of all public . improvements within the public right-of-way for Sixth Street, Walnut Avenue, Pacific Coast Highway and the Fifth Street Public Access Easement. 1.51 "Majority Interest" is defined in Recital A. 1.52 "Manager" means the person or entity responsible pursuant to the terms hereof for maintenance of the Common Areas and performance of all other obligations specifically allocated to the "Manager" hereunder. Manager may employ a person or entity to perform management functions in the Project, and in so doing may assign and delegate to such person or entity all or a portion of Manager's rights and obligations under this Declaration (and, subject to any limitations thereon set forth in Article II below, may include the reasonable costs of compensating any agents, contractors or professional managers engaged to perform such functions in the Common Area Expenses); provided however, that Manager shall remain responsible for the performance of such obligations by such person or entity. The Manager shall initially be Developer or any successor -in -interest to all (but not less than all) of Developer's Interest in the Retail Parcel, provided, however, that the Retail Parcel Owner's rights and obligations as Manager shall be deemed assigned to the Property Owners Association (or, with the consent of the City, a Condominium Association) upon formation thereof on the terms set forth in Article 13 below. Notwithstanding the foregoing, with respect to the City and the Agency only, Developer and Developer's successor -in -interest to Developer's Interest in the Retail Parcel shall remain obligated to perform any obligation of Manager hereunder to the extent not performed by the Property Owner's Association or designated Condominium Association (and the parties to this Declaration authorize such performance by Developer or Developer's successor -in -interest), provided that any such successive holder of Developer's Interest in the Retail Parcel shall be relieved of any liability for such performance upon the transfer of such holder's interest in the Retail Parcel and any transferee of such holder's interest shall be deemed to have assumed such obligation from and after the effective date of such transfer. 1.53 "Master Insurance" is defined in the Insurance Schedule. no CIM HB CCRs Execution 5233-50262\80594 1.54 "Master Parcel" means all portions of Project Site other than (i) the Parking Parcel or (ii) any portion thereof constituting a "separate interest" within the meaning of Cal. Civ. Code §1351(1) as set forth in any condominium plan now or hereafter recorded against the Project Site or any portion thereof or (iii) any other portion of the Project Site which is described in a condominium plan as "common area" or "association property." The Master Parcel shall specifically include the subsurface portions of the Project Site underlying the other Parcels (except to the extent specifically included within the Parking Parcel). 1.55 "Master Parcel Owner" shall mean the Retail Parcel Owner (including any Condominium Association formed for purposes of operating the Retail Project) unless, either as part of the 3D Parcelization or subsequent thereto, requisite documents or instruments are recorded to convey fee title to the Master Parcel to the Hotel Parcel Owner or the Property Owners Association. Notwithstanding the foregoing, there shall be no voting, consent or approval rights hereunder appurtenant to ownership of the Master Parcel nor shall any person or entity holding title to the Master Parcel by virtue thereof be deemed an "Owner" for purposes of exercising any voting or consent rights appurtenant to ownership of a Parcel hereunder. 1.56 "Member" shall mean every Owner who has a membership interest in the Property Owners' Association (but shall specifically not include the Owner of the Master Parcel). 1.57 "Minority Interest" is defined in Recital A. 1.58 "Mortgage" any mortgage, indenture of first mortgage, first deed iof trust, whether fee or leasehold, or Sale and Leaseback or other similar security interest, with respect to the entire interest of an Owner in and to any Parcel. 1.59 "Mortgagee" refers to and shall include a mortgagee, trustee, beneficiary or other holder under a Mortgage, and to the extent applicable, a fee Owner, lessor or sublessor, as. applicable, of a Parcel following a Sale and Leaseback, provided such Persons are not in possession of the Parcel. 1.60 "Non -Contesting Owner" shall mean an Owner who does not participate in a Contest pursuant to Section 5.2. 1.61 "Official Records" shall mean the Official Records of the County Recorder of the County of Orange, California. 1.62 "Operating Agreement" means that certain Operating Agreement for The Strand Public Parking Structure required by the Conditions of Approval as herein defined. -10- CIM HB CCRs Execution 5233-50262180594 1.63 "Operating Income" shall have the meaning set forth in the Operating Agreement. 1.64 "Owner" and "Owners" means each owner of fee simple title to a Parcel, or their respective successors in interest from time to time as hereinafter provided as shown by the Official Records as of the date of the exercise of powers or rights or the performance of obligations created by this Declaration. Such reference includes a person designated in writing by any Owners to act in place of such Owners as provided herein, provided such written authority shall be recorded in the Official Records, and provided further that: (a) In the event of the assignment, transfer or conveyance of all or any portion of the fee interest of any Owner in and to any Parcel as a result of which such Owner does not retain a beneficial interest other than under the terms of a deed of trust or mortgage or does not simultaneously acquire a new interest by way of leasehold, life estate or other possessory interest, then the powers conferred upon such Owner attributable to the ownership or interest so transferred shall automatically (without the necessity of a specific conveyance) be deemed assigned, transferred or conveyed to the new owner, and the obligations hereunder shall (without the necessity of a specific assumption) be deemed assumed by the new owner upon acquisition of its interest, and the new owner shall become an "Owner" under this Declaration; (b) In the event the whole of the interest of any Owner in and to any Parcel is assigned, transferred or conveyed, but a new possessory interest is created in such Owner simultaneously with the assignment, transfer or conveyance of such interests by way of leasehold or similar possessory interest, or in the event such Owner shall convey its interest in the Parcel or any part thereof by deed of trust or other security instrument as security for indebtedness, then none of the powers or obligations conferred upon such Owner pursuant to this instrument shall be assigned, transferred or conveyed with the interest assigned, transferred or conveyed by such Owner, but all of the powers and obligations herein referred to shall remain in such Owner so long as it retains any possessory interest in and to said Parcel; (c) In the event that a condominium project is established within the Retail Parcel or the Hotel Parcel (as applicable) and individual condominium interests in such Parcel are held by two or more separate Owners, then from and after conveyance of such condominium interests to separate owners and formation a Condominium Association for purposes of managing the condominium project located thereon, such Condominium Association shall be deemed to be the "Owner" of the applicable Parcel rather than the owners of any separate condominium interests located thereon and all powers granted to and obligations imposed on the "Owner" of such Parcel hereunder shall be exercisable by such Condominium Association in accordance with the articles of incorporation or association, bylaws and other governing documents of such Condominium Association. -11- CIM HB CCRs Execution 5233-50262\80594 (d) In the event any Owner shall transfer its interest or a portion of its interest in its Parcel in such manner as to vest its interest in its Parcel in more than one person, then not less than 51 % in interest of such transferees shall designate one of their number to act on behalf of all of such transferees in the exercise of the powers granted to such Owner under this instrument. Such transferees (together with the original Owner, if it retains an interest) shall collectively be deemed the Owner hereunder, and, so long as such designation remains in effect, such designee shall have the power to bind such Parcel and all such transferees. Any such designation must be in writing and served upon the other Owners under this Declaration by registered or certified mail. The acts of a designee, even a designee that has resigned or transferred its interest, shall be binding upon all persons having an interest in such Parcel, until such time as written notice of a new designation is given. In the absence of any such written designation, the other Owners under this Declaration shall only be required to deal with one person representing the Owners of any Parcel, and the acts of the individual or entity having the largest share of ownership of the Parcel, or if there is more than one having equal largest shares, then the individual or entity having the largest share whose name comes first alphabetically, shall be deemed the designee until a designee is appointed by the Owners of the Parcel in accordance with this Declaration; and (e) Whenever the rights, powers and obligations of any Owners are deemed vested in another Owner or Owners pursuant to the provisions of subsections (a) or (c) above, the transferor shall (subject to subsection (b) above) not be responsible for the obligations thereafter accruing under this Declaration as to the transferred Parcel, and the transferee(s) of such interest shall be bound to perform such obligations. 1.65 "Owner Approval" means the approval in writing of the Owner of the Parking Parcel, the Retail Parcel and the Hotel Parcel. With respect to Owner Approvals, approval by the City in its regulatory capacity as to vehicular or pedestrian access issues shall be deemed approval by the City as Owner of the Parking Parcel. Notwithstanding the foregoing, in the event that the Hotel Parcel Owner disapproves any matter approved by the Retail Parcel Owner and the Parking Parcel Owner, provided that such matter does not result in a disproportionate burden on the Hotel Parcel or the Hotel Parcel Owner, then the Retail Parcel Owner in its reasonable discretion shall be entitled to overrule the Hotel Parcel Owner and cause Owner Approval of such matter to be given. 1.66 "Parcel" and "Parcels" mean one or more, as applicable, of the Hotel Parcel, the Parking Parcel, the Master Parcel or the Retail Parcel. 1.67 "Parcelization Amendment" shall have the meaning set forth in Section 1A.2 below. -12- CIM HB CCRs Execution 5233-50262\80594 1.68 "Parkin Parcel" means that portion of the Project Site more particularly described in Exhibit "A-1" attached hereto. 1.69 "Parking Parcel Owner" means the Owner of the Parking Parcel. 1.70 "Parking Structure" means the two level subterranean garage to be constructed on the Project Site. 1.71 "Permittees" means each Owner and its respective occupants and both the Owner's and such occupants' respective officers, directors, employees, agents, contractors, customers, visitors, invitees, licensees, tenants, subtenants and concessionaires. 1.72 "Proceeds" means any proceeds of casualty insurance required to be carried under this Declaration, condemnation awards, or damages recoverable from a third party which are received or receivable by an Owner as a result of a Casualty or on account of the damage, less costs of collection. 1.73 "Project" means the Parking Parcel, the Parking Structure, Retail Project, Hotel Project and associated Improvements and operations, collectively as set forth on the Site Plan and described in Recital C. 1.74 "Proiect Architect" means the architect or architects duly licensed to practice in the State of California, as may from time to time be designated by Retail Parcel Owner subject to any approval rights of the other Parties as provided herein or other agreement binding on Retail Parcel Owner. Such Project Architect shall retain on behalf of the Owners any and all "as built" drawings and plans. 1.75 "Project Declaration" shall have the meaning set forth in Section IA.I below. 1.76 "Property Owners Association" means the property owners association to be formed pursuant to Article 13 below for purposes of managing the Project under applicable California law. The Property Owners Association shall be comprised of the Owners of the Parking Parcel, the Retail Parcel and the Hotel Parcel and shall be formed under the name "The Strand Property Owners Association" or any similar name selected by Developer (or, after the 3D Parcelization, the Retail Parcel Owner and the Hotel Parcel Owner). The Property Owners Association may be established as either (i) a California nonprofit mutual benefit corporation under Cal. Corp. Code Sections 7110 et seq. or (ii) a non-profit unincorporated association under Cal. Corp. Code Sections 18000 et seq. 1.77 "Proportionate Share" means (i) with respect to the Class A Common Area Expenses, the total Floor Area within all buildings within a Parcel (excluding the Master Parcel), divided by the total Floor Area within all buildings within the Project (excluding the Master -13- CIM HB CCRs Execution 5233-50262180594 Parcel), provided that with respect to Class A Common Area Expenses that relate to maintenance, repair or restoration costs, "Proportionate Share" shall be calculated so that each of the Hotel Parcel Owner and the Retail Parcel Owner shall pay the proportion equal to the Floor Area within all buildings within such Parcel, divided by the Floor Area within all buildings within the Hotel Parcel and'the Retail Parcel, and (ii) with respect to the Class B Common Area Expenses, the Floor Area within all buildings within a Parcel (excluding the Master Parcel), divided by the total Floor Area within all buildings within the Project other than the Parking Structure and any Improvements located on the Master Parcel. 1.78 "Retail Improvements" means the Improvements made to the Retail Parcel. 1.79 "Retail Parcel" means that portion of the Project Site on which the Retail Project will be developed as shown on the Site Plan. 1.80 "Retail Parcel Owner" means the Owner of the Retail Parcel. 1.81 "Retail Project" is defined in Recital C. 1.82 "Sale and Leaseback" means a transaction in which: (i) an Owner conveys the fee or a leasehold estate in its Parcel and immediately thereafter that transferor or an affiliated entity leases or subleases the Parcel; or (ii) the holder of a leasehold estate in its Parcel, assigns the estate or subleases the Parcel and immediately thereafter that assignor or an affiliated entity subleases the Parcel. 1.83 "Site Plan" shall have the meaning set forth in Recital C. 1.84 "Taxes" means real property taxes and general and special assessments (including community facility district special taxes or assessments). 1.85 "Term" means the period that this Declaration is in effect, as more particularly defined in Section 14.1 below. 1.86 "Termination Date" refers to the date on which this Declaration shall terminate, pursuant to the terms and provisions of this Declaration. 1.87 "31) Parcelization" is defined and discussed in Article I below. 1.88 "Tract Map" means that certain Tract Map No. 16406 recorded in the Official Records on October 6, 2005 as Instrument No. 2005-000794532. 1.89 "Water Quality Management Plan ("WQMP")" shall mean the Water Quality Management Plan for the Project on file with the City and approved by the City's Director of -14- CIM HB CCRs Execution 5233-50262\ 80594 Public Works on October 30, 2006, and any amendments thereto approved in writing by the City's Director of Public Works from time to time. 1.90 "Work" is defined in Section 3.4. ARTICLE IA. DEVELOPER'S PROJECT 1A.1 3D Parcelization. As noted in Recital D above, in accordance with Section 66428(a)(2) of the California Government Code, the Parking Parcel is being conveyed to the City concurrently with the recordation hereof by the metes and bounds description set forth in Exhibit A-1 attached hereto. In the event that Developer elects to separately convey any portion of the Project Site other than the Parking Parcel following recordation hereof and conveyance of the Parking Parcel to the City, Developer shall have the right to record one or more condominium plans against the Project Site (other than the Parking Parcel) as necessary to convey separate legal interests therein in accordance with Section 66427(e) of the California Government Code (hereinafter, the "31) Parcelization"). In connection therewith, Developer shall have the right to record one or more separate declarations of covenants, conditions and restrictions (each, a "Project Declaration") against any such portion of the Project Site to govern ownership, maintenance, operation, occupancy and use of the Hotel Project and/or the Retail Project located thereon; provided, however, that (i) no such Project Declaration may encumber or adversely effect all or any portion of the Parking Parcel and (ii) as to any portion of the Project Site encumbered thereby, the provisions of this Declaration shall prevail over any directly inconsistent or conflicting provisions of any such Project Declaration; provided, however, that as to any provision of the Project Declaration which is more restrictive or which imposes additional rights, restrictions or obligations (such as additional use restrictions or assessment obligations) on owners, occupants, tenants or permittees of the Hotel Parcel and/or Retail Parcel (collectively, "Condominium Parties") encumbered thereby, then as to such Condominium Parties but expressly excluding the City, the Agency or the Parking Parcel Owner, the more restrictive or additional provision of the Project Declaration shall prevail. Such Project Declarations may further provide for establishment of a Condominium Association to enforce the applicable Project Declaration and to operate and maintain that portion of Developer's Project encumbered thereby. 1A.2 Parcelization Amendment. Upon recordation of one or more condominium plans against any portion of the Project Site and conveyance of separate condominium interests therein, Developer shall provide written notice thereof to the Public Works Department of the City of Huntington Beach (with a copy to the City Attorney's office of the City of Huntington Beach) setting forth (i) recording information for the applicable condominium plan(s) and (ii) the names and addresses of the Owner of the Hotel Parcel and the Owner of the Retail Parcel (including, without limitation, any Condominium Association formed for purposes of providing for the management and operation thereof). In the event that Developer effects the 3D -15- CIM HB CCRs Execution 5233-50262\ 8059Z Parcelization by any means other than recordation of one or more condominium plans, Developer shall prepare and record in the Official Records an amendment to this Declaration (the "Parcelization Amendment") setting forth (i) legal descriptions of each Parcel other than the Parking Parcel (Exhibit "A=2" shall be a legal description of the Retail Parcel, Exhibit "A!3" shall be a legal description of the Hotel Parcel and Exhibit "A^4" shall be a legal description of the Master Parcel) and (ii) the names and addresses of the Hotel Parcel Owner and the Retail Parcel Owner. Prior to recordation of any such Parcelization Amendment, Developer shall first submit the Parcelization Amendment to the City Attorney's office of the City of Huntington Beach for review for consistency with the terms of this Declaration, and City shall give written approval or disapproval within thirty (30) days after submission. 1A.3 Project Site Prior to 3D Parcelization. The parties hereto acknowledge that, prior to the 3D Parcelization, all portions of the Project Site other than the Parking Parcel shall constitute a single legal parcel notwithstanding completion of the Hotel Improvements and Retail Improvements thereon. Consequently, prior to completion of the 3D Parcelization, all references herein to "Hotel Parcel," "Retail Parcel" and/or "Master Parcel" shall be deemed to refer to the legal parcel on which the Project Site is located or, as applicable, that portion thereof on which the Hotel Improvements, Retail Improvements and/or Common Area improvements have been constructed. The parties further acknowledge that, prior to the 3D Parcelization, all references herein to "Retail Parcel Owner" or "Hotel Parcel Owner" shall be deemed to refer to Developer and, if applicable, successors and assigns of Developer's Interest in the Project Site. ARTICLE 2. COMMON AREA 2.1 Configuration of Common Area. Except as provided herein, no Owner shall make any change in the use of, or change to, the configuration of the Common Area without the prior written approval of the other Owners, except for minor changes that do not affect the use or utility of the other Owners and/or their Permittees. Any change, including minor changes, to the configuration of the Common Area requiring work within Sixth Street, Walnut Avenue or the Fifth Street Public Access Easement (as described on the Tract Map) shall be subject to the review and written approval of the City prior to the implementation of the proposed change(s), which review and approval may require the Manager to apply to the City for additional permits. Any such change requiring work within Pacific Coast Highway shall, to the extent provided by Applicable Law, be subject to obtaining any required encroachment permit or other approvals from CalTrans. 2.2 Common Area Operation and Maintenance. The Common Area of the Project shall be operated and maintained by the Manager in a manner consistent with comparable first- class, mixed -use projects located in the Huntington Beach area and in compliance with other recorded instruments benefiting the City or the Agency as described in Section 12.2. -16- CIM HB CCRs Execution 5233-50262\ 80594 2.3 Emergency Action. In an emergency, any Owner may, at its option, perform repairs or maintenance that would otherwise be the Manager's or another Owner's obligation on the Common Area or on utility installations, if reasonably necessary and advisable under the circumstances; provided however that any Owner conducting repairs to or construction within Walnut Avenue, Sixth Street or Pacific Coast Highway shall, to the extent required under Applicable Law, seek an encroachment permit from the City and/or CalTrans (as applicable) within twenty-four (24) hours of commencing such emergency work. Any Owner may take such emergency action with only such notice (if any) to Manager (and to the Owner of the Parking Parcel if any such action relates to the Parking Parcel) as is reasonably practical under the circumstances. The Owner on whose Parcel the emergency action has been performed shall reimburse such repairing Owner for its reasonable expenses in respect of any such repair or maintenance, with interest thereon if not paid within fifteen (15) days after written demand, provided any such expenses that are properly Class A Common Area Expenses or Class B Common Area Expenses shall be reimbursed by the Manager and treated as otherwise specified in this Declaration for such expenses. The rights set forth in this Section are in addition to, and not in lieu of, the Owners' rights at law and in equity and as set forth elsewhere in this instrument. 2.4 Class A Common Area Expenses and Class B Common Area Expenses. The Manager shall include in Common Area Expenses the costs and expenses reasonably necessary for the operation and maintenance of the Common Areas. If the Manager employs a property manager, the Common Area Expenses for any given period may include a market rate management fee which may be a percentage of the Common Area Expenses otherwise incurred during such period; provided, however, that in no event shall the amount of such management fee paid to any affiliate of the Manager exceed the amount that would be obtainable in a commercially reasonable, arms -length negotiation with an unaffiliated third party for the provision of comparable services. Common Area Expenses shall not include amounts expended for: 2.4.1 Construction of the initial Improvements within the Common Areas; 2.4.2 Any charge for depreciation, interest or amortization; 2.4.3 Any cost of maintaining or operating any tenant's signage; 2.4.4 Any cost of maintaining or operating any area for single -tenant or single - occupant trash storage or truck parking or unloading facility; 2.4.5 Any costs payable by Owners pursuant to recorded instruments encumbering such Parcel other than this Declaration, such as the instruments described in Section 12.2. -17- CIM HB CCRs Execution 5233-50262\80594 Notwithstanding the foregoing, the Owner of the Parking Parcel shall not be responsible for Class B Common Area Expenses, the Owner of the Parking Parcel's responsibility for Class A Common Area Expenses shall extend only to operating costs for such Class A Common Area Expense (not including maintenance, repair or restoration costs), and the Owner of the Parking Parcel shall only be obligated to pay for such operating costs out of Operating Income. 2.5 Expenses. Commencing as of the Completion of the Hotel Improvements and the Retail Improvements, the Manager shall estimate the Common Area Expenses for the upcoming calendar year and prepare an Annual Plan/Budget for review and approval of the Owners as described below. Manager shall provide the first such estimate prior to completion of the Retail Parcel and Hotel Parcel, which first such estimate may be for a period of less than twelve months so that the covered period ends at the end of a calendar year, and subsequently shall be estimated based on a 12-month calendar year. If the Manager employs a property manager, the Annual Plan/Budget may include a market rate management fee which may be a percentage of the Common Area Expenses subject to,any limitations thereon set forth in the first paragraph of Section 2.4 above. 2.6 Payment of Expenses. The Manager shall pay or cause to be paid all Common Area Expenses. Manager shall be entitled to recover Common Area Expenses from Owner Assessments as set forth below: 2.6.1 During the Term, each Owner shall pay or cause to be paid to the Manager such Owner's Proportionate Share of all Common Area Expenses ("Owner Assessment"), provided the Master Parcel Owner shall not have any Common Area Expenses allocated to it. 2.6.2 The Manager shall bill each of the Owners monthly in advance and each of the Owners shall make said payments in an amount equal to such Owner's Proportionate Share of the monthly Common Area Expenses based upon the Common Area Expenses reflected in the Annual Plan/Budget as reasonably estimated by the Manager. No later than March 1 of each Expense Year, the Manager shall send to each Owner a written statement itemizing in detail the actual Common Area Expenses for the previous Expense Year, including the management fee, expended by the Manager for the Expense Year. In the event that an Owner's Proportionate Share of the actual Common Area Expenses is less than the aggregate amount of the payments theretofore made by such Owner for such Expense Year, the Manager shall refund to such Owner the excess amount paid by such Owner or apply such amount to the payments due to such Owner for the following Expense Year. Should an Owner have paid less than its Proportionate Share during said period, such Owner shall promptly pay to the Manager the amount of such deficiency. Any amounts duly owing hereunder not paid within thirty (30) days after the Manager delivers such statement shall be paid with interest at the Default Rate. 2.6.3 The Manager, at its sole discretion, may file a lien against any property of -18- CIM HB CCRs Execution 5233-50262\80594 a delinquent Owner if payment of any duly owed portion of that Owner's Assessment is not received within sixty (60) days of due date and thirty (30) days after written notice of delinquency; provided, however, without limiting the other remedies available under Article 13 or Section 10.1, so long as the City or Agency owns the Parking Parcel, the Manager shall not file a lien against the Parking Parcel. 2.7 Proposed Operations Plan and Budget. Not later than October I" of each calendar year, Manager shall deliver a proposed operations plan and an annual budget for Common Area Expenses for the following calendar year to all Owners for review. The approved operations plan and annual budget for Common Area Expenses is referred to as the "Annual Plan/Budget". The Owners shall have thirty (30) days to provide Owner Approval or reject the proposed Annual Plan/Budget, which Owner Approval shall not be unreasonably withheld, conditioned or delayed. If the Owners disapprove the Annual Plan/Budget, which disapproval shall specify the respects in which it is unacceptable, Manager shall resubmit a revised proposed Annual Plan/Budget to all Owners for review until such time as the Annual Plan/Budget receives Owner Approval. During the period.of time from the Owners' disapproval of any Annual Plan/Budget, until such time as Owner Approval is obtained, the then immediately preceding Annual Plan/Budget that received Owner Approval shall remain in effect, except that line items from such prior Annual Plan/Budget for recurring, (but not non -recurring) expenses and charges, may be increased by up to five percent (5%). Manager shall have the option to submit to the Owners a revised Annual Plan/Budget no more often than three times each calendar year to adjust the Annual Plan/Budget on the basis of the actual results of Manager to such point in such calendar year, which shall be subject to Owner Approval in accordance with the provisions of this Section. Manager shall not exceed the approved Annual Plan/Budget or revised Annual Plan/Budget so as to increase costs to the Owners without obtaining Owner Approval, which shall not be unreasonably withheld; provided, however, that Manager may exceed the Annual Plan/Budget in the event of an emergency to the extent necessary to prevent further harm, injury or damage to persons and/or property. 2.8 Common Expense Records and Audit Rights. The Manager shall keep true and accurate books and records covering all Common Area Expenses, in accordance with generally accepted accounting principles, consistently applied. Owners may upon written notice given at least three (3) business days prior to the inspection, up to two (2) years after receiving any such statement, inspect or audit the Manager's books and records to verify the propriety of any Common Area Expense. Such books and records shall be kept at the Manager's office in either Los Angeles County or Orange County, California for at least three (3) years after the end of the year to which they apply. Hard copies of such books and records shall be made available to the Owners for inspection at Manager's office (or, at Manager's discretion, delivered to the requesting Owner in electronic form). The Manager shall make all necessary arrangements with all other contractors whose charges are included in Common Area Expenses so that Owners may also, if any Owner so desires, inspect or audit their charges. If such an inspection or audit shows -19- CIM HB CCRs Execution 5233-50262\80594 that the Manager has incorrectly collected Owners' Assessments from Owners in an amount in excess of three percent (3%) of the correct amount, then the Manager shall pay the reasonable expenses incurred in such inspection or audit (and such amount shall not be considered a Common Area Expense) . If such inspection or audit determines that an Owner is either due a refund or owes an additional amount, that amount shall be promptly paid by the party owing the amount. 2.9 Late Charges and Interest. Any Assessment installment or other fee is delinquent if not paid within thirty (30) days when due or if a different time period is specifically provided for in this Declaration, the expiration of such different time period (the expiration of such time period herein called the "Delinquency Date"), in which event a reasonable late charge as established by the Manager not to exceed any amount authorized by law shall be levied against the Owner owing such installment on its Assessment or other fee, but not higher than 10%. Any Assessment or other fee not paid prior to its Delinquency Date shall bear interest from the Delinquency Date at the Default Rate. Each Owner agrees to the enforcement of payment of all Assessments or other fees provided for in this Declaration in the manner herein specified. ARTICLE 3. COVENANTS AS TO REPAIR, MAINTENANCE, ALTERATIONS AND RESTORATION 3.1 Maintenance and Repair. 3.1.1 Hotel Parcel. Subject to the provisions of Section 3.3 hereof, Hotel Parcel Owner shall, at all times during the Term, keep, maintain and repair all Improvements on the Hotel Parcel (other than the Common Area), including, but not limited to, all buildings, lighting, signage, landscaping, irrigation and architectural elements comprising such Improvements, or cause all portions of the same to be kept, maintained and repaired, in good order, condition and repair and in a manner consistent with comparable first-class, mixed -use projects located in the Huntington Beach area. 3.1.2 Retail Parcel. Subject to the provisions of Section 3.3 hereof, Retail Parcel Owner shall, at all times during the Term, keep, maintain and repair all Improvements on the Retail Parcel (other than the Common Area), including, but not limited to, all buildings, lighting, signage, landscaping, irrigation and architectural elements comprising such Improvements, or cause all portions of the same to be kept, maintained and repaired, in good order, condition and repair and in a manner consistent with comparable first-class, mixed -use projects located in the Huntington Beach area. 3.1.3 Common Area, Parking Parcel and Master Parcel. 3.1.3.1 Subject to the provisions of Section 3.3 hereof, the Manager shall, at all times during the Term, keep, maintain and repair, or cause to be kept, maintained -20- CIM HB CCRs Execution 5233-50262180594 and repaired, all portions of the Master Parcel, Parking Parcel and Common Areas, including, but not limited to, structures, lighting, lighted crosswalks, signage, landscaping, irrigation, drainage facilities, open space, public and reciprocal access easements and architectural elements comprising such Parcels and Common Areas, including but not limited to Fifth Street, Sixth Street, Walnut Avenue and Pacific Coast Highway, alleys, parking, driveway, truck access, sidewalks, street lighting and open space, or cause all portions of the same to be kept, maintained and repaired, in good order, condition and repair and in a manner consistent with comparable first-class, mixed -use projects located in the Huntington Beach area. 3.1.3.2 Prior to commencing any work on the public domestic water line(s) located within the Parking Structure or components thereof, Manager shall, to the extent required by Applicable Law, obtain an encroachment permit from the Public Works Department. All pipeline(s) and encasement material (slurry and metal sleeve) shall be returned to the same condition as prior to commencement of the work or as otherwise approved to in writing by the City Engineer. Written approval from the Public Works — Utilities Division shall be required prior to activating the domestic water pipeline(s). 3.1.3.3 The costs and expenses of all maintenance and repair to be performed by Manager pursuant to Section 3.1.3 shall be paid by the Owners (excluding the City as Owner of the Parking Parcel) pursuant to Article 2. Retail Parcel Owner and the Owner of the Parking Parcel will enter into the Operating Agreement, which shall provide for Operating Income to be reimbursed for operating costs of the Parking Structure (which operating costs do not include costs of maintenance, repair or replacement), as more particularly set forth in the Operating Agreement, with any shortfall to be paid by the Owners of the Retail Parcel and Hotel Parcel as part of Class B Common Area Expenses. 3.2 Alterations to Improvements. Each Owner (except the City as the Parking Parcel Owner) shall construct the Improvements to be constructed on such Owner's Parcel in accordance with the Approved Plans. Any Owner conducting repairs to or construction within Walnut Avenue, Sixth Street or Pacific Coast Highway shall, to the extent required under Applicable Law, seek an encroachment permit from the City and/or CalTrans (as applicable) within twenty-four (24) hours of commencing such work. Without limiting the foregoing, any such Work within Walnut Avenue or Sixth Street shall require submittal to and approval by the City of all applicable improvement plans relating thereto. Except as Owners may agree between themselves in writing, each Owner may make repairs, alterations, additions or Improvements to the Improvements on its Parcel without the consent or approval under this Declaration of the other Owners, so long as such Owner complies with Section 3.4, the provisions contained in this Declaration relating to the easements granted herein and any other agreements to which such Owner is a party or is obligated to comply with. -21- CIM HB CCRs Execution 5233-50262\80594 3.3 Restoration of the Improvements. 3.3.1 Restoration. For the purpose of this Section 3.3.1, Section 3.3.2 and Section 3.3.3, the Owner of the Retail Parcel and/or the Hotel Parcel that does not hold the Minority Interest in the applicable Parcel shall be considered the "Owner" of such Parcel. The Owner of any Parcel on which a Casualty occurs shall give the Agency, the Owner of the Parking Parcel and the other Owners written notice of any Casualty in excess of $250,000 (which amount shall increase by $25,000 on January 1, 2010 and each fifth anniversary of such date thereafter). Except as hereinafter expressly provided in this Section 3.3.1, Section 3.3.3 and Section 9.4.2, in the event of any Casualty (which shall include acts of God, fire, flood earthquake, explosion or similar occurrences) which results in damage or destruction to the Improvements on a Parcel at any time prior to the Termination Date, then the applicable Parcel Owner shall restore, repair or rebuild such Improvements (including Common Area on such Parcel) and restore, repair or rebuild such Improvements with all due diligence in accordance with the applicable requirements of Section 3.4. For purposes of this Section 3.3, all costs attributable to and to be paid from the deductible under the Property Insurance required to be maintained pursuant to Article 7 shall be deemed to be payable from available Proceeds and the .failure of either such Owner to pay the deductible under such Property Insurance shall be a Default by such Owner under this Declaration. Notwithstanding anything to the contrary contained herein, Retail Parcel Owner shall not have the obligation to restore the tenant improvements of any occupant of the Retail Parcel unless such occupant is obligated pursuant to the terms of its lease to restore such tenant Improvements, and then only to the extent such occupant actually restores such tenant improvements. Retail Parcel Owner shall use commercially reasonable efforts to enforce the terms of each such occupant's lease regarding reconstruction of such tenant improvements. If any such occupant or Retail Parcel Owner does not restore such tenant improvements, then, to the extent Retail Parcel Owner has possession of such occupant's premises or other legal right to do so, Retail Parcel Owner shall dress and decorate the storefronts of the vacant premises in a tasteful manner. 3.3.2 Special Provisions Regarding Parking Structure. Notwithstanding the foregoing, however, the Manager shall be obligated to restore and repair the Parking Structure regardless of the amount of the available Proceeds, and any shortfall in the cost of such restoration and repair shall be paid by the Owners of the Retail Parcel and the Hotel Parcel as a Class B Common Area Expense. The Owner of the Parking Parcel shall be required to provide all Proceeds available to it resulting from such Casualty to the Manager for the cost of repair or restoration required by such Casualty. At the election of the Owner of the Parking Parcel in its sole discretion, the Owner of the Parking Parcel may provide such Proceeds directly to the Manager or deposit or cause to be deposited such insurance Proceeds into an escrow account for disbursement for repair and/or restoration on the mutual signature of the Owner of the Parking Parcel and the Manager. In no event shall the Owner of the Parking Parcel have the right to use any Proceeds available to it resulting from such Casualty for any purpose other -22- CIM HB CCRs Execution 5233-50262\ 80594 than as provided above, provided that any excess of such Proceeds over the cost of repair or restoration may be used by the Owner of the Parking Parcel as it sees fit. 3.3.3 Relief from Restoration Obligation. Excluding the repair, rebuilding and restoration of the Parking Parcel which shall be unconditionally repaired, rebuilt and restored as set forth herein, any Component on the Hotel Parcel that is reasonably necessary (as determined in good faith by the Retail Parcel Owner and the Parking Parcel Owner) for the operation of the Improvements on the Retail Parcel or the Parking Parcel which Component the Hotel Parcel Owner shall be obligated to repair, rebuild or restore, and, any Component on the Retail Parcel that is reasonably necessary (as determined in good faith by the Hotel Parcel Owner and the Parking Parcel Owner) for the operation of the Improvements on the Hotel Parcel or the Parking Parcel which Component the Retail Parcel Owner shall be obligated to repair, rebuild or restore, to the extent that the restoration of the Improvements on a given Parcel is dependent on the reconstruction of Improvements on another Parcel (as reasonably determined by all of the Owners), then the Owner of such first Parcel shall be relieved from its obligation to restore contained herein until such time as the Owner of the second Parcel restores the Improvements on such second Parcel; provided, however, this Section shall not apply for so long as the Developer and/or its affiliates own the Retail Parcel and the Hotel Parcel. 3.4 Standards of Repair, Restoration and Reconstruction. All restoration, repair, rebuilding, maintenance, alterations, additions or Improvements (for the purposes of this Section 3.4 collectively called the "Work") performed by the Manager or any Owner under this Declaration shall be performed in strict compliance with each of the following: 3.4.1 The Work shall be performed only as approved by the City (to the extent required under City Charter, Code or Ordinance) according to and shall substantially conform to and comply with the original City -approved plans for such Improvement(s), as such Improvement(s) existed immediately prior to the Casualty (or, in the case of Work not arising out of a Casualty, immediately prior to such Work), unless changes thereto have been approved in writing by the Agency, the Parking Parcel Owner and the other Owners, provided that Agency and the Parking Parcel Owner shall not withhold their approval of changes required by new code requirements or minor cosmetic changes, and such changes shall not require the approval of such other Owners. 3.4.2 All Work shall be performed in a good and workmanlike manner, in accordance with good construction and engineering practices, and shall strictly conform to and comply with all applicable requirements, laws, codes, rules and regulations of governmental agencies having jurisdiction thereof and of insurance underwriters. All Work also shall be commenced and Completed with due diligence, and, except as herein provided to the contrary, at the sole cost and expense of the Owner performing the same (or if performed by Manager, -23- CIM HB CCRs Execution 5233-50262\8059/ the cost shall be a Class B Common Area Expense unless performed by Manager as a result of the failure of an Owner to comply with its obligations hereunder, in which case the defaulting Owner shall be responsible for the cost of performance). The Owner or Manager performing such Work shall use commercially reasonable efforts to conduct such Work in such a manner so as to minimize any noise, vibration, particulates and dust infiltration or other disturbance which would disturb any Owner or occupant of any other Parcel, taking into account the time of day and pattern of use of each Parcel, but such Owner or Manager shall not be liable to any other Owner or occupant in any event for damages as a result of any such disturbance, except to the extent that the damage is caused by the negligence or willful misconduct of the Owner or Manager performing the Work. 3.4.3 All Work shall be performed in accordance with and shall comply with the other applicable provisions of this Declaration, including without limitation Article 4 and Section 3.6. 3.5 Clearing of Premises. Whenever an Owner is not obligated by the terms of this Declaration to repair, rebuild or restore any Improvements that have been damaged or destroyed, subject to the prior written election of the Agency's Executive Director to accept the Parcel and Improvements in their then current state (provided such acceptance shall be approved or disapproved by written notice given within thirty (30) days after written request from such Owner), such Owner, at its sole cost and expense, and with all due diligence, shall raze such Improvements or such part thereof as has been so damaged or destroyed (in the case of the Improvements overlying the Parking Parcel or other Improvements, down to but not including the top of the construction slab upon which such Improvements were constructed), clear the premises of all debris and fill, level and clear all areas not restored. In the event that less than all of an Owner's Improvements are damaged or destroyed and such damaged or destroyed portion is not being restored, such Owner shall, with respect to the damaged or destroyed portion, and provided that any supporting underlying Improvements are then in existence, improve such damaged or destroyed portion thereof (after such portion is razed as required above) as Common Area of like standard as the Common Areas of the balance of the Project (other than the Parking Structure), provided that the obligation to restore to Common Area shall not extend to any portion of the Improvements lying above the ground floor level of the Retail Parcel. The Proceeds of any insurance policies insuring the Improvements so damaged or destroyed (including earthquake insurance but excluding the Proceeds of any rental value or use and occupancy insurance) shall be used to satisfy the applicable Owner's obligations hereunder prior to being used or distributed for any other purpose or to any other person. Notwithstanding the foregoing provisions of this Section 3.5, such Owner shall, as to its respective Parcel, leave and cause to be left in place all Components, or portions thereof, on such Parcel for so long as the Improvements benefited thereby are in existence, including any period of restoration or reconstruction of the same. The provisions of this Section 3.5 shall not apply to the Parking Parcel, but shall survive the Termination Date. -24- CIM HB CCRs Execution 5233-50262\ 80594 3.6 Repair, Maintenance and Replacement of Components. Except as may be otherwise expressly provided in this Declaration or any applicable Approved Plans, the following provisions shall apply to the repair, alteration or replacement of Components: 3.6.1 Subject to the provisions of this Section 3.6.1 and excepting the Parking Parcel Owner, each Owner whose Improvements contain a Component shall, at such Owner's cost and expense subject to the cost allocation provisions below of this Section 3.6.1, for so long as another Parcel contains an Improvement which is benefited by the subject Component, maintain, repair and replace, or cause to be maintained, repaired and replaced, such Component so that, it shall continue to have its pre-existing capacity to be so used with such benefited Improvement in question. Except as otherwise agreed in writing by such Owners, the cost of such maintenance shall be shared by the Owners (other than the Parking Parcel Owner) which benefit from the subject Component in proportion to the benefit derived from the existence of such Component. The Manager shall undertake such obligations relating to the Parking Parcel, with the costs thereof allocated as a Class B Common Area Expense. 3.6.2 Each Owner whose Parcel contains any benefited Improvement which utilizes any Component shall not, or allow any Permittee to, place upon the subject Component any burden which is in excess of the design capacity of the subject Component or which will prevent the use of the Improvement containing the subject Component for its intended purposes. Nothing contained in this Section 3.6.2 or in Section 3.6.3 shall limit or restrict any Owner from constructing, maintaining and using the Improvements on its Parcel in accordance with the Approved Plans for such Improvements. 3.6.3 Subject to Article 12, no Owner whose Parcel contains Improvements (i) located directly above or below Improvements located on another Owner's Parcel or (ii) which otherwise provide support for Improvements located on another Owner's Parcel shall, or allow any Permittee to, without the consent of each such other Owner, cut or core the slab which constitutes the roof of the underlying Improvements or the floor or support of the overlying Improvements, nor cause any increase in the design load, including standard acceptable margins of safety, imposed upon such slab, or upon the columns or foundations supporting same, as such design loads are shown on the Approved Plans, provided, however, that electrical, mechanical, plumbing and utility lines and outlets may be installed pursuant to plans and specifications approved by both such Owners and in accordance with City Codes. Retail Parcel Owner shall obtain the prior written consent of the Owner of the Parking Parcel in order to cut or core the slab which constitutes the roof of the Parking Structure, provided such consent (i) shall not be unreasonably withheld, conditioned or delayed and (ii) shall be deemed given if such cutting or coring is shown on Approved Plans for which a building permit has been issued by the City. 3.6.4 Any Owner whose Parcel contains either an Improvement containing a -25- CIM HB CCRs Execution 5233-50262\8059, Component or a benefited Improvement, as the case may be, may do any Work with respect to such Improvements, notwithstanding that during the course of performing such Work a condition otherwise prohibited by the provisions of this Section 3.6 may result, if: 3.6.4.1 During the course of performance of such Work the Owner by whom or on whose behalf such Work is being done shall, at its own cost and expense, provide such temporary facilities as may be necessary and applicable: 3.6.4.1.1 To perform the function performed by the Component, if such Work is performed with respect to the Improvement containing the same; or 3.6.4.1.2 To increase the capacity of, or supplement, the Component to the extent necessary so that the benefited Improvement shall not, during the performance of such Work, either place on such Component a burden in excess of its capacity or otherwise prevent the use of the Improvement containing the Component for its intended purposes, if such Work is performed with respect to the benefited Improvement in question; and 3.6.4.2 At the conclusion of such Work there is compliance with the provisions of this Section 3.6. 3.6.5 Notwithstanding the provisions of Sections 3.6.1 or 3.6.2, the Owner performing such Work shall not be liable to any Owner for any inconvenience, annoyance, disturbance or loss of business caused by the performance of such Work, except that the Owner performing such Work shall be liable if it or its agents are negligent, engage in willful misconduct or otherwise do not comply with the provisions of this Article 3, if applicable. The Owner performing such Work shall make all reasonable efforts to keep any such inconvenience, annoyance, disturbance or loss of business to a minimum. 3.6.6 In the event of damage or destruction to a Component, Section 3.3 and 3.4 shall govern the obligations with respect to restoration, repair or rebuilding the same, provided, however, that any uninsured portion of the costs of such restoration (including amounts applied to the deductible under the applicable property insurance) shall be allocated among the Owners as provided in Section 3.6.1 above, provided that if such Owner on whose Parcel such Component is located has not satisfied its insurance obligations under this Declaration, then such Owner shall be obligated to provide the amount of insurance proceeds that would have been available if such insurance obligations had been fulfilled. 3.6.7 Anything in this Section 3.6 to the contrary notwithstanding, but subject to cost allocation as provided in this Section 3.6, it is expressly understood and agreed that the obligations of an Owner set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.6 shall at all times remain their respective obligations, even though such obligations may relate to the restoration, -26- CIM HB CCRs Execution 5233-50262\80594 maintenance and repair of Components. ARTICLE 4. EASEMENTS 4.1 Grant of Reciprocal Easements. Each Owner hereby grants to each of the other Owners respectively, for the use and benefit of each of them and their respective Permittees and other invitees, irrevocable non-exclusive easements over the Common Area, for ingress to and egress, for the passage and accommodation of pedestrians, on such portions of the Common Area as are set aside, maintained and authorized for such use pursuant to the terms of this Declaration, and, with respect only to the Owners, for the doing of such other things as are authorized or required to be done on said Common Area pursuant to this Declaration or as required by the Maintenance and License Agreement. Without limiting any public dedication contained in the Fifth Street Public Access Easement, no such easements shall be considered public dedications. Manager shall have the right to formulate, distribute and enforce reasonable rules and regulations ("Common Area Rules") governing public use of and security for the Common Area, provided that such rules and regulations are of a type permitted to be applied to the Common Area (or portion thereof, as applicable) pursuant to Applicable Laws, including without limitation the right to eject or cause the ejection from the Common Area (or portion thereof, as applicable) of any person not authorized, empowered or privileged to use the Common Area (or portion thereof, as applicable); provided, however, that in the event of a conflict between the Common Area Rules and the provisions of this Declaration, this Declaration shall prevail. Notwithstanding the foregoing, each Owner reserves the right to close off the Common Area on the Owner's Parcel for such reasonable period or periods of time as may be legally necessary to prevent the acquisition of prescriptive rights by any person or the implied dedication of any portion of the Common Area to the public, provided no such closure shall violate any City -required public and reciprocal access. easement or shall preclude reasonable access to Improvements on other Owners' Parcels. In addition, subject to Section 12.1, nothing in this Section 4.1 shall be deemed to limit Retail Parcel Owner's right to place carts, kiosks, and other similar Common Area Improvements in the Common Area on the Retail Parcel or to allow queuing or outdoor market and restaurant seating, provided such use does not unreasonably burden the other Owners' use of their Parcels or the Common Area. 4.2 Grant of Utility Easements. 4.2.1 Each Owner, hereby grants to each other Owner, for the benefit of such grantee Owner's Parcel non-exclusive easements in, to, over, under and across the granting Owner's Parcel for the installation, operation, flow, passage, use, maintenance, repair, replacement, relocation, restoration and removal, and for ingress and egress in connection therewith, of sanitary sewers, storm drains, water and gas mains, elevator shafts and equipment, heating, ventilation and air conditioning equipment and lines, electrical power lines, telephone lines, data lines, cable television lines, other utility lines and Components, serving the Improvements and the Common Area, if any, located on each such granting Owner's Parcel, with -27- CIM HB CCRs Execution 5233-50262\80594 all of such sewers, drains, mains and lines to be underground or within the Parking Structure or enclosed within walls, slabs, chases or utility closets within Improvements on the granting Owner's Parcel, as shown in the Approved Plans for such Improvements. In no event shall the Parking Parcel Owner have any liability of any kind relating to any such easement for which the Parking Parcel is the servient tenement. 4.2.2 Except for the utility easements in existence as of the Effective Date which are not being modified or relocated in connection with the development of the Project, the location of all easements of the character described in this Section 4.2 shall be subject to the reasonable written approval of each affected Owner, provided, however, that the location of such easements shall be deemed approved if provided for in the Approved Plans of the applicable Improvements. Upon completion of the construction of any utility facility of the type described in Section 4.2.1, the Grantor and Grantee(s) shall, upon the written request by either Grantee or Grantor, join in the execution of an agreement, in recordable form, appropriately identifying the type and location of such respective utility facility, but such recorded document will not be a condition to effectiveness of the easements granted in this Section 4.2. 4.2.3 Intentionally Deleted. 4.2.4 Unless otherwise provided in the Maintenance and License Agreement, required by applicable City codes or conditions of approval, or ordinances or agreed in writing by the Grantor and the Grantee, the Grantee of any of the utility easements referred to in Section 4.2.1 shall be responsible as between the Grantor and the Grantee thereof for the installation, maintenance and repair of all sanitary sewers, storm drains, pipes and conduits, mains and lines and related equipment installed pursuant to such grant, provided, however, that if any such utility is located within a Component, then the maintenance, repair and restoration provisions of Section 3.6 hereof shall apply to the maintenance, repair and restoration thereof. Any such maintenance and repair shall be performed only after two (2) weeks notice to the Grantor of the Grantee's intention to do such work, except in the case of emergency, and otherwise in accordance with the provisions of this Section 4.2.4. 4.2.5 The Grantor of any of the utility easements granted pursuant to Section 4.2.1 shall have the right at any time to relocate on the Parcel of the Grantor any such sewers, drains, mains and lines and related equipment then located on the Parcel of the Grantor provided that such relocation and plans and specifications pertaining to such relocation are approved by the City (to the extent required by then applicable City codes) and shall be performed only after thirty (30) days' notice of the Grantor's intention to so relocate has been given to the Grantee, and such relocation and except as provided in Section 4.2.4: (i) shall not unreasonably interfere with or diminish the utility services to the Grantee; (ii) shall not reduce or unreasonably impair the usefulness or function of such utility; (iii) shall be performed without cost or expense to the Grantee; and (iv) shall not be relocated other than underground or within a structure approved by -28- CIM HB CCRs Execution 5233-50262\ 8059,e the Grantor and Grantee(s). Notwithstanding such relocation, and unless agreed otherwise in writing by the Grantor and the Grantee, the maintenance of the lines, mains and/or equipment located on the Parcel of the Grantor shall be the obligation of the Grantee; provided that if there shall be any material increase in the cost of such maintenance by reason, of such relocation, the Grantor shall bear the cost of such material increase. 4.3 Encroachment Easements. Each Owner hereby grants to each other Owner reasonable foundation encroachment and building encroachment easements, including, but not limited to, building walls, overhangs, support columns, canopies, eaves, doors, exits, alarm bells, signs, lights and lighting devices and other similar appurtenances attached to the building of the Grantee which shall survive the end of the Term and continue until the building benefited thereby is torn down. In addition to the foregoing, provided such easements do not create an unreasonable burden on the Parking Parcel, the Parking Parcel Owner hereby establishes and grants to the other Owners of the other Parcels for the benefit of such other Parcels, non-exclusive easements: (i) for the Improvements on such other Parcel (the "Encroaching Improvements") to encroach into portions of the Parking Parcel located directly below or adjacent to the Improvements to the extent necessary to permit the full use and enjoyment of the Encroaching Improvements in accordance with the intent of this Declaration, including any necessity for such encroachment which arises by means of vertical or lateral displacement of said Improvements, provided that such easement shall not permit any encroachment which would materially interfere with the use and enjoyment of the Parking Parcel and public water lines and appurtenances located therein and further provided that the Encroaching Improvements are constructed substantially in accordance with the Approved Plans therefor; and (ii) to attach the Encroaching Improvements to and to receive support from the Parking Structure. The foregoing easements shall include easements for ingress, egress and access to said areas to perform such work. 4.4 Grant of Easement For Loading Dock and Trash Room. The Retail Parcel Owner hereby grants to the Owners of the other Parcels for the benefit of such other Parcels, a non- exclusive easement for the use of the loading dock and trash room located on the Retail Parcel, as shown on the Site Plan, subject to reasonable rules and regulations as may be adopted from time to time by the Retail Parcel Owner with respect to such use to the extent permitted by law. 4.5 Temporary Construction Activities. Subject to the other provisions of this Declaration and any other applicable agreement, each Owner hereby grants to each other Owner an easement to come upon the Common Area of such Owner's Parcel for the purpose of construction, maintenance, repair, replacement, rearrangement and remodeling of buildings and Improvements within the Building Area and of landscaping, pedestrian walkways and other Improvements within the Common Area all of which shall be consistent with the Site Plan. All such work shall be conducted in the most expeditious manner reasonably possible to minimize interference with the Common Area and the work shall be diligently prosecuted to completion. In connection with the work or construction performed within or to the Building Areas, -29- CIM HB CCRs Execution 5233-50262\80594 incidental encroachment upon the Common Area may occur as a result of the use of ladders, scaffolding, store -front barricades and similar facilities resulting in temporary obstruction of portions of the Common Area, all of which are permitted hereunder so long as their use is kept within reasonable requirements of construction work expeditiously pursued. Common Area may be utilized for ingress and egress of vehicles transporting construction material and equipment and persons employed in connection with any work provided for herein and temporary storage of materials being utilized in connection with such construction, subject to the other terms and provisions hereof. Nothing contained in this Section 4.5 shall limit any requirement to obtain proper City approvals and/or building and other permits from the City and such activities may be subject to additional restrictions contained in City codes and ordinances. 4.6 Drainage. Each Owner hereby grants to each other Owner an easement to come upon the Common Area of such Owner's Parcel for the purpose of the installation, maintenance and operation of surface and underground drainage facilities for storm and runoff water in accordance with Approved Plans, which shall survive the end of the Term and continue until the building benefited thereby is torn down. 4.7 Recordation of Easements. Although the easements granted by this Article 4 are self operating, all Owners hereby agree to execute additional documents in recordable form that are reasonably necessary to effectuate the provisions of this Article 4, including, but not by way of limitation, grants of easements, licenses, and similar rights to utility companies and governmental bodies or agencies to facilitate the construction and operation of the Project. 4.8 Dominant and Servient Estates. Each easement granted pursuant to the provisions hereof is expressly and solely for the benefit of the Parcel, as applicable, of the Grantee; the Parcel so benefited shall be the dominant estate and the Parcel upon which such easement is located shall be the servient estate. All easements created by or pursuant to this Article 4 shall be appurtenant easements and not easements in gross. Any easement granted pursuant to the provisions of this Article 4, unless dedicated to, and accepted by, the City, may be abandoned or terminated by execution of an agreement so abandoning or terminating the same, by the Owners of the dominant and servient estates and consented to by the Mortgagee, if any, of the dominant estate. Any relocation of any easement shall be made at the expense of the person requesting such relocation. 4.9 Prohibition Against Granting Easements. No Owner shall grant any easements of the type set forth in this Article 4 for the benefit of any property not within the Project Site without the prior written approval of the other Owners. 4.10 Exercise of All Easements. Each Grantee, in performing any work pursuant to any of the easements granted under Article 4 hereof (including any construction, reconstruction, alterations, modifications, relocation, restoration or repair of Improvements, related utilities or -30- CIM HB CCRs Execution 5233-50262\80594 Components) shall do so in the manner provided in this Section 4.10. 4.10.1 Interference During Construction. The Grantee shall: (i) avoid causing any increase in the cost of constructing, reconstructing or restoring the Grantor's Parcel or any part thereof or Improvements thereon; (ii) avoid interfering unreasonably with any construction work being performed on the Grantor's Parcel or any part thereof or Improvements thereon; or (iii) cause as little interference as reasonably practicable with the use, occupancy or enjoyment of the Grantor's Parcel or any part thereof or Improvements thereon (including the. Common Area thereon) by such Grantor or its Permittees. 4.10.2 Workmanship. Each Grantee agrees that all construction, reconstruction, alterations, modifications, restoration or relocation of its Improvements or utilities on the Grantor's Parcel performed by such Grantee shall be done in a good and workmanlike manner, with first-class materials and in strict compliance with all Applicable Laws. Except as otherwise expressly provided herein or in the Maintenance and License Agreement or Operating Agreement, each Grantee shall pay all costs, expenses, liabilities and liens arising out of or in any way connected therewith, including, without limitation, all costs to repair any Improvements or Common Area on the Grantor's Parcel damaged as a result of such activity. Upon completion of any such work, the Grantee for whom such work is being done shall promptly restore the portions of the Improvements or Common Area so used to the condition in which the same were in prior to the commencement of such work, including the clearing of such area of all loose dirt, debris, equipment and construction materials. Such Grantee shall, at Grantor's election, also restore any portions of the Grantor's Parcel and Improvements thereon which may have been damaged by such work promptly upon the occurrence of such damage, and shall at all times during the period of such work keep all portions of the Grantor's Parcel and Improvements thereon (except the portions of the Common Area identified as storage and storing areas in the approved materials submitted pursuant to Section 4.10.3) free from and unobstructed by any loose dirt, debris, equipment or construction materials. 4.10.3 Submission of Work Plans and Schedule. Except in the case of an emergency, prior to the commencement of any construction, reconstruction, alterations, modifications, restoration or relocation by the Grantee on the Grantor's Parcel, such Grantee shall cause its architect or other appropriate engineer or consultant to submit to the Project Architect, and to the Grantor for approval, which approval shall not be unreasonably withheld or delayed, the following: (i) a plot plan of the Project showing (a) the buildings, (b) the Common Area, (c) utility connections, (d) proposed contractors' staging areas, (e) proposed material and equipment storage areas, (f) proposed location of construction shacks and other temporary Improvements, (g) proposed access routes which the Grantee agrees to require its construction personnel to use during the course of such construction or reconstruction and (h) workers' parking area; and (ii) a time schedule indicating the approximate date or dates upon which the Grantee shall cease using each portion of the Grantor's Parcel for the specific purpose described -31- CIM HB CCRs Execution 5233-50262180594 in this Article 4 above. Within fifteen (15) business days after the submission of such plot plan and time schedule, the Grantor shall notify the Project Architect and the Grantee whether the same are approved or disapproved, specifying the reason therefor if disapproved. If a Grantee shall disapprove the plot plan and/or the time schedule, the Project Architect, in consultation with the Grantor and Grantee, shall promptly revise the same in order to prevent conflicts in construction and otherwise to resolve the item disapproved by the Grantor. The foregoing approvals are in addition to any City approvals required under City codes and ordinances. 4.11 Indemnification. To the extent permitted by law, each Owner hereby agrees to protect, defend, indemnify and hold harmless the Agency, the City, any other Owner, and their respective officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) ("Indemnified Claims") caused by the indemnifying Owner's exercise of its rights under the grant of any easements and/or such Owner or such Owner's subcontractors, employees, agents or officers (if any), willful misconduct or negligent performance or its failure to comply with any of its obligations contained in this Declaration by such Owner, its officers, agents or employees provided that no Owner shall be required to indemnify any party for any Indemnified Claims to the extent caused by the negligence or willful misconduct of such party or another Owner. Indemnification by an Owner will include the indemnifying Owner's conduct of all defenses at its sole cost and expense subject to each affected Owner's approval of selection of counsel, not to be unreasonably withheld. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided pursuant to this paragraph. Nothing contained herein shall limit the effect of any waiver of rights of subrogation provided for elsewhere in this Declaration. ARTICLE 5. TAXES AND ASSESSMENT'S 5.1 Payment of Taxes and Assessments. Each Owner shall pay or cause to be paid, prior to delinquency, all Taxes levied or assessed upon or against the land and Improvements within such Owner's Parcel with respect to the Term after the Effective Date. Notwithstanding the foregoing, any taxes assessed against the Master Parcel shall be treated as Class B Common Area Expenses. No Taxes will be assessed against the Parking Parcel while owned by the City. 5.2 Contests. Subject to Section 12.2, any Owner ("Contesting Owner") may contest, object to or oppose (herein "Contest") any tax, assessment, imposition or charge of which such Owner is required by this Declaration to pay all or a portion, provided that prompt notice of such Contest shall be given to Manager, and such Contesting Owner may pay under protest any tax, assessment, imposition or charge which is the subject of a Contest. Each Owner agrees to -32- CIM HB CCRs Execution 5233-50262\80594 cooperate with the Contesting Owner at no out-of-pocket expense to the Non -Contesting Owner in any such Contest. The expense of the Contest, shall as far as possible, be paid from any benefits, if any, received therefrom, and thereafter, by the Contesting Owner. The Contesting Owner shall not subject a Non -Contesting Owner to any penalty, fine, criminal proceeding or increase in Taxes, or to imminent danger of final sale or seizure of an Owner's interest in the Project, as a result of any such Contest. ARTICLE 6. USE CONTROLS AND RESTRICTIONS 6.1 Project Use and Operation Restrictions. Manager shall be responsible for the overall supervision of the Project in accordance with the requirements of this Article. In order to provide for the efficient operation of the Project: (a) Each Owner agrees that everything done or installed or constructed by it or with its permission or consent to or on the Project shall conform to, and each Owner shall use commercially reasonable efforts to cause every occupant of its Parcel to conform to, every requirement of Applicable Law and Governmental Authority, including, but not limited to, requirements pertaining to health, welfare or safety of employees or the public. (b) Each Owner shall use commercially reasonable efforts to cause every occupant of the Project to conduct its activities in such a manner as not to constitute a nuisance or create unreasonable interference with other occupants, and their customers and business invitees. All buildings in the Project will be occupied and used only by retail businesses meeting the requirements of this Article 6. (c) Each Owner shall cause all leases of space on such Owner's Parcel to contain appropriate provisions enabling enforcement of the requirements of this Declaration. (d) No Owner shall have or permit any merchandise or substance in or about the Project or any act in or about the Project which will (a) cause or threaten the cancellation of any insurance covering any other Owner's building or the Common Area, or (b) increase the insurance rates applicable to any other Owner's building or the Common Area over the rates which would otherwise apply, unless the Owner causing the increased cost agrees to pay the increased cost. 6.2 Use Restrictions. Manager shall be responsible for the overall supervision of the Project in accordance with the requirements of this Article. In order to provide for the efficient operation of the Project and to minimize parking and traffic problems, Manager shall use commercially reasonable efforts to enforce the following restrictions: 6.2.1 Specific Prohibitions. The following uses of any Parcel are not permitted: -33- CIM HB CCRs Execution 5233-50262\ 80594 (a) Establishments open to the public having topless, bottomless, or totally nude or partially nude performers, waitresses, waiters, or other personnel, or which provide on site sales (other than catalog, Internet or similar sales or movies shown on televisions within hotel rooms ) of recorded entertainment having nude or partially nude persons performing or simulating sexual acts; businesses which show X-rated movies or pornographic movies or sell pornographic material to the public from the Project (excluding catalog, Internet or similar sales or movies shown on televisions within hotel rooms); businesses which operate as modeling studios, pool halls or massage parlors (provided, however, that the foregoing shall not be deemed to restrict operation, subject to compliance with all Applicable Laws, of a chiropractic clinic, upscale spa or similar business offering massages as part of an integrated range of health, beauty or fitness -related services). (b) Trailer courts, mini -warehouses, slaughterhouses, tanneries, canneries, barns, stables, cemeteries, junk yards, scrap metal yards or waste material businesses, or any fire or bankruptcy sale operations. (c) Preschools, churches, or daycare centers (provided, however, that the foregoing shall not be deemed to prohibit supervised children's activity/play areas provided as an amenity for guests of the Hotel Project). (d) Dangerous, hazardous or unsafe uses such as the use of explosives. No oil, gasoline or other such flammables shall be stored in violation of any local, state, federal or other governmental code or regulation. No ponds, lagoons, impoundments, reservoirs or earthen works may be installed or constructed on any Parcel for storage, containment or disposal of any materials or wastes. (e) Any illegal use or activity of any kind. ARTICLE 7. INSURANCE 7.1 Pre -Construction and Construction Period Insurance. 7.1.1 Prior to commencement of the construction on a Parcel, and until such construction is Completed, the Owner of such Parcel shall obtain and maintain in full force and effect, or cause its general contractor to obtain and maintain in full force and effect, each of the insurance policies listed on the Insurance Schedule (the "Insurance Schedule"). At such time as each Owner has Completed the construction on such Owner's Parcel, the Owner of such Parcel shall continue to maintain each of the policies required by the Insurance Schedule unless the Retail Parcel Owner and the Hotel Parcel Owner have elected to cause the Manager to maintain the Master Insurance pursuant to the provisions of Section 7.2 below. Each such Owner shall satisfy and comply with the applicable terms and provisions of the Insurance Schedule, with respect to, and the provisions of Article 3 shall apply to, the insurance maintained pursuant to this Section -34- CIM HB CCRs Execution 5233-50262\ 8059� 7.1.1. In the event Retail Parcel Owner commences construction of either of the buildings comprising the Retail Improvements at separate times, or such separate buildings are Complete_ d at separate times, then Retail Parcel Owner may comply with this Section 7.1.1 separately with respect to each such building. Until the 3D Parcelization is completed, Developer shall obtain all insurance required on the Insurance Schedule. 7.2 Post- Construction Period Insurance. 7.2.1 Master Insurance Policy Requirements. Subject to Section 7.2.4 below, Manager shall obtain and maintain in full force and effect the Master Insurance at all times during the Term from and after Completion of the Improvements on the Retail Parcel (excluding the tenant improvements of the occupants of the Retail Parcel unless Retail Parcel Owner elects otherwise) and the other Parcels, and the provisions of Article 3 shall apply to the insurance maintained pursuant to this Section 7.2. If the Improvements on the various Parcels are Completed at different times, the Improvements on the various Parcels will be added to the Master Insurance as they are Completed. The premium for and any deductibles under the Master Insurance Policy (as defined in the Insurance Schedule) shall be allocated among the Owners of each of the Parcels as provided in the Insurance Schedule. Each Owner shall require any contractors or subcontractors performing work on such Owner's Parcel after the Completion of the Improvements thereon to maintain the insurance required pursuant to Section E of the Insurance Schedule to the extent that such work meets the minimum threshold set forth in Article 3 for maintaining such insurance. If Manager fails to maintain the Master Insurance during any period it is required to do so, and such failure continues for ten (10) days after notice from any Owner, then Hotel Parcel Owner shall have the right to obtain and maintain the Master Insurance. 7.2.2 Approval of Master Insurance. Unless otherwise agreed by all Owners, at least ninety (90) days prior to the Completion of the Improvements on the first of the Parcels other than the Parking Structure or the expiration of an existing Master Insurance policy, as applicable (collectively, the "Insurance Date"), the Manager shall convene a meeting with the other Owners to discuss and agree upon potential changes to the insurance requirements and potential changes to the coverages or policy limits required by the Insurance Schedule, which changes shall require the agreement of all such Owners. In the case of the expiration of an existing Master Insurance policy, such Owners may elect by unanimous agreement to renew the existing insurance with the incumbent insurer rather than seek bids for such insurance. If such Owners do not agree to renew the existing insurance with the incumbent insurer then: (i) at least sixty (60) days prior to the Insurance Date, Manager shall cause its insurance broker to provide the Owners with a draft copy of the insurance bid specifications, and all Owners shall provide any comments they may have thereto (if at all) within ten (10) days after receipt thereof, and (ii) at least thirty (30) days prior to the Insurance Date, Manager shall cause its insurance broker to obtain and provide to the other such Owners at least three (3) quotes (including all rating and underwriting worksheets, specimen insurance policies, and financial agreements to the extent such materials are reasonably made -35- CIM HB CCRs Execution 5233-50262\ 80594 available to Manager) for insurance satisfying the agreed upon insurance requirements from insurance companies satisfying the requirements set forth in the Insurance Schedule (including any qualified insurance company from which Manager is specifically requested by another Owner to obtain a quote) (unless less than three (3) such qualified insurance companies exist, in which case Manager shall obtain quotes from all qualified insurance companies). The Owners shall meet or confer by telephone within ten (10) days after the required quotes are obtained, on a date reasonably determined by Manager, but in no event less than twenty (20) days prior to the Insurance Date, or as promptly thereafter as is practical, to agree upon the quote to be accepted by Manager. The quote selected by the Owners shall be the quote so accepted by such Owners. If the Owners cannot agree upon a quote, Manager shall select the quote to be accepted. In no event shall any Owner other than Manager solicit or accept any quote or pricing for the Master Insurance, provided, however, that if Manager fails to obtain any such quotes at least twenty- five (25) days prior to the Insurance Date, then Hotel Parcel Owner shall have the right to solicit such quotes from insurance companies satisfying the requirements set forth in the Insurance Schedule, and the Owners shall meet or confer by telephone not less than twenty (20) days prior to the Insurance Date, to agree upon the quote to be accepted, with the voting requirements and deadlock resolution procedure to be as provided above. 7.2.3 Automobile Insurance. In addition to the Master Insurance obtained and maintained pursuant to the provisions of Section 7.2.1 above, each Owner shall obtain and maintain, at each such Owner's expense except as otherwise provided in Section D of the Insurance Schedule, in full force and effect, Automobile Liability Insurance on each such Owner's automobiles and shall satisfy in all respects the provisions of the Insurance Schedule with respect thereto, and the provisions of the Insurance Schedule shall apply thereto. 7.2.4 City's Right to Carry Own Insurance. By giving at least ninety (90) days prior written notice, for so long as the City is the Parking Parcel Owner, the City may elect to obtain its own insurance with respect to the policies related to the Parking Structure and the Parking Parcel, provided such policies are in conformance with the Insurance Schedule, including without limitation the last sentence of Section 1 A of Exhibit D. In such event the liability policy shall have an "other insurance provision" described in Section 7.3.2 below. 7.3 Separate Policies. 7.3.1 Mutual Agreement Required. Notwithstanding any other provision of this Article 7 requiring Owners to insure their respective Parcels under the Master Insurance, and subject to Section 7.2.4 above, upon the mutual written agreement of the Owners of the Retail Parcel, the Parking Parcel and the Hotel Parcel, each Owner shall purchase or cause to be purchased with respect to its respective Parcel separate and individual policies of insurance complying with the requirements contained in the Insurance Schedule. Notwithstanding the foregoing or any other provisions of this Article 7, no Owner shall be required to obtain the -36- C1M HB CCRs Execution 5233-50262\80594 consent or approval of any other Owner in order to obtain insurance coverage for its own benefit which is in excess of or in addition to the insurance such Owner is required to maintain under this Article 7 and the Insurance Schedule. 7.3.2 Other Insurance Agreement Required. If the Owners purchase separate and individual policies pursuant to this Section 7.3, each such policy of Liability Insurance and each other policy, if available, shall include an "other insurance provision" by the insurance company providing coverage under such policy to the effect that if there are two or more separate and individual polices potentially covering any claim or loss and there is any dispute between the insurance companies providing coverage under such policies over which policy or policies should pay any claim or loss, such insurance companies shall pay such claim or loss according to common insurance industry practice as provided in the "other insurance clauses" of such policies, and such coverage shall be in excess of any other insurance maintained with respect to such claim or loss. 7.4 Use of Proceeds. 7.4.1 Insurance Trustee. Notwithstanding anything to the contrary contained herein, all Proceeds of Builder's Risk Insurance and Property Insurance (including earthquake insurance but excluding the Proceeds of any rental value or use and occupancy insurance) with respect to the Improvements shall be used and distributed in accordance with and to satisfy each Owner's respective obligations under this Section 7.4 and Article 3 hereof. To the extent any insured Casualty exceeds Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Insurance Trust Threshold Amount"), all such Builder's Risk Insurance and Property Proceeds shall be paid in trust to an Insurance Trustee. 7.4.2 Reconstruction Disbursements. If an Owner is obligated to restore its Improvements pursuant to Article 3 hereof or otherwise elects to do so and Builder's Risk Insurance or Property Proceeds with respect thereto are held by the Insurance Trustee, then the Insurance Trustee shall pay the insurance Proceeds attributable to such Improvements, as provided below, to such Owner, or to its contractor or contractors, in the discretion of the Insurance Trustee, as follows: 7.4.2.1 If the damaged Improvements are insured by the Master Insurance, then the insurance Proceeds payable thereunder shall be allocated among the Parcels insured thereby (A) in the manner provided under the policy or policies of Master Insurance, including taking into consideration the respective declared values of the Improvements, and (B) based upon the relative proportion of loss suffered by each Owner thereof as compared to the loss suffered by all such Owners, as reasonably determined by the insurance company issuing such Master Insurance. 7.4.2.2 In the event that an Owner elects or is obligated to restore any Improvements suffering a Casualty in excess of the Insurance Trust Threshold Amount and the -37- CIM HB CCRs Execution 5233-50262\ 80591 insurance Proceeds therefor are insufficient to pay the entire cost of such Work, as reasonably determined by the Insurance Trustee, then such Owner shall deposit with the Insurance Trustee an amount reasonably determined by the Insurance Trustee to cover any such shortfall. Such amount shall be the first funds disbursed by the Insurance Trustee in accordance with the foregoing provisions, toward payment for such Work. 7.4.2.3 All disbursements by the Insurance Trustee for restoration purposes will be governed by the draw procedures typical of large construction loans made by institutional lenders at the time of the damage or destruction in question, as reasonably determined and uniformly enforced upon all Owners by the Insurance Trustee, including, without limitation, the following: At the end of each month or from time to time as may be determined by the Insurance Trustee, against a certificate from the Project Architect (which shall be obtained at such Owner's expense), the Insurance Trustee shall disburse an amount equal to the payments to be made to the contractors or materialmen for work done, material supplied and services rendered during each month or other relevant period less any retainage required under the construction contract with the general contractor performing such work, provided, however, that as a condition precedent to such disbursement, the Owner shall first have expended for restoration an amount equal to the deductible attributable to such Improvements under the property insurance policy. 7.4.2.4 At the completion of the Work, the balance of such Proceeds required to complete the payment of such Work shall be paid to the Owner or to its contractor or contractors, as the Insurance Trustee deems appropriate; provided, however, that at the time of such payment (1) there are no mechanic's liens against all or any part of the Site by reason of such Work and the time period within which a mechanic's lien may be filed has expired, or proof has been submitted that all costs of work theretofore incurred have been paid to, and accepted by, all potential lien claimants, and (2) the Project Architect, working at such Owner's expense, shall certify that all required Work has been Completed in accordance with the approved plans and specifications and is of the same or equivalent quality and class as the original Improvements. The Insurance Trustee shall pay any funds not required for restoration, razing and/or clearing to the Owner, or its Mortgagee, as their interests may appear. 7.4.3 Non -Reconstruction Disbursements. If an Owner is not obligated to restore its Improvements pursuant to Article 3 hereof and does not otherwise elect to do so, then the Insurance Trustee shall pay the Proceeds attributable to such Improvements, as provided below, as follows: 7.4.3.1 First, to the Mortgagee of each Parcel to the extent each is entitled to Proceeds as provided in the Insurance Schedule. 7.4.3.2 Next, to the satisfaction of the affected Owner's obligations under Section 3.3.1. -38- CIM HB CCRs Execution 5233-50262\ 80594 7.4.3.3 Next, to the Owner of such Improvements. If the damaged Improvements are insured by the Master Insurance, then the insurance Proceeds payable thereunder shall be allocated among the Parcels insured thereby (A) in the manner provided under the policy or policies.of Master Insurance (including, as applicable, any constructive total loss endorsements, valued form endorsements, or other applicable endorsements or provisions), and (B) to the extent not otherwise provided under such policies, based upon the relative proportion of loss suffered by each Owner thereof as compared to the loss suffered by all such Owners, as reasonably determined by the insurance company issuing such Master Insurance. 7.5 Compliance with Insurance Requirements; Payment of Premiums. Each Owner shall comply with all rules, regulations and requirements of any insurance rating bureau having jurisdiction over its Parcel or any portion thereof or the requirements of any insurance policy affecting insurance coverage on another Owner's Parcel if noncompliance by it with respect to its Parcel or any portion thereof would: (i) increase the premiums of any policy of insurance maintained by another Owner; (ii) render another Owner's Parcel uninsurable; or (iii) create a valid defense to another Owner's right to collect insurance Proceeds under policies insuring such other Owner's Parcel; provided, further, however, that if such compliance is hereafter required solely because of the nature of the use, possession or management of or activities in another Owner's Parcel, such other Owner shall be liable for the cost and expense of such compliance. If any Owner fails to obtain, maintain or cause to be maintained any insurance policy required to be obtained or maintained by such Owner as provided hereunder or, with respect to the Master Insurance, fails to pay such Owner's share of the premium therefor on or before the date which is fifteen (15) days prior to the date the same is due, then such Owner shall be in Default under this Declaration and any of the other Owners may, at their respective election, after giving the Defaulting Owner written notice and ten (10) days to obtain, or five (5) days to pay such portion of the premiums for, as applicable, such insurance, procure or pay such portion of the premiums for the same and the Defaulting Owner shall, upon demand, reimburse the Owner acquiring or paying such portion of the premiums for such insurance for all costs in connection therewith, together with interest thereon at the Default Rate from the date of payment, and the Owner.acquiring or paying such portion of the premium for such insurance shall have the rights and remedies provided under this Declaration. If the Manager fails to obtain, maintain or cause to be maintained any insurance policy required to be obtained or maintained by the Manager as provided hereunder, or fails to pay when due the insurance premiums for insurance obtained on behalf of the Owners, then any of the other Owners may, at their respective election, after giving the Manager written notice and ten (10) days to obtain, or five (5) days to pay such portion of the premiums for, as applicable, such insurance, procure or pay such portion of the premiums for the same and the Manager shall, upon demand, reimburse the Owner acquiring or paying such portion of the premiums for such insurance for all costs in connection therewith, together with interest thereon at the Default Rate from the -39- CIM HB CCRs Execution 5233-50262\ 8059, date of payment, and the Owner acquiring or paying such portion of the premium for such insurance shall have the rights and remedies provided under this Declaration. The Manager acting through the insurance broker, shall provide reasonably sufficient detail supporting all invoices or premium allocations delivered to each applicable Owner, with a reasonably detailed description of all deviations from any such information approved by such Owners pursuant to Section 7.2.2 above. Such supporting detail shall be provided on or before the delivery of the applicable invoice, but the failure to deliver such supporting detail shall not affect the other such Owner's obligations under this Section 7.5. 7.6 Release; Waiver of Subrogation, Each Owner covenants that it will, if generally available in the insurance industry, obtain for the benefit of each other Owner a waiver of any right of subrogation which the insurer of such releasing Owner may acquire against any such Owner by virtue of the payment of any such loss covered by such insurance. If despite using commercially reasonable efforts any Owner is unable to obtain a waiver of the right of subrogation from its insurer(s) for the benefit of each such Owner, then, such Owner shall promptly give written notice to such other Owners of such fact, and during any period of time when such waiver is unobtainable, said Owner shall not have been deemed to have released any subrogated claim of its insurance carrier against the other such Owners, and during the same period of time each other such Owner shall be deemed not to have released the Owner who has been unable to obtain such waiver from any claims it or its insurance carrier may assert which otherwise would have been released pursuant to this Section 7.6. 7.7 Miscellaneous. Unless otherwise agreed by the Owners, an insurance appraisal of the Parcels shall be undertaken every fifth (5th) year during the Term for purposes of valuing such Parcels for the Property Insurance. In addition, once every five (5) years, or other longer period of time as may be agreed by such Owners, the coverage amounts required to be maintained under the Liability Insurance and the Insurance Trust Threshold Amount shall be adjusted to reflect the dollar amounts that then would be at least equivalent, in Year 2008 Constant Dollars, to the dollar coverage amount of the Liability Insurance referenced in the Insurance Schedule and the amount of the Insurance Trust Threshold Amount. In addition, from time to time during the Term, but no less often than every fifth (5th) year, the Owners shall review the policy limits (as the same may have been adjusted as provided above) and coverages set forth in this Article 7 and the Insurance Schedule to determine whether, in light of changing practices or circumstances in the real estate business, the insurance business, or the general climate of legal liability and exposure, it is in such Owners' interest to change the limit of coverage or change the insurance requirements of the Master Insurance or. any other insurance required under this Declaration, provided that: (i) any such change shall require the approval of every Owner; and (ii) nothing contained in this Article 7 shall restrict any such Owner from obtaining, for its own benefit, insurance coverage which is in addition to or in -40- CIM HB CCRs Execution 5233-50262\ 8059z excess of the insurance such Owner is required to maintain under this Article 7 and the Insurance Schedule. ARTICLE 7A. CUP REQUIRED PROVISIONS 7A. 1 THE FOLLOWING PROVISIONS HAVE BEEN REQUIRED BY THE CITY OF HUNTINGTON BEACH AS CONDITIONS OF APPROVAL OF THE PROJECT, AND MAY NOT BE AMENDED WITHOUT THE CONSENT OF THE CITY OR OTHER MEANS OF COMPLIANCE WITH APPLICABLE LAW (SUCH AS THE ISSUANCE OF NEW ENTITLEMENTS AND/OR APPROVALS ELIMINATING SUCH CONDITIONS OF APPROVAL). 7A.2 MAINTENANCE OF CLASS B COMMON AREA ELEMENTS. MANAGER SHALL OPERATE, MAINTAIN, REPAIR AND REPLACE THE CLASS B COMMON AREA (INCLUDING DRIVEWAYS, SIDEWALKS, OPEN SPACE AREAS AND PUBLIC AND RECIPROCAL ACCESS EASEMENTS SHOWN AS "CLASS B COMMON AREA" ON EXHIBIT "B" ATTACHED HERETO, AND THE LANDSCAPING, IRRIGATION, AND DRAINAGE FACILITIES ASSOCIATED WITH SUCH ELEMENTS) IN GOOD OPERATING CONDITION AND STATE OF REPAIR. ALL COSTS OF SUCH OPERATION, MAINTENANCE, REPAIR AND REPLACEMENT SHALL CONSTITUTE CLASS B COMMON AREA EXPENSES. 7A.3 WATER QUALITY MANAGEMENT PLAN. EACH OWNER, EXCEPT FOR THE PARKING PARCEL OWNER, SHALL BE OBLIGATED TO IMPLEMENT, INSPECT, MAINTAIN, PERIODICALLY UPGRADE AND MONITOR THE ELEMENTS OF THE WATER QUALITY MANAGEMENT PLAN (THE "WQMP") APPROVED FOR THE PROJECT AS SPECIFIED THEREIN, PROVIDED THE MANAGER SHALL BE RESPONSIBLE FOR ALL STRUCTURAL BEST MANAGEMENT PRACTICES ("BMP") LOCATED WITHIN THE PROJECT SITE AND PORTIONS OF THE COMMON AREA THAT ARE SUBJECT TO THE WQMP (WITH THE COSTS OF SUCH COMMON AREA WQMP COMPLIANCE CONSTITUTING CLASS B COMMON AREA EXPENSES). THE WQMP SHALL NOT BE REVISED OR AMENDED EXCEPT AS MAY BE DICTATED BY LOCAL, STATE OR FEDERAL LAW. THE MANAGER SHALL PROVIDE COPIES OF THE CITY -APPROVED WQMP TO EACH OWNER UPON REQUEST AND SHALL PROVIDE COPIES OF ANY AMENDMENT OF SUCH WQMP TO EACH OWNER. EACH OWNER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THE WQMP IN EFFECT AS OF THE DATE HEREOF. EACH TENANT AND OCCUPANT BY TAKING OCCUPANCY FURTHER ACKNOWLEDGES THAT THE WQMP IS -41- CIM HB CCRs Execution 5233-50262\ 8059, AVAILABLE FOR ITS INSPECTION AT THE CITY' S OFFICES AND THAT ANY SUCH TENANCY OR OCCUPANCY IS SUBJECT TO COMPLIANCE WITH THE WQMP. 7A.4 VALET PARKING PLAN. PRIOR TO COMMENCEMENT OF CONSTRUCTION OF THE PARKING STRUCTURE, THE CITY WILL HAVE APPROVED A VALET PARKING PLAN AS PART OF THE PARKING MANAGEMENT PLAN FOR THE PARKING STRUCTURE. THE OWNERS AGREE THAT THE PARKING STRUCTURE SHALL BE OPERATED IN ACCORDANCE WITH SUCH APPROVED VALET PARKING PLAN, AS SUCH PLAN MAY BE AMENDED AT THE REQUEST OF DEVELOPER AND APPROVED BY CITY; WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD. UPON REQUEST FROM DEVELOPER OR ANY OWNER, TENANT, HOTEL OPERATOR OR ANY PROSPECTIVE PURCHASER OR MORTGAGEE OF A PARCEL WITHIN THE PROJECT, CITY SHALL PROVIDE A COPY OF THE VALET PARKING PLAN THEN IN EFFECT. 7A.5 NO BLOCKING OR SCREENING OF FIRE HYDRANTS. NEITHER MANAGER NOR ANY OWNER SHALL BLOCK OR SCREEN ANY FIRE HYDRANTS LOCATED IN THE PUBLIC RIGHT-OF-WAY, EASEMENT OR WITHIN THE PROJECT SITE. 7A.6 MAINTENANCE AND REPAIR OF PARKING STRUCTURE. CONDITION OF APPROVAL 2AIII REQUIRES THAT THIS DECLARATION PROVIDE FOR THE MAINTENANCE, REPAIR AND REPLACEMENT OF STRUCTURES, FACILITIES AND UTILITIES WITHIN THE PARKING STRUCTURE, AND ARTICLE 3 OF THIS DECLARATION CONTAINS SUCH PROVISIONS. ARTICLE 3 MAY NOT BE AMENDED IN ANY WAY THAT AFFECTS THE MAINTENANCE, REPAIR AND REPLACEMENT OF STRUCTURES, FACILITIES AND UTILITIES WITHIN THE PARKING STRUCTURE WITHOUT THE CONSENT OF THE CITY OR OTHER MEANS OF COMPLIANCE WITH APPLICABLE LAW (SUCH AS THE ISSUANCE OF NEW ENTITLEMENTS AND/OR APPROVALS ELIMINATING SUCH CONDITIONS OF APPROVAL). ARTICLE 8. INDEMNIFICATION; LIMITATION OF LIABILITY 8.1 Owners Indemnity. To the extent permitted by law, each Owner (other than Cracchiolo) shall indemnify, defend and hold harmless the Agency and all other Owners (including the Parking Parcel Owner) and their respective directors, officials, officers, employees, contractors and agents from any and all Indemnified Claims resulting from the indemnifying Owners' (including its contractors', tenants', agents' and employees') operations, -42- CIM HB CCRs Execution 5233-50262\80594 maintenance and use in and of the Project during the Term, and/or breach of any obligation imposed on such Owner by this Declaration, including Environmental Damages and including any liens arising out of work contracted for by the indemnifying Owner, provided that no Owner shall be required to indemnify any party for any Indemnified Claims to the extent caused by the negligence or willful misconduct of such party or another Owner. This indemnification shall include all costs and expenses, and reasonable attorneys' fees which fees that any other Owner may expend in connection with any of the foregoing. To the extent permitted by law, each holder of a Majority Interest shall indemnify, defend and hold harmless the Agency and all other Owners (including the Parking Parcel Owner) and their respective directors, officials, officers, employees, contractors and agents from any and all Indemnified Claims resulting from the applicable Minority Interest holder's (including its contractors', tenants', agents' and employees') operations, maintenance and use in and of the Project during the Term, and/or breach of any obligation imposed on such Minority Interest holder by this Declaration, including Environmental Damages and including any liens arising out of work contracted for by the indemnifying party, provided that no such holder of a Majority Interest shall be required to indemnify any party for any Indemnified Claims to the extent caused by the negligence or willful misconduct of such party (or any contractors, tenants, agents and employees of such party) or another Owner other than the holder of the applicable Minority Interest. This indemnification shall include all costs and expenses, and reasonable attorneys' fees which fees that any other Owner may expend in connection with any of the foregoing. ARTICLE 9. EMINENT DOMAIN 9.1 Determination of Award. Whenever a public, quasi -governmental or military authority shall have taken, on a permanent, temporary or emergency basis, a Parcel within the Site or any portion thereof by exercise of the powers of eminent domain, condemnation or requisition, the resultant damages to be awarded to each Owner with respect to such Owner's interest in the Project Site (collectively, the "Awards" and individually an "Award") shall be determined either by agreement between the condemning authority and the Owner or Owners suffering such taking or by judicial judgment, verdict or order in a condemnation action or proceeding. Notwithstanding the provisions of such agreement, judgment, verdict or order to the contrary, the Awards shall be applied in accordance with the balance of this Article 9. 9.2 Distribution. Each Owner shall be entitled to the entire Award attributable to a condemnation of that Owner's interest in a Parcel, including without limitation any easements or other real property rights appurtenant thereto. 9.3 Rights of Mortgagees. Nothing herein contained shall be deemed to prohibit any Mortgagee from participating in any eminent domain proceedings on behalf of or in conjunction with any Owner on whose Parcel it has a Mortgage, provided such participation does not reduce the Award to any other Owner or alter the application thereof as provided in Section 9.4. -43- CIM HB CCRs Execution 5233-50262\ 8059• 9.4 Reconstruction on Condemnation. 9.4.1 Reconstruction Obligation. Subject to the provisions of this Article 9, and to the extent practicable based upon the extent of the condemnation, each Owner shall be obligated to reconstruct the Improvements on its respective Parcel in the event of a condemnation if and to the same extent and same standard it would be required to reconstruct pursuant to Article 3 if the condemnation were a Casualty and the Award were insurance Proceeds. 9.4.2 Reconstruction Election. Notwithstanding the foregoing, in the event that an Owner is not required under this Article 9 to restore or rebuild the Improvements or any portion thereof on its respective Parcel not taken by eminent domain, then the provisions of Section 3.3 shall apply as if the condemnation were a Casualty and the Award were insurance Proceeds. Subject to the foregoing (including the provisions of Sections 3.3 incorporated herein by reference), if an Owner is not required to, and does not elect to, reconstruct in accordance with the standards set forth in Section 9.4.1 all or any portion of the Improvements on its respective Parcel, such Owner shall clear such Improvements or the affected portion thereof as provided in Section 3.5. Any Award shall be applied to the restoration or razing required pursuant to this Section 9.4. The provisions of this Section 9.4.2 shall survive the Termination Date. 9.5 Inverse Condemnation. Should any inverse condemnation result by reason of actions of a public authority, and a judgment of a competent court of jurisdiction shall so determine, then the rights of the Owners set forth in Sections 9.1 through 9.4, above, shall be the same as though condemnation had taken place. ARTICLE 10. ENFORCEMENT OF AGREEMENT; RIGHT TO CURE DEFAULT 10.1 Enforcement of Agreement. Every Owner harmed by a Default or violation of this Declaration shall have the right to enforce this Declaration against any other Owner that is in violation of, or Default under, this Declaration, and the harmed Owner may prosecute any appropriate proceedings at law or in equity against the violating or Defaulting Owner. The Owner may, in any such proceeding, obtain injunctive or other equitable relief requiring the violation or Defaulting Owner to observe or perform this Declaration or restraining violations and Defaults under this Declaration; recover damages on account of such violation or Default; secure, by way of specific performance or otherwise, the performance of any covenant, condition, easement or restriction in this Declaration; and/or obtain any other remedy provided for at law or in equity. 10.2 Right to Cure Default. If any Owner shall at any time fail or refuse to pay any obligation, or perform any work or furnish any services required on its part to be paid, performed, or furnished under this Declaration ("Default"), then and in such event any other Owner shall have the right to enter upon the Defaulting Owner's Parcel, pay such obligation, perform such work, or furnish such services on behalf, at the cost, and for the account of the -44- CIM HB CCRs Execution 5233-50262\8059 Defaulting Owner, as herein provided. 10.3 Enforcement Procedures. 10.3.1 Prior to the exercise of any rights by an Owner pursuant to the foregoing Section, a notice must be sent to the Defaulting Owner (and the holder of any mortgage or deed of trust on the Parcel of such Defaulting Owner if such holder shall have delivered to the non - Defaulting Owner or recorded in the Official Records a request for such notices) specifying the nature of the Default and notifying the Defaulting Owner of the other Owner's intention to exercise such rights. If the Default is not cured within thirty (30) days after such notice, and if no other Owner commences an appropriate judicial proceeding, the Owner may exercise its rights under the foregoing Section and shall send a statement or statements of the cost thereof to the Defaulting Owner. The amount of such costs shall immediately be due and payable, and shall bear interest. Such thirty (30) day period shall be extended if the Defaulting Owner has commenced within such thirty (30) day period reasonable efforts to cure such Default, and in that event, such thirty (30) day period shall be extended so long as such efforts are diligently pursued. 10.3.2 If the obligation, work, or service described in the foregoing Section must be performed at regular intervals, the Owner performing the same may send statements at such appropriate intervals as such Owner may desire, which shall be immediately due and payable, and shall bear interest. 10.3.3 If the amount thus stated is not paid within thirty (30) days after the rendering thereof, the Owner paying the obligation, performing the work, or furnishing the services as herein provided may, for the purpose of securing such claim, impose a lien upon the Defaulting Owner's Parcel (including Improvements thereon); provided, however, without limiting the other remedies available under Section 10.1, so long as the City or Agency owns the Parking Parcel, no lien shall be filed against the Parking Parcel. Such lien may be imposed by serving written notice upon such Defaulting Owner and its lender, if any, which shall contain a representation of compliance with the provisions of this Section, an explanation as to the nature of the particular obligation, the work or service involved, and the cost thereof, together with a description of the Defaulting Owner's property, and by duly recording a copy of said notice in the Official Records. No such lien shall exist until such notice is duly served and recorded as provided herein. 10.3.4 The priority of such lien shall be determined as of the date of filing the same in the Official Records; provided, however, any such lien shall nevertheless be subject and subordinate to the lien of any third -party first mortgage or trust deed now or hereafter affecting the Defaulting Owner's Parcel. Such lien shall continue until the obligation to pay such costs is fully discharged, but in no event longer than five years from the date of recordation, and may be foreclosed in accordance with the Applicable Laws pertaining to foreclosure of mortgages -45- CIM HB CCRs Execution 5233-50262\ 8059. without power of sale. 10.3.5 Such lien shall secure not only the amount stated in the aforesaid notice, but also the reasonable costs and expenses of enforcing the same, including interest and reasonable attorneys' fees. ARTICLE 11. MORTGAGEE PROTECTION 11.1 Right to Encumber. Subject to Section 12.2, any Owner shall have the right to encumber its interest in its respective Parcel by either mortgage or deed of trust provided such Mortgagee or deed of trust is subject to and subordinate to this Declaration. Each party hereto covenants and agrees to consider in good faith and, upon approval thereof (not to be unreasonably withheld) to execute and deliver such amendments to this Declaration as may be reasonably required by any Mortgagee proposing to extend financing secured by a Mortgage on any portion of Developer's Project so long as (i) such amendments modify provisions of this Declaration only as to the Hotel Parcel or Retail Parcel, (ii) such amendments do not adversely affect the rights and obligations of the other Owners hereunder and (iii) all costs and expenses related to the amendments are borne by the requesting Owner. The City Administrator may execute and deliver amendments satisfying the requirements of this Section on behalf of the City. 11.2 Default. Breach of any of the covenants, conditions, restrictions, or reservations contained in this Declaration shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to any Parcel or the Project Site, whether or not said mortgage or deed of trust is subordinated to this Declaration, but the terms, conditions, covenants, restrictions and reservations of this Declaration shall be binding and effective against the holder of such mortgage or deed of trust and any Owner of the Project Site, or any part thereof, whose title thereto is acquired by foreclosure, trustee's sale, or otherwise. ARTICLE 12. NO LIMIT ON POLICE POWERS; RELATIONSHIP TO OTHER DOCUMENTS 12.1 City's Exercise of Police Powers. Nothing contained in this Declaration shall be deemed to limit City's exercise of its police powers, including without limitation City's right to require Developer and Owners to comply with all requirements regarding review of plans and obtaining all permits, consents and approvals otherwise required for construction, alteration, repair or similar activities. 12.2 Relationship to Other Documents. Developer and other Owners are subject to other instruments conferring rights upon Agency or the City and/or obligations on Developer and/or the other Owners, including without limitation the Fifth Street Public Access Easement, the Maintenance License Agreement, the Operating Agreement, the DDA and the Agreement Containing Covenants Affecting Real Property. Nothing contained in this Declaration shall -46- CIM HB CCRs Execution 5233-50262\ 8059, excuse performance by a party to such other agreements or any obligation contained therein or modifies or authorize the modification of such other agreements. In the event this Declaration and any of such other agreements contain different standards of performance by a party, then the more stringent standard shall apply. Similarly, if any such other agreement contains a restriction applicable to an Owner, such as a restriction on transfer, then nothing in this Declaration shall limit such restriction. ARTICLE 13. PROPERTY OWNERS ASSOCIATION 13.1 General Duties and Powers. From and after the later to occur of (a) the 3D Parcelization, or (b) the formation of the Property Owners Association, the Property Owners Association, acting alone or through its Board, its officers or other duly authorized representatives or agents, shall act as Manager in accordance with the provisions of this Declaration, the Governing Instruments or Association Rules. From and after the formation of the Property Owners Association, all consent and approval rights held by an Owner shall be vested in the Member representing such Owner, unless such Owner has provided the Property Owners Association with an express written limitation on the authority of such Member. In addition to the duties and powers set forth in the foregoing instruments, and without limiting the generality thereof, but at all times subject to the limitations set forth in Section 13.2 below, the duties and powers of the Property Owners Association, acting alone or through its Board, its officers or other duly authorized representatives or agents shall include, but shall not be limited to, the following: 13.1.1 enforce the provisions of the Governing Instruments, and the Association Rules, and carry out the obligations of the Property Owners Association hereunder which includes without limitation, the maintenance, repair, replacement and management of all Common Area; 13.1.2 pay any real and personal property taxes and other assessments which are, or could become a lien on the Common Area; 13.1.3 prepare budgets and financial statements for the Property Owners Association as prescribed in the Bylaws; 13.1.4 initiate and execute disciplinary proceedings against Members for violations of provisions of the Governing Instruments, and the Association Rules in accordance with procedures set forth in such documents; 13.1.5 employ a manager or other persons (the "Property Manager") to perform all or any part of the duties and responsibilities of the Property Owners Association (provided no such employment shall violate the Operating Agreement). The Property Manager shall report to the Board. With the advice and counsel of the President and the Executive -47- CIM HB CCRs Execution 5233-50262\ 8059, Committee, he/she shall be responsible for the Property Owners Association's day-to-day operations, organization and staff. The Property Manager shall perform all duties as the Board may from time to time prescribe; 13.1.6 enter into contracts or leases for. goods and services for the Common Area or for the benefit of the Property Owners Association and its Members; 13.1.7 borrow money as may be needed in connection with the discharge by the. Property Owners Association of its powers and duties. In connection therewith, the Property Owners Association shall have the power to pledge the right to exercise its Assessment powers in connection with obtaining funds to exercise its Assessment powers in connection with obtaining funds to repay a debt of the Property Owners Association. Said power shall include, but not be limited to, the ability to make an assignment of Assessments which are then payable to or which will become payable to the Property Owners Association; which assignment may be then presently effective but shall allow said Assessments to continue to be paid to and used by the Property Owners Association as set forth in this Declaration, unless and until the Property Owners Association shall default on the repayment of the debt which is secured by said assignment. The Property Owners Association may levy Special Assessments against the Members on a pro-rata basis to obtain such funds, provided no Special Assessments may be levied against the Parking Parcel. Upon the failure of any Member to pay said Special Assessment when due, the Property Owners Association may exercise all its rights, including, without limitation, the right to foreclose its lien, pursuant to the terms of Article 11; 13.1.8 elect officers of the Property Owners Association; 13.1.9 fill vacancies on the Board except vacancies created by the removal of a director; 13.1.10 contract for casualty, liability and other insurance as necessary or desirable in furthering the purposes of an protecting the interest of the Property Owners Association and its Members including, but not limited to, hazard and liability insurance, fidelity bonds, and officers' and directors' liability insurance; and 13.1.11 to the extent permitted by law, delegate to committees, officers, employees or agents any of its duties and powers under the Governing Instruments, according to aw and as expressly provided in the Governing Instruments. 13.1.12 the Board shall apply the exercise of its rights and duties herein enumerated in an equitable and even-handed manner with respect to each of the Members (including the Developer). 13.2 General Limitations and Restrictions on the Powers of the Property -48- CIM HB CCRs Execution 5233-50262\8059,e Owners Association and Manager. In addition to the limitations and restrictions enumerated in the Articles and Bylaws or elsewhere provided for herein, and without limiting the generality thereof, the Property Owners Association and the Manager shall be prohibited from (i) taking any action that would unreasonably burden the Parking Parcel, or violate the terms of the Operating Agreement, the Maintenance and License Agreement or the DDA and the Agreement Containing Covenants Affecting Real Property, or (ii) the payment of compensation to directors or to officers of the Property Owners Association for services performed in the conduct of the Property Owners Association's business, provided, however, the Property Owners Association may cause a director or officer to be reimbursed for reasonable expenses incurred in carrying on the business of the Property Owners Association. 13.3 Association Rules. Subject to Section 13.2, the Board shall also have the power to adopt, amend, and repeal such rules and regulations as it deems reasonable (the "Association Rules") governing use of the Common Area which may include the establishment of a system of fines and penalties, all as provided in the Bylaws. The Association Rules shall govern such matters in furtherance of the purposes of the Property Owners Association, provided, however, that the Association Rules may not discriminate among Members, and shall not be inconsistent with the Governing Instruments. A copy of the Association Rules as they may from time to time be adopted, amended or repealed or a notice setting forth the adoption, amendment or repeal of specific portions of the Association Rules shall be delivered to each Member in the same manner established in this Declaration for the delivery of notices. Upon completion of the notice requirements, said Association Rules shall have the same force and effect as if they were set forth in and were part of this Declaration and shall be binding on the Members and their successors in interest whether or not actually received thereby. The Association Rules, as adopted, amended or repealed, shall be available at the principal office of the Property Owners Association to each Member and Mortgagee upon request. In the event of any conflict between any such Association Rules and any other provisions of the Governing Instruments, the provisions of the Association Rules shall be deemed to be superseded by the provisions of the Governing Instruments to the extent of any such conflict. 13.4 Membership. Every Owner shall be a Member. The terms and provisions set forth in this Declaration, which are binding upon all such Members, are not exclusive, as Members shall, in addition, be subject to the terms and provisions of the Articles, Bylaws and the Association Rules to the extent the provisions thereof are not in conflict with this Declaration. Membership shall be appurtenant to and may not be separated from the interest of such Owner in any Parcel, which shall be the sole qualification for membership. 13.5 Transfer. The membership held by any Owner shall not be transferred, pledged or alienated in any way, except that such membership shall automatically be transferred to the transferee of the interest in a Parcel of an Owner. Any attempt to make a prohibited transfer is void and will not be reflected upon the books and records of the Property Owners -49- CIM HB CCRs Execution 5233-50262\ 8059• Association. The Property Owners Association shall have the right to record the transfer upon the books of the Property Owners Association without any further action or consent by the transferring Owner. 13.6 Voting Rights. An Owner's right to vote shall vest immediately upon the date Assessments commence upon such Owner's Parcel, as provided in this Declaration, provided the Parking Parcel Owner's right to vote shall commence upon the later to occur of the formation of the Property Owners Association or the City's ownership of the Parking Parcel. All voting rights shall be subject to the restrictions and limitations provided herein and in the Articles, Bylaws and Association Rules. 13.7 Classes . of Voting Membership. The Property Owners Association shall have one (1) class of voting membership. The Hotel Parcel Owner shall have one vote, the Retail Parcel Owner shall have one vote, and the Parking Parcel Owner shall have one vote. The Master Parcel Owner shall not be deemed to hold any voting rights in the Property Owners Association other than voting rights held in its capacity as the Owner of any other Parcel within the Project. 13.8 Delegation of Voting Rights to Lessees. An Owner may delegate to the Lessee(s) of a premise(s) within said Owner's Parcel(s) the right to vote all or any portion of the votes attributable to said Parcel(s). Any such delegation shall be evidenced by proxy filed with the Secretary of the Property Owners Association in accordance with the provisions of the Bylaws. 13.9 Approval of Members. Unless elsewhere otherwise specifically provided in this Declaration, any provision of this Declaration which requires the vote or written assent of the voting power of the Property Owners Association or any class or classes of membership shall be deemed satisfied by the following: 13.9.1 The vote in person or by proxy of more than 50% of all of the votes which are entitled to be. cast by the entire membership of the Property Owners Association. Said vote shall be at a meeting duly called and noticed pursuant to the provisions of the Bylaws dealing with the annual or special meetings of the Members; or 13.9.2 Written consents signed by more than 50% of all of the votes which are entitled to be cast by the entire membership of the Property Owners Association. Said vote by written consent shall be solicited pursuant to the procedures provided in the Bylaws. 13.10 Alternative to Management By Property Owners Association. 13.10.1 Notwithstanding anything to the contrary set forth in this Article 13, Developer shall have the right, with the consent of the City and in lieu of the formation of the -50- CIM HB CCRs Execution 5233-5026218059� Property Owners Association, to assign its rights and obligations as Manager hereunder to any Condominium Association formed for all or any portion of Developer's Project. In such event, Developer shall deliver to the City and the other Owners a. written agreement executed on behalf of such Condominium Association (an "Assignment and Assumption Agreement") pursuant to which such Condominium Association expressly accepts such assignment and assumes such obligations from and after the effective date stated therein. Such Assignment and Assumption Agreement shall specifically provide that the City shall be a third party beneficiary thereof with the direct right to enforce the obligations of the Condominium Association as Manager hereunder (and as a corollary, to enforce the rights of the Condominium Association to collect assessments from its member/owners pursuant to the applicable Project Declaration as necessary to fund performance of such obligations). Thereafter, such Condominium Association shall be the Manager and all references herein to "Manager" shall be deemed to refer to the designated Condominium Association. Notwithstanding the formation of the Condominium Association and the assumption of Manager's obligations by such Condominium Association, with respect to the City and the Agency only, Developer and Developer's successors -in -interest to Developer's Interest in the Retail Parcel shall be obligated to perform any obligation of Manager hereunder to the extent not performed by such Condominium Association (and the parties to this Declaration authorize such performance), provided that each successive holder of Developer's Interest in the Retail Parcel shall be relieved of any liability for such performance upon the transfer of interest in the Retail Parcel, and any transferee of such interest shall be deemed to have assumed such obligation from and after the effective date of such transfer. 13.10.2 The Manager shall hold regular meetings of the Owners on at least a quarterly basis to submit matters requiring Owner Approval pursuant hereto to the Owners and to generally discuss maintenance of the Common Areas and other matters of concern to the Owners; provided that (a) Manager shall not be required to hold a quarterly meeting of the Owners if the Owners collectively agree in writing to waive the conduct of any such quarterly meeting and (b) any matter requiring Owner Approval may be submitted to the Owners and approved by the written consent of each of the Owners without requiring that a quarterly meeting be conducted for such purposes. Manager shall keep and distribute to the Owners detailed minutes of such Owner meetings and shall make copies of such meeting minutes available to the Owners upon prior written request. ARTICLE 14. TERM AND TERMINATION OF DECLARATION 14.1 Term. This Declaration shall be effective upon the Effective Date and shall continue for a term of ninety-nine (99) years, and shall thereafter be deemed to automatically renew for successive ten (10) year terms unless terminated by the Owners in accordance with Section 14.2 below. 14.2 Termination. This Declaration may be terminated by written instrument -51- CIM HB CCRs Execution 5233-50262\ 8059, executed and acknowledged by all Owners, such termination to be effective upon recordation in the Orange County's Recorder's Office. 14.3 Survival of Certain Provisions. Notwithstanding anything to the contrary contained in this Declaration, any termination of this Declaration shall not affect the survivability of those easements or obligations which are perpetual and appurtenant by the express terms of this Declaration or the accrued obligations of any Owner under an indemnity obligation. Subject to such survivability, upon termination of this Declaration, all rights, privileges, duties and obligations created and imposed by this Declaration shall terminate and be of no further force or effect; provided, however, that the termination of this Declaration shall not limit or affect any remedy at law or in equity of any Owner against any other Owner with respect to any liability or obligation arising or to be performed under this Declaration prior to the date of such termination. The termination of this Declaration shall not terminate or limit any other agreement pertaining to the Project. ARTICLE 15. OPERATING AGREEMENT The parties anticipate that the Operating Agreement relating to the operation of the Parking Structure will be executed by the City and CIM/Huntington, LLC. Upon the execution of such Operating Agreement, any provisions of such Operating Agreement that conflict with the provisions of this Agreement shall control over such conflicting provisions of this Agreement. ARTICLE 16 GENERAL 16.1 Notices to Parties. All approvals, notices or other communications required or permitted hereunder to be given to any Owner shall be in writing, and shall be personally delivered or delivered by overnight commercial carrier or sent by registered or certified mail, postage prepaid, return receipt requested, or sent by Fax machine, email or other method of electronic transmission capable of providing confirmation of transmission and receipt, provided that a hard copy of the notice is delivered or mailed in the manner set forth above no later than one.business day after transmission by thereof. Notice shall be deemed effective upon the earlier of (i) if personally delivered, the date of delivery to the address of the Person set forth below; or (ii) if delivered by overnight commercial carrier, on the date of delivery, as shown on the carrier's delivery receipt; (iii) if mailed, on the date of delivery as shown by the sender's registry or certification receipt; or (iv) if by fax, email or other electronic transmission, when confirmation of complete transmission and receipt is received by the transmitting Person, provided such confirmation is received on or before 5:00 p.m. (Pacific Time) on a business day; if such confirmation is received after 5:00 p.m. (Pacific Time) on a business day or at any time on a nonbusiness day, notice will be deemed given on the next business day. For purposes of this -52- CIM HB CCRs Execution 5233-50262\ 80594 Section 16.1, a business day is Monday through Friday, excluding holidays observed by the United States Postal Service. Developer: 6922 Hollywood Blvd., Suite 900 Los Angeles, CA 90028 Attention: General Counsel email: generalcounsel@cimgroup.com Fax: (310) 496-2887 City: City Administrator City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Fax: (714) 536-5233 Agency: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Executive Director Fax: (714) 536-5233 Cracchiolo: c/o-Salvator W. Cracchiolo 1304 Pacific Coast Highway Huntington Beach, CA 92648 Upon any further conveyance of Developer's Interest in the Hotel Parcel or Retail Parcel (other than conveyances of individual condominium interests therein), the transferor thereof shall provide the City and the Agency with the name, address and other contact information of the transferee for notice purposes in accordance with this Section 16.1. 16.2 Delay Not Waiver. Any delay by any party hereto in enforcing any right or remedy shall not waive, affect, diminish, suspend or exhaust any such right or remedy. No act or omission, or series of acts or omissions, by any party as to any failure of any other party to fully perform this Declaration shall be deemed to be a waiver by any Owner of the right at all times thereafter to insist upon full and complete performance in accordance with this Declaration. 16.3 Modifications Only by Writing. None of the provisions of this Declaration shall be waived except by a written instrument executed by the Owner(s) involved. Any amendment or modification to this Declaration shall require a writing executed by all of the then Owners. To the extent Section 1.64 (d) applies to any interest in a Parcel in which Cracchiolo is an Owner, -53- CIM HB CCRs Execution 5233-50262\80594 then Cracchiolo's consent shall be required for any amendment that would adversely affect Cracchiolo. 16.4 Construction of Language of Agreement. This Declaration shall be construed according to its fair meaning, and not strictly for or against any Owner. 16.5 Estoppel Certificate. Each Owner shall, upon written request from any other Owner, which request shall quote this Section, execute and deliver to the requesting Owner a written statement certifying, to its actual knowledge, (a) whether or not this Declaration (including the insurance requirements set forth in the Insurance Schedule attached hereto) has been modified (or, if there have been modifications, stating those modifications), (b) whether or not this Declaration is in full force and effect, and (c) whether or not any Owner has failed to perform an obligation under this Declaration, and if so, the nature of the failure. If the estoppel requested includes more information than the items specified in the preceding sentence, then the requesting party shall pay the reasonable out-of-pocket expenses of the Owner(s) executing such estoppel. No Owner shall be obligated to respond to a request to execute a statement that attempts to modify any of the terms or conditions of this Declaration. A statement executed by any Owner may be relied upon by an Owner or any transferee, Mortgagee, or encumbrancer to which such statement is addressed so as to estop the party executing the statement from asserting the contrary, but the Owner executing the statement shall not be liable for any erroneous information contained therein. Such certificate may provide that in the event of a conflict between the provisions of this Declaration and the provision of the certificate, the provisions of this Declaration shall control. A statement hereunder may be requested by any Owner from any other Owner at any time and from time to time. The delivery of any such statement may be conditioned upon the execution of the statement by the other party to this Declaration to evidence its concurrence with the facts set forth in the statement. 16.6 Owners' Obligations. Whenever in this Declaration a provision requires that a certain performance be made by an Owner, (a) such party may satisfy its obligation either by performing its obligation directly or by causing such actions to be performed; and (b) such performance shall be deemed to be at the cost of the obligated Owner (subject to any agreements it may have with other persons), and at no cost or expense to any other Owner, unless a provision for reimbursement is provided for specifically. 16.7 Approvals not to be Unreasonably Withheld. Unless otherwise provided, whenever in this Declaration any Owner has the right to approve or consent to a matter presented by another Owner, such approval or consent shall not be unreasonably withheld or delayed. Each party shall use commercially reasonable efforts to respond to any request for approval within the number of days provided for such response in this Declaration or, if no response time is set forth within thirty (30) days after receipt of the request. In the event that any Owner (other than the City) shall fail to approve or disapprove any such matter within thirty day period (or -54- CIM HB CCRs Execution 5233-50262\ 8059, such shorter period as may be stated in the request for consent or approval but only to the extent reasonable under the circumstances), such Owner shall be deemed to have approved or given its consent. Notwithstanding the foregoing, the City shall not be deemed to have approved or consented to any matter in its capacity as Parking Parcel Owner unless (i) any request for approval states at the top center of the front page of such request in at least 16 point, capitalized, bolded font that "FAILURE TO ACT UNDER THIS REQUEST WITHIN THIRTY (30) DAYS FROM THE DATE OF THE CITY'S RECEIPT OF THIS REQUEST MAY IMPACT THE CITY'S RIGHTS, RESPONSIBLITIES OR OBLIGATIONS UNDER THAT CERTAIN DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENT AGREEMENT DATED AS OF , 2008" and 00 the City fails to respond to the request for approval or consent (with either approval, disapproval or request for further information, review or conditions to approval) within thirty (30) days after receipt thereof. The foregoing shall not limit the exercise of the authority of the Agency or City under the City Charter, California Constitution and the laws of the State of California. Except as otherwise expressly provided in this Declaration, so long as the City is the Parking Parcel Owner, any approval or consent required of the Parking Parcel Owner shall be deemed granted by the written approval of the City Administrator or his or her designee. Notwithstanding the foregoing, the City Administrator or his or her designee may, in his or her sole discretion., refer to the City Council any item requiring Parking Parcel Owner consent or approval; otherwise, Parking Parcel Owner approval or consent shall mean and refer to written approval or consent by the City Administrator or his or her designee. 16.8 Entire Agreement. This Declaration reflects, supersedes and merges all of the prior agreements and negotiations of the parties hereto with respect to its subject matter and contains their entire agreement. However, it does not modify, supersede, merge or limit the obligations under other written agreements referred to herein or in any lease, including without limitation, the DDA, the Maintenance License Agreement, the Operating Agreement and the Agreement Containing Covenants Affecting Real Property, or the Cracchiolo Ground Lease or any other agreement between Cracchiolo and Developer. 16.9 Time of Essence; Extensions. Time is of the essence in this Declaration, although any period of time herein may be extended in the event the benefited Owner so agrees in writing. 16:10 Other Documents. Each Owner shall furnish to any other Owner, upon request, such other documents as may be reasonably required in order to carry out the provisions of this Declaration. -55- CIM HB CCRs Execution 5233-50262\80594 16.10 Exhibits. The Exhibits herein referred to are attached and made a part hereof as if fully set forth herein. 16.12 No Termination Upon Default. No Default under this Declaration shall entitle any Owner to terminate this Declaration, but such limitation shall not affect, in any manner, any other right or remedy which any Owner may have hereunder by reason of such Default. 16.13 Captions. The captions of Articles and Sections of this Declaration, and the Table of Contents and Table of Exhibits, are for convenience only, and do not limit or amplify the covenants and conditions of this Declaration. 16.14 No Partnership. Nothing in this Declaration shall be construed to make any Owner, partners or joint venturers or render any Owner liable for the debts or obligations of any other Owner. 16.15 Interest. Any amount owing from one party to the other pursuant to this Declaration which is stated to be paid with interest shall bear interest at the Default Rate. 16.16 Force Maieure. For the purposes of any of the provisions of this Declaration, no party nor any successors in interest, shall be considered in breach of, or default in, its obligations under this Agreement (excepting therefrom obligations to pay money) as a result of the enforced delay in the performance of such obligations due to causes beyond its reasonable control and without its fault or negligence, including failure of governmental agencies to act or to issue necessary permits or licenses, acts of God, acts of the public enemy, acts of the Federal Government, acts of the other party (including but not limited to delays in performing such other party's obligation pursuant to this Declaration), fires, floods, epidemics, quarantine restrictions, strikes, labor disputes, freight embargoes, inability to obtain materials or supplies or unusually severe weather or delays of contractors or subcontractors due to such causes; it being the purpose and intent of this provision that in the event of the occurrence of any such enforced delay, the time or times for performance of the obligations of the parties, shall be extended for the period of the enforced delay. Provided that the party seeking the benefit of the provisions of this Section shall promptly notify the other party in writing of such enforced delay and of the causes thereof, the extension of time for performance shall run from ten (10) days prior to the date on which such notice is given, but in no event earlier than the date of commencement of the cause. Financial inability shall not extend the time or performance, or excuse non-performance or untimely performance, of any obligation under this Declaration. 16.17 Counterparts. This Declaration may be executed in any number of counterparts, each of which, when executed and delivered shall be deemed an original, but such counterparts shall together constitute one and the same instrument. -56- CIM HB CCRs Execution 5233-50262180594 16.18 Mediation of Disputes; Governing Law. (a) In the event of any dispute among the parties hereto arising hereunder, the party desiring to resolve the dispute shall first request that the dispute be mediated. The requested mediation shall take place in Los Angeles County, California, within 20 business days after written notification to the other party. The mediator shall be selected by JAMS/Endispute (or any successor organization thereto), and shall be a neutral, retired judge. Each party shall bear all of its own legal fees, costs and expenses of mediation and one-half of the costs of the mediator. .(b) Notwithstanding any legal decision to the contrary, any communications, written or oral, including but not limited to statements made and evidence introduced, during the course of any mediation conducted pursuant to this Section 16.18 shall be conclusively deemed to constitute privileged and confidential settlement discussions made in the course of mediation and shall not be admissible in any subsequent arbitration or litigation. (c) This Declaration shall be governed by and construed in accordance with the laws of the State of California. No conflicts of law rules of any state or country (including, without limitation, California conflicts of law rules) shall be applied to result in the application of any substantive or procedural laws of any state or country other than California. All controversies, claims, actions or causes of action arising between the parties hereto and/or their respective successors and assigns shall be brought, heard and adjudicated by the courts of the State of California, with venue in Orange County. Each of the parties hereto hereby consents to personal jurisdiction by the courts of the State of California in connection with any such controversy, claim, action or cause of action, and each of the parties hereto consents to service of process by any means authorized by California law and consent to the enforcement of any judgment so obtained in the courts of the State of California on the same terms and conditions as if such controversy, claim, action or cause of action had been originally heard and adjudicated to a final judgment in such courts. Each of the parties hereto further acknowledges that the laws and courts of California were freely and voluntarily chosen to govern this Declaration and to adjudicate any claims or disputes hereunder. 16.19 Severability. Every provision of this Declaration is intended to be severable. If any term or provision hereof is illegal, invalid or in conflict with any existing or future Applicable Law or the purpose of this Declaration, for any reason whatsoever, such term or provision shall be ineffectual and void, and the validity of the remainder of this Declaration shall not be affected thereby. 16.20 Rights Cumulative. Each and all of the rights, powers, options and remedies of an Owner contained herein shall be cumulative and not exclusive. -57- CIM HB CCRs Execution 5233-50262t80594 16.21 Successors and Assigns. Subject to the prohibitions herein on assignment or transfer, each of the covenants and conditions hereof shall inure to the benefit of and shall bind (as the case may be) each of the successors and assigns of the respective parties hereto, and any reference herein to Manager or any Owner shall include their respective successors and assigns. 16.22 Covenants Running. All of the agreements of this Declaration shall be covenants running with the land, burdening and benefiting each Owner's respective interests. 16.23 Nonrecourse to Cracchiolo. Notwithstanding any other provision of this Declaration, any and all obligation of Cracchiolo as an Owner hereunder shall be limited to Cracchiolo's interest in the Project Site (including insurance and condemnation proceeds), and in no event shall any assets of Cracchiolo be subject to recourse beyond such interest in the Project Site. 16.24 Nondiscrimination. Each Owner and its respective successors and assigns shall refrain from restricting the rental, sale or lease of its Parcel or the Improvements thereon, or any portion thereof, on the basis of sex, sexual orientation, marital status, race, color, creed, religion, ancestry or national origin of any person. All deeds, leases or contracts pertaining to any Parcel or the Improvements thereon, or any portion thereof, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." (b) 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, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises -58- CIM HB CCRs Execution 5233-50262\80594 herein leased nor shall the 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 segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through 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 tenants, lessees, sublessees, subtenants, or vendees of the land." 16.25 Authority of City Administrator to Act for Parking Parcel Owner. So long as the City is the Parking Parcel Owner, except as otherwise expressly provided in this Declaration, any consent, approval or other instrument described in this Declaration may be granted, given or executed by the City Administrator or designee on behalf of the Parking Parcel Owner and the City Administrator or designee shall be authorized to take any other action on behalf of the Parking Parcel Owner without the need for further authorization from the City Council; provided, however that, notwithstanding the foregoing, the City Administrator or designee may, in his or her sole discretion, refer to the City Council any item for which the City Administrator or designee has authority to act hereunder. 16.26 Authority of Agency Executive Director to Act for Agency. Except as otherwise expressly provided in this Declaration, any consent, approval or other instrument described in this Declaration may be granted, given or executed by the Agency Executive Director or designee on behalf of the Agency and the Agency Executive Director or designee shall be authorized to take any other action on behalf of the Agency without the need for further authorization from the Agency; provided, however that, notwithstanding the foregoing, the Agency Executive Director or designee may, in his or her sole discretion, refer to the Agency any item for which the Agency Executive Director or designee has authority to act hereunder. [remainder of page left intentionally blank] -59- C1M HB CCRs Execution 5233-50262\80594 [signatures on following pages] CIM HB CCRs Execution 5233-50262\80594 IN WITNESS WHEREOF, the parties hereto have executed this Declaration as of the date first written above. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public bod, ATTEST: B: , 5 e, , /w. Agency Secret PROVED AS TO FORM: y: _ L—� Agency GenQu sel l/'�i ��Zl,�� APPROVF$S TO FORM: In Kane 13—aff0er 84 Berkman Special Counsel INITIATED AND APPROVED: By: K�� Deputy ecutive Director C1M HB CCRs Execution CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California / I= Administrator ATTEST: B City Clerk ��PPROVED AS TO FORM: By: D y City Attorney INITIATED AND APPROVED: By: Director Public Works 5233-50262\ 8W CALIFORNIAALL-PURPOSE O State of California County of ,,?� i On Z Z -2 ' fore me, Date '} Here Insert Name and Title of the Officer personally appeared i� (.C//D&) fiyU/) L Name(s) of Siqner(s) Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the persoro whose nam(tn)464ge>ubscribed to the within instrument and acknowledged to me that qjEeV)executed the same in --Ns heir authorized capaci es and that by hislhe their signatureo on the instrument the persoros , or the entity upon behalf of which the persoQ (s acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS7�aan offici 6al.Signature` ' 'Signat re of OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to anoth document. Description of Attached Documentf/�'J Title or Type of Document Date: // - _- Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) i'm Number of Pages: Signer's Name: � %G ��(�� Signer's Name: \'�Z-_ADA70 ❑ Individual ❑ Individual Corporate Officer — Title(s): - Cl u - Lf L-- 06orporate Officer — Title(s): � ❑ Partner — ❑ Limited ❑ General ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact • C Attorney in Fact • ❑ Trustee ❑ Guardian or Conservator ❑ Other: Is Representing: Top of thumb here ❑ Trustee ❑ Guardian or Conservator Other: Is Representing Top of thumb here ©2007 National Notary Association • 9350 De Soto Ave.. P.O. Box 2402 •Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT c��;?�5,�.--�.'��.''\'.. t�t�,.c�.'.�.-�.tr<ti c;:�t�4;�; �i,.-s�.'c�cT.�e S N,.c�.'t�Na�<�c%-�..�,--�.'e,?,S • erq;�.;zS�c ci,.-�.'e!�i�t c�.-�.'�i�; • egg;'\<���g�:t State of California before me, personally appeared /A_ &2� �- � L _ Name(s) of Signer(s) a P. L. ESPARZA Commission # 1599179 Notary PubNc - Califomia Orange County - emy Comm. Expires Aug 4, 2009 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the persoro whose namq's re ubscribed to the within instrument and acknowledged to me that _1;e/s he xecuted the same in -#fis#ier ei authorized capacity and that by hisfher eir ignature s pn the instrument the persor(n or the entity upon behalf of which the persorZsDacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS m ha a d offic se0+1.17 Signature Signature of Notary Pu OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document `l and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document 0/A) — ���iJ�rr�.c� — � / Title or Type of .0 7- o F- SEC/ PnoC�z- e Document Date: // ~ 3 - ,2?OG2f Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: f,JlLSd1J Signer's Name: ❑ Individual ��`�}} ❑ Individual Corporate Officer — Title(s)a✓1Zy 'jJ itlLlh�L LP4<®rporate Officer — Title(s):. 7-1 ❑ Partner — ❑ Limited ❑ General _ ❑ Partner — ❑ Limited ❑ General _ ❑ Attorney in Fact NEL61agleumm ❑ Attorney in Fact - • ❑ Trustee Top of thumb here ❑ Trustee Top of thumb here ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: ❑ Other: Sipper Is Representing: Si er Is Representing: F 'r aT ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationaiNotary.org Item #5907 Reorder: Call Toll -Free 1-800-876-6827 "Developer" CIM/Huntington, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L. P., sole member, By: CIM Urban Fund, GP, LLC, its general partner C Date: 11/25/08 BY: Name: Nicholas V. Morosoff Title: Secretary Date: 11/25/08 By: -AX Name: Sha uba Title: ice rest ent "Cracchiolo" � /I 1 � W Salvator W. Cracchiolo, trustee for the Declaration of Trust dated June 12, 1979 I 9 1 7 C® Dolores 1, racchiolo, trustee for the Decl ion Trus e une 12, 1979 arbara F. racc iolo, trustee o the Cracchiolo Family Trust dated M rch 28, 20 Salvator W. Cracc io o, trustee of the Cracchiolo Family Trust dated March 28, 2003 -62- CIM HB CCRs Execution 5233-50262\805� ACKNOWLEDGEMENTS State of California County of On A)dj12Cm.6LX `Z3 _�Z� , before me, c cP) _Iiozd6- TjV% , a Notary public, personally appeared 5,4ZJ1,f 1'P9 LQ•I_ AWec, klpl..O , who proved to me on the basis of satisfactory evidence to be the person(g) whose name(*' Ware- subscribed to the within instrument and acknowledged to me that he/she/ -they executed the same in his/her heir authorized capacity(ies), and that by his/herfthe'sr signature(s) on the instrument the person(s), or the entity upon behalf of which the personks) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand 1d official se Signature _ (Seal) \ State of California County ofL,,S JUDILOWENTH4 9 ' COMM. #1715906 z Notary Public California A Orange County My Comm. Expires Jan. 25, 2011 O»yl��'pzgh r ���r : before me, ,Q /�i S-� (C �J�- .1 , a Notary public, perso ally appeared i , wh roved to me on the basis of satisfactory evidence to be the person whose nameKs/subscribed to thewithin instrument and acknowledged to me tha sJ+�e/th/y executedme in f /tt it authorized capacity(i ), and that by�/h�the' signature( on the instrument the personv, or the entity upon beh f of which the perso acted, execute the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signatur (Seal) DENISE DEL REY Commission # 1548472 Notary Public - Colifornia Los Angeles County My Comm. Expires Jan 29, 2009 5233-50262\ 805943.8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT �:�.v!y>. � y �'a>.rc�Ss�>'!s�S .�5�.-'�`..�S;c�.;'�� 5�.'1'>!�:� g�.�.'SS.-�.'�.%•-�.'.�ac S S�..�.'.�,.,c�.'.;�.;:��.�..-�.'S::�. S'aC.���..-�_':!a�...:;c�.;'�C��.'a; State of California County of LDS On/i&r . t �before me, 0­—`0 0_e 1%644 A_JJ4 Date Here lnsCrVYame and Title of the Offic r personally appeared rZ;Z__t DENISDEL REY Z�Comlmlssloun # 1548472 i 0,yNotor Public - Colifomlo Los AngelesCounty Comm. Expires Jon 29, 2009 Place Notary Seal Above Name(s) who proved to me on the basis of satis actory evidence to be the person whose name Ve subscribed to the in instrument and acknowledged to me that e h&thy executed the same i i r/t it authorized capacity i, and that b i h�F/ r signature�'f on the instrumen the person(( , or the entity upon behalf of which the person (,a'f a led, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signat Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual Corporate Officer — Title(s): Partner — ❑ Limited ❑ General iJ Attorney in Fact • C Trustee Top of thumb here ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: Signer's Name: O Individual O Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General G Attorney in Fact ❑ Trustee ❑ Guardian or Conservator Other: Signer Is Representing: 'RIGHT THUMBPRINT' OF SIGNER:,%. •. :v 'er'tiei. 'rr�'�`,rr. -.r'�i•v �y -ei� "� �G�4� �'`U"'�S-y ".•i.".r:"e76�.�<v `� �i-✓LMN✓.ti'"er4':r�.'✓� �6�✓'�U. �.�✓ "�. ✓ �✓,-• O 1. . �• •• 1 1 �•. -r �• :.. ACKNOWLEDGEMENTS State of California County of Ux-4.06 E O► -3 before me, Sri ���1TiVlflL a Notary public, personal y ap ep ared-7yLaigg!S t, al o L ® , who proved to me on the basis of satisfactory evidence to be the person(,6) whose name(9) is/we subscribed to the within instrument and acknowledged to me that he/she/tlwy executed the same in kis ber/tkoir authorized capacity(ies), and that by his/her/their signature(g) on the instrument the person(sf, or the entity upon behalf of which the person(sl acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand a d official seal. Signature (Seal) JUDILOWENTHAL COMM. #1715906 z r�-.; Notary Public California o z �'.. Orange County My Comm. Expires Jan. 25, 2011 1 State of California County of (J%2i?6E On /yol j � ®23: 2.� ,before me, � � i L z, EZ) %'AV!%` , a Notary public, personally appeared 14 �.t'2i9 ��w. ,e //,, g, , who proved to me on the basis of satisfactory evidence to be the person( whose name* is/are subscribed to the within instrument and acknowledged to me that he/she/thee executed the same in hiis/her/the4 authorized capacity(ie5), and that by his/her/their signature(6) on the instrument the person(4), or the entity upon behalf of which the personfA acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand a9d official se JUDI LOWENTHAL d Signature (Seal)' COMM. #1715906 z o _[ 1, �.,, Notary Public California o z \; «. '' Orange County k«> My Comm. Expires Jan. 25, 2011 5233-50262\805943.8 EXHIBIT "A" All that real property in the City of Huntington Beach, County of Orange, State of California described as follows: Being Lot 1 of Tract No. 16406 in Book 870, Pages 47 through 50, Inclusive of Miscellaneous Maps, Records of Orange County, California. Exhibit "A," page SHEET 4 OF 4 EASEMENT NOTE: TFRACT N O 16406 (ALL OF TENTATIVE TRACT NO. 10400) ® FORR DRmaNNA4DE E,SU�Rt�RY. PEDESTRIA 4 PN0 vEHIcULM e N THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA NUMBER OF LOTS: 1 PURPOM DEDICATEO TO THE PUBLIC HEREON. FOR CONDOMINIUM PURPOSES AREA ; 2.m ACRES GROSS DATE OF SURVEY: MARCH 2O03 - MICHAEL SIMON. P.L.S. 6034 TAIT Ct ASSOCIATES. INC. 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Rmi W M CKTKVS lE RN Q EXHIBIT A-1 LEGAL DESCRIPTION OF PARKING PARCEL [behind this page] EXHIBIT "A-1" LEGAL DESCRIPTION - PARKING PARCEL PARCEL1- THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41'37'10" EAST 124.55 FEET; THENCE, NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET TO THE POINT OF BEGINNING; THENCE, ALONG THE FOLLOWING 10 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 °38'08" EAST, 148.50 FEET; 3- SOUTH 48°21'52" EAST, 77.00 FEET; 4- SOUTH 64'55'17" EAST, 19.30 FEET; 5- SOUTH 48'21'52" EAST, 30.00 FEET; 6- NORTH 41 '38'08" EAST 182.00 FEET; 7- SOUTH 48°21'52" EAST 275.00 FEET; 8- SOUTH 41'38"08" WEST 211.58 FEET; 9- NORTH 48'21'52" WEST 63.67 FEET; 10- SOUTH 41 °38'08" WEST 124.42 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE ELEVATION 25.66 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW ELEVATION 9.00 FEET (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 2.37 ACRES (103,331 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. MICHAEL SIMO P.L.S. 6034 REGISTRATION EXPIRES 6130109 4,108 ATE � Exp. 6/30/09 No. 6034 \CFCAL� SHEET EXHIBIT "A-1TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 1 O F 4, 155 STH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 HUNTINGTON BEACH, CA I TEL. (714) 560-8200 EXHIBIT "A-1 "" LEGAL DESCRIPTION - PARKING PARCEL PARCEL 2: THAT PORTION OF LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF A LINE PARALLEL WITH AND DISTANT 2.83 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE SOUTHWESTERLY LINE OF SAID LOT 1 WITH THAT CERTAIN COURSE ALONG THE SOUTHEASTERLY BOUNDARY OF SAID LOT 1, SAID COURSE BEING SHOWN AS NORTH 41'37'10" EAST 124.55 FEET; THENCE, NORTH 48'21'52" WEST, ALONG SAID PARALLEL LINE, 4.70 FEET; THENCE, ALONG THE FOLLOWING 14 COURSES AND DISTANCES: 1- NORTH 48°21'52" WEST, ALONG SAID PARALLEL LINE, 336.83 FEET; 2- NORTH 41 '38'08" EAST, 148.50 FEET TO THE POINT OF BEGINNING; 3- NORTH 48°21'52" WEST, 15.93 FEET TO A POINT OF THE NORTHWESTERLY LINE OF SAID LOT 1; 4- NORTH 41 *37'11" EAST, ALONG SAID NORTHWESTERLY LINE, 40.75 FEET; 5- SOUTH 48°21'52" EAST, 15.93 FEET; 6- NORTH 41'38'08" EAST, 2.00 FEET; 7- SOUTH 48°21'52" EAST, 43.83 FEET; 8- SOUTH 59°00'03" EAST, 52.82 FEET; 9- SOUTH 77*09'19" EAST, 21.11 FEET; 10- SOUTH 48°21'25" EAST, 11.25 FEET; 11- SOUTH 41°38'08" WEST, 57.17 FEET; 12- NORTH 48'21'52" WEST, 30.00 FEET; 13- NORTH 64*55'17" WEST, 19.30 FEET; 14- NORTH 48°21'52" WEST, 77.00 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING ABOVE AND BETWEEN AN ELEVATION OF 38.79 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 26.33 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING BELOW AND BETWEEN AN ELEVATION OF 30.46 FEET ON THE NORTHWESTERLY LINE OF SAID PARCEL 2 AND AN ELEVATION OF 18.00 FEET ON THE SOUTHEASTERLY LINE OF SAID PARCEL 2 (NAVD 88). ALSO EXCEPTING THEREFROM THAT PORTION INDICATED AS "COMPONENTS" AS DEFINED IN ARTICLE 1.18 OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND GRANT OF RECIPROCAL EASEMENTS. CONTAINING AN AREA OF 0.15 ACRES (6,550 SQUARE FEET) MORE OR LESS. ALSO SHOWN ON SHEET 3 ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF MICHAEL SIMOR P. .S. 6034 REGISTRATION EXPIRES 6/30/09 Ilzi4y �7,q DATE �o Ir�No s� Exp. 6/30/09 �* No. 6034 ke F���\� OF CAS - SHEET EXHIBIT "A-1" TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 2 O F 4 155 STH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 HUNTINGTON BEACH, CA TEL. (714) 560-8200 51XIN JI NW'LY LINE LOT 1 TRACT o N0. 16406 PER RI N41'37'11"E 40.50' N48'21'52"W WILY LINE PARCEL 2 58' 2::83' `P.O:B. 1'ARCEL 2 Q. C v,,ri O•c4.. fq 00 NE'.LY R'%W,.,0NE­ M. a N'LY LIMIT OF ao )� PACIFIC _COAST HaA+Y d N j INGRESS —EGRESS '.-~ R,i PER z= RAMP _ i ".: w w 19,0' SE'LY LINE PARCEL 2 to - _.. ,548'21'S�'E .0 O coo 36.00'.• :J... U ^ ' J U z �, iyTE zte(R SIDE.,OF; ' N•41'30 08.7 1$2.00' a _ PARKWC ,"STR(UC•TUR1' U v VvALi,-"�TYP) : a ' INTERI.4�R sibE- 6F: ' Q rM) oMq. �A��o�L 1' `PARKIN�`G STRU.CiUREQf a M `WAU (TYP) 0 a POR. LOT 1 0 TRACT NO. 1 6406 ' . I� W N� N M.M. 870/47-50 w z_ m �, > J z j N... NOTES:, oz Z PA L •r: W .. ,0MITs'OF.d1PPEFt LEVEL F4V, 25 6$ NAV4 881. o Ut cn (CLEARXNC A� EYA' IN..i7FPEFt LtrVEL, PARKING PARCH) � o Q LIMITS QF`LOVtR LEV%,t, EV!6.Q0 (NAVO. 8$) :. N 0NI$HED,FtOQR'ELE16A11--ON 06'THE•iOWER LEVEL,:PARKING,IYARCEL)F— t., 10 PARCEL 2,,z WiTS,Of UPPER: ELEV= 38-:i9',:ON THt NVVLY -LINE OF PARCEL 2 -& w _.i �6.33' Q9 THESE I Y L1NIf Of'PARCEL. 2(NAVp $$)�' Q 58' .2.83:-, (STREET T0'RAMP C1EARA4CE.fLEVAT10N) J 1' LIM11S OF L09R CCEY='30;46' ON THENW=Y LINE OF PARCEL..3 &. W P.i3.8,. PARCEL1 .-t8.Q0`'ON• fiHE-SE'LY"LINE OF. PARCEL ,2(NAvD 8aj" z L1 (3TREEt TO RAMP FINISHED' SURfAfJ'ELE-VATION) . S41`3$'08';W 1"24sF2' 0 t 24.55'(Ri) INTEWOR• "SIDE OF 3 P/1RK1N .STRIfCT.URE. N 41 '37' 10"E yµgL{ . (TYI7) P.O.C. PARCEL i o: 30' AND PARCEL 2 MOST, SE'LY LINE LOT .t Tf ACT NO. t6406 PER R1 V z 54.1'`3$ 08",W 211.58' — ALLEYJ� N 0 30 60 120 (IN FEET) NOTE SEE SHEET 4 OF 4 FOR LINE TABLE DATA, LEGEND, BASIS OF BEARINGS, BENCHMARK INFORMATION AND 1 inch = 60 ft. SURVEYOR'S NOTES SHEET EXHIBIT "A-1" T'AIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 3 ®F 4, 155 5TH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 HUNTINGTON BEACH, CA TEL. (714) 560-8200 LEGEND: P.O.B. - POINT OF BEGINNING P_O.C. - POINT OF COMMENCEMENT (Ri) - RECORD DATA PER TRACT NO. 16406 M.M. 870/47-50 - PARKING PARCEL DESCRIBED IN EXHIBIT "A-1" PARCEL 1 - PARKING PARCEL DESCRIBED IN EXHIBIT "A-1" PARCEL 2 BASIS OF BEARINGS: ------- BOUNDARY LOT 1 TRACT NO. 16406 M.M. 870/47-50 - INTERIOR SIDE OF PARKING PARCEL WALL BEARINGS HEREON ARE BASED ON THE BEARINGS BETWEEN O.C.S. HORIZONTAL CONTROL STATION GPS 5019 AND STATION GPS 5034R1 BEING NORTH 33'33'25" WEST PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR. BENCHMARK: BENCHMARK ID: STANDARD 1-RM2 DESCRIBED BY OCS 2002: FOUND 3 3/4" OCS ALUMINUM BENCHMARK STAMPED "STANDARD- I -RM2" SET IN AN ORANGE COUNTY SURVEYOR WELL MONUMENT. MONUMENT IS LOCATED IN THE SOUTHWEST CORNER OF THE INTERSECTION OF PACIFIC COAST HIGHWAY AND 12TH STREET, 27 FT. NORTHEASTERLY OF THE BIKE PATH ALONG THE BLUFF AND 66.3 FT. SOUTHWEST OF THE CENTERLINE OF THE SOUTHBOUND LANES ALONG PCH 6.6 FT. SOUTHEAST OF THE PROLONGATION OF THE CENTERLINE OF 12TH STREET, MONUMENT IS SET 1.0 FT. BELOW GROUND SURFACE. ELEVATION: 30.817 FEET (NAVD 88, 1995 ADJUSTMENT) SURVEYOR'S NOTES: 1. THE EXHIBITS GENERATED HEREIN ARE FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR- 2- A CONCRETE WALL THICKNESS OF 1 FOOT (12 INCHES) WAS USED ALONG THE ENTIRE PERIMETER OF THE SUBTERRANEAN PARKING STRUCTURE, AND MAY VARY. 3. THE LIMITS OF THE UPPER AND LOWER LEVEL ELEVATIONS SHOWN HEREIN WERE TAKEN FROM THE APPROVED RECORD PLANS FOR THE SUBTERRANEAN PARKING STRUCTURE PROVIDED TO THE SURVEYOR. LINE TABLE DATA LINE BEARING DISTANCE Ll N48'21'52"W 4.70' L2 S48'21'52"E 43-83' L3 S59'00'03"E 52.82' L4 S77'09'19"E 21.11' LS I S48'21'52"E 11.25' SHEET EXHIBIT "A-1 �' T1 TAIT & ASSOCIATES INC. THE STRAND - PARKING GARAGE Engineering Surveying Environmental 4 ®F 4 155 5TH STREET 701 PARKCENTER DRIVE, SANTA ANA, CALIFORNIA 92705 HUNTINGTON BEACH, CA j TEL. (714) 560-E200 STAIR 01 SERVING PARKING GARAGE ONLY 1 --- 1_1e CLASS A COMMON AREA ` ■ STAIR A2 SERVING PARKING GARAGE TO PLAZA ELEV 3&4 LEVEL GARAGE AND HOTEL STAIR F1 FLOORS P2 4 ELEV 5 SERVING PARKING ° ' ' ' SERVING PARKING GARAGE ONLY STAIR 1 �.. GARAGE AND OFFICE GA A AN HOTEL —0 LEVELS P2-4 -- FL — 4 r ` SA M ON AR A ® •m.m�� + + A_ m o • a o Rd. Nort St. NWU,N. EXHIBIT B CLASS A COMMON AREA PAGE 1 CLASS 8 COMMON AREA LEVEL P2 r 1 I i T T i AR i c6f�AA(�ass CtV AREA TTF 10 ,.....� „,.,,....... , .,... , w s. 4 ; f ♦REA + I w I , x p �+N I���4J11 d Y 6 EXHIBIT CLASS ACOMMON ARE, r,"A 2 CLASS 8 COMMON AREA LEVEL ri W EXHIBIT B CAA (;;,; 3 194 kn, VV G. UT A VENUF MiN W. & _WA* W StAlk"Ic *0111 U-*-!,S Z-4 IIERVgro *40TEL W11hT* *Awl Nxr_.%�,j r, IL AND "UTEL _j c noon 2 T.Hkwai & ARIA 4 CWiky "K, AM W-6.11 &S A —7 TAR U �4RTel v.n ksm Poc*W TJVL PA Act org'All YW7 &PE'i PTIAV. U AWLY SIX* 01 3FAVmE Sr,CUF-W f LiXMk OWL IF PACIFIC COAST MIGHWAY MUM CLASS A COMMON' AREA CLASS 8 COMMON AREA LEVEL I • Eel9 �r� ! ut # ',�loM FF �.<.. 'a`►.r Iy�Y a a. >wa a�X;'6�i +Ti'. li�..iFi�s°tl �iA�wf',l �i�e��1 EXHIBIT B CLASS A COMMON AREA PAGE 4 CLASS, B COMMON AREA LEVEL 2 Exhibit "C" INTENTIONALLY OMITTED 5233-50262\ 805943.8 Exhibit "D" INSURANCE SCHEDULE I. INSURANCE POLICY REQUIREMENTS During the Term, each Owner shall maintain, or cause to be maintained, the following policies of insurance: A. Liability Insurance. Commercial general liability insurance having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence, with a deductible of not more than $100,000 providing coverage for bodily injury, property damage, personal injury, product liability, and completed operations. Such limit may be reached by a combination of a primary liability policy of at least One Million Dollars ($1,000,000) and following form excess and/or umbrella liability insurance; shall drop down as layers below are exhausted, provided, however, that such drop down or following form coverage shall otherwise comply with all other provisions contained in this Section I. Such liability policy shall include a deletion of the exclusion for explosion, collapse or underground hazard, if applicable, and contain a blanket written contractual liability clause and shall cover contractual liability of the insured Person under written agreements. Notwithstanding the foregoing, the City may provide liability insurance through the Big Independent Cities Excess Pool ("BICEP"), providing for a self insured retention in the amount applicable to all of the members of BICEP (for calendar year 2004, .such self insured retention amount is $1,000,000 with the member cities risk sharing any losses from $1,000,000 to $2,000,000 or larger). B. Property Insurance. A policy of property insurance commonly known as an "ail risks" or "special form" policy (including boiler & machinery comprehensive form, if applicable), covering the Improvements located on a Parcel (but excluding the tenant improvements of the occupants of the Retail Parcel unless Retail Parcel Owner elects otherwise) in an amount equal to the full replacement cost thereof, including costs attributable to a change in laws and including the cost of excavations, footings, and foundations below the lowest floor without deduction for depreciation, with such reasonable deductible amounts as may be customary from time to time in other first class mixed use projects in the Huntington Beach area and otherwise satisfying any other reasonable requirements of any Mortgagee of any Parcel, but not in excess of $100,000 for all risks other than earthquake and flood, for which industry -standard percentage deductibles are permitted. Such policy of property insurance shall insure against all risks, including but not limited to, fire, windstorm, impact by aircraft or vehicle, smoke damage, water damage, flood, sprinkler leakage, riot, civil commotion, terrorists acts and loss or damage by earthquake (with coverage levels based on maximum probable loss analysis as set forth in a seismic analysis prepared by a licensed engineer, unless such coverage is not available at commercially reasonable rates, as reasonably determined by the Owner and Mortgagee of such Parcel). C. Worker's Compensation Insurance. Worker's compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all 5233-5026Z 805943.8 persons employed by the insuring Owner in connection with its Parcel (including the "all states" and volunteers endorsements, if applicable), together with employer's liability insurance coverage in the amount of at least One Million Dollars ($1,000,000) per accident for bodily injury or disease. D. Automobile Liability Insurance. A policy of insurance covering automobile liability in the amount of One Million Dollars ($1,000,000) per accident for bodily injury and property damage. Such insurance may be provided by a combination of a primary policy and following form excess and/or umbrella liability insurance, provided, however, that such following form or umbrella coverage shall otherwise comply with all other provisions contained in this Schedule. If hazardous materials (other than in de minimis amounts) are to be transported off of any Parcel, a MCS90 endorsement and a CA99 48 (or most recent edition of ISO form or equivalent) endorsement shall be attached to such automobile liability policy at full policy limits. With respect to the Parking Parcel only, and from and after the Completion of the Improvements on the Parking Parcel, such Automobile Liability Insurance shall also include "garagekeepers legal liability coverage" in such reasonable coverage amounts as are mutually agreed by the Manager and the Parking Parcel Owner covering legal liability for loss to a customer's automobile or customer's automobile equipment left in the care of the Owner or manager of the Parking Structure. E. Builder's Risk Insurance. A policy of Builders Risk Insurance written on a completed value form. Such insurance shall be "All Risk" (including the perils of flood and earthquake, provided earthquake coverage is available at a commercially reasonable rate on the open market); provide inland -in transit coverage, including loading and unloading, off -site storage and loss of rents; and all exclusions therein for Boiler and Machinery, if any, shall be deleted. With regard to earthquake, coverage levels shall be based on maximum probable loss analysis as set forth in a seismic analysis prepared by a licensed engineer. G. Master Insurance. The term "Master Insurance" means one or more policies of insurance (each, a "Master Insurance Policy"): (i) covering the Improvements located on the Retail Parcel, the Parking Parcel and the Hotel Parcel and otherwise satisfying the requirements set forth in Section I.B above for property insurance; and (ii) covering the Retail Parcel, the Parking Parcel and the Hotel Parcel and otherwise satisfying the requirements set forth in Section I.A above for liability insurance. If the Owner's collectively are obligated or elect to provide the Master Insurance as outlined in this Section I.I, the premiums will be allocated as follows: (i) liability insurance (including umbrella/excess liability) will be based on the actual rates and premiums for the Retail Parcel, the Parking Parcel and the Hotel Parcel used by the insurer in determining the overall liability premium for the Master Insurance Policy; and (ii) property Insurance (including boiler and machinery and earthquake insurance) and rental income interruption insurance will be prorated based on each Owner's declared value for their respective Improvements and based on the actual rates used by the insurer in determining the overall insurance premium. IL GENERAL PROVISIONS A. Insurance Companies. The insurance described above shall be written by companies having a "General Policyholders Rating" of at least A-NIII (or such higher rating as may be required by a Mortgagee) as set forth in the most current issue of "Best's Insurance Guide" 5233-50262\805943.8 or an equivalent rating from another industry -accepted rating agency, unless otherwise agreed by the Retail Parcel Owner, the Parking Parcel Owner and the Hotel Parcel Owner. B. Additional Insureds. All Insurance policies required by this Insurance Schedule (except for worker's compensation, professional liability, owners protective and property insurance coverage) shall name as additional insureds ("Additional Insureds") all Owners, the City, the Agency, all Mortgagees, their respective directors, officials, officers, employees, contractors and agents, and such other, persons as an Owner reasonably requests be named as an Additional Insured solely with respect to the operations of the first -named insured at the Project (such as a manager or operator or an "anchor" lessee or lessee of a substantial portion of a Parcel). All Master Insurance policies shall name all Owners as named insureds. All property insurance policies required by this Insurance Schedule to be maintained with respect to a Parcel (whether the property insurance or under the Master Insurance) shall name all Owners of other Parcels as additional named insureds and shall name, as applicable, the Mortgagee of such Parcel as mortgagee under a standard mortgagee clause or tender's loss payable endorsement; provided, however, that the Owner obtaining such insurance shall be the sole agent with respect to receiving notice and the Owner of the Parcel on which the Casualty occurs shall be the sole party to whom the payment shall .be made in settlement of claims, subject to the Insurance Trustee provisions of the Declaration or unless otherwise agreed in writing by such Owner. C. Policies of Insurance. Each party required to maintain the insurance described above shall deliver to each Owner signed copies of the original insurance policies, including the declarations pages, all coverage parts and endorsements, and all financial agreements within ten (10) business days from receipt of such policies from the respective insurance underwriter. Original, signed insurance certificates shall be provided to the Owners and any other Additional, Insureds for all coverage required as provided above on or before the date upon which such insurance obligation commences. The insurance policies, certificates and endorsements of each insurance policy shall be signed by a person authorized by the insurer to sign on its behalf. The policies, certificates and endorsements shall be on forms reasonably acceptable to the Owners and other Additional Insureds. Each Person required to maintain the insurance shall furnish each Owner and any other Additional Insureds with certificates of renewal or "binders" thereof, at least ten (10) days prior to expiration of each policy required to be maintained by such person, but in all events prior to expiration. Each certificate shall expressly provide that such policy shall not be cancelled except after thirty (30) days' prior written notice to each Owner and any other Additional Insureds (except in the case of cancellation for nonpayment of premium, in which the case cancellation shall not take effect until at least ten (10) days' written notice has been given to each Owner and any other Additional Insureds). D. Excess Coverage. Any umbrella liability policy or excess liability shall be in "following form" and shall contain a provision to the effect that, if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance. E. Primary Coverage. Each insurance policy shall expressly provide that for any claims which are an insuring person's responsibility as provided above, such person's insurance coverage shall constitute primary insurance with respect to the Owners and any other Additional Insureds and their respective directors, officers and employees. 5233-502621805943.8 F. Separate Application. The insurance coverage described above shall apply separately to each person named as an Additional Insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. G. Insurance Requirements of Contractors. All contractors and subcontractors involved in construction projects in any portion of the Project Site for which the aggregate cost of the work (including labor, supplies and materials to be supplied in connection therewith) equals or exceeds or will equal or exceed $3,000,000, shall either maintain the insurance coverage and limits required above through participation as named insured parties under any "owner controlled" or "wrap-up" insurance program maintained by an Owner with respect to a Parcel, or alternatively shall be required to maintain the following insurance coverage: (1) Commercial General Liability Insurance. A policy of commercial general liability coverage having a combined single limit of not less than Two Million Dollars ($2, 000,000) per occurrence for bodily injury, property damage, personal injury, product liability, and completed operations. Such limit may be reached by a combination of a primary liability, policy of at least One Million Dollars ($1,000,000) and following form excess and/or umbrella liability insurance such excess and umbrella shall drop down as layers below are exhausted, provided however, that such drop down or following form coverage shall otherwise comply with all other provisions contained in this Schedule. (2) Automobile Liability. A policy of the most recent edition of Insurance Services Office form or equivalent covering Automobile Liability, code 1 (i.e., owned, not owned and hired) (any auto) with coverage in the amount of One Million Dollars ($1,000,000) per accident for bodily injury and property damage. (3) Workers' Compensation and Employers Liability Insurance. A policy of worker's compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all persons employed by such Person in the construction of the Improvements on such Parcel (including the "all states" and volunteers endorsements, if applicable), together with employer's liability insurance coverage in the amount of at least One Million Dollars ($1,000,000) per accident for bodily injury or disease. (4) If a contractor or subcontractor is performing design work in connection with such construction project, such contractor or subcontractor shall maintain professional liability insurance. If the aggregate cost of such work is less than $3,000,000, then all such contractors and subcontractors shall maintain the insurance described above, except that the combined single limit of the commercial general liability coverage shall be not less than One Million Dollars ($1,000,000). Each separate policy maintained by a contractor or subcontractor pursuant to this Section 11 (G) shall comply with each of the requirements set forth in this Section I1. Each contractor or subcontractor shall carry the foregoing coverage (1) through (3) and, if applicable, (4) in this Section II (G) for all work undertaken thereby on projects other than the Project. H. Allocation of Deductibles. Deductible amounts with respect to the property insurance portions of the Master Insurance shall be allocated, in the event of a loss within the coverage 5233-502621805943.8 afforded by such property insurance portions of the Master Insurance, to the Parcel(s) suffering the loss based upon the relative proportion of insured loss suffered on each such Parcel as compared to the insured loss suffered on all such Parcel, as determined by the insurance company providing the Master Insurance. Deductible amounts with respect to the liability insurance portions of the Master Insurance shall be allocated, in the event of a loss within the coverage afforded by such liability insurance portions of the Master Insurance, based upon the ratio of the premium paid by each Owner in comparison to the total premium paid by all such Owners for the Liability Insurance portions of the Master Insurance. I. Notice of Changes to Insurance Schedule. In the event Owners agree to modify the terms of this Exhibit D pursuant to Section 1.47, Manager shall provide a copy of the revised terms to each Owner. Manager shall provide a copy of any such revised terms to any Owner, Mortgagee, tenant or occupant upon written request. 5233-50262\ 805943.8 Council/Agency Meeting Held: Deferred Continued to: �kAp roved ondition II Appr d Denied City ler ignatul Council Meeting Date: 10/20/2008 Department ID Number: ED 08-48 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL/REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADM INISTRATOR/EXECUTI I ECTOR PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC DEVELOPMENT/DEPUTY EXECUTIVE DIRECTOR SUBJECT: APPROVE SIXTH IMPLEMENTATION AGREEMENT WITH CIM/HUNTINGTON, LLC Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: A Sixth Implementation Agreement to the Disposition and Development Agreement (DDA) has been negotiated between the Redevelopment Agency ("Agency") and CIM /Huntington, LLC ("Developer"). The original DDA provided for a mixed use development consisting of retail, restaurant, office and a hotel on the three -acre property located on Pacific Coast Highway in Downtown Huntington Beach. The Sixth Implementation's main focus is to assist the development of a boutique hotel and modifying the financing of the $7.9 million loan through Agency Tax Increment revenue. Funding Source: Redevelopment Agency will repay loan through revenues generated by the project and the Merged Project Area. The extra parking spaces will be paid through both the Parking in Lieu Fee fund ($500,000) and Redevelopment Agency revenues ($450,000). Recommended Action: Redevelopment Agency Motion to: Adopt Resolution Number, 374 a Resolution of the Redevelopment Agency of the City of Huntington Beach, California, approving and making certain findings pursuant to Health and Safety Code Section 33433 for a Sixth Implementation Agreement to the Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and CIM/Huntington, LLC. REQUEST FOR COUNCI LIRE DEVELOPMENT AGENCY ACTION MEETING DATE: 10/20/2008 DEPARTMENT ID NUMBER: ED 08-48 2. Authorize the Executive Director or designee to take any action and execute any and all documents and agreements necessary to implement this agreement. City Council Motion to: Adopt Resolution Number, 2008-64 a Resolution of the City of Huntington Beach, California, approving and making certain findings pursuant to Health and Safety Code Section 33433 for a Sixth Implementation Agreement to the Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and CIM/Huntington, LLC. 2. Authorize the City Administrator or designee to take any action and execute any and all documents and agreements necessary to implement this agreement. Alternative Action(s): 1) Approve a modified version of the Sixth Implementation Agreement; or 2) Direct staff to renegotiate the terms of the Sixth Implementation Agreement; or 3) Deny the Sixth Implementation Agreement. Analysis: The Redevelopment Agency and CIM entered into a Disposition and Development Agreement (DDA) on June 17, 1999. The DDA set forth the development of a hotel with approximately 115 — 130 rooms and 135,000 square feet of commercial space. The Agency contributed both the land and excess project costs. The DDA was subsequently amended with the approval of the First Implementation Agreement on April 6, 2000; the Second Implementation Agreement on March 5, 2001; the Third Implementation on October 30, 2002; the Fourth Implementation Agreement on September 2, 2003, and the Fifth Implementation Agreement on July 19, 2004. The changes to the project included increased hotel rooms, increased parking, land leases, and Agency assistance. The proposed Sixth Implementation Agreement allows for the Agency and Developer to capitalize on the change in market demand, demographics and the City's 2006 Strategic Plan Goals to create an environment to increase revenues and transform the City's economy into a destination economy/tourism. The project known as The Strand fulfills the objective of the Redevelopment Agency by generating and increasing public revenues through property tax, sales tax and transient occupancy tax. The estimated present value revenue for both the City and Agency is $46,204,000. The gross revenue total is $96,724,000. The total Agency expense for the project is $28,400,000. The Sixth Implementation Agreement as proposed provides for: Development of a full -service boutique hotel in lieu of the previously -approved limited service hotel concept which will provide for an increase in the transient occupancy tax (TOT) to the City. The Agency one-time investment of $2.4 million is attributed to hotel upgrades which will assist in a higher daily rate. The daily rate increase will lead to an approximately $5.1 million increase in TOT over the 25 year -2- 10/14/2008 3:07 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 10/20/2008 DEPARTMENT ID NUMBER: ED 08-48 period. The Agency also will reserve the right to approve all changes in the hotel operator or hotel flag to ensure continued quality. 2. Modifying the payment of the previously approved Agency reimbursement of $7.9 million to come solely from redevelopment tax increment funds, both site generated and the merged project area be paid over 25 years, with no pledge of general fund revenues. The Agency reimbursement was approved with the Third Implementation Agreement and set forth the reimbursement to be from site generated tax increment, TOT and other general fund revenues. 3. Reimbursement of the partial cost for the approved number of excess fixed parking stalls approved by the City in the Parking Management Plan — 25 additional stalls at $38,000 each for a total of $950,000. The Fourth Implementation Agreement set forth the reimbursement for up to 60 stalls; however, only 25 additional stalls have been approved through the Parking Management Plan. The excess spaces were determined from the number of parking stalls that are required through the Planning Department entitlement process and how many marked stalls were built. 4. Implementation of shared parking revenues above the City's base minimum approved rates. If the Developer recommends, and the City Council approves, a higher daily rate than the City's Main Promenade Parking Structure, then the additional revenue will be shared on a 50/50 basis to the City and Developer. 5. Eliminates the ability for the Developer to contest the project's assessed valuation and eliminates the Developer's opportunity to buy-out the Agency's long-term participation in project revenues, thereby ensuring continuing benefit to the Agency and project area. The Sixth Implementation Agreement also has as attachments: ® Revised Schedule of Feasibility Gap Payments — as noted above, amends how the Agency assistance is paid; ® Revised Scope of Development — acknowledges the changes in the development and upgraded hotel; ® Revised Schedule of Performance — with full project completion no later than April 30, 2009, retail spaces will begin opening up in November and the hotel will open in first quarter 2009; ® First Amendment to the Agreement Containing Covenants Affecting Real Property — established criteria for a boutique hotel; and ® Grant of License and Agreement Regarding Maintenance. of Landscaping and Public Improvements — which sets City standards for upkeep of the public improvements on the site. -3- 10/14/2008 11:25 AM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 10/20/2008 DEPARTMENT ID NUMBER: ED 08-48 Strategic Plan Goal: L-4: Create an environment that promotes tourism to increase revenues to support community services and transform the City's economy into a destination economy. Environmental Status: Not applicable. Attachment(s): o- e o ® e • 1. Adopt Resolution Number, 374 Resolution of the Redevelopment Agency of the City of Huntington Beach, California, approving and making certain findings pursuant to Health and Safety Code Section 33433 for a Sixth Implementation Agreement to the Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and CIM/Huntin ton, LLC. 2. Adopt Resolution Number, 2008-64 a Resolution of the City Council of the City of Huntington Beach, California, approving and making certain findings pursuant to Health and Safety Code Section 33433 for a Sixth Implementation Agreement to the Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and CIM/Huntin ton, LLC. 3. Sixth Implementation Agreement to Disposition and Development Agreement by and between Redevelopment Agency of the City of Huntington Beach, Agency and CIM/Huntin ton, LLC Developers 4. Summary Report Pursuant to Section 33433 of The California Community Redevelopment Law on the Disposition And Development Agreement Sixth Implementation Agreement By and Between The Redevelopment Agency Of The City Of Huntin ton Beach and CIM/Huntin ton, LLC. -4- 10/14/2008 11:25 AM ATTACHMENT #1 REDEVELOPMENT AGENCY FOR THE CITY OF HUNTINGTON BEACH RESOLUTION NO. 374 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, APPROVING AND MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 FOR A SIXTH IMPLEMENTATION AGREEMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND CIM/HUNTINGTON, LLC WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Agency") is engaged in activities necessary to execute and implement the redevelopment plan ("Redevelopment Plan") for the Merged Redevelopment Project Area of Huntington Beach ("Merged Project Area"); and WHEREAS, Agency proposes to enter into a Sixth Implementation Agreement ("Sixth Implementation Agreement") with CIM/Huntington, LLC ("Developer"), which supplements, modifies or incorporates by reference the terms of that certain Disposition and Development Agreement by and between Agency and Developer, dated as of June 17, 1999, as previously supplemented by that certain First Implementation Agreement dated as of April 6, 2000, that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001, that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated October 30, 2002, that certain Fourth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of September 15, 2003, and that certain Fifth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of July 19, 2004 (collectively, the "DDA"); and WHEREAS, pursuant to the DDA, the Agency transferred to Developer that certain real property within the boundaries of the Merged Project Area set forth with particularity in the DDA (the "Property"); and WHEREAS, pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000 et seq.) the Agency and the City Council held a joint public hearing on the Sixth Implementation Agreement, having duly published notice of such public hearing and having made copies of the DDA and proposed Sixth Implementation Agreement and other reports and documents (including the summary referred to in Section 33433 ['`33433 Report"]) available for public inspection and copying; and Agency 33433 Resol (2) Page 1 of 3 Agency Resolution No. 374 WHEREAS, the Agency has duly considered all terms and conditions of the proposed transaction, and believes that it is in the best interests of the Merged Project Area and 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 law and requirements; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, IT IS RESOLVED by the Redevelopment Agency of the City of Huntington Beach, California, as follows: All recitals set forth in this resolution are true and correct. 2. The consideration received by the Agency for the transfer of the Property is not less than the fair reuse value of the Property determined at the use and with the conditions, covenants, and development costs required by the DDA (including the Sixth Implementation Agreement), based on among reasons, the information contained in the 33433 Report. 3. The transfer of the Property to the Developer pursuant to the DDA (including the Sixth Implementation Agreement) will assist in the elimination of blight in the Merged Project Area, based on among reasons, the information contained in the 33433 Report. 4. The Agency hereby finds and determines that the transfer of the Property pursuant to the DDA (including the Sixth Implementation Agreement) is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code, based on among reasons, the information contained in the 33433 Report. 5. The proposed Sixth Implementation Agreement is hereby approved in substantially the form presented at this meeting, with such minor non -substantive changes as may be approved by the Executive Director of the Agency with the approval as to form by the Agency General Counsel. 6. The Chairman of the Agency and the Executive Director of the Agency are hereby authorized to execute the Sixth Implementation Agreement on behalf of the Agency. A copy of the Sixth Implementation Agreement when executed by the Agency shall be placed on file in the office of the Agency Clerk. Agency 33433 Resol Page 2 of 3 Agency Resolution No. 374 7. The Executive Director of the Agency (or his or her designee) is hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to carry out and implement the Sixth Implementation Agreement, and to administer the Agency's obligations, responsibilities and duties to be performed thereunder. Approved and adopted this 3rd day of Novemb,e2008. Chairman ATTEST: APPROVED AS TO FORM: ency Clerk Agency General Counsel Vq APPROVED AS TO FORM: Kane, Ballmer &`Berkman Special Counsel for the Agency Agency 33433 Reso( (2) Page 3 of 3 Res. No. 374 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, JOAN FLYNN, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on November 3, 2008 and that it was so adopted by the following vote: AYES: Hansen, Bohr, Cook, Coerper, Green, Carchio NOES: Hardy ABSENT: None ABSTAIN: None Cler f the Redevelopment gency of the City of Huntington Beach, CA . , �._ -� � :_. .< °� •, �- E, �, f � / 1, ., ', � � � - CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH RESOLUTION NO. 2008-64 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, APPROVING AND MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 FOR A SIXTH IMPLEMENTATION AGREEMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND CIM/HUNTINGTON, LLC WHEREAS, the Redevelopment Agency of the City of Huntington Beach ("Agency") is engaged in activities necessary to execute and implement the redevelopment plan ("Redevelopment Plan") for the Merged Redevelopment Project Area of Huntington Beach ("Merged Project Area"); and WHEREAS, Agency proposes to enter into a Sixth Implementation Agreement ("Sixth Implementation Agreement") with CIM/Huntington, LLC ("Developer"), which supplements, modifies or incorporates by reference the terms of that certain Disposition and Development Agreement by and between Agency and Developer, dated as of June 17, 1999, as previously supplemented by that certain First Implementation Agreement dated as of April 6, 2000, that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001, that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated October 30, 2002, that certain Fourth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of September 15, 2003, and that certain Fifth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of July 19, 2004 (collectively, the "DDA"); and WHEREAS, pursuant to the DDA, the Agency transferred to Developer that certain real property within the boundaries of the Merged Project Area set forth with particularity in the DDA (the "Property"); and WHEREAS, pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000 et seq.) the Agency and the City Council held a joint public hearing on the Sixth Implementation Agreement, having duly published notice of such public hearing and having made copies of the DDA and proposed Sixth Implementation Agreement and other reports Council 33433 Resol(2) Page 1 of 3 Resolution No. 2008-64 and documents (including the summary referred to in Section 33433 ["33433 Report"]) available for public inspection and copying; and WHEREAS, the City has duly considered all terms and conditions of the proposed transaction, and believes that it is in the best interests of the Merged Project Area and 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 law and requirements; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, IT IS RESOLVED by the City Council of the City of Huntington Beach, California, as follows: All recitals set forth in this resolution are true and correct. 2. The consideration received by the Agency for the transfer of the Property is not less than the fair reuse value of the Property determined at the use and with the conditions, covenants, and development costs required by the DDA (including the Sixth Implementation Agreement), based on among reasons, the information contained in the 33433 Report. 3. The transfer of the Property to the Developer pursuant to the DDA (including the Sixth Implementation Agreement) will assist in the elimination of blight in the Merged Project Area, based on among reasons, the information contained in the 33433 Report. 4. The City Council hereby finds and determines that the transfer of the Property pursuant to the DDA (including the Sixth Implementation Agreement) is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code, based on among reasons, the information contained in the 33433 Report. The proposed Sixth Implementation Agreement is hereby approved in substantially the form presented at this meeting, with such minor non -substantive changes as may be approved by the Executive Director of the Agency with the approval as to form by the Agency General Counsel. HI Council 33433 Resol (2) Page 2 of 3 Resolution No. 2008-64 6. The City Council hereby authorizes the City Clerk to deliver a copy of this Resolution to the Executive Director and members of the Agency. A copy of the Sixth Implementation Agreement when executed by the Agency shall be placed on file in the office of the City Clerk . Approved and adopted this 3rd day of November2008. ATTEST: APPROVED AS TO FORM: ity Clerk City Attorney I6kh APPROVED AS TO FORM: Kane, Ballmer & Berkman Special Counsel Council 33433 Resol (2) Page 3 of 3 Res. No. 2008-64 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) 1, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on November 3, 2008 by the following vote: AYES: Hansen, Bohr, Cook, Coerper, Green, Carchio NOES: Hardy ABSENT: None ABSTAIN: None qpa��) 0�1-J—vt�tid Cit Jerk and ex-officio erk of the City Council of the City of Huntington Beach, California y -- -- - 6 � _ �- " �, ` �,� - -� 1 ° �� �. � „. . �__� __ '-- ____ SIXTH IMPLEMENTATION AGREEMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, Agency and CIM/HUNTINGTON, LLC Developer ATTACHMENTS EXHIBIT 1 SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS EXHIBIT 2 SECOND REVISED SCOPE OF DEVELOPMENT EXHIBIT 3 SECOND REVISED SCHEDULE OF PERFORMANCE EXHIBIT 4 FIRST AMENDMENT TO THE AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY EXHIBIT 5 GRANT OF LICENSE AND AGREEMENT REGARDING MAINTENANCE OF LANDSCAPING AND PUBLIC IMPROVEMENTS SIXTH IMPLEMENTATION AGREEMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT This Sixth Implementation Agreement to Disposition and Development Agreement, dated as of pV,=7m8E?S 0.3, 2008 ("Sixth Implementation Agreement") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and CIM/HUNTINGTON, LLC, a California limited liability company ("Developer"). RECITALS A. The Agency and CIM Group, LLC, predecessor in interest to Developer, entered into that certain Disposition and Development Agreement dated June 17, 1999, which Disposition and Development Agreement was supplemented by that certain [First] Implementation Agreement entered into between the Agency and CIM Group, LLC dated April 6, 2000; that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March 5, 2001, that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated October 30, 2002, that certain Fourth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of September 15, 2003, and that certain Fifth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of July 19, 2004 (collectively, the "DDA"). The DDA is hereby incorporated by reference. Reference herein to the DDA shall include any and all attachments and exhibits thereto. Any capitalized term not defined herein shall have the meaning ascribed to it in the DDA. B. The Schedule of Feasibility Gap Payments appended to the DDA as Attachment No. 8 which was supplemented by that certain Revised Schedule of Feasibility Gap Payments attached to that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated October 30, 2002, describes in general terms certain rights and obligations of the parties in connection with the Agency Obligation to reimburse Developer for certain eligible costs incurred by Developer in redeveloping the Site. Agency and Developer intend through this Sixth Implementation Agreement to provide for appropriate modifications to the Schedule of Feasibility Gap Payments arising from the change in the source of funds for the Agency Obligation and to specify in greater detail based on more precise available information their respective rights and obligations in connection with such matters. C. Pursuant to the conditions of approval for the Huntington Beach Tentative Tract Map No. 16406, Conditional Use Permit No. 99-45 with Special Permits No. 02-06 and Coastal Development Permit No. 99-16 (collectively the "Conditions of Approval") relating to the development and operation of improvements on the Site, the Agency, City of Huntington Beach, Developer and Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and 6th.IMP.v6a(Sept. 18, 2008) Page 1 Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 (collectively, "Cracchiolo") are required to enter into a covenants, conditions and restrictions and reciprocal easement agreement and an operating agreement. Agency and Developer intend through this Sixth Implementation Agreement to provide for the execution of said covenants, conditions and restrictions and reciprocal easement agreement and operating agreement in compliance with the Conditions of Approval. D. Agency and Developer intend through this Sixth Implementation Agreement to modify certain provisions in the DDA relating to the development and use of the Site, public parking facility, assessed project valuation, and upgrades to the Site. E. Agency and Developer intend through this Sixth Implementation Agreement to modify certain provisions in the DDA relating to the Schedule of Performance. F. The parties are entering into this Sixth Implementation Agreement for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. AGREEMENT Based upon the foregoing Recitals, Agency and Developer agree as follows: 1. Purpose of the A reg ement. Section 101 of the DDA entitled "Purpose of the Agreement" is hereby amended by revising the minimum and approximate number of guest rooms to 142 and 157 respectively. 2. Local, State, and Federal Laws. Section 312 of the DDA is hereby deleted in its entirety and replaced with the following: "Developer agrees to carry out development, construction (as defined by applicable law) and operation of the improvements on the Site, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). Developer expressly acknowledges and agrees that neither City nor Agency has ever previously affirmatively represented to the Developer or its contractor(s) for the improvements in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a "public work," as defined in Section 1720 of the Labor Code. Developer agrees that Developer shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer agrees that Developer shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Developer 6th.IMP.v6a(Sept. 18, 2008) Page 2 agrees that the Developer shall have the obligation, at the Developer's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer shall indemnify, protect, defend and hold harmless the Agency, City and their respective elected officers, employees, contractors and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs' (including labor costs, penalties, reasonable attorneys' fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the improvements on the Site, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required disclosure, representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (4) failure by Developer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5) failure by the Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the improvements on the Site, including, without limitation, any public work (as defined by applicable law), Developer shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after recordation of the Release of Construction Covenants. Except as to public infrastructure within dedicated public rights -of -way and the public parking facilities being built by Developer, the foregoing provisions shall not, however, be construed so as to cause any of the improvements to be built by Developer to be a "public work", or to cause Labor Code Sections 1726 or 1781 to apply, to require Developer to pay "prevailing wages" or to post bonds in connection therewith. 3. Use of the Site. Sections 401(1) and 401(2) of the DDA are hereby deleted in their entirety and replaced with the following: "l. Develop and construct improvements on the Site solely in accordance with the Redevelopment Plan, the Grant Deed, the Agreement Containing Covenants Affecting Real Property (as amended), this Agreement (including but not limited to the Second Revised Scope of Development, Second Revised Attachment No. 4), and plans approved by the City of Huntington Beach, 6th.IMP.v6a(Sept. 18, 2008) Page 3 with at least 142 and approximately 157 hotel rooms, and approximately 101,591 net square feet of gross leasable area of retail, office and restaurant uses to be fully paid for by Developer, and a public parking facility conforming with City approved plans. In addition to all of the other requirements under this Agreement, the hotel to be developed on the Site shall be a Boutique Hotel having an overall standard of quality equal to or better than the following Joie de Vivre Hotels as of the date of the Sixth Implementation Agreement (all of which have at least a four star rating): (a) Harvest Inn located in St. Helena, California; (b) Hotel Kabuki located in San Francisco, California; (c) Hotel Los Gatos located in Los Gatos, California; (d) Hotel Montgomery located in San Jose, California; and (e) Hotel Vitale located in San Francisco, California, and the retail and restaurant uses to be developed on the Site shall be nationally or regionally recognizable and reputable retailers or restaurants (or local retailers or restaurants meeting at least the same quality) of the nature and quality customarily included in retail/restaurant centers meeting the requirements and restrictions of the Second Revised Scope of Development (Second Revised Attachment No. 4) and shall meet the additional requirements and restrictions set forth in Section 2.a of the Agreement Containing Covenants Affecting Real Property (as amended). The term "Boutique Hotel" as used herein shall mean an intimate, luxurious, unique destination hotel which provides an exceptional and personalized level of accommodation, services and facilities, including, but not limited to the following attributes: (i) equivalent to Upper Upscale Chain hotel, as defined by Smith Travel Research, as reasonably determined by the Agency Executive Director; (ii) furnished in a themed, stylish and/or inspirational manner; (iii) fitted with telephone, wi-fi Internet connection, plasma or LCD televisions (or other television modes having very high quality) and cable/pay televisions; (iv) twenty-four (24) hour hotel staff and guest services; (v) on -site fine dining facilities; and (vi) bars and lounges open to the general public. 2 (a). Devote the Site, or cause the Site to be devoted, to use solely in accordance with the Redevelopment Plan, the Grant Deed, the Agreement Containing Covenants Affecting Real Property (as amended), this Agreement, and plans approved by the City of Huntington Beach for hotel, retail, restaurant and parking uses, with at least 142 and approximately 157 hotel rooms, and approximately 101,591 net square feet of gross leasable area of retail and restaurant uses, and a public parking facility conforming with City approved plans. In addition to all of the other requirements under this Agreement, the hotel to be maintained on the Site shall be a Boutique Hotel having an overall standard of quality equal to or better than the following Joie de Vivre Hotels as of the date of the Sixth Implementation Agreement (all of which have at least a four star rating): (i) Harvest Inn located in St. Helena, California; (ii) Hotel Kabuki located in San Francisco, California; (iii) Hotel Los Gatos located in Los Gatos, California; (iv) Hotel Montgomery located in San Jose, California; and (v) Hotel Vitale located in San Francisco, California, and the retail and restaurant uses to be maintained on the Site shall be nationally or regionally recognizable and reputable retailers or restaurants of the nature and quality customarily included in 6th.IMP.Oa(Sept. 18, 2008) Page 4 retail/restaurant centers meeting the requirements and restrictions of the Second Revised Scope of Development (Second Revised Attachment No. 4) and shall meet the additional requirements and restrictions set forth in Section 2.a of the Agreement Containing Covenants Affecting Real Property (as amended). 2 (b). So long as the Agency receives ad valorem property tax increment revenues from the Site and the improvements thereon pursuant to the Redevelopment Plan, use the area designated on, the Site as a hotel as of the date of the Sixth Implementation Agreement only for a Boutique Hotel and for no other use. 2 (c). Maintain, repair and operate in the public parking facility to be developed and operated on the Site twenty-five (25) additional parking spaces above and beyond the four hundred eleven (411) parking spaces required by the City to be located in the public parking facility in connection with the development of the Site, for a total of four hundred thirty-six (436) parking spaces in the public parking facility. The twenty-five (25) additional parking spaces shall be in such size (e.g., tandem and/or compact) and locations within the public parking facility as pre -approved in writing by the City Planning Department from time to time. The maintenance (including repair, restoration and reconstruction) and operation of the twenty-five (25) additional parking spaces shall be in accordance with the Agreement Containing Covenants Affecting Real Property (as amended), this Agreement, the Parking Management Plan approved by the City, the covenants, conditions and restrictions and reciprocal easement agreement and operating agreement to be entered into and recorded against the Site in accordance with the Conditions of Approval and this Agreement, and plans approved by the City of Huntington Beach. 2(d). Pay, on behalf of City and Agency, any and all amounts owed to Abdelmuti Development Company ("Abdelmuti") and James A. Lane and Victoria Jean Lane, as Trustees of the James A. Lane and Victoria Jean Lane 1197 Trust, due to any increase in the cost of annual public parking passes that exceed the Threshold Cost Increase (as defined in the "Amendment to OPA") pursuant to paragraph 3 of the Fourth Amendment to Owner Participation Agreement dated February 3, 2003 between Agency and Abdelmuti (the "Amendment to OPA"), and to defend, protect, indemnify and hold harmless the City and the Agency and their respective officers, agents, elected and appointed officials, employees and volunteers free and harmless therefrom." 4. Minimum Assessed Value. Section 401(5) of the DDA entitled "Uses" is hereby deleted in its entirety and replaced with the following: "Pay when due all real estate taxes and any special taxes or assessments assessed and levied on the Site or any portion thereof or any improvements thereon or any interest therein. Developer agrees that Developer, its successors, its assigns and every successor in interest to the Site or any part thereof shall be prohibited from appealing, challenging or contesting in any manner the validity or amount of the assessed value of the Site or any portion thereof or any improvements thereon or any interest therein so as to claim an assessed value 6th.IMP.v6a(Sept. 18, 2008) Page 5 below the first full assessment by the County Tax Assessor after the completion of the initial improvements on the Site ("Baseline Assessment"). In the event Developer, its successor or assign appeals, challenges or contests the assessed value in violation of this Agreement and such appeal, challenge or contest results in an assessed value below the Baseline Assessment, Developer, its successor or assign shall annually pay to the Agency the following in -lieu fee payment in each of the years from and after such reduced assessment until the earlier to occur of (i) the end of the twenty-five year period commencing on the Completion Date; or (ii) the date that a new assessed value goes in effect that is at least as high as the Baseline Assessment: (i) An annual payment which amounts to the difference between one (1%) percent of the Baseline Assessment plus the maximum amount of annual increases permitted under applicable law to the Baseline Assessment (currently two percent (2%) a year) and one (1%) percent of the new assessed value plus the maximum amount of annual increases permitted under applicable law to the new assessed value (currently two percent (2%) a year; or at the option of the Agency (ii) Payment in the form of a credit to Agency equal to the amounts annually determined under Section 401(5)(i) above to be applied towards the Agency Obligation. Such payments shall be reduced by first crediting against amounts owing the amount of any Developer Shortfall for all prior years not theretofore reimbursed by Agency Shortfall Reimbursements except to the extent any Developer Shortfall has been caused by a violation of the foregoing prohibition on taxes and assessment appeals, challenges or contests s reasonably determined by the Agency. This prohibition against appealing, challenging or contesting shall be binding on Developer, its assigns and any successor in interest to the Site or any part thereof for twenty-five (25) years following the Completion Date." 5. Hotel Franchise Agreement. Section 403 of the DDA is hereby deleted in its entirety and replaced with the following: "At the time specified in the Schedule of Performance, Developer shall enter into a hotel franchise agreement (the "Original Franchise Agreement") which has been approved in writing by the Agency using the same approval procedures as are set forth in Section 402 herein above for the hotel management agreement, and which provides for the operation of a hotel meeting the size, level of quality and other requirements and restrictions referred to in Sections 401.1 and 401.2 above; provided however that this requirement may be waived in writing by the Agency if: (a) the Agency has approved the hotel management agreement for such proposed hotel in accordance with Section 402 above; (b) Developer provides evidence satisfactory to the Agency that a franchise agreement will not be entered into because the hotel will be owned and operated by the same entity; and (c) the Agency approves the hotel as meeting the size, level of quality 6th.IMP.v6a(Sept. 18, 2008) Page 6 and other requirements and restrictions referred to in Sections 401.1 and 401.2. Prior to the expiration or termination of the Original Franchise Agreement (and any successor franchise agreement(s)) (or, in the case where the franchise agreement requirement was waived in accordance with this Section, prior to entering into any franchise agreement or changing the flag of the hotel), Developer shall obtain the Agency's written approval of a new franchise agreement or new flag of the hotel (pursuant to said approval procedures) which shall become effective concurrently with the expiration or sooner termination of the franchise agreement which it replaces (or, in the case where the franchise agreement requirement was waived in accordance with this Section, which shall become effective upon entering into the franchise agreement). Each such franchise agreement shall be with a franchisor determined by the Agency to be comparable to, or of higher quality than, the franchisor under the Original Franchise Agreement or the first franchise agreement approved by the Agency in accordance with this Section. The Agency hereby acknowledges and consents to the Boutique Hotel being operated by Developer pursuant to an Original Management Agreement with Joie De Vivre Hospitality, Inc. provided that such Original Management Agreement is first approved by the Agency pursuant to Section 402, above." 6. Form of Nondiscrimination and Nonsegregation Clauses. Section 405 of the DDA is hereby deleted in its entirety and replaced with the following: "The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of sex, sexual orientation, marital status, race, color, creed, religion, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all 6th.IMP.v6a(Sept. 18, 2008) Page 7 persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the 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 segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through 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 tenants, lessees, sublessees, subtenants, or vendees of the land."" 7. Schedule of Feasibility Gap Payments. The DDA is hereby amended by changing all references to the "Revised Schedule of Feasibility Gap Payments" and the "Revised Attachment No. 8" to the "Second Revised Schedule of Feasibility Gap Payments" and the "Second Revised Attachment No. 8." The "Second Revised Schedule of Feasibility Gap Payments" is attached hereto as Exhibit 1 and incorporated herein by this reference. 8. Scope of Development. The DDA is hereby amended by changing all references to the "Revised Scope of Development" and the "Revised Attachment No. 4" to the "Second Revised Scope of Development" and the "Second Revised Attachment No. 4." The "Second Revised Scope of Development" is attached hereto as Exhibit 2 and incorporated herein by this reference. 9. Schedule of Performance. The DDA is hereby amended by changing all references to the "Revised Schedule of Performance" and the "Revised Attachment No. 3" to the "Second Revised Schedule of Performance" and the "Second Revised Attachment No. 3." The "Second Revised Schedule of Performance" is attached hereto as Exhibit 3 and incorporated herein by this reference. 6th.IMP.v6a(Sept. 18, 2008) Page 8 10. Agency Participation Payments; No Change in Certified Project Cost Statement. a. The parties agree that Developer shall not have a right to buy out the Agency Participation Payments. Accordingly, Section 702 of the DDA, `Buyout Provisions" and all references to Section 702 or any Buyout Provisions in the DDA are hereby deleted in their entirety. b. "Adjusted Project Costs" as amended by the Fifth Implementation Agreement is hereby deleted in its entirety and replaced to be read as follows: "Adjusted Project Costs" means Project Costs as approved by the Agency based upon the Certified Project Cost Statement approved by the Agency pursuant to Section 216(d), less the Agency Obligation, accrued interest as of the Completion Date and Agency Upgrade Assistance, as those terms are defined in the Second Revised Attachment No. 8, plus Approved Post - Construction Capital Expenditures, if any, plus the total of all Annual Return Shortfalls, if any, less Hotel Sale Proceeds from an Initial Completion Sale in a minimum amount of $12,400,000. Such minimum amount of Hotel Sales Proceeds shall apply even if the actual amount of hotel sale proceeds is less than $12,400,000, but only with respect to an Initial Completion Sale. As part of the Certified Project Cost Statement, Developer shall submit for Agency's approval an allocation of Project Costs among the hotel, the retail component and the parking component, and upon Agency's approval such allocation shall be binding upon the parties absent further agreement." C. Except as set forth above in Sections 10.a. and 10.b, the parties acknowledge and agree that nothing in this Sixth Implementation Agreement is intended to change nor does change in any way the Developer's obligation to pay to the Agency "Agency Participation Payments" or the calculation of the "Agency Participation Payment" as set forth in Section 701 of the DDA. The parties acknowledge and agree that this includes, without limitation, the fact that the Additional Parking Reimbursement (as defined in the Second Revised Attachment No. 8) shall not be included in the Project Costs used to calculate the "Adjusted Project Costs" or in the "Developer's Annual Return" pursuant to Section 701 of the DDA or included in the Certified Project Cost Statement. d. The parties acknowledge and agree that the twenty-five (25) additional parking spaces are being maintained and operated by agreement of the Developer and not due to the City or other governmental agency having jurisdiction over the development of the Site requiring a number of parking spaces in excess of 411 spaces in the public parking facility. 11. No Change to Release of Construction Covenants. The parties acknowledge and agree that nothing in this Sixth Implementation Agreement is intended to change nor does change in any way the requirements in Section 318 of the DDA pertaining to the Release of Construction Covenants. 12. Termination of the Fourth Implementation Agreement. The parties hereby release each other from any rights and obligations under the Fourth Implementation Agreement and further 6th.IMP.v6a(Sept. 18, 2008) Page 9 agree that all rights and obligations of the parties under the Fourth Implementation Agreement are hereby terminated and of no further force or affect. 13. Agreement Containing Covenants Affecting Real Property. a. The DDA is hereby amended by changing all references to the "Agreement Containing Covenants Affecting Real Property" to mean the Agreement Containing Covenants Affecting Real Property as amended by the First Amendment to the Agreement Containing Covenants Affecting Real Property. The "First Amendment to the Agreement Containing Covenants Affecting Real Property" is attached hereto as Exhibit 4 and incorporated herein by this reference. b. In order to conform the Agreement Containing Covenants Affecting Real Property to the provisions hereof, the Agency and the Developer agree that within thirty (30) days from the date of the Agency's execution of this Sixth Implementation Agreement they shall execute and record the First Amendment to Agreement Containing Covenants Affecting Real Property substantially in the form of the "First Amendment to Agreement Containing Covenants Affecting Real Property" attached hereto as Exhibit 4 and incorporated herein by this reference. 14. Covenants, Conditions and Restrictions and Reciprocal Easement Agreement. In compliance with the Conditions of Approval, Developer agrees that within thirty (30) days from the date of the Agency's execution of this Sixth Implementation Agreement Developer shall execute and record a covenants, conditions and restrictions and reciprocal easement agreement pertaining to the Site in a form and content mutually agreeable to Developer and City. 15. OperatinnAgreement. In compliance with the Conditions of Approval, Developer agrees that within thirty (30) days from the date of the Agency's execution of this Sixth Implementation Agreement Developer shall execute and record an operating agreement pertaining to the public parking facility in a form and content mutually agreeable to Developer and City. 16. Maintenance of Landscaping and Public Improvements. In compliance with the Conditions of Approval, Developer agrees that within thirty (30) days from the date of the Agency's execution of this Sixth Implementation Agreement Developer shall execute and record a Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements substantially in the form of the "Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements" attached hereto as Exhibit 5 and incorporated herein by this reference. 17. Transient Occupancy Taxes. Developer agrees on behalf of Developer, its successors, its assigns and every successor in interest to the Site or any part thereof that following the Effective Date of this Sixth Implementation Agreement Developer and such successors and assigns shall have no right to consent to any amendment, modification or repeal of City Ordinance No. 2974, City Ordinance No. 3559, Agency Ordinance No. 1 or Agency Ordinance No. 2. 6th.IMP.v6a(Sept. 18, 2008) Page 10 18. DDA in Full Force and Effect. Except as expressly provided otherwise in this Sixth Implementation Agreement, the DDA remains in full force and effect, enforceable in accordance with its terms. 19. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Sixth Implementation Agreement. 20. Authority of Executive Director. The Executive Director and Deputy Executive Director of the Agency are each authorized under this Sixth Implementation Agreement to make any approvals on the part of the Agency described in this Sixth Implementation Agreement and to negotiate and execute on behalf of the Agency documents relating to the implementation of this Sixth Implementation Agreement. 21. Date of this Sixth Implementation Agreement. The "Effective Date" of this Sixth Implementation Agreement shall be the date the Sixth Implementation Agreement is executed by both the Developer and the Agency. 6th.IMP.Oa(Sept. 18, 2008) [remainder of page left intentionally blank] [signatures on following pages] Page 11 Date: ( Y 7dJ ATTEST: AND AS TO FORM: Agency General Counsel o ob APPROVED AS TO FORM: & Berkman 6th.IMP.v6a(Sept. 18, 2008) Agency REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH rf/]�Zv—u� &M� C au�man [signatures continue on following page] Page 12 Developer CIM/Huntington, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L. P., sole member, By: CIM Urban Fund, GP, LLC, its general partner ter. Date: 09/19/08 By: -✓ Name: t Title: Date: By: Name: Title: 6th.IMP.v6a(Sept. 18, 2008) Page 13 EXHIBIT 1 SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS [behind this page] h�/ Lo 0,� SECOND REVISED ATTACHMENT NO. 8 SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS (a) The following definitions shall apply to this Second Revised Attachment No. 8: (1) "Acquisition Costs" shall have the meaning ascribed to such term in Section 201.2 of the Agreement. Developer shall be responsible for the payment of all Acquisition Costs and relocation costs subject only to payment by Agency to Developer of the Agency Obligation and accrued interest as required herein. (2) "Agency Shortfall Reimbursement" shall mean an amount payable to Developer pursuant to paragraph (e)(8) below in any year, solely from Surplus Agency Revenues, if any, actually received by the Agency in that year, equal to the amount, if any, that total Developer Shortfalls in prior years exceed total Agency Shortfall Reimbursements made in prior years. (3) "Agreement" as used herein shall mean that certain Disposition and Development Agreement by and between Agency and Developer, as implemented by the First, Second, Third, Fourth, Fifth and Sixth Implementation Agreements, to which this Second Revised Attachment No. 8 is a part. (4) "Boutique Hotel" as used herein shall mean an intimate, luxurious, unique destination hotel which provides an exceptional and personalized level of accommodation, services and facilities, including, but not limited to the following attributes: (i) equivalent to Upper Upscale Chain hotel, as defined by Smith Travel Research, as reasonably determined by the Agency Executive Director; (ii) furnished in a themed, stylish and/or inspirational manner; (iii) fitted with telephone, wi-fi Internet connection, plasma or LCD televisions (or other television modes having very high quality) and cable/pay televisions; (iv) twenty-four (24) hour hotel staff and guest services; (v) on -site fine dining facilities; and (vi) bars and lounges open to the general public. (5) "City" as used herein shall mean the City of Huntington Beach. (6) "Commencement of Hotel Operations" as used herein shall mean that certain point in time when Developer has received a written approval from the Agency of a hotel management agreement pursuant to Section 402 of the Agreement, issuance by City of a certificate of occupancy for the Boutique Hotel (issuance of a temporary certificate of occupancy will not satisfy the requirement of a certificate of occupancy), and such hotel is fully open for business to the general public as a Boutique Hotel, including, but not limited to fully opening for business to the general public all associated restaurant and banquet facilities. (7) "Completion Date" as used herein shall mean the date on which (i) a final certificate of occupancy is issued by the City for the public parking facilities and the City has issued final approval of all Shell Building permits and all Interior Improvements permits for the Boutique Hotel; or (ii) a final certificate of occupancy is issued by the City for the public parking SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 1 Attachment 8.v5a(Sept. 18, 2008) facilities and a final certificate of occupancy is issued by the City for the Boutique Hotel and seventy-five percent (75%) of the net retail space is leased; or (iii) the Release of Construction Covenants to be issued by Agency pursuant to the Agreement with respect to the improvements to be constructed by Developer on or in connection with the Site is recorded in the Official Records of Orange County. The term "Shell Building" includes, but is not limited to, the building envelope, foundation, walls and roof. The term "Interior Improvements" includes, but is not limited to, detailed interiors, restrooms and finishes. (8) "Developer Shortfall" shall mean the amount, if any, that (i) the payment made by Agency to Developer in any year on account of the Agency Obligation pursuant to paragraph (e)(2) below, is less than (ii) the amount that would be sufficient to fully amortize the Agency Obligation, plus interest, over a 25-year period commencing with the Completion Date based upon the amortization schedule then in effect pursuant to paragraph (e)(6) below. (9) "Net Tax Increment" as used herein shall mean the total ad valorem property tax increment revenue allocated to and received by Agency pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount attributable by the Orange County Assessor solely to the Merged Redevelopment Project, but specifically excluding therefrom all of the following: (a) the percentage of tax increment revenues from the Merged Redevelopment Project that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law for low- and moderate -income housing purposes; and (b) the percentage of tax increment revenues from the Merged Redevelopment Project that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements (including any and all agreements entered into prior to the Agreement by the Agency and such governmental entities implementing the tax sharing/pass-through agreements); and (c) the percentage of tax increment revenues in the Merged Redevelopment Project which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 et seq. of the Community Redevelopment Law, as amended from time to time; and (d) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter - approved indebtedness; and (e) charges for County administrative charges, fees or costs for the Merged Redevelopment Project. (10) "Project Costs" as used herein shall have the meaning ascribed to such term in Section 216 of the Agreement. (11) "Surplus Agency Revenues" shall mean the excess, if any, in any year of (i) revenues required by paragraph (e)(2) below to be available for payment from Agency to Developer on account of the Agency Obligation, over (ii) the amount actually required to be paid in that year by Agency to Developer by said paragraph (the amount that would be sufficient to fully amortize the Agency Obligation, plus interest, over the amortization period and schedule SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 2 Attachment 8.v5a(Sept. 18, 2008) then in effect pursuant to paragraph (e)(6) below, to the extent of the availability of such ear- marked funds). (12) All capitalized terms not defined in this Second Revised Attachment No. 8 shall have the meanings ascribed to such terms elsewhere in this Agreement. (b) Subject to all of the terms and conditions of the Agreement (including, without limitation, the provisions of paragraph (e) below limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the principal amount payable by the Agency to Developer under this Second Revised Attachment No. 8 shall be the sum of: (1) Seven Million Nine Hundred Thousand Dollars ($7,900,000), which is inclusive of any and all relocation costs required to be paid by Agency and all Acquisition Costs advanced to the Agency by Developer or paid to third party property owners or tenants by Developer as lease payments or other lease obligations or otherwise, pursuant to the First Implementation Agreement and Sublease or otherwise, plus (2) Nine Hundred Fifty Thousand Dollars ($950,000), which is Thirty -Eight Thousand Dollars ($38,000) for each of the twenty-five (25) additional parking spaces that the Developer is maintaining, repairing and operating on the Site above and beyond the four hundred eleven (411) parking spaces required by the City to be located in the public parking facility in connection with the development of the Site ("Additional Parking Reimbursement"), less (3) An amount equal to seventy-five percent (75%) of the amount if any by which Project Costs, as approved by the Agency after the Completion Date based upon the Certified Project Cost Statement approved by the Agency pursuant to Section 216(d) of the Agreement, are less than forty-six million dollars ($46,000,000); plus (4) An amount equal to the Agency Upgrade Assistance to be paid pursuant to paragraph (k) below. (c) The obligations of the Agency under paragraphs (b)(1), (b)(2) and (b)(3) above (collectively the "Agency Obligation") represents reimbursement to Developer for construction and installation of public infrastructure within dedicated public rights -of -way and the public parking facilities, clearance of existing improvements on the portion of the Site located within dedicated public rights -of -way and publicly owned public parking facility area, excavation, grading and other activities necessary to prepare said public rights -of -way and public parking facility area for development of said public infrastructure and public parking facilities, and acquisition and relocation costs in connection therewith. In no event shall Developer be entitled to payment or reimbursement from Agency for any "construction, alteration, demolition, or repair work" (as said phrase is defined in Labor Code Section 1720 (a)) other than for said public infrastructure and public parking facilities which are to be constructed and installed by Developer within dedicated public rights -of -way and publicly owned public parking facility area. SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 3 Attachment 8.0a(Sept. 18, 2008) (d) The Agency Obligation shall bear interest from the Completion Date until the date of repayment by Agency to Developer hereunder as follows (A) fixed at seven percent (7%) simple interest per annum as to the Seven Million Nine Hundred Thousand Dollar ($7,900,000) Agency payment obligation set forth in paragraphs (b)(1) and (b)(3); and (B) fixed at ten percent (10%) simple interest per annum as to the Nine Hundred Fifty Thousand Dollars ($950,000) Additional Parking Reimbursement set forth in paragraph (b)(2). (e) The Agency Obligation shall be a special and limited obligation payable to Developer solely from Net Tax Increment from the Merged Redevelopment Project. The Agency shall have no obligation to pay any amounts to Developer pursuant to this Second Revised Attachment No. 8 except as follows: (1) The following conditions precedent to each payment hereunder shall be satisfied: (A) The Completion Date shall have occurred; (B) Developer shall have theretofore cured any default as to any of its obligations under this Agreement or the Agreement Containing Covenants Affecting Real Property (as amended) or the Grant Deed; (C) Fee title to the public parking facilities constructed by Developer (which may be a condominium unit containing the public parking facilities) shall have been conveyed to the City of Huntington Beach prior to the first payment of the Agency Obligation, such fee title to be in marketable condition subject only to the documents to be recorded pursuant to the Agreement, matters required by the City and easements necessary for the improvements and other matters reasonably approved in writing by the Agency and the City; (D) Developer, the Agency and the City shall have agreed upon, executed and recorded a set of covenants, conditions and restrictions to be recorded against the Site, conforming in form and substance to the Declaration of Covenants, Conditions & Restrictions & Reciprocal Easement Agreement attached to the Sixth Implementation Agreement covering maintenance, repair, restoration and assessments, which shall be senior to any financing instruments or other liens; (E) Developer and the Agency shall have agreed upon, executed and recorded the First Amendment to Agreement Affecting Real Property to be recorded against the Site conforming in form and substance to the First Amendment to Agreement Affecting Real Property attached to the Sixth Implementation Agreement; (F) Developer and the City shall have agreed upon, executed and recorded an operating agreement for the public parking facilities to be recorded against the Site conforming in form and substance to the Operating Agreement attached to the Sixth Implementation Agreement; SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 4 Attachment 8.v5a(Sept. 18, 2008) (G) Developer and the City shall have agreed upon, executed and recorded the Grant of License and Agreement Regarding Maintenance of Landscaping and Public Improvements to be recorded against the Site conforming in form and substance to the Grant of License and Agreement Regarding Maintenance of Landscaping and. Public Improvements attached to the Sixth Implementation Agreement; and (H) The City shall have accepted the public parking facilities in accordance with Section 255.22 of the City of Huntington Beach Zoning and Subdivision Ordinance. As a condition precedent to the City's acceptance of the public parking facilities, Developer shall assign to the City (in form reasonably acceptable to the City Attorney, the City's Community Services Director, and the City's Director of Public Works) all of the Developer's rights in any warranties, guarantees, maintenance obligations or other contingent obligations of third persons with respect to the public parking facilities. (2) Subject to all of the terms and conditions of this Agreement, including without limitation paragraph 0) below, on or prior to September 30 of each year, beginning with the first September 30 which follows the Completion Date, and continuing until the Agency Obligation (and any accrued interest thereon) has been paid in full, the Agency shall pay to Developer an amount equal to such portion of Net Tax Increment from the Merged Redevelopment Project received by the Agency during the prior Agency fiscal year that is sufficient to repay the Agency Obligation, plus interest, within a twenty-five (25) year amortization period commencing with the Completion Date. Agency hereby covenants to refrain from taking any action which would diminish or impair in any way its receipt (and subsequent payment of the Agency Obligation and interest thereon) of Net Tax Increment from the Merged Redevelopment Project. (3) Reserved (4) Reserved (5) Reserved (6) The annual sum of Net Tax Increment from the Merged Redevelopment Project "that is sufficient to repay the Agency Obligation, plus interest, within a twenty-five (25) year amortization period commencing with the Completion Date," as provided for in subparagraph (2) of this paragraph (e), shall be recalculated prior to each September 30 during the 25-year amortization period to account for all of the following: (A) prepayments of Agency's obligations pursuant to paragraph (f) of this Second Revised Attachment No. 8; and (B) any Developer Shortfalls; and (C) any Agency Shortfall Reimbursements paid to Developer. In making such calculation, the amortization period shall be reduced to equal the time between the effective date of such calculation and the date the 25-year period for the original amortization period expires. (7) Any amount of the Agency Obligation, including accrued and unpaid interest, that remains unpaid for any reason whatsoever on the twenty-fifth anniversary of the SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 5 Attachment 8.v5a(Sept. 18, 2008) Completion Date, after application of all funds required to be paid to Developer by this Second Revised Attachment No. 8, shall be forgiven by Developer and shall no longer be owed to Developer nor be considered an indebtedness of the Agency. (8) The Agency shall pay to Developer any Agency Shortfall Reimbursement that may be due in any year, if any, concurrently with the payment required by paragraph (e) (2) above, which Agency Shortfall Reimbursement payments shall be credited in favor of Agency against the Agency Obligation. (f) The Agency's obligations hereunder may be prepaid by the Agency, in whole or in part, at any time and from time to time without penalty. (g) The parties acknowledge and agree that nothing in this Sixth Implementation Agreement is intended to change nor does change in any way the requirements in Section 318 of the Agreement pertaining to the Release of Construction Covenants. (h) The Agency's obligation to pay Net Tax Increment from the Merged Redevelopment Project in accordance with this Second Revised Attachment No. 8 shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith, provided that the Agency determines at the time of issuance of any such future bonds, based upon a report obtained by the Agency from its financial consultant, that such issuance and indebtedness will not materially and adversely affect the Agency's ability to perform its obligations under this Second Revised Attachment No. 8. The Agency shall give Developer a copy of any such report within fifteen (15) days after the Agency's receipt of such report. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Net Tax Increment from the Merged Redevelopment Project to Developer under this Second Revised Attachment No. 8 is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 33671.5 of the Community Redevelopment Law. (i) This Second Revised Attachment No. 8 is part of the Agreement and is subject to all of the terms and conditions thereof. 0) The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts owed by Developer to the Agency, including without limitation amounts payable by Developer to the Agency pursuant to Section 701 of the Agreement, against amounts payable by the Agency under this Second Revised Attachment No. 8; provided, however, that no amount shall be set off by Agency unless either (X) determined by final judgment to be owing to Agency, or (Y) in the case of amounts owed to Agency pursuant to Section 701 of this Agreement, such set off amount does not exceed the amount paid to Agency for the Operating Year which precedes the date of the set off. (k) The Agency shall pay to Developer a one time lump sum payment of Two Million Four Hundred Thousand Dollars ($2,400,000) within sixty (60) days of Commencement of Hotel SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 6 Attachment 8.0a(Sept. 18, 2008) Operations of a Boutique Hotel on the Site to provide Developer with assistance in upgrading the Boutique Hotel; provided however that no such payment shall be made unless and until the conditions precedent set forth in paragraph (e)(1) are satisfied (the "Agency Upgrade Assistance"). SECOND REVISED SCHEDULE OF FEASIBILITY GAP PAYMENTS Page 7 Attachment 8.v5a(Sept. 18, 2008) EXHIBIT 2 SECOND REVISED SCOPE OF DEVELOPMENT [behind this page] SECOND REVISED ATTACHMENT NO.4 SECOND REVISED SCOPE OF DEVELOPMENT I. DEVELOPMENT OF THE SITE Developer shall develop the Site in accordance with plans approved in writing by the City, Conditional Use Permit No. 99-45 with Special Permits No. 02-06 and Coastal Development Permit No. 99-16, including, without limitation, a new Boutique Hotel including at least 147 guest rooms, at least 101,591 square feet of new gross leasable area retail and restaurant improvements, a parking facility with the number of public parking spaces required by the City per applicable City requirements plus an additional 25 parking spaces, and other amenities, all in accordance with entitlements and plans approved by the City. In addition to all of the other requirements under the Agreement, the hotel to be developed on the Site shall be a Boutique Hotel having an overall standard of quality equal to or better than the following Joie de Vivre Hotels as of the date of the Sixth Implementation Agreement (all of which have at least a four star rating): (a) Harvest Inn located in St. Helena, California; (b) Hotel Kabuki located in San Francisco, California; (c) Hotel Los Gatos located in Los Gatos, California; (d) Hotel Montgomery located in San Jose, California; and (e) Hotel Vitale located in San Francisco, California, and the retail and restaurant uses to be developed on the Site shall be nationally or regionally recognizable and reputable retailers or restaurants (or local retailers or restaurants meeting at least the same quality) of the nature and quality customarily included in retail/restaurant centers meeting the requirements and restrictions of this Second Revised Scope of Development. The term "Boutique Hotel" as used herein shall mean an intimate, luxurious, unique destination hotel which provides an exceptional and personalized level of accommodation, services and facilities, including, but not limited to the following attributes: (i) equivalent to Upper Upscale Chain hotel, as defined by Smith Travel Research, as reasonably determined by the Agency Executive Director; (ii) furnished in a themed, stylish and/or inspirational manner; (iii) fitted with telephone, wi-fi Internet connection, plasma or LCD televisions (or other television modes having very high quality) and cable/pay televisions; (iv) twenty-four (24) hour hotel staff and guest services; (v) on -site fine dining facilities; and (vi) bars and lounges open to the general public. In addition, the work specified in lI. of this Second Revised Scope of Development shall be completed as a condition precedent to the issuance of a Release of Construction Covenants. The design and construction of the development shall be coordinated in order to maximize its compatibility with the abutting commercial uses and to minimize traffic and other impacts on adjacent uses. Restaurants and retail establishments on the Site shall be of a quality and nature consistent with the City's specific plan for the area, and shall first be approved in writing by Agency. No fast food restaurants which typically include "drive -through" features shall be Scope.Q(Sept. 18, 2008) permitted. No increase in the number of liquor stores on the Site shall be permitted. No tattoo parlors, massage parlors, or adult entertainment uses shall be permitted, nor shall the sale or exhibition of obscene or pornographic items be permitted. No Bar Establishments shall be permitted. "Bar Establishment" means a place of business providing the on premises service of alcoholic beverages, beer or wine, without bona fide hot food service and with less than 75% of the customers served at tables. II. PUBLIC IMPROVEMENTS AND SITE PREPARATION The public parking facility and other public improvements to be constructed hereof shall be constructed by Developer pursuant to plans and budget approved by the City. The public parking facility shall contain approximately 411 of the parking spaces required for the development of the Site and 25 additional parking spaces. The Developer shall construct such improvements without undertaking a formal competitive bidding process normally required for the construction of public improvements. Because of the scope and location of such public improvements within the overall development to be constructed on the Site by Developer, there is an integral relationship between the public and the private improvements to be constructed which requires using a single plan of construction and general contractor for both public and private improvements in order to avoid disruptive and costly duplication of many necessary construction activities. Neither the Agency nor the City would obtain any material financial advantage by publicly bidding such public improvements, and would in all likelihood suffer a material financial disadvantage from such multiplicity of construction plans and contractors. Scope.Q(Sept. 18, 2008) 0) EXHIBIT 3 SECOND REVISED SCHEDULE OF PERFORMANCE [behind this page] 2 3 4 5 7 SECOND REVISED ATTACHMENT NO. 3 SECOND REVISED SCHEDULE OF PERFORMANCE Submission - Developer's Deposit. Developer shall submit Developer's Deposit to Agency pursuant to Section 108 of this Agreement. Submission - Applications for Grading and Excavation Permits. Developer shall submit to City for approval applications for grading and excavation permits and related documents. Submission - Evidence of Financing. Developer shall submit to Agency for approval the evidence of financing referred to in Section 215 of this Agreement and the guaranteed maximum contracts for public parking and other public improvements. Approval - Evidence of Financing. Agency shall approve or disapprove evidence of financing and guaranteed maximum contracts. Submission - Hotel Franchise Agreement. Developer shall submit to Agency for approval or disapproval a proposed Hotel Franchise Agreement pursuant to Section 403 of this Agreement. Approval - Hotel Franchise Agreement. Agency shall approve or disapprove the proposed Hotel Franchise Agreement. Submission - Hotel Management Agreement. Developer shall submit to Agency for approval or disapproval a proposed Hotel Management Agreement pursuant to Section 402 of this Agreement. Approval - Hotel Management Agreement. SOP.v4(Sept. 18, 2008) Completed. Completed. Completed. Completed. Waived for initial operation by Developer through an Original Management Agreement to be approved by the Agency. N/A. Not later than October 15, 2008. Satisfaction of this item shall be a condition precedent to the payment of any portion of the Agency Obligation or the Additional Parking Reimbursement. Within 30 days after receipt by Agency SECOND REVISED ATTACHMENT NO. 3 SECOND REVISED SCHEDULE OF PERFORMANCE Agency shall approve or disapprove the proposed Hotel Management Agreement. 9. Submission - Proiect Cost Budget. Completed. Developer shall submit to Agency for approval or disapproval a proposed Project Cost Budget pursuant to Section 216 of this Agreement. 10. Approval - Project Cost Budget. Agency Completed. shall approve or disapprove the proposed Project Cost Budget. 11. Opening of Escrow. Agency shall open Completed. escrow for conveyance of the Site. 12. Conveyance of Site; Close of Escrow. Completed. Agency and Developer shall execute and cause to be recorded the Grant Deed. 13. Commencement of Construction. Completed. Developer shall commence the work and improvements required for development of the Site. 14. Completion of Construction. Developer Not later than April 30, 2009. shall complete construction of all improvements. NOTES: 1. Deadlines set forth in this Schedule of Performance are subject to the enforced delay provisions of Section 604 of the Agreement. 2. Extensions may be approved in writing by the Agency's Executive Director pursuant to Section 308 of the Agreement. 3. Descriptions of items of performance and deadlines in this Schedule of Performance are not intended to supercede more complete descriptions in the text of the Agreement; and in the event of any conflict between the text of the Agreement and this Schedule, the text of the Agreement shall govern. 2 SECOND REVISED ATTACHMENT NO. 3 SECOND REVISED SCHEDULE OF PERFORMANCE SOP.v4(Sept. 18, 2008) EXHIBIT 4 FIRST AMENDMENT TO THE AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY [behind this page] This Document was electronically recorded by 'Eli Cert Mail C Recorded in Official Records, Orange County OFFICIAL BUSINESS Tom Daly, Clerk -Recorder Document entitled to free �119Y1uf�1111Jill1E��ll1�19n916�s��ld0�ll��li NO FEE recording per Government Code Sections 6103 and 27383 2008000544606 'l'l :09auv>I 'l'1/21/08 228 59 Al2 17 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Agency Clerk FIRST AMENDMENT TO AGREEMENT CONTAINING COVENANTS AFFECTING REAL. PROPERTY This FIRST AMENDMENT TO AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY (this "First Amendment") is made and entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and CIM/HUNTINGTON, LLC, a California limited liability company ("Owner") as of M t�Ein66EN 03 , 2008 with reference to the following: A. Owner holds fee title to that certain real property described in the legal description attached hereto as Exhibit A and incorporated herein by this reference, and shown on the Property Map as attached hereto as Exhibit B and incorporated herein by this reference ("Owner Property"). Owner has a leasehold interest in that certain real property described in the legal description attached hereto as Exhibit A, and shown on the Property Map as attached hereto as Exhibit B ("Leased Premises"). The Owner Property and the Leased Premises are collectively referred to herein as the "Property". B. The Property is subject to the Redevelopment Plan for the Main -Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). C. The Property is subject to that certain Disposition and Development Agreement by and between the Agency and Owner dated June 17, 1999, which Disposition and Development Agreement was supplemented by that certain [First] Implementation Agreement entered into between the Agency and CIM Group, LLC dated April 6, 2000; that certain Second Implementation Agreement entered into between the Agency and CIM Group, LLC dated March First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 1 5, 2001, that certain Third Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated October 30, 2002, that certain Fourth Implementation Agreement entered into between the Agency and CIM/Huntington, LLC dated as of September 15, 2003, that certain Fifth Implementation Agreement entered into between the Agency and CIM/HUNTINGTON, LLC dated as of July 19, 2004 and certain Sixth Implementation A reement entered into between the Agency and CIM/HUNTINGTON, LLC dated as of O 42 / 6�; 2008 (collectively, the "DDA"), all of which are public records on file at the offices of the Agency. The Property is referred to in the DDA as the "Site." All capitalized terms in this First Amendment shall have the meanings ascribed to them in the DDA unless indicated to the contrary herein. D. Pursuant to the DDA, Agency and Owner entered into that certain Agreement Containing Covenants Affecting Real Property dated as of June 23, 2004 ("Covenant Agreement") which was recorded on June 25 2004 as Instrument No. 2004000580586 D. In connection with the Sixth Implementation Agreement to the DDA, Owner and Agency desire to enter into this First Amendment to amend the Covenant Agreement in order to conform it to the DDA. NOW, THEREFORE, in consideration of the foregoing, Owner and Agency hereby agree as follows: 1. Revisions to Covenant Agreement. a. Section La. Construction Covenants. Section La. of the Covenant Agreement is hereby deleted in its entirety and replaced with the following: "a. Develop and construct improvements on the Property solely in accordance with the Redevelopment Plan, the Grant Deed, this Covenant Agreement (as amended), the DDA (including but not limited to the Second Revised Scope of Development, Second Revised Attachment No. 4), and plans approved by the City of Huntington Beach, with at least 142 and approximately 157 hotel rooms, and approximately 101,591 net square feet of gross leasable area of retail, office and restaurant uses to be fully paid for by Owner, and a public parking facility conforming with City approved plans. In addition to all of the other requirements under this Covenant Agreement, the hotel to be developed on the Property shall be a Boutique Hotel having an overall standard of quality equal to or better than the following Joie de Vivre Hotels as of the date of the Sixth Implementation Agreement to the DDA (all of which have at least a four star rating): (a) Harvest Inn located in St. Helena, California; (b) Hotel Kabuki located in San Francisco, California; (c) Hotel Los Gatos located in Los Gatos, California; (d) Hotel Montgomery located in San Jose, California; and (e) Hotel Vitale located in San Francisco, California, and the retail and restaurant uses to be developed on the Property shall be nationally or regionally recognizable and reputable retailers or First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 2 1 . � restaurants (or local retailers or restaurants meeting at least the same quality) of the nature and quality customarily included in retail/restaurant centers meeting the requirements and restrictions of the Second Revised Scope of Development (Second Revised Attachment No. 4) and shall meet the additional requirements and restrictions set forth in Section 2.a of the Agreement Containing Covenants Affecting Real Property (as amended). The term "Boutique Hotel" as used herein shall mean an intimate, luxurious, unique destination hotel which provides an exceptional and personalized level of accommodation, services and facilities, including, but not limited to the following attributes: (i) equivalent to Upper Upscale Chain hotel, as defined by Smith Travel Research, as reasonably determined by the Agency Executive Director; (ii) furnished in a themed, stylish and/or inspirational manner; (iii) fitted with telephone, wi-fi Internet connection, plasma or LCD televisions (or other television modes having very high quality) and cable/pay televisions; (iv) twenty-four (24) hour hotel staff and guest services; (v) on -site fine dining facilities; and (vi) bars and lounges open to the general public." b. Section 2.a. — Surviving Covenants. The first paragraph of Section 2.a. of the Covenant Agreement is hereby deleted in its entirety and replaced with the following: "a. Devote the Property, or cause the Property to be devoted, to use solely in accordance with the Redevelopment Plan, the Grant Deed, the Agreement Containing Covenants Affecting Real Property (as amended), the DDA, and plans approved by the City of Huntington Beach for hotel, retail, restaurant and parking uses, with at least 142 and approximately 157 hotel rooms, and approximately 101,591 net square feet of gross leasable area of retail and restaurant uses, and a public parking facility conforming with City approved plans. In addition to all of the other requirements under this Covenant Agreement, the hotel to be maintained on the Property shall be a Boutique Hotel having an overall standard of quality equal to or better than the following Joie de Vivre Hotels as of the date of the Sixth Implementation Agreement to the DDA (all of which have at least a four star rating): (i) Harvest Inn located in St. Helena, California; (ii) Hotel Kabuki located in San Francisco, California; (iii) Hotel Los Gatos located in Los Gatos, California; (iv) Hotel Montgomery located in San Jose, California; and (v) Hotel Vitale located in San Francisco, California, and the retail and restaurant uses to be maintained on the Property shall be nationally or regionally recognizable and reputable retailers or restaurants of the nature and quality customarily included in retail/restaurant centers meeting the requirements and restrictions of the Second Revised Scope of Development (Second Revised Attachment No. 4), and meeting the following requirements and restrictions:" C. Section 2.c. — Surviving Covenants. Section 2.c. of the Covenant Agreement is hereby deleted in its entirety and replaced with the following: First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 3 "c. Pay when due all real estate taxes and any special taxes or assessments, assessed and levied on the Property or any portion thereof or any improvements thereon or any interest therein. Owner agrees that Owner, its successors, its assigns and every successor in interest to the Property or any part thereof shall be prohibited from appealing, challenging or contesting in any manner the validity or amount of the assessed value of the Property or any portion thereof or any improvements thereon or any interest therein so as to claim an assessed value below the first full assessment by the County Tax Assessor after the completion of the initial improvements on the Property ("Baseline Assessment"). In the event Owner, its successor or assign appeals, challenges or contests the assessed value in violation of this Covenant Agreement and such appeal, challenge or contest results in an assessed value below the Baseline Assessment, Owner, its successor or assign shall annually pay to the Agency the following in -lieu fee payment in each of the years from and after such reduced assessment until the earlier to occur of (i) the end of the twenty-five year period commencing on the Completion Date; or (ii) the date that a new assessed value goes in effect that is at least as high as the Baseline Assessment: (i) An annual payment which amounts to the difference between one (1%) percent of the Baseline Assessment plus the maximum amount of annual increases permitted under applicable law to the Baseline Assessment (currently two percent (2%) a year) and one (1%) percent of the new assessed value plus the maximum amount of annual increases permitted under applicable law to the new assessed value (currently two percent (2%) a year; or at the option of the Agency (ii) Payment in the form of a credit to Agency equal to the amounts annually determined under Section 401(5)(i) of the DDA to be applied towards the Agency Obligation. Such payments shall be reduced by first crediting against amounts owing the amount of any Developer Shortfall for all prior years not theretofore reimbursed by Agency Shortfall Reimbursements except to the extent any Developer Shortfall has been caused by a violation of the foregoing prohibition on taxes and assessment appeals, challenges or contests s reasonably determined by the Agency. This prohibition against appealing, challenging or contesting shall be binding on Owner, its assigns and any successor in interest to the Property or any part thereof for twenty-five (25) years following the Completion Date." d. Sections 2.h. and 2.i. — Surviving Covenants. Sections 2.h. and 2.i. of the Covenant Agreement are hereby deleted in their entirety and replaced with the following: "h. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, religion, creed, color, national First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 11 origin, sex, sexual orientation, disability, marital status, age or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Owner 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 Property. i. The Owner shall refrain from restricting the rental, sale or lease of the property on the basis of sex, sexual orientation, marital status, race, color, creed, religion, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (i) In deeds: "The grantee herein covenants by and for himself 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." (ii) 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, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the 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 segregation with reference to the First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) k selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (iii) In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through 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 tenants, lessees, sublessees, subtenants, or vendees of the land." e. New Sections 2.o., 2.p., 2.q., 2.r., and 2.s. — Surviving Covenants. New Sections 2.o., 2.p., 2.q., 2.r., and 2.s. are hereby added to the Covenant Agreement as follows: "o. So long as the Agency receives ad valorem property tax increment revenues from the Property and the improvements thereon pursuant to the Redevelopment Plan, use the area designated on the Property as a hotel as of the date of the Sixth Implementation Agreement to the DDA only for a Boutique Hotel and for no other use. P. Maintain, repair and operate in the public parking facility to be developed and operated on the Property twenty-five (25) additional parking spaces above and beyond the four hundred eleven (411) parking spaces required by the City to be located in the public parking facility in connection with the development of the Property, for a total of four hundred thirty-six (436) parking spaces in the public parking facility. The twenty-five (25) additional parking spaces shall be in such size (e.g., tandem and/or compact) and locations within the public parking facility as pre -approved in writing by the City Planning Department from time to time. The maintenance (including repair, restoration and reconstruction) and operation of the twenty-five (25) additional parking spaces shall be in accordance with this Covenant Agreement, the Parking Management Plan approved by the City, the covenants, conditions and restrictions and reciprocal easement agreement and operating agreement to be entered into and recorded against the Site in accordance with the Conditions of Approval and the DDA, and plans approved by the City of Huntington Beach. q. Pay, on behalf of City and Agency, any and all amounts owed to Abdelmuti Development Company ("Abdelmuti") and James A. Lane and Victoria Jean Lane, as Trustees of the James A. Lane and Victoria Jean Lane 1197 Trust, due to any increase in the cost of annual public parking passes that exceed the Threshold Cost Increase (as defined in the "Amendment to OPA") pursuant to First Amdmt Agreement Containing Covenants 0 (execution) (Sept. 18, 2008) 31 paragraph 3 of the Fourth Amendment to Owner Participation Agreement dated February 3, 2003 between Agency and Abdelmuti (the "Amendment to OPA"), and to defend, protect, indemnify and hold harmless the City and the Agency and their respective officers, agents, elected and appointed officials, employees and volunteers free and harmless therefrom. r. At the time specified in the Second Revised Schedule of Performance, Owner shall enter into a hotel management agreement first approved in writing by the Agency, it being understood and agreed that Owner may redact from such agreement when submitted to Agency for approval any confidential business information not relevant to the purposes of the DDA and this Covenant Agreement (the "Original Management Agreement"). Prior to the expiration or termination of the Original Management Agreement (and any successor hotel management agreement(s)), Owner shall obtain the Agency's written approval of a new hotel management agreement which shall become effective concurrently with the expiration or sooner termination of the hotel management agreement which it replaces. Each such hotel management agreement shall be with a manager determined by the Agency to have not less than eight (8) years of experience in the successful operation of first quality hotels comparable to the hotel to be constructed on the Property. Approvals required of the Agency under this Section 2.r. shall follow and be limited by the following procedures: Within twenty (20) days after receipt of Owner's request for approval, Agency shall respond in writing by stating what further information, if any, Agency reasonably requires in order to determine whether or not to approve the agreement. Owner shall promptly furnish to Agency such further information as may be reasonably requested. Owner's request for approval shall be deemed complete twenty (20) days after Agency's receipt thereof, if no timely response requesting further information is delivered to Owner, or, if such a timely response requesting further information is received, on the date that Owner delivers such additional information to Agency, provided that Owner's additional information is responsive to Agency's request. Agency shall approve or disapprove the matter within thirty (30) days after Owner's request for such approval is accepted as complete or is deemed complete. Approval will not be unreasonably withheld if Owner demonstrates that the proposed management agreement will provide capable, competent and experienced operation of hotels similar in quality, size and type as required to be maintained on the Property pursuant to the DDA and this Covenant Agreement. If Agency shall disapprove a hotel operator, Agency shall do so by written notice to Owner stating the reasons for such disapproval. S. At the time specified in the Schedule of Performance, Owner shall enter into a hotel franchise agreement (the "Original Franchise Agreement") which has been approved in writing by the Agency using the same approval procedures as are set forth in Section 402 herein above for the hotel management agreement, and which provides for the operation of a hotel meeting the size, level of quality First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 7 and other requirements and restrictions referred to in Sections 401.1 and 401.2 above; provided however that this requirement may be waived in writing by the Agency if: (a) the Agency has approved the hotel management agreement for such proposed hotel in accordance with Section 402 above; (b) Owner provides evidence satisfactory to the Agency that a franchise agreement will not be entered into because the hotel will be owned and operated by the same entity; and (c) the Agency approves the hotel as meeting the size, level of quality and other requirements and restrictions referred to in Sections 401.1 and 401.2. Prior to the expiration or termination of the Original Franchise Agreement (and any successor franchise agreement(s)) (or, in the case where the franchise agreement requirement was waived in accordance with this Section, prior to entering into any franchise agreement or changing the flag of the hotel), Owner shall obtain the Agency's written approval of a new franchise agreement or new flag of the hotel (pursuant to said approval procedures) which shall become effective concurrently with the expiration or sooner termination of the franchise agreement which it replaces (or, in the case where the franchise agreement requirement was waived in accordance with this Section, which shall become effective upon entering into the franchise agreement). Each such franchise agreement shall be with a franchisor determined by the Agency to be comparable to, or of higher quality than, the franchisor under the Original Franchise Agreement or the first franchise agreement approved by the Agency in accordance with this Section. The Agency hereby acknowledges and consents to the Boutique Hotel being operated by Owner pursuant to an Original Management Agreement with Joie De Vivre Hospitality, Inc. provided that such Original Management Agreement is first approved by the Agency pursuant to Section 2.r., above." f. Section 5 — Agency Participation Payment. The parties agree that Owner shall not have a right to buy out the Agency Participation Payments. Accordingly, Section 5.(b) of the Covenant Agreement, "Buyout Provisions" and all references to Section 5.(b) or any Buyout Provisions in the Covenant Agreement are hereby deleted in their entirety. g. Section 12 — Release of Construction Covenants. Section 12. of the Covenant Agreement is hereby deleted in its entirety and replaced with the following: "12. Release of Construction Covenants. The Construction Covenants shall remain in effect until the recording of the Release of Construction Covenants to be issued by the Agency with respect to all improvements to be constructed pursuant to the DDA. The covenants against discrimination shall remain in effect in perpetuity. Except for such other dates as may be expressly provided herein, the Surviving Covenants shall remain in effect until a date which is thirty (30) years after the date this Covenant Agreement is recorded, unless and until they expire earlier in accordance with the express terms thereof, except for the covenant set forth in Paragraph 2.f hereinabove to pay the Agency Participation Payment, which shall remain if effect for forty (40) years from the Operating First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 8 Commencement Date. Upon the issuance and recordation of the Release of Construction Covenants by the Agency pursuant to the DDA, Owner shall have the right to have this Covenant Agreement restated and re -recorded with the deletion of the Construction Covenants, and the Agency agrees to enter into documents as may be reasonably required, subject to the approval of Agency legal counsel as to form, so as to effectuate the provisions of this paragraph." 2. Further Revisions. Any provisions of the Covenant Agreement which conflict with the intent of this First Amendment shall be deemed revised in accordance with this First Amendment. Nothing in this First Amendment is intended to or limits in any way any general provision in the Covenant Agreement which may pertain to Owner's obligations thereunder. 3. Binding on Successors and Assigns. This First Amendment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties hereto. 4. Covenant Agreement in Full Force and Effect. Except as otherwise modified herein, the terms and conditions of the Covenant Agreement shall remain unmodified and in full force and effect. In the event of any conflict between the terms of this First Amendment and the Covenant Agreement, the terms of this First Amendment shall control. 5. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this First Amendment and the DDA. 6. Date of this First Amendment. The effective date of this First Amendment shall be the date this First Amendment is executed by the Agency. 7. Counterparts. This First Amendment may be executed by each party on a separate signature page, and when the executed signature pages are combined with the balance of this First Amendment, it shall constitute one single instrument. [signatures on following pages] [remainder of page left intentionally blank] First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 0 Agency REDEVELOPMENT AGENCY OF THE CITY OF HLI,TTINGTON BEACH Date: NOVEN3LI��a 7. Executi ATTEST: AND AS TO FORM: Agency General Counsel c W 1410? APPROVED AS TO F [signatures continue on following page] First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) CIM/Huntington, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L. P., sole member, By: CIM Urban Fund, GP, LLC, its general partner Date: 10/14/08 By: l Name: Nicholas V. Morosoff Title: Secretary Date: By: Name: Title: First Amdmt Agreement Containing Covenants v3 (execution) (Sept. 18, 2008) 11 State of California County of Los Angeles On October 14, 2008 before me, Ellen Jo Rose , a Notary Public in and for said State, personally appeared Nicholas V. Morosoff , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS rdy li-W and official seal. Signature 14 Epf4fi-lo ose, Notary Public State of California County of 0,Q46)6C�- (Seal) ELLEN JO ROSE Commission # 1520364 z �=a Notory Public — CoffornioD Los Angeles County My Comm. Expires Oct 18, 2008 On NO ac-m6Ek- / Lmo t� before me, L ` �'��} a Notary Public in and for said State, personally appeared, " L. la" -►- FR,Q CJ/csoA) , who proved to me on the basis of satisfactory evidence to be the personG whose name's are subscribed to the within instrument and acknowledged to me that -he� �e executed the same in -44 •/their) authorized capacit res � and that byrhis�4etheir signatures on the instrument the persorW, or the entity upon behalf of which the persorosi` acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature SL4� EXHIBIT A LEGAL DESCRIPTION OF PROPERTY [behind this page] i LEGAL DESCRIPTION Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel A: Lots 9, 10, 12; 14, 16, 18, 20, 22, 24, 26, and 28 in Block 104 of Huntington Beach as shown on a Map recorded in Book 3, Page 36 of Miscellaneous Maps, records of Orange County, California. Excepting therefrom the Southeasterly 2 and 5/8`'' inches of said Lot 9. Also excepting therefrom all that portion of said land lying below a depth of 500 feet measured vertically from the present surface of the ground. Parcel B: Lots 1, 2, 3, 6 through 21 inclusive, 23, 25 and 27 in Block 105 of Huntington Beach as shown on a Map recorded in Book 3, Page 36 of Miscellaneous Maps, records of Orange. County, California. Also excepting therefrom all that portion of said land lying below a depth of 500 feet measured vertically from the present.surface of the. ground. Parcel C: Lots 4 and 5 in Block 105 of Huntington Beach as shown on a Map recorded in Book 3, Page 36 of Miscellaneous Maps, records of Orange County, California. Also excepting therefrom all that portion of said land lying below a depth of 500 feet measured vertically from the present surface of the ground. APN: 024-152-02 and 024-152-03 and 024-152-04 and 024-152-05 and 024-152-10 and 024-152-11 and 024-152-12 and 024-152-13 and 024-152-14'and 024-153-01 and 024- 153-02 and 024-153-03 and 024-153-10 and 024-153-16 KAcg\HB\CFM\Closing\legal Description Parcel A-C K:\CG\HB\CIM\Closing*xecution copies\Deed.execution copy(6-23-04)(final).doc b W,4.Lf9U/ Z 28 L27' — � - —— -- 26 5 R" • — 24 Lai — — - - 22 6 e 22 20 7., - — — 17 8 l9 no•. 17 7 n.4r " , 25 79•� •4,.5o• 14 18 20 26 12� P.M. 275-1 ms. 5.1 41 3) 2 I 1 s "' 5r4 t— 5 r 10 9) 81,7 6 I Rh, . I I so, 29•.I 25' 61 n s t P i t .22• RL a 104 z 123• 73• 41 "-Ji'� I LJ6.J/`9 O I t,f 1, PAC tF I C CI M Ccr1 = o J (A Vv4y} COASTMCCsrsa g 1 AM 8-2 • PM '--io ' EXHIBIT 5 GRANT OF LICENSE AND AGREEMENT REGARDING MAINTENANCE OF LANDSCAPING AND PUBLIC IMPROVEMENTS [behind this page] This Document was electronically recorded) by ER Cert Mail C Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder OFFICIAL BUSINESS �II�III �p�pI�p�III�� IIpgIIII� pII�p Document entitled to free NO FEE recording per Government Code 2008000544607 11:09am 11 /21 /08 Sections 6103 and 27383 228 59 Al2 Ili 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: � i ty Clerk GRANT OF LICENSE AND AGREEMENT REGARDING MAINTENANCE OF LANDSCAPING AND PUBLIC IMPROVEMENTS (CIM-Huntington Beach) This Agreement is made and entered into on this 3Mday of /lp� , 2008, by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "City," and CIM/HUNTINGTON, LLC, a California limited liability company, hereinafter referred to as "Licensee." 1. Recitals. a. Property. In connection with the development of that certain real property (the "Property") located in the City of Huntington Beach, County of Orange, State of California, and more particularly described in the legal description attached hereto as Exhibit "A" and incorporated by this reference as though fully set forth herein, Licensee is required by City to provide landscaping ("Landscaping") and other improvements (the "Improvements") in the public right-of-way in accordance with plans and specifications previously submitted by Licensee and approved by City. b. Improvement Area. Licensee will construct and install the Landscaping and the Improvements in a portion of the Property (hereinafter referred to as the "Improvement Area") that has been dedicated to the City by Licensee as public right-of-way, such Improvement Area more particularly described in the sketch collectively attached hereto as Exhibit `B" and incorporated by this reference as though fully set forth herein. C. Purpose of Agreement. The purpose of this Agreement is to delineate the parties' respective obligations, on the terms and conditions set forth below, with respect to the maintenance and replacement of the Landscaping, hardscape, and other Improvements in the Improvement Area. -1- Grant of License and Agmt Re Maintenance. Agency.v4 (Oct. 1, 2008) 2. Grant of License. Subject to terms and conditions hereinafter set forth, City grants Licensee a non-exclusive license (the "License") to use the Improvement Area for the installation, maintenance, repair, and replacement of the Landscaping and the Improvements. 3. Installation and Maintenance of Landscaping_. During the term of this License, Licensee agrees to maintain, at its sole cost and expense, the Landscaping in good and satisfactory condition and in accordance with the other documents recorded in favor of the City and/or the Redevelopment Agency of the City of Huntington Beach (the "Agency") in connection with the development of the Property. The Landscaping shall be installed as depicted on the Improvement Plans approved by the City pursuant to Conditional Use Permit No. 99-45 and shall include all plant materials and irrigation systems. Maintenance shall include, but not be limited to, watering/irrigation, repairing and/or adjusting irrigation systems when failures occur, fertilizing, cultivating, edging, mowing of grass, performing general planting and trimming or other corrective gardening as needed to maintain a healthy and natural appearance, road visibility and irrigation coverage, spraying grass and plants with both insecticides and herbicides, and generally keeping the Improvement Area in clean, safe and attractive condition, taking into consideration normal growth of the landscape materials and a continuation of the aesthetic quality of the area. The growth of all plant materials shall not be allowed to grow and obstruct sight distance, nor irrigation be allowed to spray across or onto any bicycle path, pedestrian walk or street right-of-way from the edge of the curb/gutter to the center of the street as designated on Exhibit `B." The Improvement Area shall be free from weeds, debris and harmful insects at all times. All gardening and maintenance performed shall conform to the best maintenance practices and to the Arboricultural and Landscape Standards Specification issued by the City's Department of Public Works. 4. Installation and Maintenance of Improvements. During the term of this License, Licensee agrees to maintain, at its sole cost and expense, the Improvements in good and satisfactory condition and in accordance with the other documents recorded in favor of the City and/or the Agency in connection with the development of the Property. The Improvements shall be installed as depicted on the Improvement Plans approved by the City pursuant to Conditional Use Permit No. 99-45 and shall include traffic control devices, enhanced hardscape, sidewalks, curbs, gutters, and street paving installed within the applicable Improvement Area, furniture, fountains, sculptures, benches, and other street furniture (but not bus shelters and appurtenant structures installed for the use of the Orange County Transportation Authority), including any signage or advertisements on or in connection with any of the foregoing, special lighting, lighting fixtures, signage and any enhancements to standard public facilities. Maintenance shall include, but not be limited to, removal of graffiti, paint, stickers, gum, wax and other deleterious materials, and keeping the Improvement Area in clean, safe and attractive condition, free and clear of litter, mud and debris and free from any objectionable noises, odors or nuisances and to comply with all health and police regulations, in all respects at all times. Without limiting the foregoing, Licensee shall provide trash pick-up, sweeping and clean-up as required to guarantee no offensive odors, gum, wax, litter, liquids or other materials are allowed to remain on or stain paving, planters, containers, decorative features, artwork or other surfaces. The frequency of refuse pick up and cleaning shall be, at a minimum, equal to the frequency of collection, disposal and hydro -washing that the City of Huntington Beach utilizes for Main Street in the downtown -2- Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) first block area. Catch basins shall be cleaned at a minimum of once per year prior to the beginning of the rainy season (October 1st). More cleanings may be required to maintain a sanitary, free flowing and odorless site condition. Building maintenance activities, including, without limitation, all clean-up, window washing, refuse enclosure and container cleaning, landscape maintenance, steam cleaning, etc., shall meet all "O" discharge requirements, i.e., "Full Waste Water Recovery Systems." Refer to the approved Water Quality Management Plan (WQMP), including sections N 11, N 15 and Structural Best Management Practices (BMP's) for restrictions and requirements. Licensee agrees to dispose of litter and debris only in receptacles designated by City. 5. Repair, Replace and Restore Enhanced Pavement Surface Treatment. Licensee agrees to repair, replace and restore, at Licensee's sole cost and expense, any enhanced pavement surface treatment constructed per the Improvement Plans approved by the City pursuant to Condition Use Permit No. 99-45 that may be affected by maintenance and/or repair of public water facilities (e.g., meters, fire hydrants, valves, meter boxes, vaults, appurtenances, etc.) performed by the City. The City shall replace and restore the areas and surface improvements to the condition in which they were prior to the performance of such work, except for any enhanced pavement surface treatments and enhanced hardscape. The City shall have no obligation for maintenance, repair, or replacement of enhanced pavement surface treatments resulting from City maintenance and repair to public water improvements and appurtenances located within the Improvement Area. 6. Refurbishing. Licensee shall perform, at its sole cost and expense, any and all refurbishing to the Improvement Area as necessary to bring the Improvement Area into an operating condition, all in accordance with plans submitted by Licensee to City, which plans shall be subject to the prior written approval of City. No changes, modifications or alterations may be made to the Improvement Area without the prior written consent of City, which will not be unreasonably withheld or delayed. All building permits, business licenses and other applicable permits and licenses shall be secured and paid for by Licensee. 7. Damage to Improvement Area. In the event any damage is caused to any Landscaping, pathways, sidewalks, curb, street or utilities as a result of the installation of the Improvements or Landscaping, repairs and/or maintenance of the Landscaping or Improvement Area or normal wear, theft, vandalism or destruction by natural occurrence, Licensee or its successors and assigns agree to repair same at their own expense. All repairs and replacement of amenities or finished surfaces such as repairing broken, cracked or lifted hard surfacing, shall be with the same materials and colors as originally approved and installed. All building permits, business licenses and other applicable permits and licenses shall be secured and paid for by Licensee. All repairs or replacement shall be completed promptly after receipt of written notice to repair by the City, and in any event within twenty business days after such notice. 8. Mechanics' Lien. Licensee agrees not to suffer any mechanics' lien(s) to be filed against the Landscaping or Improvement Area by reason of any work, labor, services or material performed at or furnished to the Landscaping or Improvement Area to City or to anyone holding the Landscaping or Improvement Area through or under the Agreement. Nothing in this Agreement shall be construed as consent on the part of the City to subject the City's estate in the -3- Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) Landscaping or Improvement Area to any mechanics' lien(s) or liability under the mechanics' lien law of the State of California. 9. Assi nnment. The License herein granted is personal to Licensee and is non - assignable except as expressly provided herein. Any attempt to assign this License, except as expressly authorized herein, shall be null and void. Other than the license granted hereunder, Licensee hereby expressly waives any claim to or interest or estate of any kind or extent whatsoever in the Landscaping or Improvement Area arising out of this License or out of Licensee's use or occupancy of the Landscaping or Improvement Area whether now existing or arising at any future time. This License is appurtenant to the Property and may not be separately assigned apart from the Property or the interests therein, except that the assignment of this License to a property owners' association or a similar organization having the same qualifications for membership and formed for the same purposes as a property owners' association shall be deemed to be a valid assignment. Licensee shall give notice in writing to City of each such assignment. As a condition to any such assignment, the assignee shall expressly assume the obligations of Licensee hereunder pursuant to a recorded assignment document in form and substance reasonably satisfactory to the City. Such notice shall include the mailing address of the assignee, and will become the assignee's address for service of notices. The Property is now, or will be, a mixed use project composed of a parking structure, hotel and retail center. Licensee intends to complete the subdivision of the Project Site into separate three-dimensional parcels (each, a "Parcel") either through the filing of a condominium plan or other vertical subdivision (the "Subdivision"). As the improvements on the Improvement Area will be for the benefit of the Parcel owners, it is agreed that Licensee may assign its rights under this Agreement to the owner or owners of the Parcels or to a property owners' association comprised of such Parcel owners. 10. Term. The term of this License shall be perpetual, provided that City may terminate this License upon thirty (30) days' written notice to Licensee. In the event of any such termination, Licensee and its successors and assigns shall be required to terminate the water and electrical service to the Improvement Area irrigation system to the reasonable satisfaction of City. 11. Applicable Law. Licensee shall, at its sole cost and expense, faithfully observe in the use, maintenance and occupation of the Landscaping and Improvement Area all municipal ordinances, and all state and federal statutes now in force and which may hereafter be in force, and shall fully comply, at its sole expense, with all regulations, orders, and other requirements issued or made pursuant to any such ordinances and statutes. All building permits, business licenses and other applicable permits and licenses shall be secured and paid for by Licensee. 12. Utilities. Licensee shall bear the expense of irrigation water, electricity and any other utility necessary to the operation of the Improvement Area pursuant to this License. Licensee shall be solely responsible for using such utilities in a safe and hazardless manner, complying in all respects with applicable codes and ordinances. -4- Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) 13. Workers' Compensation Insurance. Pursuant to California Labor Code §1861, Licensee or its successors or assigns acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation; Licensee covenants that it will comply with such provisions prior to commencing performance of the work hereunder. Licensee shall maintain such Workers' Compensation Insurance in an amount of not less than One Hundred Thousand Dollars ($100,000) bodily injury by accident, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident hereto, in forms and underwritten by insurance companies reasonably satisfactory to City. Licensee shall require all subcontractors to provide such workers' compensation insurance for all of the subcontractors' employees. Licensee shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation insurance, and Licensee shall similarly require all subcontractors to waive subrogation. 14. Insurance. In addition to the Workers' Compensation Insurance and Licensee's covenant to indemnify City, Licensee or its successors and assigns shall obtain and furnish to City, a policy of commercial general liability insurance, including motor vehicle coverage, covering all activities to be undertaken by Licensee concerning the Property, Landscaping, Improvements and Improvement Area. Said policy shall indemnify Licensee, its officers, agents and employees, while acting within the scope of their duties, against any and all claims of liability arising out of or in connection with all activities to be undertaken by Licensee concerning the Property, Landscaping, Improvements and Improvement Area and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of $1,000,000 per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than $1,000,000. Said policy shall name City, the Agency and their respective officers, and employees as Additional Insureds, and shall specifically provide that any other insurance which may be applicable to all activities to be undertaken by Licensee concerning the Property, Landscaping, Improvements and Improvement Area shall be deemed excess coverage and that Licensee's insurance shall be primary. 15. Certificates of Insurance, Additional Insured Endorsements. Prior to commencing performance of the work hereunder, Licensee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Agreement; said certificates shall: a. provide the name and policy number of each carrier and policy; and b. shall state that the policy is currently in force; and C. shall promise to provide that such policies will not be canceled or modified without thirty (30) days' prior written notice to City. -5- Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) Licensee shall maintain the foregoing insurance coverages in force until this License is terminated. The requirement for carrying the foregoing insurance coverages shall not derogate from the provisions for indemnification of City by Licensee under this Agreement. City or its representative shall at all times have the right to demand the original or a copy of all said policies of insurance. Licensee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. 16. Indemnification and Hold Harmless. Licensee hereby agrees to protect, defend, indemnify and hold and save harmless City, the Agency and their respective officers and employees against any and all liability, claims, judgments, costs and demands, however caused, including those resulting from death or injury to Licensee's employees and damage to Licensee's property, arising directly or indirectly out of the grant of License herein contained or the activities to be undertaken by Licensee concerning the Property, Landscaping, Improvements, and Improvement Area caused in whole or in part by any negligent act or omission of the Licensee, any subcontractors, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, including but not limited to concurrent active or passive negligence except where caused by the active negligence, sole negligence or willful misconduct of City or the Agency. Licensee will conduct all defense at its sole cost and expense. 17. Rules and Regulations. Licensee and its successors or assigns agree to obey and observe (and cause its officers, employees, contractors, licensees, invitees and all other doing business with Licensee to obey and observe) all rules and regulations of general applicability regarding the Property, Landscaping, Improvements, and Improvement Area as may be established by City at any time and from time to time during the term of this Agreement. 18. Default. In the event Licensee and its successors or assigns does not maintain the Landscaping or Improvement Area in an adequate manner, City shall cause such maintenance to be performed adequately and all costs incurred shall be assessed to and billed directly to the Licensee. Payment shall be due within thirty (30) days following the receipt of an invoice from the City. A late charge of ten percent (10%) shall be applied after any payment hereunder is due but unpaid. In addition, one and a half (1-1/2%) percent interest per month shall be added for each month payment hereunder is due but unpaid. 19. Covenant. Licensee for itself, and its successors and assigns, agrees that this instrument shall be a covenant running with the land, binding upon and inuring to the benefit of Licensee, as the owner of the common areas of the Property, as the burdened parcels, and its respective successors in interest, heirs, personal representatives, and inuring to the benefit of City, as the owner of the Improvement Area, provided, however, that upon conveyance of the common areas of the Property, including without limitation, Licensee's transfer thereof to a property owners' association, the transferor shall be released from all duties under this Agreement arising after the date such transferor shall have given notice of assignment in writing to City and expressly assumed the obligations of Licensor as provided hereunder. M Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) 20. Notices. Any notice or special instruments required to be given in writing under this Agreement shall be given either by personal delivery to Licensee (as designed herein) or to City as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, return receipt requested and depositing the same in the United States Postal Service, addressed as follows: To City: Director of Public Works City of Huntington Beach 2000 Main Street Huntington Beach, CA 92647 To Licensee: CIM/Huntington, LLC 6922 Hollywood Blvd., Suite 900 Hollywood, CA 90028 Attention: General Counsel With a copy to: Fragner Seifert Pace & Winograd, LLP 300 S. Grand Ave, 14th FL Los Angeles, California 90071 Attention: Matthew C. Fragner 21. Captions and Terms. The captions and section numbers appearing in the Agreement are for convenience only and are not a part of the Agreement and do not in any way limit, amplify, define, construe or describe the scope of intent of the terms and provisions of this Agreement, or in any way affect this Agreement. 22. Recordation. This agreement shall be recorded with the County Recorder of Orange County, California. 23. No Third Party Benefit. This Agreement is made and entered into for the sole benefit and protection of the parties hereto, and the parties do not intend to create any rights or benefits under this Agreement for any person who is not a party to this Agreement, except for any permitted assignees. 24. Estoppel Certificates. Each Party hereby covenants that within ten (10) days after a written request of any other Party, it will issue to such other Party, or to any mortgagee, or to any prospective purchaser or prospective mortgagee specified by such requesting Party, an estoppel certificate stating: (i) whether the Party to whom the request has been directed knows of any default under this Agreement, and if there are known defaults specifying the nature thereof; and (ii) whether the Agreement has been modified or amended in any way (or if it has, then stating the date of such modification or amendment and attaching a copy thereof to such estoppel). 25. Entirety. The foregoing, and the attachments hereto, set forth the entire Agreement between the parties. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized offices the day, month and year first above written. -7- Grant of License and Agmt Re Maintenance Agency v4 red to v 3 (Oct. 1, 2008) By: MA-yok- Name: /� �—� CITY: CITY OF HUNTINGTON BEACH, a Calif is municipal corporation Z/" 6"�� — ayor APPROVED AS TO FORM: (b aCity Attorney ID (tj- k28 INITIATED AND APPROVED: Director of Public orks -s- Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) CIM/Huntington, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L. P., sole member, By: CIM Urban Fund, GP, LLC, its general partner Date: 10/14/08 By: Date: By: Name: Nicholas V. Morosoff Title: Secretary Name: Title: M Grant of License and Agmt Re Maintenance.Agency.v4 (Oct. 1, 2008) State of California County of Los Angeles On October 14, 2008 before me, Ellen Jo Rose a Notary Public in and for said State, personally appeared Nicholas V. Morosoff , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my h d offs is al. Signature (Seal) E1,1en Jo Rose, Notary Public State of California County of �e J-,-- - 7- ,° 1520364 Cuil�arnia Lo P, County s t My Cemr^ .esOct 18, 2008 ELLEN JO ROSE Commission # 1520364 z Notary Public — California➢ Los Angeles County My Comm. ExpiresOct 18, 2008 On before me, a Notary Public in and for said State, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On November 17, 2008 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Debbie Cook who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Conarrdon 0 15"179 H"V RM - Carmw Omnwaw* 2004 otary Signaturey EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT "A" All that real property in the City of Huntington Beach, County of Orange, State of California described as follows: Being Lot 1 of Tract No. 16406 in Book 870, Pages 47 through 50, Inclusive of Miscellaneous Maps, Records of Orange County, California. Exhibit "A," page 1 to �0 1 SHEET 4 OF 4 (ALL OF TENTATIVE TRACT NO. 16406) NUMBER OF LOTS: 1 AREA - 2.955 ACRES GROSS DATE OF SURVEY: MARCH 2O03 22 ry EASEMENT NOTE: FACT N O M 16406 QA A 65' WIDE EASEMENT AND 24' WIDE EASEMENT [J R A FOR DRAINAGE, UTILITY, PEDESTRIAN AND VEHICULAR IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA PURPOSES DEDICATED TO THE PUBLIC HEREON. FOR CONDOMINIUM PURPOSES MICHAEL SIMON, P.L.S. 6034 TAIT & ASSOCIATES, INC. DATE OF SURVEY: MARCH 2O03 FOUND SPIKE AND WASHER, FLUSH, PER CHBFB 3/111 J TIE N0. 4816, R.S. 94-1042. R.S., 151 24-29. REPLACED WITH SPI E AND WASHER < STAMPED PLS 6034. ACCEPTED AS CENTERLINE INTERSECTION I -{(p-DO'$9'59- N48'22'S0"w ny R-J.50' 317.64' [[317.50']] * C p-B9'S9'S9" 162.57' [E162.50']] .oc [[itJ.50']] [[J0.00']] \ m t94B'22'S°'W L=23SE3.56' RECIPROCAL ACCESS EASEMENT RENEFRE OF °LOTT 22. UNE BLOCK N48'22'SOYI 11>.5>' 'ANDI,II'rN ES.CENTERUNE BY L8 AVEP pOPTI°PILEYBETYEEN�WAINUT m© 1105. M.M. 3/36. 2 AVE, AND PCH AVE. 5p' DETAIL "A" al 28 jp5 wa f NOT TO SCALE 8� BL.00y, 3136 NOTE: I- 8 - - - - _?1 SEE SHEET 3 FOR MONUMENT NOTES. \` DATUM STATEMENT, BASIS OF BEARINGS, EASEMENT NOTES AND BOUNDARY SURVEY. LU �A r ( wae'z250'W tzS.OJ' I122 D © APPROVED VEHICULAR ACCESS �-" q 1 I GEE, GuAIL_I-_ , LOCATIONS BY THE PLANNING N 1 7 EST. BY PROP. KONG COMMISSION SHOWN HEREON. _ <i ry ©g THE NWO UN(, LOTS 12, 14, 16, 18, 20, 22, ., . g a ry 2h, 26 ANp 28, PER n g a /x/^ V/ R vY ' )u ��\[\ 0 40 60 120 160 U SCALE: 1"-40' H- STAMPED LS. 5B48, FLUSH, PER N CORNER RECORD NO. 2001- J 2 I 1130, FITS TIES PER CORNEA FOUND SPINE AND WASHER, RECORD 2001-314, ACCEPTED C FLUSH. PER CHB MONUMENT EST. CENTERLNE INTERSECTION OF ALLEY AS CENTERLNE INTERSECi1pN BOOK 3, PAGE 121 TIE N0. Bt' PROP, BETWEEN FIFTH ST. AND SIXTH Ci 00DOW AND P.M.B. 275/1-3, ACCEPTED AS CENTERLINE PER M.M. 3/36 EST. CENTERLINE INTERSECTION OF ALLEY REPLACED WITH 01 WALNUT AVENUE BY PROP. BETWEEN MAIN ST. AND FIFTH ST., 0.1 . 1 PER M.M. 3/36 - N4B22'50Y! IN.i.S.) 635.10' 31 J.54'(J1 J.SJ')fIStJDO'J] 155.OJ' 155.00'])__ 154.91' 155.02' (155.03') [[155.00-D 162.52- [[16240']] %� DO Do, GLOW N48'22'S0•W 30258' 112.59' B4.62' �� t00.87' 11 J.52' [[117.50']] 105.3J' NKW22'50'W T. J Sip• NOB.36'z5"E Js0' II f� 13.6B' .9 1 '1 ILOT In 1 u JJ50' 3I 2.955 - 1 1 ACRES GROSS 12..'_ 2.868 = 85p° ACRES NET - ALLEY VACATED BY Cm OF �, A C 4.50' o HUNTINGTON BEACH RESOLUTION - N0. 2005-28 APPROVED APRIL G 1 J ^ 4, 2005 REC. APRIL 14, 2005 O R INST. NO. 2005-00283330, - lJ z O _ r J\ ' all vEHICIEM ACCESS RIl- TO 1'ALHUT n n m n n r nvENUE MEET at APPROVEDLowno6s I W H I R „I W BY THE PUNNING COI.INIfib10N, ARE HEREW U) W Iry °i 'J ED. 5&W STAMPED RELFISm nND REllND015Nm TO THE CITY N W I 1� c 2a>Ot, FLUSH, n 8 OF HUNRNCiON BUCH. Q (E J �) - NO RET.. ACCEPTED AS J THE MOST Y/'LY CORNER W �, R - UJ LOT 1J. BLOCK EST. BY POOP, ALONG t. 0. 2 LINE 1 1 w g [jJ _ 1 J OF LOTS 8 14, 18, 1B, 20, 22, 24, 26 AND 2B PER M.M, 3/3B. r n, I U = r) (' )✓ H• AL VEHICUTAR ACCESS RIGHf21lp" < J [f1n.s°']](11 J.a•) C J J n vJ L n THE AllE15. IXCEPT AT MPROVFD n 11J.50' o rvI n �_ l LOGTIONS BY THE PUNNING �10 PUB{JC DUNAGE COMMISSION, ME HEREBY _ _EASEM - - _ _ _ _ o !1 O m n RE�FAsm M'D REUNDDI$Hm TO THE Cltt OF HONRNOTCH BEACH. Z zl..l ED. IT. NO REF m G 1 i1 o C 1992 /],50' ACCE LOT, AS MOI, 5'LY iwn z I r� NjT COR. LOT 17, BLK 1C4 (� a 4.50' ALLEY DEDICATED C I ALLEY DEDICATED ON P.M C o n N < lY �` s TO TIE PUSUC HEREON NO. 91-2]5. P.M.B. 2J3/1-3 imn 250' SIXTH STREET DEDICATED ( 1 J i CEi�V2°RELIN£R 11EV FROML3/3`61 y-T.LONGi0 THE PUBLIC HEREON. 1 `\ I n cT FIRH ST., PER M.M. /�LLEY r �✓ J Nalrzz•1aw �.i. 4J.50' 63.21"J 11J.49I[ 11J.50ALL -I.- ACCESS RIGHTS TO D_ 32.5D' 32.5D' (- STREET, PUMNI AT APPROVED LOCATIONS yg_ 'T� _ _ N4B'22'14_V/_23J.J0'_ _ _ yI� I a BY THE PLANNING NQUIISHED , AGE HEREBY ._ 199.98' D0.00']] '�A']I\ I r ALLEY n flELGSED INO REUNOUSMm N THE >.50' �II x O CITY OF HUNTINGTON BEACH. I MLY LIN[ LOT 10, y-� I qg '14'W 200.20' EST. CENT RUNE INTERSECTION M.M. 3/3fi ILO \ I N48'22'14'W 2.9.97' U25OGD'jj 8Y PROP. ALONG THE CENTER - ALL VEHICUIM ACCESS MCHiS TO PACIFIC COAST II 0 ESL, CENTERLINE n HIGNYIAY, IXCFPi AT MPROVED LOCATIONS NORTHWESTERLY UNE F E'LY C R. LOT 9, ESE. BY PROP. ALONG THE 4t.50' ENE MAIN Si. SET NOTHING, ALLEY BY PROP. BY THE PWINING COMMISSION, ME HEREBt DEED RECORDED OCIOPER W NE'LY ONES OF LOTS 1 TO 1D. PER M.M. 3/36 ALONG THE CENTER- - N RELEASED PNO REUNOUISHED TO THE CITY 10, 1990 A5 INSTRUMENT 1n a WINLY LINE OF PARCEL 1, LINE OF SIXTH ST. w OF HUNTINGTON BEACH. la a PER M.M. 3/36. N0, 1990 A988, OF PEP P.M.B. 2J5/I-3 _ OFFICIAL RECORDS. o I -�. o� PARCCL MAP N0. 91236 � 8 n SETY UNE OF o n m I _ o !"`�" LOT 9, M.M. 3/36 P.AL9 2Y6/1.8 I` a 5.00' PACIFIC GOABT HIGHWAY DEDICATED w �.,., S'LY Q>R. LOT 9 EST. Bt' LN87. NO. 93=083 TO THE PUBLIC HEREON, ry o I- PROP • ALONG THE SW'LY ppRGEL 1 R-20.00' UNES OF LOTS I TO 21, _ - 37.50' oI n Nd8'22'49'W B-J1.41' t"L o I `" f i IPEA MM. 3/36FD. CST NO REF, ACCEPTED4SEARCHED. FOUND NOTHING A8 MOST S'LY CDR. LOT JTIES SET PER G.P.S. 502D N48'21'S2V/ 33J.42'0OJ00 NOT APPEAR TO FIT 222.66' 69.12' 45. 4' Ih _ THEMSELVES AND MAY NOT :I 5°.0,3_ _ _ _ BE THE SAME TIES. 2J9.8J 80.04 199.94,[[200.00']] 8 0T ACCEPTED, NOTHING N48'21'521Y 359,91' J 49'99 200.16 SEE. m I w W'LY OCR. LOT 10. [[50.00'D NW21'52 W 249.93' [[250.00']] M.M. J/36 539'S0'3B1V g o ' FR. L9R, NO REF, AT S39''- IN/ 'NIEF v1pi 1.91 N.T.S. FROM INTERSECTION OF -NE LINE, INSO. O ^ PA(iIFI(c COAST HIGHWAY (C3-I) N0. 90-52B988, D.E. AND NE'LY UNE OF PCH N 1 (CONSIRUCTON CENTERLINE) NOT ACCEPTED 5998' V �_ N48'2t'S21Y 635.06' SFARCHEp FOUND NOTHING EST. �'..UND Non+wa ESTABLISHED BY INTERSECTION OF THE SWLY PROLONGATION OF THE CENTERLINE OF SIXTH STREET FROM ORANGE AVE. AND WALNUT AVE WITH � SURVEY PACIFIC COAST HIGHWAY (PCH) B! INTERSECTON vlI1H THE SYfLY GATON OF THE CENTERLINE OF MAIN of AUI AVEEr FROM ENTER NC & PMF AVIRH , ONLY ON OF PACIFIC COAST HYIY. ONLY ONE TIE F0. PER CALTWWS TIE 90 OJS/3. THE CENTERLINE OF PCH. a) tp l EXHIBIT B IMPROVEMENT AREA [behind this page] MEMO; ---- -- OWN ,'�; MWA ■ FillIN i r1 Fig 111000 Pgo or, vmq� �►Ai�••� /Jf�t _ �w a n,*. ��% '` " '_ _ SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON THE DISPOSITION AND DEVELOPMENT AGREEMENT SIXTH IMPLEMENTATION AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and CIM/HUNTINGTON, LLC INTRODUCTION The following Summary Report ("Report") has been prepared in accordance with Section 33433 of the California Health and Safety Code. The Report sets forth certain details of the proposed Sixth Implementation Agreement to the Disposition and Development Agreement (DDA) between the Redevelopment Agency of the City of Huntington Beach ("Agency") and CIM/HUNTINGTON, LLC, a California Limited Liability Company ("Developer"). The Agency and Developer entered into the DDA along with five implementation agreements (collectively "DDA"). The dates of the DDA and Implementation Agreements are as follows: original DDA executed on June 17, 1999; First Implementation Agreement to DDA executed on April 6, 2000; Second Implementation Agreement to DDA executed on March 5, 2001; Third Implementation Agreement to DDA executed on October 30, 2002; Fourth Implementation Agreement to DDA executed on September 2, 2003; and Fifth Implementation Agreement to DDA executed on July 19, 2004. The DDA currently provides for the development of a mixed use project consisting of retail, office, hotel and public parking facility (collectively "Project") located at the southeast corner of Pacific Coast Highway and 5t" Street which contains approximately 3 acres ("Site"). The Developer is currently constructing approximately 213,000 square feet of building space comprised of, a suite hotel consisting of 149 rooms; 68,000 square feet of retail and restaurant uses; and 30,000 square feet of office space and a parking structure with at least 411 fixed spaces. The Agency, through the DDA, conveyed or disposed of the Agency owned portion of the Site, which was acquired with tax increment moneys, to the Developer in 2005. The Site is located in the Merged Redevelopment Project Area (Project Area) and the DDA is intended to implement the Merged Redevelopment Project Redevelopment Plan (Redevelopment Plan). The existing DDA and document summaries are as follows: • Agency entered into original DDA on June 17, 1999 o A hotel with approximately 115 to 130 rooms, 135,000 square feet of commercial space, the developer to construct a publicly owned parking structure, Agency to contribute land and $900,000 for excess Project costs, Agency has Project participation, conveyance of Agency owned property • First Implementation Agreement to DDA executed on April 6, 2000 o Developer and Agency agree to enter into a land lease for a portion of the Site • Second Implementation Agreement executed on March 5, 2001 o Adjust development schedule and Developer and Agency agree to enter into another land lease for a different portion of the Site • Third Implementation Agreement to DDA executed on October 30, 2002 o Increase hotel rooms from 145 to 160 rooms, reduce commercial square footage from 110,000 to 100,000 square feet, increase project costs from $45.8 to $46 million, termination of Agreement by either party if discretionary land entitlements are not achieved, Agency Assistance increased to $7.9 million, modification to reduce Site • Fourth Implementation Agreement to DDA executed on September 2, 2003 o Increase parking by 60 additional fixed spaces in structure; Agency to pay $25,000 per fixed space up to a maximum of $1,500,000 © Fifth Implementation Agreement to DDA executed on July 19, 2004 o Developer proposed to sell hotel site to hotel operator, Developer to convey parking structure to Agency prior to first Agency participation payment Previously, in connection with the DDA, two (2) summary reports and two (2) reuse analyses, as prescribed under Section 33433 of the California Health and Safety Code were prepared. Section 33433 requires that, prior to the conveyance of property acquired directly or indirectly with tax increment moneys the Agency must have prior approval of the legislative body to convey the property; provide public review of the document conveying the real estate interest; provide a summary report that describes, among other things, the cost to the Agency of the transaction; the estimated value of the conveyance; and the value of the conveyance based upon the conditions, covenants and development costs of the DDA. All these criteria were met by the Agency prior to the conveyance of the Agency owned land to the Developer in 2005. Additionally the 2 101612008 summary reports address the financial terms of the DDA and any significant changes in financial terms in the subsequent Implementation Agreements. The proposed Sixth Implementation Agreement allows for the Developer and Agency to capitalize on the change in demographics, market demand and the adoption by the City Council of a new specific plan that is geared towards new business activity. Since the execution of the DDA, the market demand has shifted from a moderate mixed use development to a significantly higher and more upscale product including, upscale retail shops and restaurants, executive office uses with views and public parking inclusive of valet services for all customers. This Report includes, or references, the following information: I. Summary of the Salient Points of the DDA as Proposed to be amended by the Sixth Implementation Agreement: This section includes a description of the Project and the major responsibilities imposed on the Developer and the Agency by the DDA as proposed to be amended in the Sixth Implementation Agreement. II. Cost of the DDA and Net Benefit of the DDA to the Agency and City by the Proposed Sixth Implementation Agreement: This section details the cost of the DDA, as proposed to be amended by the Sixth Implementation Agreement, to the Agency, the differential in total net cost and revenue to the Agency associated with implementing DDA as proposed to be amended by the Sixth Implementation Agreement to the Agency, as compared to the DDA without the Sixth Implementation Agreement. This section further depicts the increase in public revenues to be received by the City from this Project based on the Sixth Implementation Amendment as compared to the approved DDA without the Sixth Implementation Agreement. III. Estimated Value of the Interests to be conveyed: This section summarizes the estimated value of the interests that were conveyed determined at the highest and best uses permitted under the Redevelopment Plan and determined at the use and with the conditions, covenants, and development costs required by the DDA. IV. Consideration Received and Comparison with Established Value: This section describes the total revenue to be received by the Commission and explains any difference between the total revenue and the established value of the Site. V. Blight Elimination: This section describes why the conveyance of the Agency's property will assist in alleviating blight. 3 101612008 VI. AB 1290 Implementation Plan Conformance: This section describes how the conveyance of the Agency's property is consistent with the Project Area Implementation Plan. The First, Second, Fourth, and Fifth Implementation Agreements (Amendments) did not require Summary Reports due to the determination of the neutrality of impact of the Amendments on the overall financial transaction. The original DDA and the Third Implementation Agreement required summary reports due to conveyance of property acquired with tax increment moneys and a significant change in the financial provisions of the DDA. Similarly, the proposed Sixth Implementation Agreement requires a summary report due to significant change in the financial provisions of the DDA. This Summary Report does not require modifications to the following Sections of the Summary Report for the Third Implementation Agreement, which is attached hereto as Attachment 1, and incorporated herein by reference: 1. Section I, Summary of the salient terms of the DDA A summary of the salient terms of the DDA without the proposed Sixth Implementation Agreement is set forth in the Third Implementation Agreement Summary Report (Section II). 2. Section III, the Estimated Value of the Interests to be conveyed determined at the highest and best uses permitted under the Redevelopment Plan The value of the conveyed property determined at the highest and best uses permitted under the Redevelopment Plan is set forth in the Third Implementation Agreement Summary Report (Section V.B). 3. Section IV, Consideration Received and Comparison with Established Value The Consideration Received and Comparison with Established Value of the conveyed property is discussed in the Third Implementation Agreement Summary Report (Section VI). 4. Section V, the Elimination of Blight The Elimination of Blight is discussed in the Third Implementation Agreement Summary Report (Section VII). 5. Section VI, AB 1290 Implementation Plan Conformance The findings for Implementation Plan Conformance discussed in the Third Implementation Agreement Summary Report (Section Vill). 4 101612008 The sections that are discussed in this Summary Report are: 1. Section I, Summary of the salient terms of the proposed Sixth Implementation Agreement 2. Section II, Net Benefit of the Agreement to the Agency and City; Cost of the Agreement to the Agency 3. Section III, Estimated Value of the Interest Conveyed Determined at the Use and with the Conditions, Covenants, and Development costs required by the DDA 5 101612008 I. SECTION I - SUMMARY OF THE TERMS OF THE PROPOSED SIXTH IMPLEMENTATION AGREEMENT A. Project Description The Site is comprised of approximately 3 acres encompassing two blocks located in the Main -Pier Sub Area of the Huntington Beach Merged Redevelopment Project Area. Pacific Coast Highway, Sixth Street, Walnut Avenue and the alley bound the site between Fifth and Main Street. The DDA provides for the construction of the project consisting of between 100,000 and approximately 110,000 square feet of gross leaseable area of new retail and restaurant improvements (of which up to 40,000 square feet may be devoted to restaurant uses and a minimum of 28,000 square feet must be devoted to restaurant uses and a minimum of 28,000 square feet must be devoted to office uses); a 142 to 157 room boutique hotel, and a public parking facility and related amenities. The Developer is CIM/Huntington, LLC. B. Proposed Business Terms and Responsibilities The Sixth Implementation Agreement proposes the following major business terms and requires the Developer and Agency to complete the following activities: 1. In addition to the basic project description, the Developer shall construct a Boutique Hotel (as defined in the Sixth Implementation Agreement) as compared to the previously required Residence Inn hotel concept. In addition, there is a new covenant running with the land that the portion of the Site developed with i the hotel may only be used for a Boutique Hotel. The proposed Joie de Vivre (JdV) Boutique Hotel project contains a structure, interior improvements, fixture and equipment and finishes and average daily rates that exceed the quality, revenue, and rating of the previous Residence Inn Hotel required by the DDA: ® The Developer will retain the hotel development rights and will be constructing the hotel improvements. Previously, the Developer had intended to sell the Site to a separate developer and hotel operator ® Agency shall contribute a partial feasibility gap payment to Developer up to $2,400,000 for the development of an upgraded hotel (standard suite hotel to a upscale boutique hotel) and the requirement to only use the hotel portion of the Site for a Boutique Hotel o Agency contribution shall be a one time payment upon commencement of the JdV Hotel operations 6 101612008 o Agency hotel contribution will be solely from net tax increment generated by the Merged Redevelopment Project Area and no general fund sources o The definition of Commencement of Hotel Operations is the Developer having received a written approval by the Agency of its Hotel Management Agreement as currently required by the existing DDA, a Certificate of Occupancy, and fully open for business as a JDV Hotel along with its associated restaurant and banquet facilities • The conversion from a typical suite hotel to a boutique hotel over a 25 year period will increase the present value transient occupancy taxes (TOT) revenues by approximately $5,100,000 o The one time contribution of $2,400,000 is approximately half of the increase in TOT from the Residence Inn Hotel concept to a Boutique JdV Hotel o Interior improvements and furniture, fixtures, equipment upgrades for rooms, common areas, health facilities, business centers, lounges and restaurant cost increases from a standard Residence Inn suite hotel to a JdV Boutique Hotel concept has been reviewed and is determined to be approximately $7,800,000 • Agency must approve all changes in hotel operator or hotel flags over the life of the DDA 2. Agency to reconstitute payment terms of the reimbursement of the $7.9 million . financial gap and Developer loan to the Agency (this reimbursement was previously approved in the Third Implementation Agreement). Terms of the revised reimbursement to be: • Shall be paid over 25 years, or sooner (this is the existing reimbursement term) • 7% interest per year (the existing interest rate is the lower of 10% or the rate as stated in the issuance of a Community Facilities District Bond (CFD). Due to the current financial markets and the cost of issuance of a CFD, the parties agreed not to issue a CFD due to higher rates than the Developer's and Agency's cost of funds. The proposed rate is forty-two percent (42%) less then 10% and approximately twenty percent (20%) above current CFD rates for infrastructure costs). • Repayment shall be made solely from net tax increment generated by the Merged Redevelopment Project Area versus previous repayment collateral sources including net tax increment as well as general funds sources including TOT receipts 7 101612008 3. Agency and City shall pay Developer for 25 fixed parking spaces, above the project code compliant minimum of 411, within the parking structure. The Developer will be obligated to maintain, repair and operate these additional fixed stalls.. The payment will be approximately $38,000 per approved space (which is below the actual cost to construct each stall) or $950,000 for the approved fixed stalls. The City shall pay $500,000, plus interest from the City Parking In -lieu Fund which is part of the General Fund and the Agency shall pay $450,000, plus interest from tax increment funds. Terms of the payment to be: • Shall be paid over 25 years, or sooner • 10% interest per year until paid • Repayment shall be from the City Parking In -lieu Fund and Agency net tax increment generated by the Merged Redevelopment Project Area and no general fund sources 4. The Developer and City shall enter into a twenty-five (25) year operating agreement to provide for Developer's management of the associated operations of the public parking facility. The following primary terms will govern the Operating Agreement: • Developer may recommend rates for all associated parking fees for the parking facility, which includes but is not limited to daily rates, retail customer parking, hotel client parking, valet, visitor parking, office tenants and others. Recommended rates will solely be recommended by Developer and shall be subject to approval by the City by ordinance • Developer will ensure public parking access at all times when parking facility is operating • The City and Developer will share 50/50 all net revenue (only to the extent there is net revenue) produced by all parking revenues generated by use of the parking facility above the base revenue of City established rates in the City's Main Street Public Parking Structure [e.g. If the daily rate for a space in the City operated parking structure in the downtown is $9/per day per space and the rate in the Developer managed parking structure is $11/per day per space, then the City will keep all parking revenue proceeds up to the $9 and Developer will share the $2/per space per day differential above the base, equally (50/50)]. If the rate per space at the Strand Public Parking Structure is at the same or below the rate at the Main Street Structure, then Developer shall not share in any of the parking revenue generated by the Strand Parking 8 101612008 Structure. This formula will apply to both daily rates and overnight parking rates. The City and Developer will quarterly review the revenues and parking facility expenditures. These revenues are excluded from the following financial analysis due to the fact that parking increases are subject to City Council approval. ® All other net operating revenues shall belong to the City. 5. The Project shall maintain a minimum annual assessed valuation of the amount of the first full assessment by the Orange County Tax Assessor upon completion of the project: ® Developer or owner may not challenge the assessment or request a decrease in the assessment below the first full assessment; o In the event Developer appeals, challenges or contests the assessed value in violation of the DDA, then Developer shall annually pay to the Agency in each of the twenty-five (25) years referred to in the DDA (or until the assessed value equals at least the first full assessment) an in - lieu fee payment equal to the difference between one (1 %) percent of first full assessment plus the maximum amount of annual increases permitted under applicable law (currently two percent (2%) a year) and one (1 %) percent of the new assessed value. o The Agency may choose to have the in -lieu fee incurred, due to the Developer's appeal, challenge or contest of the assessed value in violation of the DDA, applied as a partial credit against the Agency Obligation. 6. The existing DDA provides for the Developer to buy-out of required Agency participation payments under the following events: a. Prior to the 10th Anniversary In Certain Circumstances: Pay the Agency the greater of $2.4 million or the Buyout Amount (as defined in the DDA), b. After the 10th Anniversary: Pay the Buyout Amount i. The buy-out provision would be eliminated from the DDA as part of the Sixth Implementation Agreement. An analysis by the Agency's economic consultant, Tierra West Advisors, estimates that the Agency would achieve a greater revenue return by eliminating the Developer's opportunity to buy-out the Agency's right to participate in ongoing Project Revenues. Tierra West Advisors analysis has determined that based upon the prescribed formula and estimated revenues, the Agency stands to gain an additional $3,300,000 in revenue over the duration of the Project. 7. The Developer shall be obligated to pay, on behalf of he City of Huntington Beach and the Agency, any and all amounts owed to Abdelmuti Development Company (Abdelmuti) and James A. Lane and Victoria Jean Lane, as Trustees of the James A. Lane and Victoria Jean Lane 1197 Trust, due to any increase in the cost of annual public parking passes that exceed the Threshold Cost Increase (as defined in the Amendment to OPA) pursuant to 9 101612008 paragraph 3 of the Fourth Amendment to Owner Participation Agreement dated February 2, 2003 between Agency and Abdelmuti (Amendment to OPA). 10 101612008 II. SECTION II — COST ARID NET BENEFIT OF THE AGREEMENT TO THE AGENCY AND CITY Agency Costs The Agency's commitment to implement the DDA and Sixth Implementation Agreement entails the following Agency costs: C Contribute $2,400,000 for the Agency's requirement to develop a Joie de Vivre (JdV) Boutique Hotel ranging from 142 to 157 Rooms (Developer and Agency had previously agreed to construct a standard Residence Inn suite hotel with 149 rooms) ® Contribute $950,000 for 25 parking spaces above the project code complaint minimum of 411 within the parking structure. Total estimated Agency Costs to be incurred in connection with the DDA are as follows: Previously incurred acquisition and Site costs $ 7,850,000 Repayment of Agency Obligation $ 7,900,000 Repayment of Agency Obligation $ 2,400,000 Estimated Interest ($7.91VI plus $2.4M) $ 9,047,600 Repayment of Parking Space Obligation $ 450,000 Estimated Interest ($450,000) $ 789,400 Total estimated Agency Costs $28,437,000 Agency Revenue The estimated present value Agency Project revenue from the DDA and the Sixth Implementation Agreement is as follows: Tax Increment $15,895,800 Elimination of Buy -Out of Agency's participation rights $ 9,705,300 Total Estimated Agency Revenue $25,601,100 City Revenue and Costs The DDA and Sixth Implementation Agreement provide the following estimated present value Project revenue to the general fund revenues: TOT $13,763,800 Project Sales Tax $ 3,643,800 Project Parking Revenue* $ 1,818,700 City General Fund Revenues $19,226,300 *(less $500,000 and interest for excess parking and does not assume City Council increase in Downtown Parking Rates) Combined Public Revenues Combined City General Fund and Agency Revenues: $46,204,600 11 101612008 Details of the Costs and Revenues associated with the project for the Agency and City are outlined below: Total Agency Costs - Present Value and Interest Initial Land Acquisition Costs 'Sed—y Report - September 2002 Original Agency Contribution and Site costs Estimated Interest Payments " loan terms - 25 years @ 7 Boutique Hotel Reimbursement Principal Loan Amount Reimbursement of Parking Space Obligation Estimated Interest Payments `loan terms - 25 years @ 10 Sub -Totals Gross Total NPV Total Interest Contribution $28,436,968 $28,436,968 $7, 850, 000 $7,900,000 $9,047,577 $2,400,000 $450,000 $789,391 $9,836,968 $18,600,000 Net Agency Revenue From DDA $70,664,143 $25,601,082 Present Value Whole Dollars Dollars Proposed Project Valuation and Net Tax Increment $115,000,000 $35,456,501 $15,895,841 "tax increment discounted at 5.5% over 30 years Net Present Value of Project Participation less Buy -Out $35,207,641 $9,705,241 'TOT discounted at 7% over 30 years Sub -Total $70,664,143 $25,601,082 fated City Revenues Gross & Present Value Net General Fund Revenue Based on DDA & 6th Amendment $54,496,806 $19,226,374 Present Value Whole Dollars Dollars Proposed Project TOT - JDV Hotel' 157 rooms $36,705,273 $13,763,819 'TOT discounted at 7% over 30 years Proposed Project Sales Tax' 96,000 $9,692,198 $3,643,826 'discounted at 7% over 30 years Proposed Project Parking Income' 436 spaces $8,099,335 $1,818,729 'discounted at 7% over 30 years, less $500, 000 & interest for Excess parking AGENCY - Redevelopment Project Area $70,664,143 CITY - General Fund Revenue $54,496,806 Subtotal $125,160,948 AGENCY COST - ($28,436,968) NET PUBLIC REVENUE COLLECTED $96,723 $25,601,082 $19,226,374 $44,827,457 ($28,436,968) 12 101612008 III. SECTION III ESTIMATED VALUE OF THE INTEREST CONVEYED DETERMINED AT THE USE AND WITH THE CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS REQUIRED BY THE DDA. As described in Section Three (starting at page 47) of the report entitled "The Strand Economic Analysis proposed Sixth Implementation Agreement" prepared by the Agency's economic consultant Tierra West Advisors, which is attached hereto as Attachment 2 and incorporated herein by reference, residual Project/land value remains a negative <$22.5 million>. This is determined by reducing the residual land value of $10.27 million from $32.77 million, which is the cost of the parking structure. The Agency's current project assistance of $7.9 million as set forth in the original DDA and the proposed maximum increased financial assistance of $450,000 of Agency assistance and $500,000 from City Parking In -lieu Fund for increased parking within the parking structure and the $2.4 million of assistance for the Agency required Boutique Hotel as set forth in the proposed Sixth Implementation Agreement, totals $11.25 million in total Agency/City assistance. After deduction of the total proposed maximum $11.25 million Agency/City assistance, the Project/land residual value remains a negative <$11.25 million> determined at the use and with based upon the conditions, and covenants, and development costs required by the DDA as proposed to be amended by the Sixth Implementation Agreement. The $11.25 million is not greater then the negative residual land value. The Developer is reliant upon future sale proceeds to offset the excess negative residual land value. 13 101612008 Exhibit 1 Development Program. Huntington Beach Retail/Office/Hotel Project - Blocks 104 and 105 RETAIL / RESTAURANT / OFFICE Gross Leasable No. Teriant Square Feet Al Express 6,000 Retail Al Vacant 5,000 Retail Al It's A Grind 1,323 Restaurant Al Vacant 1,467 Retail A1.2 Office 13,790 Office A1.3 Office 12,280 Office B1 Retail 5,100 Retail B2 Office 3,910 Office C1 Johnny Rocket 2,000 Restaurant C1 Ben & Jerry 940 Restaurant C1 Vacant 1,760 Retail C2 Office 4,700 Office D1 Victoria Secret 5,000 Retail D1 Retail 7,060 Retail D1 Retail 2,300 Retail E1.1 Vacant 7,500 Restaurant E1.2 Hollister 7,000 Retail F1 Abercrombie & Fitch 7,720 Retail F1 Pacific Sunwear 4,000 Retail F1 Office 6,800 Office F1 Retail 1,930 Retail 107,580 HOTEL Area (Rooms) 117,320 Square Feet Area (Common Areas) 4,590 Square Feet Total 121,910 Square Feet Area (Courtyard) 22,630 Square Feet Rooms 157 Rooms Total Gross Leasable Area (excluding parking) 229,490 Square Feet PARKING Subterranean Structured Spaces 400 Spaces Sources: CIM Group; Sedway Group. 15-Jan-08 N:\Team-Sedway\Proposals & Jobs 1996\3696-HBeach\33433_2001\[33433 Model Update2.xls]Exhhibit3 Exhibit 2 Development Cost Summary - Parking Component Huntington Beach Retail/Office/Hotel Project - Blocks 104 and 105 2002 Dollars Total Cost Measure Direct Costs Structured Parking $7,900,000 $ 19,700 per Space Direct Cost Contingency $592,500 7.5% Total Direct Costs $8,492,500 Total Direct Costs per Space $21,231 Indirect Costs Permits $297,200 3.5% of directs Design and Engineering $249,000 2.9% of directs Project Development Fee $339,700 4.0% of directs Bond Financing $145,500 1.7% of directs Traffic Mitigation Fee $116,667 1.4% of directs Other Indirect Costs $266,833 3.1% of directs Interest Carry $387,400 4.6% of directs Contingency on Indirects $70,700 0.8% of directs Total Indirect Costs $1,873,000 TOTAL PARKING COSTS $10,365,500 Total Parking Costs per Space $25, 914 Sources: CIM Group; Sedway Group. N:\Team-SedwayTroposals & Jobs 1996\3696-HBeach\33433_2001\[33433 Model Update2.xls]Exhhibit3 15-Jan-08 Exhibit 3 Development Cost Summary Huntington Beach Retail/Office/Hotel Project - Blocks 104 and 105 1. Assumptions OTHER PUB. RETAIL HOTEL PARKING IMPRVMTS. Direct Costs - Construction Contingency 7.5% 7.5% 7.5% 5.0% Architecture & Engineering 5.8% 5.8% 4.0% Building Permits and Associated Fees 3.5% 3.5% 3.5% 3.5% Indirect Costs - Construction Contingency 5.0% 5.0% 5.0% 5.0% Reimbursables 12.0 % 12.0 % 10.0 % 10.0% Project Development Fee 4.0% 4.0% 4.0% 4.0% Parking Structure Design & Engineering 0.0 % 0.0 % 3.5% 0.0 % II. Development Costs OTHER PUB. Direct Development Costs RETAIL HOTEL PARKING IMPRVMTS. TOTAL MEASURE Sitework $785,400 $1,988,000 $1,499,300 $3,243,000 $7,515,700 Dev. Est. Building ABC 4,370,250 0 N/A 0 4,370,250 $ 75 Per SF Buildings DEFG 3,698,250 0 N/A 0 3,698,250 $ 75 Per SF Parking N/A 0 6,400,000 0 6,400,000 $ 40 Per SF Hotel Rooms N/A 10,971,900 N/A 0 10,971,900 $ 90 Per SF Hotel Courtyard Utility Connection Subtotal Construction Contingency Total Direct Costs (Before TI's) Tenant Improvements Total Tenant Improvements Total Direct Costs (After TI's) N/A N/A 452,600 N/A N/A N/A 0 200,000 452,600 200,000 $ 25 Per SF Dev. Est. 8,853,900 13,412,500 7,899,300 3,443,000 33,608,700 664,043 1,005,938 592,448 172,150 2,434,578 9,517,943 14,418,438 8,491,748 3,615,150 36,043,278 3,835,900 $ 36 Per SF 3,835,900 0 0 0 3,835,900 Dev. Est. $13,353,843 $14,418,438 $8,491,748 $3,615,150 $39,879,178 Indirect Development Costs Permits and Associated Fees $333,100 $504,700 $297,200 $126,500 $1,261,500 Traffic Mitigation Fee 116,667 116,667 116,666 0 350,000 Architecture and Engineering 463,900 656,900 224,000 3,000 1,347,800 Special Design Consultants 25,000 25,000 25,000 25,000 100,000 Landscape Architect 31,250 31,250 31,250 31,250 125,000 Other 62,000 6,000 0 0 68,000 Reimbursables 55,700 78,800 22,400 300 157,200 Development Fee 400,615 432,553 254,752 108,455 1,196,375 EIR/Traffic/Parking 43,750 43,750 43,750 43,750 175,000 DDA Approval/Implementation (Legal, etc.) 25,000 25,000 25,000 25,000 100,000 Bond Financing 0 0 145,500 145,500 291,000 Community Outreach 25,000 25,000 25,000 25,000 100,000 Deposit & Other Reimbursables 37,500 37,500 37,500 37,500 150,000 Planning Consultants 5,000 5,000 5,000 5,000 20,000 Geotech/Environmental/Civil 27,500 27,500 27,500 27,500 110,000 Concept Design/Feasibility 7,500 7,500 7,500 7,500 30,000 Gensler/Concept/CUP 18,750 18,750 18,750 18,750 75,000 Legal (DON4) Leases 125,000 50,000 0 0 175,000 Project Marketing & Promotion (DON4) 7,500 7,500 7,500 7,500 30,000 Market Research/Leasing Plan 15,000 0 0 0 15,000 Marketing (Artwork & Copy) 50,000 0 0 0 50,000 Leasing Commissions (DONE) $1,458,000 $250,000 $0 $0 $1,708,000 Interest Carry 592,500 651,900 387,400 168,200 $1,800,000 Operating Loss - Cap'd Taxes, Ins., GL 450,000 $450,000 Indirect Cost Contingency 90,700 112,900 70,800 34,200 308,600 Subtotal - Indirect Development Costs $4,466,932 $3,114,170 $1,772,468 $839,905 $10,193,475 Percent of Direct Costs (excluding TI's) 47 % 22 % 21 % 23% 28% TOTAL DEVELOPMENT COSTS $17,820,775 $17,532,608 $10,264,216 $4,455,055 $50,072,653 Hotel Sale (13,082,000) (13,082,000) Net Project Costs (Excl. Developer Profit) $17,820,775 $4,450,608 $10,264,216 $4,455,055 $36,990,653 Developer Profit $ 2,138,493 $ 534,073 $ 1,231,706 $ 534,607 $ 4,438,878 Total Development Cost $19,959,268 $4,984,681 $11,495,922 $4,989,661 $41,429,531 Sources: CIM Group; Sedway Group. NATeam-Sedway\Proposals & Jobs 199613696-HBeach\33433_2001\133433 Model Update2.xls]Exhhibit3 Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. 3 % of D.C. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. Dev. Est. 12 % of Costs 15-Jan-08 I Exhibit 4 Operating Assumptions - Retail Component Huntington Beach Retail/Office/Hotel Project - Blocks 104 and 105 2002 Dollars Potential Gross Retail I Office Income Total Measure No. Tenant Tvoe Al Express Retail 6,000 Sq. Ft. $213,000 $35.50 per SF per Year Ai Vacant Retail 5,000 Sq. Ft. $150,000 $30.00 Al It's A Grind Restaurant 1,323 Sq. Ft. $63.604 $48.00 Al Vacant Retail 1,467 Sq. Ft. $26,406 $18.00 A1.2 Office Office 13,790 Sq. Ft. $303,380 $22.00 A1.3 Office Office 12,280 Sq. Ft. $270,160 $22.00 B1 Retail Retail 5,100 Sq. Ft. $183,600 $36.00 B2 Office Office 3,910 Sq. Ft. $86,020 $22.00 C1 Johnny Rocket Restaurant 2,000 Sq. Ft. $72,000 $36.00 C1 Ben 8 Jerry Restaurant 940 Sq. Ft. $42,300 $45.00 C1 Vacant Retail 1,760 Sq. Ft. $105,600 $60.00 C2 Office Office 4,700 Sq. Ft. $103,400 $22.00 Di Victoria Secret Retail 5,000 Sq. Ft. $177,500 $35.50 D1 Retail Retail 7,060 Sq. Ft. $211,800 $30.00 D1 Retail Retail 2,300 Sq. Ft. $69,000 $30.00 E1.1 Vacant Restaurant 7,500 Sq. Ft. $180,000 $24.00 E1.2 Hollister Retail 7,000 Sq. Ft. $196,000 $28.00 F1 Abercrombie 8 Fitch Retail 7,720 Sq. Ft. $231,600 $30.00 F1 Pacific Sunwear Retail 4,000 Sq. Ft. $180,000 $45.00 F1 Office Office 6,800 Sq. Ft. $149,600 $22.00 F1 Retail Retail 1,930 Sq. Ft. $92.640 $48.00 TOTAL RETAIUOFFICE INCOME 107,580 $3,107,510 Expense Reimbursements (CAM, Ins.,elc.) $309,758 78% Recovery Expense Reimbursements (Management Fee only) $27,968 20% Recovery Expense Reimbursements (Property Taxes only) $222,300 78% Recovery Less Vacancy Loss $1( 23,596) 3% ofAbove Revenue EFFECTIVE GROSS INCOME AND EXPENSE RECOVERY $3,543,940 Less Expenses (CAM and Insurance) ($397,126) $3.69 per sq. Ft. Less Management Fee (Excluding Parking) ($139,838) 4.5% of Total Retail Income Less Property Taxes (Incl. Parking; Excl. Hotel) ($285,000) Developer Estimate Less Collection Loss ($31,075) 1.0% of Total Retail Income Other Non -Recoverable Expenses ($30,000) $0.28 per Sq. Ft. Total Expenses ($883,039) NET OPERATING INCOME $2,660,901 Ground Rent ($168,000) Developer Estimate NOI After Ground Rent $2,492,901 Sources: CIM Group; Sedway Group. N9Team-Seaway\Proposals & Jobs 1996\3696-HBeach\33433_2001\[33433 Model Upoate2. x1s]Exhhibn3 Exhibit 5 Operating Assumptions - Hotel Component Huntington Beach Hotel Project - Blocks 104 and 105 2002 Dollars Hotel Operating Assumptions Hotel Average Daily Rate (ADR) $ 130.00 Number of Hotel Rooms 157 Occupancy Rate 73% Potential Gross Room Revenue $ 5,438,245 Room Revenue as % of Total Revenue 95% Total Hotel Revenue $ 5,724,468 Operating Expense Ratio (Incl. Mngmt. Fee, FF&E Reserve) 59% Net Operating Income (B-4 Ground lease) $ 2,347,032 Developer Cash Flow Annual Hotel Ground Lease Payment (Base) Participation Rent /1 Cost Adjustment Recovery /2 Net Cash Flow to Developer Notes /1 30% of Gross Revenue > $5,442,000 $326, 560 84,740 $ 472,000 $ 883,300 /2 10-yr amortization of construction cost > $13,082,000 reimbursement Sources: CIM Group; Sedway Group. N:\Team-Sedway\Proposals & Jobs 1996\3696-HBeach\33433_2001\[33433 Model Update2.xls]Exhhibit3 Exhibit 6 Dynamic Cash Flow and Value Calculation Huntington Beach Retail/Hotel Project - Blocks 104 and 105 Inflation Factor Factor Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 1, Operating Statement Retail/Office Income 9.0%e ry4thl $3,107,510 3,107,510 3,107,510 3,387,186 3,387,186 3,387,186 3,692,033 3,692,033 3,692,033 4,024,316 Expense Reimbursements (CAM, Ins.,etc.) $309,758 319,051 328,623 338,481 348,636 359,095 369,868 380,964 392,393 404,164 Expense Reimbursements (Management Fee) $27,968 28,807 29,671 30,561 31,478 32,422 33,395 34,397 35,429 36,491 Expense Reimbursements (Property Taxes only) $222,300 226,746 231,281 235,907 240,625 245,437 250,346 255,353 260,460 265,669 Less Vacancy Loss - Rate 10.0 % 3.4% 3.4% 3.4% 3.4% 10.0 % 3.4% 3.4% 3.4% 3.4% Less Vacancy Loss ($366,754) ($125,192) ($125,701) ($135,733) ($136,269) ($402,414) ($147,752) ($148,333) ($148,931) ($160,842) GROSS INCOME AND EXPENSE RECOVERY $3,300,782 3,556,922 3,571,383 3,856,402 3,871,655 3,621,726 4,197,889 4,214,412 4,231,383 4,569,799 Expenses (CAM and Insurance) 3.0% ($397,126) (409,040) (421,311) (433,950) (446,969) (460,378) (474,189) (488,415) (503,067) (518,159) Management Fee 3.5% NA ($139,838) (124,492) (124,998) (134,974) (135,508) (126,760) (146,926) (147,504) (148,098) (159,943) Property Taxes (including Parking Excl. Hotel) 2.0% ($285,000) (290,700) (296,514) (302,444) (308,493) (314,663) (320,956) (327,375) (333,923) (340,601) Collection Loss 1.0% NA ($31,075) (36,821) (36,971) (39,921) (40,079) (40,241) (43,456) (43,627) (43,803) (47,306) Ground Lease ($168,000) (168,000) (168,000) (188,160) (188,160) (188,160) (188,160) (188,160) (210,739) (210,739) Other Non -Recoverable Expenses 3.0% ($30,000) (30,900) (31,827) (32,782) (33,765) (34,778) (35,822) (36,896) (38,003) (39,143) TOTAL EXPENSES ($1,051,039) (1,059,953) (1,079,621) (1,132,232) (1,152,974) (1,164,981) (1,209,510) (1,231,978) (1,277,634) (1,315,892) NET OPERATING INCOME - Retail $2,249,743 $2,496,969 $2,491,762 $2,724,170 $2,718,680 $2,456,745 $2,988,380 $2,982,434 $2,953,749 $3,253,906 Hotel Participation Income 3.0% $883,300 906,199 929,785 954,079 979,101 1,004,874 1,031,421 1,058,763 1,086,926 1,115,934 NET OPERATING INCOME - Retail and Hotel $3,133,044 $3,403,168 $3,421,548 $3,678,249 $3,697,782 $3,461,619 $4,019,800 $4,041,197 $4,040,675 $4,369,840 Less Agency Participation (1) $0 $0 $0 $0 $0 $0 ($17,940) ($24,359) ($24,202) ($122,952) Plus Reversion (2) $ 41,582,490 Less Agency Participation in Reversion (1) ($2,400,000) Net Operating Income After Agency Participation $3,133,044 $3,403,168 $3,421,548 $3,678,249 $3,697,782 $3,461,619 S4,001,860 $4,016,838 $4,016,472 $39,059,538 II. Project Valuation Under Terms of the DDA (254,763) Discount Rate 11.00 % Net Present Value (rounded) $33,600,000 Notes. (1) The DDA stipulates that the Agency moll receive 30% of stipulated NOI (80 % of EG0 above minimum return of 12% of cumulative development cost to the Developer. Upon sale before Year 11, the Developer shall pay the Agency a minimum of $2 4 million. (2) Reversion Calculation Year 11 NOI $3,924,878 (excludes hotel cost recovery payment) Cap Rate 9.25 % Indicated Value $ 42,431,112 Less Selling Expenses $ (848,622) 2.0 % Net Proceeds $ 41,582,490 Sources: CIM Group; Sedway Group. N \Tearn-Sedway\Proposals 8 Jobs 1996\3696-HBeach\33433_2001\[33433 Model Update2.xlsl 15-Jan-08 Exhibit 7 Valuation Analysis Huntington Beach - Blocks 104 and 105 Highest and Best Use Value 2002 Dollars I. Development Program Land Area 92,600 sq.ft. Coverage Ratio 0.30 Retail Building Area 27,780 sq.ft. II. Operations Retail Rent (annual) TOTAL RETAIL INCOME Less Vacancy/Collection Loss NET OPERATING INCOME III. Valuation Cap Rate Indicated Building Value IV. Residual Value $27.00 perSq.Ft. $750,060 8% ($60,005) $690,055 9.25% $7,460,056 Building Value $7,460,056 Less Development Costs at $100 /sq.ft. ($2,778,000) Less: Developer Profit @ 12% ($895,207) Indicated Residual Land Value $3,786,849 Per Square Foot $40.89 Sources: CIM Group; Sedway Group. N:\Team-Sedway\Proposals & Jobs 1996\3696-HBeach\33433_2001\133433 Model lJpdate2.xls]Exhhi1bit3 NOTICE OF JOINT PUBLIC HEARING The Redevelopment Agency of the City of Huntington Beach ("Agency") and the City of Huntington Beach ("City") will conduct a joint public hearing on October 20, 2008 at 6:00 pm, or as soon thereafter as the matter may be heard, in the Council Chambers, located at 2000 Main Street, Huntington Beach, California 92648, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et. seq.) for the purpose of considering the proposed Sixth Implementation Agreement to the Disposition and Development Agreement by and between the Redevelopment Agency of the City of Huntington Beach and CIM/Huntington, LLC. A copy of the current Disposition and Development Agreement ("DDA"), the proposed Sixth Implementation Agreement, and a summary containing or referencing the following information is available for public inspection and copying during regular office hours at the offices of the City Clerk at 2000 Main Street, Huntington Beach, California 92648: 1. A summary of the DDA as proposed to be amended by the Sixth Implementation Agreement; 2. The costs of the DDA and net benefit of the DDA to the Agency and City from the proposed Sixth Implementation Agreement; 3. The estimated value of the interests that were conveyed determined at the highest and best uses permitted under the Redevelopment Plan and determined at the use and with the conditions, covenants, and development costs required by the DDA; 4. The total revenue received by the Agency and explanation of any difference between the total revenue and the established value of the site; 5. A description of how the conveyance of the Agency's property will assist in alleviating blight; 6. A description of how the conveyance of the Agency's property is consistent with the Project Area Implementation Plan. ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or submit to the City Clerk written evidence for or against the proposed Sixth Implementation Agreement. If you challenge the Agency's action in court, you may be limited to raising only those issues that you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City at, or prior to, the joint public hearing. If there are any further questions, please call Kellee Fritzal, Deputy Director of Economic Development at (714) 374-1519. Please direct your written communication to: JOAN L. FLYNN, CITY CLERK CITY OF HUNTINGTON BEACH 200 MAIN STREET — 2ND FLOOR HUNTINGTON BEACH CA 92648 (714)536-5227 P. xe : C rH>= cr y el�lc.- I,OBEP,T MAYER- s� CORPORAT IOTA e /twu/ November 3ra, 2008 BY FACSIMILE TRANSMISSION rf'&' Honorable Mayor Debbie Cook Honorable Council Members City of Huntington Beach 2000 Main Street Huntington Beach, CA 92649 Re: City Council Agenda Item 8, November 3, 2008 CIMIHuntington LLC, 6'h Implementation Agreement Dear Honorable Mayor and City Council Members, I am writing to express my support for the Strand project and the Shorebreak Hotel.: The change from a limited service hotel as originally approved at the site to a full -service boutique hotel with restaurant and meeting space is a very important improvement not just for the project itself, but also for the downtown merchants by attracting higher rated business on a more year-round basis. Further, the addition of Joie de Vivre, the state's most highly rated boutique hotel operator, is a significant enhancement to the identity of Huntington Beach as a premium tourist destination which serves well our interests at the Hyatt Regency Huntington Beach Resort & Spa and the Hilton Waterfront Beach Resort. Lastly, this improvement will create a higher quality experience for not only the guests of the Shorebreak Hotel, but also for the guests of the Hyatt and Hilton hotels that visit the downtown area. Therefore, I look forward to the completion of the Strand and Shorebreak Hotel and we urge the City to support CIM's entrepreneurial efforts in this very challenging economic period. Sincerely, R. J. Mayer, ' President The Robert aye Corporation cc: Fred Wilson, City Administrator Stanley Smalewitz, Director of Economic Development 660 Newpon Center Drive. Suite 1050 _ Newp(irt Beech, CA 92660 PO. Box 8680. Newport Beach. CA 92658-86SO tel 949.759,8091 . fax 949.720.1017 l% �04' (a) HiRton Waterfront Beach Resort 2008 NOV -3 PM 1: 39 3 November 2008 Honorable Mayor Debbie Cook Honorable Council Members City of Huntington Beach 2000 Main Street Huntington Beach CA 92648 RE: City Council Agenda Item 8, November 3, 2008 CIM/Huntington LLC, Fit' Implementation Agreement Dear Distinguished City Officials, I am writing on behalf of The Hilton Waterfront Beach Resort, in support of the Staff Recommendations that the City Council's Redevelopment Agency approve the 6th Implementation Agreement for The Strand. The Hilton Waterfront Beach Resort has been a consistent supporter of The Strand, not only for its enhancements to downtown which our guests have long desired, but specifically because a hotel at The Strand will grow the visitor and destination lodging market for Huntington Beach. We have many reasons to appreciate the fact that the hotel is a full service destinational boutique property when initially plans called for a limited serviced experience. The reputation of the Shorebreak Hotel's operator, Joie de Vivre, and comprehensive transformation of this hotel plan delivers on the promise to target a new visitor demographic that will increase visitor spending for businesses in Huntington Beach. The Strand is nearing completion and looks great. We look forward to the opening of The Shorebreak Hotel in April and I urge the City to stand with these entrepreneurial efforts in this very challenging economic period. Thank you for your consideration and support. J.D. Sha General ae"FredTVilson, City Administrator Stanley Smalewitz, Director of Economic Development OMU S A 21100 Pacific Coast Highway, Huntington Beach, CA 92648 Tel: 714 845 8000 Fax: 714 845 8424 www.waterfrontresort.com Official Sponsor of the U.S. Olympic Team Reservations: www.hilton.com or 1-800-HILTONS Re:,comments re city council Strand agenda item Pagel of 2 Lugar, Robin From: Smalewitz, Stanley Sent: Friday, October 31, 2008 10:53 AM To: 'mark@bixby.org' Cc: CITY COUNCIL; 'city.clerksurfcity-hb.org@surfcity-hb.org'; 'city.administrator@surfcity-hb.org' Subject: Re: comments re city council Strand agenda item Mark: I was on another call when you phoned, next time leave me your # and I'll call you. In any case we will get you the full report. From: Mark Bixby To: Smalewitz, Stanley Cc: CITY COUNCIL; city.clerk@surfcity-hb.org; City Administrator Sent: Fri Oct 31 10:43:45 2008 Subject: Re: comments re city council Strand agenda item Hi Stanley, 1 phoned your cell but got voice mail. Please send me an electronic copy of the full Strand report. In a perfect world, this report should already be on the city web site somewhere, but I haven't been able to find it there. Thanks... - Mark B. Smalewitz, Stanley wrote: Mark: I highly recommend you look at the full 33433 Report which is comprehensive and lays out the full economic assumptions in the proposed 6th Amendment. As a point of clarification. The delegation of authority is standard approach which involves the mundane of legal language and logistics of how the Operator manages the garage. The Delegation never involves deal points or any terms which would make any change as detailed in the 33343. Such changes would require the Agency to file an amended Report and come back to Council approval and a new Noticed. Public Hearing to am mend the 33343 Report. Should you have any additional questions please call me. My cell phone is most immediate 323 595-5776 Stanley ----- Original Message ----- From: Mark Bixby <mark�ubixbti org> To CITY COUNCIL; c ty.clerkf�i surfeits hb.org; Smalewitz, Stanley; fulls_onA,,surfctty-hb.org <ftv lsonfusurfcity-hb.or�Q> 4 Sent: Thu Oct 30 21:1 I :29 2008 Subject: comments re city council Strand agenda item��i�%�' 10/31 /2008 Re: comments re city council Strand agenda item Page 2 of 2 Hi all. I'd like to make the following comments re the city council 11/03/08 meeting agenda item #8 for The Strand. First, I am strongly opposed to delegating negotiation/approval of the parking structure agreement and the CCRs to the city administrator. It is essential for healthy transparency in government that major contracts be approved with full public scrutiny, and in this case the city council should be the entity in charge of approving these agreements. If these agreements really are "close to being finalized" according to the staff report, then waiting another few weeks so the city council can approve the finalized versions won't unduly burden the project. Second, the claim is made in multiple places throughout the staff report that investing an extra $2.4M in this project to upgrade from a Residence Inn to a Joie de Vivre will result in $5.IM of increased TOT over the 25-year period. Yet no details are provided on how the $5.1 M figure is calculated. What room rate is assumed? What occupancy rate is assumed? How were those rates chosen? Based on other JdV hotels? Based on the HB Hilton and Hyatt? Are those rates constant through the year or are they seasonally adjusted to reflect actual seasonal demand? Is there any CPI adjustment? Etc. If I'm doing the math right, getting back $5.IM over 25 years for an investment of $2.4M is a yield of approximately 4.5%, which is better than what the city treasurer is currently getting on the bulk of her investments. But that assumes the $5.1M figure is accurate, and without knowing the kinds of details I mention in my previous paragraph, the accuracy cannot be gauged. I urge the fiscal conservatives on the city council to closely question staff to determine if this extra $2.4M investment really is a fiscally sound one. Thanks... Mark Bixby 17451 Hillgate Ln Huntington Beach, CA 92649-4707 714-625-0876 mark�ci;;.b..xlay,_org Remainder of .sig suppressed to conserve expensive California electrons... :Nark@bixbv.ora Remainder of .sig suppressed to conserve expensive California electrons... 10/31 /2008 Pagel of 3 Lugar, Robin From: John Yonai Uyonai@tierrawestadvisors.com] Sent: Friday, October 31, 2008 1:48 PM To: Mark Bixby; Smalewitz, Stanley Cc: Fritzal, Kellee; CITY COUNCIL; city.clerk@surfcity-hb.org; City Administrator Subject: RE: Strand 33433 report Mark The ADR of $195 utilized in our analysis is not the Rack Rate. The average daily rate is generally assumed to be the amount of room revenue collected and the rack rate is the published rate, which, as you point out, could be reduced due to fluctuations in demand, seasonal adjustments, discounts, etc. Though JdV has not published its rack rates for the new hotel as yet, the general manager at the last Huntington Beach Economic update indicated that room rates would be in the $275 to $300++ range. Like yourself, our firm is more comfortable utilizing the lower ADR rates in our analysis which attempts to adjust for the various discounts/seasons/conventions etc. I hope this helps Thanks John Tier: West a d iso s. hic. - R- a; t: stme & R deti e i}},mc C. _;t sufit ms From: Mark Bixby [mailto:mark@bixby.org] Sent: Friday, October 31, 2008 1:30 PM To: Smalewitz, Stanley Cc: Fritzal, Kellee; CITY COUNCIL; city.clerksurfcity-hb.org@surfcity-hb.org; city.administrator@surfcity-hb.org; John Yonai Subject: Re: Strand 33433 report Hi Stanley and all, Is the estimated ADR reflecting "rack" rates or real rates? Nobody ever pays "rack" rates, which are basically theoretical maximum dream rates unlikely to be paid unless occupancy was approaching 100%. The detailed report does not say if ADR was derived from "rack" rates. If ADR is really "rack" -based, then the estimated TOT will be skewed unrealistically high. - Mark B. Smalewitz, Stanley wrote: Mark: The assumptions was based on research done by our Consultant, tierra west and reviewed and questioned by staff. I do know for a fact because I required we compared Residence Inn 10/31 /2008J Page 2 of 3 "Rack Rates" to similar Jdv Hotel "Rack Rates" (by geographic similarity -serving the same marketplace). Staff also believes that the ceilings in high season are higher for a boutique hotel. But as I mentioned in my earlier email we took a conservative fiscal approach and did NOT include that in our analysis. From: Mark Bixby To: Fritzal, Kellee Cc: Smalewitz, Stanley; CITY COUNCIL; city.c_lerk@surfcity-hb.City Administrator Sent: Fri Oct 31 11:45:50 2008 Subject: Re: Strand 33433 report Thanks, that is what I was looking for and answers most of my questions. Though still unanswered is what seasonality assumptions have gone into producing an apparently annualized ADR of $195 and occupancy rate of 76%. Le. one would expect ADR and occupancy to be higher during summer peak season, and lower during winter off-season. But how much variance is there to each season and is $195/76% an average, median, or other type of annualized calculation? The detailed report apparently doesn't explain. I have only extremely quickly skimmed the detailed report and may have additional questions after I have had time to do a more thorough reading over the weekend. I would like to request that it should be standard practice for ALL detailed reports like this to be available for convenient public viewing on the city's web site. Thanks for the quick response on getting me the detailed report! - Mark B. Fritzal, Kellee wrote: Sent is a second email From: Mark Bixby[ma.i.IIto;_ma_.rk(&bixby._.oral Sent: Friday, October 31, 2008 11:14 AM To: Fritzal, Kellee Cc: Smalewitz, Stanley Subject: Re: Strand 33433 report Hi Kellee, Nope, not what I wanted. What you sent is the summary report which is already included in the agenda packet. What I am looking for is the full detailed report. Thanks... - Mark B. Fritzal, Kellee wrote: Mark — Attached is the 33433 Summary Report, please let me know if this is what you wanted. 10/31 /2008 Page 3 of 3 mar ixbv ra Remainder of .sig suppressed to conserve expensive California electrons... Remainder of .sig suppressed to conserve expensive California electrons... rx "` ::o; ra Remainder of .sig suppressed to conserve expensive California electrons... 10/31 /2008 CITY OF HUNTINGTON BEACH INTER -DEPARTMENTAL COMMUNICATION ECONOMIC DEVELOPMENT DEPARTMENT DATE: NOVEMBER 3, 2008 TO: JOAN FLYNN, CITY CLERK FROM: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC �X DEVELOPMENT SUBJECT: LATE COMMUNICATION: REGARDING ITEM: ADDENDUM TO SIXTH IMPLEMENATION AGREEMENT WITH CIM/HUNTINGTON, LLC/ APPROVAL OF OPERATING AGREEMENT AND CC&R'S Attached is the Power Point for the Item that will be presented at tonight's City Council Meeting. C-iOld CITY OF HUNTINGTON BEACH HUNTINGTON BEACH REDEVELOPMENT AGENCY Developer - CIM GROUP 11/03/2008 THE STRAND PROPOSED SIXTH AMENDMENT b TIERRAWEST A 1) v i S Q 12 S Real Estate & Redevelopment Consultants Summary of Transaction to Date • Agency and Developer entered into Disposition and Development Agreement in June 1999 • Developer agreed to construct a mixed use project consisting of • Hotel — Residence Inn • Office • Retail • Parking garage • Parking garage is to be conveyed to the City upon completion • City owns parking garage in perpetuity • Developer to operate parking structures on behalf of the City and Project Summary ®f Transaction to ®ate • Agency previously agreed to provide up to $7,900,000 in project assistance - over 25 years at 10% interest through a mix of Agency and General Fund revenues • Agency previously agreed to provide up to $1,500,000 in parking garage costs — through parking in -lieu and CFD financing • Subject to fixed stalls exceeding the code required parking for the project • Agency and City participated in project profit 6t" IMPLEMENTATION AGREEMENT • Market dynamics over the past 24 months have required the need for several changes in the Project • Desire for an upscale Boutique Hotel • Developer to maintain ownership of the Hotel • Parking garage construction cost and size • Financing of Project 2 Proposed Sixth Amendment Agency and Developer in the proposed sixth amendment are addressing the following: • Boutique Hotel from Residence Inn JdV average daily room rate of $195 per night Residence Inn average daily room rate $115 per night 157 rooms White table cloth dinner house — average plate cost $20 • Food Service only proposed by Residence Inn • Parking Structure City to retain ownership of structure Provide approximately 436 spaces • CIM to Operate Parking Structure and Valet Service • Net Revenue to City • City to approve operations • Operating Agreement 25 years Proposed Sixth Amendment (2) Higher costs attributable to a Boutique Hotel • Increase Agency Assistance by $2.4m Agency Parking Structure reimbursement • Fix cost reimbursement amount for 25 stalls at $950,000 Prior Amendments had committed a number of City/Agency resources to repayment of $7.9 million: • TOT • Tax Increment • Parking Revenue 3 • Agency assistance payments are limited to available tax increment generated from Project Site and Merged Project Area • Not to exceed 25 years • Interest rate at 7% • No Developer request for reduction in assessed valuation • Minimum value established as the amount stated by the Orange County Assessor • Developer can not contest value • The $950,000 loan for the parking structure reimbursement — interest rate at 10% • $500,000 from the Parking In -Lieu fund • $450,000 from tax increment 7 Estimated Agency Revenues Net Ag—y Revemne From DDA Gross Total $70,664,143 NPV Total $25,601,082 Wnnb fhllars Present Value Proposed Project Valuation and Net Tax vorement $115.000,000 $35,456,501 D U— $15,895,841 'bsimaerraif dizburte1955%owr3) taus Net Present Vaue of Project Participation less Buy -Out $35,207,641 $9,705.241 'TOT dnwur to d. T % oar 3) jots Sub -Total $70,664, 143 $25,601,082 Estimated City Revenues Gross 6 PresBnt Vale Net General Fund Rewnue Based on DDA& 61h Amendment $54,496,806 $19,226,374 " Wfiole Dollars Present Value Dollars Proposed Project TOT -J DV Hotel' 157 rooms $36705,273 $13,763,819 'TOT duourted4 7%mw30 �s Proposed Project Sales Tax' 96,000 $9,692,198 $3,643.826 —e7%me .— Proposed Project Parking Income' 436 spaces $U99,335 $1,818,729 'dsca Wat 7%ava'30yeen,/ S500,0004 irre,ett/o'Eeross (erlvnp Estimated Combined Public Revenue AGENCY- Redevelopment Project Area $70,664,143 $25,601,082 CITY -General Fund Revenue E55A16,94 Sutd9 $125,160,948 $44,826374 E44,827,457 AGENCY COST- ($28,436,968) ($28,436,968) NET PUBLIC REVENUE COLLECTED $96,723,980 $161390,489 4d City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK November 19, 2008 Tom Daly O. C. Clerk — Recorder 12 Civic Center Plaza, Rm. 101 Santa Ana, CA 92701-4057 Attn: Document Examiner Enclosed please find A GRANT OF LICENSE AND AGREEMENT REGARDING MAINTENANCE OF LANDSCAPING AND PUBLIC IMPROVEMENTS AND A FIRST AMENDMENT TO AGREEMENT CONTRAINING COVENANTS AFFECTING REAL PROPERTY (CIM-HUNTINGTON BEACH) with conformed copies to be recorded and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. Please return the conformed copy of the agreements in the enclosed self-addressed stamped envelopes. Joan L. Flynn, CMC City Clerk Enclosures Re:CIM/The Strand. G: /followup/deeds/deed iette r2002. doc Sister , ies: njo, Japan • Waitakere, New Zealand ( Telephone: 714-536-5227 )