HomeMy WebLinkAboutPCH Beach Resort, LLC (Robert Mayer) - 2006-04-06 RECEIVED
206 APR 25 AM 10: 44
CITY OF HUNTINGTON BEACH a " " 1
nary C
Inter-Department Communicationsu, ,4G T ON _ACli
TO: JOAN FLYNN, City Clerk
FROM: JENNIFER MCGRATH, City Attorney
DATE: April 20, 2006
SUBJECT: Documents executed by both the City and Redevelopment Agency
relating to the Hyatt 2006 refinance
Attached to this memo is one set of the original documents executed by both the City and the
Redevelopment Agency on April 12, 2006,relating to the Hyatt 2006 refinance.
These documents were executed pursuant to the Amended and Restated Development
Agreement between the City of Huntington Beach and Mayer Financial, Ltd. and the Waterfront
Hotel, LLC, and the Amended and Restated Disposition and Development Agreement between
the Redevelopment Agency and Mayer Financial, Ltd. The documents should be retained in
your files.
I you have any questions,please contact Leonie Mulvihill.
JENNIFER MCGRATH,)
City Attorney
/k
Attachments as above
c: Stanley Smalewitz, Director
Economic Development(with copy)
gJmulvihill/06memos/hyatt to clerk
Recorded in Official Records, Orange County
Tom Daly, Clerk-Recorder
IIIIIIIIIIIillllllllllllllllllllllllllllllllllllllllllllllllll fIDUITY NATIONAL TITLE COMPANY 54.00
2006000231645 03:28pm 04/06/06
RECORDING REQUESTED BY 0.0 48 Al2 17
0.00 0.00 0.00 0.00 48.00 0.00 0.00 0.00
AND WHEN RECORDED MAIL TO:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street,N.W.
East Lobby, Suite 700
Washington,D.C. 20007-5201
Attention: Christopher J. Hart, Esq.
FTl�' r- — (Space Above For Recorder's Use)
ESTOPPEL AGREEMENT REGARDING GROUND LEASE
THIS ESTOPPEL AGREEMENT REGARDING GROUND LEASE ("Agreement") is
made and entered into as of the 04— day of Yi t , 2006, by and among the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic (herein the "Agency"); PCH BEACH RESORT, LLC, a California limited
liability company ("Developer"); and GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank(together with its successors and assigns, "Lender").
PRELIMINARY RECITALS:
A. The Agency and Mayer Financial, L.P., as developer("Mayer") have entered into
an Amended and Restated Disposition and Development Agreement dated as of September 14,
1998 ("Original Agreement"), as amended by that certain First Implementation Agreement to
Amended and Restated Disposition and Development Agreement dated as of May 15, 2000
("First Implementation Agreement") and as further amended by Second Implementation
Agreement to Amended and Restated Disposition and Development Agreement dated as of
February 5, 2001 ("Second Implementation Agreement") (the Original Agreement as amended
by the First Implementation Agreement and Second Implementation Agreement being herein
referred to as the "DDA") pursuant to which the Agency has acquired the Development Property
as described in Exhibit"A"attached hereto ("Development Property").
B. The Developer has acquired the interest of Mayer in the DDA insofar as the DDA
relates to and affects the Development Property pursuant to that certain Assignment and
Assumption Agreement and Consent to Assignment dated April3, 2001. The Agency has
consented to such acquisition and acknowledged and agreed that for purposes of the
development of the Development Property the Developer shall be the "developer" of the same as
set forth in the DDA and is entitled to all of*the benefits of the "developer" under the DDA
insofar as it affects or relates to the Development Property.
C. In furtherance of the DDA and in order to construct the required improvements on
the Development Property, the Agency, as landlord, and the Developer, as lessee, have executed
and delivered that certain Ground Lease dated April, 2001, a Memorandum of which was
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684425.04 a03/29/06
recorded on April 18, 2001, as Document No. 20010232769 in the Office of the County
Recorder, Orange County, California, pursuant to which the Agency has leased the Development
Property to Developer("Ground Lease").
D. Pursuant to the terms of the Ground Lease, the Developer has agreed to construct
on the Development Property and operate either itself or through a hotel manager a resort hotel
of approximately 519 keyed guest rooms, a conference center and other amenities ("Resort Hotel
Project").
E. The Developer obtained a bridge loan from Lender on or about August 19, 2005,
in the original principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) (the "Bridge Loan") to refinance a prior bridge loan. In furtherance thereof,
Developer and Lender entered into certain loan documents wherein Lender disbursed the Bridge
Loan, or portions thereof, to Developer under the conditions contained therein.
F. Developer has obtained from Lender a commitment for a loan (the"Loan") in the
maximum principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) and in connection therewith the Developer will execute and deliver to Lender
its deed of trust encumbering and conveying the Developer's interest in the Resort Hotel Project
as security for the Loan. In furtherance thereof, Developer and Lender have entered into or will
enter into certain loan documents ("Loan Documents") wherein Lender shall disburse the Loan,
or portions thereof,to Developer under the conditions contained therein.
G. To evidence the Loan, the Developer will be executing and delivering to Lender
its Second Amended and Restated Deed of Trust Note in the amount of the Loan (herein the
"Note").
H. As security for the repayment of the Note, among other collateral documents, the
Developer has or will be executing and delivering to Fidelity National Title Company, as trustee,
for the benefit of Lender its Second Amended and Restated Leasehold Deed of Trust,
Assignment of Rents and Profits, Security Agreement, and Fixture Filing of even date herewith
(herein the "Deed of Trust") conveying the Development Property in trust to Fidelity National
Title Company, as trustee, for the benefit of Lender.
I. The proceeds of the Loan will be used to refinance the Bridge Loan.
J. The parties are executing this Agreement for the purpose of setting forth certain
understandings with respect to the mortgaging of the leasehold estate created under the Ground
Lease.
NOW THEREFORE, in consideration of the making of the Loan it is agreed as follows:
1. The aforesaid Recitals are incorporated herein.
2. A true and correct copy of the Ground Lease is on file with the City of Huntington
Beach.
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684425.04 a03/29/06 -2-
3. The Ground Lease remains in full force and effect in accordance with its terms
and together with the DDA constitutes the entire agreement between the Agency and Developer
with respect to the leasing of the Development Property and:
(a) The Ground Lease has not been modified, supplemented or amended in
any respect.
(b) Except for the Ground Lease and the DDA, there are no other agreements
or understandings, whether written or oral, between Developer and
Agency with respect to the Ground Lease or the Development Property.
(c) Neither Agency nor, to the best of Agency's knowledge, Developer, has
assigned the Ground Lease or sublet the Development Property.
(d) As of the date hereof there are no defaults under the Ground Lease by
Agency.
(e) The rent and all other payments due to Agency under the Ground Lease
are current in all respects.
(f) Agency has not received written notice of any pending eminent domain
proceedings or other governmental actions or judicial actions against
either Agency's or Developer's interest in the Development Property,
including, without limitation, actions relating to violations of any
environmental laws, and Agency has no reason to believe that there are
grounds for any claim of any such action.
(g) The "Operating Commencement Date" under the Ground Lease is
January 19, 2003.
4. The Agency is the current holder of the landlord's interest in the Ground Lease
and has not assigned or transferred its interest in the Ground Lease to any other person or entity
nor has it mortgaged, encumbered or otherwise subjected its interest in the Ground Lease to the
lien of any security instrument which has priority over the rights of the Developer under the
Ground Lease.
5. The Agency acknowledges that the Developer is executing and delivering to
Lender the aforesaid Deed of Trust encumbering and conveying the Developer's interest in the
Ground Lease as security for the aforesaid Loan and, to the extent the consent of the Agency is
required for such acts on the part of the Developer, the Agency consents to the same including
the mortgaging and conveying of the Developer's leasehold estate in the Ground Lease, the
leasehold improvements and related security and collateral agreements, all subject to Section 900
of the Ground Lease.
6. In accordance with Section 502 of the Ground Lease the Agency has approved the
Hotel Management Agreement dated April 11, 2001, between the Developer, as owner, and
Hyatt Corporation, as manager, and has approved Hyatt Corporation as the manager.
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7. The Agency acknowledges that the requirement of Section 503 of the Ground
Lease that the Agency approve an "Original Franchise Agreement" is satisfied by the execution
and delivery of the Hotel Management Agreement with Hyatt Corporation and that there will be
no separate Franchise Agreement with respect to the Resort Hotel Project.
8. The Agency acknowledges that in accordance with Section 901 of the Ground
Lease that Lender is approved as a"responsible bona fide institutional lender"and as a leasehold
mortgagee under the Ground Lease and approves the making of the Loan by Lender and the
execution and delivery of the Deed of Trust on the leasehold estate.
9. In accordance with Section 902 of the Ground Lease the Agency agrees that
Lender is an approved "Mortgagee" within the terms and conditions of Section 900 of the
Ground Lease, shall be entitled to all the rights and burdened with all of the obligations of a
"Mortgagee" under the Ground Lease including those contained in Section 902, upon a trustee's
sale or foreclosure of the Deed of Trust or deed in lieu thereof shall recognize Lender as tenant in
accordance with Section 902 of the Ground Lease and shall provide in accordance with Section
902 the services of landlord for the benefit of Lender, its successors and assigns. Upon Agency's
receipt of a notice from Lender pursuant to the terms of the Ground Lease in connection with
Lender's rights pursuant to Article 900 of the Ground Lease, Agency shall comply with the
provisions of the Ground Lease in connection with such notice.
10. Pursuant to Section 1316(3)of the Ground Lease the Agency acknowledges that:
(a) foreclosure of a mortgage or deed of trust encumbering Agency's fee
interest in the Development Property shall not terminate or disturb the
rights of the tenant under the Ground Lease, or the rights of any leasehold
mortgagee or other lender, including Lender, so long as tenant or such
leasehold mortgagee is not then in default (after applicable notice and cure
periods) under the Ground Lease; and
(b) Agency shall cause a copy of any written default notices sent by a fee
mortgagee to Agency to be sent to the tenant under the Ground Lease and
such leasehold mortgagee and other lender, including Lender.
11. The Agency shall provide Lender with any notices that it is required to provide to
Lender, as mortgagee, under the Ground Lease, including, without limitation, those notices to be
provided under Section 904 of the Ground Lease.
12. Agency acknowledges the previous assignment to the Developer by Mayer of all
its right, title and interest in and to the Ground Lease. In addition, the Agency hereby expressly
approves and consents to (a) any subsequent transfer, whether voluntary or involuntary, of
membership interests in Developer between Grand Resort, LLC ("GR") and Coast Beach, LLC
("CB"), two of the three original members of the Developer, so long as such transfer is pursuant
to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of Developer's Limited
Liability Company Agreement, together with (i) any subsequent change in the share of capital or
profits held by GR or CB in the Developer from time to time, so long as such transfer is pursuant
to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of the Developer's Limited
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684425.04 a03/29l06 -4-
Liability Company Agreement, (ii) any subsequent change in interests, capital or profits that
results in CB becoming the managing member of the Developer, so long as such transfer is
pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of the Developer's
Limited Liability Company Agreement, and (iii) any subsequent change in the ownership of
shares in SPE PCH Beach Resort, Inc. ("SPE"), the third member of Developer, which results
from any of the foregoing permitted transfers so long as SPE's membership interest in the
Developer does not increase as a result thereof, (b) any transfers that result in the transfer of
membership interests to a third party so long as the existing members, in the aggregate, retain a
Controlling Interest in the Developer (the term "Controlling Interest" as used herein shall mean
with respect to any entity, other than an individual, (i) an ownership interest in Developer
totaling in excess of fifty percent [50%] of the voting and ownership interests of such entity, or
(ii) control of the management and day to day operations of such entity) and (c) a voluntary or
involuntary sale, exchange, conveyance or direct or indirect transfer of membership interests or
"units" in either CB or GR's limited liability company, or the creation or issuance of new
membership interests or "units" therein in one or a series of transactions, so long as the result is
that an aggregate of at least 51%of each such company's membership interests or "units" shall be
vested legally or beneficially in a party or parties who are now members of each of such
companies. No such transfers shall require any notice to the Agency or the taking of any act by
the Developer or its members as a condition to the effectiveness thereof, and Sections 802 and
803 of the Ground Lease shall be inapplicable to such transfers. Notwithstanding anything
contained herein to the contrary and the execution of this Agreement by Lender, the foregoing
transfers of interests in Developer shall remain subject to the terms and provisions of the Loan
Documents.
13. For purposes of Section 1004 of the Ground Lease the Agency acknowledges that
the amount of the deductible as to any required earthquake insurance will take into account such
earthquake insurance as is available at commercially reasonable rates.
14. As a permitted Mortgagee, Lender shall be entitled to all the rights, benefits and
privileges afforded to a Mortgagee under Sections 902 through 912 of the Ground Lease.
15. Agency acknowledges that on May 29, 2003, a Release of Construction
Covenants was recorded as Document No. 2003000624371 in the Official Records of Orange
County, California, and, pursuant to Section 804 of the Ground Lease, the same constitutes
evidence of satisfactory completion of all construction and development related to the
Development Property and required under the Ground Lease.
16. Any notices and other communications permitted or required by the provisions of
this Agreement (except for telephonic notices expressly permitted) shall be in writing and shall
be deemed to have been properly given or served by depositing the same with the United States
Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt
Requested, bearing adequate postage, or deposited with reputable private courier or overnight
delivery service, and addressed as hereinafter provided. Each such notice shall be effective upon
being deposited or delivered as aforesaid. The time period within which a response to any such
notice must be given, however, shall commence to run from the date of receipt of the notice by
the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of the notice sent.
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By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America. Each notice shall be addressed as
follows:
To Lender:
GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale,UT 84047
Attn: Loan Notices (GMACCM Loan No 01-1052372)
with a copy to:
Katten Muchin Rosenman,LLP
1025 Thomas Jefferson Street,N.W.
East Lobby, Suite 700
Washington,D.C. 20007-5201
Attn: Christopher J. Hart, Esq.
To the Agency:
Redevelopment Agency of the City of Huntington Beach
City Hall
2000 Main Street
Huntington Beach,California 92648
Attn: Stanley Smalewitz,Director of Economic Development
To the Developer:
PCH Beach Resort, LLC
c/o The Robert Mayer Corporation
Suite 1050
660 Newport Center Drive
Newport Beach, California 92660
Attn: Robert L. Mayer,Jr. and Stephen Bone
with copy to:
Coast Beach, LLC
c/o Hyatt Development Corporation
200 West Madison Avenue
Chicago, Illinois 6060
Attn: Dale Moulton
17. The Agency acknowledges that pursuant to the terms of the documents governing
the Loan, the Developer has conveyed, granted and assigned to Lender all of the Developer's
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684425.04 a03/29/06 -6-
right to amend, cancel, modify, alter, terminate or surrender the Ground Lease and the Agency
shall abide by the restrictions on amendment, cancellation, modification, alteration, termination
or surrender contained in Section 905 of the Ground Lease.
18. The Agency acknowledges that it has been provided for its inspection and review
a copy of all of the Loan Documents (a complete list of which are attached hereto as
Exhibit`B"), and approves the same.
19. The Agency shall provide to Lender estoppel certificates in conformity with
Section 908 of the Ground Lease from time to time upon reasonable request and without charge
certifying such correct information as Lender may reasonably request.
20. Notwithstanding the place of execution of this instrument, the parties to this
instrument have contracted for California law to govern this instrument and it is controllingly
agreed that this instrument is made pursuant to and shall be construed and governed by the laws
of the State of California without regard to the principles of conflicts of law.
21. This Agreement and each and every covenant, agreement and other provision
hereof shall be binding upon and shall inure to the benefit of Lender,the Developer, the Agency
and their respective successors and assigns.
22. The unenforceability or invalidity of any provisions hereof shall not render any
other provision or provisions herein contained unenforceable or invalid.
23. This Agreement may be executed in any number of counterparts which together
shall constitute one and the same instrument.
IN FURTHERANCE, this Agreement is executed as of the date first above written.
PCH BEACH RESORT,LLC, a California
limited liability company
By: GRAND RESORT, LLC,a California
limited liability company,
Its: Managing Member
By: RLM MANAGEMENT, INC.,a California
corporation,
Its: Manager
By:
Robert L. ay r Jr.
Its: Presi nt
!62/019740-0016
684425.04 a03/29/06 -7-
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body,
corporate and politic
By:
Dr. Penelo a Culbreth-Graft
Its: Executive Director
Approved as to Form:
(� ncy General Counsel ���KIUt�
1
Approve to Form:
Kane Ball er&BerkAn,j
Agency S cial Counsel
I
162/019740-0016
684425.04 a03/29/06 —8—
GMAC COMMERCIAL MORTGAGE BANK,
a Utah industrial bank
By:
Its: Lewis L. Deiefield
Er lilt;lr
162/019740-0016
684426.04 a03/22/06 -9-
STATE OF VIRIGINIA)
ss
COUNTY OF ARLINGTONI
On fp� 1 f r me,
personally appeared 1 )-n04TJA
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
CA-
N6tary Publ c
[SEALI, KIMBERLY S. KOVACH
Notary Public
COMMOnwtolth ®f Virglnlo
My 'Omm. EMs. Jan. 31. 2009
162/019740-0016
684425.04 a03/22/06
State of California )
)ss
County of Orange )
On Aprl 5,2006 ,before me, K. Copeland
personally appeared Penelope Culbreth-Graft 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.
K. COPELAND
U COMM.#1409904 WITNESS my hand and official seal.
NOTARY PUBLIC-CALIFORNIA n
F ORANGE COUNTY 0
Q01MY COMM.EXPIRES APRIL 8,2007
STATE OF 6-&G(JP09-WA )
) ss
COUNTY OF O f-MA y E )
On -kD v j ,before me, tg g �A ovRs y)-A ,
personally appeared L..e,,-4 l__ M.n.�..,�✓ }1�r•
personally known to me ( ) to be the
person(•&) whose name() is/we-subscribed to the within instrument and acknowledged to me that
he/& executed the same in his/her#keir authorized capacity(iea), and that by his/hon4keif
signature(i) on the instrument the person(&) or the entity upon behalf of which the person(s)
acted,executed the instrument.
Witness my hand and official seal.
T;;t5Zffi" REX MORISHITA '
^
Commission I HITA1414842 L
@my
Notary Public-CaliforniaOrange CountyNot Public
Comm.Expires May 1,2007
[SEAL]
162/019740-0016
684425.04 a03/29/06 —1 Q'
EXHIBIT"A"
DESCRIPTION DEVELOPMENT PROPERTY
All that certain land situated in the State of California, County of Orange, City of Huntington
Beach,and is described as follows:
Parcel A:
Lot 1 of Tract No. 15535, as shown on a map filed in Book 790, pages 44 to 50 inclusive of
Miscellaneous Maps,Records of Orange County, California
Parcel B:
A non-exclusive revocable license to utilize that certain area defined as "Grand Coast Resort
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement') recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "F" attached thereto, for the installation, maintenance, repair and replacement of
landscaping and other improvements, as said license is set forth in paragraph 2 of the Agreement.
Parcel C:
A non-exclusive revocable license to utilize that certain area defined as "Overcrossing
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement') recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "G" attached thereto, for the installation, maintenance, repair and replacement of
overcrossing and other improvements, as said license is set forth in paragraph 2 of the
Agreement.
Parcel D:
A non-exclusive appurtenant easement upon,in,over,under and along those portions of the land
as described in that certain"Wall and Landscaping Easement and Maintenance Agreement',
dated May 30, 2003, executed by and between PCH Beach Resorts, LLC, a California limited
liability company and PLC/Lyon Waterfront LLC, a Delaware limited liability company
recorded June 12,2003 as instrument no. 2003000690325, of Official Records of Orange
County, State of California.
EXHIBIT"A"
TO ESTOPPEL AGREEMENT REGARDING GROUND
162/019740-0016
684425.04 a03/29/06 LEASE
EXHIBIT`B"
LOAN DOCUMENTS
a. Second Amended and Restated Deed of Trust Note;
b. Second Amended and Restated Leasehold Deed of Trust, Assignment of Leases
and Profits, Security Agreement and Fixture Filing;
C. Second Amended and Restated Assignment of Leases, Rents and Profits;
d. Second Amended and Restated Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals;
e. Second Amended and Restated Guaranty of Recourse Obligations;
f. Second Amended and Restated Environmental Indemnity Agreement;
g. Second Amended and Restated Consent, Subordination and Recognition
Agreement;
h. Second Amended and Restated Replacement Reserve Agreement;
i. Patriot Act Certificate;
j. UCC Financing Statements(Orange County and California Secretary of State);
k. Estoppel Agreement Regarding Ground Lease;
1. Estoppel Agreement Regarding Development Agreement and Property
Agreements;
in. Estoppel Agreement Regarding Disposition and Development Agreement; and
n. Second Amended and Restated Deposit Account Control Agreement
o. Section 905.1 Notice to Ground Lessor
EXHIBIT`B"
TO ESTOPPEL AGREEMENT REGARDING GROUND
162/019740-0016
684425.04 a03/29/06 LEASE
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: KIMBERLY S. KOVACH
Date Commission Expires: JAN 31, 2009
County where bond is Filed: ARLINGTON, VIRGINIA
Place of execution - Newport Beach Date - April 5, 2006
FIDELITY NATIONAL TITLE COMPANY
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: K. COPELAND
Date Commission Expires: APRIL 8, 2007
County where bond is Filed: ORANGE
Commission No.: 1409904
Manufacturer/Vendor No.: TCC1
Place of execution - Newport Beach Date - April 5, 2006
FIDELITY ATIONAL TITLE COMPANY
i
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: REX MORISHITA
Date Commission Expires: MAY 1, 2007
County where bond is Filed: ORANGE
Commission No.: 1414842
Manufacturer/Vendor No.: NNA1
Place of execution - Newport Beach Date - April 5, 2006
FIDELITY NAT NAL TITLE COMPANY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
Washington, D.C. 20007-5201
Attention: Christopher J. Hart, Esq. `
(Space Above For Recorder's Use)
ESTOPPEL AGREEMENT REGARDING GROUND LEASE
THIS ESTOPPEL AGREEMENT REGARDING�RO LEASE ("Agreement") is
made and entered into as of the �— day of 2006, by and among the
REDEVELOPMENT AGENCY OF THE CITY OF TINGTON BEACH, a public body,
corporate and politic (herein the "Agency"); PCH BEACH RESORT, LLC, a California limited
liability company ("Developer"); and GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank (together with its successors and assigns, "Lender").
PRELIMINARY RECITALS:
A. The Agency and Mayer Financial, L.P., as developer ("Mayer") have entered into
an Amended and Restated Disposition and Development Agreement dated as of September 14,
1998 ("Original Agreement"), as amended by that certain First Implementation Agreement to
Amended and Restated Disposition and Development Agreement dated as of May 15, 2000
("First Implementation Agreement") and as further amended by Second Implementation
Agreement to Amended and Restated Disposition and Development Agreement dated as of
February 5, 2001 ("Second Implementation Agreement") (the Original Agreement as amended
by the First Implementation Agreement and Second Implementation Agreement being herein
referred to as the "DDA") pursuant to which the Agency has acquired the Development Property
as described in Exhibit "A"attached hereto ("Development Property").
B. The Developer has acquired the interest of Mayer in the DDA insofar as the DDA
relates to and affects the Development Property pursuant to that certain Assignment and
Assumption Agreement and Consent to Assignment dated April3, 2001. The Agency has
consented to such acquisition and acknowledged and agreed that for purposes of the
development of the Development Property the Developer shall be the "developer of the same as
set forth in the DDA and is entitled to all of the benefits of the "developer" under the DDA
insofar as it affects or relates to the Development Property.
C. In furtherance of the DDA and in order to construct the required improvements on
the Development Property, the Agency, as landlord, and the Developer, as lessee, have executed
and delivered that certain Ground Lease dated April, 2001, a Memorandum of which was
162/019740-0016
684425.04 a03/29/06
recorded on April 18, 2001, as Document No. 20010232769 in the Office of the County
Recorder, Orange County, California, pursuant to which the Agency has leased the Development
Property to Developer("Ground Lease").
D. Pursuant to the terms of the Ground Lease, the Developer has agreed to construct
on the Development Property and operate either itself or through a hotel manager a resort hotel
of approximately 519 keyed guest rooms, a conference center and other amenities ("Resort Hotel
Project").
E. The Developer obtained a bridge loan from Lender on or about August 19, 2005,
in the original principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) (the "Bridge Loan") to refinance a prior bridge loan. In furtherance thereof,
Developer and Lender entered into certain loan documents wherein Lender disbursed the Bridge
Loan, or portions thereof, to Developer under the conditions contained therein.
F. Developer has obtained from Lender a commitment for a loan (the "Loan") in the
maximum principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) and in connection therewith the Developer will execute and deliver to Lender
its deed of trust encumbering and conveying the Developer's interest in the Resort Hotel Project
as security for the Loan. In furtherance thereof, Developer and Lender have entered into or will
enter into certain loan documents ("Loan Documents") wherein Lender shall disburse the Loan,
or portions thereof,to Developer under the conditions contained therein.
G. To evidence the Loan, the Developer will be executing and delivering to Lender
its Second Amended and Restated Deed of Trust Note in the amount of the Loan (herein the
"Note").
H. As security for the repayment of the Note, among other collateral documents, the
Developer has or will be executing and delivering to Fidelity National Title Company, as trustee,
for the benefit of Lender its Second Amended and Restated Leasehold Deed of Trust,
Assignment of Rents and Profits, Security Agreement, and Fixture Filing of even date herewith
(herein the "Deed of Trust") conveying the Development Property in trust to Fidelity National
Title Company, as trustee, for the benefit of Lender.
I. The proceeds of the Loan will be used to refinance the Bridge Loan.
J. The parties are executing this Agreement for the purpose of setting forth certain
understandings with respect to the mortgaging of the leasehold estate created under the Ground
Lease.
NOW THEREFORE, in consideration of the making of the Loan it is agreed as follows:
l. The aforesaid Recitals are incorporated herein.
2. A true and correct copy of the Ground Lease is on file with the City of Huntington
Beach.
162/019740-0016
684425.04 a03/29/06 -2-
3. The Ground Lease remains in full force and effect in accordance with its terms
and together with the DDA constitutes the entire agreement between the Agency and Developer
with respect to the leasing of the Development Property and:
(a) The Ground Lease has not been modified, supplemented or amended in
any respect.
(b) Except for the Ground Lease and the DDA, there are no other agreements
or understandings, whether written or oral, between Developer and
Agency with respect to the Ground Lease or the Development Property.
(c) Neither Agency nor, to the best of Agency's knowledge, Developer, has
assigned the Ground Lease or sublet the Development Property.
(d) As of the date hereof there are no defaults under the Ground Lease by
Agency.
(e) The rent and all other payments due to Agency under the Ground Lease
are current in all respects.
(f) Agency has not received written notice of any pending eminent domain
proceedings or other governmental actions or judicial actions against
either Agency's or Developer's interest in the Development Property,
including, without limitation, actions relating to violations of any
environmental laws, and Agency has no reason to believe that there are
grounds for any claim of any such action.
(g) The "Operating Commencement Date" under the Ground Lease is
January 19, 2003.
4. The Agency is the current holder of the landlord's interest in the Ground Lease
and has not assigned or transferred its interest in the Ground Lease to any other person or entity
nor has it mortgaged, encumbered or otherwise subjected its interest in the Ground Lease to the
lien of any security instrument which has priority over the rights of the Developer under the
Ground Lease.
5. The Agency acknowledges that the Developer is executing and delivering to
Lender the aforesaid Deed of Trust encumbering and conveying the Developer's interest in the
Ground Lease as security for the aforesaid Loan and, to the extent the consent of the Agency is
required for such acts on the part of the Developer, the Agency consents to the same including
the mortgaging and conveying of the Developer's leasehold estate in the Ground Lease, the
leasehold improvements and related security and collateral agreements, all subject to Section 900
of the Ground Lease.
6. In accordance with Section 502 of the Ground Lease the Agency has approved the
Hotel Management Agreement dated April 11, 2001, between the Developer, as owner, and
Hyatt Corporation, as manager, and has approved Hyatt Corporation as the manager.
162/019740-0016
684425.04 a03/29/06 -3-
7. The Agency acknowledges that the requirement of Section 503 of the Ground
Lease that the Agency approve an "Original Franchise Agreement" is satisfied by the execution
and delivery of the Hotel Management Agreement with Hyatt Corporation and that there will be
no separate Franchise Agreement with respect to the Resort Hotel Project.
8. The Agency acknowledges that in accordance with Section 901 of the Ground
Lease that Lender is approved as a"responsible bona fide institutional lender" and as a leasehold
mortgagee under the Ground Lease and approves the making of the Loan by Lender and the
execution and delivery of the Deed of Trust on the leasehold estate.
9. In accordance with Section 902 of the Ground Lease the Agency agrees that
Lender is an approved "Mortgagee" within the terms and conditions of Section 900 of the
Ground Lease, shall be entitled to all the rights and burdened with all of the obligations of a
"Mortgagee" under the Ground Lease including those contained in Section 902, upon a trustee's
sale or foreclosure of the Deed of Trust or deed in lieu thereof shall recognize Lender as tenant in
accordance with Section 902 of the Ground Lease and shall provide in accordance with Section
902 the services of landlord for the benefit of Lender, its successors and assigns. Upon Agency's
receipt of a notice from Lender pursuant to the terms of the Ground Lease in connection with
Lender's rights pursuant to Article 900 of the Ground Lease, Agency shall comply with the
provisions of the Ground Lease in connection with such notice.
10. Pursuant to Section 1316(3) of the Ground Lease the Agency acknowledges that:
(a) foreclosure of a mortgage or deed of trust encumbering Agency's fee
interest in the Development Property shall not terminate or disturb the
rights of the tenant under the Ground Lease, or the rights of any leasehold
mortgagee or other lender, including Lender, so long as tenant or such
leasehold mortgagee is not then in default (after applicable notice and cure
periods) under the Ground Lease; and
(b) Agency shall cause a copy of any written default notices sent by a fee
mortgagee to Agency to be sent to the tenant under the Ground Lease and
such leasehold mortgagee and other lender, including Lender.
11. The Agency shall provide Lender with any notices that it is required to provide to
Lender, as mortgagee, under the Ground Lease, including, without limitation, those notices to be
provided under Section 904 of the Ground Lease.
12. Agency acknowledges the previous assignment to the Developer by Mayer of all
its right, title and interest in and to the Ground Lease. In addition, the Agency hereby expressly
approves and consents to (a) any subsequent transfer, whether voluntary or involuntary, of
membership interests in Developer between Grand Resort, LLC ("GR") and Coast Beach, LLC
("CB"), two of the three original members of the Developer, so long as such transfer is pursuant
to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of Developer's Limited
Liability Company Agreement, together with (i) any subsequent change in the share of capital or
profits held by GR or CB in the Developer from time to time, so long as such transfer is pursuant
to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of the Developer's Limited
162/019740-0016
684425.04 a03/29/06 -4-
Liability Company Agreement, (ii) any subsequent change in interests, capital or profits that
results in CB becoming the managing member of the Developer, so long as such transfer is
pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or 9.6 of the Developer's
Limited Liability Company Agreement, and (iii) any subsequent change in the ownership of
shares in SPE PCH Beach Resort, Inc. ("SPE"), the third member of Developer, which results
from any of the foregoing permitted transfers so long as SPE's membership interest in the
Developer does not increase as a result thereof, (b) any transfers that result in the transfer of
membership interests to a third party so long as the existing members, in the aggregate, retain a
Controlling Interest in the Developer (the term "Controlling Interest" as used herein shall mean
with respect to any entity, other than an individual, (i) an ownership interest in Developer
totaling in excess of fifty percent [50%] of the voting and ownership interests of such entity, or
(ii) control of the management and day to day operations of such entity) and (c) a voluntary or
involuntary sale, exchange, conveyance or direct or indirect transfer of membership interests or
"units" in either CB or GR's limited liability company, or the creation or issuance of new
membership interests or "units" therein in one or a series of transactions, so long as the result is
that an aggregate of at least 51% of each such company's membership interests or "units" shall be
vested legally or beneficially in a party or parties who are now members of each of such
companies. No such transfers shall require any notice to the Agency or the taking of any act by
the Developer or its members as a condition to the effectiveness thereof, and Sections 802 and
803 of the Ground Lease shall be inapplicable to such transfers. Notwithstanding anything
contained herein to the contrary and the execution of this Agreement by Lender, the foregoing
transfers of interests in Developer shall remain subject to the terms and provisions of the Loan
Documents.
13. For purposes of Section 1004 of the Ground Lease the Agency acknowledges that
the amount of the deductible as to any required earthquake insurance will take into account such
earthquake insurance as is available at commercially reasonable rates.
14. As a permitted Mortgagee, Lender shall be entitled to all the rights, benefits and
privileges afforded to a Mortgagee under Sections 902 through 912 of the Ground Lease.
15. Agency acknowledges that on May 29, 2003, a Release of Construction
Covenants was recorded as Document No. 2003000624371 in the Official Records of Orange
County, California, and, pursuant to Section 804 of the Ground Lease, the same constitutes
evidence of satisfactory completion of all construction and development related to the
Development Property and required under the Ground Lease.
16. Any notices and other communications permitted or required by the provisions of
this Agreement (except for telephonic notices expressly permitted) shall be in writing and shall
be deemed to have been properly given or served by depositing the same with the United States
Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt
Requested, bearing adequate postage, or deposited with reputable private courier or overnight
delivery service, and addressed as hereinafter provided. Each such notice shall be effective upon
being deposited or delivered as aforesaid. The time period within which a response to any such
notice must be given, however, shall commence to run from the date of receipt of the notice by
the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of the notice sent.
162/019740-0016
684425.04 a03/29/06 -5-
By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America. Each notice shall be addressed as
follows:
To Lender:
GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale, UT 84047
Attn: Loan Notices (GMACCM Loan No 01-1052372)
with a copy to:
Katten Muchin Roseman, LLP
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
Washington,D.C. 20007-5201
Attn: Christopher J. Hart,Esq.
To the Agency:
Redevelopment Agency of the City of Huntington Beach
City Hall
2000 Main Street
Huntington Beach, California 92648
Attn: Stanley Smalewitz,Director of Economic Development
To the Developer:
PCH Beach Resort, LLC
c/o The Robert Mayer Corporation
Suite 1050
660 Newport Center Drive
Newport Beach, California 92660
Attn: Robert L. Mayer,Jr. and Stephen Bone
with copy to:
Coast Beach, LLC
c/o Hyatt Development Corporation
200 West Madison Avenue
Chicago, Illinois 6060
Attn: Dale Moulton
17. The Agency acknowledges that pursuant to the terms of the documents governing
the Loan, the Developer has conveyed, granted and assigned to Lender all of the Developer's
162/019740-0016
684425.04 a03/29/06 -6-
right to amend, cancel, modify, alter, terminate or surrender the Ground Lease and the Agency
shall abide by the restrictions on amendment, cancellation, modification, alteration, termination
or surrender contained in Section 905 of the Ground Lease.
18. The Agency acknowledges that it has been provided for its inspection and review
a copy of all of the Loan Documents (a complete list of which are attached hereto as
Exhibit `B"), and approves the same.
19. The Agency shall provide to Lender estoppel certificates in conformity with
Section 908 of the Ground Lease from time to time upon reasonable request and without charge
certifying such correct information as Lender may reasonably request.
20. Notwithstanding the place of execution of this instrument, the parties to this
instrument have contracted for California law to govern this instrument and it is controllingly
agreed that this instrument is made pursuant to and shall be construed and governed by the laws
of the State of California without regard to the principles of conflicts of law.
21. This Agreement and each and every covenant, agreement and other provision
hereof shall be binding upon and shall inure to the benefit of Lender, the Developer, the Agency
and their respective successors and assigns.
22. The unenforceability or invalidity of any provisions hereof shall not render any
other provision or provisions herein contained unenforceable or invalid.
23. This Agreement may be executed in any number of counterparts which together
shall constitute one and the same instrument.
IN FURTHERANCE,this Agreement is executed as of the date first above written.
PCH BEACH RESORT, LLC, a California
limited liability company
By: GRAND RESORT, LLC, a California
limited liability company,
Its: Managing Member
By: RLM MANAGEMENT, INC., a California
corporation,
Its: Manager
By:
Robert L. n
Its: Presid
162/019740-0016
684425.04 a03/29/06 -7-
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body,
corporate and politic
By: �
Dr. Penel e Culbreth-Graft
Its: Executive Director
Approved as to Form:
AgencyGeneralCounsel fp�Ilglo�
Approved as to Form:
I I Arv--*'�' -
Kane Bal & r ,
Agency ecial Coun 1
162/019740-0016
684425.04 a03/29/06 'g'
GMAC COMMERCIAL MORTGAGE BANK,
a Utah industrial bank
By: --/- /'V/,//
Its: Lewis L. Deiafieid
Authorized SigmatOfY
162/019740-0016
684427.04 a03/22/06 -9-
STATE OF c&-l r-yF-l�L(A )
) ss
COUNTY OF 'D f-An"6,S )
5 �0� �fi'JC llJl,b✓i3�I
On -��p✓\1� � ,before me, ,
personally appeared R-o�-✓-� c_. M4-
personally known to me o o be the
person(s)whose name(s) is/ave subscribed to the within instrument and acknowledged to me that
he/she/trey executed the same in his/her/their authorized capacity("), and that by his/hen'dieir
signature(-&-) on the instrument the person(.&) or the entity upon behalf of which the person4)
acted, executed the instrument.
Witness my hand and official seal.
REX MORISHITA
Commission# 1414842
r Notary Public-California
Orange County Notary Public
My Comm.Expires May 1,2007
[SEAL]
162/019740-0016
684425.04 a03/29/06 —1 0—
State of California )
)ss
County of Orange )
On Aprl 5, 2006 , before me, K. Copeland
personally appeared Penelope Culbreth-Graft 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
�C, OOPELAD ND � my hand and official seal.
' COMM..#1409904
NOTARY PUBLIC•CALIFORNIA
ORANGE COUNTY
MY COMM,EXPIRES APRIL 8,2007
STATE OF VIRGINIA)
ss
COUNTY OF ARLINGTON)
On UI b ore{tee, m1�&Lcicv\
personally appeared ¢.k4
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Publi
KIMBERLY S. KOVACH
[SEAL] Notary PublIc
Commonwealth of Virginia
My Comm. Exps. Jan. 31, 2009
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On ,before me, ,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
162/019740-0016
684427.04 a03/22/06 -1 0-
EXHIBIT "A"
DESCRIPTION DEVELOPMENT PROPERTY
All that certain land situated in the State of California, County of Orange, City of Huntington
Beach, and is described as follows:
Parcel A:
Lot 1 of Tract No. 15535, as shown on a map filed in Book 790, pages 44 to 50 inclusive of
Miscellaneous Maps,Records of Orange County, California
Parcel B:
A non-exclusive revocable license to utilize that certain area defined as "Grand Coast Resort
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement") recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "F" attached thereto, for the installation, maintenance, repair and replacement of
landscaping and other improvements, as said license is set forth in paragraph 2 of the Agreement.
Parcel C:
A non-exclusive revocable license to utilize that certain area defined as "Overcrossing
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement") recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "G" attached thereto, for the installation, maintenance, repair and replacement of
overcrossing and other improvements, as said license is set forth in paragraph 2 of the
Agreement.
Parcel D:
A non-exclusive appurtenant easement upon, in, over, under and along those portions of the land
as described in that certain "Wall and Landscaping Easement and Maintenance Agreement",
dated May 30, 2003, executed by and between PCH Beach Resorts, LLC, a California limited
liability company and PLC/Lyon Waterfront LLC, a Delaware limited liability company
recorded June 12, 2003 as instrument no. 2003000690325, of Official Records of Orange
County, State of California.
EXHIBIT"A"
TO ESTOPPEL AGREEMENT REGARDING GROUND
1 62/0 1 97 40-001 6
684425.04 a03/29/06 LEASE
EXHIBIT `B"
LOAN DOCUMENTS
a. Second Amended and Restated Deed of Trust Note;
b. Second Amended and Restated Leasehold Deed of Trust, Assignment of Leases
and Profits, Security Agreement and Fixture Filing;
C. Second Amended and Restated Assignment of Leases, Rents and Profits;
d. Second Amended and Restated Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals;
e. Second Amended and Restated Guaranty of Recourse Obligations;
f. Second Amended and Restated Environmental Indemnity Agreement;
g. Second Amended and Restated Consent, Subordination and Recognition
Agreement;
h. Second Amended and Restated Replacement Reserve Agreement;
i. Patriot Act Certificate;
j. UCC Financing Statements (Orange County and California Secretary of State);
k. Estoppel Agreement Regarding Ground Lease;
1. Estoppel Agreement Regarding Development Agreement and Property
Agreements;
In. Estoppel Agreement Regarding Disposition and Development Agreement; and
n. Second Amended and Restated Deposit Account Control Agreement
o. Section 905.1 Notice to Ground Lessor
EXHIBIT `B"
TO ESTOPPEL AGREEMENT REGARDING GROUND
I62/019740-0016
684425.04 a03/29/06 LEASE
Recorded in Official Records, Orange County
Tom Daly, Clerk-Recorder
F1Di_1 1Y INATIIOI AL TITLE COaI fiA")r IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII�II�IIIII 54.00
2006000231643 03:28pm 04/06/06
119 48 Al2 17
RECORDING REQUESTED BY 0.00 0.00 0.00 0.00 48.00 0.00 0.00 0.00
AND WHEN RECORDED MAIL TO:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street,N.W.
East Lobby, Suite 700
Washington,D.C. 20007-5201
Attention: Christopher J. Hart, Esq.
(Space Above For Recorder's Use)
ESTOPPEL AGREEMENT REGARDING DISPOSITION AND DEVELOPMENT
AGREEMENT
THIS ESTOPPEL AGREEMENT REGARDING DISPOSITION AND
DEVELOPMENT AGREEMENT ("Agreement") is made and entered into as of the A day
of A]ri I, 2006, by and among the REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH, a public body, corporate and politic (herein the "Agency"); PCH
BEACH RESORT, LLC, a California limited liability company ("Developer"); and GMAC
COMMERCIAL MORTGAGE BANK, a Utah industrial bank (together with its successors and
assigns, "Lender").
PRELIMINARY RECITALS:
A. The Agency and Mayer Financial, L.P., as developer("Mayer") have entered into
an Amended and Restated Disposition and Development Agreement dated as of September 14,
1998 ("Original Agreement"), as amended by that certain First Implementation Agreement to
Amended and Restated Disposition and Development Agreement dated as of May 15, 2000
("First Implementation Agreement") and as further amended by Second Implementation
Agreement to Amended and Restated Disposition and Development Agreement dated as of
February 5, 2001 ("Second Implementation Agreement") (the Original Agreement as amended
by the First Implementation Agreement and Second Implementation Agreement being herein
referred to as the "DDA") pursuant to which the Agency has acquired the Development Property
as described in Exhibit"A"attached hereto ("Development Property").
B. The Developer has acquired the interest of Mayer in the DDA insofar as the DDA
relates to and affects the Development Property pursuant to that certain Assignment and
Assumption Agreement and Consent to Assignment dated April 3, 2001. The Agency has
consented to such acquisition and acknowledged and agreed that for purposes of the
development of the Development Property the Developer shall be the"developer"of the same as
set forth in the DDA and is entitled to all of the benefits of the "developer" under the DDA
insofar as it affects or relates to the Development Property.
162/019740-0016
6W26.04 a03/29/06
C. In furtherance of the DDA and in order to construct the required improvements on
the Development Property, the Agency, as landlord, and the Developer, as lessee, have executed
and delivered that certain Ground Lease dated April, 2001, a Memorandum of which was
recorded on April 18, 2001, as Document No. 20010232769 in the Office of the County
Recorder, Orange County, California, pursuant to which the Agency has leased the Development
Property to Developer("Ground Lease").
D. Pursuant to the terms of the Ground Lease, the Developer has agreed to construct
on the Development Property and operate either itself or through a hotel manager a resort hotel
of approximately 519 keyed guest rooms, a conference center and other amenities("Resort Hotel
Project").
E. The Developer obtained a bridge loan from Lender on or about August 19, 2005,
in the original principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) (the `Bridge Loan") to refinance a prior bridge loan. In furtherance thereof,
Developer and Lender entered into certain loan documents wherein Lender disbursed the Bridge
Loan, or portions thereof,to Developer under the conditions contained therein.
F. Developer has obtained from Lender a commitment for a loan(the"Loan") in the
maximum principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) and in connection therewith the Developer will execute and deliver to Lender
its deed of trust encumbering and conveying the Developer's interest in the Resort Hotel Project
as security for the Loan. In furtherance thereof, Developer and Lender have entered into or will
enter into certain loan documents ("Loan Documents") wherein Lender shall disburse the Loan,
or portions thereof,to Developer under the conditions contained therein.
G. To evidence the Loan, the Developer will be executing and delivering to Lender
its Second Amended and Restated Deed of Trust Note in the amount of the Loan (herein the
"Note").
H. As security for the repayment of the Note, among other collateral documents, the
Developer has or will be executing and delivering to Fidelity National Title Company, as trustee,
for the benefit of Lender its Second Amended and Restated Leasehold Deed of Trust,
Assignment of Rents and Profits, Security Agreement, and Fixture Filing of even date herewith
(herein the "Deed of Trust") conveying the Development Property in trust to Fidelity National
Title Company, as trustee,for the benefit of Lender.
I. The proceeds of the Loan will be used to refinance the Bridge Loan.
I The parties are executing this Agreement for the purpose of setting forth certain
understandings with respect to the mortgaging of the leasehold estate created under the Ground
Lease.
NOW THEREFORE,in consideration of the making of the Loan it is agreed as follows:
1. The aforesaid Recitals are incorporated herein.
l621019740-0016
68"26.04 a03/29/06 -2-
2. The Ground Lease and the DDA constitute the entire agreement between the
Agency and Developer with respect to the leasing of the Development Property and:
(a) Except for the Ground Lease and the DDA, there are no other agreements
or understandings, whether written or oral, between Developer and
Agency with respect to the Ground Lease or the Development Property;
and
(b) Agency has not received written notice of any pending eminent domain
proceedings or other governmental actions or judicial actions against
either Agency's or Developer's interest in the Development Property,
including, without limitation, actions relating to violations of any
environmental laws, and Agency has no reason to believe that there are
grounds for any claim of any such action.
3. The Agency acknowledges that the Developer is executing and delivering to
Lender the aforesaid Deed of Trust encumbering and conveying the Developer's interest in the
Ground Lease as security for the aforesaid Loan and, to the extent the consent of the Agency is
required for such acts on the part of the Developer, the Agency consents to the same including
the mortgaging and conveying of the Developer's leasehold estate in the Ground Lease, the
leasehold improvements and related security and collateral agreements.
4. Upon Agency's receipt of a notice from Lender pursuant to the terms of the DDA
in connection with either of such lender's rights pursuant to the DDA, Agency shall comply with
the provisions of the DDA in connection with such notice.
5. Agency acknowledges the previous assignment to the Developer by Mayer of all
its right, title and interest in and to the DDA (as it relates to the Development Property) and the
Ground Lease and the execution and delivery by the Developer of the Ground Lease,is expressly
permitted by Section 316(f) of the DDA and does not require the consent of the Agency. In
addition, the Agency hereby expressly approves and consents to (a) any subsequent transfer,
whether voluntary or involuntary, of membership interests in Developer between Grand Resort,
LLC ("GR") and Coast Beach, LLC ("CB"), two of the three original members of Developer, so
long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or
9.6 of the Developer's Limited Liability Company Agreement, together with (i) any subsequent
change in the share of capital or profits held by GR or CB in Developer from time to time, so
long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or
9.6 of the Developer's Limited Liability Company Agreement, (ii) any subsequent change in
interests, capital or profits that results in CB becoming the managing member of the Developer,
so long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1
or 9.6 of the Developer's Limited Liability Company Agreement, and (iii) any subsequent
change in the ownership of shares in SPE PCH Beach Resort, Inc. ("SPE"), which results from
any of the foregoing permitted transfers so long as SPE's membership interest in the Developer
does not increase as a result thereof, (b) any transfers that result in the transfer of membership
interests to a third party so long as the existing members, in the aggregate, retain a Controlling
Interest in Developer (the term "Controlling Interest" as used herein shall mean with respect to
any entity, other than an individual, (i) an ownership interest in Developer totaling in excess of
162/019740-0016
684426.04 a03/29/06 -3-
fifty percent [50%] of the voting and ownership interests of such entity, or (ii) control of the
management and day to day operations of such entity) and (c) a voluntary or involuntary sale,
exchange, conveyance or direct or indirect transfer of membership interests or "units" in either
CB or GR's limited liability company,or the creation or issuance of new membership interests or
"units" therein in one or a series of transactions, so long as the result is that an aggregate of at
least 51% of each such company's membership interests or "units" shall be vested legally or
beneficially in a party or parties who are now members of each of such companies. No such
transfers shall require any notice to the Agency or the taking of any act by the Developer or its
members as a condition to the effectiveness thereof, and Sections 316(a)-(c) and 316.1 of the
DDA shall be inapplicable to such transfers. Notwithstanding anything contained herein to the
contrary and the execution of this Agreement by Lender, the foregoing transfers of interests in
Developer shall remain subject to the terms and provisions of the Loan Documents.
6. Agency acknowledges that on May 29, 2003, a Release of Construction
Covenants was recorded as Document No. 2003000624371 in the Official Records of Orange
County, California, and, pursuant to Section 317 of the DDA, the same constitutes evidence of
satisfactory completion of all construction and development related to the Development Property
and required under the DDA.
7. Agency acknowledges that the DDA was terminated with respect to the
Development Property as of the recordation of the Release of Construction Covenants, except as
set forth in Section 404 of the DDA.
8. Agency acknowledges that Mayer and Agency have taken all actions required of
each under that certain Amended and Restated Mobilehome Acquisition and Relocation
Agreement dated as of October 19, 1998 (which agreement is referred to in the DDA as the
"Driftwood Agreement").
9. Agency acknowledges that there are no defaults under the DDA with respect to
the Development Property as to the surviving provisions in Section 404 of the DDA, including
without limitation, Agency's payment obligations under the Schedule of Feasibility Gap
Payments.
10. Any notices and other communications permitted or required by the provisions of
this Agreement (except for telephonic notices expressly permitted) shall be in writing and shall
be deemed to have been properly given or served by depositing the same with the United States
Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt
Requested, bearing adequate postage, or deposited with reputable private courier or overnight
delivery service, and addressed as hereinafter provided. Each such notice shall be effective upon
being deposited or delivered as aforesaid. The time period within which a response to any such
notice must be given, however, shall continence to run from the date of receipt of the notice by
the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of the notice sent.
By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America. Each notice shall be addressed as
follows:
162/019740-0016
684426.04 a03/29/06 -4-
To Lender:
GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale,UT 84047
Attn: Loan Notices(GMACCM Loan No. 01-1052372)
with a copy to:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street,N.W.
East Lobby, Suite 700
Washington,D.C. 20007-5201
Attn: Christopher J. Hart, Esq.
To the Agency:
Redevelopment Agency of the City of Huntington Beach
City Hall
2000 Main Street
Huntington Beach, California 92648
Attn: Stanley Smalewitz, Director of Economic Development
To the Developer:
PCH Beach Resort, LLC
c/o The Robert Mayer Corporation
Suite 1050
660 Newport Center Drive
Newport Beach, California 92660
Attn: Robert L.Mayer,Jr. and Stephen Bone
with copy to:
Coast Beach, LLC
c/o Hyatt Development Corporation
200 West Madison Avenue
Chicago, Illinois 6060
Attn: Dale Moulton
11. The Agency acknowledges that it has been provided for its inspection and review
a copy of all of the Loan Documents,and approves the same.
12. Notwithstanding the place of execution of this instrument, the parties to this
instrument have contracted for California law to govern this instrument and it is controllingly
162/019740-0016
684426.04 a03/29/06 -5-
agreed that this instrument is made pursuant to and shall be construed and governed by the laws
of the State of California without regard to the principles of conflicts of law.
13. This Agreement and each and every covenant, agreement and other provision
hereof shall be binding upon and shall inure to the benefit of Lender, the Developer, the Agency
and their respective successors and assigns.
14. The unenforceability or invalidity of any provisions hereof shall not render any
other provision or provisions herein contained unenforceable or invalid.
15. This Agreement may be executed in any number of counterparts which together
shall constitute one and the same instrument.
162/019740-0016
684426.04 a03/29/06 -6-
IN FURTHERANCE,this Agreement is executed as of the date first above written.
PCH BEACH RESORT, LLC,a California
limited liability company
By: GRAND RESORT, LLC, a California
limited liability company,
Its: Managing Member
By: RLM MANAGEMENT, INC., a California
corporation,
Its: Manager
By:
Robert L:. Mayr,Jr.
Its: President
1621019740-0016
684426.04 a0R29/06 —/—
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body,
corporate and politic
By:
Dr. Pene pe Culbreth-Graft
Its: Executive Director
Approved as to Form:
A
Y`'rjncy Ge eral Counsel I.f Lf (Q
Approved as to Form:
Kane B er&Ber a ,
Agency ecial Counsel
162/019740-0016
684426.04 a03/29/06 -8-
GMAC COMMERCIAL MORTGAGE BANK,
a Utah industrial bank
By:
Its: a Lewis L. Delafield
Authorized Signator,
162/019740-0016
684425.04 a03/22/06 -9-
STATE OF VIRGINIA )
)ss
COUNTY OF ARLINGTON)
On befZM
` Jpersonally appeared \
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
otary Publi
[SEAL] ICIMBERLY S. KOVACH
Notary Public
Commonwealth of Virginia
MY Comm. Ups. Jan. 31, 2009
162/019740-0016
684425.04 203/22/06 -3-
STATE.OF c.ALkr—OILN (Ac )
)ss
COUNTY OF y¢A 4 Gt 5. )
On f�P✓� >M61 ,before me,
personally appeared V+ L• �lld�.y.¢r "rr.
personally known to me ) to be the
person(•e)whose name(f) is/are subscribed to the within instrument and acknowledged to me that
he/shetthey executed the same in his/hekkeir authorized capacity*&), and that by his/heb4heir
signature(.e}on the instrument the person(,) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
REX MORISHITA `
Commission#1414842 '—
�� Notary Public-California
QEOrange County Notary Public
My Comm.ExpiresMay 1,2007
[SEAL]
162/019740-0016
684426.04 43/29J06 -10-
State of California )
)ss
County of Orange )
On Aprl 5.2006 ,before me, K. Copeland
personally appeared Penelope Culbreth-Graft 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.
K. COPELAND
V NOTARY #14099044 WITNESS my hand and official seal.
OIA
U61MYCOMMIXPIRES
PUBLIC-CALIFORNIA
�. ORANGE COUNTY n
APRIL 8,2007 1
I
EXHIBIT"A"
DESCRIPTION DEVELOPMENT PROPERTY
All that certain land situated in the State of California, County of Orange, City of Huntington
Beach, and is described as follows:
Parcel A:
Lot 1 of Tract No. 15535, as shown on a map filed in Book 790, pages 44 to 50 inclusive of
Miscellaneous Maps,Records of Orange County, California
Parcel B:
A non-exclusive revocable license to utilize that certain area defined as "Grand Coast Resort
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement") recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "F" attached thereto, for the installation, maintenance, repair and replacement of
landscaping and other improvements, as said license is set forth in paragraph 2 of the Agreement.
Parcel C:
A non-exclusive revocable license to utilize that certain area defined as "Overcrossing
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement') recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "G" attached thereto, for the installation, maintenance, repair and replacement of
overcrossing and other improvements, as said license is set forth in paragraph 2 of the
Agreement.
Parcel D:
A non-exclusive appurtenant easement upon, in, over, under and along those portions of the land
as described in that certain "Wall and Landscaping Easement and Maintenance Agreement',
dated May 30, 2003, executed by and between PCH Beach Resorts, LLC, a California limited
liability company and PLC/Lyon Waterfront LLC, a Delaware limited liability company
recorded June 12, 2003 as instrument no. 2003000690325, of Official Records of Orange
County, State of California.
EXHIBIT"A"
TO ESTOPPEL AGREEMENT REGARDING DISPOSITION
162/019740-0016
684426.04 a03/29106 AND DEVELOPMENT AGREEMENT
EXHIBIT`B"
LOAN DOCUMENTS
a. Second Amended and Restated Deed of Trust Note;
b. Second Amended and Restated Leasehold Deed of Trust, Assignment of Leases
and Profits, Security Agreement and Fixture Filing;
C. Second Amended and Restated Assignment of Leases, Rents and Profits;
d. Second Amended and Restated Assignment of Contracts, Licenses, Permits,
Agreements,Warranties and Approvals;
e. Second Amended and Restated Guaranty of Recourse Obligations;
£ Second Amended and Restated Environmental Indemnity Agreement;
g. Second Amended and Restated Consent, Subordination and Recognition
Agreement;
h. Second Amended and Restated Replacement Reserve Agreement;
i. Patriot Act Certificate;
j. UCC Financing Statements(Orange County and California Secretary of State);
k. Estoppel Agreement Regarding Ground Lease;
1. Estoppel Agreement Regarding Development Agreement and Property
Agreements;
in. Estoppel Agreement Regarding Disposition and Development Agreement;
n. Second Amended and Restated Deposit Account Control Agreement
o. Section 905.1 Notice to Ground Lessor
EXHIBIT"B"
TO ESTOPPEL AGREEMENT REGARDING DISPOSITION
684426.04a033129/06 AND DEVELOPMENT AGREEMENT
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: KIMBERLY S. KOVACH
Date Commission Expires: JAN 31, 2009
County where bond is Filed: ARLINGTON, VIRGINIA
Place of execution - Newport Beach Date - April 5, 2006
FIDELITY NATIONAL TITLE COMPANY
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: K. COPELAND
Date Commission Expires: APRIL 8, 2007
County where bond is Filed: ORANGE
Commission No.: 1409904
Manufacturer/Vendor No.: TCC1
Place of execution - Newport Beach Date - April 5, 2006
el3n�'
FIDELITY L TITLE COMPANY
Government Code 27361.7
1 certify under the penalty of perjury that the notary seal on
this document read as follows:
Name of Notary: REX MORISHITA
Date Commission Expires: MAY 1, 2007
County where bond is Filed: ORANGE
Commission No.: 1414842
Manufacturer/Vendor No.: NNA1
Place of execution - Newport Beach Date - April 5, 2006
FIDELITY NATIONAL TITLE COMPANY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
Washington, D.C. 20007-5201
Attention: Christopher J. Hart, Esq. 7 �s ���'`'` &-vj7
(Space Above For Recorder's Use)
ESTOPPEL AGREEMENT REGARDING DISPOSITION AND DEVELOPMENT
AGREEMENT
THIS ESTOPPEL AGREEMENT REGARDING DISPOSITION AND
DEVELOPMENT AGREEMENT ("Agreement") is made and entered into as of the (P day
of , 2006, by and among the REDEVELOPMENT AGENCY OF THE CITY OF
INGTON BEACH, a public body, corporate and politic (herein the "Agency"); PCH
BEACH RESORT, LLC, a California limited liability company ("Developer"); and GMAC
COMMERCIAL MORTGAGE BANK, a Utah industrial bank (together with its successors and
assigns, "Lender").
PRELIMINARY RECITALS:
A. The Agency and Mayer Financial, L.P., as developer ("Mayer") have entered into
an Amended and Restated Disposition and Development Agreement dated as of September 14,
1998 ("Original Agreement"), as amended by that certain First Implementation Agreement to
Amended and Restated Disposition and Development Agreement dated as of May 15, 2000
("First Implementation Agreement") and as further amended by Second Implementation
Agreement to Amended and Restated Disposition and Development Agreement dated as of
February 5, 2001 ("Second Implementation Agreement") (the Original Agreement as amended
by the First Implementation Agreement and Second Implementation Agreement being herein
referred to as the "DDA") pursuant to which the Agency has acquired the Development Property
as described in Exhibit "A" attached hereto ("Development Property").
B. The Developer has acquired the interest of Mayer in the DDA insofar as the DDA
relates to and affects the Development Property pursuant to that certain Assignment and
Assumption Agreement and Consent to Assignment dated April 3, 2001. The Agency has
consented to such acquisition and acknowledged and agreed that for purposes of the
development of the Development Property the Developer shall be the "developer" of the same as
set forth in the DDA and is entitled to all of the benefits of the "developer" under the DDA
insofar as it affects or relates to the Development Property.
162/019740-0016
684426.04 a03/29/06
C. In furtherance of the DDA and in order to construct the required improvements on
the Development Property, the Agency, as landlord, and the Developer, as lessee, have executed
and delivered that certain Ground Lease dated April, 2001, a Memorandum of which was
recorded on April 18, 2001, as Document No. 20010232769 in the Office of the County
Recorder, Orange County, California, pursuant to which the Agency has leased the Development
Property to Developer("Ground Lease").
D. Pursuant to the terms of the Ground Lease, the Developer has agreed to construct
on the Development Property and operate either itself or through a hotel manager a resort hotel
of approximately 519 keyed guest rooms, a conference center and other amenities ("Resort Hotel
Project").
E. The Developer obtained a bridge loan from Lender on or about August 19, 2005,
in the original principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) (the "Bridge Loan") to refinance a prior bridge loan. In furtherance thereof,
Developer and Lender entered into certain loan documents wherein Lender disbursed the Bridge
Loan, or portions thereof, to Developer under the conditions contained therein.
F. Developer has obtained from Lender a commitment for a loan (the "Loan") in the
maximum principal amount of One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) and in connection therewith the Developer will execute and deliver to Lender
its deed of trust encumbering and conveying the Developer's interest in the Resort Hotel Project
as security for the Loan. In furtherance thereof, Developer and Lender have entered into or will
enter into certain loan documents ("Loan Documents") wherein Lender shall disburse the Loan,
or portions thereof, to Developer under the conditions contained therein.
G. To evidence the Loan, the Developer will be executing and delivering to Lender
its Second Amended and Restated Deed of Trust Note in the amount of the Loan (herein the
"Note")
i
I
H. As security for the repayment of the Note, among other collateral documents, the
Developer has or will be executing and delivering to Fidelity National Title Company, as trustee,
for the benefit of Lender its Second Amended and Restated Leasehold Deed of Trust,
Assignment of Rents and Profits, Security Agreement, and Fixture Filing of even date herewith
(herein the "Deed of Trust") conveying the Development Property in trust to Fidelity National
Title Company, as trustee, for the benefit of Lender.
1. The proceeds of the Loan will be used to refinance the Bridge Loan.
J. The parties are executing this Agreement for the purpose of setting forth certain
understandings with respect to the mortgaging of the leasehold estate created under the Ground
Lease.
NOW THEREFORE, in consideration of the making of the Loan it is agreed as follows:
1. The aforesaid Recitals are incorporated herein.
162/019740-0016
684426.04 a03/29/06 -2-
2. The Ground Lease and the DDA constitute the entire agreement between the
Agency and Developer with respect to the leasing of the Development Property and:
(a) Except for the Ground Lease and the DDA, there are no other agreements
or understandings, whether written or oral, between Developer and
Agency with respect to the Ground Lease or the Development Property;
and
(b) Agency has not received written notice of any pending eminent domain
proceedings or other governmental actions or judicial actions against
either Agency's or Developer's interest in the Development Property,
including, without limitation, actions relating to violations of any
environmental laws, and Agency has no reason to believe that there are
grounds for any claim of any such action.
3. The Agency acknowledges that the Developer is executing and delivering to
Lender the aforesaid Deed of Trust encumbering and conveying the Developer's interest in the
Ground Lease as security for the aforesaid Loan and, to the extent the consent of the Agency is
required for such acts on the part of the Developer, the Agency consents to the same including
the mortgaging and conveying of the Developer's leasehold estate in the Ground Lease, the
leasehold improvements and related security and collateral agreements.
4. Upon Agency's receipt of a notice from Lender pursuant to the terms of the DDA
in connection with either of such lender's rights pursuant to the DDA, Agency shall comply with
the provisions of the DDA in connection with such notice.
5. Agency acknowledges the previous assignment to the Developer by Mayer of all
its right, title and interest in and to the DDA (as it relates to the Development Property) and the
Ground Lease and the execution and delivery by the Developer of the Ground Lease, is expressly
permitted by Section 316(f) of the DDA and does not require the consent of the Agency. In
addition, the Agency hereby expressly approves and consents to (a) any subsequent transfer,
whether voluntary or involuntary, of membership interests in Developer between Grand Resort,
LLC ("GR") and Coast Beach, LLC ("CB"), two of the three original members of Developer, so
long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or
9.6 of the Developer's Limited Liability Company Agreement, together with (i) any subsequent
change in the share of capital or profits held by GR or CB in Developer from time to time, so
long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1 or
9.6 of the Developer's Limited Liability Company Agreement, (ii) any subsequent change in
interests, capital or profits that results in CB becoming the managing member of the Developer,
so long as such transfer is pursuant to either CB or GR exercising its rights under Section 4.5, 7.1
or 9.6 of the Developer's Limited Liability Company Agreement, and (iii) any subsequent
change in the ownership of shares in SPE PCH Beach Resort, Inc. ("SPE"), which results from
any of the foregoing permitted transfers so long as SPE's membership interest in the Developer
does not increase as a result thereof, (b) any transfers that result in the transfer of membership
interests to a third party so long as the existing members, in the aggregate, retain a Controlling
Interest in Developer (the term "Controlling Interest" as used herein shall mean with respect to
any entity, other than an individual, (i) an ownership interest in Developer totaling in excess of
162/019740-0016
684426.04 a03/29/06 -3-
fifty percent [50%] of the voting and ownership interests of such entity, or (ii) control of the
management and day to day operations of such entity) and (c) a voluntary or involuntary sale,
exchange, conveyance or direct or indirect transfer of membership interests or "units" in either
CB or GR's limited liability company, or the creation or issuance of new membership interests or
"units" therein in one or a series of transactions, so long as the result is that an aggregate of at
least 51% of each such company's membership interests or "units" shall be vested legally or
beneficially in a party or parties who are now members of each of such companies. No such
transfers shall require any notice to the Agency or the taking of any act by the Developer or its
members as a condition to the effectiveness thereof, and Sections 316(a)-(c) and 316.1 of the
DDA shall be inapplicable to such transfers. Notwithstanding anything contained herein to the
contrary and the execution of this Agreement by Lender, the foregoing transfers of interests in
Developer shall remain subject to the terms and provisions of the Loan Documents.
6. Agency acknowledges that on May 29, 2003, a Release of Construction
Covenants was recorded as Document No. 2003000624371 in the Official Records of Orange
County, California, and, pursuant to Section 317 of the DDA, the same constitutes evidence of
satisfactory completion of all construction and development related to the Development Property
and required under the DDA.
7. Agency acknowledges that the DDA was terminated with respect to the
Development Property as of the recordation of the Release of Construction Covenants, except as
set forth in Section 404 of the DDA.
8. Agency acknowledges that Mayer and Agency have taken all actions required of
each under that certain Amended and Restated Mobilehome Acquisition and Relocation
Agreement dated as of October 19, 1998 (which agreement is referred to in the DDA as the
"Driftwood Agreement").
9. Agency acknowledges that there are no defaults under the DDA with respect to
the Development Property as to the surviving provisions in Section 404 of the DDA, including
without limitation, Agency's payment obligations under the Schedule of Feasibility Gap
Payments.
10. Any notices and other communications permitted or required by the provisions of
this Agreement (except for telephonic notices expressly permitted) shall be in writing and shall
be deemed to have been properly given or served by depositing the same with the United States
Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt
Requested, bearing adequate postage, or deposited with reputable private courier or overnight
delivery service, and addressed as hereinafter provided. Each such notice shall be effective upon
being deposited or delivered as aforesaid. The time period within which a response to any such
notice must be given, however, shall commence to run from the date of receipt of the notice by
the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of the notice sent.
By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America. Each notice shall be addressed as
follows:
162/019740-0016
684426.04 a03/29106 -4-
To Lender:
GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale, UT 84047
Attn: Loan Notices (GMACCM Loan No. 01-1052372)
with a copy to:
Katten Muchin Rosenman, LLP
1025 Thomas Jefferson Street,N.W.
East Lobby, Suite 700
Washington, D.C. 20007-5201
Attn: Christopher J. Hart, Esq.
To the Agency:
Redevelopment Agency of the City of Huntington Beach
City Hall
2000 Main Street
Huntington Beach, California 92648
Attn: Stanley Smalewitz,Director of Economic Development
To the Developer:
PCH Beach Resort, LLC
c/o The Robert Mayer Corporation
Suite 1050
660 Newport Center Drive
Newport Beach, California 92660
Attn: Robert L. Mayer, Jr. and Stephen Bone
with copy to:
Coast Beach, LLC
c/o Hyatt Development Corporation
200 West Madison Avenue
Chicago, Illinois 6060
Attn: Dale Moulton
11. The Agency acknowledges that it has been provided for its inspection and review
a copy of all of the Loan Documents, and approves the same.
12. Notwithstanding the place of execution of this instrument, the parties to this
instrument have contracted for California law to govern this instrument and it is controllingly
162/019740-0016
684426.04 a03/29/06 -5-
agreed that this instrument is made pursuant to and shall be construed and governed by the laws
of the State of California without regard to the principles of conflicts of law.
13. This Agreement and each and every covenant, agreement and other provision
hereof shall be binding upon and shall inure to the benefit of Lender, the Developer, the Agency
and their respective successors and assigns.
14. The unenforceability or invalidity of any provisions hereof shall not render any
other provision or provisions herein contained unenforceable or invalid.
15. This Agreement may be executed in any number of counterparts which together
shall constitute one and the same instrument.
162/019740-0016
684426.04 a03/29/06 -6-
IN FURTHERANCE,this Agreement is executed as of the date first above written.
PCH BEACH RESORT, LLC, a California
limited liability company
By: GRAND RESORT, LLC, a California
limited liability company,
Its: Managing Member
By: RLM MANAGEMENT, INC., a California
corporation,
Its: Manager
By:
Robert( ay r.
Its: President
162/019740-OO16
684426.04 a03/29/06 -7-
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body,
corporate and politic
By:
Dr. Penel e Culbreth-Graft
Its: Executive Director
Approved as to Form:
gency General Counsel U44qtqok
Approv as to Form:
Kane B lmer& BerkWaj,
Agency ecial Counsel
162/019740-0016
684426.04 a03/29/06 -8-
GMAC COMMERCIAL MORTGAGE BANK,
a Utah industrial bank
By:
Its: Delafield
d SWITY
162/019740-0016
684427.04 a03/22/06 -9-
r
STATE OF GAf L I fi-0 R-4!Be )
)ss
COUNTY OF t7 Rhlyk(nE
On vl% � q ,2 0(0 ,before me, ot/sS�LI- Dt ,
personally appeared Z06C --k— L'.
personally known to me to be the
person(e)whose name(s) is/are-subscribed to the within instrument and acknowledged to me that
he/shvf hl executed the same in his/herf heir authorized capacity(-ies&), and that by his/herftheir
signature(s) on the instrument the person(s) or the entity upon behalf of which the personH
acted, executed the instrument.
Witness my hand and official seal.
REX MORISHITA
_ Commission#1414842
@my
Notary Public-California Notary Public
Orange County
Comm.Expires May 1,2007
[SEAL]
162/019740-0016
684426.04 a03/29/06 -1 0'
State of California )
)ss
County of Orange )
On Aprl 5, 2006 , before me, K. Copeland
personally appeared Penelope Culbreth-Graft 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.
r K. COPELAND
n WITNESS my hand and official seal.
NOTARY PUBLIC-CALIFORNIA
ORANGE COUNTY 0
OMY COMM.EXPIRES APRIL 8,2007
STATE OF VIRGINIA)
) ss
COUNTY OF ARLINGTON)
On (A�('L 7—q. 2Mr-befoxe me, 1 V�i1
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL] KIMBERLY S. KOVACH
Notary Public
Commonwealth of Virginia
My Comm. Ems. Jan. 11, 2009
STATE OF CALIFORNIA )
ss
COUNTY OF )
On ,before me, ,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
162/019740-0016
684427.04 a03/22/06 -1 0-
EXHIBIT "A"
DESCRIPTION DEVELOPMENT PROPERTY
All that certain land situated in the State of California, County of Orange, City of Huntington
Beach, and is described as follows:
Parcel A:
Lot 1 of Tract No. 15535, as shown on a map filed in Book 790, pages 44 to 50 inclusive of
Miscellaneous Maps, Records of Orange County, California
Parcel B:
A non-exclusive revocable license to utilize that certain area defined as "Grand Coast Resort
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement') recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "F" attached thereto, for the installation, maintenance, repair and replacement of
landscaping and other improvements, as said license is set forth in paragraph 2 of the Agreement.
Parcel C:
A non-exclusive revocable license to utilize that certain area defined as "Overcrossing
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement') recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "G" attached thereto, for the installation, maintenance, repair and replacement of
overcrossing and other improvements, as said license is set forth in paragraph 2 of the
Agreement.
Parcel D:
A non-exclusive appurtenant easement upon, in, over, under and along those portions of the land
as described in that certain "Wall and Landscaping Easement and Maintenance Agreement',
dated May 30, 2003, executed by and between PCH Beach Resorts, LLC, a California limited
liability company and PLC/Lyon Waterfront LLC, a Delaware limited liability company
recorded June 12, 2003 as instrument no. 2003000690325, of Official Records of Orange
County, State of California.
EXHIBIT"A"
TO ESTOPPEL AGREEMENT REGARDING DISPOSITION
162/019740-0016
684426.04 a03/29/06 AND DEVELOPMENT AGREEMENT
EXHIBIT"B"
LOAN DOCUMENTS
a. Second Amended and Restated Deed of Trust Note;
b. Second Amended and Restated Leasehold Deed of Trust, Assignment of Leases
and Profits, Security Agreement and Fixture Filing;
C. Second Amended and Restated Assignment of Leases,Rents and Profits;
d. Second Amended and Restated Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals;
e. Second Amended and Restated Guaranty of Recourse Obligations;
f. Second Amended and Restated Environmental Indemnity Agreement;
g. Second Amended and Restated Consent, Subordination and Recognition
Agreement;
h. Second Amended and Restated Replacement Reserve Agreement;
i. Patriot Act Certificate;
j. UCC Financing Statements (Orange County and California Secretary of State);
k. Estoppel Agreement Regarding Ground Lease;
1. Estoppel Agreement Regarding Development Agreement and Property
Agreements;
in. Estoppel Agreement Regarding Disposition and Development Agreement;
n. Second Amended and Restated Deposit Account Control Agreement
o. Section 905.1 Notice to Ground Lessor
EXHIBIT"B"
TO ESTOPPEL AGREEMENT REGARDING DISPOSITION
162/019740-0016
694426.04 a03/29/06 AND DEVELOPMENT AGREEMENT
This Document was electronically recorded by
fIDL I Y NATIONAL TITLE COMPANY Fidelity National Major Accounts
Recorded in Official Records, Orange County
OFFICIAL BUSINESS Tom Daly, Clerk-Recorder
Document entitled to free IIIIIIIIIIIIIIIIIIIII�IIIIIIIIIIIIIIIIIIIIIIIIII IIII�IIIII
recording per Government 15.00
Code Section 6103 2006000232555 08:00am 04/07/06
227 92 R23 4
Recording Requested By and 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00
When Recorded Mail To:
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: Executive Director
q�q �.� (Space Above For Recorder's Use)
REQUEST FOR NOTICE
Request is hereby made on this day of April, 2006, that a copy of any NOTICE OF
DEFAULT and a copy of any NOTICE OF SALE under that certain Second Amended and
Restated Leasehold Deed of Trust, Assignment of Leases and Profits, Security Agreement and
Fixture Filing recorded as Instrument No. Cam- 231 ULA � in the Official Records of
Orange County, California on April_(� , 2006, executed by PCH Beach Resort, LLC, as Trustor,
in which GMAC Commercial Mortgage Bank is named as Beneficiary, and Fidelity National
Title Company, as Trustee, and describing the following real property:
Please see Exhibit"A", attached hereto and incorporated herein.
be mailed to REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH at
the following address:
Redevelopment Agency of the City of Huntington Beach
City Hall
2000 Main Street
Huntington Beach, California 92648
Attn: Executive Director
.NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the
address contained in this recorded request. If your address changes, a new request must be
recorded.
[End—Signature Block On Next Page]
1 62/01 9740-00 1 6
696669.02 a04/04/06
4.
IN WITNESS WHEREOF, the undersigned has executed this Request for Notice as of
the date set forth above.
PCH BEACH RESORT, LLC,
a California limited liability company
By: Grand Resort, LLC,
a California limited liability company,
its managing member
By: RLM Management, Inc.,
a California corporation,
its manager
By: qa'
Name: Rob L. M yer, Jr.
Title: Press ent
162/019740-0016
696669.02 a04/04/06 -2-
STATE OF CALIFORNIA . )
ss.
COUNTY OF Orange )
On April 19 , 2006, before me, F-eK Notary Public,
personally appeared Robert L. Mayer, Jr., personally known to me (or-proved tQ-ffte-on1hr-basi-s
of sakisfa&topy-��) to be the person(s) whose name(s) is/are- subscribed to the within
instrument and acknowledged to me that he/she hey executed the same in his/h#p4he�r
authorized capacity(ies), and that by his/hekheir signature(.R)-on the instrument the person(-R) or
the entity upon behalf of which the person(�)-acted, executed the instrument.
Witness my hand and official seal.
- - - - - i�`
REX MORISHIrTA
Commission# 1414842
a
z9MY
Notary Public-California Notary Public
Orange County
Comm.Expires May 1,2007
[SEAL]
162/019740-0016
696669.02 a04/04/06 -3-
EXHIBIT "A"
DESCRIPTION OF PROPERTY
All that certain land situated in the State of California, County of Orange, City of Huntington
Beach, and is described as follows:
Parcel A:
Lot 1 of Tract No. 15535, as shown on a map filed in Book 790, pages 44 to 50 inclusive of
Miscellaneous Maps, Re cords of Orange County, California
Parcel B:
A non-exclusive revocable license to utilize that certain area defined as "Grand Coast Resort
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement") recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "F" attached thereto, for the installation, maintenance, repair and replacement of
landscaping and other improvements, as said license is set forth in paragraph 2 of the Agreement.
Parcel C:
A non-exclusive revocable license to utilize that certain area defined as "Overcrossing
Improvement Area" in that certain "License Agreement to Provide Landscaping and Other
Improvements in the Public Right-Of-Way" ("Agreement") recorded April 18, 2001 as
Instrument No. 20010232765 of Official Records of Orange County, California, and delineated
on Exhibit "G" attached thereto, for the installation, maintenance, repair and replacement of
overcrossing and other improvements, as said license is set forth in paragraph 2 of the
Agreement.
Parcel D:
A non-exclusive appurtenant easement upon, in, over, under and along those portions of the land
as described in that certain "Wall and Landscaping Easement and Maintenance Agreement",
dated May 30, 2003, executed by and between PCH Beach Resorts, LLC, a California limited
liability company and PLC/Lyon Waterfront LLC, a Delaware limited liability company
recorded June 12, 2003 as Instrument No. 2003000690325, of Official Records of Orange
County, State of California.
EXHIBIT "A"
696669.02a 4/0 TO REQUEST FOR NOTICE
696669.02 a04/04/06