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13 TUSD CONVEYANCE (CONVEYANCE AGMT ONLY) 06-03-08
1 5/22/08 2 3 4 5 6 AGREEMENT 7 8 BETWEEN 9 l0 THE CITY OF TUSTIN 11 12 - AND 13 14 THE TUSTIN UNIFIED SCHOOL DISTRICT 15 16 FOR 17 18 CONVEYANCE OF A PORTION OF MCAS, TUSTIN 19 20 AND 21 22 ESTABLISHMENT OF AN ELEMENTARY AND HIGH SCHOOL 4830-1136-1024,6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 AGREEMENT BETWEEN THE CITY OF TUSTIN AND THE TUSTIN UNIFIED SCHOOL DISTRICT FOR CONVEYANCE OF A PORTION OF MCAS, TUSTIN AND THE ESTABLISHMENT OF AN ELEMENTARY AND HIGH SCHOOL TABLE OF CONTENTS 1.0 SUBJECT AND PURPOSE OF THE AGREEMENT; APPLICABLE REQUIREMENTS .......................................................................................................... 1 1.1 Background for this Agreement ............................................................................. 1 1.2 Definitions; Attachments ....................................................................................... 3 1.3 General Intent of This Agreement ......................................................................... 3 1.4 Purpose of This Agreement ................................................................................... 4 1.5 Description of TUSD Property Affecting This Agreement ................................... 5 1.6 Federal Requirements Applicable to Tustin Legacy .............................................. 6 1.7 Local Requirements ............................................................................................... 6 1.8 Not a Development Agreement ............................................................................. 8 2.0 EFFECT OF AGREEMENT IS BINDING .................................................................. 8 3.0 PLANNING GOALS ....................................................................................................... 8 3.1 General Planning Goals ......................................................................................... 8 3.2 Use of TUSD Property ........................................................................................... 9 4.0 DEVELOPMENT AND REUSE .................................................................................... 9 4.1 Development General Requirements ..................................................................... 9 4.2 Development Standards ........................................................................................ . 9 4.3 Development Process ........................................................................................... 10 4.4 Major Improvements ............................................................................................ 11 4.5 Development Coordination .................................................................................. 12 4.6 Existing Structures and Other Improvements ...................................................... 12 4.7 Utilities and Infrastructure ................................................................................... 12 4830-1136-1024.6 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 5.0 CONSENT TO FINANCING ....................................................................................... 14 5.1 Consent to Financing Participation ...................................................................... 14 5.2 No Opposition ...................................................................................................... 14 6.0 ENVIRONMENTAL PROVISIONS ........................................................................... 14 6.1 As Is, Where Is, With All Faults .......................................................................... 14 6.2 Environmental Mitigation .................................................................................... 15 6.3 Adequacy of the EIS/EIR ..................................................................................... 15 7.0 TRANSFER AND CONVEYANCE ............................................................................ 15 7.1 Schedule ...............................................................................................................15 7.2 Quitclaim Deed .................................................................................................... 16 7.3 Sublease ............................................................................................................... 16 7.4 Personal Property ................................................................................................. 16 7.5 Surveys and Title Insurance ................................................................................. 16 8.0 ESCROW CLOSING .................................................................................................... 16 8.1 City Document Deliveries .................................................................................... 16 8.2 TUSD Document Deliveries ................................................................................. 17 8.3 Procedures for Conveyance of TUSD Property ftom City to TUSD ................... 18 9.0 RESERVED EASEMENTS .......................................................................................... 19 10.0 COVENANTS AND RESTRICTIONS ....................................................................... 19 10.1 Use Covenant ....................................................................................................... 19 10.2 Maintenance Covenant ......................................................................................... 19 10.3 Non-Discrimination and Equal Opportunity ........................................................ 19 11.0 DEED RESTRICTIONS/COVENANTS RUNNING WITH THE LAND .............. 20 12.0 CHANGES TO OWNERSHIP AND CONTROL BY TUSD .................................... 21 12.1 Restrictions on Rights and Powers under Agreement .......................................... 21 12.2 Restrictions on Transfer ....................................................................................... 21 12.3 Other Transfers .................................................................................................... 22 12.4 Remedies for Improper Transfers ........................................................................ 22 12.5 Termination of Restrictions ................................................................................. 23 12.6 Eminent Domain .................................................................................................. 23 4830-1136-1024.6 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 13.0 INDEMNIFICATION AND ENVIRONMENTAL PROVISIONS .......................... 23 13.1 TUSD's Indemnification ...................................................................................... 23 13.2 Environmental Indemnification ........................................................................... 23 13.3 Duration of Indemnities ....................................................................................... 24 14.0 REPRESENTATIONS ..................................................................................................24 14.1 City .......................................................................................................................24 14.2 TUSD ................................................................................................................... 24 15.0 NOTICE ......................................................................................................................... 24 16.0 EFFECT OF CONVEYANCE ..................................................................................... 25 16.1 Effect of Quitclaim Deeds ................................................................................... 25 16.2 Possession ............................................................................................................ 25 16.3 Power of Termination and Reversion .................................................................. 25 16.4 As Is, Where Is, With All Faults .......................................................................... 25 17.0 SHORT FORM NOTICE OF AGREEMENT ........................................................... 27 18.0 MISCELLANEOUS PROVISIONS ............................................................................ 27 LIST OF EXHIBITS A. Glossary of Defined Terms B-1. Description of Elementary School Parcel B-2. Description of High School Parcel C. Description of Subsequent TUSD Parcels D. Initial Closing Quitclaim Deed E. Sublease F. Short Form Notice of Sublease G. Bill of Sale H-1. Representations of the City H-2. Representations of TUSD I. Short Form Notice of Agreement 4830-1136-1024.6 111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 AGREEMENT BETWEEN THE CITY OF TUSTIN AND THE TUSTIN UNIFIED SCHOOL DISTRICT FOR CONVEYANCE OF A PORTION OF MCAS, TUSTIN AND THE ESTABLISHMENT OF AN ELEMENTARY AND HIGH SCHOOL THIS AGREEMENT (this "Agreement") is made and entered into this day of 2008 (the "Effective Date"), by and between the CITY OF TUSTIN ("City"), a municipal corporation organized under the laws of the State of California, acting in its capacity as the Local Redevelopment Authority for the disposition and conveyance of portions of the former Marine Corps Air Station Tustin, California, and the TUSTIN UNIFIED SCHOOL DISTRICT ("TUSD"). The City and TUSD are sometimes referred to herein individually as a "Party" and collectively as the "Parties". The Parties agree as follows: 1.0 SUBJECT AND PURPOSE OF THIS AGREEMENT; APPLICABLE REQUIREMENTS 1.1 Background for this Agreement. 1.1.1. Pursuant to the Defense Base Closure and Realignment Act of 1990 (Part A of Title XXIX of Public Law 101-510; U.S.C. Section 2687 Note), as amended (the "Base Closure Law"), the United States (the "Government") determined to close the Marine Corps Air Station Tustin ("MCAS Tustin") located substantially within the City of Tustin. In 1992, the City was designated by the Office of Economic Adjustment on behalf of the Secretary of Defense as the local redevelopment authority ("LRA") for preparation of a reuse plan for MCAS Tustin and in order to facilitate the closure of MCAS Tustin and its reuse in furtherance of the economic development of the City and surrounding region. 1.1.2. In its capacity as the LRA, the City served as the lead agency for preparing the base reuse plan, the applicable environmental documents under California law, and other documents related to the planning for the civilian reuse of MCAS Tustin. The City determined that the most appropriate tool to guide the conversion of the base from military to civilian use and to facilitate review and approval of entitlements, permits, and uses was the preparation of a combined reuse plan and specific plan. The MCAS Tustin Reuse Plan ("Reuse Plan") was developed in accordance with federal procedures under the Base Closure Law and was adopted by the City of Tustin City Council on October 16, 1996 and amended by Errata in September 1998. The Reuse Plan was subsequently reviewed and approved by the United States Department of Housing and Urban Development. On February 3, 2003 the City approved and adopted the MCAS Tustin Specific Plan/Reuse Plan by Ordinance No. 1257 setting forth the zoning and entitlement framework for future development of the former MCAS Tustin ("Specific Plan"), as subsequently amended in 2005 and 2006. The portion of the former 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 MCAS Tustin located within the City of Tustin is referred to herein as "Tustin Legacy". The Specific Plan conforms to and implements the Reuse Plan and the Tustin General Plan. Tustin Legacy is also located and defined within the MCAS Tustin Redevelopment Project Area. 1.1.3. A Final Joint Environmental Impact Statement/Environmental Impact Report for the Disposal and Reuse of MCAS Tustin (the "EIS/EIR") and Mitigation Monitoring and Reporting Program for the EIS/EIR were adopted by the City on January 16, 2001. In March 2001, a Record of Decision was issued by the Department of the Navy (hereinafter, "Navy") approving the EIS/EIR and the Reuse Plan. An additional Supplement to the EIS/EIR for the Tustin Ranch Road Interchange was certified by the City on December 6, 2004 and an Addendum to the EIS/EIR was certified on April 17, 2006. The EIS/EIR, as supplemented and amended is referred to herein as the "Final EIS/EIR". 1.1.4. TUSD reviewed drafts of the Reuse Plan and Specific Plan, the attendant EIS/EIR, and other related and supporting documents. TUSD participated in the formulation of such documents, provided comments, and otherwise fully participated in the process that culminated in the certification of the environmental documents and the adoption and approval of the Reuse Plan and Specific Plan. 1.1.5. The Reuse Plan and Specific Plan include all detailed planning, policies, regulations, and implementation strategies and procedures necessary to guide the reuse and development of all property located within MCAS Tustin. The Reuse Plan and Specific Plan are intended to serve as both policy-oriented and regulatory documents and contain the development and reuse regulations that will govern all development, construction, and use of property at Tustin Legacy. 1.1.6. City and TUSD entered into the Agreement Between City of Tustin and Tustin Unified School District Regarding Transfer of School Sites and Other Mitigation Measures, dated October 21, 1996 ("1996 TUSD Agreement"), for the transfer of approximately sixty (60) acres for purposes of two ten (10) acre parcels for elementary schools and one forty (40) acre parcel for a high school at MCAS Tustin. 1.1.7. Under the 1996 TUSD Agreement, City agreed to transfer such parcels to TUSD following the conveyance of the parcels from the Navy to the City, or support the transfer of the parcels under an educational public benefit conveyance ("PBC") directly from the federal government, in exchange for TUSD agreeing not to challenge, comment on, or oppose the approval or implementation of proposals, applications, approvals or permits relating to MCAS Tustin or the redevelopment of MCAS Tustin. 1.1.8. Pursuant to the Reuse Plan and Specific Plan and the 1996 TUSD Agreement, TUSD acquired one of the two ten (10) acre parcels for an elementary school through a PBC from the U.S. Department of Education. 1.1.9. Pursuant to the authority provided by section 2905(b)4 of the Base Closure Law and the implementing regulations of the Department of Defense (32 CFR Part 175), the Secretary 4830-1136-1024.6 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 of the Navy, on behalf of the United States of America, is authorized to convey surplus property at a closing installation to the LRA at no cost for economic development purposes. 1.1.10. In May 2002, the Navy approved an Economic Development Conveyance of Property ("EDC") and agreed to convey 1,153 acres of the former MCAS Tustin to the City for economic development in accordance with the Reuse Plan. On May 13, 2002, a portion of this property was conveyed by the Navy to the City by Federal Deed, in accordance with the provisions of that certain Agreement Between The United States of America and the City of Tustin, California, For The Conveyance of a Portion of the Former Marine Corps Air Station Tustin ("EDC Agreement"), which sets forth the terms and conditions of the conveyance of portions of MCAS Tustin from the Navy to the City ("City Property"), including the remaining parcels to be conveyed to TUSD ("TUSD Property"). A portion of the City Property, including a portion of the TUSD Property, was leased to the City by the Navy pursuant to the EDC Agreement and that certain Lease In Furtherance of Conveyance Between the United States of America and The City of Tustin, California For Portions of the Former Marine Corps Air Station Tustin (the "LIFOC"). 1.1.11. The Reuse Plan and the 1996 TUSD Agreement requires that the City and TUSD enter into an agreement prior to TUSD's receipt and use of the TUSD Property. 1.2 Definitions; Attachments. Capitalized terms used herein, including in the Exhibits attached hereto, unless otherwise defined herein, shall have the respective meanings specified in the Glossary of Defined Terms attached hereto as Exhibit "A." Unless otherwise indicated, references in this Agreement to sections, paragraphs, clauses, exhibits, attachments and schedules are those contained in or attached to this Agreement and all exhibits and schedules referenced herein are incorporated herein by this reference as though fully set forth in this Agreement. 1.3 General Intent of This Agreement. 1.3.1. Consistent with the Reuse Plan and Specific Plan and the 1996 TUSD Agreement, the City desires and intends to convey the TUSD Property to TUSD, and TUSD desires and intends to acquire the TUSD Property, to plan, develop, maintain, and use all such property solely and continuously for a public elementary school and high school ("Public Schools" as that term is defined in Exhibit A). TUSD recognizes and acknowledges that pursuant to Government Code Section 54999 et seq., Article XIIID, Section 4(a) of the State Constitution, the California Environmental Quality Act, and other provisions of state law, TUSD is obligated, or may be obligated, to dedicate, install, construct, or otherwise contribute and fund such capital improvements and infrastructure as may be necessary to serve the TUSD Property and any development or use maintained on the TUSD Property, or to otherwise mitigate any adverse impacts development of the TUSD Property may cause or create, subject to the provisions of Section 4.7.1. 1.3.2. The City, acting in its capacity as the LRA, will coordinate with and assist TUSD in its development and use of the TUSD Property for public elementary and high school 4830-1136-1024.6 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 education purposes provided the City receives assurances from TUSD that the TUSD Property will be developed and used in a manner consistent with the Reuse Plan and Specific Plan and the 1996 TUSD Agreement, and that TUSD will participate in any financing plans or programs the City may devise or implement to fund infrastructure improvements necessary or desirable to provide municipal, utility, and public services to all property and development within the boundaries of the former MCAS Tustin, subject to the provisions of Section 4.7.1. 1.4 Purpose of This Agreement. 1.4.1. The purpose of this Agreement is (a) to effectuate the Reuse Plan and Specific Plan, in accordance with the terms and conditions set forth in the 1996 TUSD Agreement, EDC Agreement, the Federal Deed and LIFOC, through the disposition and development of portions of Tustin Legacy as further described herein and (b) to provide for the conveyance to TUSD of the TUSD Property, for the maintenance of the TUSD Property by TUSD and the construction by TUSD on the TUSD Property of improvements that will support the Public Schools on the TUSD Property, including necessary infrastructure and other improvements as more particularly described herein. 1.4.2. This Agreement provides for the disposition by the City to TUSD of the TUSD Property and further ensures that the TUSD Property is planned, developed, maintained and used in a manner consistent with the Reuse Plan and Specific Plan. Subject to the specific provisions set forth in this Agreement, this Agreement is intended to: 1. Identify the planning goals of TUSD and the City for the TUSD Property; 2. Identify the scope and schedule for short-range improvements and long- range development plans for the TUSD Property; 3. Establish a process for meaningful consultation on development and operational issues of mutual concern; 4. Identify capital infrastructure improvements, roadway, existing utility and new utility rights-of--way and easement dedications, as maybe needed, and environmental impact report mitigation that will be required of TUSD; 5. Identify procedures necessary or desirable to implement this Agreement; and 6. Affirm TUSD's commitment to return, directly to the City, the TUSD Property, or any portion thereof, not used for the purposes for which it was transferred in accordance with the Reuse Plan and Specific Plan. 1.4.3. This Agreement provides a process whereby the Development/Reuse Regulations and Development Processing Requirements, as defined and provided for in Chapters 3 and 4 of the Specific Plan, and which may not otherwise be applicable to TUSD's use of the TUSD 4830-1136-1024.6 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Property under State Law, shall apply to the TUSD Property for the uses and under the terms and conditions of this Agreement, 1.4.4 This Agreement will ensure the implementation of the Reuse Plan and Specific Plan, eliminate uncertainty in planning, provide for the orderly development of the TUSD Property, eliminate uncertainty about the validity of the application of the rules and regulations in the Reuse Plan and Specific Plan to the TUSD Property and TUSD, allow installation of necessary or desirable improvements, provide for public services appropriate to the development and use of TUSD, and generally serve the public interest within the City and the surrounding region. 1.4.5. The Parties acknowledge that the consideration to be received by the City pursuant to this Agreement and the consideration to be received by TUSD hereunder constitute sufficient consideration to support the covenants and agreements of the City and TUSD. 1.5 Description of TUSD Property Affecting This Agreement. 1.5.1. Initial Closing and Conveyance of TUSD Property. The initial closing and conveyance of TUSD Property ("Initial Closing") will consist of an approximate 38.477 acre, more or less, portion of the High School parcel and the 10.010 acre Elementary School parcel located in the City, County of Orange, California as more particularly described and depicted in Exhibit "B" ("Initial TUSD Parcels"). The Initial Closing by the City to TUSD will occur upon satisfaction of the requirements set forth herein for such transfer. 1.5.2. Subsequent Closing and Conveyance of TUSD Property. A subsequent closing and conveyance of TUSD Property ("Subsequent Closing") will consist of approximately 1.478 acres, more or less, of the remaining TUSD Property located in the City, County of Orange, California as more particularly described and depicted in Exhibit "C" ("Subsequent TUSD Parcels"). The Subsequent Closing by the City to TUSD will occur upon satisfaction of the requirements set forth herein for such transfer. 1.5.3. Pending conveyance of the Subsequent TUSD Parcels by the Navy to the City, TUSD agrees to sublease from the City, at the Initial Closing, the Subsequent TUSD Parcels in accordance with the Sublease. 1.5.4 Reserved Ri ts. The City will not convey to TUSD as part of this transaction: 1.5.4.1. Mineral Rights. Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas rights and other hydrocarbons by whatsoever name known, geothermal, steam and rights thereto and all products derived from any of the foregoing, that may be within the TUSD Property together with the perpetual right of drilling, mining, exploring for and storing in and removing same from the TUSD Property or any other land, including the right to whipstock or directionally drill and mine from lands other than the TUSD Property, oil or gas wells, tunnels and shafts into, through or across the subsurface of the TUSD Property and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or 4830-1136-1024.6 5 1 beyond the exterior limits thereof; but without, however, the right to drill, mine, store, explore or 2 operate through the surface of the TUSD Property or otherwise to materially affect t hues or 3 operation of the TUSD Property as anticipated by this Agreement. By way of clarification, the 4 reservation by the City of the rights, titles and interests described in this clause (a) shall not be 5 deemed to limit TUSD's right to drive piles, construct caissons, foundations, basements and 6 other subsurface improvements for the purpose of constructing the High School or Elementary 7 School, and other wised engage in subsurface construction activities in order to construct the 8 High School and Elementary School. 9 10 1.5.4.2 Water Rights. Any and all water, water rights or interests therein 11 appurtenant to the TUSD Property or owned or used by the City in connection with or with 12 respect to the TUSD Property no matter how acquired by the City whether such water rights shall 13 be riparian, overlying appropriative, littoral, percolating, prescriptive, adjudicated, statutory or 14 contractual, together with the perpetual right and power to explore, drill, redrill, and remove the 15 same from or in the TUSD Property, to store the same beneath the surface of the TUSD Property 16 and to divert or otherwise utilize such water, rights or interests on any other property owned or 17 leased by the City; but without, however, any right to enter upon or use the surface of the TUSD 18 Property in the exercise of such rights or otherwise materially affect the use or operation of the 19 TUSD Property as anticipated by this Agreement. 20 21 1.6 Federal Requirements Applicable to Tustin Legacy. The Parties acknowledge 22 and agree that this Agreement is entered into as part of the Economic Development Conveyance 23 of certain property at Tustin Legacy to the City pursuant to the Base Closure Law, the EDC 24 Agreement and the terms and conditions of the Federal Deed, including the Environmental 25 Restriction pursuant to California Civil Code Section 1471 contained therein, and as required by 26 the Reuse Plan and Specific Plan. Notwithstanding any provision to the contrary contained 27 herein, this Agreement is and shall be subject to the terms and conditions of the EDC Agreement 28 and the Federal Deed and the rights, obligations and remedies of the Federal Government 29 thereunder, and nothing contained in this Agreement shall be construed in a manner that is 30 inconsistent with the rights, obligations and remedies of the Federal Government thereunder. 31 32 1.7 Local Requirements. 33 34 1.7.1 This Agreement is subject to all Government Requirements, including the Tustin 35 General Plan, the Reuse Plan, the Specific Plan and any redevelopment plan hereinafter enacted 36 with respect to the TUSD Property, each of which. is incorporated herein by reference and made 37 apart hereof as though fully set forth herein. 38 39 1.7.2 TUSD Consent to Regulation. Pursuant to and in accordance with the applicable 40 provisions of this Agreement (including this Section 1.7), TUSD acknowledges and consents to 41 the City's regulation of the development and the use of the TUSD Property, notwithstanding any 42 other provision of state law or equity to the contrary, including any principle or right of 43 sovereignty or preemption that may otherwise inure to the benefit of TUSD under any current or 44 future law or regulation of the State of California or Federal Government, including, but not 45 limited to, certain State review authorities as reserved for school facilities as well as any State or 4830-1136-1024.6 6 1 Federal authorizations that may permit a district to not develop the subject school parcels and to 2 surplus land and use the funds for operating expenses or to improve other schools. TUSD 3 acknowledges that its compliance with the regulatory program and all other terms and conditions 4 as described in this Agreement is required by the Reuse Plan and Specific Plan and was a 5 primary inducement in securing (1) the conveyance of the TUSD Property from the United States 6 and (2) the City's support and approval of such conveyance. 8 1.7.3 Notwithstanding any other provision of this Agreement, in the event TUSD 9 processes plans for the structural design of a building with the California Division of the State 10 Architect ("DSA"), as required or permitted under Section 17280-17317 of the California 11 Education Code, as it may be amended from time to time ("The Field Act"), or by DSA or 12 another State of California agency under another applicable statute that concerns the review and 13 approval of building plans for elementary school and/or high school structures, then TUSD shall 14 not be required to have the City's Community Development Department plan check the 15 particular structure for Building Code compliance. However, the TUSD shall not be exempt from 16 processing such plans for the development of public schools on the TUSD Property with the City 17 under other provisions of the Specific Plan and other Local Requirements. 18 19 1.7.4 TUSD and the City acknowledge that the foregoing provisions of this Section 1.7 20 do not limit the City's right to exercise normal processing, review and approval rights, and 21 collection of normal fees in connection therewith, concerning matters not specifically related to 22 DSA's authority over the structural design of particular buildings, including, but not limited to 23 the requirement that TUSD prepare and submit for City's review and written approval the 24 following: 25 26 (a) a Concept Plan under Section 4.2.2 of the Specific Plan; 27 (b) a Site Plan and Design Review under Section 4.2.4 of the Specific Plan and Section 28 9272 of the Tustin City Code and Community Development Department procedures; 29 (c) construction level drawings demonstrating consistency with approved Concept Plan, 30 Site Plan and Design Review approvals; and 31 (d) construction level drawings and plans for grading, drainage, siting of improvements, 32 alterations to a public right-of--way, circulation, parking and utilities connection 33 meeting all requirements of the Tustin City Code, Specific Plan, all Public Works 34 right-of--way improvement standards as adopted by the City, and submittal and 35 approval of supplemental information such as a Transportation Demand Management 36 Plan, as defined in and in conformance with Tustin City Code Section 9901 et seq. 37 and a Water Quality Management Plan ("WQMP") in accordance with the City's 38 Water Quality Ordinance as defined in and in conformance with Tustin City Code 39 Section 4900 et seq. and all Federal, State, and Regional Water Quality Control 40 Board rules and regulations for development of the TUSD Property. 41 42 1.7.5 TUSD shall provide copies of plans being processed by TUSD with DSA to the 43 City on a timely basis (either as part of the ongoing communication process provided for in 44 Section 4.5 or otherwise). 45 4830-1136-1024.6 1 2 3 4 5 6 '7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 1.7.6 The .City will retain authority for any determinations that said plans and information submittals are consistent with the Concept Plan, Site Plan and Review approvals by the City required by Section 4.2 of the MCAS Tustin Specific Plan, Tustin City Code Section 9272 or other applicable provisions of the MCAS Tustin Specific Plan or Tustin City Code and previous written comments provided by the City to TUSD on grading, drainage, siting of improvements, alterations to a public right-of--way, circulation, parking and utility connections., any Transportation Demand Management Plan, and any WQMP. The City in reviewing said plans and information submittals shall provide written comments to TUSD. The determination as to whether TUSD responses to City written comments are adequate shall be in City's sole determination. TUSD shall not proceed until the City provides written approvals on all reviewed plans and information submittals that all Government requirements are met, including TUSD obtaining any necessary permits and reimbursing the City for all review costs pursuant to the City's adopted fee schedule. 1.8 Not a Develoument Agreement. This Agreement is not a Development Agreement as provided in California Government Code Section 65864 and is not a grant of entitlement, land use approval or vested right in favor of TUSD. 2.0 EFFECT OF AGREEMENT IS BINDING This Agreement, and all of the terms, covenants, obligations, rights, standards, and conditions of this Agreement, shall run with the land comprising the TUSD Property and shall be binding upon and inure to the benefit of the parties and their respective assigns, heirs, other successors-in-interest, lessees, and all other persons or entities acquiring the TUSD Property or any portion thereof or any interest therein. Nothing in this Agreement shall be construed as a dedication or transfer of any right or interest in the title to the TUSD Property, except as otherwise expressly provided in this Agreement. All of the provisions of this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to applicable law, including, but not limited to, Section 1468 of the California Civil Code. All of the burdens, obligations, duties, rights, and benefits of the parties under this Agreement (including without limitation the right of TUSD to construct, develop, and maintain Public Schools shall continue in full force and effect, notwithstanding the completion of all or any portion of such Public Schools, until such time as the City in its sole discretion determines that enforcement of these burdens, obligations, duties, rights, and benefits is no longer equitable. 3.0 PLANNING GOALS 3.1 General Planning Goals. The TUSD Property is designated for development and use as Public Schools. and is located within and constitutes an integral part of Neighborhoods G and D of the Reuse Plan and Specific Plan. In accordance with the Reuse Plan and Specific Plan, TUSD will plan, develop and maintain an elementary school within Neighborhood G and a high school within Neighborhood D. TUSD will use reasonable efforts to plan, develop, and use the TUSD Property in a manner that is supportive of the intent of Neighborhoods G and D, respectively, and which is compatible with the other uses which may 4830-1136-1024.6 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 be developed and maintained within such Neighborhoods in accordance with the Reuse Plan and the Specific Plan. 3.2 Use of TUSD Property. The Parties acknowledge and agree that the TUSD Property will be conveyed for use in perpetuity and continuously as Public Schools. TUSD represents and agrees that its undertakings pursuant to this Agreement are for the purpose of developing such Public Schools and not for speculation in land holding or for subsequent use by or sale to other parties. TUSD acknowledges and agrees that no voluntary or involuntary successor in interest of TUSD shall acquire any rights or powers under this Agreement except as provided in Article 12. 4.0 DEVELOPMENT AND REUSE 4.1 Development General Requirements. Subject to the applicable provisions of this Agreement, development of the TUSD Property is subject to all Governmental Requirements including but not limited to the Tustin General Plan, the Reuse Plan and Specific Plan, all Public Works right-of--way improvement standards as adopted by the City, submittal and approval of a Transportation Demand Management Plan in conformance with Tustin City Code Section 9901, submittal and approval of a Water Quality Management Plan (WQMP) in accordance with the City's Water Quality Ordinance and all Federal, State, and Regional Water Quality Control Board rules and regulations for development of the TUSD Property, Cooperative Agreement D02-119 between the City of Tustin, Orange County Flood Control District and the County of Orange, Agreement Between the City of Irvine and The City of Tustin Regarding the Implementation, Timing and Funding of Transportation/Circulation Mitigation for the MCAS Tustin Project, Amendment to the Joint Exercise of Powers Agreement Between the City of Santa Ana and the City of Tustin Regarding the Tustin-Santa Ana Transportation System Improvement Authority, and any Redevelopment Plan(s) enacted hereafter with respect to the TUSD Property, each of which is incorporated herein by reference and made a part hereof as though fully set forth herein. 4.2 Development Standards. 4.2.1 Subject to the applicable provisions of this Agreement, the maximum density and intensity of uses, the general location of uses, the number and size of legal lots, the maximum height and size of the proposed improvements, requirements for the dedication and reservation of land for public purposes and other standards of development applicable to the TUSD Property shall be in accordance with Chapter 2, Plan Description, Chapter 3, Land Use and Development/Reuse Regulations, and Chapter 4, Specific Plan Administration, in the Specific Plan. 4.2.2 Pursuant to the 1996 TUSD Agreement, TUSD shall not establish aMello-Roos Community Facilities District ("CFD") on any portion of property located within MCAS-Tustin, which utilizes a written request from two members of the legislative body or a land owner petition process. TUSD shall limit any petition process for establishment of a CFD to a petition often percent (10%) of the registered voters residing within the proposed CFD, provided that the 4830-1136-1024.6 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 TUSD also agrees that any registered voter petition for establishment of a CFD that would affect MCAS-Tustin would not be acted on unless there was a minimum of 100 registered voters within the boundaries of MCAS-Tustin to be included with the proposed CFD for each of the ninety (90) days preceding the close of any protest hearing, and until entitlements are approved for fifty percent (50%) of the units proposed in the Reuse Plan within TUSD boundaries. TUSD acknowledges and agrees that for any CFD established, it shall not impose a levy, impact fee, exaction, assessment or special tax which will result in the total special tax on individual properties exceeding one half of one percent (.5%) of assessed value. 4.3 Development Process. 4.3.1. TUSD shall prepare long-range educational and facilities Concept Plans for each parcel of the TUSD Property ("Long-Range Concept Plans") that demonstrate TUSD's financial and management plans to implement the requirements of the Reuse Plan and Specific Plan: Such plans shall promote orderly growth and development of the TUSD Property and establish a framework for school development. (a) The facilities planning shall include but not be limited to the following components as applicable: 1. classroom buildings; 2. ancillary services and service buildings; 3. recreation/open space/athletic fields; 4. parking locations; 5. roadways; and 6. security and maintenance/utility functional areas. (b) Additional information to be submitted with the Long Range Concept Plans shall include: 1. The location and acreages of specific uses proposed on each parcel of the TUSD Property including proposed square footages of all building improvements; 2. An overall external and internal access plan including an analysis of necessary local infrastructure and circulation improvements required. This analysis shall also include phasing of necessary improvements and assignment of non-residential Land Use Trips to each parcel of the TUSD Property; 3. A design program for each parcel of TUSD Property that demonstrates consistency with the applicable community plan or urban design guidelines established for each Neighborhood and Planning Area where each TUSD Property is located, including conformance with the City's Final Design Guidelines for Legacy Park dated March 2007, as amended from time to time; 4. A concept landscape and hardscape plan, streetscape design, parkway and edge treatments; 4830-1136-1024.6 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 5. Conceptual utility connection plans and overall drainage plan concepts required for development and phasing of infrastructure and other major improvements on each parcel of TUSD Property; 6. Any phasing of on-site or off-site improvements with the time frames proposed for completion; and 7. Other information as deemed necessary by the City. 4.3.2 The preparation of the Long Range Concept Plans shall be completed within two (2) years of the Effective Date. Pursuant to the 1996 TUSD Agreement, TUSD acknowledges and agrees that the proposed Public Schools shall be fully implemented by TUSD by the later of either: 1) five (5) years from the date of the Initial Closing; or 2) when building permits are issued for eighty percent (80%) of the new units being proposed in the Specific Plan within TUSD boundaries, whichever occurs first. Further, if within twelve (12) months from the date of any transfer of TUSD Property, actual development of the Public Schools is not proceeding on the transferred property, upon the request of the City, TUSD agrees to enter into an agreement with the City to permit the accommodation of interim public uses on the transferred property prior to school development. TUSD shall consult with the City in preparation of its Long-Range Concept Plans and shall share a preliminary draft of such plans with the City for review and comment prior to its release to the public. TUSD agrees to fully consider, address and respond to all comments received from the City on such plans and shall not adopt the Long Range Concept Plan until the City indicates in writing to TUSD that its comments have been addressed satisfactorily. In adoption of its Long-Range Concept Plans, TUSD shall comply with all requirements of CEQA and its implementing regulations as required by the City for all entitlement and application submittals to the City. 4.3.3. Prior to commencing the use of the TUSD Property or the construction or installation of any improvement on the TUSD Property and subject to the applicable provisions of this Agreement (including Section 1.7), TUSD shall comply with the Development Processing Requirements, including the requirement to prepare and submit the Long Range Concept Plans for the Public Schools on the TUSD Property in accordance with Section 4.2.1 of the Specific Plan and all requirements contained in Chapter 4 of the Specific Plan. TUSD shall process all appropriate environmental documents for individual projects as required by CEQA and its implementing regulations. TUSD shall also notify the City of all "projects" on the TUSD Property as that term is defined by CEQA and the City shall be considered a Lead Agency under CEQA for actions by the City in its review and approval of discretionary entitlement applications to be submitted by TUSD. 4.4 Major Improvements. Subject to the applicable provisions of this Agreement (including Section 1.7), TUSD shall not construct or make or permit the construction or making of any Major Improvements on the TUSD Property without providing the City, with all documents and information related to any such Major Improvements ("Construction Documents"), including the Long Range Concept Plans, design development drawings meeting 4830-1136-1024.6 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 the required Site Plan and Design Review submittal requirements of City, and final construction designs and specifications. Subject to the applicable provisions of this Agreement (including Section 1.7), TUSD shall provide the City, with the Construction Documents at each phase of the development and drafting process, or upon a reasonable request by the City Manager's Office or Community Development Director or his/her designated representative. The City may provide comments to any Construction Documents and TUSD agrees to give full consideration to all such comments received by TUSD within thirty (30) days following receipt by the City of the applicable Construction Documents and TUSD shall not begin construction of the Major Improvement(s) under review by the City prior to the written approval by the City of said Construction Documents. 4.5 Development Coordination. During the planning and development of the Public Schools on the TUSD Property, TUSD shall hold regular meetings, at least quarterly, with City representatives including the Assistant City Manager and the Community Development Director, and their representatives, to discuss the planning, development, and operational issues of mutual concern, including the preparation, submission and review of the Long Range Concept Plans, design development drawings meeting the required Site Plan and Design Review submittal requirements of City and Construction Documents. Such meetings shall serve as a forum for exchange of information concerning the design and development of the Public Schools as well as provide the opportunity for the City to advise TUSD of other development issues which may affect the TUSD Property. 4.6 Existing Structures and Other Improvements. Subject to the requirements of Chapter 3 of the Reuse Plan and Section 5.3 of this Agreement, TUSD shall demolish or upgrade existing structures on the TUSD Property to conform to the Uniform Building Code, as amended by the City, State of California Title 24 Access Compliance (handicapped provisions), and the requirements of the Americans with Disabilities Act ("ADA"). Existing buildings, open space areas, and other improvements on the TUSD Property shall be demolished or upgraded in accordance with Chapter 3 of the Specific Plan. 4.7 Utilities and Infrastructure. 4.7.1 Backbone Infrastructure Improvements. 4.7.1.1 TUSD acknowledges and agrees that the development of the TUSD Property, together with the development of the remainder of Tustin Legacy, will require the funding and construction of backbone infrastructure improvements located off the TUSD Property, including Tustin Legacy road improvements, traffic and circulation improvements, flood control channels and retention basins, and lighting and landscaping ("City's Tustin Legacy Backbone Infrastructure Program"). 4.7.1.2 Except for lighting and landscaping backbone infrastructure which may be funded by a City assessment district, the City hereby waives and agrees to relieve TUSD of its fair share obligation for the City's Tustin Legacy Backbone Infrastructure Program, whether funded by City Community Facilities District(s), by City established Assessment District(s), or 4830-1136-1024.6 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 by City capital facilities fees as may be defined and permitted pursuant to the California Constitution. TUSD agrees not to oppose a determination by the City to form an assessment district for lighting and landscaping, and to include the TUSD Property in such district, and agrees not to oppose the imposition of assessments on terms that do not discriminate against the TUSD Property as compared with other public agency property in the proposed district. 4.7.1.3 Capital facilities also needed to serve Tustin Legacy are facilities for water (domestic and reclaimed), sewer, electricity, gas, telephone, cable and telecommunications ("Other Entities' Tustin Legacy Backbone Infrastructure Program"). TUSD shall pay its fair share contribution to the Other Entities' Tustin Legacy Backbone Infrastructure Program to the full extent permitted by applicable law through connection fees of those entities or as otherwise required by each such entity's rules and regulations for service. 4.7.1.4 This Agreement meets the Final EIS/EIR requirement that any development applicant enter into an Agreement to acknowledge its fair share contribution to funding the construction of backbone infrastructure at Tustin Legacy. 4.7.2 Horizontal Improvements. TUSD acknowledges and agrees that it shall be responsible for design, installation and construction of all Horizontal Improvements for development of the TUSD Property and as required by the City or other utility providers pursuant to any entitlement conditions, Development Permit, the Specific Plan or any other governmental requirement, subject to the provisions of Section 1.7. 4.7.3 Utilities. 4.7.3.1 Provision of Utilities. TUSD shall be solely responsible for obtaining utility services to serve the TUSD Property. Any separate metering of utilities required by any utility service provider shall be the responsibility of TUSD. TUSD shall pay all service charges, and all initial utility deposits and fees, for water, electricity, sewage, janitorial, trash removal, gas, telephone, pest control and any other utility services furnished to the TUSD Property and the improvements on the TUSD Property ("Utilities"). The City shall not be liable for any reason for any loss or damage resulting from an interruption of any of these services. In order to facilitate upgrading of utility systems, the City may designate the provider of Utilities and in such event TUSD shall use such designated provider; provided that TUSD shall have no claim against the City, of any type, for any failure of such provider to provide such service, and TUSD's remedy, if any, shall be limited to such provider. 4.7.3.2 .Pre-existing Utility S std. TUSD acknowledges and agrees that pre- existing water, electric, sewer, natural gas, and storm drainage systems may be present on the TUSD Property ("Utility Systems") and that such Utility Systems will be transferred to TUSD from the City as related personal property by a Bill of Sale at the Initial Closing. The Utility Systems are to be upgraded or replaced with new systems as part of the planned development and reuse of MCAS Tustin or may be used by the Government for the provision of Utilities to support ongoing Government activities on MCAS Tustin. TUSD, its employees, agents, or contractors, shall not alter, modify, repair, replace, or relocate any part of the Utility Systems 4830-1136-1024.6 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 without the prior written consent of the City. Such consent is within the reasonable discretion of the City and will not be granted where any such alteration, modification, repair, replacement, or relocation may interfere with the development or reuse of MCAS Tustin. TUSD shall be responsible for all costs related to such alteration, modification, repair, replacement, or relocation. The City, the Government, and utility service providers shall at all times have full access to the TUSD Property for operation, maintenance, repair and replacement of these systems as may be required. An easement providing such access shall be included in the quitclaim deed conveying the TUSD Property from the City to TUSD. Such operation, maintenance, repair and replacement activities shall take priority over the provision of Utilities to TUSD or any use of the TUSD Property by TUSD in the event of any conflict and the City and the Government shall not be liable for any loss or damage resulting from the disconnection or interruption of utility services to TUSD or any interference with TUSD's use of the TUSD Property necessitated by such activities. The determination to disconnect or interrupt any of TUSD's utility service or interfere with TUSD's use of the TUSD property is within the sole discretion of the City, provided that the City will provide TUSD with fourteen (14) days' prior notice of such determination, except in the case of utility breakages and emergency interruptions not within the control of the City. 5.0 CONSENT TO FINANCING 5.1 Consent to Financing Participation. TUSD consents to and agrees to participate in and shall not contest, oppose, or challenge any Funding Process the City may initiate to finance the Tustin Legacy Backbone Infrastructure Program provided the terms of such Funding Process do not discriminate against the TUSD Property as compared with other portions of the City Property, and all subject to the provisions of Section 4.7.1. 5.2 No Opposition. TUSD shall not contest, oppose, or challenge, nor fund or assist in any way any other person or entity to contest, oppose, or challenge before any local, state, or federal agency, or file or maintain any actions or proceedings before a court or administrative body to set aside, enjoin, challenge, appeal, or otherwise pursue any legal, equitable, or administrative remedies regarding the approval or implementation of any proposals, applications, approvals or permits (including any related environmental documentation) relating to the former MCAS Tustin, or regarding any proposed, approved, or existing uses at the former MCAS Tustin which are consistent with the Reuse Plan or Specific Plan including but not limited to development proposals on the Urban Regional Park site, or within any Neighborhood or Planning Area identified in the Specific Plan or any other parcel abutting the TUSD Property. 6.0 ENVIRONMENTAL PROVISIONS 6.1 As Is, Where Is, With All Faults. 6.1.1 TUSD acknowledges and agrees that TUSD has examined the Property and shall accept the property in an "AS IS, WHERE IS, WITH ALL FAULTS" condition, in its present state and condition and with all faults, if any. TUSD further acknowledges and agrees, except as otherwise provided in this Agreement, that the City has not made and does not make and 4830-1136-1024.6 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 specifically negates and disclaims any representations, warranties, promises, agreements or guarantees of any kind or character, whether express or implied, oral or written, past, present or future, whether by the City or any of its agents, elected or appointed officials, or representatives or employees. 6.1.2 Environmental Condition of TUSD Property; Restrictions. TUSD acknowledges and agrees that the acquisition of the TUSD Property by TUSD will be subject to other conditions, restrictions, and clauses contained in many of the environmental reports prepared for the City Property, including without limitation the EDC Agreement, the Environmental Baseline Study ("EBS"), the Finding of Suitability to Transfer ("FOST"), any quitclaim deed for the TUSD Property from the Navy, the Finding of Suitability to Lease ("FOSL"), and the Final EIS/EIR ("Environmental Reports"), and that the City has provided, or provided access to, all such Environmental Reports known to the City. 6.2 Environmental Mitigation. TUSD shall install, contribute, dedicate, improve, or otherwise provide all necessary Environmental Mitigation as applicable for the use and development of the TUSD Property. Such mitigation shall be fully installed or completed as identified in the Final EIS/EIR. The Environmental Mitigation required for the TUSD Property is described in the Final EIS/EIR and the quitclaim deed conveying the TUSD Property from the Government to the City, which, in relevant part, is set forth verbatim in the quitclaim deed attached as Exhibit "D" to this Agreement ("Quitclaim Deed"). 6.3 Adequacy of the Final EIS/EIR. TUSD acknowledges that the Final EIS/EIR is a legally adequate and sufficient document, prepared, certified, and approved in a manner consistent with all applicable provisions of federal and state law, and TUSD and the City acknowledge that the EIS/EIR is the controlling program environmental document governing this Agreement and the conveyance of the TUSD Property to TUSD from the City, but only to the extent TUSD uses the TUSD Property in the manner provided in Section 4 of this Agreement. TUSD acknowledges and agrees that it is also required to comply with all requirements of CEQA and its implementing regulations and City regulations in adopting the program environmental document and may be required to prepare additional supplemental documentation for the acquisition of the TUSD Property and for individual projects on the TUSD Property as determined necessary by the City in its authority as a Lead Agency under CEQA in reviewing and approving any discretionary actions required on the Property by this Agreement or the Specific Plan or other Governmental Regulations. 7.0 TRANSFER AND CONVEYANCE 7.1 Schedule. The City agrees to convey that portion of the TUSD Property owned by the City to TUSD in an initial closing (the "Initial Closing") no later than thirty (30) days after the Effective Date; at such Initial Closing, the City also will transfer possession to TUSD, by Sublease, of that portion of the TUSD Property held by the City under the terms of that certain Lease in Furtherance of Conveyance dated May 13, 2002. The City agrees to transmit to TUSD a deed for the conveyance of the remaining portion of the TUSD Property to TUSD in a 4830-1136-1024.6 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 subsequent closing ("Subsequent Closing(s)") no later than sixty (60) days after the City receives title from the Government of such remaining portion(s) of the TUSD Property. Upon written acceptance of this Agreement, this Agreement shall constitute the joint escrow instructions of TUSD and the City to First American Title ("Escrow Holder") to open an escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending this Agreement unless specifically so instructed by the City and TUSD in writing. Any such supplemental escrow instructions must be in writing and signed by the City and TUSD and accepted by the Escrow Holder as effective. 7.2 (quitclaim Deed. The TUSD Property shall be conveyed by one or more good and sufficient quitclaim deeds in substantially the form of the Quitclaim Deed attached hereto and made a part hereof as Exhibit "D". 7.3 Sublease. That portion of the TUSD Property not owned in fee by the City at the time of the Initial Closing shall be transferred to TUSD by the sublease attached hereto and made a part hereof as Exhibit "E" ("Sublease"). The Parties shall also record a short form notice of the Sublease against the portions of the TUSD subleased from the City to TUSD in substantially the form of Exhibit "F," attached hereto and made a part hereof ("Short Form Notice of Sublease"). 7.4 Personal Property. The City's right, title and interest in the Personal Property shall be transferred to the TUSD at the Closings pursuant to the terms and conditions of a Bill of Sale, in substantially the form attached hereto and made a part hereof as Exhibit "G". 7.5 Surveys and Title Insurance. TUSD shall have the right to request and obtain an ALTA extended coverage owner's policy of insurance and any other title endorsements as TUSD deems necessary; provided that the issuance of an ALTA Policy shall not delay the Close of Escrow and shall not be a condition precedent to the Close of Escrow. Any title insurance that maybe desired by TUSD shall be procured at its sole cost and expense. The City shall cooperate with TUSD or its authorized agent and shall permit examination and inspection of any documents relating to the title of the TUSD Property as it may have available. If such searches disclose title exceptions that appear to be in error to TUSD, the City agrees to cooperatively work with TUSD to have the title exceptions removed, released, or insured over recognizing that the TUSD Property is being conveyed by the City "As Is". 8.0 ESCROW CLOSING 8.1 City Document Deliveries. The City shall deliver to the Initial Closing and Subsequent Closing, as appropriate, the following documents reasonably satisfactory to TUSD and in a form previously reviewed and approved by TUSD, duly authorized, executed, and notarized: A. Quitclaim Deed in the form set forth in Exhibit "D" conveying fee ownership of the TUSD Property to TUSD provided that the Quitclaim Deed set forth in Exhibit D will be 4830-1136-1024.6 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 modified by the City for the Subsequent Closing to reflect any specific provisions of the Federal Deed for said Subsequent TUSD parcels B. Bill of Sale for the Personal Property that will be conveyed to TUSD in the form set forth in Exhibit "G." C. Sublease in the form set forth in Exhibit "E" transferring possession of the leased TUSD Property to TUSD. D. Short Form Notice of Sublease in the form set forth in Exhibit "F" E. A Federal "FIRPTA" Affidavit executed by the City certifying that the City is not a "foreign person" under the Foreign Investment in Real Property Tax Act. F. California's Real Estate Withholding Exemption Certificate Form 597-W. G. Such proof of the City's authority and authorization to enter into this Agreement and consummate the transactions contemplated hereby, and such proof of the power and authority of the individuals(s) executing and/or delivering any instruments, documents or certificates on behalf of the City to act for and/or bind the City as maybe reasonably required by the Title Company and/or TUSD. H. Certificate confirming that the City's representations in this Agreement are true and correct as of the date of the Closing in substantially the form set forth in Exhibit "H-1 ". I. Such other documents or instruments as Escrow Holder may reasonably request to consummate the transaction contemplated herein. 8.2 TUSD Document Deliveries. TUSD shall deliver to the Initial Closing and Subsequent Closing, as appropriate, the following documents reasonably satisfactory to the City and in a form previously reviewed and approved by the City, duly authorized, executed, and notarized: A. Quitclaim Deed in the form set forth in Exhibit "D" conveying fee ownership of the TUSD Property to TUSD provided that the Quitclaim Deed set forth in Exhibit D will be modified by the City for the Subsequent Closing to reflect any specific provisions of the Federal Deed for said Subsequent TUSD parcels. B. Bill of Sale for the Personal Property that will be conveyed to TUSD in the form set forth in Exhibit "G." C. Sublease in the form set forth in Exhibit "E" transferring possession of the leased TUSD Property to TUSD. D. Short Form Notice of Sublease in the form set forth in Exhibit "F" 4830-1136-1024.6 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 E. Such proof of the TUSD's authority and authorization to enter into this Agreement and to consummate the transactions contemplated hereby, and such power and authority of the individuals(s) executing and delivering any instruments, documents or certificates on behalf of TUSD to act for and/or bind TUSD as may be reasonably required by the Title Company and/or the City. F. Certificate confirming that the TUSD representations in this Agreement are true and correct as of the date of the Closing in substantially the form set forth in Exhibit "H-2". G. Such other documents or instruments as Escrow Holder may reasonably request to consummate the transaction contemplated herein. 8.3 Procedures for Conveyance of TUSD Property from City to TUSD. The Closing of escrow for this transaction shall be addressed as follows: 8.3.1 Costs and Expenses. All costs and expenses of Closing shall be the responsibility of TUSD. 8.3.2 Other Actions of Escrow Holder. At the Close of Escrow and subject to satisfaction or waiver by the benefited party of any of the document delivery requirements noted in Section 8.1 or 8.2, Escrow Holder shall promptly undertake the following in the manner indicated below: 8.3.2.1 Funds. Debit all expenses of escrow to TUSD to be deposited with the Escrow Holder by TUSD. 8.3.2.2 Recording. Cause the Quitclaim Deed, the Short Form Notice of Sublease and other documents which TUSD and the City may mutually direct, or which may be required to be recorded by the terms of this Agreement, to be recorded in the Official Records, obtain conformed copies thereof and distribute same to TUSD and the City. 8.3.2.3 Title Policy. If requested by TUSD, direct the Title Company to issue TUSD's Title Policy to TUSD. Concurrent with the issuance of the Title Insurance Policy and the City's Title Insurance Policy, if any, the Title Company shall provide endorsements as may be requested by the respective insured parties. 8.3.2.4 Delivery of Documents to TUSD and City. Deliver to TUSD and the City original counterparts (and conformed copies, if applicable) of the Quitclaim Deed, the Short Form Notice of Sublease, the FIRPTA Certificate, the California Form 597-W and other documents (or copies thereof) deposited into Escrow by TUSD or the City pursuant hereto, and deliver to TUSD and the City a certified copy of their respective Escrow closing statements. 8.3.2.5 Other Actions. Take such other actions as the TUSD and the City direct pursuant to mutually executed supplemental escrow instructions. 4830-1136-1024.6 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 9.0 RESERVED EASEMENTS The Quitclaim Deed conveying the TUSD Property to TUSD shall contain any necessary reservations of easements by the City that the City determines are required to implement the Reuse Plan and Specific Plan and facilitate redevelopment of MCAS Tustin. 10.0 COVENANTS AND RESTRICTIONS 10.1 Use Covenant. TUSD covenants for itself and its successors that TUSD, and its successors, shall use all TUSD Property only for those uses specified in Section 3.2 of this Agreement. 10.2 Maintenance Covenant. From and after the date of acquisition by TUSD of any portion of the TUSD Property, TUSD and its successors shall: (i) maintain the portions of the TUSD Property owned by it in a clean and weed-free condition; (ii) maintain any improvements on the TUSD Property under construction consistent with construction industry practice; and (iii) upon completion of all or any portion of improvements, maintain improvements in the same aesthetic and same condition or better as the condition of the improvements at the time a certificate of occupancy is issued on the improvements, reasonable wear and tear excepted. 10.3 Non-Discrimination and Equal Opportunity. 10.3.1 TUSD covenants and agrees, for itself and its successors, that (a) it shall not discriminate against any employee or applicant for employment on any basis prohibited by law and (b) it has received and read, understands and agrees to be bound with respect to the entirety of the TUSD Property by the Non-Discrimination Covenant contained in the Navy Deed. 10.3.2 TUSD shall provide equal opportunity in all employment practices. 10.3.3 Obligation to Refrain from Discrimination. TUSD covenants and agrees for itself and its successors that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the use, occupancy, tenure, or enjoyment of the TUSD Property nor shall TUSD itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, sublessees or vendees of the TUSD Property. 10.3.4 Redevelopment Law; Form of Nondiscrimination and Nonsegre~ation Clauses. All deeds, leases or contracts that TUSD enters into that affect the TUSD Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 10.3.4.1 In Deeds: 4830-1136-1024.6 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 10.3.4.2 In Leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 10.3.4.3 In Contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 11.0 DEED RESTRICTIONS/COVENANTS RUNNING WITH THE LAND The obligations of TUSD set forth in this Agreement shall be covenants running with the land, shall be set forth in the Quitclaim Deed and shall be binding upon TUSD and all subsequent owners of the TUSD Property or any part thereof. The Quitclaim Deed shall convey the TUSD Property subject to reservations, covenants and restrictions set forth in the quitclaim 4830-1136-1024.6 20 1 deed transferring the TUSD Property from the Navy to the City, the EDC Agreement and this 2 Agreement. 3 4 12.0 CHANGES TO OWNERSHIP AND CONTROL BY TUSD 5 6 12.1 Restrictions on Rights and Powers Under Agreement. TUSD agrees that no 7 voluntary or involuntary successor in interest of TUSD shall acquire any rights or powers under 8 this Agreement or in the TUSD Property except as set forth in this Article 12. 9 10 12.2 Restrictions on Transfer. TUSD and its successors-in-interest shall not effect, 11 or agree to effect, any transfer, sale, assignment, gift or other conveyance of all or any portion of 12 the TUSD Property or any improvements thereon or any interest therein, or any right or interest 13 under this Agreement, whether voluntarily, involuntarily or by operation of law or otherwise 14 (collectively, a "Transfer"), unless such Transfer is a Permitted Transfer. "Permitted Transfer" 15 shall mean only any of the following: 16 17 (a) Any mortgage, deed of trust, pledge, hypothecation or other similar 18 transfer (including sale-leaseback financing transactions) for the purpose of providing security 19 for the repayment of indebtedness and related obligations incurred to finance or refinance the 20 acquisition, development or construction of the TUSD Property or improvements thereon in 21 accordance with the provisions of this Agreement, provided, that such mortgage, deed of trust, 22 pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) 23 shall: 24 25 (I) be subordinate to this Agreement, and 26 27 (II) provide that the proceeds of such mortgage, deed of trust, pledge, 28 hypothecation or other similar transfer (including sale-leaseback financing transactions) shall be 29 used solely for the purposes set forth in Article 12.2(a). 30 31 (b) Granting of easements or similar rights to public utilities or governmental 32 or quasi-governmental entities in the ordinary course of development or operation of the TUSD 33 Property in accordance with the provisions of this Agreement. 34 35 (c) Leases or subleases for use of the TUSD Property only as permitted under 36 this Agreement for public educational facilities, provided that the City has first reviewed and 37 approved the lessee or sublessee and the terms and conditions of any lease or sublease in 38 accordance with the procedures set forth in this Article 12.2(c). In the event TUSD or a 39 successor desires to effect a lease or sublease, TUSD or such successor shall submit to the City 40 the name of the proposed lessee or sublessee, a copy of the proposed lease or sublease and such 41 other information as the City may reasonably request for the purposes of determining that such 42 lessee or sublessee has the capability and resources necessary to carry out its obligations under 43 the proposed lease or sublease and that the lease or sublease is consistent with the terms and 44 conditions of this Agreement. The information that maybe requested by the City shall include, 45 but not be limited to, (i) current financial statements of the proposed lessee or sublessee to the 4830-1136-1024.6 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 extent existing (and if not, then other reasonable evidence of financial resources), (ii) the names of the persons or entities who manage or control the affairs of the proposed lessee or sublessee and (iii) information regarding the experience of the proposed lessee or sublessee (and the persons managing or controlling such lessee or sublessee) in owning or operating enterprises such as or similar to the enterprises to be pursued under the proposed lease or sublease. Within thirty (30) business days after receipt of the relevant information reasonably requested by the City, the City shall give TUSD or its successor written notice of the City's approval or disapproval of the proposed lessee or sublessee and the terms and conditions of any lease or sublease. (d) Any other Transfer as to which TUSD or its successor in interest receives the prior written consent of the City, which consent may be withheld by the City for any reason whatsoever. 12.3 Other Transfers. For the purposes of this Agreement, "Transfer" also shall include any of the following: (a) If TUSD is or becomes bankrupt or insolvent or if any involuntary proceeding is brought against TUSD (unless, in the case of a petition filed against TUSD, the same is dismissed within ninety (90) days), or TUSD makes an assignment for the benefit of creditors, or institutes a proceeding under or otherwise seeks the protection of federal or State bankruptcy or insolvency laws, including the filing of a petition for voluntary bankruptcy or instituting a proceeding for reorganization or arrangement; (b) If a writ of attachment or execution is levied on this Agreement or on the TUSD Property, or on any portion thereof, where such writ is not discharged within ninety (90) days; (c) If, in any proceeding or action in which a Party is a party to such proceeding or action, a receiver is appointed with authority to take possession of the TUSD Property, or any portion thereof, or any improvements thereon, where possession is not restored to the Party within ninety (90) days; or (d) If TUSD experiences any change in status, ownership or control after which TUSD does not continue to be engaged as a duly authorized provider of college-level educational services under applicable law. 12.4 Remedies for Improper Transfers. Any purported Transfer that is not a Permitted Transfer shall, at the election of the City, be null and void. If there is any Transfer that is not a Permitted Transfer, such Transfer shall be a Material Default under this Agreement as of the date of the transfer, which date shall not be extended by Force Majeure Delay. In the event of a Transfer in violation of this Article 12, the City shall have all remedies available to it at law and in equity, including the right to exercise the Power of Termination and the right to the return of the TUSD Property to the City contained in Section 16.3. 4830-1136-1024.6 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 12.5 Termination of Restrictions. The provisions of this Article 13 shall continue in effect unless released by the City in writing. 12.6 Eminent Domain. At no point during the Term of this Agreement shall TUSD exercise a right of eminent domain over any portion of the TUSD Property. 13.0 INDEMNIFICATION AND ENVIRONMENTAL PROVISIONS 13.1 TUSD's Indemnification. TUSD shall indemnify, protect, defend, assume all responsibility for and hold harmless the City and its appointed and elected officials, employees, contractors, representatives and agents (collectively referred to as the "Indemnified Parties"), with counsel reasonably acceptable to the City, from and against any and all Claims resulting or arising from or in any way connected with the following, provided TUSD shall not be responsible for (and such indemnity shall not apply to) the gross negligence or willful misconduct of the Indemnified Parties: A. TUSD's use of the TUSD Property in any way; B. Any other activities of TUSD; C. Any plans or designs for Improvements prepared by or on behalf of the TUSD, including any errors or omissions with respect to such plans or designs; D. Any loss or damage to the City resulting from any inaccuracy in or breach in any representation or warranty of TUSD, or resulting from any breach or default by TUSD under this Agreement; or E. Any development or construction of improvements by TUSD, whether regarding quality, adequacy or suitability of the plans, any labor, service, equipment, or material furnished to the TUSD Property, any person furnishing the same or otherwise. 13.2 Environmental Indemnification. Effective as to the TUSD Property, upon TUSD's acquisition of the fee title to all or any portion thereof, or TUSD's acceptance of a leasehold interest to all or any portion thereof, TUSD shall, to the maximum extent permitted by law, indemnify, protect, defend, assume all responsibility for and hold harmless the Indemnified Parties from and against any and all Claims resulting or arising from or in any way connected with the existence, release, threatened release, presence, storage, treatment, transportation and/or disposal of any Hazardous Materials at any time on, in, under, from, about or adjacent to any portion or portions of the TUSD Property, regardless whether any such condition is known or unknown now or upon acquisition and regardless of whether any such condition pre-exists acquisition or is subsequently caused, created or occurring, provided, however, that TUSD shall not be responsible for (and such indemnity shall not apply) to the gross negligence or willful misconduct of the Indemnified Parties. This environmental indemnity shall be included in any recorded short form of this Agreement against said lands and shall be binding upon successors of TUSD owning all or any part thereof in accordance with Section 13.3 of this Agreement. 4830-1136-1024.6 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 13.3 Duration of Indemnities. The indemnities set forth in this Section 13 shall survive any Closing or the termination of this Agreement, and shall be included in the Quitclaim Deed and continue to be binding and in full force and effect in perpetuity with respect to TUSD and its successors. 14.0 REPRESENTATIONS 14.1 Cam. The City hereby represents to TUSD that on and as of the date of this Agreement and on and as of the Closing, the City has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by the City pursuant hereto, and all required action and approvals therefore have been duly taken and obtained for the Closing. The individuals signing this Agreement and all other documents executed or to be executed pursuant hereto on behalf of the City shall be duly authorized to sign the same on the City's behalf and to bind the City thereto. This Agreement and all documents to be executed pursuant hereto by the City are and shall be binding upon and enforceable against the City in accordance with their respective terms. 14.2 TU5D. TUSD hereby represents to the City that on and as of the date of this Agreement and on and as of the Closing, TUSD has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by TUSD pursuant hereto, and all required action and approvals therefore have been duly taken and obtained for the Closing. The individuals signing this Agreement and all other documents executed or to be executed pursuant hereto on behalf of TUSD shall be duly authorized to sign the same on TUSD's behalf and to bind TUSD thereto. This Agreement and all documents to be executed pursuant hereto by TUSD are and shall be binding upon and enforceable against TUSD in accordance with their respective terms. 15.0 NOTICE Notices shall be deemed sufficient under this Agreement if made in writing and submitted to the following addresses (or to any new or substitute address hereinafter specified, in a writing theretofore delivered in accordance with the notice procedure set forth herein by the intended recipient of such notice): If to the City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attn: City Manager & Assistant City Manager City of Tustin 300 Centennial Way Tustin, CA 92780 Attn: Community Development Director 4830-1136-1024.6 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 With a copy to: George R. Schlossberg, Esq. Kutak Rock LLP 1101 Connecticut Avenue, N.W. Suite 1000 Washington, DC 20036 (202) 828-2418 If to TUSD: Superintendent Richard Bray 300 C Street Tustin, CA 92780 With a copy to: 16.0 EFFECT OF CONVEYANCE. 16.1 Effect of Quitclaim Deeds. The delivery of the executed Quitclaim Deed pursuant to this Agreement from the City to TUSD shall be deemed full performance by the City of its obligations hereunder with regard to the TUSD Property other than any obligations of the City which are required by this Agreement to be performed after the delivery of such Quitclaim Deed. 16.2 Possession. Upon Closing, the City shall immediately deliver possession of the TUSD Property to TUSD. 16.3 Power of Termination and Reversion. Notwithstanding TUSD's obligation to use the Property for the purposes for which it was transferred in accordance with Section 10 of this Agreement in perpetuity, and TUSD's obligation not to sell, transfer, assign or otherwise convey any interest in the Property other than in accordance with section 12 of this Agreement, the Quitclaim Deed and the Bill of Sale shall each include, a power of termination ("Power of Termination") and the right to the return of the TUSD Property to the City that is incorporated into this Agreement as if included herein. 16.4 As Is, Where Is, With All Faults. 16.4.1 No Representations or Warranties. Except as provided herein, the TUSD Property shall be conveyed "as is, where is, with all faults" and without any representation or warranty whatsoever and without any obligation on the part of the City except as expressly provided for by this Agreement or the Quitclaim Deed. 16.4.2 No Unauthorized Representations. No person acting on behalf of the City is authorized to make, and by execution hereof, TUSD acknowledges that no person has made, any 4830-1136-1024.6 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 representation, agreement, statement, warranty, guarantee or promise regarding the TUSD Property or the transaction contemplated herein or the past, present or future zoning, land use entitlements, construction, physical condition or other status of the TUSD Property except as may be expressly set forth in this Agreement. No representation, warranty, agreement, statement, guarantee or promise, if any, made by any person acting on behalf of the City that is not contained in this Agreement will be valid or binding on the City. 16.4.3 Release. Save and except for the covenants, representations and warranties of the City and any other "Released Party" (as defined below in this Section) under this Agreement, TUSD and any person claiming by, through or under TUSD, including all voluntary and involuntary successors of TUSD owning all or any portion of the Site ("Releasing Party"), hereby waives, as of the date of execution of this Agreement and as of the Closing Date, its right to recover from, and fully and irrevocably releases, the City and its officers, elected officials, employees, agents, attorneys, affiliates, representatives, contractors, successors and assigns (individually, a "Released Party", collectively, the "Released Parties") from any and all Claims that TUSD may now have or hereafter suffer or acquire for any costs, losses, liabilities, damages, expenses, demands, actions or causes of action: (a) arising from any information or documentation supplied by any of the Released Parties; (b) arising from any condition of the TUSD Property, known or unknown by any Releasing Party or any Released Party; (c) arising from any construction defects, errors, omissions or other conditions, latent or otherwise, including environmental matters, as well as economic and legal conditions on or affecting the TUSD Property, or any portion thereof; (d) arising from the existence, release, threatened release, presence, storage, treatment, transportation or disposal of any Hazardous Materials at any time on, in, under, from, about or adjacent to the TUSD Property or any portion thereof; (e) by any governmental authority or any other third party arising from or related to any actual, threatened, or suspected release of a Hazardous Material on, in, under, from, about, or adjacent to the TUSD Property, or any portion thereof, including any investigation or remediation at or about the TUSD Property; (f) arising from the Tustin Legacy Backbone Infrastructure Program, the cost or extent thereof, or the amount of the Fair Share Contribution; and/or (g) arising from the formation of any community facilities district in connection with the recoupment or payment of the Fair Share Contribution; provided, however, that the foregoing release by the Releasing Parties shall not apply to the extent that any Claim is the result of the willful misconduct or fraud of the City or its officers, employees, representatives, agents or consultants arising after the Close of Escrow. This release includes Claims of which TUSD is presently unaware or which TUSD does not presently suspect to exist which, if known by TUSD, would materially affect TUSD's release to the Released Parties. TUSD specifically waives the provision of California Civil Code Section 1542, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." In this connection and to the extent permitted by law, TUSD hereby agrees, represents and warrants, which representation and warranty shall survive the Closings on TUSD and the termination of this Agreement and not be merged with the Quitclaim Deed, that TUSD realizes 4830-1136-1024.6 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and TUSD further agrees, represents and warrants, which representation and warranty shall survive the Closings on the TUSD Property and the termination of this Agreement and not be merged with the Quitclaim Deed, that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that TUSD, on behalf of itself and the other Releasing Parties, nevertheless hereby intends to release, discharge and acquit the Released Parties from any such unknown Claims and controversies which might in any way be included as a material portion of the consideration given to the City by TUSD in exchange for the City's performance hereunder. This release shall run with the land and bind all owners and successor owners thereof and, to further evidence its effectiveness with respect to successor owners of the TUSD Property, shall be included in its entirety in the Quitclaim Deed. Initials of TUSD Signatory 17.0 SHORT FORM NOTICE OF AGREEMENT Upon execution of this Agreement, the City and TUSD shall execute the Short Form Notice of Agreement attached hereto as Exhibit "I". The Short Form Notice of Agreement shall be recorded in the Official Records of the County of Orange, California immediately following the execution of this Agreement. The Short Form Notice of Agreement shall be in a form approved by the City Manager and the City Attorney. 18.0 MISCELLANEOUS PROVISIONS 18.1 No amendment, change, modification or supplement to this Agreement shall be valid and binding on any of the Parties unless it is represented in writing and signed by each of the Parties hereto. 18.2 The covenants, representations and warranties contained in this Agreement shall survive any investigation made by any Party hereto and the closing of the transactions contemplated hereby. 18.3 The Parties shall fully cooperate with each other in attaining the purposes of this Agreement and shall take any additional acts or sign any additional documents as may be necessary or appropriate as related thereto. 18.4 In all cases, the language in all parts of this Agreement shall be construed simply, according to its fair meaning and not strictly for or against any Party, with the view of preserving 4830-1136-1024.6 2'] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 and protecting the intent and purposes of the Reuse Plan and Specific Plan, it being agreed that the Parties or their agents have all participated in the preparation of this Agreement. 18.5 No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be deemed a waiver and no waiver shall be binding unless executed in writing by the Party making the waiver. 18.6 The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and the subsequent owner(s) of all or any portion of the TUSD Property and their respective successors. There are no third-party beneficiaries to this Agreement, and neither Party shall have any right to assign its rights under this Agreement except for the City's right to assign this Agreement to a city or other governmental entity that succeeds to the City's jurisdictional authority concerning the City Property. 18.7 This Agreement may be executed in two or more identical counterparts, each of which shall be deemed to be an original and each of which shall be deemed to be one and the same instrument when each Party signs each such counterpart. 18.8 All attachments to this Agreement, including all Exhibits and the Reuse Plan, are incorporated as a part of this Agreement. 18.9 Each of the Recitals is incorporated into this Agreement. 18.10 All references to the Parties shall include all officials, officers, personnel, employees, agents, assigns, and subcontractors of the Parties. 18.11 This Agreement, together with the exhibits attached hereto and the Reuse Plan and Specific Plan, is intended by the Parties to be the final expression of their agreement with respect to the subject matter of this Agreement and the complete and exclusive statement of the terms of this Agreement between the Parties, and supersedes any prior understandings between the Parties, whether oral or written. 18.12 The failure of either Party to insist, in any one or more instances, upon strict performance of any of the terms of this Agreement shall not be construed as a waiver or relinquishment of such Party's right to future performance of this Agreement, but the obligations of the other Party with respect to such future performance shall continue in full force and effect. Whenever the terms of this Agreement call for one Party to approve an action or make a determination before the other Party may undertake or perform such action, said approval or determination shall not be unreasonably denied or delayed. 18.13 Within ten (10) days after receiving a written request from TUSD, the City will execute and deliver to TUSD an estoppel certificate stating whether (i) to the City's knowledge TUSD or the TUSD Property is in violation of the provisions of this Agreement, specifically including, but not limited to Section 3.2 and Article 12, and if the City believes TUSD or the 4830-1136-1024.6 28 1 TUSD Property is in violation of any part of this Agreement, describing such violation with 2 reasonable detail, and (ii) in the City's belief a particular existing or proposed use or transaction 3 described by TUSD in reasonable detail in its request for such estoppel certificate will violate 4 Section 3.2 or Article 12 of this Agreement (and, if the City believes such proposed use or 5 transaction will constitute such a violation, then describing the reason(s) for the City's belief 6 with reasonable detail). 7 8 9 10 Signature Page Follows 11 4830-1136-1024.6 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 The Parties have each executed this Agreement as of the date first written above. Approved as to Form: City Attorney or Special Counsel By: Approved as to Form: TUSD Counsel By: 4830-1136-1024.6 CITY OF TUSTIN William A. Huston, City Manager TUSTIN UNIFIED SCHOOL DISTRICT Richard Bray, Superintendent 30 EXHIBIT A Glossary of Defined Terms 4828-4589-0562.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Exhibit A Glossary of Defined Terms "Agreement" means this Agreement, the exhibits to this Agreement, and the Reuse Plan. "$usiness Day(s)" means any day on which City Hall is open for business and shall specifically include Fridays when City Hall is officially closed, Saturday, Sunday or a legal holiday. "CEQA" means the California Environmental Quality Act and implementing regulations and guidelines, contained in Cal. Public Resources Code Section 21000 et seq., and Cal. Code of Regulations, title 14, Section 15000 et seq, and any City implementing regulations. "City" means the City of Tustin. "Claim" or "Claims" means any and all claims, actions, causes of action, demands, orders, or other means of seeking or recovering losses, damages, liabilities, costs, expenses (including attorneys' fees, fees of expert witnesses, and consultants' and court and litigation costs), fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen. "Closing" or "Close of Escrow" means the point in time when the City conveys fee title in all or a portion of the TUSD Property to TUSD. "Closing Conditions" means the TUSD Closing Conditions and City Closing Conditions. "Community Development Director" means the Community Development Director of the City of Tustin. "Concept Plan" means a type of plan required by the City concurrent with submission of anew development proposal, reuse project, or subdivision used to document and insure that the necessary linkages are provided between the development project and the Planning Area/Neighborhood in which it is located, the integrity of the Specific Plan and purpose and intent of each Neighborhood is maintained, and applicable considerations of City requirements are identified and satisfied. "Development Processing Requirements" means the processing procedures and requirements contained in Chapter 4 of the Specific Plan, "Specific Plan Administration" and as may be amended from time to time, including references in Chapter 4 to applicable requirements of the Tustin City Code, and all applicable requirements of the Tustin City Code and other Governmental Regulations.. 4830-1136-1024.6 31 1 "Development/Reuse Regulations" means the applicable land use and development/reuse 2 regulations contained in Chapter 2, and Chapter 3 of the Specific Plan and applicable provisions 3 of the Tustin City Code, as may be amended from time to time, including without limitation, 4 height and size of proposed buildings, rules applicable to landscaping, zoning, subdivisions, 5 setbacks, density or intensity of use, exactions, timing of development, dedication and 6 reservation of land for public purposes, signage, growth management, traffic demand 7 management consistent with the Trip Budget Tracking System established as part of the EIS/EIR 8 and Specific Plan and the City's Transportation Demand Ordinance, and design criteria and 9 guidelines of the City including references in Chapters 2, 3, and 4 and applicable requirements in 10 the Tustin City Code. 11 12 "Final EIS/EIR" means the Joint Environmental Impact Statement/Environmental Impact 13 Report prepared and certified for the Reuse Plan and Specific Plan and other related 14 discretionary entitlement actions for which the City is the Lead Agency, together with any 15 supplements or addendums thereto. 16 17 "Environmental Mitigation" means the improvements, dedications, applicable payments 18 in lieu of improvements, and the implementation, installation, and/or performance of measures or 1.9 tasks attributed to the development and use of the TUSD Property that have been identified in the 20 Final EIS/EIR or any subsequent required environmental documentation/assessment or pursuant 21 to any Funding Process or identified as a mitigation measure in the Final EIS/EIR or any 22 subsequent required environmental documentation/assessment which should or will be imposed 23 as a condition of approval of any development on the TUSD Property through any environmental 24 documentation/assessment of any development on the TUSD Property subsequent to the date of 25 this Agreement. 26 27 "Federal Law" means all applicable statutes, rules, regulations, and orders of the United 28 States relating to the realignment and closure of military bases, including, but not limited to, the 29 National Defense Authorization Act for fiscal year 1999, the Base Closure Community 30 Redevelopment and Homeless Assistance Act of 1994, and the National Defense Authorization 31 Act for fiscal year 2000, and the regulations promulgated thereunder, including, but not limited 32 to, 32 CFR Parts 174 and 175, as they currently exist or as may be amended and applicable to 33 this Agreement. 34 35 "Funding Process" means any plan or program for the financing of public improvements 36 authorized or allowed under any law, including but not limited to Government Code Section 37 54999 et seq., and Article XIIID, Section 4(a) of the State Constitution, which the City of Tustin 38 may initiate. 39 40 "Government Requirements" shall mean all laws, statutes, codes, ordinances, rules, 41 regulations, standards, guidelines and other requirements, including the Tustin City Code, issued 42 by any governmental authority having jurisdiction over the Parties, the TUSD Property, or any 43 development project on the TUSD Property, or any component thereof, with TUSD's 44 acknowledgement and consent to the regulation of the development and the use of the TUSD 45 Property as described in Section 1.7.2 of the Agreement, notwithstanding any other provision of 4830-1136-1024.6 32 1 state law or equity to the contrary, including any principle or right of sovereignty or preemption 2 that may otherwise inure to the benefit of TUSD under any current or future law or regulation of 3 the State of California or Federal Government, including but not limited to, certain State review 4 authorities as reserved for school facilities as well as any State or Federal authorizations that may 5 permit a district to not develop the subject school parcels and to surplus land and use the funds 6 for operating expenses or to improve other schools. TUSD has acknowledged that its 7 compliance with the regulatory program and all other terms and conditions as described in this 8 Agreement is required by the Reuse Plan and Specific Plan and is a primary inducement in 9 securing (1) the conveyance of the TUSD Property from the United States and (2) the City's 10 support and approval of such conveyance. 11 12 "Horizontal Improvements" means the on site and off site infrastructure improvements 13 and utilities and dedications, or any applicable payments in lieu of improvements, which are the 14 full required obligation of the TUSD and are required to be constructed or installed on or in 15 connection with development of the TUSD Property, including all public and private streets, 16 roadways, drives, alleyways, sidewalks and all utilities required for the development of the 17 TUSD Property or to connect to off site infrastructure (e.g., utility connections); provided, 18 however, that Horizontal Improvements shall not include the Tustin Legacy Backbone 19 Infrastructure Program. 20 21 "LRA" means the Local Redevelopment Authority as such term is used and defined 22 pursuant to Federal Law. 23 24 "Major Improvements" means any improvements, alterations, reconstruction repairs, 25 replacements, additions or changes (collectively the "Changes") that (i) equal an aggregate of 26 10,000 square feet or more of floor area, (ii) constitute a physical site change, (iii) constitute 27 construction or Changes to the roofs, exterior stucco or siding, windows or architecture of 28 buildings on the TUSD Property, or (iv) would normally require a plan check by the State 29 Architects office. 30 31 "MCAS Tustin" means the former Marine Corps Air Station at Tustin, California. 32 33 "Neighborhood" means any of Neighborhoods A through H which are part of the 34 community structure as described more fully in Chapter 2 of the Specific Plan. 35 36 "Personal Property" means that certain tangible personal property, including without 37 limitation, furnishings, furniture, machinery, equipment, tools, appliances, utility distribution 38 systems, and vehicles that may have been left on the TUSD. Property following transfer by 39 quitclaim deed or lease of the TUSD Property from the Government to the City, which is to be 40 transferred to TUSD in an "As is, where is" condition under the terms of this Agreement. 41 42 "Planning Area" means the smallest regulatory unit for the application of the City's 43 development regulations. 44 4830-1136-1024.6 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 "Public Schools" means an elementary school and/or high school constructed on the TUSD property in compliance with the Reuse Plan and Specific Plan and includes uses customarily associated with and subordinate to a public elementary school and/or high school. . "Reuse Plan" means the MCAS Tustin Specific Plan/Reuse Plan dated October 16, 1996, including as a part thereof an Errata dated September 1998, and as such Reuse Plan may be adopted and amended from time to time. "Tustin City Code" means the compilation of City laws or ordinances as organized or codified by the City and as amended from time to time. "TUSD" means the Tustin Unified School District. "TUSD Property" means the real property located within the bounds of MCAS Tustin to be conveyed to the TUSD under this Agreement. The TUSD Property will include: i. All improvements on the TUSD Property. ii. All hereditaments and tenements therein and reversions, remainders, issues, profits, privileges and other rights belonging or related thereto excluding: a. Any and all oil, oil rights, minerals, mineral rights, natural gas rights and other hydrocarbons by whatsoever name known, geothermal steam and all products derived from any of the foregoing, that may be within or under the TUSD Property together with the perpetual right of drilling, mining, exploring for and storing in and removing the same from the TUSD Property or any other land, including the right to whipstock or directionally drill and mine from lands other than the TUSD Property, oil or gas wells, tunnels and shafts into, through or across the subsurface of the TUSD Property and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such well or mines; but without, however, the right to drill, mine, store, explore or operate through the surface of the TUSD Property. b. Any and all water, water rights or interests therein appurtenant or relating to the TUSD Property or owned or used by the City in connection with or with respect to the TUSD Property (no matter how acquired by the City), whether such water rights shall be riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated, statutory or contractual, together with the perpetual right and power to explore, drill, redrill and remove the same from or in the TUSD Property, to store the same beneath the surface of the TUSD Property and to divert or otherwise utilize such water, rights or interests on any other property owned or leased by the City; but without, however, any right to enter upon or use the surface of the TUSD Property in the exercise of such rights. 4830-1136-1024.6 34 1 "Sublease" means that sublease by which the City transfers possession of that portion of 2 the TUSD Property to TUSD held by the City pursuant to the Lease In Furtherance Of 3 Conveyance dated May 13, 2002, pending its conveyance by quitclaim deed from the 4 Government to the City. 4830-1136-1024.6 35 EXHIBIT B-1 Description of Elementary School Parcel Size of parcel is 10.010 acres. Lot 3 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 884, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County 4828-4589-0562.1 EXHIBIT B-2 Description of High School Parcel Size of parcel is 38.477 acres. Lot 35 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4828-4589-0562.1 EXHIBIT C Description of Subsequent TUSD Parcels Size of parcel is 1.478 acres. Legal Description: Lot 32 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4828-4589-0562.1 EXHIBIT D Initial Closing Quitclaim Deed 4828-4589-0562.1 5/23/08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 TUSTIN UNIFIED SCHOOL DISTRICT OFFICIAL BUSINESS REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 6103 Recording requested by and when recorded mail to: Assistant City Manager The City of Tustin 300 Centennial Way Tustin, California 92780 Mail copy of Quitclaim Deed and Tax Statements to: Superintendent Tustin Unified School District 300 C Street Tustin, California 92780 Space Above This Line Reserved for Recorder's Use QUITCLAIM DEED AND ENVIRONMENTAL RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471 This DEED is made this day of 2008, by the CITY OF TUSTIN, CALIFORNIA, the recognized local redevelopment authority for Marine Corps Air Station Tustin (the "GRANTOR"), in favor of the TUSTIN UNIFIED SCHOOL DISTRICT (the "GRANTEE"). RECITALS: WHEREAS A. GRANTOR requested from the United States of America (hereinafter the "Government") conveyance of a portion of the former Marine Corps Air Station Tustin, ("MCAS Tustin") which was closed pursuant to and in accordance with the Defense Base Closure and Realignment Act of 1990, as amended (Pub. L. No. 101-510; "Base Closure Act") and which is no longer required for military purposes; and 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 B. The Government and GRANTOR entered into the Agreement between the United States of America and the City of Tustin, California, for the Conveyance of a Portion of the Former Marine Corps Air Station Tustin (the "Agreement"), dated May 13, 2002, which sets forth the terms and conditions of the conveyance of portions of MCAS Tustin from the Government to GRANTOR; and C. Pursuant to the Agreement, the Government conveyed property at the Marine Corps Air Station, Tustin ("City Property") to GRANTOR on May 13, 2002; and D. Pursuant to California Civil Code § 1471 and a Finding of Suitability to Transfer ("FOST"), the Government determined that it is reasonably necessary to impose certain restrictions on the use of the City Property to protect present and future human health or safety or the environment as a result of the presence of hazardous materials on portions of the City Property described hereinafter with particularity. E. GRANTOR and GRANTEE have entered into that certain Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and the Establishment of an Elementary and High School, dated ("TUSD Conveyance Agreement"), setting forth the terms and conditions of the conveyance of a portion of the City Property from GRANTOR to GRANTEE. NOW THEREFORE, GRANTOR, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby remise, release and forever quitclaim to GRANTEE, all of GRANTOR's right, title and interest in and to that certain real property, comprising approximately 48.487 acres, more or less (hereinafter "TUSD Property"), as more particularly described in Exhibit "A." 1. TOGETHER WITH: 1.1. All improvements on the TUSD Property excluding the following: 1.1.1 Electrical, gas, telephone and cable television systems, including distribution lines, pad mounted and overhead distribution poles and/or transformers, and all conduits and duct banks from outlet or master meters or connection points to end usage points; all GRANTOR owned water, sewer, and storm drain systems (does not include culvert ditches), including distribution lines and pipelines from outlet or master meters or connection points currently owned by GRANTOR to end usage points ("Systems"). 1.2 All hereditaments and tenements therein and reversions, remainders, issues, profits, privileges and other rights belonging or related thereto. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 3. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 2. EXCEPTING THEREOUT AND THEREFROM, however, and reserving to GRANTOR its successors and assigns, together with the right to grant and transfer all or a portion of the same, the following: 2.1 Any and all oil, oil rights, minerals, mineral rights, natural gas rights and other hydrocarbons by whatsoever name known, geothermal steam and all products derived from any of the foregoing, that may be within or under the TUSD Property together with the perpetual right of drilling, mining, exploring for and storing in and removing the same from the TUSD Property or any other land, including the right to whipstock or directionally drill and mine from lands other than the TUSD Property, oil or gas wells, tunnels and shafts into, through or across the subsurface of the TUSD Property and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such well or mines; but without, however, the right to drill, mine, store, explore or operate through the surface of the TUSD Property. 2.2 Any and all water, water rights or interests therein appurtenant or relating to the TUSD Property or owned or used by GRANTOR in connection with or with respect to the TUSD Property (no matter how acquired by GRANTOR), whether such water rights shall be riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated, statutory or contractual, together with the perpetual right and power to explore, drill, redrill and remove the same from or in the TUSD Property, to store the same beneath the surface of the TUSD Property and to divert or otherwise utilize such water, rights or interests on any other property owned or leased by GRANTOR; but without, however, any right to enter upon or use the surface of the TUSD Property in the exercise of such rights. 2.3 A permanent easement to access, use, install, maintain, operate, construct, replace, and repair the Systems on, in, over and under the TUSD Property. GRANTOR and GRANTEE have not been able to prepare maps or drawings describing the location and extent of the Systems prior to the execution of this Deed, therefore, the exact location of this easement right is unknown, but shall be coterminous with the actual location of the Systems as determined by the GRANTOR in the future and shall extend to the minimum amount of space actually required to access, use, install, maintain, operate, replace, upgrade and repair existing Systems within the TUSD Property. 2.4 A permanent easement to access, use, install, maintain, operate, construct, replace, and repair Utility Distribution Systems. For purposes of this Section 2.4, Utility Distribution Systems shall mean: electrical, gas, telephone and cable television systems, including distribution lines, pad mounted and overhead distribution poles and/or transformers, and all conduits and duct banks from outlet or master meters or connection points or end usage points on the TUSD Property; water, sewer, and storm drain systems, including culvert ditches), including distribution lines and pipelines from outlet or master meters or connection points to end usage points on the TUSD Property. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 4. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 2.5 A permanent non-exclusive easement in gross on, over, under or across the TUSD Property within 10 feet from all property lines bordering on and parallel to any public street or future public street as identified on the MCAS Tustin Specific Plan/Reuse Plan for the construction, installation, emplacement, operation and maintenance of the Systems and any new utility systems, without unreasonably interfering with GRANTEE's reasonable use and enjoyment thereof. 3. SUBJECT TO THE FOLLOWING NOTICES, COVENANTS, RESTRICTIONS, AND CONDITIONS, which shall run with the land and be binding upon and enforceable as equitable servitudes against GRANTEE, its successors and assigns, in perpetuity: 3.1 Conditions: 3.1.1 The TUSD Property shall be planned, developed, maintained and used in perpetuity and continuously as Public Schools. For purposes of this Deed, Public Schools means an elementary school and high school constructed on the TUSD property in compliance with the Reuse Plan and Specific Plan and includes accessory uses when customarily associated with and subordinate to a public elementary school and/or high school. Any uses not listed above are subject to a determination by the GRANTOR as either permitted, permitted subject to a conditional use permit or prohibited, consistent with the terms and conditions of the Specific Plan, this Agreement, the TUSD Property Quitclaim Deed, and the Sublease (until such Sublease terminates). 3.1.2 MCAS Tustin Specific Plan/Reuse Plan. The TUSD Property shall be planned, developed and maintained in accordance with the standards applicable to the TUSD Property as set forth in the MCAS Tustin Specific Plan/Reuse Plan, dated October 1996, as amended by the MCAS Tustin Specific Plan/Reuse Plan ERRATA, dated September 1998 ("MCAS Tustin Specific Plan/Reuse Plan") including, maximum density and intensity of uses, general location of uses, maximum height and size of proposed improvements, requirements for the dedication and reservation for public purposes. No direct vehicular access shall be provided to the TUSD property for the portions of the TUSD Property that directly abut Redhill Avenue. 3.1.3 Major Improvements. GRANTEE shall not construct or make or permit the construction or making of any Major Improvements (as defined herein) on the TUSD Property without providing GRANTOR with documents related to any such Major Improvements ("Construction Documents"), including concept drawings, design development drawings, and final construction designs and specifications. GRANTEE shall provide GRANTOR with the Construction Documents at each phase of the development and drafting process, or upon a reasonable request by GRANTOR. GRANTOR may provide comments to any Construction Documents and GRANTEE agrees to give full consideration to all such comments received by GRANTEE within thirty (30) days following receipt by GRANTOR of the applicable Construction Documents. GRANTEE shall not begin construction of the Major Improvement(s) under review by GRANTOR prior to the expiration of the thirty (30) day review period. For purposes of this 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Deed, Major Improvements means, any improvements, alterations, reconstruction repairs, replacements, additions or changes (collectively the "Changes") that (i) equal an aggregate of 10,000 square feet or more of floor area, (ii) constitute a physical site change, (iii) constitute construction or Changes to the roofs, exterior stucco or siding, windows or architecture of buildings on the TUSD Property, (iv) would normally require plan check by the State Architects office. During GRANTEE'S, or its contractors, preparation of all Construction Documents, GRANTEE shall hold regular meetings, at least monthly, with GRANTOR to coordinate preparation, submission, and review of the Construction Documents by GRANTOR. Such meetings shall serve as a forum for exchange of information concerning the design and development of Major Improvements. 3.2 Restrictions on Transfers: 3.2.1 Permitted Transfers. GRANTEE shall not effect, or agree to effect, any transfer, sale, assignment, gift or other conveyance of all or any portion of the TUSD Property or any improvements thereon or any interest therein, whether voluntarily, involuntarily or by operation of law or otherwise (collectively, a "Transfer"), unless such Transfer is a Permitted Transfer. "Permitted Transfer" shall mean only any of the following: (a) Any mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) for the purpose of providing security for the repayment of indebtedness and related obligations incurred to finance or refinance the acquisition, development or construction of the TUSD Property or improvements thereon in accordance with the provisions of the TUSD Conveyance Agreement, provided, that such mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) shall: (I) be subordinate to the rights of GRANTOR and the Government under this Deed, the TUSD Conveyance Agreement, and the Agreement, and (II) provide that the proceeds of such mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) shall be used solely for the purposes set forth in Article 3.2.1. (b) Granting of easements or similar rights to public utilities or governmental or quasi-governmental entities in the ordinary course of development or operation of the TUSD Property in accordance with the provisions of this Deed. (c) Leases or subleases for use of the TUSD Property only as permitted under this Deed, provided that GRANTOR has approved the lessee or sublessee, which approval shall not be unreasonably withheld. In the event GRANTEE or a successor desires to effect a lease or sublease, GRANTEE or such successor shall submit to GRANTOR the name of the proposed lessee or sublessee and such other information as GRANTOR may reasonably request for the 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 6. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 purposes of determining that such lessee or sublessee has the capability and resources necessary to carry out its obligations under the proposed lease or sublease. The information that may be requested by GRANTOR shall include, but not be limited to, (i) current financial statements of the proposed lessee or sublessee to the extent existing (and if not, then other reasonable evidence of financial resources), (ii) the names of the persons or entities who manage or control the affairs of the proposed lessee or sublessee and (iii) information regarding the experience of the proposed lessee or sublessee (and the persons managing or controlling such lessee or sublessee) in owning or operating enterprises such as that to be pursued under the proposed lease or sublease. Within twenty (20) business days after receipt of the relevant information reasonably requested by GRANTOR, GRANTOR shall give GRANTEE or its successor written notice of approval or disapproval of the proposed lessee or sublessee. (d) Any other Transfer as to which GRANTEE or its successor in interest receives the prior written consent of the GRANTOR, which consent may be withheld by the GRANTOR for any reason whatsoever. 3.2.2 Other Transfers. For the purposes of this Deed, "Transfer" also shall include any of the following: (a) If GRANTEE is or becomes bankrupt or insolvent or if any involuntary proceeding is brought against GRANTEE (unless, in the case of a petition filed against GRANTEE, the same is dismissed within ninety (90) days), or GRANTEE makes an assignment for the benefit of creditors, or institutes a proceeding under or otherwise seeks the protection of federal or State bankruptcy or insolvency laws, including the filing of a petition for voluntary bankruptcy or instituting a proceeding for reorganization or arrangement; (b) If a writ of attachment or execution is levied on the TUSD Property, or on any portion thereof, where such writ is not discharged within ninety (90) days; (c) If, in any proceeding or action in which GRANTEE is a party, a receiver is appointed with authority to take possession of the TUSD Property, or any portion thereof, or any improvements thereon, where possession is not restored to GRANTEE within ninety (90) days; or (d) If GRANTEE experiences any change in status, ownership or control after which GRANTEE does not continue to be engaged as a duly authorized provider of college-level educational services under applicable law. 3.2.3 Remedies For Improper Transfers. Any purported Transfer that is not a Permitted Transfer shall, at the election of GRANTOR, be null and void. In the event of a Transfer in violation of this Section 3.2, GRANTOR shall have all remedies available to it at law and in equity, including the right to exercise the Power of Termination and the right to the return of the TUSD Property to the City contained in Section 3.3 of this Deed. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 7. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 3.3 Power of Termination and Reversion: In addition to the Grantor's other remedies under applicable law or equity for breach of the use restrictions set forth in Section 3.1.1 or transfers in violation of Section 3.2, if at any time from the date of recording of this Deed, the TUSD Property or any part or interest thereof is used for any purpose not consistent with the Public Schools use designated or permitted under Section 3.1.1 of this Deed; or is sold, leased, mortgaged, encumbered or otherwise disposed of in violation of Section 3.2 of this Deed, and such use or transfer is not cured to the reasonable satisfaction of GRANTOR within thirty (30) days of GRANTEE or its successor receiving written notice of such violation from GRANTOR stating Grantor's assertion in reasonable detail that Grantee is in violation with the terms of this Quitclaim Deed, at the option of GRANTOR, all right, title and interest in and to such portion of the TUSD Property as to which such violation has occurred shall, upon recording of a Notice of Entry by GRANTOR, pass to and become the property of GRANTOR, which shall have an immediate right to entry thereon, and GRANTEE, its successors and assigns, shall forfeit all right, title, and interest in and to the TUSD Property and in and to any and all tenements, hereditaments, and appurtenances thereto. 3.4 No Waiver: The failure of GRANTOR to insist in any one or more instances upon complete performance of the conditions, or any other terms and covenants of this Deed, shall not be construed as a waiver of GRANTOR's right to future performance of any such conditions, terms or covenants, and GRANTEE's obligations with respect to such future performance shall continue in full force and effect. However, GRANTOR's failure to record a Notice of Entry under Section 3.3 of this Deed, and, or, to request the transfer to GRANTOR of the proceeds in trust under Section 3.5.2., within one year from the date GRANTOR discovers a violation of Section 3.1.1 or Section 3.2 of this Deed, shall constitute a waiver of GRANTOR'S power of termination under Section 3.3 and, right to the proceeds in trust under Section 3.5.2, with respect to such violation. 3.5 Covenants: 3.5.1 GRANTOR Regulation. GRANTEE, by acceptance of this Deed, covenants and agrees, for itself, its successors and assigns, to the regulation of the development of the TUSD Property by GRANTOR pursuant to the MCAS Tustin Specific Plan/Reuse Plan and consistent with the MCAS Tustin Specific Plan/Reuse Plan and this Deed. GRANTEE shall comply at all times with such regulation notwithstanding any other provision of state law or equity to the contrary, including the principle or right of sovereignty or preemption that might otherwise inure to the benefit of GRANTEE under the laws of the State of California. GRANTEE further acknowledges that its compliance with the regulation of the development of the TUSD Property is a primary inducement in securing (i) the conveyance of the TUSD Property from the Government and (ii) GRANTOR's support and approval of such conveyance. 3.5.2 Unauthorized Disposal. GRANTEE, by acceptance of this Deed, further covenants and agrees for itself, its successors and assigns, that in the event the TUSD Property or any part or interest thereof at any time within the period of thirty (30) years from the date of this 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 8. 1 Deed is sold, leased, mortgaged, encumbered or otherwise disposed of in violation of Section 3.2 2 of this Deed, all net proceeds therefrom including the monetary value of any non-cash receipts to 3 GRANTEE, shall be considered to have been received and held in trust by GRANTEE for 4 GRANTOR and shall be subject to the direction and control of GRANTOR. The provisions of this 5 paragraph shall not affect the rights reserved to GRANTOR under any other provisions of this 6 Deed and GRANTOR's rights under this Section 3.5.2 shall not be affected by any waiver of 7 GRANTOR's rights under any other provision of this Deed including Section 3.3. 8 9 3.5.3 Maintenance. GRANTEE, by acceptance of this Deed, further covenants 10 and agrees for itself, its successors and assigns, that at all times GRANTEE shall at its sole cost 11 and expense keep and maintain the TUSD Property and the improvements thereon, including all 12 buildings, structures and equipment at any time situated upon the TUSD Property, in good order, 13 condition and repair, and free from any waste whatsoever. 14 15 3.5.4 Estoppel Certificates Within ten (10) days after receiving a written request 16 from GRANTEE, the GRANTOR will execute and deliver to GRANTEE an estoppel certificate 17 stating whether (i) to the GRANTOR's knowledge GRANTEE or the TUSD Property is in 18 violation of the provisions of this Deed, specifically including, but not limited to Section 3.1.1 and 19 Section 3.2, and if the GRANTOR believes GRANTEE or the TUSD Property is in violation of 20 any part of this Deed, describing such violation with reasonable detail, and (ii) in the GRANTOR's 21 belief a particular existing or proposed use or transaction described by GRANTEE in reasonable 22 detail in its request for such estoppel certificate will violate Section 3.1.1 or Section 3.2 of this 23 Deed (and, if the GRANTOR believes such proposed use or transaction will constitute such a 24 violation, then describing the reason(s) for the GRANTOR'S belief with reasonable detail). 25 26 3.6 Enforcement of Covenants Conditions and Restrictions: GRANTEE, its 27 successors and assigns, shall reimburse GRANTOR for all damages, claims, or liability 28 whatsoever that GRANTOR sustains as a result of a breach by GRANTEE of any of the conditions 29 or any other terms and covenants of this Deed, including all costs and expense (including 30 reasonable attorney's fees and court costs) related to, or arising from GRANTOR's enforcement or 31 restraint of a breach by GRANTEE of any of the conditions or any other terms and covenants of 32 this Deed. 33 34 3.7 GRANTEE agrees to accept conveyance of the Property subject to all covenants, 35 conditions, restrictions, easements, rights-of--way, reservations, rights, agreements, and 36 encumbrances of record. 37 38 3.8 Federal Deed. The quitclaim deed from the Government conveying the City 39 Property to GRANTOR was recorded prior to the recordation of this Deed. In its transfer of the 40 City Property to GRANTOR, the Government identified certain building(s) or portions of 41 building(s) as being located on the TUSD Property. GRANTOR has no knowledge regarding the 42 accuracy of such information. Additionally, in its transfer of the City Property to GRANTOR, the 43 Government identified certain building(s) or portions of building(s) as having, presumed to have, 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 or requiring surveys for, friable and non-friable asbestos containing materials and lead based paint, and the presence of certain contaminants and hazardous materials. GRANTOR has no knowledge regarding the accuracy of such information, and GRANTOR makes no warranties regarding the condition of the building(s) on the TUSD Property. GRANTOR makes no warranties regarding the environmental conditions on the TUSD Property; GRANTOR has no knowledge regarding the accuracy or adequacy of the Government's remediation of the City Property as provided in the deed conveying the City Property to GRANTOR, and GRANTOR has taken no steps to abate any such conditions. The italicized information below is copied verbatim (except as discussed below) from the Federal Deed conveying the City Property to GRANTOR. To the extent applicable to the TUSD Property conveyed hereunder, by acceptance of this Deed GRANTEE hereby acknowledges and assumes all responsibilities placed upon GRANTOR under the terms of the aforesaid Federal Deed to GRANTOR. Within the italicized information only, the term "GRANTOR" shall mean the Government, and the term "GRANTEE" shall mean the City of Tustin; to avoid confusion, the words "Government" have been added in parenthesis after the word "GRANTOR", and "City of Tustin" has been added in parenthesis after the word "GRANTEE". Quitclaim Deed G and Environmental Restriction Pursuant to Civil Code Section 1471 2.4 Asbestos Containing Material 2.4.1. GRANTEE (City of Tustin) is hereby informed and does hereby acknowledge that hazardous materials in the form of asbestos or asbestos- containing materials ("ACM') have been found and are otherwise presumed to exist in buildings and structures on the Property. The EBS and FOST disclose the presence of known asbestos or ACM hazards in such buildings and structures on the Property. 2.4.2. GRANTEE (City of Tustin) covenants, on behalf of itself, its successors and assigns, as a covenant running with the land, that it will prohibit occupancy and use of buildings and structures, or portions thereof, containing known asbestos or ACM hazards prior to abatement of such hazards. In connection with its use and occupancy of the Property, including, but not limited to, demolition of buildings and structures containing asbestos or ACM, it will comply with all applicable federal, state and local laws relating to asbestos and ACM. 2.4.3 An ACM survey has not been conducted for Buildings/Structures 562, 569, 584, 590, 592, 597, and 607 on Parcel I-G-1. GRANTEE (City of Tustin) shall prohibit occupancy and use of those buildings and structures and portions thereof until ACM surveys have been conducted by 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 10. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 GRANTEE (City of Tustin) or its successors and assigns, and any necessary abatement required under applicable federal, state and local laws relating to asbestos and ACM has been completed by GRANTEE (City of Tustin) or its successors and assigns. 2.4.4. The GRANTOR (Government) shall provide a notice of release, in recordable form, to the GRANTEE (City of Tustin) at such time as demolition of the buildings on the Property containing ACM has been completed and the appropriate government regulatory agency(s) have confirmed in writing to the GRANTEE (City of Tustin) that ACM has been removed from the buildings and any necessary soil remediation has been conducted in accordance with all applicable federal, state, and local laws and regulations. This notice of release shall be deemed to remove all notices and restrictions relating to ACM from the Property. The GRANTOR (Government) shall have no obligation under this subparagraph for the demolition of buildings or the removal of ACM or soil remediation related to such demolition or removal action. 2.5 Lead Based Paint (LBP). 2.5.1. The Property may include improvements that are presumed to contain LBP because they are thought to have been constructed prior to 1978. Building 182 is restricted from residential use and children are not allowed to occupy the building. When Building 182 is demolished, the GRANTEE (City of Tustin) or its successors and assigns, will be required to demolish the building in accordance with applicable laws and conduct post-demolition sampling and abatement of any soil-lead hazards related to the demolition prior to occupation of any newly constructed buildings. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Pursuant to 40 CFR Section 745.113 the following notice is provided; "Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase. " 2.5.2. The GRANTEE (City of Tustin) hereby acknowledges the required disclosure of the presence of any known LBP and/or LBP hazards in 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 11. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 target housing constructed prior to 1978 in accordance with the Residential Lead-Based Paint Hazard Reduction Act of 1992, 42 U.S.C. Section 4852d (Title X). The GRANTEE (City of Tustin) acknowledges the receipt of available records and reports pertaining to LBP and/or LBP hazards and receipt of the Environmental Protection Agency (EPA) approved pamphlet "Protect Your Family from Lead in Your Home " (EPA 747-K-94-001). Furthermore, the GRANTEE acknowledges that it has read and understood the EPA pamphlet. 2.5.3. The GRANTEE (City of Tustin) covenants and agrees that, in any improvements on the Property defined as target housing by Title X and constructed prior to 1978, LBP hazards will be disclosed to potential occupants in accordance with Title X before use of such improvements as a residential dwelling (as defined in Title X). Further, the GRANTEE (City of Tustin) covenants and agrees that LBP hazards in target housing will be abated in accordance with Title X before use and occupancy as a residential dwelling. "Target housing" means any housing constructed prior to 1978, except housing for the elderly or persons with disabilities (unless any child who is less than six [6J years of age resides, or is expected to reside, in such housing) or any zero- bedroom dwelling. 2.5.4. The GRANTEE (City of Tustin) covenants and agrees that in its use and occupancy of the Property, it will comply with Title X and all applicable federal, state, and local laws relating to LBP. The GRANTEE (City of Tustin) acknowledges that the GRANTOR (Government) assumes no liability for damages for personal injury, illness, disability, or death to the GRANTEE (City of Tustin), or to any other person, including members of the general public, arising from or incident to the purchase, transportation, removal, handling, use, disposition, or other activity causing or leading to contact of any kind whatsoever with LBP on the Property, arising after the conveyance of the Property from the GRANTOR (Government) to the GRANTEE (City of Tustin), whether the GRANTEE has properly warned, or failed to properly warn, the persons injured. 2. S. S. The GRANTOR (Government) shall provide a notice of release, in recordable form, to the GRANTEE (City of Tustin) at such time as demolition of the buildings on the Property containing LBP has been completed and the appropriate government regulatory agency(s) have confirmed in writing to the GRANTEE (City of Tustin) that LBP has been removed from the buildings and any necessary soil remediation has been conducted in accordance with all applicable federal, state, and local laws and regulations. This Notice of Release shall be deemed to remove all notices and restrictions relating to LBP from the Property. The GRANTOR (Government) shall have no obligation under this subparagraph for the demolition of buildings or the removal of LBP or soil remediation related to such demolition or removal action. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 12. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 2.6. Notices And Covenants: 2.6.1. Notices: Hazardous Substance Notifcation. Pursuant to 42 U.S.C. ~ 9620(h)(3)(A), and the provisions of 40 C.F.R, part 373, the Grantor (Government) hereby gives notice that hazardous substances were stored for one year or more, released or disposed of on the Property. The information contained in this notice is required by regulations promulgated under Section 120(h) of the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA or "Superfund'), 42 U.S.C. ~ 9620(h). The Grantor (Government) has made a complete search of its files and records concerning the Property. Based on that search, the type and quantity of such hazardous substances, the time at which such storage, release or disposal took place, to the extent such information is available, and a description of the remedial action taken, if any, is contained in Exhibit "B. " 2.6.2. "Grant of Covenant [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(ii)(I)J. The GRANTOR (Government) covenants and warrants that all remedial action necessary to protect human health and the environment with respect to any hazardous substance remaining on the Property has been taken before the date of transfer. 2.6.3. Additional Remediation Obligation [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(ii)(II)J. The GRANTOR (Government) covenants and warrants that GRANTOR (Government) shall conduct any additional remedial action found to be necessary after the date of transfer for any hazardous substance existing on the Property prior to the date of this Deed. This covenant shall not apply to the extent that the GRANTEE (City of Tustin) caused or contributed to any release or threatened release of any hazardous substance, pollutant, or contaminant. 2.6.4. Access [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(iii)J. In connection with GRANTOR 's (Government's) covenant in 2.6.3 above and in connection with ongoing remediation on GRANTOR'S (Government's) property adjacent to the Property, GRANTEE (City of Tustin) agrees on behalf of itself, its successors and assigns, as a covenant running with the land, that GRANTOR (Government), or its officers, agents, employees, contractors and subcontractors, shall have the right, upon reasonable notice to GRANTEE (City of Tustin), to enter upon the Property in any case in which a response or corrective action is found to be necessary at such property after the date of this deed, or such access is necessary to carry out a response action or corrective action on adjoining property. Neither GRANTEE (City of Tustin), nor its successors and assigns, shall have any claim on account of such entries against the United States or any of its officers, agents, employees, contractors or subcontractors. The right to 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 13. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 enter shall include the right to conduct tests, investigations and surveys, including, where necessary, drilling, test pitting, boring and other similar activities. Such right shall also include the right to construct, operate, maintain or undertake any other response or corrective action as required or necessary, including, but not limited to monitoring wells, pumping wells, treatment facilities, and the installation of associated utilities. In exercising these rights of access, except in case of imminent and substantial endangerment to human health or the environment, the GRANTOR (Government) (1) shall give the GRANTEE (City of Tustin) reasonable notice of any action to be taken related to such remedial or corrective actions on the Property, and (2) make reasonable efforts to minimize interference with the on-going use of the Property. Furthermore, the GRANTOR (Government) and GRANTEE (City of Tustin) agree to cooperate in good faith to minimize any conflict between the necessary environmental investigation and remediation activities and the GRANTEE'S (City of Tustin's) use of the Property. Any inspection, survey, investigation or other response, corrective or remedial action undertaken by GRANTOR (Government) will, to the maximum extent practical, be coordinated with representatives designated by the GRANTEE (City of Tustin). In connection with GRANTOR'S (Government's) remedial actions described above, GRANTEE (City of Tustin) agrees on behalf of itself, its successors and assigns, as a covenant running with the land, to comply with the provisions of any health or safety plan in effect during the course of any such action. 2.7. Environmental Restriction. 2.7.1. The following environmental covenants, conditions, and restrictions (hereinafter "environmental restrictions') regarding the use of the Property have been determined by the GRANTOR (Government) to be reasonably necessary to protect present or future human health or safety or the- environment as provided by CERCLA and California Civil Code Section 1471. The environmental restrictions made and accepted herein by GRANTEE (City of Tustin) shall be for the benefit of and enforceable by the GRANTOR (Government) herein as provided under Civil Code Section 1471 and applicable Federal statutes and regulations, shall run with the land, and shall be binding on the GRANTEE (City of Tustin), its successors and assigns. GRANTOR (Government) has installed monitoring and pumping wells, together with associated monitoring and other equipment on the Property. The approximate location of those wells and associated equipment is shown on Exhibit "C. " GRANTEE (City of Tustin), its successors and assigns, shall not alter, disturb or remove said wells or equipment without the prior written approval of GRANTOR (Government), United States Environmental Protection Agency, California 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 14. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Department of Toxic Substance Control, and Regional Water Quality Board, Santa Ana Region (collectively "Cognizant Regulatory Agencies'). 2.7.2. These environmental restrictions may be released at such time as the GRANTOR (Government) and the Cognizant Regulatory Agencies have determined that the restricted Property is protective of present or future human health or safety of the environment for the use that was formerly prohibited. Upon receipt of such written confirmation, the GRANTOR (Government) shall deliver to the GRANTEE (City of Tustin) in recordable form, a release (the "Release') relating specifically to the environmental use restrictions set forth in this deed. The execution of the Release by the GRANTOR (Government) shall remove all notices and restrictions relating to the remedy addressed by the restrictions from the title to the Property. 3. NO HAZARD TO AIR NAVIGATION: GRANTEE (City of Tustin) covenants for itself, its successors and assigns, that in connection with any construction or alteration on the Property, it will obtain a determination of no hazard to air navigation from the Federal Aviation Administration in accordance with Title 14, Code of Federal Regulations, part 77, entitled "Objects Affecting Navigable Airspace, " or under the authority of the Federal Aviation Act of 1958, as amended. Quitclaim Deed H and Environmental Restriction Pursuant to Civil Code Section 1471 2.4 Asbestos Containing Material 2.4.1. GRANTEE (City of Tustin) is hereby informed and does hereby acknowledge that hazardous materials in the form of asbestos or asbestos- containing materials ("ACM') have been found and are otherwise presumed to exist in Buildings/Structures IOP, 516, 567, 3002T, 6168, and 6480 on the Property. The EBS and FOSTs disclose the presence of known asbestos or ACM hazards in such buildings and structures on the Property. 2.4.2. GRANTEE (City of Tustin) covenants, on behalf of itself, its successors and assigns, as a covenant running with the land, that it will prohibit occupancy and use of buildings and structures, or portions thereof, containing known asbestos or ACM hazards prior to abatement of such hazards. In connection with its use and occupancy of the Property, including, but not limited to, demolition of buildings and structures containing asbestos or ACM, it will comply with all applicable federal, state and local laws relating to asbestos and ACM. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 15. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 2.4.3 An ACM survey has not been conducted for Structure 39. GRANTEE (City of Tustin) shall prohibit occupancy and use of Structure 39 and portions thereof until ACM surveys have been conducted by GRANTEE (City of Tustin) or its successors and assigns, and any necessary abatement required under applicable federal, state and local laws relating to asbestos and ACM has been completed by GRANTEE (City of Tustin) or its successors and assigns. 2.4.4. The GRANTOR (Government) shall provide a notice of release, in recordable form, to the GRANTEE (City of Tustin) at such time as demolition of the buildings on the Property containing ACM has been completed and the appropriate government regulatory agency(s) have confirmed in writing to the GRANTEE (City of Tustin) that ACM has been removed from the buildings and any necessary soil remediation has been conducted in accordance with all applicable federal, state, and local laws and regulations. This notice of release shall be deemed to remove all notices and restrictions relating to ACM from the Property. The GRANTOR (Government) shall have no obligation under this subparagraph for the demolition of buildings or the removal of ACM or soil remediation related to such demolition or removal action. 2.5 Lead Based Paint (LBP). 2.5.1. The Property may include improvements) that are presumed to contain LBP because they are thought to have been constructed prior to 1978. Buildings 23A, 23B, 23C, 23D, 23E, and 23F are restricted from residential use and children are not allowed to occupy the buildings. When these buildings are demolished, GRANTEE (City of Tustin) or its successors and assigns, will be required to demolish the buildings in accordance with applicable laws and conduct post-demolition sampling and abatement of any soil-lead hazards related to the demolition prior to occupation of any newly constructed buildings. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Pursuant to 40 CFR Section 745.113 the following notice is provided; "Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase. " 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 16. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 2.5.2. The GRANTEE (City of Tustin) hereby acknowledges the required disclosure of the presence of any known LBP and/or LBP hazards in target housing constructed prior to 1978 in accordance with the Residential Lead-Based Paint Hazard Reduction Act of 1992, 42 U.S.C. Section 4852d (Title X). The GRANTEE (City of Tustin) acknowledges the receipt of available records and reports pertaining to LBP and/or LBP hazards and receipt of the Environmental Protection Agency (EPA) approved pamphlet "Protect Your Family from Lead in Your Home " (EPA 747-K-94-001). Furthermore, the GRANTEE (City of Tustin) acknowledges that it has read and understood the EPA pamphlet. 2.5.3. The GRANTEE (City of Tustin) covenants and agrees that, in any improvements on the Property defined as target housing by Title X and constructed prior to 1978, LBP hazards will be disclosed to potential occupants in accordance with Title X before use of such improvements as a residential dwelling (as defined in Title X). Further, the GRANTEE (City of Tustin) covenants and agrees that LBP hazards in target housing will be abated in accordance with Title X before use and occupancy as a residential dwelling. "Target housing" means any housing constructed prior to 1978, except housing for the elderly or persons with disabilities (unless any child who is less than six [6J years of age resides, or is expected to reside, in such housing) or any zero- bedroom dwelling. 2.5.4. The GRANTEE (City of Tustin) covenants and agrees that in its use and occupancy of the Property, it will comply with Title X and all applicable federal, state, and local laws relating to LBP. The GRANTEE (City of Tustin) acknowledges that the GRANTOR (Government) assumes no liability for damages for personal injury, illness, disability, or death to the GRANTEE(City of Tustin), or to any other person, including members of the general public, arising from or incident to the purchase, transportation, removal, handling, use, disposition, or other activity causing or leading to contact of any kind whatsoever with LBP on the Property, arising after the conveyance of the Property from the GRANTOR to the GRANTEE (City of Tustin), whether the GRANTEE (City of Tustin) has properly warned, or failed to properly warn, the persons injured. 2.5.5. The GRANTOR (Government) shall provide a notice of release, in recordable form, to the GRANTEE (City of Tustin) at such time as demolition of the buildings on the Property containing LBP has been completed and the appropriate government regulatory agency(s) have confirmed in writing to the GRANTEE (City of Tustin) that LBP has been removed from the buildings and any necessary soil remediation has been conducted in accordance with all applicable federal, state, and local laws and regulations. This Notice of Release shall be deemed to remove all notices and restrictions relating to LBP from the Property. •The GRANTOR (Government) shall have no obligation under this 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 17. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 subparagraph for the demolition of buildings or the removal of LBP or soil remediation related to such demolition or removal action. 2.6. Notices And Covenants: 2.6.1. Notices: Hazardous Substance Notification. Pursuant to 42 U.S.C. ,~ 9620(h)(3)(A), and the provisions of 40 C.F.R. part 373, the Grantor (Government) hereby gives notice that hazardous substances were stored for one year or more, released or disposed of on the Property. The information contained in this notice is required by regulations promulgated under Section 120(h) of the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA or "Superfund'), 42 U.S.C. ~ 9620(h). The Grantor (Government) has made a complete search of its files and records concerning the Property. Based on that search, the type and quantity of such hazardous substances, the time at which such storage, release or disposal took place, to the extent such information is available, and a description of the remedial action taken, if any, is contained in Exhibit "B. " 2.6.2. Grant of Covenant [CERCLA 42 U.S. C. Section 9620 (h)(3)(A)(ii)(I)J. The GRANTOR (Government) covenants and warrants that all remedial action necessary to protect human health and the environment with respect to any hazardous substance remaining on the Property has been taken before the date of transfer. 2.6.3. Additional Remediation Obligation [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(ii)(II)J. The GRANTOR (Government) covenants and warrants that GRANTOR (Government) shall conduct any additional remedial action found to be necessary after the date of transfer for any hazardous substance existing on the Property prior to the date of this Deed. This covenant shall not apply to the extent that the GRANTEE (City of Tustin) caused or contributed to any release or threatened release of any hazardous substance, pollutant, or contaminant. 2.6.4. Access [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(iii)J. In connection with GRANTOR 's (Government's) covenant in 2.6.3 above and in connection with ongoing remediation on GRANTOR 's (Government's) property adjacent to the Property, GRANTEE (City of Tustin) agrees on behalf of itself, its successors and assigns, as a covenant running with the land, that GRANTOR (Government), or its officers, agents, employees, contractors and subcontractors, shall have the right, upon reasonable notice to GRANTEE (City of Tustin), to enter upon the Property in any case in which a response or corrective action is found to be necessary at such property after the date of this deed, or such access is necessary to carry out a response action or corrective action on adjoining property. Neither GRANTEE (City of Tustin), nor its successors and assigns, 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 18. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 shall have any claim on account of such entries against the United States or any of its officers, agents, employees, contractors or subcontractors. The right to enter shall include the right to conduct tests, investigations and surveys, including, where necessary, drilling, test pitting, boring and other similar activities. Such right shall also include the right to construct, operate, maintain or undertake any other response or corrective action as required or necessary, including, but not limited to monitoring wells, pumping wells, treatment facilities, and the installation of associated utilities. In exercising these rights of access, except in case of imminent and substantial endangerment to human health or the environment, the GRANTOR (Government) (1) shall give the GRANTEE (City of Tustin) reasonable notice of any action to be taken related to such remedial or corrective actions on the Property, and (2) make reasonable efforts to minimize interference with the on-going use of the Property. Furthermore, the GRANTOR (Government) and GRANTEE (City of Tustin) agree to cooperate in good faith to minimize any conflict between the necessary environmental investigation and remediation activities and the GRANTEE's (City of Tustin's) use of the Property. Any inspection, survey, investigation or other response, corrective or remedial action undertaken by GRANTOR (Government) will, to the maximum extent practical, be coordinated with representatives designated by the GRANTEE (City of Tustin). In connection with GRANTOR's (Government's) remedial actions described above, GRANTEE (City of Tustin) agrees on behalf of itself, its successors and assigns, as a covenant running with the land, to comply with the provisions of any health or safety plan in effect during the course of any such action. 2.7. Environmental Restriction. The following environmental covenants, conditions, and restrictions (hereinafter "environmental restrictions') regarding the use of the Property have been determined by the GRANTOR (Government) to be reasonably necessary to protect present or future human health or safety or the environment as provided by CERCLA and California Civil Code Section 1471. The environmental restrictions made and accepted herein by GRANTEE (City of Tustin) shall be for the benefit of and enforceable by the GRANTOR (Government) herein as provided under Civil Code Section 1471 and applicable Federal statutes and regulations, shall run with the land, and shall be binding on the GRANTEE (City of Tustin), its successors and assigns: 2.7.1. Restrictions for Monitoring Wells. a. Monitoring Wells 1001 BC47S, 1001 MW47D, IOOIMW43D, and IOO1BC43S and associated monitoring or other related 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 19. 1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 equipment shall not be altered, disturbed, or removed by the GRANTEE (City of Tustin), its successors and assigns, without the prior written approval of the GRANTOR (Government), the California Department of Toxic Substances Control ("the Department ") and the California Regional Water Quality Control Board, Santa Ana Region ("RWQCB'). b. These Restrictions are imposed upon, run with, and shall pass with the portions of the Property that contain each of the four monitoring wells as described in Legal Description A.1 (Parcel I-H-1 S, Portion of Reuse Plan Disposition Site 28) and Legal Description A.2 (Parcel I-H-16, Portion of Reuse Plan Disposition Site 28) set forth in Exhibit "A ". 2.7.2. The Department and the RWQCB, and other regulatory agencies that have jurisdiction, including any contractor or representative acting at the direction of any such aforementioned entity, shall have a reasonable right of entry and access to the portions of the Property described in subparagraph 2.7.1.b above from a public road through Parcel I-H-1 (as described in Exhibit "A " of this Deed) for purposes of sampling, inspection, monitoring, maintenance, well closure, and other activities relating to Monitoring Wells IOOIBC47S, IOO1MW47D, IOO1MW43D, and IOOIBC43S and associated monitoring or other equipment consistent with the purposes of this Covenant. The Department and the RWQCB shall provide the GRANTEE (City of Tustin) and its successors and assigns with reasonable prior written notice of such activities and make reasonable efforts to minimize interference with the ongoing use of the Property. 2.7.3. GRANTOR (Government) has installed monitoring and pumping wells in addition to those described in Subparagraph 2.7.1 above, together with associated monitoring and other equipment on the Property. The approximate location of those wells and associated equipment is shown on Exhibit "C. " GRANTEE (City of Tustin), its successors and assigns, shall not alter, disturb or remove said wells or equipment without the prior written approval of GRANTOR (Government) and cognizant regulatory agencies. 2.7.4. These environmental restrictions may be released at such time as the GRANTOR (Government) has obtained written confirmation from the Department that the appropriate regulatory agencies have determined that the restricted Property is protective of present or future human health or safety or the environment for the use that was formerly prohibited. Upon receipt of such written confirmation, the GRANTOR (Government) shall deliver to the GRANTEE (City of Tustin) in recordable form, a release (the "Release ") relating specifically to the environmental use restrictions set forth in this deed. The execution of the Release by the GRANTOR (Government) shall remove all notices and restrictions relating to the remedy addressed by the restrictions from the title to the Property. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 20. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 2.7.5. GRANTOR (Government) and GRANTEE (City of Tustin) acknowledge a certain recorded Covenant to Restrict Use of Property Environmental Restriction (Re: Marine Corps Air Station Tustin) dated May 13, 2002, (the "Covenant ") by and between the GRANTOR (Government), as Covenantor, and the Department and the RWQCB, as Covenantees, which also sets forth the restrictions in Subparagraphs 2.7,1 and 2.7.2 protecting the monitoring wells as well as terms and requirements regarding monitoring, maintenance, and access to the monitoring wells. GRANTOR (Government) and GRANTEE (City of Tustin) intend that the restrictions set out in Subparagraph 2.7.1 and 2.7.2, which are enforceable by the GRANTOR (Government), shall be interpreted in a manner that is consistent with and not in conflict with the restrictions set forth in Article IV of the Covenant which are enforceable by the Deparment and RWQCB. A failure to enforce the Covenant by the Department or RWQCB shall not preclude the GRANTOR (Government) from enforcing these restrictions. 2.8. Indemnification Regarding Transferees. The GRANTOR (Government) hereby recognizes its obligations under Section 330 of the National Defense Authorization Act of 1993 (Pub. L. 102-484), as amended, regarding indemnification of transferees of closing Department of Defense property. 2.9. Non-Discrimination. GRANTEE (City of Tustin) covenants for itself, its successors and assigns, that it will comply with all applicable provisions of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1975 in the use, occupancy, sale or lease of the Property. The foregoing shall not be construed to prohibit the operation of federal or state approved programs focusing on the special needs of the homeless, veterans, victims of domestic violence and other classes of persons at risk; nor shall it be construed to prohibit employment practices not otherwise prohibited by law. The GRANTOR (Government) shall be deemed a beneficiary of this covenant without regard to whether it remains the owner of any land or interest therein in the locality of the Property hereby conveyed and shall have the sole right to enforce this covenant in any court of competent jurisdiction. 3. NO HAZARD TO AIR NAVIGATION: GRANTEE (City of Tustin) covenants for itself, its successors and assigns, that in connection with any construction or alteration on the Property, it will obtain a determination of no hazard to air navigation from the Federal Aviation Administration in accordance with Title 14, Code of Federal Regulations, part 77, entitled "Objects Affecting Navigable Airspace, " or under the authority of the Federal Aviation Act of 1958, as amended. 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 21. 1 The responsibilities and obligations placed upon the land by the Government shall run with 2 the land and be binding on all subsequent owners of the TUSD Property unless or until such 3 responsibilities and obligations are released pursuant to the provisions set forth in the Federal 4 Deed. GRANTOR and its successors and assigns, respectively, shall not be liable for any breach 5 of such responsibilities and obligations with regard to the TUSD Property arising from any matters 6 or events occurring after transfer of ownership of the TUSD Property by GRANTOR or its 7 successors and assigns, respectively; provided, however, that each such party shall, 8 notwithstanding such transfer, remain liable for any breach of such responsibilities and obligations 9 to the extent caused by the fault or negligence of such party. 10 11 3.9 "As is, Where Is, With All Faults". As further set forth in the TUSD Agreement, 12 the GRANTEE acknowledges that it has examined the TUSD Property and is acquiring the TUSD 13 Property from the GRANTOR in an "AS IS, WHERE IS, WITH ALL FAULTS" condition, in its 14 present state and condition and with all faults, which provisions shall survive the close of escrow 15 related to this transaction and do not merge with this Deed. 16 17 3.10 TUSD Conveyance Agreement. The TUSD Conveyance Agreement imposes 18 certain covenants, conditions and restrictions on the TUSD Property, including, without limitation, 19 the Release contained in section 16.4.3 of the TUSD Conveyance Agreement, and certain non- 20 discrimination and non-segregation covenants, each of which is set forth verbatim below in italics 21 and each of which is hereby declared to be a covenant running with the land in perpetuity. Within 22 the italicized language which follows, certain terms shall have the following meanings: the term 23 "TUSD" shall mean the "GRANTEE" hereunder; the term "City" shall mean the GRANTOR 24 hereunder; the term Agreement shall mean the TUSD Conveyance Agreement; the term "Closing 25 Date" shall mean the date first set forth above on this Quitclaim Deed; and the term "TUSD 26 Property" shall mean the "TUSD Property" conveyed pursuant to this Deed. All other terms shall 27 have the same meaning as used or defined in the TUSD Conveyance Agreement. 28 29 16.4.3 Release. Save and except for the covenants, representations and 30 warranties of the City and any other "Released Party" (as defined below in this 31 Section) under this Agreement, TUSD and any Person claiming by, through or 32 under TUSD, including all voluntary and involuntary successors of TUSD owning 33 all or any portion of the Site ("Releasing Party "), hereby waives, as of the date of 34 execution of this Agreement and as of the Closing Date, its right to recover from, 35 and fully and irrevocably releases, the City and its officers, elected officials, 36 employees, agents, attorneys, affiliates, representatives, contractors, successors and 37 assigns (individually, a "Released Party ", collectively, the "Released Parties') 38 from any and all Claims that TUSD may now have or hereafter suffer or acquire for 39 any costs, losses, liabilities, damages, expenses, demands, actions or causes of 40 action: (a) arising from any information or documentation supplied by any of the 41 Released Parties; (b) arising from any condition of the TUSD Property, known or 42 unknown by any Releasing Party or any Released Party; (c) arising from any 43 construction defects, errors, omissions or other conditions, latent or otherwise, 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 22. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 including environmental matters, as well as economic and legal conditions on or affecting the TUSD Property, or any portion thereof,• (d) arising from the existence, Release, threatened Release, presence, storage, treatment, transportation or disposal of any Hazardous Materials at any time on, in, under, from, about or adjacent to the TUSD Property or any portion thereof,• (e) by any governmental authority or any other third party arising from or related to any actual, threatened, or suspected release of a Hazardous Material on, in, under, from, about, or adjacent to the TUSD Property, or any portion thereof, including any investigation or remediation at or about the TUSD Property; (~ arising from the Tustin Legacy Backbone Infrastructure Program, the cost or extent thereof, or the amount of the Fair Share Contribution; and/or (g) arising from the formation of any community facilities district in connection with the recoupment or payment of the Fair Share Contribution; provided, however, that the foregoing release by the Releasing Parties shall not apply to the extent that any Claim is the result of the willful misconduct or fraud of the City or its officers, employees, representatives, agents or consultants arising after the Close of Escrow. This release includes Claims of which TUSD is presently unaware or which TUSD does not presently suspect to exist which, if known by TUSD, would materially affect TUSD `s release to the Released Parties. TUSD specifically waives the provision of California Civil Code Section 1542, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. " In this connection and to the extent permitted by law, TUSD hereby agrees, represents and warrants, which representation and warranty shall survive the Closings on TUSD and the termination of this Agreement and not be merged with the Quitclaim Deed, that TUSD realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and TUSD further agrees, represents and warrants, which representation and warranty shall survive the Closings on the TUSD Property and the termination of this Agreement and not be merged with the Quitclaim Deed, that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that TUSD, on behalf of itself and the other Releasing Parties, nevertheless hereby intends to release, discharge and acquit the Released Parties from any such unknown Claims and controversies which might in any way be included as a material portion of the consideration given to the City by TUSD in exchange for the City's performance hereunder. This release shall run with the land and bind all owners and successor owners thereof and, to further evidence its effectiveness with respect to successor 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 23. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 owners of the TUSD Property, shall be included in its entirety in the Quitclaim Deed. 10.3 Non-Discrimination and Epual Opportunity. 10.3.1 TUSD covenants and agrees, for itself, and its successors, that (a) it shall not discriminate against any employee or applicant for employment on any basis prohibited by law and (b) it has received and read, understands and agrees to be bound with respect to the entirety of the TUSD Property by the Non- Discrimination Covenant contained in the Navy Deed. 10.3.2 TUSD shall provide equal opportunity in all employment practices. 10.3.3 Obligation to Refrain from Discrimination. TUSD covenants and agrees for itself and its successors, that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the use, occupancy, tenure, enjoyment of the TUSD Property nor shall TUSD itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, sublessees or vendees of the TUSD Property. 10.3.4 Redevelopment Law: Form of Nondiscrimination and No seQre~ation Clauses. All deeds, leases or contracts that TUSD enters into that affect the TUSD Property shall contain or be subject to substantially the following non-discrimination or non-segregation clauses: 10.3.4.1 In Deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. " 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 24. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 10.3.4.2 In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subleases, subtenants or vendees in the land herein leased. " 10.3.4.3 In contracts: "There shall be no discrimination against or-segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin- or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. " 4. The terms of this Deed, including without limitation the provisions of Section 3.10 of this Deed, are hereby agreed and declared by GRANTEE and GRANTOR and declared to be covenants running with the land and enforceable as restrictions and equitable servitudes against the TUSD Property, and are hereby declared to be and shall be binding upon the TUSD Property and GRANTEE and the successors and assigns of GRANTEE owning all or any portion of the TUSD Property. 5. NOTICES: All notices, consents, demands, requests and other communications a party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set for below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty eight (48) hours from the time of mailing if mailed as provided in this Section: 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 25. 1 2 3 4 If to GRANTOR: City of Tustin 300 Centennial Way Tustin, California 92780 Attn: City Manager 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Christine Shingleton Assistant City Manager City of Tustin 300 Centennial Way Tustin, California 92780 With a copy (which George R. Schlossberg, Esq. shall not constitute Kutak Rock LLP notice) to: 1101 Connecticut Avenue, N.W. Suite 1000 Washington, DC 20036 If to GRANTEE: Richard Bray Superintendent Tustin Unified School District 300 C Street Tustin, California 92780 With a copy (which shall not constitute notice) to: [Signature Page Follows] 4844-3748-9920.5 TUSD QUITCLAIM DEED Page 26. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 IN WITNESS WHEREOF, GRANTOR has caused its name to be signed to this Quitclaim Deed on the day first above written. CITY OF TUSTIN By: William A. Huston City Manager Dated: Attest: Pamela Stoker City Clerk Approved as to Form: Douglas C. Holland, Esq. City Attorney ACKNOWLEDGEMENT OF GRANTEE'S COVENANTS TO INDICATE ACCEPTANCE of its covenants and agreements contained in this Quitclaim Deed and .receipt of the documents described herein, GRANTEE has executed this document on the date written below. TUSTIN UNIFIED SCHOOL DISTRICT By: Richard Bray Superintendent Dated: 4844-3748-9920.5 EXHIBIT A-1 Legal Description of High School Parcel Size of parcel is 38.477 acres. Lot 35 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4844-3748-9920.5 EXHIBIT A-2 Legal Description of Elementary School Parcel Size of parcel is 10.010 acres. Lot 3 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 884, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4844-3748-9920.5 EXHIBIT B Hazardous Substance Notification 4844-3748-9920.5 Exhibit B Hazardous Substances Notification Deed G Disposal Legal a Date(s) of Storage Stored (S), Released (R), Parcel' Descrip. AOC Hazardous Substances and/or Operation °C Parcel Disposed (D) of Parcel 16 i-G-1 AMS-02A PR/VSI indicated no visible/reyarted 1953 NA releases identified, unit integrity good. Parce116 I-Gl ST-31A Thinner 1990-1995 S Parcel 16 I-G-1 ST-31A Speedy-Dry absorbent 1990-1995 S Parcel 16 1-G-1 ST-31B Thinner Prior to 1990 S Parcel 16 1-G-1 ST-31B Speedy-Dry absorbent Prior to 1990 S Parce116 I-G-1 ST-75A Aircraft cleaning compound 1992-1997 S ', Parcel 16 1-C-1 ST-75A Path cleaner 1992-1997 S Notes: 'Parcel number corresponds to the MCAS Tustin Reuse Plan Disposal Site number °This table was prepared in accordance with 40 CFR 373 and 40 CFR 302.4 Reference: FOST dated 22 April 2002 Acronyms/Abbreviali on s: AOC -area of concern AMS -aerial photograph, miscellaneous, stain, possible spill CFR -code of federal register FOST -Finding of Suitability to Transfer Page 1 ofd MCAS -Marine Corps Air Station NA -Not available PRNSI -preliminary review/visual site inspection ST -storage, -emporary Document: 2002-404597 Page . . .... ..........~ •,••vr .:opy `o 0 N ~ ~ ~p 9 C` S O 5 K K C K O 4 6 N .Y p C K 1' ~ a N N N N N d' ~~ K Q' Q' d' K C N N N u1 w Mt ~ O ~ az ~ ~~~~m~W~~ ~~ ~~~~ m~ yob s339yy8g3 ~o~ ~o~~Bi~ 3588 ~~~~ 9Sy89B9Q8B3 w° $d $ae~~$~ QQ Q° i i 8QQ9358~ ~ i m7S B3 QBQS 9 # m i 7 ~ N ^ ~ b X m X F ~ ~ ~ ~ j S u . 3 z z z z z" rcc_ a Z j $ ~ ~ ~ ~ ~ z ~ ~ z ~ ~ ~ ~ ~ ~ ~ z ~ ° ~ ~ i z z z 3 5 n x v ~ g ~ p g • y~ ~ ~ r g ~ ~ ~ ~ w Z i. c ~ Fg O 2 2 p Z 2 q }}~l S. ~ < ~ Z~ C L~ ~ W F aa Z Z 2 Z 2 2 ~ ~ g ~ Z ~ ~ e q~ Q ~~ g Z 0 V LLY x }~Q~a y Q q Z 2 Z Z T Y m y ~ ~ '! ~ V ~Y g ~ ~ o ~y~ ~ S~~ ~.. _ U C ~ O $' m nom/ y b~~„ ~ ~ p N~ H e ~i N A ~ m t ~ v N ~ ~ ~ H ~ i K ~~ W ~ ~ i ~ z~ ~QQ~ ~R R Pz z~ZZZZ~~,' ~$ ' ~ $i i~Z~~ a ~ ~ ~ A N 2 a g ~ w a ~ ~ g M ~'n ~ ~i ~ o ogp~~ t e`~ g ~ o a' Rr E ~ p ~ ~' ~ / ~ te i C O E u~ s. ~ 21F{5° N ~ V ~ X 3 3 O O Q p 88(p'1' 8 4 ~ ~ ~ ~ ~ 0~ 4 8 • w ~' ~ ~ . ( ~ m : 3 ~ i0 f0 m O ~ ~ 2 LL N 1- 2 : .Yr Y ff ' ~ ~ '~ a z ~ E N a T £~ ~ ~ ~ 3~~r.~~ £C ~~ ~ ~ ~ }C ~ R3 E8 A R R R $ R R ~ ~? ° R ~ ~ R ~} K~ N N N N N r-r. N N N N r-~~~ t-H~~ N N N N N N N N N ~~ N N ~~~~ N N H N ~~ ~~r~ N N N N N N a ~q ~q ~+ c ~~~~~~ ~q ~~~~? ~~qq ~q ~q y ~VV~~~~V~ ~q ~q ~~? !q ~?~~~ 'q ~p !Q ~?~ ~~~~ N d ~ a 'v S SBS ~ '< ': ~ S»S 9 5: ~ : : : 3 ° g3 ~ S 9e :; ~gSg p ~~ ~~ gg ~~ c a aaa n~a g aa~~ ~~ ~~ ~~'' r ' ' ~ 5a ~aa~a ~ a ~ ? ~ ~ k ~ ~ ~~~~ ~ a, a ~ Document: 2002 af-a x ~a N ~ O 4~ E N N N~ a' (Y R K K C K Z K K K K K K C C N N N N N N Lc a N!Y ,g K ~ pp~~ Np q p Q~ yP~ q p~ p~ rp~~ m Qq p o ONi ~T CNA ~ ~ Of O~ O Ol Q1 P Q ~ 0 T~ m 0o W Ol Q P . O N ~ m m p ~ ~ OI T C O. V ~ s ~ r ~ ~ 34p ~Bp mS ~p9p~ 2 ppS ~3p 3 9 3 «e pS 9 «y m° mBp « e8p 3 «p $ '~ h. h h ~ W P O Ol ~ O 01 ~ m W 01 O O m W 0~ 01 0 O+ O~ ~~'~ ~~~~ G G C C C C G C C G C C C G C a GC~ ~~~~ ~~~~ ~ ~~~ a>» >>>> >» »>>> >>>>>>>>_ _Y Y Q Q a 4 q N ` q Q Q ' Z Z Z G~ 2 ~ Z Z Z Z Z ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ r ~ ~ 7 ~ ~ Q e ~ ~ i ~ ~ j z ~ ~ ~ ~ ~ i z ? ~ ~ ~ ~ ~ ~ i ~ ~ i z z a 3 c t~ O z N d V C ro N rn N R '~ g e o s.$ ~~QQ 2 s e ~r q~~ r~~~ Q< a N 2 Z Z 2 Z Z ~ ~ 2= 2~ ~ 2= c ~ Y Z Y 2 2 Z Z ulr a~ n Y N <V Z Y ~. ~ ~ ~ ~ Pv° ~ ° m o ° ~ ~ g 4 d d d 4 $ ziii i~;~~ °~~ ~ ^'YN R~mg,zzzzz z A N N pi ~' r P ~. ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~ ~ a~~ 4 ~~~ ~ _ r ~ a _ ri o ~ o~~ ~ ~ ~ o a ~D $ n~ ~ a o~y3p~'~ E ~ Ta ~ ~ ~ d d ~ R~ ~" V V V V V 4 5 0 5 Y m ai m N @ h h n +~ '° N ~ ~ ~ ~ n w~ sf r~ ~i `~ ~ n n `~ r~i n ~ ~ ~ r/ `~, ~ 7 ~ 3 ; ~ ~ q (Q~ r ~rH r, ~:.rr ~ rr ~~r~-~ ~r rrrrr o0 9~ N N N N N N N N N N N N N N N N N N N N N N F- F- r" 6 0 9 d ~~ ~~~~ v~ a~ ~~~ ~~~~~ ~v~~~~~~~~ ~_ ~ a b O E ~ ~ ~ ~ ~ ~ ~ ~ n ~ n a a a ~ ~ ~' ffi ~ ~ ~ a m ~ a `~ ~ Z A ~ ~ rv c~ oocument 2002-404597 Page lr~, inc. rxi C. Q w. v Z N m U eCepp L N ~ a N V! 7 O ti of S o `o Na(~ H ~ O' 0 ~ ~ N w 'pig D p1 O Z" c d V O V OUG w S N 0 A d 2 h 4 u a D ~~~~~ £~~a a~ is ~ 3 ~ ~ « ~~ E ~ ~~ ~'~ ~ # .E ~~ ~~o~~ x xvi~'<=mH~ ~3ti ~~~iz~~~~~~;~~ a w 0 u c w N N O v a 8 <~ ~ ~~ ~ ~ ~ ~a~ ~~~ 0 $ ~ ~W "~ o S ~ ~ ~ ~ ~ ~ ~ 6 ~ ~ E o sa ~ ~4~~~3~~8~~8~~3~ ~~ A Document: 2002-AtN-'~' Exhibit B Hazardous Substances Notification Deed H Olsposaf Parcel' Legal Oescrip. Parcel OC Site Hazardous Substances° AS No. Regulatory Synonym RCRA Waste No. Reportable t]uandty` (Pounds) Datels) of Storage and/or Quantity Operation Released (R), or Disposed (D) of Parcel 25 I-H-2 - Pestiudes, unknown type Before 1942 to approx. NA NA NA NA Unknown 1996 R Parcel 26 I-H-2 -- Pestiudes, unknown type 9e!ore ':942 to approx. NA NA NA NA Unknown 1996 R Parcel 28 I-H-i STD-03A Freon NA NA NA NA Unknown 1991.1998 S Parcel 28 6H-t STU-U3B Freon NA NA NA NA Unknown prior l0 1991 S Parcel 29 I-H-1 AS'3A Mundlons NA NA NA NA Unknown 1942•present 5 Parcel 29 I-H-1 AS-38 MUnIGOnS NA NA NA NA Unknown 1942-present S Parrel79 I-H-t AS-3C Munlhpn5 NA NA NA NA Unknown 1942-present S Parcel 29 I-H• t MAW-U8 Destroyed well, NA NA NA NA Unknown TBD NA Parcel 29 6H•1 OC`+-O1 Agrculturalchemlcals NA NA NA NA Unknown 1983-present S Parcel ?9 I-H-1 ST-81 Inactrvel'ornpprary storage of hazmats.No current hazmat storage NA !JA NA NA Unknrnvn i(k2't999 S Parcel 3U I-H-7 -- Pestiudes, unknown type Before 1942 Iv aUOrox NA NA NA NA Unknown 1936 R Parcel 3t I•H-8 -- hest~udes.unknowntype Eieforei942 'O Bp~rOx. NA NA NA NA Unknown 1996 R Parce132 LH-2 AMS•5 A~nalpgotolcature NA NA NA NA NA 1953 NA ~Jpen~um Qf'R/VSI II?I1Ss7IE!~ P-Q Vrs IDlB/BDprtetl naedSeS no hazardous waste sturave Parcel 32 I-H-2 -- PeSLCldes. unknown type NA NA NA NA Unknown t 942 to a ro R NVIPS 4'an:tl~ nlYn~A! GOnASUVnU1 IU UlV MCAS T(,S:M RAUSe flan !]ii YISAI $Aq n~TDAI °Tr,.~ Idt1k3 wus J~c0.ntY7 :n A::curaartie wl~h ~0 GFR :1/l aM AO CI R X72 ~ 'I'JA Tha rc~yxleU S~U51 ~'rfxl 5 nil ASIAA to IM 61J GFR M)7 ~ IdOW unU Ir1Olllpe hdi ru LUrrF!!iQll'AI:~~ !e{rtxla0~q Vad+ll liy Rn'V~Unces FO$T W:UU 28 $eplNnogr Z()07 AnA F;l$r UaleU 22 Apni 2WI AOC a r.a ~x l/l:l:bf^ M:,AJ . Mn^~HI G(X1y5 Ai, Jld llnll aM5 dl'ndl w11U1[Xl~a{ilr. rl.,~CI•II.inUWS. Slam. OD.iS:U:e S(x~l hA FkN avd~~aU9 ~A~ ~..hei'~M:U: AtiSIrdG1 ~J^/N;nS N~vV SI ~ (;i YI~!rr:tUlY lP. ViCw'/Ng Uai SIIC nSptlCYHYI ~F r2 cUaA M IWFrAI eplxlp RCItA ResUVtro Con58rvabUn dnA RAGP/ety Arl FC$I ~ 1 NrUinQ d $urtdtr~ny ;,>Trdrilur $T - s•/apc Iun.~YAry MAW mrSCeBarWtA15. iparWUn PA wAll TBr) ~ IU JA aAle~l n~f1AA / ~~ G Document 2002-404590 Page o~ an off~c~ai copy' `0 5 N_ ~_ ~ ,~~, w ~ d x ~ o o O n C ~ ~ P Q~i ~ OP~i ~ • P pa O~ p~ T Oi tP'i O~ P O~ a a~ x`0 3 g o o g o 3 o g g g 9 3 0 -° 1 N w 6 ~ m m m m m m m p ~ ~ C m m m m m m m O H O N ~ rn m rn m a P m a m .~' !j ~ ~ ~ [[ O {{ 7 ~ E ~ ~ ~ tt 3 ; C ~ ~ ~ ~ C ~^ C O ' > > > > > > > j 7 7 9' u tq T g tb ~ j ° I ~ .- ~ .. .- .- ~ ~ - •- 2 Z Z Z v ~ a x << 0 Z ~ m ~ Q Q G < K K U h Z~ ? 4 Z 4 Z j r j Q 2 ~ Z~ ~ Z ~ G 2 0: w ~ O E c ~ c ~ ~ ° < o m c° °' R ` v w `>. N i z ~ ~ i ~e i ~ A 6 s Z < ~~o < L _ ~ z r z z o o ~ 3 r. z 2 ng P ~ N ~ ~' 9 . N n ~' oY m N G aC O ti n R _ *' r~ N ~ j 0 Q ~ 1pO~ 2 n m v o fv ~~ j b u1 ,y U ~Il pN. 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N ~ ~ ~ ~ Y V N h N h n _ ~ ~C O m P G~i p~ 0~ Q~ ~ c1 N c P ~ cCi OPi m ~ rn o n o ~ ~ •, r ~ t~ r ~ ~ w m ~ °' v~ a~ E n m m m m m °' m m m m C ; ° C ~ ~ ~ ~ ~ ~ C O b b~ ~ ~ b ~ Y CC O ~ 7 7 J 7 ~ J 7 7 .7 J 7 > > J ° u .- n ~ ~ ' c ~ ~ a w o a Z < Z < Z < a Z Z a = ~ ~ ~ .. .- .. .. .- •- .o'a 0 z ~~ i i z i i i ~ i~ z i o > o z i > 3 C O E ~ R fV c O fi o m ° o m U „ N T. ~ y e 0 o Z Z Z ZZ Z= p G$~ a z a~~ Z S v a e z Boa 5e ~ 4 z Z y o 4 5 (~ ~+ d V s ,y „~ p C ~ ~ . . L y w ~ _ y i ~ z i i i z n ~ ~ ~ rv r z ,. U ~ N ~ dd y cc „ _ b ' + o a Y r °m ~ ° a g j E 5 ~ s `` Y ~ ~ ~S a }, .~ ~ ~ £ ~ o y y P 00 ~ o T u 6 " F A 5 g_ ~ ~ n ~ ~ Q s ~ ° ~ R n & ~ n o o 0 ~ ~ N O U m ry U mm N U © N U m ~<] ~ - V 1'1 ~ H YI 1 '1 r ~ rf t~ n F 1~'1 f~ M n t7 f`~' n Q N N N N N f~/1 N N N VI N N N N N U H m = T T o rv I O ~ O rv m ri I O rv O N O ry 0 ~ 0 ' m O ~ (p ' m ~ { ;~ ~ ~ r r r { n { r rv ; t V T n { ~ ~ rv { N ? 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A~1 :~ ~ a l .: f•jjf~~s,, .y It .•j~ ~ , ,a ~-'! ,~' _ :~j / .\. :i 1.. .:• •~~ ~''/ ., \`. ~. ~ . i.• . /i .'~ ~- Oocumenl: 2002-404598 Page: 103 EXHIBIT E Sublease 4828-4589-0562.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 5/22/08 GROUND SUB-LEASE BETWEEN THE CITY OF TUSTIN AND THE TUSTIN UNIFIED SCHOOL DISTRICT FOR A PORTION OF MCAS TUSTIN THIS GROUND SUBLEASE ("Sub-Lease") is made and entered into on this day of , 2008 ("Sub-Lease Commencement Date") by and between the City of Tustin, a municipal corporation organized under the laws of the State of California acting as the Local Redevelopment Authority ("LRA") under the Defense Base Closure and Realignment Act of 1990 ("City" or "Landlord"), and the Tustin Unified School District ("TUSD" or "Tenant"). RECITALS A. The United States of America, acting by and through the Department of the Navy ("Government"), is the owner of real and personal property commonly referred to as the former Marine Corps Air Station, Tustin, California ("MCAS Tustin"), which was closed as a military installation and is subject to disposal pursuant to and in accordance with the Defense Base Closure and Realignment Act of 1990, as amended (Pub. Law No. 101-510). B. Landlord and Government have agreed upon a method of conveyance of a portion of MCAS Tustin ("EDC Property") as set forth in the Economic Development Conveyance Memorandum of Agreement ("EDC MOA") dated May 13, 2002. The EDC MOA contemplates that the Landlord will, following conveyance of the applicable portion of the EDC Property from the Government to Landlord, convey a portion of the EDC Property to Tenant ("TUSD Property") for educational purposes. Government issued a Finding of Suitability to Lease the Leased Premises (as herein defined), dated (the "FOSL"). 2002. C. Government conveyed a portion of the EDC Property to Landlord on May 13, D. Prior to the conditions for a transfer of the remaining portions of the EDC Property to Landlord being met, immediate possession of the remaining portions of the EDC Property have been leased by Government to Landlord pursuant to a Lease in Furtherance of Conveyance ("LIFOC") dated May 13, 2002. E. A Final Joint Environmental Impact Statement/Environmental Impact Report for the Disposal and Reuse of MCAS Tustin (the "EIS/EIR") and Mitigation Monitoring and Reporting Program for the EIS/EIR were adopted by the City on January 16, 2001. In March 2001, a Record of Decision was issued by the Government approving the EIS/EIR and the MCAS Tustin Reuse Plan. An additional Supplement to the EIS/EIR for the Tustin Ranch Road Interchange was certified by the City on December 6, 2004 and an Addendum to the EIS/EIR 4848-0738-0480.4 MCAS TUSTIN 5UB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 was certified on April 17, 2006. The EIS/EIR, as supplemented and amended is referred to herein as the "Final EIS/EIR". F. Pursuant to the that certain Agreement Between City of Tustin and Tustin Unified School District Regarding Transfer of School Sites and Other Mitigation Measures, dated October 21, 1996 ("1996 TUSD Agreement") and the Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and the Establishment of an Elementary School and High School, dated ("TUSD Conveyance Agreement"), Landlord and Tenant agreed upon a method of conveyance of the TUSD Property and agreed to make and enter into this Sub-Lease for the portion of the TUSD Property remaining under the LIFOC. Tenant will lease from Landlord the Leased Premises (as herein defined), which leasehold interest is junior to and subject to the provisions of the LIFOC. Pursuant to the TUSD Conveyance Agreement, Landlord and Tenant have agreed upon a method of conveyance by Landlord to Tenant of the Leased Premises at one or more subsequent closings following conveyance by the Government to Landlord of such property in accordance with the FOSL. As a result thereof, this -Sub-Lease is a "sub-lease" in accordance with applicable laws, statutes and ordinances. NOW, THEREFORE, in consideration of the terms, covenants and conditions hereinafter set forth, Landlord and Tenant hereby agree as follows: AGREEMENT 1.0 LEASED PREMISES; GOVERNING DOCUMENTS 1.1 Leased Premises. Landlord does hereby sublease, rent, and demise to Tenant and Tenant does hereby hire and rent from Landlord, approximately 1.478 acres, more or less, of real property located in the City, County of Orange, California as more particularly described and depicted in Exhibit "A" ("Land"), together with all improvements and fixtures therein ("Improvements"), and all Transferred Utility Systems (as defined herein) (collectively, the "Existing Improvements"), if any, currently thereon. The Land and Existing Improvements are collectively referred to in this Sub-Lease as the "Leased Premises." 1.2. LIFOC. 1.2.1 Incorporated Provisions. The provisions of the LIFOC are incorporated herein as though fully set forth herein, except in each case that (i) "Lessee" shall mean Tenant hereunder, (ii) "Government" shall mean Landlord hereunder, (iii) Landlord shall be under no obligations to perform any obligation of Government under the LIFOC, and (iv) the provisions regarding the extent of the property constituting the Leased Premises, the Rent and other specific information shall be as set forth in this Sub-Lease. 4848-0738-0480.4 2 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 1.2.2 Subordination to LIFOC. Tenant represents that it has read and is familiar with the terms of the LIFOC, a true and correct copy of which is available from, and on file with, the Landlord. By entering into this Sub-Lease, Tenant acknowledges and agrees that this Sub-Lease is subject to and subordinate to the LIFOC and Tenant agrees to be bound by all terms, conditions, and covenants of the LIFOC to the extent related to the Leased Premises. In addition to the foregoing and not as limitation thereof, Tenant acknowledges that Landlord's right, title, and interest to the Leased Premises arises solely under the LIFOC, and Tenant shall assume and faithfully perform all covenants running with the land and all obligations set forth in the LIFOC as obligations to be performed by "Lessee" to the extent related to the Leased Premises. It is the intent of the Landlord and the Tenant that the Tenant shall assume and fully and timely perform all obligations of Landlord as "Lessee" under the LIFOC for the Leased Premises, and as required of the City under Article 34 of the EDC MOA. Landlord hereby transfers to Tenant all rights and benefits of Landlord under the LIFOC to the extent relating to the Leased Premises only, and Landlord hereby covenants to cooperate with Tenant (at no cost to Landlord) to enable Tenant to received all benefits of Landlord under the LIFOC to the extent relating to the Leased Premises. Notwithstanding the foregoing, all governmental approvals by the Government required by the LIFOC will require the Tenant to make said requests first to the Landlord and the Landlord will be the point of contact for all approvals between the Government and the Tenant related to the Leased Premises. 1.2.3 LIFOC Parcel Limitations. Notwithstanding any provision of this Sub-Lease, Landlord and Tenant hereby agree as follows: (a) Tenant will not do or permit anything to be done in or on the Leased Premises which will cause the occurrence of a default by Landlord under the LIFOC; (b) if the LIFOC expires or is terminated for any reason other than conveyance by the Government to Landlord of all of the LIFOC parcels, then this Sub-Lease shall thereupon terminate, without any liability to Landlord under this Sub-Lease or the TUSD Conveyance Agreement (unless such expiration or termination is caused by a material default of Landlord under the LIFOC), as if such date were the scheduled expiration date of the Term, as defined in Section 2 herein. Landlord shall take all necessary actions within Landlord's control to keep the LIFOC in full force and effect during the term of this Sub-Lease and to cause the Government to transfer the Leased Premises to Landlord upon the satisfaction of all conditions precedent thereto set forth in the EDC MOA and implementing documents. 1.2.4 Limitation on Liability. Landlord shall have no liability to Tenant for Government's defaults under the LIFOC. Tenant agrees that Landlord shall not be obligated to perform any of the Government's obligations under the LIFOC. Tenant further agrees that neither this Sub-Lease nor any of Tenant's obligations hereunder shall be affected by Government's default under the LIFOC, except to the extent that the LIFOC is terminated. Landlord reserves all rights to enforce the LIFOC, but agrees to make reasonable and diligent efforts to enforce Government's obligations under the LIFOC, to the extent that Tenant is a material beneficiary thereof. Landlord shall not be required to initiate a legal action against Government but agrees to reasonably cooperate with Tenant to enforce Government's obligations under the LIFOC. 4848-0738-0480.4 3 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 2 1.2.5 Effect of Subsequent Closing. Upon transfer by the Government to 3 Landlord of the Leased Premises and the release of such Leased Premises from the LIFOC, this 4 Sub-Lease as to such Leased Premises only and without further action by either parties, become 5 a direct lease of such Leased Premises to Tenant, upon and subject to each of the terms and 6 conditions set forth herein or incorporated herein by reference. 7 8 1.2.6 Federal Documents. Tenant acknowledges and agrees that this 9 Sub-Lease is subject to the terms and conditions set forth in the EDC MOA and implementing 10 documents, in each case, including all matters, issues, contingencies, deed restrictions, 11 environmental restrictions, leases, and obligations as stated therein. 12 13 1.2.7 Pnority. In the event of any conflict in the rights of Tenant under 14 this Sub-Lease and the rights of Landlord under the LIFOC, the terms, conditions and covenants 15 of the LIFOC shall control. 16 17 Z.0 TERM AND COMMENCEMENT. 18 19 2.1 Commencement and Termination. Subject to subsection 2.3 and 2.4, the 20 term ("Term") of this Sub-Lease shall begin on the Sub-Lease Commencement Date and end on 21 the earlier of: (a) the 31S` day of December 2050; or (b) the effective date of conveyance, for that 22 portion of the Leased Premises conveyed to Tenant (each such portion hereinafter referred to as 23 "Conveyed Portion"), unless extended in accordance with the provisions of Section 2.2 or sooner 24 terminated in accordance with the provisions of Section 20 and 21 herein. 25 26 2.2 Earlier Termination with respect to Conveyed Parcels. This Sub-Lease 27 shall automatically terminate with respect to the Leased Premises upon the Subsequent Closing 28 thereof identified in the TUSD Conveyance Agreement, as if such date were the stated expiration 29 date contained herein for such Leased Premises, and neither party hereto shall have any further 30 obligations under this Sub-Lease with respect to the Leased Premises other than any obligations 31 which otherwise would survive termination of this Sub-Lease. From and after each such 32 Subsequent Closing, all references to the Leased Premises shall be deeded to exclude such 33 Conveyed Parcels (and all or any portion of the Leased Premises) and this Sub-Lease shall 34 continue in full force and effect with respect to any remainder of the Leased Premises. 35 36 2.3 Extension. The Term of this Sub-Lease shall be automatically extended to be 37 confirmed in writing by City for a one year period upon the Sub-Lease Termination Date (to the 38 next anniversary of the Sub-Lease Commencement Date) and upon each subsequent expiration 39 date arising as a result of an extension pursuant to this Section 2.3, if on such date all of the 40 following are true: (a) This Sub-Lease has not been earlier terminated in accordance with its 41 terms, (b) the TUSD Conveyance Agreement remains in full force and effect with respect to the 42 Leased Premises, and (c) either (i) the LIFOC remains in full force and effect with respect to the 43 Leased Premises or (ii) the Leased Premises has been conveyed in fee by the Government to 4848-0738-0480.4 4 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Landlord pursuant to the LIFOC (such that the LIFOC has then terminated or is not longer in effect as to the entirety of the Leased Premises) but Landlord has not yet conveyed the Leased Premises to Tenant. 2.4 Inspection. Tenant acknowledges that (a) it has inspected the Leased Premises prior to any use or occupancy of the Leased Premises and (b) that it has no additional inspection or review rights under this Sub-Lease. 2.5 Commencement of Possession. If Landlord is unable to give possession of the Leased Premises on the Sub-Lease Commencement Date because the Leased Premises is not ready for occupancy or for any other reason, Landlord shall not be subject to any liability for the failure to give possession on said date. Under such circumstances, unless the delay is the fault of Tenant, the Rent (as defined in Section 3 hereof) shall not commence until the Leased Premises is available for occupancy by Tenant, and no such failure to give possession on the Sub-Lease Commencement Date shall in any way affect the validity of this Sub-Lease or the obligations of Tenant hereunder, nor shall the same be construed in any way to extend the Term of the Sub- Lease. 2.6 Surrender and Restoration. 2.6.1 Surrender. Upon the expiration of the term of this Sub-Lease or its termination by Tenant or Landlord, the Tenant shall quietly and peacefully remove itself and its property from the Leased Premises and surrender the possession thereof to the Landlord on the expiration date, or the date of prior termination; provided, in the event that Landlord terminates this Sub-Lease for a breach of this Sub-Lease by Tenant, or because of a termination of the LIFOC not caused by Landlord, the Tenant shall be allowed a reasonable period of time, as determined by the Government, in which to remove all of its property from and terminate its operations on the Leased Premises. During such period prior to surrender, all obligations assumed by the Tenant under this Sub-Lease shall remain in full force and effect. The Landlord may, in its discretion following thirty (30) days notice to Tenant, declare any property which has not been removed from the Leased Premises upon surrender as abandoned property. 2.6.2 Restoration. Before the expiration or prior to termination of the Sub-Lease, Tenant shall restore the Leased Premises to the condition in which it was first received and used by the Tenant, or to such improved condition as may have resulted from any improvement made therein by the Tenant, subject however to ordinary wear and tear and loss or damage for which the Tenant is not liable hereunder. Tenant is not obligated to restore improvements to the Leased Premises once those improvements have been demolished or to demolish improvements that have been completed during the term of this Sub-Lease. If Tenant fails to surrender the Leased Premises in such condition, Landlord may restore the Leased Premises to such condition and Tenant shall pay the cost thereof on demand. 4848-0738-0480.4 5 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 3.0 RENT. For purposes of this Sub-Lease, Base Rent and Cost Reimbursements are hereinafter collectively referred to as "Rent". 3.1 Base Rent. As consideration for this Sub-Lease, Tenant shall provide as Base Rent in lieu of cash payments, all such protection and maintenance services for the Leased Premises as described in Section 12 of the LIFOC and this Sub-Lease, and shall submit a monthly statement detailing the services provided and all costs incurred by Tenant to perform such services during the period covered by such statement ("Base Rent Statement"). For purposes of calculating the cost of Base Rent in the event Tenant assigns or sublets the Leased Premises under Section 10 of this Sub-Lease or defaults under Section 19 of this Sub-Lease, Landlord will use the average monthly costs incurred by Tenant to perform such services during the term of this Sub-Lease, as reflected on the Base Rent Statements. 3.2 Additional Rent. In addition to the Base Rent, Tenant shall pay the following direct operating expenses and additional cost reimbursements set forth in Section 3.3, with all sums payable by Tenant being deemed "Additional Rent" for California statutory remedy purposes. 3.2.1 Operating Expenses. Tenant shall directly pay all charges, impositions, costs and expenses of every nature and kind relating to the Leased Premises to the extent that Landlord is obligated to pay such amounts under the LIFOC with respect to the Leased Premises ("Operating Expenses"). In addition, Tenant shall pay for or directly perform all protection and maintenance services for the Leased Premises as described in Section 12 of this Sub-Lease, in Section 12 of the LIFOC and in the TUSD Conveyance Agreement, to the extent that Landlord is obligated to pay for or perform such services under the LIFOC with respect to the Leased Premises. Any costs incurred by Landlord resulting from Tenants' failure to perform under this Section shall be a "Cost Reimbursement" obligation under Section 3.2.2 3.2.2 Additional Cost Reimbursement. All sums payable by Tenant to Landlord under this Sub-Lease which are not Base Rent or Operating Expenses shall be deemed a Cost Reimbursement ("Cost Reimbursement"). Cost Reimbursement shall include any and all costs incurred by Landlord, whether under the LIFOC, TUSD Conveyance Agreement or otherwise, which (a) specifically are attributable to an action (or inaction) of Tenant under the Sub-Lease, (b) constitute a Claim and/or Loss incurred by Landlord (as a result of Tenant's action or inaction) or Tenant's use thereof or action or inaction with respect thereto and/or (c) arise as a result of or are related to Tenant's failure to provide the protection and maintenance services required by Section 12 of the LIFOC and Sections 3.2 and 12.1 of this Sub-Lease to the extent that Landlord is obligated to provide such services under the LIFOC with respect to the Leased Premises, and shall include amounts owing from Landlord to Government as a result of any of the foregoing. Landlord shall advise Tenant in writing of such costs and Tenant shall be obligated to pay to Landlord the full amount of the Cost Reimbursement within thirty (30) calendar days of the date of such invoice of such costs. 4848-0738-0480.4 6 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3.2.3 Place of Payment. All payments due and owing shall be made by 3 the Tenant and shall be made payable to the City of Tustin and delivered to the City of Tustin 4 Finance Director at 300 Centennial Way, Tustin, California, 92780, or to a third party at such 5 other place as the Landlord may designate in writing from time to time. 6 7 3.3 Late Charge. If any payment of or any part thereof to be made by Tenant 8 to Landlord pursuant to the terms of this Sub-Lease shall become overdue for a period in excess 9 of ten (10) calendar days, then in addition to any other remedies available to Landlord under this 10 Sub-Lease or otherwise, Tenant shall pay to Landlord a late charge equal to ten (10) percent of 11 such overdue amount for the purpose of defraying the expense incident to handling such 12 delinquent payment, together with interest from the date such payment or part thereof was due, at 13 the default rate of 10 percent per annum, but in no event in excess of the maximum legal rate. 14 15 3.4 No Waiver. Nothing herein or in the imposition or acceptance of a late 16 charge or interest by Landlord shall be construed as a waiver of any rights of Landlord arising 17 out of any default of Tenant; the right to collect any late charge or interest is separate and apart 18 from any rights or remedies of Landlord relating to any default by Tenant. 19 20 3.5 Survival. The obligations of Tenant with respect to the payment of Rent 21 shall survive the termination of this Sub-Lease. 22 23 3.6 Net Lease. The Tenant hereby acknowledges and agrees that this Sub- 24 Lease is intended to be a triple net lease to the Landlord, as such term is commonly used for the 25 leasing of industrial properties, and except as expressly stated herein, Landlord is not responsible 26 for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to 27 the Leased Premises, or the use and occupancy thereof, or the contents thereof or the business 28 carried on therein, and that the Tenant shall pay all charges, impositions, costs and expenses of 29 every nature and kind relating to the Leased Premises except as otherwise expressly agreed to 30 herein. As set forth in this Sub-Lease in Section 12, all costs of maintenance and repair of the 31 Leased Premises, all costs of insuring the Leased Premises, as identified in Section 18 and all 32 taxes as that term is defined in Section 6 of this Sub-Lease, attributable to the Leased Premises 33 shall be paid directly by the Tenant. Notwithstanding anything contained in this Sub-Lease to 34 the contrary, Tenant shall have no obligation to make any capital or extraordinary improvements 35 or repairs to the Leased Premises or to perform any environmental remediation of or at the 36 Leased Premises, except to the extent required in the LIFOC or this Sub-Lease or to the extent 37 such is required as a result of Tenant's negligence or willful misconduct. 38 39 3.7 Security Deposit. Landlord agrees to waive the requirement of a security 40 deposit for Tenant. 41 42 43 4848-0738-0480.4 7 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 4.0 USE OF LEASED PREMISES. 4.1 Subject to any restrictions in the TUSD Conveyance Agreement, the LIFOC and the FOSL and consistent with the MCAS Tustin Specific Plan and all applicable Government Requirements, as such term is defined in the TUSD Conveyance Agreement, Tenant may use and occupy the Leased Premises for the development, construction, operation and maintenance of a Public High School as specifically described in the TUSD Conveyance Agreement. Tenant shall not use the Leased Premises for any other purpose unless expressly agreed to by the Landlord in writing. 4.2 There shall be no filming on the Leased Premises portraying the U.S. Military without prior written authorization from the Landlord. 4.3 Compliance with FOSL and Other Governmental Documents. Any use or uses of the Leased Premises shall comply with all terms and conditions of this Sub-Lease, the LIFOC and the FOSL for the Leased Premises under the LIFOC, subject to the uses being consistent with the National Environmental Policy Act ("NEPA") Record of Decision ("ROD") and the Final EIS/EIR for the disposal and reuse of MCAS Tustin prepared for conformance with not only NEPA but the California Environmental Quality Act and its implementating State regulations ("CEQA"), and all conditions expressed therein as well as all conditions expressed in any other environmental action with respect to the uses of the Leased Premises prepared for compliance with NEPA and CEQA. 4.4 Environmental Matters and Use of Hazardous or Toxic Materials. Tenant shall not conduct environmental testing, sampling or invasive testing or boring on the Sub-Lease Premises without the written consent of Landlord, nor allow any dangerous or hazardous condition created by Tenant to exist or continue on the Leased Premises. In accordance with 10 U.S.C. 2692, the Tenant is prohibited from storing or disposing non-DOD approved toxic or hazardous materials, which includes materials that are explosive, flammable, or pyrotechnic in nature, on a military installation, except to the extent authorized by a statutory exception to 10 U.S.C. 2692 or as authorized by the Secretary of Defense or his or her designee. In the event that Tenant desires to store or dispose of any hazardous materials, which includes materials that are explosive, flammable, or pyrotechnic in nature, on the Leased Premises, Tenant shall comply with the provisions of Section 23 of this Sub-Lease. 4.5 Historic Preservation. Tenant shall not undertake any activity that may affect an identified historic or archeological property, including excavation, construction, alteration, maintenance or repairs of the Leased Premises, Historic Buildings, or sites in a manner that is inconsistent with the Memorandum of Agreement Among the United States Navy, the California State Historic Preservation Officer and the Advisory Council on Historic Preservation for the Disposal and Reuse of Marine Corps Air Station, Tustin, Orange County, California set forth as Exhibit K to the EDC MOA. Buried cultural materials may be present on 4848-0738-0480.4 8 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Leased Premises. If such materials are encountered, Tenant shall stop work immediately and notify Government and Landlord. 5.0 "AS-IS" TENANT'S RESPONSIBILITY. 5.1 As-Is; Where-Is. 5.1.1 No Representations or Warranties. The Tenant recognizes that the Landlord would not sublease and subsequently convey to the Tenant the Leased Premises except on an "AS IS, WHERE IS, WITH ALL FAULTS" basis, and the Tenant acknowledges that, except as expressly set forth in this Sub-Lease, Landlord has made no representations or warranties of any kind whatsoever, either express or implied in connection with any matters with respect to the Leased Premises or any portion thereof. The Tenant's determination to enter into this Sub-Lease and, subsequent to the Sub-Lease Commencement Date and consistent with the TUSD Conveyance Agreement, to proceed to Close of Escrow with respect the Leased Premises, constitutes the Tenant's agreement that the Tenant, in consummating the transactions described in this Sub-Lease, is subleasing the Leased Premises, and later will be acquiring the Leased Premises, in each case in an "AS IS, WHERE IS, WITH ALL FAULTS" basis, in its present state and condition and with all faults. The Tenant further acknowledges and agrees that, except as otherwise specifically provided in this Sub-Lease and/or the TUSD Conveyance Agreement, Landlord has not made and does not make and specifically negates and disclaims any representations, warranties, promises, agreements or guaranties of any kind or character, whether express or implied, oral or written, past, present or future, whether by Landlord or any of its agents, elected or appointed officials, representatives or employees, of, concerning or with respect to: Premises; (b) the existence or nonexistence of any liens, easements, covenants, conditions, restrictions, claims or encumbrances affecting the Leased Premises; (a) the value of, or the income to be derived from, the Leased 29 (c) the suitability of the Leased Premises for any and all future 30 development, uses and activities which the Tenant may conduct thereon, including the 31 development of the High School as described in the TUSD Conveyance Agreement; 32 (d) the habitability, merchantability or fitness for a particular purpose 33 of the Leased Premises; 34 35 Premises; (e) the manner, quality, state of repair or lack of repair of the Leased 36 (f) the nature, quality or condition of the Leased Premises including 37 water, soil and geology; 4848-0738-0480.4 9 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 (g) the compliance of or by the Leased Premises or its operation with 2 any Government Requirements, as such term is defined in the TUSD Conveyance Agreement, 3 including the National Environmental Policy Act, CEQA and the Americans with Disabilities 4 Act of 1990; 5 (h) the manner or quality of the construction or materials, if any, 6 incorporated into the Leased Premises; 7 (i) the presence or absence of Hazardous Materials, including asbestos 8 or lead paint at, on, under, or adjacent to the Leased Premises; 9 (j) the content, completeness or accuracy of the information, 10 documentation, studies, reports, surveys and other materials, delivered to the Tenant in 11 connection with the review of the Leased Premises and the transactions contemplated in the 12 TUSD Conveyance Agreement; 13 (k) the conformity of the Existing Improvements on the Leased 14 Premises, if any, to any plans or specifications for the Leased Premises; 15 (1) compliance of the Leased Premises with past, current or future 16 statutes, laws, codes, ordinances, regulations or Government Requirements, as such term is 17 defined in the TUSD Conveyance Agreement, relating to zoning, subdivision, planning, building, 18 fire, safety, health or environmental matters and/or covenants, conditions, restrictions or deed 19 restrictions; 20 (m) the deficiency of any undershoring or of any drainage; 21 (n) the fact that all or a portion of the Leased Property may be located 22 on or near an earthquake fault line or falls within an earthquake fault zone established under the 23 Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 262 1-2630 or 24 within a seismic hazard zone established under the Seismic Hazards Mapping Act, California 25 Public Resources Code, Sections 2690-2699.6 and Sections 3720-3725; 26 (o) the existence or lack of vested land use, zoning or building 27 entitlement affecting the Leased Premises; 28 (p) the construction or lack of construction of Tustin Legacy, as such 29 term is defined in the MCAS Specific Plan and Reuse Plan, or if constructed, the construction of 30 Tustin Legacy in accordance with design guidelines, plans and specifications previously or to be 31 prepared therefor; 32 (q) the contents of the EDC MOA and implementing documents, the 33 Base Closure Law, the FOST and the FOSL; and 34 (r) with respect to any other matters. 4848-0738-0480.4 10 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 5.1.2 Environmental Condition of Leased Premises; Restrictions. The 2 Tenant acknowledges and agrees that: (i) the Landlord has acquired and/or leased the Leased 3 Premises from the Navy, (ii) the Navy has conducted an Environmental Baseline Survey for the 4 EDC Property; (iii) the Navy determined that the EDC Property was suitable for transfer and 5 issued the FOST for all the Property other than the Leased Premises; (iv) in accordance with the 6 Landlord's recent leasing of the Leased Premises, the Navy determined that the Leased Premises 7 were suitable for leasing and issued the FOSL; (v) Landlord makes no representation or warranty 8 as to the environmental condition of the Leased Premises, the Navy's obligations with respect to 9 the environmental condition of the foregoing property or any portion thereof, or of the adequacy 10 or accuracy of any environmental report that has been rendered; (vi) there maybe some residual 11 contamination on the Leased Premises as a result of Navy historic activities; (vii) the Navy has 12 agreed to accept certain limited responsibility for any contamination it caused, including any 13 contamination discovered after transfer from the Navy, in accordance with existing Government 14 Requirements, as such term is defined in the TUSD Conveyance Agreement, including the 15 National Defense Authorization Act For Fiscal Year 1993 as amended (Public Law No. 102-434) 16 Section 330; and (viii) based on an agreement between the Navy and DTSC, the deed restrictions 17 contained in the Federal Deed and LIFOC are binding upon successors and assigns of the 18 Landlord and are enforceable by DTSC pursuant to a conveyed property right from the Navy to 19 DTSC. 20 21 6.0 UTILITIES. 22 23 6.1 Provision of Utilities. The obtaining of utility services shall be solely the 24 responsibility of Tenant. Any separate metering of utilities required by any utility provider shall 25 be the responsibility of Tenant. Tenant shall pay all service charges, and all initial utility 26 deposits and fees, for water, electricity, sewage, janitorial, trash removal, gas, telephone, pest 27 control and any other utility services furnished to the Leased Premises and the improvements on 28 the Leased Premises during the entire term of this Sub-Lease ("Utilities"). Tenant shall pay for 29 all Utilities in addition to Rent. If any such Utilities are not separately metered or billed to 30 Tenant for the Leased Premises but rather are billed to and paid by Landlord, Tenant shall pay to 31 Landlord, as Cost Reimbursements, its pro rata share of the cost of such services, as reasonably 32 determined by Landlord. If any Utilities are not separately metered, Tenant shall have the right 33 to determine Tenant's consumption by either submetering, survey or other methods designed to 34 measure consumption with reasonable accuracy. Landlord shall not be liable for any reason for 35 any loss or damage resulting from an interruption of any of these services. Landlord may 36 designate the provider of Utilities and in such event Tenant shall use such designated provider; 37 provided that Tenant shall have no claim against the City, of any type, for any failure of such 38 provider to provide such service, and Tenant's remedy, if any, shall be limited to such provider. 39 40 6.2 AS-IS Tenant Responsibility. Tenant acknowledges and agrees that the 41 Transferred Utility Systems (as defined below) will be conveyed to Tenant by Landlord by bill 42 of sale substantially in the form attached to the TUSD Conveyance Agreement. The Transferred 43 Utility Systems shall not be used by Tenant in conjunction with development of the 4848-0738-0480.4 11 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 improvements on the Leased Premises. Tenant agrees to diligently pursue Utilities directly from 2 private or municipal suppliers and agrees that it will accept needed Utilities from any private or 3 municipal supplier, who should during the term of this Sub-Lease, become capable of delivering 4 such services to the Leased Premises at commercial rates. If Tenant, after exhausting such 5 efforts, is unable to obtain the provision of needed Utilities and to the extent Landlord is, at the 6 time, operating existing systems on the EDC Property and providing Utilities to the Government 7 pursuant to Section 10.2 of the LIFOC, Landlord shall work to provide such Utilities, but only to 8 the extent provided to the Government, to Tenant. If Landlord provides such Utilities, Tenant 9 shall pay Landlord commercial rates for the Utilities as an Operating Expense. Tenant 10 acknowledges and agrees that the decision to provide Utilities to Tenant is within the sole 11 discretion of Landlord and that Landlord may interrupt or terminate in whole or in part such 12 Utilities at any time without any continuing obligation to Tenant and without any liability for any 13 losses or damages suffered by Tenant resulting from such interruption or termination. Landlord 14 agrees to provide Tenant with fourteen (14) days notice prior to such termination. 15 16 6.3 Utility System Alteration. Tenant acknowledges and agrees that any 17 Utility Systems currently on the Leased Premises are not adequate for the purposes intended by 18 the Tenant. Tenant agrees that it shall perform all abandonment, demolition, removal, alteration, 19 modification, repair, replacement and relocation (each an "Alteration") of the Transferred Utility 20 Systems in accordance with and as required by the Government Requirements, as such term is 21 defined in the TUSD Conveyance Agreement, provided that prior to commencing such 22 Alteration, Tenant shall have obtained the written approval of Landlord. Such approval is within 23 the sole discretion of Landlord and will not be granted where the replacement, removal, or 24 relocation, may interfere with the use or redevelopment plans of Landlord or the Government, or 25 their contractors or tenants, may negatively impact public health and safety, or negatively impact 26 the logical and orderly phasing of Tustin Legacy Backbone Infrastructure Work, as defined in 27 the MCAS Reuse Plan and Specific Plan. Tenant shall be responsible for all costs related to any 28 Alteration performed by Tenant or at the direction of Tenant and/or Landlord. 29 30 6.4 Access. Tenant acknowledges and understands that pre-existing water, 31 electric, sewer, natural gas, and storm drainage systems may be present on the Leased Premises 32 and that such systems are to be upgraded or replaced with new systems to be located adjacent to 33 the Leased Premises as part of the planned redevelopment of the EDC Property or may be used 34 by the Government for the provision of Utilities to support ongoing Government activities on 35 MCAS Tustin. Landlord and the Government shall at all times have full access to the Leased 36 Premises for operation, maintenance, repair and replacement of these systems as may be 37 required. Such operation, maintenance, repair and replacement activities shall take priority over 38 the provision of Utilities to Tenant, whether provided by Landlord or other utility service 39 providers, or any use of the Leased Premises by Tenant in the event of any conflict and Landlord 40 and the Government shall not be liable for any loss or damage resulting from the disconnection 41 or interruption of Utilities services to Tenant or any interference with Tenant's use of the Leased 42 Premises necessitated by such activities. The determination to disconnect or interrupt Tenant's 43 utility service or interfere with Tenant's use of the Leased Premises is within the sole discretion 4848-0738-0480.4 12 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 of Landlord, provided that Landlord will provide Tenant with fourteen (14) days prior notice of such determination. 6.5 Definition of Transferred Utilit~ystems. For purposes of this Sub-Lease, the following terms shall have the meaning set forth below: (a)" Utility Systems" shall mean all utility distribution systems transferred by the Government to the Landlord and shall include the following: (i) all current Landlord owned electric, gas, telephone, and cable systems including distribution lines, pad mounted and overhead distribution poles and transformers; (ii) all conduits and duct banks from outlet or master meters or connection points outside the Leased Premises to end usage points on the Leased Premises and (iii) all water, sewer, and storm drain systems (does not include culvert ditches), including distribution lines and pipelines from outlet to master meters or connection points outside the Leased Premises to end usage points on the Leased Premises. (b) "Transferred Utility Systems" shall mean those Utility Systems on the TUSD Property which shall be transferred from the Landlord to Tenant pursuant to a Bill of Sale. 7.0 TAXES. Tenant shall pay all Taxes (as hereinafter defined) levied or imposed against the Leased Premises or Landlord and/or Tenant's interest therein during the Term. "Taxes" shall mean all taxes, assessments and governmental charges, whether federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Rent, the Leased Premises, or any possessory interest therein, or the operation of the Leased Premises, whether or not directly paid by Landlord. Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Leased Premises, provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included within Taxes as defined herein to the extent of such substitution. There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the taxing year, but only to the extent such contests result in a reduction of Taxes for such year or any other year during the Term. Tenant shall pay to the appropriate governmental authority any use, possessory interest, and/or occupancy tax applicable to the Leased Premises. In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent within ten days of demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority. 7.1 The interest created by this Sub-Lease may at some time be subject to property taxation under the laws of the State of California. If property taxes are imposed, the party in whom the possessory interest is vested may be subject to the payment of the taxes levied 4848-0738-0480.4 1 3 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 on such interest. This notice is included in this Lease pursuant to the requirements of Section 107.6 (a) of the Revenue and Taxation Code of the State of California. 7.2 Tenant shall pay the Taxes directly imposed upon it or Landlord in accordance with the instructions of the taxing entity. Tenant shall pay the Taxes originally imposed upon Landlord, upon Landlord's election, either (i) annually within 30 days after the date the Landlord provides Tenant with a statement setting forth in reasonable detail such Taxes (which statement shall not be provided to Tenant more than 60 days before such Taxes are due), or (ii) monthly in advance based on estimates provided by Landlord based upon the previous year's tax bill. 7.3 All Taxes originally imposed upon Landlord and payable by Tenant with respect to the Leased Premises shall be prorated on a per diem basis for any partial tax year included in the Term. Tenant's obligation to pay Taxes during the last year of the Term shall survive the termination of this Sub-Lease. 8.0 ACCESS BY GOVERNMENT AND LANDLORD. In addition to access required under other provisions of this Sub-Lease, the Government and Landlord shall be allowed access to the Leased Premises at all reasonable times throughout the term of this Sub- Lease, for any reasonable purposes upon prior written notice to the Tenant, subject to the LIFOC and this Sub-Lease. Tenant shall ensure that a telephone roster is maintained at all times on on- call persons representing Tenant who will be available on short notice, 24 hours a day, 365 days per year, and possess and have authority to use all keys necessary to gain access to the Leased Premises, to facilitate entry in time of emergency. The Tenant shall ensure that the Landlord has a current roster of such on-call personnel and their phone numbers. Tenant shall have no claim against the Government or Landlord for exercise of their rights of access hereunder. 9.0 COVENANTS OF TENANT. 9.1 Standard of Maintenance. Tenant shall at a minimum maintain and keep the Leased Premises in accordance with and as required by the Government Requirements, as such term is defined in the TUSD Conveyance Agreement, the TUSD Conveyance Agreement, this Sub-Lease, and any Special Restrictions and Covenants, Conditions and Restrictions, imposed on the Leased Premises. 9.2 Compliance with Laws. Tenant shall not make or permit to be made any use of the Leased Premises or any part thereof (i) which would violate any of the covenants, agreements, terms, provisions, and conditions of this Sub-Lease or the LIFOC; or (ii) which would directly or indirectly violate any federal, state or local law, ordinance, rule or governmental regulation; or (iii) which will suffer or permit the Leased Premises or any part thereof to be used in any manner or permit anything to be brought into or kept therein which, in the reasonable judgment of Landlord, shall in any way impair or tend to impair the character, 4848-0738-0480.4 14 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 reputation or appearance of the Leased Premises or which will impair or interfere with or tend to impair or interfere with any of the services performed by Landlord. 9.3 Tenant shall not display, inscribe, print, maintain or affix on any place in or about the Leased Premises any sign, notice, legend, direction, figure or advertisement, except as may be consistent with the City's ordinance and approved by Landlord in writing consistent with the LIFOC. 9.4 Tenant shall not attach any additional locks or similar devices to any door or window, change any locks or make additional keys for any doors to the Leased Premises, without Landlord's prior written consent. All keys must be returned to Landlord at the expiration or termination of this Sub-Lease. 9.5 Unless Landlord gives advance written consent, Tenant shall not install or operate any steam or internal combustion engine, boiler, in or about the Leased Premises, or use any illumination other than electric light, or use or permit to be brought into the building any inflammable fluids such as gasoline, kerosene, naphtha and benzine, or any explosives, radioactive materials or other articles deemed extra hazardous to life, limb, or property. Tenant shall not use the Leased Premises for any illegal or immoral purpose. 9.6 The sidewalks, halls, passages, exits and entrances shall not be obstructed by Tenant or used for any purpose other than for ingress to and egress from the Leased Premises. 9.7 Tenant shall not use, keep, or permit to be used or kept any foul or noxious gas or substance on the Leased Premises, or permit or suffer the Leased Premises to be occupied or used in a manner offensive or objectionable to Landlord by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business therein, nor shall any animals or birds be brought in or kept in or about the Leased Premises. 9.8 Tenant shall comply with the Rules and Regulations. 9.9 Tenant shall comply with all laws, enactments, rules, ordinances and regulations of all governmental authorities relating or applicable to Tenant's occupancy of the Leased Premises and all covenants of the LIFOC governing use of the Leased Premises. Tenant shall obtain all permits and licenses required by the City of Tustin and shall pay all required fees. 9.10 Outside storage areas are not permitted unless expressly authorized in writing by Landlord. 9.11 Additional Costs. In addition to all other liabilities for breach of any covenant of this Section 9, Tenant shall pay to Landlord an amount equal to any increase in insurance premiums payable by Landlord caused by such breach. 4848-0738-0480.4 1 5 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 10.0 ALTERATIONS. 10.1 Tenant shall not make any alterations, improvements, or additions to the exterior or interior of the Leased Premises (collectively the Work), without Landlord's prior written consent in each and every instance. In the event Tenant desires to perform any Work, Tenant shall first submit to Landlord a written description of the proposed Work, and, if Landlord requires, plans and specifications relating thereto, and obtain Landlord's written approval prior to commencing it. Approval of Work may be conditioned upon providing the Landlord and the Government with a performance and payment bond satisfactory to them in all respects in addition to other requirements deemed reasonably necessary to protect the interests of the Landlord and the Government. 10.2 Because of the possibility that the Leased Premises will ultimately be under the jurisdiction of the City of Tustin for compliance with health and safety regulations and requirements, prior to undertaking or doing any Work on the Leased Premises, or any portion thereof, Tenant shall submit an application to the City of Tustin Community Development Department, and, if required by the City, to other City departments, for review and obtaining approval of such plans and proposals for such Work as required under the TUSD Conveyance Agreement In addition to the application to the City of Tustin Community Development Department, Tenant shall also submit a narrative description of all proposed Work, with the projected schedule and costs thereof, and an analysis as to how and why such Work will or will not be visible from the exterior of the Buildings, or affect any historically significant features, or be substantially likely to adversely affect the environmental cleanup of MCAS Tustin, human health, or the environment, or adversely impact the structure of the Buildings. All Work shall be done at the expense of Tenant without any costs or obligation to Landlord. No Work shall be undertaken by Tenant on the Leased Premises, unless such Work has been approved by the City Community Development Department. In addition, there shall be no Work performed on the Leased Premises without prior written consent of the Government to the extent required, and in the manner set forth, in Section 8 of the LIFOC. 10.3 At the termination of this Sub-Lease, all improvements, whether temporary or permanent in character, made by Landlord or Tenant in or upon the Leased Premises shall become Landlord's property and shall remain upon the Leased Premises at the termination of this Sub-Lease without compensation to Tenant (excepting only Tenant's movable office furniture, trade fixtures, and manufacturing, office and professional equipment, and any Work approved by Landlord as to which, at the time of such approval, Landlord stated, in writing, that such Work had to be removed at the termination of the Sub-Lease). 11.0 ASSIGNMENT AND SUBLETTING. 11.1 Restrictions on Transfer. Tenant shall not effect, or agree to effect, any transfer, sale, assignment, gift or other conveyance of all or any portion of the Leased Premises or any improvements thereon or any interest therein, or any right or interest under this Sub- 4848-0738-0480.4 16 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Lease, whether voluntarily, involuntarily or by operation of law or otherwise (collectively, a "Transfer"), unless such Transfer is a Permitted Transfer. "Permitted Transfer" shall mean only any of the following: (a) Any mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) for the purpose of providing security for the repayment of indebtedness and related obligations incurred to finance or refinance the acquisition, development or construction of the Leased Premises or improvements thereon in accordance with the provisions of this Sub-Lease and the TUSD Conveyance Agreement, provided, that such mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) shall: (I) be subordinate to this Sub-Lease, and (II) provide that the proceeds of such mortgage, deed of trust, pledge, hypothecation or other similar transfer (including sale-leaseback financing transactions) shall be used solely for the purposes set forth in Section 10.1(a) above. (b) Assignments or subleases for use of the Leased Premises only as permitted under this Sub-Lease for public school purposes, provided that the Landlord has approved the assignee or sublessee and the sublease document in writing. In the event Tenant or a successor desires to effect an assignment or sublease, Tenant or such successor shall submit to the Landlord the name of the proposed assignee or sublessee, a copy of the final draft Sublease before it is executed and such other information as the Landlord may request for the purposes of determining that such assignee or sublessee has the capability and resources necessary to carry out its obligations under the proposed assignment or sublease. The information that may be requested by the City shall include, but not be limited to, (i) current financial statements of the proposed assignee or sublessee to ,the extent existing (and if not, then other reasonable evidence of financial resources), (ii) the names of the persons or entities who manage or control the affairs of the proposed assignee or sublessee, (iii) information regarding the experience of the proposed assignee or sublessee (and the persons managing or controlling such lessee or sublessee) in owning or operating enterprises such as that to be pursued under the proposed assignment or sublease, and (v) the terms and condition of the proposed assignment or subletting. Within thirty (30) business days after receipt of the relevant information reasonably requested by the Landlord, the Landlord shall give Tenant or its successor written notice of approval or disapproval of the proposed assignment or sublessee. (c) Any other Transfer as to which Tenant or its successor in interest receives the prior written consent of the Landlord, which consent may be withheld by the City for any reason whatsoever. 11.2 Other Transfers. For the purposes of this Sub-Lease, "Transfer" also shall include any of the following: 4848-0738-0480.4 17 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 (a) If Tenant is or becomes bankrupt or insolvent or if any involuntary proceeding is brought against Tenant (unless, in the case of a petition filed against the TUSD, the same is dismissed within ninety (90) days), or Tenant makes an assignment for the benefit of creditors, or institutes a proceeding under or otherwise seeks the protection of federal or State bankruptcy or insolvency laws, including the filing of a petition for voluntary bankruptcy or instituting a proceeding for reorganization or arrangement; (b) If a writ of attachment or execution is levied on this Sub-Lease or on the Leased Premises, or on any portion thereof, where such writ is not discharged within ninety (90) days; (c) If, in any proceeding or action in which the Tenant or its successor in interest is a party, a receiver is appointed with authority to take possession of the Leased Premises, or any portion thereof, or any improvements thereon, where possession is not restored to the Tenant or its successor in interest within ninety (90) days; or (d) If Tenant experiences any change in status, ownership or control after which Tenant does not continue to be engaged as a duly authorized provider of public elementary school and high school educational services under applicable law. 11.3 Remedies for Improper Transfers. Any purported Transfer that is not a Permitted Transfer shall, at the election of the Landlord, be null and void. If there is any Transfer that is not a Permitted Transfer, such Transfer shall be a Material Default under this Agreement as of the date of the transfer, which date shall not be extended by Force Majeure Delay. In the event of a Transfer in violation of this Section 10, the Landlord shall have all remedies available to it at law and in equity, including the right to immediate possession of the Leased Premises. 11.4 If, with the consent of Landlord, this Sub-Lease is assigned or if the Leased Premises or any part thereof is sublet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect Rent from the assignee, Tenant, or occupant, and apply the net amount collected to the Rent herein reserved. The collection of Rent from an assignee or occupant shall not release Tenant from its obligation to pay Rent not otherwise collected from such assignees or occupants. If Landlord consents to such subletting or assignment, it shall nevertheless be a condition to the effectiveness thereof that a fully executed copy of the sublease or assignment is furnished to Landlord and that any assignee assumes in writing all obligations of Tenant under this Sub-Lease and the LIFOC. No consent to any assignment, subletting or occupancy shall be deemed a waiver of any of Tenant's obligations contained in this Sub-Lease or the LIFOC or the acceptance of the assignee, Tenant or occupant as Tenant, nor a release of Tenant from further performance of any covenants and obligations under this Sub-Lease or the LIFOC. 4848-0738-0480.4 18 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 11.5 Any approval given by Landlord of an assignment or subletting of this Sub-Lease shall not constitute a waiver of the necessity of such approval of any subsequent assignment or subletting. 11.6 If Tenant requests Landlord to approve a proposed assignment or subletting, Tenant shall pay to Landlord, whether or not consent is ultimately given, Landlord's attorneys' fees incurred in connection with reviewing each such request. 11.7 Notwithstanding any other provisions of this Sub-Lease, Landlord may, within its sole discretion, assign this Sub-Lease to a third party, including the Tustin Community Redevelopment Agency. 12.0 PROTECTION AND MAINTENANCE SERVICES. The services to be provided by the Tenant hereunder shall include the furnishing of all labor, supervision, materials, supplies, and equipment necessary to furnish the structural (including roof) maintenance; fencing maintenance; plumbing maintenance; electrical maintenance; maintenance of heating and cooling systems; exterior utility systems maintenance; pavement and grounds maintenance (including grass cutting, shrub trimming and tree removal); pest control; security within the Leased Premises; refuse collection, removal, and disposal; and utilities maintenance on the Leased Premises necessary for the protection of Leased Premises. 12.1 Maintenance. Tenant shall, at Tenant's own expense, maintain and repair the Leased Premises. The degree of such maintenance and repair to be furnished by the Tenant hereunder shall be that which is sufficient to maintain weather tightness, structural stability, protection from fire hazards of erosion, and elimination of safety and health hazards, which arise during the term of the lease and which are not caused by the actions of the Landlord, the Government or their employees, contractors, or agents, so that the Leased Premises being serviced will remain in the condition in which they exist at the commencement of the Sub-Lease, ordinary wear and tear excepted. Both Landlord and Government, upon due notice, may inspect the Leased Premises, to insure performance of the maintenance required. 12.2 Housekeeping. Debris, trash and other unused materials shall be promptly removed from the Leased Premises, and the area of work shall be kept reasonably clean and free of unused materials at al times. At termination of the Sub-Lease, the Leased Premises shall be left without containers, Tenant's equipment, and other undesirable materials, and in an acceptably clean condition. 12.3 Security and Fire Protection. Tenant shall provide for all security and safety within the Leased Premises. 12.3.1 Any crimes or other offenses, including traffic offenses and crimes and offenses involving damage to or theft of Government property, shall be reported to the 4848-0738-0480.4 1 9 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 appropriate authorities for their investigation and disposition to Landlord and to Government as property owner. 12.3.2 Tenant shall take or cause to be taken, all reasonable and necessary fire protection precautions at Leased Premises. 12.4 Services. The Tenant shall be responsible, at its cost and expense, for obtaining and providing any and all services, not otherwise provided by Landlord in accordance with the terms of this Sub-Lease, which may be required in connection with the Tenant's use or occupancy of the Leased Premises. 13.0 RULES AND REGULATIONS. Notwithstanding any other provision of this Sub-Lease, Landlord shall have the right to make such reasonable rules and regulations as in the judgment of Landlord may from time to time be necessary for the safety, appearance, care and cleanliness of the Leased Premises and for the preservation of good order therein. Such rules to be provided shall be in writing and shall be subject to the prior written approval of Tenant, which approval shall not be unreasonably withheld or delayed. 14.0 EMINENT DOMAIN. 14.1 In the event that title to the whole of the Leased Premises shall be lawfully condemned or taken in any manner for any public or quasi-public use or conveyed in lieu of condemnation, this Sub-Lease shall automatically terminate as of the date possession is required to be delivered to the condemnor. In the event that only a portion of the Leased Premises is taken, this Sub-Lease shall automatically terminate as to the portion condemned and remain in full force and effect as to all remaining portions. However, in the event condemnation of a portion of the Leased Premises renders, in Landlord's reasonable opinion, the remaining Leased Premises unsuitable for the conduct of Tenant's business, either party may terminate this Sub- Lease as to the whole of the Leased Premises as of the date when possession of such condemned portion of the Leased Premises is delivered to the condemning authority. 14.2 In the event of any eminent domain by the City, Tenant, by signing this Sub-Lease is waiving any and all rights of any type, kind or amount for relocation benefits, including but not limited to any such or similar rights prescribed by any state, federal or local law and/or regulation and waiving any and all rights to just compensation under the U.S. and California constitutions. 14.3 At no point during the Term of this Sub-Lease shall Tenant exercise a right of eminent domain over any portion of the TUSD Property or the Leased Premises. 4848-0738-0480.4 2 0 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 15.0 TENANT-LANDLORD RELATIONSHIP. 15.1 This Sub-Lease is not intended and shall not be construed to create the relationship of agent, servant, employee, or representative of the Landlord by Tenant. 15.2 Tenant understands and agrees that all persons furnishing services to Tenant pursuant to this Sub-Lease are, for purposes of workers compensation and liability, solely employees of Tenant and not of Landlord. 15.3 Tenant shall bear the sole responsibility and liability for furnishing workers compensation benefits to any person for injuries ftom or connected with services performed on behalf of Tenant pursuant to this Sub-Lease. 15.4 Tenant understands and specifically agrees to inform its employees that Tenant is not an agent, servant, employee or representative of Landlord. 16.0 INDEMNITY. 16.1 Tenant shall defend, with counsel acceptable to Landlord, indemnify, protect, and hold harmless Landlord and the Government and their respective appointed officials, agents, attorneys, affiliates, employees, contractors, representatives, successors and assigns (the "Landlord Indemnified Parties") from, and shall pay all costs, expenses and reasonable attorney's fees for all trial and appellate levels and post judgment proceedings in connection with, any and all claims and demands, actions, proceedings, losses, liens, costs and judgments of any kind and nature whatsoever, including expenses incurred in defending against legal actions, for death or injury to persons or damage to property and for civil fines and penalties arising or growing out of, or in any manner predicated upon the occupation or use of the Leased Premises by Tenant, its employees, agents, servants, guests, invitees, contractors, or sublessees ,including the following: 16.1.1 Any dangerous, hazardous, unsafe or defective condition, in or on the Leased Premises, of any nature whatsoever, which may exist by reason of any act, omission, neglect, or any use or occupation of the Leased Premises by Tenant, its officers, agents, employees, sublessees, licensees or invitees from commencement of the term of the Sub-Lease; 16.1.2 Any operation conducted upon or any use or occupation of the Leased Premises by Tenant, its officers, agents, employees, sublessees, licensees or invitees under or pursuant to the provisions of this Sub-Lease or otherwise; 16.1.3 Any act, omission, or negligence of Tenant its officers, agents, employees; 16.1.4 Any plans or design for Improvements prepared by or on behalf of the Tenant, including any errors or omissions with respect to such plans and designs; 4848-0738-0480.4 2 1 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 16.1.5 The loss of, or damage to any property of Tenant by theft or otherwise; 16.1.6 Any loss or damage to Landlord Indemnified Parties resulting from any (i) inaccuracy in or breach of any representation or warranty of the Tenant, or (ii) any breach or default by Tenant, under this Sub-Lease. 16.1.7 Any failure of Tenant, its officers, agents, employees or sublessees to comply with the terms or conditions of this Sub-Lease, the LIFOC, or any applicable federal, state, regional or municipal law, ordinance, rule or regulation related to the use or occupancy of the Leased Premises. 16.1.8 Any development or construction of any Horizontal Improvements or Vertical Improvements as defined in the TUSD Conveyance Agreement, whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Sub-Lease Premises, or any portion of any of the foregoing, any person furnishing the same or otherwise. 16.1.9 The failure of the Tenant and/or Tenant's officers, directors, employee, agents, representatives, consultants and or contractors (at every tier) to comply in construction of Improvements with the prevailing wage requirements imposed by State Law and/or Davis-Bacon Act requirements imposed by Federal law. 16.2 Landlord will notify the Tenant within 30 days of receiving notice of any claim filed against it that is covered by this indemnity. 16.3 Tenant also agrees to indemnify the Government and Landlord and pay for all damages or loss suffered by Landlord or Government including, but not limited to, economic loss, damage or loss of Government or Landlord's property and injury to Government or Landlord's employees arising out of the conditions, operations, uses, occupations, acts, omissions or negligence referred to in Section 16.1. 16.4 Waiver. Landlord shall not be liable to Tenant and Tenant hereby waives all claims against Landlord, its agents and employees, for any injury or damage to any person or property occurring or incurred in connection with or in any way relating to the Leased Premises from any cause. Without limiting the foregoing, Neither Landlord nor its agents or employees, shall be liable for and there shall be no abatement of Rent for (i) any damage to Tenant's property stored with or entrusted to agents of Landlord, (ii) loss of or damage to any property by theft or any other wrongful or illegal act, or (iii) any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Leased Premises or from the pipes, appliances, appurtenances or plumbing works therein or from the roof, street or subsurface or from any other place or resulting from dampness 4848-0738-0480.4 22 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 or any other cause whatsoever or from the acts or omissions of other tenants, occupants or other 2 visitors to the Leased Premises or to other portions of the former MCAS Tustin or from any 3 other cause whatsoever, (iv) any diminution or shutting off of light, air or view by any structure 4 which may be erected on lands adjacent to the Leased Premises, or (v) any latent or other defect 5 in the Leased Premises or other portions of the former MCAS Tustin. Tenant agrees that in no 6 case shall Landlord ever be responsible or liable on any theory for any injury to Tenant's 7 business, loss of profits, loss of income or any other form of consequential damage. Tenant shall 8 immediately notify Landlord in the event of (a) the occurrence of a fire or accident on the Leased 9 Premises, or (b) the discovery of any defect thereon or in the fixtures or equipment thereof. 10 11 Nothing in this Section 16 is intended as a waiver of Tenant's indemnity and contribution 12 rights under federal law and the responsibility of Government to indemnify and hold harmless 13 the Landlord and any Tenant from toxic torts and other environmental claims in accordance with 14 public law 102-484, the National Defense Authorization Act for Fiscal Year 1993, Section 330, 15 as amended. 16 17 16.5 Environmental Indemnity. As a material part of the consideration for this 18 Sub-Lease, and effective as to the entirety of the Leased Premises, upon the Tenant's entry onto 19 the Leased Premises or any portion thereof, the Tenant hereby agrees that Tenant shall, to the 20 maximum extent permitted by law, indemnify, protect, defend and hold harmless the 21 Indemnified Parties from and against any and all Claims resulting or arising from or in any way 22 connected with the existence, Release, threatened Release, presence, storage, treatment, 23 transportation and/or disposal of any Hazardous Materials at any time on, in, under, from, about 24 or adjacent to any portion or portions of said lands, or any improvements thereon, regardless 25 whether any such condition is known or unknown now or upon acquisition and regardless 26 whether any such condition pre-exists acquisition or is subsequently caused, created or 27 occurring, which Release, threatened release, presence, storage, treatment, transportation and/or 28 disposal was caused or exacerbated by the Tenant. As a material part of the consideration for 29 this Sub-Lease, and effective as to each of the Leased Premises, or any portion of any of the 30 foregoing, upon the Tenant's acquisition of fee and/or leasehold interest to all or any portion 31 thereof, the Tenant, hereby agrees that the Tenant shall, to the maximum extent permitted by 32 law, indemnify, protect, defend, and hold harmless the Indemnified Parties from and against any 33 and all Claims resulting or arising from or in any way connected with the existence, Release, 34 threatened Release, presence, storage, treatment, transportation and/or disposal of any Hazardous 35 Materials at any time on, in, under, from, about or adjacent to any portion or portions of said 36 lands, regardless whether any such condition is known or unknown now or upon acquisition and 37 regardless whether any such condition pre-exists acquisition or is subsequently caused, created 38 or occurring. The environmental indemnity shall be binding upon the Tenant. 39 17.0 TENANT'S LIABILITY EXTENDS TO ITS CONTRACTORS AND 40 SUBLESSEES. The Tenant's liability shall extend to the performance of work or the use of 41 Leased Premises by any contractor, assignee, or sublessee of the Tenant under this Sub-Lease. 42 43 18.0 INSURANCE. 4848-0738-0480.4 23 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 18.1 On or before the Sub-Lease Commencement Date, Tenant shall provide and maintain at its own expense during the term of this Sub-Lease the following insurance covering its operations under this Sub-Lease. Such insurance shall be provided with insurers licensed to do business in the State of California, with a rating of at least A-VII or better (if a California admitted carrier) or A-x (if offered by a surplus line carrier that is non-admitted), according to the latest Best's Key Rating Guide, except that the City will accept workers' compensation insurance rated B-VIII or better of from the State Compensation Fund. Subject to the prior approval of the City Attorney and City Risk Manager, such insurance maybe provided by an umbrella or excess liability insurance policy otherwise meeting the requirements of this Section 18. Evidence of such insurance shall be delivered to Landlord on or before the date that Tenant occupies the Premises, and shall be provided on an Accord form specifically identifying this Sub-Lease and shall contain required endorsements signed by the underwriter's authorized representative. Written signed endorsements shall require that (a) Landlord is to be given at least thirty (30) days advance written notice, of any material modification in or termination of insurance unless otherwise approved in writing by the City Attorney or City Risk Manager, (b) such insurance shall be primary to and not contributing with any other insurance maintained by Landlord, (c) shall name the Landlord, and the Government, and their respective officers and employees as additional insureds, and (d) provide that all losses shall be payable notwithstanding any act or failure to act or negligence of Landlord or Government, or any other person. All insurance shall be maintained on an occurrence basis. 18.1.1 Comprehensive General Liability Insurance. Comprehensive general liability and property damage insurance covering the Leased Premises, contractual, broad form property damage, and bodily injury or death, with a combined single limit of not less than $1,000,000 per occurrence with respect to personal injury or death, and $ 1;000,000 per occurrence with respect to property damage. 18.1.2 Workers Compensation Insurance. Workers compensation insurance in an amount and form meeting all applicable requirements of the California Labor Code, covering all persons providing services by or on behalf of Tenant and all risks to such persons. 18.2 Deductibles. All insurance limits identified in this Section 18 shall be without deduction, provided that the United States Government and Landlord may permit a deductible amount in those costs where, in its judgment, such a deduction is justified. 18.3 Other Insurance Provisions. 18.3.1 The general liability policy is to contain, or be endorsed to contain, the following provisions: 4848-0738-0480.4 24 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 (a) The Landlord and the Government and their respective officers, officials, employees and contractors are to be covered as insureds as respects: liability arising out of use of the Leased Premises. The coverage shall contain no special limitations on the scope of protection afforded to the Landlord, its officers, officials, employees or contractors or to the Government. (b) The Tenant's insurance coverage shall be primary insurance as respects the Government and the Landlord, and their respective officers, officials, employees and contractors. Any insurance or self-insurance maintained by the Landlord or the Government shall be excess of the Tenant's insurance and shall not contribute with it. (c) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Landlord, its officers, officials, employees or volunteers. (d) Coverage shall state that the Tenant's insurance shall apply separately to each additional insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (e) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Landlord and the Government. 18.3.2 The workers' compensation and all liability policies are to contain, or be endorsed to contain, the following provisions: (a) "The insurer waives any right of subrogation against the Landlord and the Government which may arise by reason of any payments made under a policy." (b) Coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the Landlord and the Government. 18.4 Subcontractors. Tenant shall include all of its subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 18.5 Failure by Tenant to procure or maintain required insurance shall constitute an Event of Default, upon which Landlord may immediately terminate this Sub-Lease. Tenant's operations shall be subject to suspension by Landlord during any period Tenant fails to maintain required insurance in full force and effect. 4848-0738-0480.4 25 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 18.6 Verification of Coverage. In addition to completing City's form, Tenant shall furnish the Landlord with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the Landlord before occupancy commences. 18.7 Damage and Destruction. In the event of damage or loss to the Buildings or improvements situated on the Leased Premises, the following shall apply: 18.7.1 Tenant shall take all appropriate steps to erect necessary structures to preclude unauthorized access to the Leased Premises and otherwise mitigate hazardous and unsafe conditions within the Leased Premises caused by the damage and destruction. 18.7.2 In the event that damage and destruction to the Leased Premises is the result of an event for which insurance coverage is not required hereunder or is in excess of the amount required, Tenant shall have the option to repair the Leased Premises, or if such damage and destruction render the Leased Premises unusable for their intended purposes, to terminate this Sub-Lease in accordance with applicable provisions herein by written notice to the Landlord. In the event Tenant elects to terminate this Sub-Lease under this Section, Tenant shall be responsible for compliance with Section 18.7.1 above and for removing its property from the Leased Premises including all hazardous materials it brought to the Leased Premises, and for reporting, containing, removing and cleaning up any land, air and water pollution resulting from the damage and destruction which is attributable to Tenant's use of the Leased Premises. Such responsibilities will be carried out by Tenant in a timely manner in compliance with Section 23 and other applicable provisions of this Sub-Lease with due consideration for human health and safety and the protection of the environment. 19.0 DEFAULT. It shall constitute an event of default ("Event of Default") under this Sub-Lease if: 19.1 Tenant fails to pay in full when due all Additional Rent including Cost Reimbursements and such failure continues for a period of five (5) days after written notice to Tenant from Landlord. 19.2 Tenant fails to perform or observe any term obligation, covenant, or agreement hereunder within ten (10) days after written notice of any such failure has been given by or on behalf of Landlord, or, if more than ten (10) days is required to cure such failure, if Tenant fails to commence such cure as promptly as practical and thereafter diligently to pursue such cure and thereafter complete such cure within thirty (30) days after such notice; or 19.3 Tenant assigns or sublets, or purports to assign or sublet the Leased Premises or any part thereof other than in the manner and upon the conditions set forth herein; or 4848-0738-0480.4 2 6 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 19.4 Tenant liquidates its business, becomes insolvent (Tenant shall be deemed insolvent if it has ceased to pay its debts in the ordinary course of business or cannot pay its debts as they become due, whether it has committed an act of bankruptcy or not, and whether insolvent, within the meaning of federal bankruptcy law or not), makes an assignment for the benefit of creditors, files or has filed against it a petition of bankruptcy bill in equity or other proceedings for the appointment of a receiver or other custodian for its property, or if proceedings for reorganization or composition with creditors under any law are instituted by or against Tenant or if any levy or sale or execution of any kind is made upon or of any property of Tenant in the Leased Premises; or 19.5 The determination by Landlord, the State Fair Employment and Housing Commission, the Federal Equal Employment Opportunity Commission or other state or federal civil rights agency, of discrimination having been committed by Tenant in violation of state and/or federal laws in connection with this Sub-Lease. 19.6 Tenant abandons or vacates the Leased Premises or Tenant removes or attempts to remove or manifests an intention to remove Tenant's goods or property from or out of the Leased Premises otherwise than in the ordinary and usual course of business; or 19.7 Tenant fails to vacate the Leased Premises on the expiration date unless this Sub-Lease is otherwise renewed or extended. 20.0 LANDLORD'S REMEDIES. 20.1 If an Event of Default hereunder shall have occurred which has not been cured pursuant to Section 19.2, or any other Event of Default described in Sections 19, Landlord may, at its option, exercise any one or more of the following remedies: 20.1.1 Termination of Sub-Lease. Landlord may terminate this Sub- Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of Cost Reimbursements due or other performance of the terms and conditions hereof. Upon such termination, Tenant shall immediately surrender possession of the Leased Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the aggregate cost of all Rent, which is due and owing for the entire term of the Sub- Lease to Landlord but unpaid or unperformed by Tenant. 20.1.2 Relettin~. With or without terminating this Sub-Lease, as Landlord may elect, Landlord may re-enter and repossess the Leased Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the Term; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for the cost of (i) Rent, ,and other sums which would be payable under this Sub-Lease by Tenant in the absence of such expiration, 4848-0738-0480.4 2 7 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the 2 account of Tenant after deducting from such proceeds all of Landlord's expenses, reasonable 3 attorneys' fees and expenses, employees' expenses, alteration costs, expenses of preparation for 4 such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant's breach 5 of this Sub-Lease. If the Leased Premises are, at the time of default, sublet or leased by Tenant 6 to others, Landlord may, as Tenant's agent, collect Rents due from any Tenant or other Tenant 7 and apply such Rent to the Rent and other amounts due hereunder without in any way affecting 8 Tenant's obligation to Landlord hereunder. Such agency, being given for security, is hereby 9 declared to be irrevocable. 10 11 20.1.3 Acceleration of Rent. Landlord may declare the cost of Base Rent 12 and all Additional Rent including Cost Reimbursements (the amount of Cost Reimbursements to 13 be based on historical amounts and Landlord's estimates for future amounts) for the entire 14 balance of the then current term immediately due and payable, together with all other charges, 15 payments, costs, and expenses payable by Tenant as though such amounts were payable in 16 advance on the date the Event of Default occurred. 17 18 20.1.4 Rent Minus Fair Market Value. Landlord may declare 19 immediately due and payable from Tenant, in addition to any damages or other amounts 20 becoming due from Tenant under any other provision of this Sub-Lease, an amount equaling the 21 difference between the Rent reserved in this Sub-Lease from the date of the default to the 22 expiration date and the then fair market value of the Leased Premises for the same period. 23 24 20.1.5 Removal of Contents by Landlord. With respect to any portion of 25 the Leased Premises which is vacant or which is physically unoccupied by Tenant, Landlord may 26 remove all persons and property therefrom, and store such property in a public warehouse or 27 elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal 28 process (all of which Tenant expressly waives) and without being deemed guilty of trespass or 29 becoming liable for any loss or damage which maybe occasioned thereby. Landlord shall have a 30 lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant's property, 31 which lien is to be in addition to Landlord's lien now or hereafter provided bylaw. 32 33 20.1.6 Right of Distress and Lien. In addition to all other rights and 34 remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted 35 by law, have a right of distress for Rent and lien on all of Tenant's fixtures, merchandise and 36 equipment in the Leased Premises, as security for Rent and all other charges payable hereunder. 37 38 20.2 Proceedings. Tenant hereby releases Landlord and any and all attorneys 39 who may appear for Landlord from all errors in said proceedings and all liability thereof. 40 41 20.3 Survival of Tenant's Obli ations. No expiration or termination of this 42 Sub-Lease (except as expressly provided herein) and no repossession of the Leased Premises or 43 any part thereof shall relieve Tenant of its liabilities and obligations hereunder, all of which shall 4848-0738-0480.4 28 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 survive such expiration, termination or repossession, and Landlord may, at its option, sue for and collect all Rent and other charges due hereunder at any time as when such charges accrue. 20.4 Not Exclusive Right. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity or by statute. 20.5 Expenses. In the event that Landlord commences suit for the repossession of the Leased Premises, for the recovery of Rent or any other amount due under the provisions of this Sub-Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys' fees. 21.0 TERMINATION. 21.1 Termination by Government of the LIFOC for Breach. The Government has the right to terminate the LIFOC on account of a breach by Landlord, the Lessee thereof, of any of the terms and conditions of the LIFOC. In the event of a breach involving the performance of any obligation under the LIFOC, the LIFOC provides that Landlord, as the Lessee thereunder, shall be afforded sixty (60) working days from the receipt of the Government's notice of intent to terminate, unless Government determines that a shorter period is required, to commence action to complete the performance of the obligation or otherwise cure the subject breach and avoid termination of the LIFOC, which action to cure is to be completed within a reasonable period of time. Landlord agrees to immediately, and in any event within 24 hours after Landlord's receipt, except when it arrives on a weekend or holiday (in which event it shall be delivered by the next business day) provide a copy of any such notice to Tenant. In the event that any such notice is delivered to Landlord as the Lessee under the LIFOC, for any such breach occasioned or caused by the action, negligence or inaction of Tenant, or any party acting on behalf of or through Tenant, for an obligation, covenant or undertaking of Tenant under this Sub-Lease, then Tenant shall either commence action to complete the performance of the obligation or otherwise cure the subject breach and avoid termination of this Sub-Lease and the LIFOC, which action to cure is to be completed within a reasonable period of time, or immediately advise the Landlord of Tenant's intended course of action to cure the breach if it cannot be reasonably cured within the ten working day period specified and the estimated date as to when said action will be completed. Tenant shall either cure such breach within thirty (30) working days from the date of receipt by Landlord of the Government's notice of intent to terminate, or Tenant shall provide its plan and program in writing as to its proposed action to complete the performance of the obligation and shall commence such cure of the breach as soon as reasonable and possible under the circumstances and complete such action to cure within a reasonable period of time in light of the nature of the breach and any circumstances beyond Tenant's reasonable control. If Tenant should fail to cure within the grace periods provided above, and the Government does not terminate the Sub-Lease under the provisions of the LIFOC, 4848-0738-0480.4 29 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 then Landlord shall have the option to terminate this Sub-Lease, without the necessity of providing further notice or rights of cure to Tenant. 21.2 In the event that the Government shall elect to terminate the LIFOC on account of the breach by the Tenant of any of the terms and conditions hereof or of the LIFOC to be performed by Tenant, the Tenant shall indemnify Landlord against any claims the Government may have against Landlord for any of the following under the LIFOC: the Leased Premises. 21.2.1 The costs incurred by the Government in resuming possession of 21.2.2 The costs incurred in Governments performance of any of Tenant's obligations under this Sub-Lease. 21.2.3 An amount equal to the aggregate of any obligations, and charges assumed hereunder pursuant to Section 3 and not therefore paid or satisfied, which amounts shall be due and payable at the time when such obligations, and charges would have accrued or become due and payable under this Sub-Lease. 21.3 Termination by Government for Other Than Breach. In addition to the right to terminate the LIFOC for breach, the Government is entitled to terminate the LIFOC in the event of a National Emergency as declared by the President or the Congress of the United States and the Government makes a reasonable determination that such National Emergency requires the use by the United States of America of the Leased Premises, or such National Emergency otherwise necessitates the use of MCAS Tustin and such use will materially interfere with the Lessee's use under the LIFOC or any Tenant's use of the Leased Premises. In the event of a termination for a national emergency, the Landlord as Lessee under the LIFOC, is to be provided with no less than 30 days written notice of such termination and shall immediately provide Tenant with a copy of any notification it receives from the Government relative to such termination. The Landlord shall meet and confer with the Tenant and the government to determine what is a reasonable time for the Tenant to vacate the Leased Premises, considering the factors of the nature of the exiting uses of the Tenant, the consequences which would be affected if such termination is required and the losses and penalties which would be engendered if such termination is required. Landlord shall provide Tenant with as long and reasonable time as is under the facts and circumstances acceptable to the Government relative to such termination. In the event of such termination, Tenant and Landlord as Lessee under the LIFOC shall have only such remedies as are otherwise available under the law with respect to compensation from the Government for such termination. Tenant shall not seek and shall not have any claim against Landlord for any such termination by the Government, except to the extent that Landlord obtains recovery therefor from the Government on behalf of Tenant. 21.4 Termination by Tenant termination by Tenant. 4848-0738-0480.4 30 The following provisions shall apply to a MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 21.4.1 Tenant may terminate this Sub-Lease if the Tenant is required by 3 Government or Landlord to vacate all or a substantial portion of Leased Premises for a period in 4 excess of 5 calendar days if due to entry by Government for the purpose of corrective or 5 remedial action and such activity substantially interferes with Tenant's use of the Leased 6 Premises for a period of more than five (5) consecutive calendar days. 7 8 21.4.2 Damage and Destruction. The Tenant shall have the right to 9 terminate this Sub-Lease upon 30 days written notice to the Landlord in the event of damage to 10 or destruction of all of the improvements on the Leased Premises or such a substantial portion 11 thereof as to render the Leased Premises incapable of use for the purpose for which it is leased 12 hereunder and provided that the Government has not authorized or directed the repair, rebuilding 13 or replacement or the cost of the repair, rebuilding, or replacement of the Building is in excess of 14 the amounts of insurance carried therefor by the Tenant and such damage or destruction was not 15 occasioned by the willful misconduct or gross negligence of the Tenant or any of its officers, 16 agents, servants, employees, subtenants, licensees, or invitees; or the damage or destruction was 17 not occasioned by any failure or refusal on the part of the Tenant to fully perform its obligations 18 under this Sub-Lease. 19 20 21.4.3 Tenant may terminate this Sub-Lease in the event of breach by 21 Landlord of any of the terms and conditions hereof upon thirty (30) calendar days written notice 22 to Landlord. In the event of a breach involving the performance of any obligation, Landlord, 23 shall be afforded sixty (60) calendar days from the receipt of Tenant's notice of intent to 24 terminate to complete performance of the obligation or otherwise cure the subject breach and 25 avoid termination of this Sub-Lease. 26 27 21.5 Termination for Lack of Utility Service. Tenant may terminate this Sub- 28 Lease upon 60 days notice if domestic water, waste water, electrical or gas service is not 29 available from a public or private source. 30 31 21.6 Termination by Landlord. Landlord may, at its sole discretion, terminate 32 this Sub-Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by 33 payment of Cost Reimbursements due or other performance of the terms and conditions hereof, 34 upon any exercise by Landlord of its Power of Termination and the right to the return of the 35 TUSD Property to the City, pursuant to Section 16.3 of the TUSD Conveyance Agreement and 36 the provisions of any quitclaim claim deed conveying portions of the TUSD Property from the 37 Landlord to Tenant. Upon such termination, Tenant shall immediately surrender possession of 38 the Leased Premises to Landlord, and Landlord shall immediately become entitled to receive 39 from Tenant an amount equal to the aggregate cost of all Rent, which is due and owing for the 40 entire term of the Sub-Lease to Landlord but unpaid or unperformed by Tenant. 41 42 22.0 VACATION OF LEASED PREMISES. In the event environmental 43 contamination is discovered on the Leased Premises which creates, in the Government's 4848-0738-0480.4 3 1 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 determination, an imminent and substantial endangerment to human health or the environment, then notwithstanding any other termination rights and procedures contained in this Sub-Lease, the Government may require the Landlord to require that Tenant vacate the Leased Premises for such period of time, and to such extent, as the Government determines in good faith is necessary to abate the danger. The Government shall use its best efforts to minimize disruption of the Tenant's operations. The Government will also use its best efforts to provide temporary accommodations for use by Tenant during the period of such vacation action. Neither the Government nor Landlord shall be liable for the exercise of authority, which is in conformity with this subsection, but the Government nevertheless shall not be relieved of any liability it may have under the Federal Tort Claims Act, the comprehensive Environmental Response, Compensation and Liability Act, and other statutory and common law, if it would be liable in its role as the generator or disposer of the environmental contamination, or as the present, or former, owner or operator of the Leased Premises. 23.0 ENVIRONMENTAL PROVISIONS. 23.1 Definitions. "Hazardous Materials" shall mean any material, substance or waste that is or has the characteristic of being hazardous, toxic, ignitable, reactive, flammable, explosive, radioactive or corrosive, including, without limitation, petroleum, solvents, lead, acids, pesticides, paints, printing ink, PCBs, asbestos, materials commonly known to cause cancer or reproductive problems and those materials, substances and/or wastes, including wastes which are or later become regulated by any local governmental authority, in the State of California or the United States Government, including, but not limited to, substances defined as "hazardous substances," "hazardous materials," "toxic substances" or "hazardous wastes" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801, et seq.; the Resource Conservation and Recovery Act; all environmental laws of the State of California, and any other environmental •law, regulation or ordinance now existing or hereinafter enacted. "Hazardous Materials Laws" shall mean all present and future federal, state and local laws, ordinances and regulations, prudent industry practices, requirements of governmental entities (including without limitation the U.S. Navy) and manufacturer's instructions relating to industrial hygiene, environmental protection or the use, analysis, generation, manufacture, storage, presence, disposal or transportation of any Hazardous Materials, including without limitation the laws, regulations and ordinances referred to in the preceding sentence. 23.2 Use of Premises by Tenant. Tenant hereby agrees that Tenant and Tenant's officers, employees, representatives, agents, contractors, subcontractors, successors, assigns, subtenants, concessionaires, invitees and any other occupants of the Leased Premises (for purposes of this Section 23, referred to collectively herein as "Tenant Representatives") shall not cause or permit any Hazardous Materials to be used, generated, manufactured, refined, produced, processed, stored or disposed of, on, under or about the Leased Premises or MCAS Tustin or transport to or from the Leased Premises or MCAS Tustin without the express prior written consent of Landlord, which consent may be limited in scope and predicated on strict 4848-0738-0480.4 32 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 compliance by Tenant of all applicable Hazardous Materials Laws and such other reasonable 2 rules, regulations and safeguards as may be required by Landlord (or any insurance carrier, 3 environmental consultant or lender of Landlord, or environmental consultant retained by any 4 lender of Landlord) in connection with using, generating, manufacturing, refining, producing, 5 processing, storing or disposing of Hazardous Materials on, under or about the Leased Premises 6 or MCAS Tustin. In connection therewith, Landlord shall at its own expense procure, maintain 7 in effect and comply with all conditions of any and all permits, licenses and other governmental 8 and regulatory approvals required for the storage or use by Tenant or any of Tenant's 9 Representatives of Hazardous Materials on the Leased Premises or MCAS Tustin, including 10 without limitation, discharge of (appropriately treated) materials or wastes into or through any 11 sanitary sewer serving the Leased Premises or MCAS Tustin. 12 13 23.3 Remediation. If at any time during the Term, any contamination of the 14 Leased Premises by Hazardous Materials shall occur where such contamination is caused by the 15 act or omission of Tenant or Tenant's Representatives ("Tenant's Contamination"), then Tenant, 16 at Tenant's sole cost and expense, shall promptly and diligently remove such Hazardous 17 Materials from the Leased Premises or the groundwater underlying the Leased Premises to the 18 extent required to comply with applicable Hazardous Materials Laws. Tenant shall not take any 19 required remedial action in response to any Tenant's Contamination in or about the Leased 20 Premises or enter into any settlement agreement, consent, decree or other compromise in respect 21 to any claims relating to any Tenant's Contamination without first obtaining the prior written 22 consent of Landlord, which may be subject to conditions imposed by Landlord as determined in 23 Landlord's sole discretion. Landlord and Tenant shall jointly prepare a remediation plan in 24 compliance with all Hazardous Materials Laws and the provisions of this Sub-Lease. In addition 25 to all other rights and remedies of the Landlord hereunder, if Tenant does not promptly and 26 diligently take all steps to prepare and obtain all necessary approvals of a remediation plan for 27 any Tenant's Contamination, and thereafter commence the required remediation of any 28 Hazardous Materials released or discharged in connection with Tenant's Contamination within 29 thirty (30) days after all necessary approvals and consents have been obtained and thereafter 30 continue to prosecute such remediation to completion in accordance with the approved 31 remediation plan, then Landlord, at its sole discretion, shall have the right, but not the obligation, 32 to cause such remediation to be accomplished, and Tenant shall reimburse Landlord within 33 fifteen (15) business days of Landlord's demand for reimbursement of all amounts reasonably 34 paid by Landlord (together with interest on such amounts at the highest lawful rate until paid), 35 when such demand is accompanied by proof of payment by Landlord of the amounts demanded. 36 Tenant shall promptly deliver to Landlord, copies of hazardous waste manifests reflecting the 37 legal and proper disposal of all Hazardous Materials removed from the Leased Premises as part 38 of Tenant's remediation of any Tenant's Contamination. 39 40 23.4 The parties recognize that no adequate remedy at law may exist for 41 Tenant's breach of Section 23. Accordingly, Landlord may obtain specific performance of any 42 provision of Section 23. 43 4848-0738-0480.4 33 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 23.5 Hazardous Materials Handling Plan. Prior to execution of this Sub-Lease, Tenant shall complete, execute, and deliver to Landlord an Environmental Questionnaire Disclosure Statement ("Environmental Questionnaire"), in the form of Exhibit "C" attached hereto. To the extent Tenant intends to store, use, treat or dispose of hazardous materials on the Leased Premises, Tenant shall prepare and submit together with the Envirorunental Questionnaire, a Hazardous Materials Handling Plan ("Hazardous Materials Handling Plan"). For a period of fifteen (15) days following Landlord's receipt of the Environmental Questionnaire, and Hazardous Materials Handling Plan, if applicable, Landlord and, to the extent required by paragraph 4.4 or 10 U.S.C. § 2692, the Government shall have the right to approve or disapprove such documents. .The failure of Landlord or the Government to approve such documents shall be deemed Landlord's disapproval thereof. Landlord and Government's approval of the Environmental Questionnaire and the Hazardous Materials Handling Plan shall constitute approval for Tenant's use of the hazardous materials set forth therein in compliance with Hazardous Materials Laws and the Hazardous Materials Handling Plan. Following approval of the Hazardous Materials Handling Plan, Tenant shall comply therewith throughout the Term. To the extent Tenant is permitted to utilize Hazardous Materials upon the Leased Premises, such use shall be limited to the items set forth in the Environmental Questionnaire, shall comply with Hazardous Materials Laws and the Hazardous Materials Handling Plan and Tenant shall promptly provide Landlord with complete and legible copies of all the following environmental items relating thereto: reports filed pursuant to any self-reporting requirements; permit applications, permits, monitoring reports, workplace exposure and community exposure warnings or notices and all other reports, disclosures, plans or documents relating to water discharges, air pollution, waste generation or disposal, and underground storage tanks for hazardous materials; orders, reports, notices, listings and correspondence of or concerning the release, investigation of, compliance, cleanup, remedial and corrective actions, and abatement of hazardous materials; and all complaints, pleadings and other legal documents filed by or against Tenant related to Tenant's use, handling, storage or disposal of hazardous materials. If, in conjunction with Tenant's permitted use of the Leased Premises, Tenant desires to commence the use, treatment, storage or disposal of previously undisclosed hazardous materials, prior to such usage thereof, Tenant shall notify Landlord thereof, by written summary detailing the scope of such proposed usage and updating the Hazardous Materials Handling Plan to the extent required by such proposed usage. For a period of fifteen (15) days following Landlord's receipt of such notice, Landlord and, to the extent required by paragraph 4.4 or 10 U.S.C. § 2692, the Government shall have the right to approve or disapprove of such documents. The failure of Landlord or the Government to approve of such documents within such time period shall be deemed Landlord's disapproval thereof. 23.6 Tenant acknowledges and understands that Leased Premises and adjacent property may have been used in the past for industrial purposes and that hazardous substances may have been released on and beneath said property. In addition to the provisions set forth in this Section 23, environmental protection provisions for the use of and activities on the Leased Premises are set forth in the LIFOC attached hereto at Exhibit "B." Tenant agrees to abide by all such provisions as well as other provisions necessary to protect human health and the 4848-0738-0480.4 34 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 environment and prevent interference with the remedial activities on Leased Premises and adjacent property, and to comply with all obligations of Landlord set forth in such provisions. 23.7 Tenant shall be responsible for and shall defend, with counsel acceptable to Landlord, indemnify and hold Landlord harmless of, from, and against any and all claims, damages, costs, expenses, losses, liabilities, fines or penalties, of any kind, caused by, relating to or arising from Tenant's, or Tenant Representatives', breach of the provisions of this Section 23 or the environmental protection provisions contained in the LIFOC. The liability and indemnity in this subparagraph shall survive the expiration or earlier termination of this Sub-Lease. 24.0 COMPLIANCE WITH ADA. Tenant represents, warrants and covenants that: 24.1 Tenant shall conduct its business in accordance with the requirements of the Americans with Disabilities Act of 1990 (the "Act") and with all other applicable federal, state and local, statutes, rules, regulations and ordinances relating to handicap accessibility; and 24.2 Provided that Landlord consents to any alterations to be performed by Tenant in or about the Leased Premises under Section 10 (Alterations) of this Sub-Lease, Tenant shall perform any and all such alterations (as that term is defined under the Act) in compliance with the applicable provisions of the Act and with all other such applicable statutes, rules, regulations and ordinances relating to handicapped accessibility. 25.0 LABOR LAWS. follows: 25.1 Equal Opportunity. During the term of this Sub-Lease, Tenant agrees as 25.1.1 Tenant will not discriminate against any employee of Tenant or applicant for employment because of race, color, religion, sex, or national origin. The employees of Tenant shall be treated during employment, without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising, layoff or termination, rate of pay or other forms of compensation, selection for training, including apprenticeship. Tenant agrees to post in conspicuous places, setting forth the provisions of this nondiscrimination clause. 25.1.2 Tenant will, in all solicitations or advertisements for employees placed by or on behalf of Tenant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin. 4848-0738-0480.4 3 5 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 25.1.3 Tenant will send to each labor union or representative of workers 2 with which it has a collective bargaining agreement or other contract or understanding, advising 3 the labor union or worker's representative of Tenant's commitments under this Equal Opportunity 4 Clause and shall post copies of the notice in conspicuous places available to employees and 5 applicants for employment. 6 7 25.1.4 Tenant will comply with all provisions of Executive Order 11246 8 of September 24, 1965, as amended by Executive Order 11375 of October 13, 1967, and of the 9 rules, regulations, and relevant orders of the Secretary of Labor of the United States of America. 10 11 25.1.5 Tenant will furnish all information and reports required by. 12 Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of 13 October 13, 1967, and by the rules, regulations, and orders of the Secretary of Labor or pursuant 14 thereto, and will permit access to its books, records, and accounts by the government and the 15 Secretary of labor for purposes of investigating to ascertain compliance with such rules, 16 regulations, and orders. 17 18 25.1.6 In the event of Tenant's noncompliance with the Equal 19 Opportunity Clause of this Sub-Lease or with any said rules, regulations, or orders, this Sub- 20 Lease maybe canceled, terminated or suspended in whole or in part and Tenant maybe declared 21 ineligible for further Government contracts in accordance with procedures authorized in 22 Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of 23 October 13, 1967, and such other sanctions may be imposed and remedies invoked as provided 24 in Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of 25 October 13, 1967, or by rule, regulation, or order of the Secretary of Labor, or as otherwise 26 provided bylaw. 27 28 25.1.7 Tenant will include the above provisions in every sublease or 29 purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued 30 pursuant to Section 204 of Executive Order 11246 of September 24, 1965, as amended by 31 Executive Order 11375 of October 13, 1967, so that such provisions will be binding upon each 32 sublessee or vendor. Tenant will take such action with respect to any sublessee or purchase order 33 as the Government may direct as a means of enforcing such provisions including sanctions for 34 noncompliance; provided, however, that in the event Tenant becomes involved in, or is 35 threatened with, litigation with the sublessee or vendor as a result of such direction by the 36 Government, Tenant may request the United States to enter into such litigation to protect the 37 interests of the United States. 38 39 25.2 Convict Labor. In connection with the performance of work required by 40 this Sub-Lease, Tenant agrees not to employ any person undergoing a sentence of imprisonment 41 at hard labor unless the utilization of prisoners is in conformity with provisions of Executive 42 Order 11755. 43 4848-0738-0480.4 36 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 25.3 Labor Standards. To the extent applicable to this Sub-Lease and any work 2 performed under this Sub-Lease or on the Leased Premises, Tenant shall comply with all federal 3 labors laws and related regulations including, Fair Labor Standards Act (29 U.S.C. 201-219), 4 Contract Work Hours and Safety Standards Act (40 U.S.C 327-330, Walsh-Healy Public 5 Contracts Act (41 U.S.C. 35-45), Davis-Bacon Act (40 U.S.C. 276a to 276a-7), and, McNamara- 6 O'Hara Service Contract Act (41 U.S.C. 351-358). 7 8 26.0 LIENS. The Tenant shall promptly discharge or cause to be discharged any valid 9 lien, stop notice, right in rem, claim, or demand of any kind on the Leased Premises, except one 10 in favor of the Government, or the Landlord, which at any time may arise or exist with respect to 11 the Leased Premises or materials or equipment furnished therefor, or any part thereof, and if the 12 same shall not be promptly discharged by the Tenant, or should the Tenant be declared bankrupt 13 or make an assignment on behalf of creditors, or should the leasehold estate be taken by 14 execution, the Landlord reserves the right to take immediate possession without any liability to 15 the Tenant or any subtenant thereof. If the Tenant breaches the foregoing, Tenant and any 16 subtenant thereof shall be responsible for any costs incurred by the Government in securing clear 17 title to its property. 18 19 27.0 SUBORDINATION OF LEASE. This Sub-Lease is subject and subordinate to 20 any mortgages which may now or hereafter be placed upon the Leased Premises and to all 21 renewals, modifications, consolidations, replacements and extensions thereof, provided that the 22 holder(s) of such mortgage(s) shall agree in writing not to disturb the possession of the Leased 23 Premises by Tenant or the rights of Tenant under this Sub-Lease so long as Tenant is not in 24 material default (subject to applicable notice and cure rights in favor of Tenant as contained in 25 this Sub-Lease) in the performance of its obligations thereunder and, in the event of foreclosure, 26 Tenant agrees to look solely to the mortgagee's interest in the Leased Premises for the payment 27 and discharge of any obligations imposed upon the mortgagee or Landlord under this Sub-Lease. 28 This clause shall be self-operative, and no further instrument or subordination shall be necessary 29 unless requested by a mortgagee or the insuring title company, in which event Tenant shall sign, 30 within five (5) business days after requested, such instruments and/or documents as the 31 mortgagee and/or insuring title company reasonably request be signed ("SNDA"). In the event 32 Tenant fails to execute a SNDA or an estoppel certificate as provided herein, Tenant hereby 33 constitutes and appoints Landlord as its attorney-in-fact, with full power of substitution, to sign, 34 execute, certify, acknowledge, deliver or record, where required or appropriate, in the name, 35 place and stead of Tenant, all such SNDAs and estoppel certificates for and on behalf of Tenant 36 as maybe required. 37 38 28.0 ESTOPPEL CERTIFICATE. 39 40 28.1 Tenant and Landlord shall, at any time and from time to time, upon not 41 less than ten (10) days' prior request by the other party, execute, acknowledge and deliver to the 42 other party, or to such other persons who may be designated in such request, a statement in 43 writing certifying that this Sub-Lease is unmodified and in full force and effect (or if there have 4848-0738-0480.4 3 7 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 been modifications, that the same is in full force and effect as modified and stating the modifications) and, if so, the dates to which the rent and any other charges have been paid in advance, and such other items requested by the other Party, including without limitation, the lease commencement date and expiration date, rent amounts, and that no offsets or counterclaims are present. 28.2 In addition to Article 28.1, Landlord's estoppel certificate will state whether (i) to the Landlord's knowledge Tenant or the Leased Premises is in violation of the provisions of this Sub-Lease, specifically including, but not limited to Section 4.1 and Section 10, and if the Landlord believes Tenant or the Leased Premises is in violation of any part of this Sub-Lease, describing such violation with reasonable detail, and (ii) in the Landlord's belief a particular existing or proposed use or transaction described by Tenant in reasonable detail in its request for such estoppel certificate will violate Section 4.1 or Section 10 of this Sub-Lease (and, if the Landlord believes such proposed use or transaction will constitute such a violation, then describing the reason(s) for the Landlord's belief with reasonable detail). 28.3 It is intended that any statement or estoppel certificate delivered pursuant to this Article 28 may be relied upon by any prospective purchaser or encumbrancer (including assignee) of the Leased Premises. 29.0 LIMITATION ON LIABILITY. In consideration of the benefits accruing hereunder, Tenant and all successors and assigns covenant and agree that, in the event of any actual or alleged failure, breach or default hereunder by Landlord: (1) Tenant's sole and exclusive recourse shall be against Landlord's interest in the Leased Premises and Tenant shall not have any right to satisfy any judgment which it may have against Landlord from any other assets of Landlord; (2) no member, partner, stockholder, director, officer, employee, beneficiary or trustee (collectively, "Partner") of Landlord shall be sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction over Landlord); (3) no service of process shall be made against any Partner of Landlord (except as may be necessary to secure jurisdiction over Landlord); (4) no Partner of Landlord shall be required to answer or otherwise plead to any service of process; (5) no judgment will be taken against any Partner of Landlord; (6) any judgment taken against any Partner of Landlord maybe vacated and set aside at any time nunc pro tunc; (7) no writ of execution will ever be levied against the assets of any Partner of Landlord; and (8) these covenants and agreements are enforceable both by Landlord and also by any Partner of Landlord. 30.0 ATTORNEY'S FEES. If Tenant or Landlord shall be in breach or default under this Sub-Lease, such party ("Defaulting Party") shall reimburse the other party ("Non-Defaulting Party") upon demand for any costs or expenses that the Non-Defaulting Party incurs in connection with any breach or default of the Defaulting Party under this Sub-Lease, whether or not suit is commenced or judgment entered. Such costs shall include legal fees and costs incurred for the negotiation of a settlement, enforcement of rights or otherwise. Furthermore, if any action for breach of or to enforce the provisions of this Sub-Lease is commenced, the court 4848-0738-0480.4 3 8 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 in such action shall award to the party in whose favor a judgment is entered, a reasonable sum as 2 attorneys' fees and costs. The losing party in such action shall pay such attorneys' fees and costs. 3 Tenant shall also indemnify Landlord against and hold Landlord harmless from all costs, 4 expenses, demands and liability Landlord may incur if Landlord becomes or is made a party to 5 any claim or action (a) instituted by Tenant against any third party, or by any third party against 6 Tenant, or by or against any person holding any interest under or using the Project by license of 7 or agreement with Tenant; (b) for foreclosure of any lien for labor or material furnished to or for 8 Tenant or such other person; (c) otherwise arising out of or resulting from any act or transaction 9 of Tenant or such other person; or (d) necessary to protect Landlord's interest under this Sub- 10 Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the United States Code, 11 as amended. Tenant shall defend Landlord against any such claim or action at Tenant's expense 12 with counsel reasonably acceptable to Landlord, or at Landlord's election, Tenant shall reimburse 13 Landlord for any legal fees or costs Landlord incurs in any such claim or action. 14 15 31.0 CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the 16 following rights: 17 18 31.1 To hold copies of all keys and passkeys to the Leased Premises, other than 19 to vaults, safes, or restricted areas within the Leased Premises. 20 21 31.2 On reasonable prior written notice to Tenant, no less than 48 hours in 22 advance, to show the Leased Premises to prospective tenants during the last nine months of the 23 Term, and to any prospective purchaser, mortgagee, or assignee of any mortgage or ground lease 24 on the Leased Premises and to others having a legitimate interest in the Leased Premises at any 25 time during the Term. 26 27 31.3 At any time in the event of an emergency, and otherwise at reasonable 28 times, to take any and all measures, including making any inspections, repairs, alterations, 29 additions, and improvements to the Leased Premises, as may be necessary or desirable for the 30 safety, protection, or preservation of the Leased Premises, or Landlord's interests, or as may be 31 necessary or desirable in the operation or improvement of the Leased Premises, or in order to 32 comply with all laws, orders, and requirements of governmental or other authorities, using 33 reasonable efforts not to interfere with the use and occupancy of the Leased Premises by Tenant. 34 Landlord shall not be in default hereunder nor have any liability to Tenant, nor shall Tenant have 35 any right to terminate this Sub-Lease or claim an offset against or reduction in Rent payable 36 hereunder, due to any damage, annoyance or inconvenience resulting from any such inspections, 37 repairs, alterations, additions or improvements, or the failure of Landlord to make any such 38 inspections, repairs, alterations, additions or improvements; provided however that Landlord 39 shall be liable for its gross negligence or willful misconduct. Tenant shall reasonably cooperate 40 with Landlord or Landlord's agents or contractors in carrying out any such inspections, repairs, 41 alterations, additions or improvements. 42 4848-0738-0480.4 39 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 In the event such measures become necessary as a result of deficiencies in Tenants performance of its obligations under this Sub-Lease, in addition to all other available remedies, Landlord may, but shall not be obliged to, enter upon Leased Premises without notice to Tenant and correct Tenant's deficiencies using Landlord's forces, equipment and materials on Leased Premises suitable for such purposes, or by employing an independent contractor. Landlord's costs so incurred, including direct and indirect overhead costs as determined by Landlord, shall be reimbursed to Landlord by Tenant and/or its sureties within thirty (30) days of demand thereof. 31.4 Any officers and/or authorized employees of Landlord may enter upon Leased Premises at any and all reasonable times for the purpose of determining whether or not Tenant is in compliance with the terms and conditions of this Sub-Lease, or for any other purpose incidental to the rights of Landlord within the Leased Premises. 31.5 Entry by the officers, employees, agents or independent contractors of Landlord upon Leased Premises for the purpose described in this paragraph shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach of this Sub-Lease. 32.0 HOLDING OVER. Should Tenant hold over and remain in possession of the Leased Premises after the expiration of this Sub-Lease, without the written consent of Landlord, such possession shall be as a month-to-month tenant. Unless Landlord agrees otherwise in writing, Additional Rent during the hold-over period shall be payable in an amount equal to one hundred fifty percent (150.00%) of the Rent paid for the last month of the term hereof until Tenant vacates the Leased Premises and the Security Deposit shall increase to an amount equal to the increased monthly Rent. All other terms and conditions of this Sub-Lease shall continue in full force and effect during such hold-over tenancy, which hold-over tenancy shall be terminable by either party delivering at least one (1) month's written notice, before the end of any monthly period. Such hold-over tenancy shall terminate effective as of the last day of the month following the month in which the termination notice is given. 33.0 NOTICES. Any notice required to be given under the terms of this Sub-Lease or any law applicable thereto must be either personally delivered or placed in a sealed envelope, postage prepaid, address to the person on whom it is to be served with return receipt requested, and deposited in the United States mail. Personal service shall be deemed complete upon delivery and service by mail shall be deemed complete upon receipt as reflected by the return receipt. The address to be used for any notice served by mail upon the parties shall be as follows: 33.1 If for Tenant, addressed to Tenant, at or such other place as Tenant may from time designate by notice to Landlord: 4848-0738-0480.4 40 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 ATTN: Richard Bray Superintendent Tustin Unified School District 300 C Street Tustin, CA 92780 33.2 If for Landlord, addressed to Landlord at: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager With a Copy to: George R. Schlossberg, Esq. Kutak Rock LLP 1101 Connecticut Avenue, N.W. Washington, D.C. 20036 33.3 If for Government, addressed to: BRAG Operations Office Southwest Division Naval Facilities Engineering Command 1420 Kettner, Suite 507 San Diego, CA 92101-2434 33.4 The parties may designate alternate contacts or addresses by giving notice as provided in this Section 30. 34.0 WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord and Tenant that the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Sub-Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased Premises and any emergency statutory or any other statutory remedy. 35.0 BROKERAGE. Tenant represents and warrants that it has not dealt with a broker, agent or other person in connection with this Sub-Lease and that no broker, agent or other person was responsible for this transaction. Tenant agrees to defend with counsel acceptable to Landlord, indemnify and hold Landlord harmless from and against any claims by any broker, agent or other person claiming a commission or other form of compensation by 4848-0738-0480.4 41 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 virtue of that person's business relationship with Tenant with regard to this transaction. The provisions of this Section shall survive the termination of this Sub-Lease. 36.0 AUDIT. This Sub-Lease shall be subject to audit by Landlord and by any and all cognizant government agencies. The Tenant and Landlord shall make available to such agencies for use in connection with such audits all records, reports, reviews, audits, documents or other material which it maintains with respect to this Sub-Lease and copies of all reports required to be filed hereunder. The Tenant and Landlord will make these materials available for a period of three years after termination or expiration of this Sub-Lease. 37.0 FAILURE TO INSIST ON COMPLIANCE. The failure of either party to insist, in any one or more instances, upon performance of any of the terms, covenants, or conditions of this Sub-Lease shall not be construed as a waiver or relinquishment of the right to the future performance of any such terms, covenants, or conditions and the right to the future performance of any such terms, covenants, or conditions and the obligations in respect of such future performance shall continue in full force and effect. Whenever the terms of this Sub-Lease call for one party to approve an action or make a determination before the party may undertake or perform such action, said approval or determination shall not be unreasonably denied or delayed. 38.0 SUBJECT TO EXISTING AND FUTURE EASEMENTS AND RIGHTS- OF-WAY. 38.1 Tenant acknowledges that the LIFOC, and this Sub-Lease, are subject to all outstanding easements and rights-of--way for location of any type of facility over, across, in, and upon the Leased Premises or any portion thereof including roads, structures, facilities or conduits necessary for or related to ongoing Government remediation activities and Landlord owned utilities. To the extent relocation of such items is required by the Landlord or Government, the Tenant may relocate such items at its own cost and expense in a manner satisfactory to the Government or Landlord as applicable. 38.2 Tenant further acknowledges that the Government is entitled, under Section 27 of the LIFOC, to grant such additional easements and rights-of--way over, across, in and upon the Leased Premises as it shall determine to be in the public interest; provided that any such additional easement or right-of--way shall not unreasonably interfere with the access to, and the use and possession of, the Leased Premises by Landlord or any sublessees, or other occupants who are legitimately in possession or occupancy of the Leased Premises through Landlord or any sublessee of Landlord, and shall be conditioned on the assumption by the grantee thereof of liability to the Landlord for such damages as the Landlord shall suffer for property destroyed or property rendered unusable on account of the grantee's exercise of its rights thereunder. There is reserved to the rights of the holders of such easements and rights-of- way as are presently outstanding or which may hereafter be granted, to any workers officially engaged in the construction, installation, maintenance, operation, repair or replacement of 4848-0738-0480.4 42 MCA5 TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 facilities located thereon, and to any Federal, state or local official engaged in the official inspection thereof, such reasonable rights of ingress and egress over Leased Premises as shall be necessary for the performance of their duties with regard to such facilities. 39.0 ADMINISTRATION. Except as may be otherwise provided in the LIFOC or this Sub-Lease, the Government shall, under the direction of the Commander, Naval Facilities Engineering Command, Southwest Division, have complete charge of the administration of the LIFOC and any interests the Government has under this Sub-Lease, and shall exercise full supervision and general direction thereof insofar as the interest of the Government are affected. 40.0 QUIET POSSESSION. Upon Tenant paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of the Leased Premises for the entire Term hereof, subject to all the provisions of this Sub-Lease. 41.0 SEVERABILITY AND APPLICABLE LAW. 41.1 Whenever possible, each provision of this Sub-Lease shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Sub-Lease shall be invalid under the applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of that provision, or the remaining provisions of this Sub-Lease. 41.2 This Sub-Lease has been made and entered into in the State of California and the laws of this State shall govern its validity and interpretation in the performance hereunder by the parties. 42.0 FORCE MAJEURE. Except as otherwise specifically provided herein, and in the event either party shall be delayed or prevented from performance of any act required under this Sub-Lease by reason of fire, earthquake, war, labor dispute, or other cause without fault and beyond control of the party so obligated, performance of such acts shall be excused for the period of time of the delay as determined, in writing, by Landlord provided Tenant shall have the right to terminate this Sub-Lease if there is more than five (5) days of delay. 43.0 SPECIAL STIPULATIONS. 43.1 No receipt of money by Landlord from Tenant after the termination of this Sub-Lease or after the service of any notice or after the commencement of any suit or after final judgment for possession of the Leased Premises shall reinstate, continue or extend the term or affect any such notice, demand or suit or imply consent for any action for which Landlord's consent is required. 43.2 No delay or forbearance by either party in exercising any right or remedy hereunder or in undertaking or performing any act or matter which is not expressly required to be 4848-0738-0480.4 43 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 undertaken by a party shall be construed to be a waiver of said party's rights or to represent any agreement by said party to undertake or perform such act or matter thereafter. 43.3 All of the covenants of both parties hereunder shall be deemed and construed to be "conditions" as well as "covenants" as though the words specifically expressing or importing covenants and conditions were used in such separate instance. 43.4 Tenant agrees that, upon receiving a written request from Landlord, Tenant will within ten (10) days deliver a copy of this Sub-Lease, or, if Landlord so requests, a Short Form Notice of this Sub-Lease, in recordable form to Landlord. Tenant shall not record this Sub-Lease or a Short Form Notice thereof, without the prior written consent of Landlord. 43.5 Neither party has made any representations or covenants, except as contained herein, or in some further writing signed by the party making such representation or promise. All prior communications or understandings, oral or written, between Landlord and Tenant are superseded by this Sub-Lease and this Sub-Lease contains the entire agreement between the parties hereto with respect to the subject matter of this Sub-Lease, and shall not be amended, modified or supplemented unless by agreement in writing, signed by both parties. 43.6 Tenant shall look solely to the Leased Premises and Rents derived therefrom for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies or with respect to this Sub-Lease, the relationship of Landlord and Tenant thereunder or Tenant's use and occupancy of the Leased Premises. 43.7 This Sub-Lease may be executed in one or more counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall constitute one and the same instrument. This Sub-Lease shall become binding when any one or more counterparts hereof, individually or taken together, shall bear the signatures of Landlord and Tenant. 43.8 Each provision hereof shall extend to and shall, as the case may require, bind and inure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and assigns in the event this Sub-Lease has been assigned with the express, written consent of Landlord. 43.9 Time is of the essence of every provision of this Sub-Lease. 43.10 The title and headings and table of contents of this Sub-Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein. The term "Landlord" and the term "Tenant" as used herein shall mean, where appropriate, all persons acting by or on behalf of the 4848-0738-0480.4 44 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 respective parties, except as to any required approvals, consents or amendments, modifications or supplements hereunder, when such terms shall only mean the parties originally named herein. 44.0. DISPUTE RESOLUTION. Any disputes arising under this Sub-Lease that involve or relate to the Government or the Government's interpretation of the LIFOC that are subject to resolution under the Contracts Disputes Act, 431 U.S.C. Section 601 et seq. pursuant to the provisions of Section 23 of the LIFOC shall be resolved under that Act. All other disputes that may arise under this Sub-Lease shall be resolved in accordance with the provisions of the laws of the State of California. 45.0 LIST OF EXHIBITS. Exhibit "A": Description of Leased Land Exhibit "B": Lease in Furtherance of Conveyance Exhibit "C": Environmental Questionnaire Disclosure Form [Signature Page Follows] 4848-0738-0480.4 45 MCAS TUSTIN SUB-LEASE BETWEEN THE CITY AND TUSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 IN WITNESS WHEREOF, Landlord has, by action of the City of Tustin City Council, authorized this Sub-Lease to be executed for and on behalf of the City of Tustin by the Assistant City Manager or City Manager, and Tenant has caused the same to be executed by its duly authorized officer on the date first above written. "LANDLORD" City of Tustin By: William A. Huston, City Manager/or Christine A. Shingleton, Assistant City Manager Dated: Attest: Pamela Stoker City Clerk Approved as to Form: George Schlossberg, Esq. Special Counsel "TENANT" TUSTIN UNIFIED SCHOOL DISTRICT By: Richard Bray, Superintendent Dated: 4848-0738-0480.4 46 EXHIBIT A Description of Leased Land Size of parcel is 1.478 acres. Legal Description: Lot 32 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4848-0738-0480.4 EXHIBIT B Lease in Furtherance of Conveyance (Navy document will be inserted prior to Transmittal of Sublease to TUSD} EXHIBIT C Environmental Questionnaire Disclosure Form 4848-0738-0480.4 ,~ PERMIT SCREENING FORM ORANGE COUNTY FIRE AUTHORITY SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT -ORANGE COUNTY CERTIFIED UNIFIED PROGRAM AGENCY This questionnaire was developed by the Orange County Fire Authority (OCFA) in conjunction with the South Coast Air Quality Management District (SCAQMD), and the County of Orange Certified Unified Program Agency (CUPA) to facilitate review of your plans, the issuance of required building and fire permits, as well as issuance of your Certificate of Occupancy. This form will: 1) Determine your need for compliance with federal and state mandated Community-Right-to-Know laws. These laws pro- hibitthe issuance of a Certificate of Occupancy to a business that will handle hazardous materials unless the business has met or is meeting the requirement to file a chemical inventory disclosure packet with the OCFA. These laws may require a Risk Management Plan to be filed with OCFA if the facility will handle certain regulated substances. These laws also govern the permitting of a facility handling certain regulated substances to be constructed within I ,000 feet of a school (K-12), general acute care hospital or long term care facility; 2) Determine your need for compliance with state mandated AQMD laws; 3) Determine your need for compliance with specific Uniform Fire and Building Code requirements which may affect the building design, plan submittal, permit issuance or obtaining a Certificate of Occupancy; and 4) Determine your need for compliance with state mandated hazardous materials regulations. To determine whether your business is subject to any of these regulations, please read, complete and sign this questionnaire. Most questions require only a "yes" or "no" response. Print legibly, preferably in black ink. ~ ) Business Name Contact Person Phone Mailing Address City State Site Address of Proposed Facility City State Zip Zip Describe the business operation, activity, or process (e.g. semiconductor fabrication, auto repair -oil changes, wholesale pool supply, restau- rant, etc.). If you require assistance in the completion of this form please contact OCFA, Planning & Development Services at (714) 573-6100. OFFICIAL USE ONLY ISSUING DEPARTMENT: REASON FOR SUBMITTAL: O Planning ^ New building ^ Building ^ Tenant improvement and/or upgrades to building or site ^ Business License ^ New business, no tenant improvement ^ Fire ^ Business relocation D HCA/CUPA D Business owner change only ^ Other O Fire Authority plan approval required. Hold permit for OCFA approval. ^ No Fire Authority plan approval required. Route form to OCFA. ^ Fire Authority Community Right-to-Know (Hazardous Materials Services Section) approval required. Hold Certificate of Occupancy for Fire Authority approval. ^ SCAQMD Approval required. Hold Certificate of Occupancy for SGAQMD clearance. City Permit # Business License # b F034 f R11001 DISTRIBUTION: WNrfE: FlRE BLUE: FIRE/OCCUPA • PINK: OWNER/OCCUPANT • CARD COPY: BUILDING DEPT. Paae 1 FIRE AUTHORITY PERMIT SCREENING QUESTIONNAIRE Please answer ~( of the following questions: Will you conduct any of the following processes on site or use, store, handle any of the following materials? (Check all that apply) AGREE YES NO ^ O + AEROSOL PRODUCTS (storage in excess of 500 pounds net weight) ^ ^ ASSEMBLY OCCUPANCY (50 or more people gathered for drinking, dining, education, religion, etc.) O O AUTOMOBILE WRECKING YARD ^ ^ +BATTERY SYSTEMS/STORAGE/CHARGING ^ ^ COMBUSTIBLE FIBER STORAGE 100 cubic feet (includes fibrous materials such as cotton, baled wastepaper, straw, Spanish moss, etc.) ^ ^ COMBUSTIBLE MATERIAL STORAGE 2500 cubic feet (empty packing cases, boxes, barrels, rubber or cork, etc.) ^ O +DRY CLEANING OPERATIONS ^ ^ DUST PRODUCING OPERATIONS (wood working, milling grinding, pulverizing, grain elevator. Flour mill, etc.) O O GARAGE, MOTOR VEHICLE SERVICE/REPAIR OR FUEL-DISPENSING STATION ^ ^ • HAZARDOUS MATERIALS Isee Attachment A for list; a hazardous material is a1tY chemical which is required to have a material safety data sheet (MSDS), including petroleum products] O ^ HIGH PILED COMBUSTIBLE STORAGE (top of storage is greater than 12 feet or 6 feet for plastics, tires and flammable liquids. ^ ^ +INSTALLAT[ON OF ABOVE OR BELOW GROUND TANK, PERMANENT UR TEMPORARY O O LIQUIFIED PETROLUEM GAS ^ D MATCHES (manufacture or store in excess of 14,400 individual matches) ^ ^ +MED[CALGASINSTALLATION O O OVENS, INDUSTRIAL BAKING OR DRYING (equipment used to dry or bake goods other than food products) ^ O +REFRIGERATION EQUIPMENT (fixed system in which a refrigerant is circulated for the purpose of extracting heat) ^ O ;SPRAYING OR DIPPING OPERATIONS (flammable or combustible liquids applied with a sprayer or used in tanks) ^ ^ TIRE STORAGE (SOU square feet or more) or [ire recapping O O + WELDING AND CUTTING OPERATIONS ^ This is a "Spec" building. [ do not know what operations will be conducted. ^ I will ag conduct any of the above operations or use, store, handle, or display any hazardous matetialslchernicals in the operation of my husiness. + NOTE: An OCFA Chemical Classification Packet may he required with the plan. Call (714) 573-6100 for a copy of the packet. YES NO 1. O ^ Will you or the future building occupant store, use or handle hazardous materials/chemicals in quantities equal to or greater than 55 gallons of liquid, 500 pounds of solid or 200 cubic fee[ of compressed gas at any one time? 2, ^ ^ Will you or [he future building occupant store, use or handle aay amount of DOT Division 1. I. 1.2 or 1.3 explosive, highly toxic material, commercial grade pesticide or fertilizer, or unsealed radioactive isotope (see definitions in Attachment B)? 3. ^ O Will you or the future building occupant store, use or handle >4py amount of carcinogen or any chemical with a component that is a carcinogen as defined by California law (list available -call Fire Authority/HMSS et 714 573-6250)? 4. O D Will you or [he future building occupant store, use or handle any Exvemely Hazardous SubstanceJRegulated Substance, as defined by California law (tut available-call Fire Authority/HMSS at 714 573-6250)? 5. ^ ^ If you or the future building occupant will be handling any Extremely Hazardous Substance/Regulated Substance, will the business be located within 1,000 feet of the outer boundary of a school, general acute care hospital or long-term health care facility? 6. O O You must complete Attachment C, page 5. Did you answer "yes" to any question on Attachment C? SCAQMD permit required. 7. D O Will you be generating hazardous waste at your facility? Hazardous Waste Generator Program 8. O O Will you be treating hazardous waste on-site'? Tiered Permit Hazardous Waste On-Site Treatment 9. O O Will you be operating underground tanks for the storage of hazardous substances? Underground Storage Tank Program 10. O O Will you be operating aboveground storage tanks for storage of petroleum products? Aboveground Petroleum Storage Act Spill Prevention, Control & Countermeasure Plans A "Yes" answer to questions 1, 2, 3, 4, or 5 requires you to complete a Hazardous Materials Disclosure Chemical Inventory and Business Emergency Plan - Contaet the Orange County Fire Authority at (714) 573-6250 to request this packet. A "Yes" answer to question 6 requires you to contact the SCAQMD at 1- 800-288-7664 for permit information. A "Yes" answer to questions 7, 8, 9, 10 requires you to contact the Orange County Certified Uttified Program Agency at (714) 433-6000 and ask for the CUPA Division. The owner orhis/her authorized agent is responsible to ensure that all occup~nts• present and fpture, comply with the reporting and storage, use and handling requirements for any processes/materials described above. Note: A "No" answer to any of the above questions may subject your business to on-site verification by the Orange County Fire Authority. Failure to properly disclose your usage of hazardous materials may result in civil or criminal action being taken against you. I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date Signature of owner or authorized agent Print Name and Title b CnOn /01/nn1 r11CTOlA1RMrJ• W41TC• FICfC QI IIG• GI[rF/ft(:AIrPA • PINK• f7WNPR/(lf:C11PAHJT • CORt1CAPV~ RIl1LDINGDEPT. Paae2 ATTACHMENT A: Hazardous Material Definitions UNIFORM FIRF COD DEFINITIONS FOR HAZARDOUS MATERIALS 1994 EDITION I. EXPLOSIVE: A chemical that causes a sudden, almost instantaneous release of pressure, gas and heat when subjected to sudden shock, pressure, or high temperatures or (b) a material or chemical, other than a blasting agent, that is commonly used or intended to be used for the purpose of producing an explosive effect. 2. COMPRESSED GAS: A gas or mixture of materials that is a gas at 68°F or less at 14.7 Asia of pressure, and has a boiling point of 68°F or less at 14.7 psis. The material may be either liquefied, nonliquefied, or in solution. 3 LIQUEFIED PETROLEUM GAS (LPGI: A material which is composed predominantly of the following hydrocarbons or mixtures of them: propane, propylene, butane (normal butane or isobutane) and butylenes. 4. FLAMMABLE LIQUID: Any liquid having a Flash point below 100°F. and having a vapor pressure not exceeding 40 pounds per square inch (absolute) at 100°F. Class I liquids shall include those having flash points below 100°F. 4. COMBU~'IBLE LIQUID: A liquid having a flash point at or above 100°F. 6. FL.A_MM_ABL•E SOLID: A solid substance, other than one which is defined as a blasting agent or explosive, that is liable to cause fire through friction or as a result of retained heat from manufacture, which has an auto ignition temperature below 212 degrees F, or which bums so vigorously or persistently when ignited that it creates a serious hazard. Flammable solids include solid materials which when dispersed in air as a cloud may be ignited and cause an explosion. ~ 7. ORGANIC P~R,QXIDE: An organic compound that contains the bivalent -0-0- structure and which may be considered to be a structural derivative of hydrogen peroxide where one or both of the hydrogen atoms have been replaced by an organic radical. Organic peroxides may present an explosive hazard (detonation or deflagration) or they may be shock sensitive. They may also decompose into various unstable compounds over an extended period of time. S. OXIDIZER: A chemical other than a blasting agent or explosive that initiates or promotes combustion in other materials, thereby causing fire either of itself or through the release of oxygen or other gases. Q,.~YROPHORIC: A solid, liquid, or gas that will spontaneously ignite in air at or below a temperature of 130 degrees F. 10. UNSTABLE MATERIALS: A material, other than an explosive, which in the pure state or as commercially produced will vigorously polymerize, decompose, condense or become self-reactive and undergo other violent chemical changes, including explosion, when exposed to heat, friction or shock, or in the absence of an inhibitor or in the presence of contaminants or in contact with incompatible materials. 11 WATER-REACTIVE SO41D/LIQUID MATERIAL: A material which explodes; violently reacts; produces flammable, toxic or other hazardous gases; or evolves enough heat to cause self-ignition of nearby combustibles upon exposure to water or moisture. 12. CRYOGENIC FLUIDS: Those fluids that have a normal boiling point below (minus)-150 degrees F. 13. HIGHLY TOXIC MATERIALS: A material which produces a lethal dose or lethal concentration which falls within any of the following categories: (a) A chemical that has a median lethal dose (LD50) of 50 mg/kg or less of body weight when administered orally to albino rats weighing between 200 and 300 grams. (b) A chemical that has a median lethal dose (LD50) of 200 mg/kg or less of body weight when administered by continuous contact for 24 hours, or less if death occurs within 24 hours, with the bare skin of albino rabbits weighing between 2 and 3 kg each. (c) A chemical that has a median lethal concentration (LC50) in air of 200 ppm by volume of gas or vapor, or 2 mg/liter of mist, fume or dust, when administered by continuous inhalation for one hour, to albino rats weighing between 200 and 300 grams. Mixtures of these materials with ordinary materials, such as water, may not warrant classification as highly toxic. While this system is basically simple in application, any hazard evaluation which is required for the precise categorization of this type of material shall be per- formed by experienced, technically competent persons. 14. TOXIC MATERIAL: A material which produces a lethal dose or a lethal concentration within any of the following categories: (a) A chemical or substance that has a median lethal dose (LD50) of more than 50 mg/kg but not more than 500 mg/kg of body weight when administered orally to albino rats weighing between 200 and 300 grams each. (b) A chemical or substance that has a median lethal dose (LD50) of more than 200 mg/kg but not more than 1,000 mg/kg of body weight when administered by continuous contact for 24 hours, or less if death occurs within 24 hrs., with bare skin of albino rabbits weighing between 2 and 3 kilograms each. (c) A chemical or substance that has a median lethal concentration (LC50) in air more than 200ppm but not more than 2,OOOppm by volume of gas or vapor, or more than 2mg/I. but not more than 20 mg/L of mist, fume or dust, when administered by continuous inhalation for one hour, or less if death occurs within one hour, to albino rats weighing between 200 and 300 grams each. 15 RADIOACTIVE MATERIAL: A solid, liquid, or gas material or combination of materials that spontaneously emits ionizing radiation. 16. CORR(,2„ IS VE: A solid, liquid, or gas that causes visible destruction of, or irreversible alterations in, living tissue by chemical action at the site of contact. A chemical is considered to be corrosive if, when tested on the intact skin of albino rabbits by the method described in Appendix A to C.RR 49 Part 173, it destroys or changes irreversibly the structure of the tissue at the site of contact following an exposure period of four hours. This term does not refer to action on inanimate surfaces. 17. CARCj~VOGEN: A solid, liquid, or gas that causes the development of cancerous growths in living tissue. Listed on the California Prop. 65 list of possible carcinogens. 1S. IRRITANT: A solid, liquid or gas that is not corrosive, but which causes a reversible inflammatory effect on .living tissue by chemical action at the site of contact. A chemical is a skin irritant if, when tested on the skin of albino rabbits by the methods of 16 C.F.R. 1500.41 for four hours exposure or by other appropriate techniques, it results in an imperial score of 5 or more. A chemical is an eye irritant if so determined under the procedure listed in 16 C.F.R. 1500.42 or other approved techniques. jp. SENSITIZER: A solid, liquid, or gas that causes a substantial proportion of exposed people or animals to develop an allergic reaction in normal tissue after repeated exposure to the chemical. Z0. TARtE~ET ORGAN TOXINS: A solid, liquid, or gas that causes damage to particular organs or systems. Attachment A Page 4 p F034 (Rt/00) ATTACHMENT B COMMERCIAL. GRADE PESTICIDE OR FERTILIZER: Any pesticide or fertilizer requiring a license to purchase (not available for retail purchase directly by the public). EXFLOSIVE: Any Division 1.1, 1.2 or 1.3 explosive as defined by the Department of Transportation. HIGHLY TOXIC MATERIAL: A material that has a median lethal concentration (LCso) in air of 200 parts per million by volume or less of gas or vapor, or 2 milligrams per liter or less of mist, fume or dust, when administered by continuous inhalation for one hour, or less if death occurs within one hour, to albino rats weighing between 200 and 300 grams each. jJNSEALER RADIOACTIVE ISOTOPE: Any radioactive material that allows alpha, beta, or gamma emitters to be released into the atmosphere. , Attachment C ® South Coast Air Quality Management District 21865 E. Copley Drive, Diamond Bar, CA 91765-4182 (909) 396-3529 • http://www.agmd.gov Air Quality Permit Checklist City Tracking # California State Law Code 65850.2 prohibits cities from issuing an occupancy ,permit to a business without clearance from the local air quality agency. This checklist will determine if you need to obtain cleazance from the South Coast Air Quality Management District (AQMD). Company Name: Property Address: City: Contact Person: Type of Business: Applicant (print name Zip Code: . Title: Telephone: Signature: _ Will the facility have any of the following equipment? Yes [ ] No [ Charbroiler Dry cleaning machine Spray booth Printing press (screen/lithographic/flexographic) Internal combustion engine (greater than 50 HP (excluding motor vehicles) Boiler/combustion equipment (greater than 2 nvllion BTU/hr. maximum input) Abrasive blasting cabinet/room Baghouse/cartridge-type dust filter/scrubber Motor fuel storage and dispensing equipment • Will any of the following operations be performed? Yes [ ) No [ ] Application of paints or adhesives Etching, plating, casting, or melting of metals Molding, extruding, or curing of plastics Mixing and blending of liquids and/or powders Storage of acids, solvents, organic liquids, or fuels Production of fumes, dust, smoke, or strong odors If you answered "No" to both questions, this checklist is your clearance from AQMD. If you answered "Yes" to either question, you must contact AQMD to determine if air quality permits are required. If permits are needed, AQMD will assist you in submitting permit application(s) and then provide you with a clearance letter. You can call AQMD at their Small Business Assistance Office at (800) 388-2121. Revised March 1999 South Coast Air Quality Management District 21865 E. Copley Drive, Diamond Bar, CA 91765-4182 ~, ~~~ ~~ ® (909) 396-3529 + http://www.agmd.gov NOTICE OF GOVERNMENT CODE SECTION 65750.2 (AB3205) REQUIREMENTS California State Law (Government Code 65850.2) prohibits Building Departments from issuing a final certificate of occupancy unless all requirements or the local air quality agency are met. All applicants are required to complete the air quality permit checklist. The checklist is designed to aid the applicant for non-residential buildings only. If the answer to any of the questions is "YES", the Building Department must obtain a written release from the local air quality agency verifying that the applicant is in compliance. 1. All non-residential building permit applicants must complete this checklist. 2. If the answers to ~ questions are "NO", the Building Department can accept this checklist as the written release. 3. If any questions are answered "YFS", the applicant must contact the District by calling (800) 388-2121 to determine whether air quality permits are required for any equipment which may be operated at the site. If the District determines that air quality permits are not required or that all requirements have been met, a written release will be issued. 4. If air quality permits are required and applications have not been submitted, the applicant must submit the necessary permit application(s) and appropriate fees before a written release will be issued. AQMD is committed to expediting all clearance letter requests. However, it may take several weeks to verify compliance with all requirements. Therefore, you are advised to contact AQMD immediately after applying for building permits. 1-800-388-2121 a F034 (R1J00) Attachment C Page 7 EXHIBIT F Short Form Notice of Sublease 4828-4589-0562.1 5/22/08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 TUSTIN UNIFIED SCHOOL DISTRICT OFFICIAL BUSINESS REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 6103 Recording requested by and when recorded mail to: City of Tustin, California Tustin City Hall 300 Centennial Way Tustin, CA 92780 Att: Assistant City Manager Space Above This Line Reserved for Recorder's Use SHORT FORM NOTICE OF GROUND SUB-LEASE THIS SHORT FORM NOTICE is entered into this day of 2008 ("Effective Date"), by and between the CITY OF TUSTIN ("City"), a municipal corporation organized under the laws of the State of California, acting in its capacity as the local redevelopment authority for the disposition and conveyance of portions of the former Marine Corps Air Station Tustin, California, and the TUSTIN UNIFIED SCHOOL DISTRICT ("TUSD"). The City and TUSD are sometimes referred to herein individually as a "Party" and collectively as the "Parties". RECITALS: WHEREAS: 1. The City requested from the United States of America (hereinafter the "Government") conveyance of a portion of the former Marine Corps Air Station Tustin, ("MCAS Tustin") which was closed pursuant to and in accordance with the Defense Base Closure and Realignment Act of 1990, as amended (Pub. L. No. 101-510; "Base Closure Act") and which is no longer required for military purposes; and 2. The City and TUSD entered into the Agreement Between City of Tustin and Tustin Unified School District Regarding Transfer of School Sites and Other Mitigation Measures, dated October 21, 1996 ("1996 TUSD Agreement"), for the transfer of two ten (10) 4825-5969-2288.2 MCAS TUSTIN SHORT FORM NOTICE OF GROUND SUB-LEASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 acre parcels for elementary schools and one forty (40) acre parcel for a high school at MCAS Tustin. 3. Under the 1996 TUSD Agreement, City agreed to transfer such parcels to TUSD following the conveyance of the parcels from the Navy to the City, or support the transfer of the parcels under an educational public benefit conveyance ("PBC") directly from the federal government, in exchange for TUSD agreeing not to challenge, comment on, or oppose the approval or implementation of proposals, applications, approvals or permits relating to MCAS Tustin or the redevelopment of MCAS Tustin. 4. Pursuant to the Reuse Plan and Specific Plan and the 1996 TUSD Agreement, TUSD acquired one of the two ten (10) acre parcels for an elementary school through a PBC from the U.S. Department of Education. 5. Pursuant to the authority provided by section 2905(b)4 of the Base Closure Law and the implementing regulations of the Department of Defense (32 CFR Part 175), the Secretary of the Navy, on behalf of the United States of America, is authorized to convey surplus property at a closing installation to the LRA at no cost for economic development purposes. 6. In May 2002, the Navy approved an Economic Development Conveyance of Property ("EDC") and agreed to convey 1,153 acres of the former MCAS Tustin to the City for economic development in accordance with the Reuse Plan. On May 13, 2002, a portion of this property was conveyed by the Navy to the City by Federal Deed, in accordance with the provisions of that certain Agreement Between The United States of America and the City of Tustin, California, For The Conveyance of a Portion of the Former Marine Corps Air Station Tustin ("EDC Agreement"), which sets forth the terms and conditions of the conveyance of portions of MCAS Tustin from the Navy to the City ("City Property"), including the remaining parcels to be conveyed to TUSD ("TUSD Property"). A portion of the City Property, including a portion of the TUSD Property, was leased to the City by the Navy pursuant to the Conveyance Agreement and that certain Lease In Furtherance of Conveyance Between the United States of America and The City of Tustin, California For Portions of the Former Marine Corps Air Station Tustin (the "LIFOC"). 7. The Parties have entered into that certain Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and the Establishment of an Elementary and High School, dated ("TUSD Conveyance Agreement"), setting forth the terms and conditions of the conveyance of the TUSD Property from the City to TUSD for establishment of an Elementary School and High School. 8. The City and TUSD have entered into that certain Ground Sub-lease Between the City of Tustin and the Tustin Unified School District for a Portion of MCAS, dated ("Sub-lease"), setting forth the terms and conditions of the sublease of a portion of the TUSD Property under the LIFOC ("Leased Premises") pending conveyance of the Leased Premises 4825-5969-2288.2 2 MCAS TUSTIN SHORT FORM NOTICE OF GROUND SUB-LEASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 pursuant to the TUSD Conveyance Agreement. The Leased Premises are more particularly described in Exhibit "A," attached hereto and made a part hereof. 9. The Parties agree to this Short Form Notice which is to be recorded in order that third parties may have notice of the existence of the Sub-lease and the rights of the Parties under the Sub-lease. AGREEMENTS: NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, agreements, covenants and conditions herein contained, the execution and delivery of the Sub-lease by the Parties, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby state and agree as follows: 1. The Parties have executed and delivered the Sub-lease. Copies of the Sub-lease are being held by both Parties at their respective addresses. 2. The City let the Leased Premises to TUSD and TUSD leased the Leased Premises from the City on the terms and conditions set forth in the Sub-lease. 3. All of the terms, conditions, provisions and covenants of the Sub-lease are incorporated in this Short Form Notice by reference as though written out at length herein and the Sub-lease and this Short Form Notice shall be deemed to constitute a single instrument or document. The rights and obligations of the Parties shall be construed solely by reference to the provisions of the Sub-lease and in the event of any conflict between the provisions of the Sub- lease and those of this Short Form Notice, the provisions of the Sub-lease shall control. 4. This Short Form Notice shall inure to the sole benefit of and be binding upon the Parties and their respective successors and assigns. [Signature Page Follows] 4825-5969-2288.2 3 MCAS TUSTIN SHORT FORM NOTICE OF GROUND SUB-LEASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have caused their duly appointed representatives to execute this short Form Notice as of the Effective Date set forth above. CITY OF TUSTIN William A. Huston, City Manager Approved as to Form: City Attorney or Special Counsel By: TUSTIN UNIFIED SCHOOL DISTRICT Richard Bray, Superintendent Approved as to Form: TUSD Counsel By: 4825-5969-2288.2 4 EXHIBIT A Size of parcel is 1.478 acres. Description of Sublease Parcel Legal Description: Lot 32 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4828-4589-0562.1 EXHIBIT G Bill of Sale 4828-4589-0562.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 5/22/08 BILL OF SALE FOR FORMER MILITARY PERSONAL PROPERTY LOCATED AT THE FORMER MARINE CORPS AIR STATION, TUSTIN This Bill of Sale is made by and between the CITY OF TUSTIN ("City"), a municipal corporation organized under the laws of the State of California, acting in its capacity as the Local Redevelopment Authority for the disposition and conveyance of portions of the former Marine Corps Air Station, Tustin, California, and the TUSTIN UNIFIED SCHOOL DISTRICT ("TUSD"). RECITALS A. Pursuant to the Agreement Between the United States of America and the City of Tustin, California For the Conveyance of a Portion of the Former Marine Corps Air Station Tustin, dated May 13, 2002 ("Conveyance Agreement") and the Lease In Furtherance of Conveyance Between the United States of America and the City of Tustin, California for Portions of the Former Marine Corps Air Station Tustin, dated May 13, 2002 ("LIFOC"), the Federal Government through the Secretary of the Navy ("Navy") conveyed or leased to the City portions of the former Marine Corps Air Station Tustin ("City Property"). B. The City and TUSD entered into that Agreement Between the Ciry of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS Tustin and the Establishment of an Elementary School and High School, dated ("TUSD Conveyance Agreement").for the conveyance of portions of the City Property to TUSD for educational purposes ("TUSD Property"), by quitclaim deed ("TUSD Deed") and sub-lease of other portions of the TUSD Property from the City to TUSD pending conveyance of such portions from the Navy to the City ("LIFOC Ground Sublease"). C. Pursuant to the TUSD Conveyance Agreement, the City agrees to transfer to TUSD, under a Bill of Sale, (1) all tangible personal property appurtenant to the TUSD Property either conveyed or leased to TUSD pursuant to the TUSD Conveyance Agreement ("Miscellaneous Personal Property"), and (2) certain utility distribution systems located on the TUSD Property ("Utility Systems" as defined in Section 2 below) (collectively "Miscellaneous Personal Property" and "Utility Systems" shall be referred to as the "Personal Property"). MUTUAL UNDERSTANDINGS NOW, THEREFORE, in consideration of the foregoing recitals and other consideration set forth herein, it is mutually agreed as follows: 4833-3026-4576.4 BILL OF SALE FOR PERSONAL PROPERTY TUSTIN UNIFIED SCHOOL DISTRICT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 1. Transfer. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City hereby grants, releases, quitclaims and transfers title and ownership of the Personal Property consisting of the Miscellaneous Personal Property and the Utility Systems to TUSD. 2. Utility Systems. 2.1. For purposes of this Bill of Sale, "Utility Systems" shall mean: "All utility distribution systems located on the TUSD Property, whether such TUSD Property was transferred to TUSD by the TUSD Deed or the LIFOC Ground Sublease, that (a) were transferred originally by the Navy to the City, and (b) are currently owned by the City, and shall include the following: (i) all electrical, gas, telephone and cable television systems, including distribution lines, pad mounted and overhead distribution poles and/or transformers, (ii) all conduits and duct banks from outlet or master meters or connection points to end usage points, and (iii) all water, sewer, and storm drain systems (but does not include culvert ditches), including distribution lines and pipelines from outlet or master meters or connection points on the TUSD Property to end usage points on the TUSD Property. " 2.2. Utility Systems Alteration. TUSD agrees that it shall perform all abandonment, demolition, removal, alteration, modification, repair, replacement or relocation (each an "Alteration") of the Utility Systems in accordance with and as required by law and regulation, provided that prior to commencing such Alteration, TUSD shall have obtained the prior written consent of the City. Such consent is within the sole discretion of the City, but will not be unreasonably withheld, provided, such City consent will not be granted where such TUSD Alterations may interfere with the environmental remediation of the real property underlying such Utility Systems or the development or reuse of MCAS Tustin, or negatively impact the public health and safety, or interfere with the logical and orderly phasing of Tustin Legacy Backbone Infrastructure. 3. Power of Termination and Reversion. In addition to the Grantor's other remedies under applicable law or equity for breach of the use restrictions set forth in the TUSD Conveyance Agreement or TUSD Deed, or transfers in violation of the TUSD Conveyance Agreement or TUSD Deed, if at any time the City exercises its Power of Termination under the TUSD Conveyance Agreement or the TUSD Deed, then immediately following delivery of an appropriate written notice from the City to TUSD, TUSD, its successors and assigns, shall forfeit all right, title, and interest in and to such Personal Property, consisting of the Utility Systems and 4833-3026-4576.4 2 BILL OF SALE FOR PERSONAL PROPERTY TUSTIN UNIFIED SCHOOL DISTRICT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 the Miscellaneous Personal Property, and all right, title and interest in and to such Personal Property, shall pass to and vest in the City. 4. Former Military Property; No Warranty. The Personal Property, consisting of the Utility Systems and the Miscellaneous Personal Property,. transferred under this Bill of Sale was acquired by the City from the Navy by reason of the closure of the former Marine Corps Air Station, Tustin. TUSD hereby understands and acknowledges that the City has no knowledge and makes no representations as to the accuracy of the description of the Utility Systems or Miscellaneous Personal Property, or the Personal Property's fitness, adequacy or safety for any particular purpose. The Personal Property is delivered to TUSD "as is," "where is," and City makes no warranty of any kind, and particularly no warranty as to its usability generally or as to its fitness or safety for any particular purpose. 5. Indemnification. The City shall not be responsible, and TUSD agrees that it shall be responsible for and at all times relieve, indemnify, protect, defend and hold harmless the City and all of its officers, agents and employees from any and all claims and demands, actions, proceedings, losses, liens, costs and judgments of any kind and nature whatsoever, including expenses incurred in defending against legal actions, for death or injury to persons or damage to property and for civil fines and penalties arising or growing out of, or in any manner connected with, any TUSD Alterations of the Utility Systems or TUSD's failure to obtain consent prior to any such TUSD Alterations, or the ownership, use, operation, maintenance, storage, sale or lease by TUSD of any Personal Property transferred under this Bill of Sale except to the extent such death or injury to persons or damage to property is caused by the negligence of the City, its officers, agents and employees related to the use, operation, maintenance, storage, sale or lease of any such Personal Property. IN WITNESS WHEREOF, the parties hereto have, on the respective dates set forth below, duly executed this Bill of Sale. CITY OF TUSTIN TUSTIN UNIFIED SCHOOL DISTRICT By: William A. Huston City Manager Date: 4833-3026-4576.4 3 By: Richard Bray Superintendent Date: EXHIBIT H-1 Representations of the City 4828-4589-0562.1 Exhibit H-1 City Representations Tustin Unified School District Dear [ ]: I have received the Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and Establishment of an Elementary and High School ("TUSD Conveyance Agreement"). To the best of the City's information, knowledge and belief, I certify that all representations of the City set forth in the TUSD Conveyance Agreement are true and correct as of the day of , 2008, the date of the TUSD Property Closing. Sincerely, William A. Huston, City Manager City of Tustin 300 Centennial Way Tustin, California 92780 4840-7140-9410.2 EXHIBIT H-2 Representations of TUSD 4828-4589-0562.1 Exhibit H-2 TUSD Representations William A. Huston, City Manager City of Tustin 300 Centennial Way Tustin, California 92780 Dear Mr. Huston: I have received the Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and Establishment of an Elementary and High School ("TUSD Conveyance Agreement"). To the best of TUSD's information, knowledge and belief, I certify that all representations of TUSD set forth in the TUSD Conveyance Agreement are true and correct as of the day of , 2008, the date of the TUSD Property Closing. Sincerely, Tustin Unified School District 4828-1298-7138.2 EXHIBIT I Short Form Notice of Agreement 4828-4589-0562.1 5/22/08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TUSTIN UNIFIED SCHOOL DISTRICT OFFICIAL BUSINESS REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 6103 Recording requested by and when recorded mail to: Assistant City Manager The City of Tustin 300 Centennial Way Tustin, CA 92780 Space Above This Line Reserved for Recorder's Use SHORT FORM NOTICE OF AGREEMENT THIS SHORT FORM NOTICE is entered into this day of 2008 ("Effective Date"), between the CITY OF TUSTIN, CALIFORNIA (the "City"), a municipal corporation organized under the laws of the State of California, acting in its capacity as the local redevelopment authority for the disposition and conveyance of portions of the former Marine Corps Air Station Tustin, California, and the TUSTIN UNIFIED SCHOOL DISTRICT ("TUSD"). The City and TUSD are each sometimes referred to herein individually as a "Party" and collectively as the "Parties." RECITALS: WHEREAS: 1. The City requested from the United States of America (hereinafter the "Government") conveyance of a portion of the former Marine Corps Air Station Tustin, ("MCAS Tustin") which was closed pursuant to and in accordance with the Defense Base Closure and Realignment Act of 1990, as amended (Pub. L. No. 101-510; "Base Closure Act") and which is no longer required for military purposes; and 2. The City and TUSD entered into the Agreement Between City of Tustin and Tustin Unified School District Regarding Transfer of School Sites and Other Mitigation Measures, dated October 21, 1996 ("TUSD Agreement"), for the transfer of two ten (10) acre parcels for elementary schools and one forty (40) acre parcel for a high school at MCAS Tustin. 4827-9555-4562.1 MCAS TUSTIN SHORT FORM NOTICE OF AGREEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 3. Under the TUSD Agreement, City agreed to transfer such parcels to TUSD following the conveyance of the parcels from the Navy to the City, or support the transfer of the parcels under an educational public benefit conveyance ("PBC") directly from the federal government, in exchange for TUSD agreeing not to challenge, comment on, or oppose the approval or implementation of proposals, applications, approvals or permits relating to MCAS Tustin or the redevelopment of MCAS Tustin. 4. Pursuant to the Reuse Plan and Specific Plan and the TUSD Agreement, TUSD acquired one of the two ten (10) acre parcels for an elementary school through a PBC from the U.S. Department of Education. 5. Pursuant to the authority provided by section 2905(b)4 of the Base Closure Law and the implementing regulations of the Department of Defense (32 CFR Part 175), the Secretary of the Navy, on behalf of the United States of America, is authorized to convey surplus property at a closing installation to the LRA at no cost for economic development purposes. 6. In May 2002, the Navy approved an Economic Development Conveyance of Property ("EDC") and agreed to convey 1,153 acres of the former MCAS Tustin to the City for economic development in accordance with the Reuse Plan. On May 13, 2002, a portion of this property was conveyed by the Navy to the City by Federal Deed, in accordance with the provisions of that certain Agreement Between The United States of America and the City of Tustin, California, For The Conveyance of a Portion of the Former Marine Corps Air Station Tustin ("EDC Agreement"), which sets forth the terms and conditions of the conveyance of portions of MCAS Tustin from the Navy to the City ("City Property"), including the remaining parcels to be conveyed to TUSD ("TUSD Property"). A portion of the City Property, including a portion of the TUSD Property, was leased to the City by the Navy pursuant to the Conveyance Agreement and that certain Lease In Furtherance of Conveyance Between the United States of America and The City of Tustin, California For Portions of the Former Marine Corps Air Station Tustin (the "LIFOC"). 7. The Parties have entered into that certain Agreement between the City of Tustin and the Tustin Unified School District for the Conveyance of a Portion of MCAS, Tustin and the Establishment of an Elementary and High School, dated ("TUSD Conveyance Agreement"), setting forth the terms and conditions of the conveyance of the TUSD Property from the City to TUSD for establishment of an Elementary School and High School. The TUSD Property is more particularly described in Exhibit "A," attached hereto and made a part hereof. 8. The Parties agree to this Short Form Notice which is to be recorded in order that third parties may have notice of the existence of the TUSD Conveyance Agreement and the rights of the Parties under the TUSD Conveyance Agreement. 4827-9555-4562.1 2 MCAS TUSTIN SHORT FORM NOTICE OF AGREEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 AGREEMENTS: NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, agreements, covenants and conditions herein contained, the execution and delivery of the TUSD Conveyance Agreement by the Parties, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby state and agree as follows: 1. The Parties have executed and delivered the TUSD Conveyance Agreement. Copies of the TUSD Conveyance Agreement are being held by both Parties at their respective addresses. 2. The City will convey the TUSD Property to TUSD and TUSD will acquire the TUSD Property from the City on the terms and conditions set forth in the TUSD Conveyance Agreement. 3. All of the terms, conditions, provisions and covenants of the TUSD Conveyance Agreement are incorporated in this Short Form Notice by reference as though written out at length herein and the TUSD Conveyance Agreement and this Short Form Notice shall be deemed to constitute a single instrument or document. The rights and obligations of the Parties shall be construed solely by reference to the provisions of the TUSD Conveyance Agreement and in the event of any conflict between the provisions of the TUSD Conveyance Agreement and those of this Short Form Notice, the provisions of the TUSD Conveyance Agreement shall control. 4. This Short Form Notice shall inure to the sole benefit of and be binding upon the Parties and their respective successors and assigns. [Signature Page Follows] 4827-9555-4562.1 3 MCAS TUSTIN SHORT FORM NOTICE OF AGREEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have caused their duly appointed representatives to execute this short Form Notice as of the Effective Date set forth above. CITY OF TUSTIN William A. Huston, City Manager Approved as to Form: City Attorney or Special Counsel By: TUSTIN UNIFIED SCHOOL DISTRICT Richard Bray, Superintendent Approved as to Form: TUSD Counsel By: 4827-9555-4562. I 4 EXHIBIT A Description of Elementary School Parcel Size of parcel is 10.010 acres. Lot 3 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 884, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County Description of High School Parcels Size of parcel is 38.477 acres. Lot 35 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. Size of parcel is 1.478 acres. Legal Description: Lot 32 of Tract Map 17026, located in the City of Tustin, County of Orange, State of California, recorded on September 27, 2006, as instrument No. 2006000644310, Book 844, Page 1-14, inclusive of Miscellaneous Maps, Official Records of Orange County. 4828-4589-0562.1