HomeMy WebLinkAbout11 DISPOSITION AND DEVELOPMENT AGREEMENT (DOA) WITH FLIGHT VENTURE LLC (AKA LINCOLN PROPERTY COMPANY COMMERCIAL, INC./ALCION VENTURES, LLC)Agenda Item 11
AGENDA REPORT Reviewed:
MEETING DATE: NOVEMBER 15, 2016
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
City Manager JCP
Finance Director ST
SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) WITH FLIGHT
VENTURE LLC (AKA LINCOLN PROPERTY COMPANY COMMERCIAL,
INC./ALCION VENTURES, LLC)
SUMMARY
Authorization is requested to approve the DDA between Flight Venture LLC (Developer) and the City for
FLIGHT. The DDA specifies the terms and conditions under which the City -owned property, formerly
known as Cornerstone 1, will be conveyed and developed by Flight Venture LLC. The purpose of the DDA
is to effectuate, through the development and maintenance of the property, the Reuse Plan for MCAS
Tustin and the Specific Plan for Tustin Legacy.
RECOMMENDATION
Authorize the City Manager to execute the DDA between the Flight Venture LLC and City subject to
any non -substantive modifications as may be deemed necessary and/or recommended by the City's
special real estate counsel or the City Attorney.
FISCAL IMPACT
The property is 39.7 acres and is owned by the City in -fee. Under the DDA the property will be disposed
of in two phases. The disposition price for Phase 1 is $25,984,847. For Phase 2, the Developer has an
option, not an obligation to purchase. The option is 10 -years commencing with the disposition of Phase
1, the Phase 2 price is adjusted annually ranging from $31,390,643 in the first year to $47,280,105 in the
tenth year. For example, if the Developer would purchase Phase 2 in the first year following the close of
Phase 1, the City would receive to total of $57,375,490 for Phase 1 and Phase 2. If the option is not
exercised until year 10, the City would receive $73,264,952. For the Developer to have the right to
purchase Phase 2 during the 10 -year period, the Developer shall make annual option payments which are
applied toward the purchase price; however, if the Developer does not purchase Phase 2 or fails to make
annual payments all option payments will be retained by the City and the Developer will lose the right to
purchase Phase 2.
The Developer will be constructing and financing peripheral horizontal improvements (i.e., on-site streets
and utilities) throughout the site which includes Phase 1 and Phase 2. Because the City retains ownership
of Phase 2, until the option is exercised, the cost of the Phase 2 horizontal improvements will be reimbursed
by the City to the Developer. In lieu of option payments the Developer will receive credit for the costs of
improvements advanced for the benefit of Phase 2. The credit will be in accord with the option payment
schedule in the DDA and credited toward the purchase price. In the event the Developer does not purchase
Phase 2, the City's reimbursement for the amount outstanding for cost of the improvements will be
accelerated, due and payable within 12 months unless Phase 2 is transferred.
Negotiation costs, such as legal and staff costs incurred by the City are reimbursed by the Developer in
Agenda Report — DDA
November 15, 2016
Page 2 of 4
accord with the ENA. The City, under an existing agreement with CBRE, will be paying a commission of
approximately $1,439,394 at the close of Phase 1. A commission will be paid to CBRE, at the close of
Phase 2 and which will be approximately 5.5% of the then purchase price.
A default by the City, Developer, or transferee may impact this section.
COORELATION TO THE STRATEGIC PLAN
This action correlates to the City's Strategic Plan for Economic and Neighborhood Development (Goal A).
DISCUSSION
On June 2, 2015, the City entered into an ENA with the Developer to negotiate the construction of
870,000 square feet for a creative -style office campus; the ENA has been amended twice extending
the negotiating period through November 15, 2016. The Planning Commission on September 27, 2016
recommended that the City Council adopt the entitlement actions recommended by the Community
Development Department. On November 1, 2016 the City Council adopted the entitlement actions
recommended by the Planning Commission.
This is the first office project to be undertaken at Tustin Legacy. It is one of the largest ground -up office
projects to be built in Orange County within the last 10 years. It will be a significant employment center
with approximately 1,500 to 1,700 employees in Phase 1. At the buildout of Phase 2 a total of 3,100 to
3,400 employees will be at the FLIGHT project.
DDA Summary
Description of the Property
The property is 38.74 acres and is owned in -fee by the City. The Developer will be purchasing
Phase 1 which is 17.545 acres and have an option to purchase Phase 2 which is 21.195 acres.
Developer Requirements for Construction of Phase 1 and Phase 2
In Phase 1 the Developer is required to build not less than 350,000 square feet of gross building
area (GBA) not to exceed 390,440 GBA. Within Phase 1 the project will consist of a large office
campus comprising four buildings, a small office campus comprising four buildings, a food hall
and a conference center. If the Developer exercises the option for Phase 2, they will be required
to build not less than 400,000 GBA, not to exceed 479,560 GBA. If both phases are constructed,
the Developer will construct not less than 750,000 GBA and not more than 870,000 GBA.
Phase 1 Conveyance
The Developer's intention is to close escrow in March 2017; however, the Developer has until
August 31, 2017 to close which can be extended by six months (i.e., until February 28, 2018) if
the Developer opts to pay an additional $250,000. This extension payment is non-refundable but
is applicable to the purchase price if the Developer closes.
The Developer must comply with specific closing conditions which are addressed in Section 7 of
the DDA; the appropriate form agreements addressing those conditions are found as attachments
in the DDA. The closing conditions for Phase 1 are typical of transactions previously executed by
the City with private party developers. These conditions include, but are not limited to: proof of
financing as appropriate including equity and debt, entitlements, and the project being permit
ready.
Phase 2 Conveyance
Phase 1 must close before the Developer can exercise the option to purchase Phase 2. Within
60 days of exercising the option for Phase 2, the Developer must meet specific closing conditions
standard to Phase 1. The minimum threshold conditions, specific to Phase 2 are as follows: (a)
the Developer shall have leases or transfer agreements executed with end users (i.e., tenants or
build -to -suit users) for not less than 232,050 GBA of office uses, or (b) the Developer or Phase 2
Agenda Report — DDA
November 15, 2016
Page 3 of 4
Developer shall have a binding contract(s) to sell or lease at least 100,000 GBA of office uses to
a build -to -suit user(s) in Phase 2 . In either case, the Developer will be required to construct not
less than 400,000 GBA in Phase 2. As previously noted under the Fiscal Impact section, the
developer has 10 years to close on Phase 2 under the threshold conditions and closing conditions
stated in the DDA.
Non -Compete Covenant
The non -compete covenant, not found in previous DDAs, recognizes the requirement of the
Developer by the City to make a significant speculative investment in a large-scale office campus.
For Phase 1 the covenant terminates the earlier of: 1) 315,000 GBA is leased/sold, or 2) October
1, 2020. During the Phase 1 stabilization period, up to 150,0000 GBA of office uses may be
constructed in non -FLIGHT projects if the office uses are located in a mixed-use project and the
ground floor is not -occupied by office users.
For Phase 2 the covenant terminates the earlier of: 1) 360,000 GBA being leased/sold, or 2) three
years from the close of escrow on Phase 2. During the Phase 2 stabilization period, up to
100,0000 GBA of office uses may be constructed in non -FLIGHT projects if the office uses are
located in a mixed-use project and the ground floor is not -occupied by office users. This would
change only if no permits were issued for mixed-use office during Phase 1, in that event the total
would increase to 200,000 GBA. A total of 250,000 GBA of office space located in mixed-use
projects can be constructed if Phase 1 and Phase 2 were to be constructed concurrently.
Standalone office projects can be developed when the Phase 1 the covenant has terminated and
the option for Phase 2 has not been exercised by the Developer. The covenant is not applicable
beyond the boundaries of Tustin Legacy and it impacts only properties currently owned or
controlled by the City. Nothing in this covenant restricts the City from entering into binding
agreements such as DDAs with respect to sale or lease for office development at Tustin Legacy;
however, it restricts the amount of office space constructed and the type of project in which the
office space is located. The restrictions shall apply only during each of the Non -Compete Phases
and not during any period prior to, between or following such periods or during any period in which
the Developer is in Material Default. Upon the termination of each non -compete period for each
Phase the restrictions shall be of no further force. City staff will monitor the threshold levels
through leasing reports certified by the Developer.
Schedule of Performance
The Schedule of Performance specifies outside dates, that is, dates by which an item must be
commenced or completed. In the event of non-performance, a DDA default is triggered. The
option periods were previously discussed under the Fiscal Impact section. The major construction
completion dates commence no later than 90 days following the close of escrow, these dates for
Phase 1 are as follows: 1) Minimum Horizontal Improvements, such as grading, infrastructure and
roads must be completed by the Developer with 21 months, with the exception of cap/paving
roadways; and, 2) the Developer must complete the construction of all horizontal improvements
and minimum vertical improvements, meaning the office campus, with 36 months. Phase 2 must
meet similar performance dates as outlined for Phase 1. The Developer and City staff have
worked on and reviewed the current project schedule in which commencement and completion
dates are typical for a project of this scale. The Schedule of Performance is based on the
anticipated project schedule, allowing for slippage in the normal course of events.
Agenda Report — DDA
November 15, 2016
Page 4 of 4
Reversion and Repurchase Rights Reserved by City
One of the City's goals for Tustin Legacy is that development occur in an orderly manner; thus,
the City does not sell property to private parties in order to prevent land speculation. The City has
addressed this in the DDA by preserving its rights through the Right of Repurchase and the Right
of Reversion. These rights can only be exercised by the City if the there is a Material Default by
the Developer and the Developer fails to cure the default.
The staff recommendation is based on the following: 1) design and quality of the project; 2) the need to
develop an employment center at Tustin Legacy that compliments the existing and planned residential
and retail uses in Tustin Legacy; 3) the ability of the Developer to deliver the project in a timely manner,
and 4) a fair market valued transaction.
:Dir
hn Buchanan
or of Economic Development
Attachment — Disposition and Development Agreement City of Tustin and Flight Venture LLC.
TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
CORNERSTONE I
by and between
CITY OF TUSTIN
and
FLIGHT VENTURE LLC
DATED: November 15, 2016
Tustin
TABLE OF CONTENTS
Page
1. Subject and Purpose of Agreement; Parties; Applicable Requirements ......................
- 1 -
1.1
Background Regarding MCAS Tustin.............................................................
- 1 -
1.2
Description of Development Parcels; Subdivision ..........................................
-2-
2-
1.3
1.3
Purpose of Agreement......................................................................................
-3 -
1.4
Parties to the Agreement..................................................................................
-5 -
1.5
Federal Requirements Applicable to Tustin Legacy ........................................
-6-
6-
1.6
1.6
Local Requirements Applicable to Tustin Legacy ...........................................
-6-
6-
1.7
1.7
Not a Development Agreement.......................................................................
-6-
6-
1.8
1.8
ENA Deposits, City Transaction Expenses and Independent Contract
Consideration...................................................................................................
-7-
7-
1.9
1.9
Definitions; Attachments.................................................................................
-8-
8-
2.
2. Prohibition
Against Transfers and Transfer of Control ...............................................
-9-
9-
2.1
2.1
Importance of Developer Qualifications..........................................................
-9-
9-
2.2
2.2
Transfers and Transfers of Control..................................................................
-9-
9-
2.3
2.3
Remedies for Improper Transfers or Transfers of Control ............................
-23 -
2.4
Changes..........................................................................................................
-23 -
3. Representations and Warranties.................................................................................
-23 -
3.1
Developer's Representations and Warranties ................................................
-23 -
3.2
Developer Covenants Regarding Representations and Warranties ...............
-26-
26-
3.3
3.3
City Representations and Warranties.............................................................
-26-
26-
4.
4. Conveyance of Property from City to Developer......................................................
28-
-28-
4.1
4.1
Conveyance of Property.................................................................................
-28-
28-
4.2
4.2
Purchase Price................................................................................................
-29-
29-
4.3
4.3
Payment of Purchase Price.............................................................................
-30-
30-
4.4
4.4
Escrow and Joint Escrow Instructions...........................................................
-37-
37-
4.5
4.5
Investigation; Property Conveyed "As -Is." ...................................................
-37-
37-
4.6
4.6
Covenants; Preconditions to Close of Escrow ...............................................
-43 -
4.7
Guarantor Illiquidity Event............................................................................
-49-
49-
5.
5. Developer's Due Diligence Investigation..................................................................
-51 -
5.1
Due Diligence Period.....................................................................................
-51 -
5.2
No Financing Contingency............................................................................
-52-
52-
5.3
5.3
Termination of Agreement.............................................................................
52-
-52-
5.4
5.4
Limited License.............................................................................................
-53 -
5.5
Indemnity.......................................................................................................
-53 -
5.6
Review of Certain Records and Materials.....................................................
54-
-54-
5.7
5.7
Communications with City and Third Parties ................................................
-54-
54-
6.
6. Title; Survey...............................................................................................................
-55 -
6.1
Survey by Developer......................................................................................
-55 -
6.2
Permitted Exceptions.....................................................................................
-55 -
6.3
Supplemental Title Reports............................................................................
-55 -
6.4
ALTA Policy; Endorsements.........................................................................
-56-
56 -
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6.5
Mandatory City Obligations with Respect to Title . .....................................
57-
-57-
7.
7.
Close
of Escrow.........................................................................................................
57-
-57-
7.1
7.1
Time and Place of Close of Escrow...............................................................
57-
-57-
7.2
7.2
Conditions Precedent to Phase 1 Property Close of Escrow ..........................
-58 -
7.3
Conditions Precedent to Phase 2 Property Close of Escrow ..........................
-64-
64-
7.4
7.4
Additional Closing Requirements..................................................................
69-
-69-
7.5
7.5
Procedures for Conveyance...........................................................................
70-
-70-
8.
8.
Development
of the Property and Additional Covenants of Developer and City......
-72-
72-
8.1
8.1
Scope of Development...................................................................................
-72-
72-
8.2
8.2
Timing and Conditions of Project Development ...........................................
74-
-74-
8.3
8.3
Land Use Matters...........................................................................................
-75 -
8.4
Design Approval............................................................................................
-77-
77-
8.5
8.5
Financial Status..............................................................................................
80-
-80-
8.6
8.6
Project Budget Statement...............................................................................
80-
-80-
8.7
8.7
Backbone Infrastructure Improvements.........................................................
80-
-80-
8.8
8.8
Development Covenants................................................................................
82-
-82-
8.9
8.9
City Rights of Access.....................................................................................
-83 -
8.10
Disclaimer of Responsibility by City and Exculpation ..................................
-83 -
8.11
Local, State and Federal Laws.......................................................................
-84-
84-
8.12
8.12
Liens, Taxes and Assessments.......................................................................
-85 -
8.13
Non -Compete Covenant.................................................................................
-85 -
8.14
City Park Completion....................................................................................
87-
-87-
8.15
8.15
City's Activities on Development Parcels .....................................................
88-
-88-
9.
9.
Certificate of Compliance..........................................................................................
-88-
88-
9.1
9.1
Certificate of Compliance Defined................................................................
-88-
88-
9.2
9.2
Conditions Precedent for Phase 1 Parcel Certificate of Compliance .............
-89-
89-
9.3
9.3
Conditions Precedent for Phase 2 Parcel Certificate of Compliance .............
-90-
90-
9.4
9.4
Conclusive Presumption................................................................................
-91 -
9.5
Not Evidence..................................................................................................
-91 -
9.6
City Obligations.............................................................................................
92-
-92-
9.7
9.7
Effect of Certificate of Compliance; Termination of Agreement ..................
-92-
92-
10.
10.
Indemnification and Environmental Provisions.........................................................
-93 -
10.1
Developer's Indemnification for Non -Environmental Matters ......................
-93 -
10.2
Developer's Environmental Indemnification.................................................
94-
-94-
10.3
10.3
Duration of Indemnities.................................................................................
-95 -
10.4
Claim Response.............................................................................................
-95 -
10.5
Release Notification and Remedial Actions ..................................................
96-
-96-
10.6
10.6
Conflict with Section 330 and Other Federal Government Obligations........
-97-
97-
10.7
10.7
Insurance and Indemnification.......................................................................
-97-
97-
11.
11.
Insurance....................................................................................................................
- 98 -
11.1
Required Insurance........................................................................................
-98-
98-
11.2
11.2
General Insurance Requirements.................................................................
-101 -
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12.
Tustin
Covenants and Restrictions......................................................................................
- 102 -
12.1
Prohibited Uses............................................................................................
- 102-
12.2
Maintenance Covenant.................................................................................
- 102-
12.3
Landscape Installation and Maintenance Agreement and Roadway and
Utility Easement Agreement........................................................................
-104-
104-
12.4
12.4
Duration of Covenants.................................................................................
-104-
104-
12.5
12.5
Obligation to Refrain from Discrimination..................................................
-105 -
12.6
Deed Restrictions/Covenants Running with the Land .................................
-105 -
12.7
Priority of Agreement and Special Restrictions ...........................................
-105 -
13.
CC&Rs.....................................................................................................................
-105 -
14.
Potential
Defaults and Material Defaults.................................................................
- 106 -
14.1
Potential Defaults.........................................................................................
-106-
106-
14.2
14.2
Material Defaults.........................................................................................
-106-
106-
14.3
14.3
Due Diligence Information; Products..........................................................
- 107 -
15.
Nonoccurrence of a Condition at Close of Escrow ..................................................
- 108 -
15.1
Failure of a Condition to Phase 1 Property Close of Escrow Absent a
Default..........................................................................................................
109-
-109-
15.2
15.2
DEFAULT OF DEVELOPER RESULTS IN FAILURE OF PHASE 1
PROPERTY CLOSE OF ESCROW............................................................
- 110 -
15.3
FAILURE OF PHASE 2 PROPERTY CLOSE OF ESCROW ...................
- 112 -
15.4
Failure to Close; Default of City..................................................................
-113 -
16.
Remedies for Defaults After the Close of Escrow ...................................................
- 116 -
16.1
General Remedies........................................................................................
- 116 -
16.2
Lien Rights...................................................................................................
- 116 -
16.3
Right of Repurchase.....................................................................................
- 117 -
16.4
Right of Reversion.......................................................................................
- 119 -
16.5
Cooperation of Developer............................................................................
- 125 -
17.
Mortgages and Mortgagee Protection......................................................................
- 126 -
17.1
Transfers to Permitted Mortgagee...............................................................
-126-
126-
17.2
17.2
Acknowledgment by City of Permitted Mortgagee .....................................
-129-
129-
17.3
17.3
Change in Loan Documents.........................................................................
-129-
129-
17.4
17.4
Initial Notice................................................................................................
-129-
129-
17.5
17.5
Foreclosure Transfers...................................................................................
129-
-129-
17.6
17.6
Mortgagee Protections.................................................................................
130-
-130-
17.7
17.7
Failure of Permitted Mortgagee to Cure ......................................................
-132-
132-
17.8
17.8
Condemnation or Insurance Proceeds..........................................................
-132-
132-
17.9
17.9
Loss Payable Endorsement to Insurance Policy ..........................................
-132-
132-
17.10
17.10
Subordination Agreement............................................................................
-133 -
17.11
Constructive Notice and Acceptance...........................................................
-133 -
17.12
Bankruptcy Affecting the Developer...........................................................
-133 -
17.13
Notice and Cure Rights of City....................................................................
-134-
134 -
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18. General Provisions...................................................................................................
Tustin
- 134-
18.1
Applicable Law; Consent to Jurisdiction; Service of Process .....................
- 134-
18.2
Legal Fees and Costs...................................................................................
- 134-
18.3
Memorandum of DDA; Modifications or Amendments ..............................
- 135 -
18.4
Further Assurances.......................................................................................
-135 -
18.5
Rights and Remedies Are Cumulative; Limitation on Damages .................
-136-
136-
18.6
18.6
Notices, Demands and Communications between the Parties .....................
-137-
137-
18.7
18.7
Delay............................................................................................................
-138 -
18.8
Conflict of Interest.......................................................................................
- 141 -
18.9
Non -liability of City Officials and City or Developer Employees ..............
- 141 -
18.10
Consents and Approvals..............................................................................
- 141 -
18.11
No Real Estate Commissions.......................................................................
-142-
142-
18.12
18.12
Date and Delivery of Agreement.................................................................
142-
-142-
18.13
18.13
Constructive Notice and Acceptance...........................................................
-142-
142-
18.14
18.14
Survival of Covenants..................................................................................
-142-
142-
18.15
18.15
Construction and Interpretation of Agreement ............................................
-143 -
18.16
Time of Essence...........................................................................................
-144-
144-
18.17
18.17
Fees and Other Expenses.............................................................................
144-
-144-
18.18
18.18
No Partnership.............................................................................................
144-
-144-
18.19
18.19
Binding Effect..............................................................................................
-144-
144-
18.20
18.20
No Third Party Beneficiaries.......................................................................
-144-
144-
18.21
18.21
Counterparts.................................................................................................
144-
-144-
18.22
18.22
Duplicate Originals, Entire Agreement and Waivers ..................................
- 145 -
18.23
Confidentiality.............................................................................................
- 145 -
18.24
Proprietary and Governmental Roles; Actions by Parties ...........................
-146-
146-
18.25
18.25
Performance of Acts on Business Days .......................................................
147 -
-147-
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TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR CORNERSTONE 1
THIS TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR
CORNERSTONE 1 (the "Agreement") is entered into as of November 15, 2016 (the "Effective
Date") by and between the CITY OF TUSTIN, a municipal corporation of the State of California
(as more fully defined in Section 1.4.1, "City"), and FLIGHT VENTURE LLC, a Delaware
limited liability company (as more fully defined in Section 1.4.2, the "Developer"). The City and
Developer and their respective successor and assigns are sometimes referred to in this
Agreement individually as a "Party" and collectively as the "Parties." The Parties agree as
follows:
1. Subject and Purpose of Agreement; Parties; Applicable Requirements.
1.1 Background Regarding MCAS Tustin.
1.1.1 Pursuant to the Defense Base Closure and Realignment Act of 1990,
(Part A of Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended (the
"Base Closure Law") the Federal Government (defined below) determined to close the Marine
Corps Air Station -Tustin ("MCAS Tustin") located substantially in the City of Tustin. In 1992,
the City was designated as the Lead Agency or Local Redevelopment Authority for preparation
of a reuse plan for MCAS Tustin in order to facilitate the closure of MCAS Tustin and its reuse
in furtherance of the economic development of the City and surrounding region. The MCAS
Tustin Reuse Plan developed in accordance with this procedure was adopted by the City Council
of the City of Tustin on October 17, 1996 and amended in September, 1998 (the "Reuse Plan").
1.1.2 A Final Environmental Impact Statement/Final Environmental Impact
Report for the Disposal and Reuse of MCAS Tustin (the "Final EIS/EIR") and Mitigation
Monitoring and Reporting Program for the Final EIS/EIR were adopted by the City on
January 16, 2001. In March 2001, a Record of Decision was issued by the United States
Department of the Navy (hereinafter, "Navy") approving the Final EIS/EIR and the Reuse Plan.
Subsequently, a Supplement to the Final EIR/EIS and various addenda to the Final EIS/EIR were
approved by the City.
1.1.3 In May 2002, the Navy and the City entered into 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 dated as of May 13,
2002 (the "Memorandum of Agreement"), pursuant to which the Navy agreed to convey
approximately 1,153 acres of MCAS Tustin to the City. On May 13, 2002, a total of
approximately 977 acres, including portions of the Development Parcels (as hereinafter defined)
which are the subject of this Agreement, were conveyed by the Navy to the City by quitclaim
deed in accordance with the provisions of the Memorandum of Agreement. The additional
acreage was made subject to a ground lease by the City from the Navy and portions thereof,
including the remaining portions of the Development Parcels, were subsequently conveyed by
the Navy to the City pursuant to quitclaim deed. The approximately 1,153 acres of MCAS
Tustin Cornerstone I DDA 11-8-2016 (agd) - 1 - City of Tustin/Flight Venture LLC
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Tustin located within the City of Tustin and either conveyed by the Navy to the City or subject to
ground lease between the Navy and the City are referred to in this Agreement as "Tustin
Legacy".
1.1.4 On February 3, 2003, the City adopted an ordinance approving the
"MCAS Tustin Specific Plan/Reuse Plan" setting forth the zoning and entitlement framework for
future development of Tustin Legacy, which has been subsequently amended. The intent of the
Specific Plan (as defined below) is to conform to and implement the Reuse Plan and the City's
General Plan.
1.1.5 The City desires to effectuate development of Tustin Legacy through
the sale and development of such property in accordance with applicable federal and local
requirements. The City intends that Tustin Legacy shall be developed in accordance with all
City requirements, including implementing redevelopment plans, the Reuse Plan and the Specific
Plan. To this end, pursuant to the Disposition Strategy for the Master Development Footprint
adopted by the City Council in April, 2011 (the "Disposition Strategy"), which authorized the
City to directly market portions of Tustin Legacy to potential end business users in order to more
specifically direct and accelerate development absorption, the City initiated a marketing initiative
including retaining CBRE to identify potential office developers.
1.1.6 In response to the City's marketing initiative, Lincoln Property
Company Commercial, Inc., a Texas corporation ("LPCC" ), submitted a business proposal on
March 9, 2015 for purchase and development, in two phases, of approximately 37.4 acres of land
within Disposition Area 4 of the Disposition Strategy, within an area of Tustin Legacy referred
to by the City as "Cornerstone I." On June 2, 2015, the City Council selected LPCC, an Affiliate
of which is the "Operating Member" of Developer under the Original Joint Venture Agreement
(as "Operating Member" is defined therein) for exclusive negotiations with respect to such
property and the conditions under which the Developer would undertake implementation of its
business proposal with respect to each phase, and entered into the ENA.
1.2 Description of Development Parcels; Subdivision.
1.2.1 The real property described by Disposition Package 4 that is the
subject of this Agreement consists of approximately 39.7 acres of land located in the City of
Tustin, County of Orange, California and is comprised of a portion of Parcel I -D-1 and all of
Parcel III -D-5 as described in the Navy transfer documents and as a "Portion of Reuse Plan
Disposition Site 6", "Portion of Reuse Plan Disposition Site 7', and "Portion of Reuse Plan
Disposition Site 6 & 7; portion of Carve -Out 3" in the Reuse Plan. Such property has been
subsequently reparcelized, and as of the Effective Date, is owned in fee by the City.
1.2.2 As part of the transactions contemplated herein, the City has Recorded
pursuant to the Subdivision Map Act and the City Code, Parcel Map No. 2015-168 subdividing
the land described in Section 1.2.1 into the following parcels as further depicted on
Attachment 213:
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(a) Parcel "A" comprised of approximately 0.966 acres which shall be
retained by the City and upon which the public right-of-way portions of Flight Way (as the same
may be renamed pursuant to application to the City filed by Developer) will be constructed;
(i) approximately 38.74 acres as legally described on
Attachment 2A and depicted on Attachment 2B (collectively the "Development Parcels") which
the City proposes to sell to Developer and Developer proposes to purchase from the City in
accordance with the terms of this Agreement, and which is further divided as follows:
(ii) One (1) parcel totaling in the aggregate approximately
17.543 acres, referred to on Attachments 2A and 2B as Parcel 1 and herein as the "Phase 1
Parcel"; and
(iii) One (1) parcel totaling in the aggregate approximately
21.195 acres, referred to on Attachments 2A and 2B as Parcel 2 and herein as the "Phase 2
Parcel".
Prior and as a condition to the Phase 1 Property Close of Escrow, the above described land shall
be further subdivided pursuant to Vesting Tentative Tract Map No. 18003 ("Subdivision Map")
that Developer shall process, pursuant to the Subdivision Map Act and the City Code, into
twenty-one (21) legal lots as further depicted on the Subdivision Map attached as
Attachment 3A.
1.2.3 Pursuant to the terms of this Agreement, the City intends to establish
by declaration of Special Restrictions certain covenants, conditions and restrictions with respect
to the Property, and thereafter, to convey the Development Parcels to Developer in two closings
in accordance with the terms and conditions of this Agreement. The Phase 1 Parcel comprises
the portion of the Development Parcels to be conveyed at the Phase 1 Property Close of Escrow
(as defined below) and the Phase 2 Parcel comprises the portion of the Development Parcels to
be conveyed at the Phase 2 Property Close of Escrow (as defined below). Developer shall Record
a phased final map prior to the conveyance of each Phase. The Phase 2 Property Close of
Escrow shall in all events take place subsequent to the Phase 1 Property Close of Escrow.
1.3 Purpose of Agreement.
1.3.1 Purpose. The purpose of this Agreement is to (a) effectuate the Reuse
Plan and the Specific Plan, in accordance with the terms and conditions set forth therein and in
the Memorandum of Agreement and the Federal Deeds, through disposition and development of
portions of Tustin Legacy as further described in this Agreement and (b) provide for the sale and
conveyance of the Property (as defined below), for the maintenance and use of the Property and
certain related improvements by the Developer and for the construction of the Project by the
Developer on the Property, in accordance with the Disposition Strategy for the Master Developer
Footprint adopted by the City Council in April 2011 and the terms and conditions of this
Agreement.
1.3.2 Proiect Definition. This Agreement further provides for development
on the Development Parcels by Developer of the "Project" to consist of construction,
installation, maintenance and use of up to 870,000 GBA of development, which Improvements
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(as defined below) shall be designed and constructed as further set forth in Article 8 and the
Scope of Development and shall include the following:
(a) the Horizontal Improvements (which shall be divided into the
Phase 1 Horizontal Improvements (which include the Minimum Horizontal Improvements), and
the Phase 2 Horizontal Improvements), to include private in -tract infrastructure and public on-
site and off-site infrastructure improvements more fully described on Attachment 8 and/or
depicted on Attachment 9; and
(b) the "Vertical Improvements" to be constructed in two phases,
defined as follows and in the Scope of Development attached as Attachment 8:
(i) the "Phase 1 Vertical Improvements" all of which shall
be constructed on the Phase 1 Parcel, containing no less than 369,500 GBA of commercial
development (the "Minimum Phase 1 Vertical Improvements"), which shall, as to each
Building constructed, include the core and shell, exterior staircases and balcony systems and
common restrooms but shall exclude the requirement to construct any other tenant improvements
and shall meet the following requirements:
(A) each of buildings Al, A2, B and C (large campus)
and any two or more of buildings E, F, G and H (small campus) as depicted on the Site Plan
attached as Attachment 313, which shall in the aggregate be comprised of not less than 358,000
GBA of Office Uses; and
(B) approximately 11,500 GBA located in a stand-alone
building containing Food Hall Uses ("Food Hall Building") depicted as building D-1 on the Site
Plan attached as Attachment 3B; and
(C) parking as required by City Code, of which not less
than 50% of City Code -required parking shall be contained in parking structures to be
constructed by Developer.
In addition to the foregoing, the Phase 1 Vertical Improvements may include up to 15,000 GBA
of Retail Uses (excluding the Food Hall Building), provided that the amount of Retail Uses in
both Phase 1 and Phase 2 (in addition to the Food Hall Building in Phase 1) shall not exceed
15,000 GBA in the aggregate. In no event shall the total Vertical Improvements in Phase 1
exceed 390,440 GBA.
With respect to the Minimum Phase 1 Vertical Improvements, if within eighteen (18) months
following the later of (1) issuance of a certificate of occupancy for the Food Hall Building and
(2) completing utility lines for and installation of major kitchen fixtures for Food Hall Uses, the
Food Hall Building is not fifty percent (50%) leased, then the Food Hall Building may be used
for any other Office Uses or Retail Uses (subject to the overall caps on Office Uses and Retail
Uses set forth above); and
(ii) the "Phase 2 Vertical Improvements" all of which shall
be constructed on the Phase 2 Parcel as a second phase of the Project which shall, as to each
Building constructed, include the core and shell, exterior staircases and balcony systems and
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common restrooms but shall exclude the requirement to construct any other tenant improvements
and shall meet the following requirements and containing:
(A) not less than 400,000 GBA of Office Uses
(comprising the "Minimum Phase 2 Vertical Improvements"); and
(B) parking as required by City Code of which not less
than 50% of City Code -required parking shall be contained in above or below -ground parking
structures to be constructed by Developer.
In addition to the foregoing, the Phase 2 Vertical Improvements may include up to 15,000 GBA
of Retail Uses, provided that the amount of Retail Uses (excluding the Food Hall Building) in
both Phase 1 and Phase 2 do not exceed 15,000 GBA in the aggregate. In no event shall the total
Vertical Improvements in Phase 2 exceed 479,560 GBA.
1.3.3 Benefits. The disposition of the Property, the development and
Completion of the Project pursuant to this Agreement, and the fulfillment generally of this
Agreement, are in the vital and best interests of the citizens of the City and the health, safety and
welfare of its residents, and are in accord with the public purposes and provisions of applicable
federal, state, and local laws and requirements.
1.4 Parties to the Agreement.
1.4.1 Com. The City is a municipal corporation of the State of California.
The City has been recognized as the Local Redevelopment Authority by the Office of the
Secretary of Defense for the former Marine Corps Air Station, Tustin, for purposes of the Base
Closure Law. "City" as used in this Agreement shall mean the City of Tustin and each assignee
or successor to the City's rights, powers and responsibilities. The City Council shall have the
right, in its sole discretion, to assign its rights and obligations to any agency or instrumentality of
the City, provided that in the event the City exercises such right to assign any of its proprietary
obligations, such assignment shall not relieve the City of any responsibility for its governmental
obligations, if any, under this Agreement. The principal office of the City and mailing address is
300 Centennial Way, Tustin, California 92780.
1.4.2 Developer. As of the Effective Date, Developer is a Delaware limited
liability company. Whenever the term "Developer" is used in this Agreement, such term shall
have the meaning set forth in Attachment 1. As of the Effective Date, the principal office and
mailing address of Developer is c/o Lincoln Property Company Commercial, Inc., 915 Wilshire
Blvd., Suite 2050, Los Angeles, CA 90017. Flight Venture LLC specifically excluding any
Transferee or successor or assignee thereof, is the "Initial Developer". Developer shall have the
right, solely in accordance with the provisions of Section 2.2.2(a), (b), (f), or (g) or
Section 2.2.3(b) and the other terms and conditions set forth in this Agreement, to assign its
rights and obligations under this Agreement and the Other Agreements with respect to
development of Phase 1 or Phase 2 to a Phase Transferee.
1.4.3 Relationship of City and Developer. The Parties acknowledge and
agree that the relationship of the City and Developer is neither that of a partnership nor that of a
joint venture. Notwithstanding any provision of this Agreement, Developer is not, and shall not
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be deemed to be, the agent of the City for any purpose, and shall not have the power or the
authority to bind the City to any contractual or other obligation. Prior to each Close of Escrow,
with respect to portions of the Property not yet acquired by Developer, Developer may only
characterize itself to third parties as the prospective purchaser and/or developer of the Property.
Developer shall not at any time hold itself out to the City or to any other third party as an agent
of the City, and shall not, by any act or omission, mislead any third party into believing, or allow
any third party to continue in the mistaken belief, that Developer is an agent of the City or has
the power or authority to bind the City to any contractual or other obligation.
1.5 Federal Requirements Applicable to Tustin Legacy.
1.5.1 Federal Economic Development Conveyance. The Parties
acknowledge and agree that this Agreement is entered into as part of an economic development
conveyance of Tustin Legacy to the City pursuant to the Base Closure Law, the Memorandum of
Agreement and the terms and conditions of the Federal Deeds, including the Environmental
Restriction pursuant to California Civil Code Section 1471 contained therein. Notwithstanding
any provision to the contrary contained in this Agreement, this Agreement is and shall be subject
to the terms and conditions of the Memorandum of Agreement and the Federal Deeds and the
rights, obligations and remedies of the Federal Government thereunder, and nothing contained in
this Agreement shall be construed in a manner that is inconsistent with the rights, obligations and
remedies of the Federal Government thereunder.
1.5.2 Memorandum of Agreement and Federal Deeds. Notwithstanding
anything in this Agreement to the contrary, if any provision of this Agreement contradicts,
modifies or in any way changes the terms of the Memorandum of Agreement or the Federal
Deeds, the terms of the Memorandum of Agreement and Federal Deeds shall prevail and govern.
1.6 Local Requirements Applicable to Tustin Legacy.
This Agreement is subject to all Governmental Requirements, including the General Plan,
the Specific Plan, the City Code, the Reuse Plan and any redevelopment plan applicable to the
Property; provided, however, that the City acknowledges that, concurrently with the execution of
this Agreement, City and Developer are entering into a Development Agreement (the "DA")
relating to the Property and that any provisions of this Agreement requiring Developer or the
Property to comply with any Governmental Requirements imposed by the City relating to
entitlements or development of the Property shall be subject to the terms of the DA and in the
event of any inconsistency between such Governmental Requirements and the DA, the
Governmental Requirements required to be imposed pursuant to the DA shall control.
1.7 Not a Development Agreement.
This Agreement is not a development agreement as provided in Government Code
Section 65864 and, as further set forth in Section 8.3.41 is not a grant of any entitlement, permit,
land use approval, or vested right in favor of Developer, the Project or the Property. The City
shall use good faith efforts, within applicable legal constraints and consistent with applicable
City policies, to take such actions as may be necessary or appropriate to effectuate and carry out
this Agreement in a timely and commercially reasonable manner.
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1.8 ENA Deposits, City Transaction Expenses and Independent Contract
Consideration.
1.8.1 ENA Deposits and ENA Transaction Expenses. Pursuant to the
ENA, LPCC has paid to the City deposits totaling Eight Hundred Thousand Dollars
($800,000.00) (the "ENA Deposit") to be used by the City to pay "City Transaction Expenses"
as defined therein and City staff costs incurred in negotiating this Agreement (the "ENA
Transaction Expenses ").
1.8.2 City Costs Deposit; Independent Consideration. Upon the
execution of this Agreement by the Parties, the funds remaining in the ENA Deposit shall be the
"City Costs Deposit", provided that Developer shall, as a condition to the effectiveness of this
Agreement, deliver to the City additional funds sufficient to bring the City Costs Deposit to
$100,000.00 (the "City Costs Deposit"). The City Costs Deposit shall be deposited by the City
in an account in a bank or trust company selected by the City. If any interest is paid on such
account, such interest shall accrue to any balances in the account for the benefit of Developer
and as additional security for Developer obligations hereunder. One Hundred Dollars ($100.00)
of the City Costs Deposit shall be retained by the City as "Independent Contract
Consideration'. Until the earliest to occur of (a) the Phase 2 Property Close of Escrow, (b) the
Phase 2 Property Outside Closing Date, (c) expiration of the Option without it being exercised or
(d) termination of this Agreement, if at any time the amount of funds in the City Costs Deposit
account (including interest accrued thereon) is depleted below Fifty Thousand Dollars ($50,000),
Developer shall be required to pay to the City each time an additional Fifty Thousand Dollars
($50,000) which shall be credited to the City Costs Deposit, and deposited by the City into the
City Costs Deposit account to be applied to City Transaction Expenses in accordance with the
provisions of Section 1.8.3.
1.8.3 Payment of Transaction Expenses. Developer shall pay (a) all ENA
Transaction Expenses incurred prior to the Effective Date and remaining unpaid as of the
Effective Date and (b) all DDA Transaction Expenses incurred by the City during the term of
this Agreement, whether arising with respect to matters or incurred by the City prior to or
following each Close of Escrow (collectively, the "City Transaction Expenses"). The City
Costs Deposit has been established to fund the City Transaction Expenses and may be used by
the City for such purpose, and shall be depleted accordingly. Immediately upon incurring any
City Transaction Expenses or receipt of an invoice from third parties for same, subject to
complying with the requirements of Section 1.8.4, the City shall have the right to deduct the
amounts due it on account thereof from the City Costs Deposit. In addition, to the extent then
unpaid, at each Close of Escrow or at the earlier termination of this Agreement, the City shall be
entitled to deduct from the City Costs Deposit the payment of all City Transaction Expenses then
unpaid and Developer shall, as a condition to Close of Escrow and subject to Section 1.8.4, pay
the full amount of City Transaction Expenses incurred by the City to and including the date of
such Close of Escrow. Within thirty (30) calendar days following the earliest of (w) the Phase 2
Property Close of Escrow, (x) the Phase 2 Property Outside Closing Date, (y) expiration of the
Option without it being exercised, or (z) the termination of this Agreement, the remaining
amount of the City Costs Deposit then held by the City, if any, shall be promptly returned by the
City to Developer, provided that the return of such funds shall not terminate the obligations of
Developer to pay in accordance with Section 1.8.4 all City Transaction Expenses arising or
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incurred prior to issuance of the Certificate Compliance for its respective portion of the Project.
Subject to the terms of Section 1.8.41 Developer shall pay the outstanding amounts due with
respect to City Transaction Expenses to the City within thirty (30) calendar days following
receipt of an invoice from the City therefor, provided that the City shall first apply the amount of
the City Cost Deposit, if any, then held by it in satisfaction of such invoice, and shall reflect the
amount of such credit on the invoice.
1.8.4 Payment of City Transaction Expenses; Exclusions from City
Transaction Expenses. Absent manifest error, the determination of costs, expenses, and fees
constituting City Transaction Expenses shall be made by the City in its sole discretion, and
Developer shall receive written notices from the City setting forth amounts constituting City
Transaction Expenses and related non -confidential documents evidencing such expenses. If
Developer reasonably objects to any such amounts and the City agrees, in its sole discretion, that
such objection is reasonable, the City shall cooperate with Developer to investigate such amounts
and to seek an appropriate adjustment or reduction in such amounts. The determination of the
City Manager shall be final with respect to any amounts due. Notwithstanding anything to the
contrary in this Agreement, the City and Developer hereby acknowledge and agree that the City
Transaction Expenses do not include: (a) any fees or deposits required of Developer for
processing entitlement applications; (b) any fees or costs for complying with provisions of
CEQA or its State CEQA implementing regulations or other matters identified in Sections 8.3.6
or 8.3.8; (c) any costs to review or approve any applications or submittals by Developer to the
City in connection with the Project; (d) the Development Costs, Project Fair Share Contribution
or any other development impact fees, exactions or other costs imposed as conditions of approval
with respect to the Entitlements or pursuant to the Other Agreements; (e) the marketing fees set
forth in Section 8.7.4; or (f) any other matters in this Agreement that expressly require Developer
to pay, at its sole cost, for expenses incurred in connection with this Agreement that are not
otherwise duplicative of other fees to be paid to the City in connection with the Phase 1 Project
and/or Phase 2 Project. The obligation of Developer to pay for the City Transaction Expenses
pursuant to this Section 1.8 shall not diminish or limit Developer's obligation to pay for any of
the costs in the preceding sentence.
1.9 Definitions; Attachments.
1.9.1 Definitions. Capitalized terms used in this Agreement, including in
the Attachments attached hereto, unless otherwise defined in this Agreement, shall have the
respective meanings specified in the Glossary of Defined Terms attached hereto as Attachment 1.
Unless otherwise indicated, references in this Agreement to articles, sections, paragraphs,
subsections, clauses, exhibits, attachments and schedules are to the same contained in or attached
to this Agreement and all attachments and schedules referenced in this Agreement are
incorporated in this Agreement by this reference as though fully set forth in this Section.
1.9.2 "Substantially in the Form and Substance." Wherever used in this
Agreement, the term "substantially in the form and substance" shall mean that the referenced
document, when compared to the previously approved form of document, is consistent in all
material respects, and none of the modifications in the referenced document materially diminish
a Party's rights or materially increase such Party's obligations thereunder, as determined by the
Party for whose benefit the condition is written, in its sole discretion.
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2. Prohibition Against Transfers and Transfer of Control
Any purported Transfer that does not comply with the requirements of Article 2 shall, at
the election of the City, be null and void and such Transfer shall be a Material Default under this
Agreement as of the date of the Transfer by the violating party, in accordance with the provisions
of Section 14.2.3.
2.1 Importance of Developer Qualifications
Developer represents and agrees that its undertakings pursuant to this Agreement
are for the purpose of development of the Project and not for speculation in land holding.
Developer further recognizes that the qualifications and identity of LPCC and the Affiliate of
LPCC which is the party with the Operating Rights and Responsibilities with respect to Initial
Developer, and of Alcion Real Estate Partners Master Fund III, L.P., the sole owner of Initial
Developer's managing member, and which is an Affiliate of Alcion, are of particular concern to
the City and community and in light of the following:
(a) The importance of the development of the Development Parcels
and Tustin Legacy to the general welfare of the community;
(b) The fact that a Transfer of Control is for practical purposes a
transfer of rights and obligations under this Agreement or the Property; and
(c) That it is because of the qualifications and identity of Initial
Developer's Key Employees and Initial Developer's Controlling Persons that the City is entering
into the Agreement with Developer.
2.2 Transfers and Transfers of Control.
2.2.1 Restrictions on Transfers. For the reasons set forth in Section 2. 1,
Developer, on behalf of itself and all Successor Owners, acknowledges and agrees as follows:
(a) Any Transfer or Transfer of Control in contravention of this
Article 2 shall be a Material Default under this Agreement in accordance with Section 14.2.3 and
no Person shall acquire any rights or powers under this Agreement except as set forth in this
Article 2.
(b) Except as set forth in Section 2.2.2 with respect to Permitted
Transfers, prior to the Recordation of a Certificate of Compliance for each Phase (or, if
applicable, Building Pad), any Transfer or Transfer of Control with respect to such Phase (or, if
applicable, Building Pad) shall be invalid and shall have no force or effect unless such Transfer
or Transfer of Control is authorized pursuant to and has been approved by the City in accordance
with the requirements of Section 2.2.3, 2.2.4, 2.2.5, 2.2.8 or Article 17, which approval may be
granted or withheld in the City's sole discretion.
(c) Notwithstanding any Transfers and/or Transfers of Control,
Developer on behalf of itself and each Successor Owner agrees that: (i) neither Initial Developer
nor any subsequent Developer shall be released with respect to the Ongoing Matters or for any
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other matters for which it remains liable pursuant to Sections 2.2.2(a) and 2.2.2(b), and
(ii) unless it is released by the City as set forth in Section 2.2.3(a)(iv) or as otherwise set forth in
this Agreement or agreed to by the City in writing, Initial Developer and each subsequent
Developer shall remain fully liable for its obligations under this Agreement and the Other
Agreements for such period as it is Developer under this Agreement and for the Additional
Liability Period and also shall remain liable with respect to each and every term of this
Agreement expressly surviving termination of this Agreement for the period described herein.
2.2.2 Permitted Transfers. The following Transfers and Transfers of
Control are "Permitted Transfers", and shall not be subject to the City's prior written consent
or otherwise subject to the requirements of Sections 2.2.3:
(a) Any Transfer of the entirety of Developer's interest in the Project
to a Developer Affiliate or any Transfer of the entirety of Developer's interest in Phase 1 or
Phase 2 individually to a Developer Affiliate; provided that except as set forth in
Section 2.2.2(f), unless such Transfer is approved by the City in its sole discretion, there shall be
no Transfer of Developer's interest in Phase 1 or Phase 2 to a Developer Affiliate resulting in
separate Control or ownership of Phase 1 and Phase 2 until each of the following has occurred:
(1) the Phase 1 Property Close of Escrow has occurred, (2) the Minimum Horizontal
Improvements have been Completed, and (3) the Option shall have been exercised; and provided
further that, in all cases, Developer shall provide the City with written notice of such transaction
not less than thirty (30) calendar days prior to the proposed Transfer and shall provide, no later
than ten (10) calendar days following such Transfer, (x) an original certificate executed by the
chief financial officer or other appropriate authorized officer of the Transferee in favor of City as
to the matters set forth in this Section 2.2.2, and (y) an original certificate executed by the chief
financial officer or other appropriate authorized officer of the Transferor that the conditions set
forth in the applicable portion of this Section 2.2.2 have been satisfied and reaffirming the
ongoing obligations of Transferor under this Agreement and the Other Agreements,
notwithstanding such Permitted Transfer, and each of the following shall apply and be satisfied:
(i) the City shall be entitled to look to the Transferor prior to
such Transfer (with the right, but not the obligation, to additionally look to the Initial Developer
if Initial Developer remains a Developer Affiliate of Transferor, and/or to the last Developer
approved in writing by the City) to fully comply with this Agreement as though there had not
been a Transfer (and each such Person shall remain fully liable under this Agreement), and to
cause the Developer Affiliate to comply with this Agreement;
(ii) An Affiliate of Alcion is the Controlling Person of the
Developer Affiliate that is the Transferee and LPCC (or an Affiliate of LPCC), or another Person
approved by the City in accordance with Section 2.2.7, has the Operating Rights and
Responsibilities;
(A) if previously executed, the applicable Joint
Venture Agreement(s) and Guaranty(ies) for each Phase shall remain in full force and effect
following such Transfer without any defaults thereunder and without any modifications thereto
other than modifications that have been consented to by the City in its sole discretion and if not
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previously executed, Developer shall deliver Joint Venture Agreements for each of Transferor
and Transferee meeting the requirements of Section 4.6.2;
(iii) Developer shall not be in Potential Default or Material
Default under this Agreement at the time of such Transfer;
(iv) the Transferee at the time of the Transfer shall have
expressly assumed for itself and its successors and assigns, and for the benefit of the City, by
instrument substantially in the form and substance of the instrument attached hereto as
Attachment 16A or Attachment 16B as applicable, and otherwise in a form acceptable to the City
in its sole discretion, acknowledged and Recorded, all the rights and obligations of Developer
under this Agreement and the Other Agreements arising from and after the date of such Transfer
and the Transferee shall agree to assume and to be subject to all the conditions and restrictions to
which Developer is subject by reason of this Agreement and the Other Agreements; and
(v) the Transferee shall certify in writing for the benefit of the
City as to the truth and correctness, as of the effective date of the assignment, of the
representations and warranties set forth in Section 3.1 to the knowledge of its specified
Developer Knowledge Parties.
(b) Any Transfer of Control by Developer to a Developer Affiliate or
any Transfer of Control with respect to Developer's interest in Phase 1 or Phase 2 individually to
a Developer Affiliate; provided that except as set forth in Section 2.2.2(f), unless such Transfer
of Control is approved by the City in its sole discretion, there shall be no Transfer of Control
with respect to Phase 1 or Phase 2 to a Developer Affiliate resulting in separate Control or
ownership of Phase 1 and Phase 2 until each of the following has occurred: (i) the Phase 1
Property Close of Escrow has occurred, (ii) the Minimum Horizontal Improvements have been
Completed and (iii) the Option shall have been exercised, and provided further that Developer or
Developer Affiliate shall provide the City with notice of such Transfer of Control, which shall
include a certification that all of the conditions set forth in this Section 2.2.2(b) have been
satisfied: (x) an Affiliate of Alcion is the Controlling Person of the Developer Affiliate, and
LPCC (or an Affiliate of LPCC) or another Person approved by the City in accordance with
Section 2.2.7, has the Operating Rights and Responsibilities; (y) if previously executed, the
applicable Joint Venture Agreement(s) and Guaranty(ies) for each Phase shall remain in full
force and effect following such Transfer of Control without any defaults thereunder and without
any modifications thereto other than modifications that have been consented to by the City in its
sole discretion and if not previously executed, Developer shall deliver Joint Venture Agreements
for each of Transferor and Transferee meeting the requirements of Section 4.6.2, and (z)
Developer shall not be in Potential Default or Material Default under this Agreement at the time
of such Transfer of Control.
(c) Any Transfer pursuant to a Space Lease; provided that such
Transfers shall be subject in all cases to Section 2.2.4;
(d) Any Transfer of portions of the Property to the City and/or grants
of easements in the Property to the City, to any public or quasi -public entity or to any utility, as
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necessary or desirable for the development of the Project, or to a property owners association in
accordance with the CC&Rs;
(e) Any temporary license or other grant of access rights in a Parcel or
any portion thereof to the City or to a Developer Affiliate and/or to any other third party, as
necessary or desirable for the development of the Property; and
(f) Notwithstanding the provisions of Section 2.2.2(a) and (b),
Developer shall have the right to carry out a Transfer and/or a Phase Transfer to a Developer
Affiliate as a Permitted Transfer following the Phase 1 Property Close of Escrow but prior to
Completion of the Minimum Horizontal Improvements and/or exercise of the Option if and only
if: (i) the Developer Affiliate to which the Transfer is proposed is Controlled by an Affiliate of
Alcion or the Person assuming control pursuant to a Transfer of Control is an Affiliate of Alcion
(such that each of Phase 1 and Phase 2 will be held by Developer or a Developer Affiliate
Controlled by an Affiliate of Alcion); (ii) the Transfer or Transfer of Control otherwise meets the
requirements of Section 2.2.2(a) or (b), as applicable, (iii) the proposed Controlling Person or
Transferee as applicable, submits to the City, for approval by the City in its sole discretion, with
respect to a Phase 2 Transfer, a revised Phase 2 Financing Plan meeting the requirements of
Section 4.6.1 and, with respect to a Phase 1 Transfer, a revised Phase 1 Financing Plan meeting
the requirements of Section 4.6.1, and (iv) the Developer and Transferee demonstrate, to the
satisfaction of the City in its sole discretion, that the conditions in Section 4.6.2(b), (c), (d) and
(e), as applicable, of this Agreement are satisfied as to each of Phase 1 and Phase 2, provided
that (A) prior to the Transfer, the Transferee shall be obligated to provide information to the City
concerning its proposed Guarantor and the then -current Net Worth and Liquidity and the Net
Worth and Liquidity anticipated at the time at which the Guaranty would be given and additional
information required by Section 4.6.2(b)(iv) or (c)(iv) as applicable to assure that the Guarantor
meets the Minimum Liquidity Standards, but shall not be obligated to provide a Guaranty at the
time of the Transfer unless the Guaranty would otherwise then be required to be provided
pursuant to this Agreement (and City's review of such information shall not be deemed to be
City's approval of Guarantor, which approval shall be provided, if at all, at and as a condition to
the Close of Escrow for the relevant Phase) and (B) with respect to the requirement to evidence
funding for Development Costs pursuant to Section 4.6.2(d), each of Transferor and Transferee
(or their respective Controlling Persons) shall demonstrate to the City that it or its Equity
Investor currently has, and has provided Developer with a binding contractual commitment to
invest, sufficient equity to fund the entire amount identified as the equity contribution of
Developer shown under the applicable Phase 1 Financing Plan or Phase 2 Financing Plan
approved by the City, including the amounts described in Section 4.6.2(d)(i) through Civ),
provided that in no event shall the amount described in this clause (iii) with respect to Phase 1 or
Phase 2 individually be required to exceed One Hundred and Fifty Million Dollars
($150,000,000.00), (iv) with respect to any Transfer or Transfer of Control prior to the
Completion of the Minimum Horizontal Improvements, the Phase 1 Developer provides
assurance to the City of Completion of the Minimum Horizontal Improvements, which assurance
may be provided through bonds, guarantees, cash collateral, or other instruments or means
satisfactory to the City in its sole discretion. The City approvals under this Section 2.2.2(f) are in
each case delegated by the City to the City Manager or the City Manager's designee.
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(g) Prior to the Phase 1 Property Close of Escrow, Developer intends
to Transfer all of its right, title, and interest in this Agreement, the Project, and the Property to
Flight Phase 1 Owner LLC, a Delaware limited liability company, of which Flight Venture LLC,
a Delaware limited liability company, is the sole member, and to satisfy each of the conditions
and requirements set forth in Section 2.2.2(a) with respect thereto. Upon satisfaction of each of
the applicable conditions and requirements set forth in Section 2.2.2(a) and (f), the City
acknowledges that such Transfer shall be a Permitted Transfer under this Agreement.
(h) The Transfer to a Qualified Foreclosure Purchaser or to the
applicable Permitted Mortgagee (or an affiliate thereof) (either, an "Approved Foreclosure
Transferee"), in connection with a Foreclosure of any Parcel (which foreclosed Parcel, together
with all of Developer's right, title, and interest in and to this Agreement and all other documents
and agreements related hereto to the extent of such Parcel is hereby referred to as the
"Foreclosed Collateral"); provided that such Transfer shall not release the Approved
Foreclosure Transferee from the obligations of this Agreement or the Other Agreements and
such Approved Foreclosure Transferee and all other Transferees acquiring from and after a
Foreclosure shall thereafter hold such Foreclosed Collateral subject to and shall assume and,
unless otherwise specifically stated in Article 17 or any Subordination Agreement then in effect
between City and the applicable Permitted Mortgagee, shall be obligated to comply with all
requirements of this Agreement, including without limitation, restrictions on Transfers and
Transfers of Control otherwise contained in this Agreement.
2.2.3 Provisions Applicable to Transfers and Transfers of Control
Other than Permitted Transfers. Except for Permitted Transfers described in Section 2.2.2,
prior to any Transfer or any Transfer of Control, Developer shall comply with the requirements
of this Section 2.2.3 and prior to the Recording of a Certificate of Compliance for a Phase or
Building Pad, Transfers and Transfers of Control affecting that Phase or Building Pad that are
not addressed by this Section 2.2.3 are prohibited except with respect to a Transfer to any Pad
Transferee that is an End User in accordance with Section 2.2.3(c) or Space Tenants in
accordance with Section 2.2.4 or a Construction Loan that is secured by a Permitted Mortgage in
accordance with Sections 2.2.8 and 17. Section 2.2.3(a) shall apply with respect to Transfers of
Initial Developer's or any subsequent Developer's entire interest in Phase 1 and Phase 2 of the
Project; Section 2.2.3(b) shall apply solely with respect to Transfers of either the entirety of
Phase 1 or the entirety of Phase 2 (other than those portions Transferred to Pad Transferees that
are End Users or Space Tenants) resulting in a division of ownership between Phase 1 and
Phase 2; Section 2.2.3(c) shall apply with respect to Transfers of Building Pads to Pad
Transferees, Section 2.2.4 shall apply with respect to Transfers of Leasable Space to Space
Tenants pursuant to a Space Lease, and Section 2.2.8 shall apply with respect to Transfers that
are Mortgages. References below to Transfers of the Project or any Phase of the Project shall
apply to and include Transfers of Developer's interests in any of this Agreement, the
Improvements, the Property and/or the Project, or the portions thereof applicable to a Phase.
Nothing in this Section 2.2.3 shall limit or release a Transferor's liability during any applicable
Additional Liability Period.
(a) Transfer of Entire Interest. Prior to Recordation of a Certificate of
Compliance and subject to the provisions of Section 9.7, the following shall apply with respect to
Transfers of the entirety of any Developer's interest in the Project and/or Transfer of Control by
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Developer (but shall specifically exclude Transfers governed by Section 2.2.3(b)) and
notwithstanding any other provision of this Agreement, Developer shall not Transfer any portion
of its interest in the Property, the Project, the Improvements or this Agreement less than the
entirety thereof except pursuant to Section 2.2.2, this Section 2.2.3(a) and Section 2.2.3(b),
2.2.3(c)_ 2.2.4. 2.2.5 or 2.2.8 or Article 17:
(i) Prior to any Transfer or Transfer of Control governed by
this Section, Developer shall obtain the prior written consent of the City to such Transfer or
Transfer of Control, which consent shall be granted or denied in the City's sole discretion.
(ii) In order to provide the City with information necessary to
inform its right to consent to a Transfer or Transfer of Control pursuant to this Section,
Developer shall provide to the City at least twenty (20) Business Days prior to the date of any
proposed Transfer or Transfer of Control:
(A) The names of the proposed Transferee and its
principals or the new Controlling Person, as applicable;
(B) All of the material proposed terms of the Transfer
or Transfer of Control;
(C) In the case of a Transfer, current audited financial
statements of the proposed Transferee (or financial statements certified by the chief financial
officer or other appropriate authorized officer or authorized representative of the proposed
Transferee, if the proposed Transferee does not have audited financial statements);
(D) In the case of a Transfer of Control, current audited
financial statements of the proposed new Controlling Person (or financial statements certified by
the chief financial officer or other appropriate authorized officer or authorized representative of
the proposed new Controlling Person, if the proposed new Controlling Person does not have
audited financial statements);
(E) The names of all Persons who Control the proposed
Transferee or the new Controlling Person, as applicable;
(F) In the case of a Transfer, a certificate of the
proposed Transferee describing other real estate projects developed by, leased by, or sold by the
proposed Transferee in California over the preceding five (5) year period, the dates of
involvement by the proposed Transferee with such projects and the success of the projects, such
certificate to be made by the manager, president or other Person with appropriate authority from
the proposed Transferee to do so;
(G) In the case of a Transfer of Control, a certificate by
the proposed new Controlling Person describing other real estate projects developed by, leased
by, or sold by the proposed new Controlling Person in California over the preceding five (5) year
period, the dates of involvement by the proposed new Controlling Person with such projects and
the success of the projects, such certificate to be made by the manager, president or other Person
with appropriate authority from the proposed new Controlling Person to do so; and
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(H) Such other relevant information as the City may
request in its sole discretion in connection with its consent rights under this Agreement
(including information analogous to the information described in Sections 4.6.1 through 4.6.6,
8.5.1, and 8.5.2 of this Agreement), which may include evidence that the proposed Transferee or
proposed new Controlling Person has sufficient financial capacity to perform the obligations of
Developer under this Agreement.
(iii) The proposed Transferee at the time of the Transfer shall
have expressly assumed for itself and its successors and assigns, and for the benefit of the City,
by instrument in substantially the form and substance of the instrument attached hereto as
Attachment 16A, or otherwise in a form acceptable to the City in its sole discretion,
acknowledged and Recorded, all the rights and obligations of Developer under this Agreement
and the Other Agreements arising from and after the date of such Transfer and the proposed
Transferee shall agree to be subject to all the conditions and restrictions to which Developer is
subject by reason of this Agreement and the Other Agreements with respect to the assigned
interests in the Project, and shall certify in writing for the benefit of the City as to the truth and
correctness, as of the effective date of the assignment, of the representations and warranties set
forth in Section 3.1 to the knowledge of its specified Developer Knowledge Parties.
(iv) Upon a Transfer of all of Developer's interests in the
Project pursuant to this Section 2.2.3(a) to a Transferee approved by the City, in the City's sole
discretion, and the provision by the Transferee of the following items, Developer shall be
released from its obligations under this Agreement and the Other Agreements arising from and
after the date of such Transfer; provided that in no event shall Developer be released with respect
to the Ongoing Matters:
(A) An assumption in writing by a Transferee of all
obligations of the assignor under this Agreement and the Other Agreements (including the
obligations to deliver a Phase 1 Joint Venture Agreement and/or a Phase 2 Joint Venture
Agreement, as applicable, in form and substance acceptable to the City in its sole discretion and
to otherwise comply with the requirements of Section 4.6, as applicable) pursuant to an
Assignment as described in Sections 2.2.3(a)(iiih and
(B) A Guaranty made by a Person with assets meeting
the requirements of the City and sufficient, in the determination of the City in its sole discretion,
to secure the development, construction and maintenance obligations of Developer under this
Agreement, which shall be in the form and substance of the instrument attached hereto as
Attachment 14 or otherwise in a form acceptable to the City in its sole discretion and meeting the
requirements of Section 4.6.3.
(b) Transfer of a Phase. Notwithstanding anything in this Agreement
to the contrary, until Recording of the Certificate of Compliance for the Phase of the Project
proposed to be Transferred, any Transfer resulting in a division of ownership between Phase 1
and Phase 2, including (i) Transfer by a Developer of its interest and/or ownership in Phase 1,
the Phase 1 Project, the Phase 1 Provisions and, if then acquired by the Transferor, the Phase 1
Property including the Improvements constructed or to be constructed thereon, (ii) Transfer by a
Developer of its interest and/or ownership in Phase 2, the Phase 2 Project, the Phase 2
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Provisions, including the Option if applicable, and/or the Phase 2 Property and Improvements
thereon if then acquired by the Transferor, and/or (iii) Transfer of Control of Developer or any
Developer Affiliate ("Phase Transfer" and the Property, interests and obligations so
Transferred, the "Transferred Phase") shall (A) meet the requirements of Section 2.2.2 as
determined by the City in its sole discretion or (B) require the prior written consent of the City,
which may be granted or denied by the City in its sole discretion. Until issuance of a Certificate
of Compliance for the affected Property and interests, unless expressly permitted by this
Section 2.2.3(b) or Sections 2.2.2, 2.2.4, 2.2.5 or 2.2.8 or Article 17, no Transfer of less than the
entirety of Developer's interest in and to a Phase shall be permitted by this Agreement. Any
Phase Transfer shall be carried out in accordance with the requirements of this Agreement,
including by execution by the Phase Transferor and the Phase Transferee of an agreement in
substantially the form and substance of the Assignment and Assumption Agreement attached
hereto as Attachment 16B or as otherwise approved by the City in its sole discretion ("Phase
Assignment"), pursuant to which the Phase Transferee shall assume all of the Phase Transferor's
right, title and interest in and to the Transferred Phase and shall agree to comply with the terms
of this Agreement and the Other Agreements with respect to and perform all obligations of
Developer thereunder with respect to the Transferred Phase including construction of the
Improvements thereon, use and maintenance of the Project, the Property and the Improvements
located thereon and all matters related thereto. Except as otherwise permitted in accordance with
Section 2.2.2(f) or otherwise approved by the City in its sole discretion, in no event shall
Developer carry out a Phase Transfer at any time prior to occurrence of each of the following:
(x) the Phase 1 Property Close of Escrow, (y) the Completion of the Minimum Horizontal
Improvements and (z) exercise of the Option. Any Phase Transfer pursuant to
Section 2.2.3(b)(B) shall be made only in accordance with the following requirements:
(i) The City shall have provided its prior written approval, in
its sole discretion, to the Person proposed as the Phase Transferee ("Approved Phase
Transferee"), and in order to provide the City with information necessary to inform its right to
consent to a Transfer of the foregoing interests to a Phase Transferee, the Phase Transferor and
the proposed Phase Transferee shall provide to the City, not less than twenty (20) Business Days
prior to the date of the proposed Transfer, the biographies of the principals of the proposed Phase
Transferee and any proposed Phase 2 Equity Investor and Phase 2 Guarantor and any proposed
new Phase 1 Equity Investor and Phase 1 Guarantor, the information described in
Section 2.2.3(a)(ii)(A) through H) with respect to the proposed Phase Transferee, including an
updated Financing Plan as described in Section 4.6.1, and the information required by Sections
4.6.2 and 4.6.6;
(ii) The City's approval rights with respect to the proposed
Phase Transferee and the proposed Transfer to such Person shall include the rights to:
(A) Assure that the Phase Transferor and the proposed
Phase Transferee have met all requirements of this Agreement with respect to such Transfer,
including execution of the Phase Assignment and to be advised whether or not Phase Transferor
and the proposed Phase Transferees are Related Parties;
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(B) Confirm the financial capacity of the proposed
Phase Transferee, the Phase 2 Equity Investor and the Phase 2 Guarantor and any proposed new
Phase 1 Equity Investor and Phase 1 Guarantor;
(C) Approve the Phase 2 Financing Plan, the Phase 2
Joint Venture Agreement, the Phase 2 Equity Investor and, if the Phase Transfer is with respect
to Phase 1, also approve all revisions to the Phase 1 Financing Plan, the Phase 1 Joint Venture
Agreement, the Phase 1 Equity Investor and the Phase 1 Guarantor, and all information provided
by the proposed Phase Transferee pursuant to the applicable provisions of Sections 4.6;
(D) Approve the Phase 2 Guarantor(s) and the Phase 2
Guaranty and any new Phase 1 Guarantor(s) and Phase 1 Guaranty pursuant to Section 4.6.3, and
(E) Approve the terms of the Transfer, including the
terms of the conveyance agreements and all documents executed in connection therewith by the
Phase Transferor and Phase Transferee in order to ensure that the same are consistent with the
Financing Plan, the Phase 1 Financing Plan and the Phase 2 Financing Plan approved by the City
in accordance with Section 4.6 and the requirements of this Section 2.2.3(b).
(iii) The entirety of Developer's interest in this Agreement with
respect to either the Phase 1 Project or the Phase 2 Project shall be concurrently Transferred to
the Approved Phase Transferee, together with all right, title and interest of Phase Transferor in
and to the Transferred Phase, provided that the Phase 1 Obligations shall in all events remain the
obligation of the Phase 1 Developer.
(iv) The Parties agree that Phase Transferor shall assign and
Phase Transferee shall assume all rights and obligations of Developer related to the Transferred
Phase and the Improvements existing or to be constructed thereon, and those additional
corresponding rights and obligations under this Agreement and the Other Agreements, including
the following:
(A) Phase Transferee, by Phase Assignment
acknowledged and Recorded, shall assume from and after the date of such Transfer the rights and
obligations of the Developer under this Agreement and the Other Agreements with respect to the
Transferred Phase and the Improvements now or thereafter to be constructed thereon, including
the obligations to construct and Complete, in connection with Phase 2, the Minimum Phase 2
Improvements or in connection with Phase 1, the Minimum Phase 1 Improvements, except that
the Phase 1 Developer (whether Transferor or Transferee) shall retain the Phase 1 Obligations (it
being further understood that except in the case of a Transfer pursuant to Section 2.2.2(f), the
Minimum Horizontal Improvements for the Phase 1 Parcel must have been completed prior to
the date of such Phase Transfer), and with respect to the foregoing, shall be subject to all of the
other terms and conditions of this Agreement, as further provided in such Phase Assignment;
(B) Phase Transferee shall have agreed in writing for
the benefit of the Phase Transferor and the City that Phase Transferee's development of the
Transferred Phase and the acquired Property shall be in full compliance with the then -existing
Entitlements and the Approved Plans unless otherwise approved by the City in its sole discretion;
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(C) as a condition precedent to each Close of Escrow
and to each subsequent Transfer to a Phase Transferee (other than a Space Lease), the
Controlling Person of the Approved Phase Transferee or, if such Controlling Person is not
approved by the City as the Guarantor for the Transferred Phase, another Person approved by the
City in its sole discretion as Guarantor for the Transferred Phase in accordance with Section 4.6,
shall deliver to the City a Guaranty for the Transferred Phase.
(D) For avoidance of doubt, unless otherwise agreed by
the City in its sole discretion, upon the execution and delivery of the Phase Assignment, Phase
Transferee shall be deemed to have assumed and shall be obligated to comply with and perform:
all obligations of the Developer of the Transferred Phase under this Agreement and the Other
Agreements with respect to the Transferred Phase including all requirements of each of the
provisions of this Agreement and the Other Agreements that are imposed upon "Developer",
with respect to the Project, the Property, the Improvements now or to be constructed thereon, but
in such event only with respect to the Transferred Phase.
(E) Upon (1) the Transfer of all of Phase Transferor's
interests in either Phase 1 or Phase 2 to an Approved Phase Transferee, the execution and
delivery of the Phase Assignment, including an assumption in writing by the Phase Transferee of
all of the obligations of Developer with respect to the Transferred Phase as set forth in the Phase
Assignment, (2) provision of an executed Joint Venture Agreement by which the Phase
Transferee is governed for the Transferred Phase, (3) compliance with the requirements of this
Section 2.2.3(b) and Section 4.6, and (4) delivery of an executed Phase 1 Guaranty by the Phase
1 Guarantor if such Transfer relates to Phase 1 and takes place concurrently with or following the
Phase 1 Property Close of Escrow, or delivery of an executed Phase 2 Guaranty by the Phase 2
Guarantor if such Transfer takes place concurrently with or following the Phase 2 Property Close
of Escrow, then, except as set forth below, the Phase Transferor shall automatically be released
from the obligations of Developer under this Agreement and the Other Agreements with respect
to construction and Completion of the Improvements on the Transferred Phase and with respect
to the other obligations expressly assumed by the Phase Transferee under the assignment
instrument; provided that, notwithstanding the foregoing or the assumption of obligations by the
Phase Transferee, the Phase Transferor shall not be relieved of any of its other obligations under
this Agreement and the Other Agreements and specifically, and without limitation shall not be
relieved or released from the Ongoing Matters and/or, in its capacity as Phase Transferor with
respect to Phase 2, from the Phase 1 Obligations, which shall remain the obligations of the
Transferor for so long as the Transferor owns the Phase 1 Property or any portion thereof and
shall be binding on each Successor Owner of the Phase 1 Property or any portion thereof that is
not an End User unless and until each such Person is expressly released in writing by the City.
(c) Transfer to Pad Transferees that are End Users. With respect
to Transfers of Building Pads to Pad Transferees that are End Users (whether by sale or Ground
Lease) occurring following the Close of Escrow with respect to a Phase and prior to the issuance
of a Certificate of Compliance for such Phase or for such Building Pad (but specifically
excluding a Transfer of the entirety of the Property or any Phase, pursuant to Section 2.2.3(a) or
b�, the following covenants and restrictions shall apply and further provided that no Transfer of
one or more Building Pads comprising less than the entirety of a Phase may be made to a Pad
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Transferee that is not an End User prior to issuance of a Certificate of Compliance for the
applicable Building Pad (other than Permitted Transfers described in Section 2.2.2):
(i) In the case of any Transfer pursuant to this Section 2.2.3(c),
the City shall (A) be provided advance written notice of (A) the identity of the End User to
confirm that such End User would not be engaging in a Prohibited Use, (B) the terms of the
Ground Lease or Transfer Agreement and all other Transfer documents proposed to be executed
by Developer and Pad Transferee, to confirm that they comply and do not conflict with the terms
and requirements of this Agreement and the Other Agreements, and (C) the building type, size
and use of the Vertical Improvements to be constructed on the Building Pad. If the Pad
Transferee shall be responsible for construction of Improvements upon the Transferred Building
Pad, then not less than twenty (20) Business Days prior to the Transfer, the Developer shall
provide to the City, and the City shall have the right to approve or disapprove in its sole
discretion, evidence of the financial capacity of the proposed Pad Transferee to finance and
construct such Improvements.
(ii) Developer shall cause to be made available to the City at
least fifteen (15) Business Days prior to the date of any such proposed Transfer the following:
(A) the name of the proposed End User with respect to a
Building Pad;
(B) current audited financial statements of the proposed
Pad Transferee or financial statements certified by the chief financial officer or other appropriate
authorized officer of the proposed Pad Transferee if the proposed Pad Transferee does not have
audited financial statements or a net worth letter from the certified public accountant from the
proposed Pad Transferee;
(C) such other relevant information as the City may
reasonably request to the extent necessary to evidence that the proposed Pad Transferee intends
to operate a business that is not a Prohibited Use, and to perform those obligations of Developer
under this Agreement assigned to the Pad Transferee with respect to the Building Pad;
(iii) Pad Transfers to Pad Transferees shall not be valid or of
force or effect unless:
(A) the sale agreement or Lease with the Pad Transferee
prohibits use of the Building Pad for Prohibited Uses;
(B) if requested by Developer or the Pad Transferee, the
Pad Transferee and Developer shall have executed in favor of the City a written agreement
substantially in the form and substance of the Pad Transferee Non -Disturbance and Attornment
Agreement agreed to by City and Developer pursuant to Section 12.3 or in such other form as is
agreed to by the City in its sole discretion, which shall, among other things, acknowledge the
City's rights under this Agreement; and
(C) City has provided its prior written consent to those
items and Transferees for which it has a right of consent pursuant to this Section 2.2.3(c).
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(iv) Provided that each of the conditions in Sections 2.2.3(c)(i)
throughkid) are satisfied, then at the request of Pad Transferee: (A) prior to execution by
Developer and the Pad Transferee of a Ground Lease or Transfer Agreement, the Pad Transferee
and the City shall, at the request of either such party, enter into a letter agreement attaching the
City Non -Disturbance and Attornment Agreement and (B) the City shall, upon execution and
delivery of such City Non -Disturbance and Attornment Agreement by Pad Transferee and
Developer execute such agreement; provided that in each case, the City Non -Disturbance and
Attornment Agreement shall not be effective until the date of legal Transfer of the Building Pad
by Developer to the Pad Transferee;
(v) Developer shall retain all of its obligations under this
Agreement relating to the Transferred Building Pad and the construction of the Improvements,
including the Minimum Horizontal Improvements, payment of all Development Costs and
performance of the maintenance and indemnity obligations set forth in this Agreement with
respect to such Building Pad, and all Ongoing Matters; provided that Developer may assign to
the Pad Transferee its maintenance obligations for such Building Pad; provided that such
Developer shall not be relieved of such obligations due to any assignment;
(vi) Developer shall use commercially reasonable efforts to
cause the Transfer Agreement or Ground Lease or a declaration of special land use restrictions
comparable to that recorded by the master developer of the Campus at Playa Vista development
("SLUR"), as applicable, to include the following provisions (which shall be subject to
modifications reasonably requested by Developer and Pad Transferee, provided that such
modifications do not have a material adverse effect on the City as determined by the City in its
sole discretion) as remedies in favor of Developer, in the event that any Pad Transferee or any
successor in interest to all or any portion of such Pad Transferee's rights with respect to the
Building Pad shall: (A) default under the covenants, conditions and restrictions set forth in the
applicable Quitclaim Deed, the Special Restrictions or the CC&Rs or (B) fail to occupy the
Building Pad within the time period required for such occupancy by the Transfer Agreement or
Lease;
(vii) If the Pad Transferee holds: (A) a leasehold interest in the
Building Pad and Improvements have not yet been Completed on such Building Pad, Developer
shall use its commercially reasonable efforts to cause the recordation of a SLUR or to include in
the Ground Lease a right of Developer, either (1) to terminate the applicable Ground Lease or (2)
to buy out such leasehold interest (provided that such lease may include one or both of the
foregoing remedies, in Developer's discretion) or (B) the fee interest in such Building Pad and
Improvements have not yet been Completed on such Building Pad, Developer shall use its
commercially reasonable efforts to cause the recordation of a SLUR or to have (1) a written
option or (2) other legally enforceable right to purchase such fee interest;
(viii) Developer agrees to notice defaults and pursue the
remedies set forth in a Ground Lease, Transfer Agreement or SLUR to the extent Developer has
the right to enforce the same pursuant to the terms therein and to use commercially reasonable
efforts to mitigate the effect of any default by a Transferee thereunder; provided, however, that
nothing in this Agreement, the Other Agreements, the Ground Lease, sale contract or the City
Non -Disturbance Agreement is intended to or shall limit the City's rights with respect to
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Developer. The City shall have the express right (but not the obligation) to seek specific
performance: (A) against Developer requiring such Party to exercise its rights and remedies
under agreements with the Pad Transferee or its successor in interest (but in such circumstance
the City and Developer shall agree upon an extension of the Schedule of Performance with
respect to Developer's obligation to Complete the Vertical Improvements (including the core and
shell, exterior staircases and balcony systems and common restrooms, but excluding the
requirement to construct any other tenant improvements) on such Building Pad in order to permit
Developer to seek an appropriate Pad Transferee approved by the City for such Building Pad)
and (B) against Developer, the Pad Transferee, or its successor in interest, including the City's
Right of Repurchase or Right of Reversion contained in this Agreement with respect to property
Transferred to the Pad Transferee.
2.2.4 Space Lease Transfers.
(a) With respect to all Space Lease Transfers:
(i) Developer shall retain all of the obligations under this
Agreement relating to such Building Pad and Improvements thereon, including construction of
the Improvements, payment of all Development Costs, and the performance of Developer's
maintenance obligations and all indemnity obligations of Developer set forth in this Agreement
with respect to such Building Pad and Improvements thereon and Developer shall not have the
right to assign such obligations to the Space Tenant, including no right to assign the obligation to
carry out construction of the Vertical Improvements (but Developer may transfer the obligation
to construct interior tenant improvements without relieving Developer of any of its obligations
under this Agreement);
(ii) The rights of the Space Tenant to its respective portion of
the Property shall be "subject to" the use limitations contained in this Agreement, the Special
Restrictions, and the CC&Rs; and
(iii) Upon request of Developer, the City shall enter into a City
Non -Disturbance and Attornment Agreement with Developer and a Space Tenant under a Space
Lease substantially in the form and substance of Attachment 23 (or in other form agreed to by
the City in its sole discretion).
(b) Until the issuance of a Certificate of Compliance with respect to
each Phase, Developer shall cause an authorized officer of Developer to execute and deliver to
the City on a quarterly basis certified written reports (each, a "Quarterly Leasing Report")
summarizing leasing activity (which will report leasing activity in terms of both GBA and
rentable square feet) with respect to each such Phase through the latest quarter and certifying as
to the truth and correctness of the information contained in the Quarterly Leasing Report.
2.2.5 Bankruptcy. The following shall be considered Transfers which are
prohibited without consent from the City, which may be granted or withheld in the City's sole
discretion (herein, a "Developer Insolvency Event"):
(a) If Developer is or becomes bankrupt, or insolvent or if any
involuntary proceeding is brought against Developer (unless, in the case of a petition filed
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against Developer, the same is dismissed within ninety (90) calendar days), or Developer 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 any Parcel, or on any portion thereof, where such writ is not discharged within ninety (90)
calendar days; or
(c) If, in any proceeding or action in which Developer is a party, a
receiver is appointed with authority to take possession of a Parcel, or any portion thereof, where
possession is not restored to Developer within ninety (90) calendar days.
2.2.6 City Estoppel.
(a) From time to time (but in no event more often than annually or in
connection with a Permitted Transfer or other Transfer or Transfer of Control consented to by
the City in accordance with this Agreement), within twenty (20) calendar days of the City's
receipt of a written request therefor, the City shall execute and deliver to Developer and the
Transferee, and if applicable, any Permitted Mortgagee, a City Estoppel, substantially in the
form and substance of the City Estoppel attached hereto as Attachment 6 with such modification
as may be reasonably requested by any Transferee or Permitted Mortgagee, together with such
modifications as are necessary in the City's sole discretion to ensure the accuracy of the
statements made therein.
(b) Developer shall promptly pay to the City all of the City's expenses,
including legal fees and staff costs, incurred with respect to the preparation, review, and delivery
of each City Estoppel and with respect to the City's review and approval (or disapproval), as
applicable, of each Transfer or Transfer of Control, not to exceed Three Thousand Dollars
($3,000.00) per estoppel; provided, however, such cap shall not be applicable if Developer
proposes any material changes to the City Estoppel, or Developer is in Default under this
Agreement or any of the Other Agreements at such time. The City costs incurred pursuant to this
Section shall be DDA Transaction Expenses.
2.2.7 Exclusion of LPCC. The City has selected LPCC as the developer of
the Project based upon the experience of LPCC and the business terms it has proposed for this
transaction. Therefore, notwithstanding that LPCC has entered into agreements pursuant to
which the Controlling Person of Developer is not LPCC or an Affiliate of LPCC, and such
Controlling Person has a right to Transfer this Agreement and the Property to a Developer
Affiliate or to Transfer Control to a Developer Affiliate or to otherwise make certain Transfers or
Transfers of Control under this Agreement, in no event shall Developer make a Permitted
Transfer or any other Transfer or Transfer Control to any Person that would result in the removal
of LPCC (or an Affiliate of LPCC) as the Person which has the Operating Rights and
Responsibilities, without the prior written consent of the City, which consent shall be exercised
in the sole discretion of the City provided, however, that in the event that the Controlling Person
requests the removal of LPCC or an Affiliate of LPCC as a result of a default by the Affiliate of
LPCC that is a party to the Original Joint Venture Agreement or, if then in effect, any other Joint
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Venture Agreement approved by the City in its sole discretion pursuant to which LPCC (or an
Affiliate of LPCC) had Operating Rights and Responsibilities, the City and Developer shall meet
and confer in good faith regarding the mutual selection of a replacement for LPCC (or an
Affiliate of LPCC) with respect to the Operating Rights and Responsibilities, from the following
five (5) developers and/or their affiliates in connection therewith (each, a "Designated
Developer"): (i) Hines, (ii) Trammell Crow, (iii) Bixby, (iv) LBA, and (v) OliverMcMillan;
provided that any of the foregoing shall be ineligible for selection if such entity or a substantial
portion of the affiliates of such entity have been the subject of any of the events or actions
described in Section 2.2.5 within the preceding eighteen (18) months.
2.2.8 Requirements for Mortgages and Mezzanine Financing. Prior to
the Recordation of a Certificate of Compliance for any portion of the Property, Developer shall
not encumber any portion of the Property with a Mortgage, except in compliance with the
requirements of this Agreement, including Article 17. Developer shall not obtain or utilize
Mezzanine Financing without the prior consent of the City in its sole discretion.
2.3 Remedies for Improper Transfers or Transfers of Control.
Without limiting the generality of the foregoing, a failure (a) by Developer to comply
with the requirements of this Article 2 with respect to any Transfer or Transfer of Control or
(b) by any Transferee to execute the assumption agreement required by Section 2.2, shall in each
case be a Material Default under this Agreement, subject to the provisions of Section 14.2.3, and,
in such event, the City shall have all remedies available to it specified in this Agreement.
2.4 Changes.
Developer shall promptly notify the City in the event that (a) any of the following
Persons cease to be involved with the development of the Project: (1) any of the Key
Employees, (2) the Project Architect, or (3) an Affiliate of LPCC, or (b) an Affiliate of LPCC
ceases to have the Operating Rights and Responsibilities.
3. Representations and Warranties.
3.1 Developer's Representations and Warranties.
Developer represents and warrants to the City as follows as of the Effective Date:
3.1.1 Developer has the necessary experience, financial experience and
qualifications necessary to perform as Developer pursuant to this Agreement and to construct
and complete the Project, and, without limiting the foregoing, Developer is experienced in the
development, management, and leasing of commercial projects of the size and type described in
this Agreement and understands the process and requirements associated with projects such as
the Project described herein.
3.1.2 Developer's acquisition of the Property, development of the Project
and its other undertakings pursuant to this Agreement are for the purpose of timely development
of the Development Parcels in accordance with the Schedule of Performance attached to this
Agreement and not for speculation or land holding.
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3.1.3 Developer is a limited liability company, duly organized, and validly
existing and in good standing under the laws of the State of Delaware, is duly qualified to do
business and in good standing in the State of California.
3.1.4 Subject to all of the conditions set forth in this Agreement for the
benefit of Developer, Developer has (or will have prior to the date by which a particular step is
required to be taken or performance of a particular obligation is required to be commenced
pursuant to this Agreement or any Other Agreements) all requisite power and authority required
to enter into this Agreement and the instruments referenced in this Agreement, to consummate
the transaction contemplated hereby and to take any steps contemplated thereby or hereby, and to
perform its obligations hereunder and thereunder.
3.1.5 Developer has obtained (or will have obtained prior to the date by
which a particular step is required to be taken or performance of a particular obligation is
required to be commenced pursuant to this Agreement or any Other Agreements) all required
consents in connection with entering into this Agreement and the instruments and documents
referenced in this Agreement to which Developer is or shall be a party and the consummation of
the transactions contemplated hereby.
3.1.6 The individuals executing this Agreement and the individuals that will
execute the instruments referenced in this Agreement on behalf of Developer have, or will have
upon execution thereof, the legal power, right and actual authority to bind Developer to the terms
and conditions hereof and thereof.
3.1.7 This Agreement has been duly authorized, executed and delivered by
Developer and all documents required in this Agreement to be executed by Developer pursuant
to this Agreement shall be, at such time as they are required to be executed by Developer, duly
authorized, executed and delivered by Developer and are or shall be, at such time as the same are
required to be executed hereunder, valid, legally binding obligations of and enforceable against
Developer in accordance with their terms, except as enforceability may be limited by bankruptcy
laws or other similar laws affecting creditors' rights.
3.1.8 Neither the execution nor delivery of this Agreement or the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement and
the certificates, declarations and other documents referenced in this Agreement, nor the
consummation of the transactions in this Agreement contemplated, nor compliance with the
terms of this Agreement and the documents referenced in this Agreement, will violate any
provision of law or any order of any court or Governmental Authority to which Developer is
subject or conflict with or result in the breach of any terms, conditions, or provisions of, or
constitute a default under any bond, note, or other evidence of indebtedness or any contract,
indenture, mortgage, deed of trust, loan partnership agreement, lease or other agreements or
instruments to which Developer or any of its members are a party and which affect the Property
or the transactions contemplated by this Agreement.
3.1.9 No attachments, execution proceedings, assignments of benefit to
creditors, bankruptcy, reorganization or other insolvency proceedings are pending or, to the best
of Developer's knowledge, threatened against Developer or its members.
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3.1.10 Developer is relying solely upon its own inspections and investigations
in proceeding with this Agreement and the transactions contemplated hereby, and is not relying
on the accuracy or reliability of any information provided to it by the City, on any oral or written
representation (excepting only those representations and warranties of the City expressly set
forth in Sections 3.3 and 18.11.2 of this Agreement) and not on the non -disclosure of any facts or
conclusions of law made by the City, or any of its elected and appointed officials, officials,
employees, agents, attorneys or representatives made in connection with this Agreement. In
making such investigation and assessment, Developer has been provided access to any persons,
records or other sources of information which it has deemed appropriate to review and it has
thereafter completed such investigation and assessment. Without limiting the generality of the
foregoing provisions, Developer acknowledges that except as set forth in Section 3.3.8 of this
Agreement, the City has not made and will not make any representations or warranties
concerning the condition of the Property, the compliance or non-compliance of the Property or
any portion thereof with Environmental Laws or the existence or non-existence of Hazardous
Materials in relation to the Property or any portion thereof or otherwise.
3.1.11 Except as described on Attachment 4, there is no litigation or
governmental action either pending or, to the knowledge of Developer's Representatives,
threatened, to which Developer or any of LPCC, LO Flight LLC, Alcion Flight Investors LLC,
Alcion Flight Strategic LLC, Alcion Real Estate Partners Strategic Parallel Fund III, L.P., Alcion
Real Estate Partners Master Fund III, L.P., or any Person Controlling any of the foregoing is or
may be a party or to which the Property may become subject, which would reasonably be
expected to prevent or materially impair Developer's ability to develop the Property and the
Project or carry out its other obligations under this Agreement, and upon each Close of Escrow,
the Other Agreements then in effect, as contemplated by the terms of this Agreement.
3.1.12 Except as set forth in this Agreement and the ENA, Developer has not
paid or given, and will not pay or give, any third Person any money or other consideration for
obtaining this Agreement, other than the normal cost of conducting business and cost of
professional services such as architects, engineers, attorneys, and real estate brokers.
3.1.13 Developer has not knowingly submitted or delivered or knowingly
caused to be submitted or delivered any reports, documents, instruments, information and forms
of evidence to the City concerning or related to this Agreement and the transactions
contemplated hereby which, to the best of Developer's knowledge, contain any material
misrepresentation or intentional omission.
3.1.14 LO Flight LLC, Alcion Flight Investors LLC, and Alcion Flight
Strategic LLC have executed that certain Limited Liability Company Agreement of Flight
Venture LLC as of December 23, 2015 (the "Original Joint Venture Agreement") a copy of
which has been caused to be made available by Developer to the City and is subject to
Section 18.23. The Original Joint Venture Agreement is in full force and effect and has not been
amended or modified. Except as set forth in the Original Joint Venture Agreement, in any
documents executed in connection with any Construction Loan, and, if approved by the City in
its sole discretion, in any documents executed in connection with any Mezzanine Financing,
Developer does not have any contingent obligations or any other contracts the performance or
nonperformance of which could adversely affect the ability of the Developer to fund the Project
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or to carry out its obligations hereunder. Developer has not and shall not undertake such
additional projects as could reasonably be expected to jeopardize the sufficiency of such equity,
capital and firm and binding commitments for the purposes expressed in the preceding sentence.
Subject to Section 7.2.2(b)(x) and 7.3.2(b)(y), Developer's representations and warranties
set forth in this Section 3.1 shall be deemed to be restated at each Close of Escrow, and shall
survive each Close of Escrow until the Certificate of Compliance has been issued as to the
relevant Phase and shall not be merged with any Quitclaim Deed. As used in Article 3, "to
Developer's knowledge" and similar phrases means any knowledge of the Key Employees, in
each case without any duty of inquiry (collectively, the "Developer Knowledge Parties").
Notwithstanding anything to the contrary contained herein, (a) none of the Developer
Knowledge Parties shall be personally liable for any inaccuracy or breach by Developer of the
representations and warranties contained in this Section 3.11 elsewhere in this Agreement or in
any of the Other Agreements, and (b) the City shall not be entitled to make a claim for a breach
of Developer's representations and warranties if Developer had disclosed in writing facts to the
City Manager or the then -current Economic Development Director indicating that the applicable
representation and warranty was incorrect prior to (i) the execution of this Agreement and the
City proceeded with the execution of this Agreement, or (ii) the relevant Close of Escrow and the
City proceeded with such Close of Escrow, in either case in spite of such inaccuracy.
3.2 Developer Covenants Regarding Representations and Warranties.
Developer shall promptly advise the City in writing if any of the Developer Knowledge
Parties becomes aware (without any duty of inquiry) that any representation or warranty made by
Developer in Section 3.1 is or becomes untrue in any material respect prior to the Close of
Escrow.
3.3 City Representations and Warranties.
City represents and warrants to Developer as follows:
3.3.1 The City is a municipal corporation incorporated within and existing
pursuant to the laws of the State of California.
3.3.2 Subject to all of the conditions set forth in this Agreement for the
benefit of the City, the City has (or will have prior to the date by which a particular step is
required to be taken or performance of a particular obligation is required to be commenced
pursuant to this Agreement or any Other Agreements) all requisite power and authority required
to enter into this Agreement and the instruments referenced in this Agreement, to consummate
the transaction contemplated hereby and to take any steps contemplated thereby or hereby, and to
perform its obligations hereunder and thereunder.
3.3.3 The City has obtained (or will have obtained prior to the date by which
a particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Agreement or any Other Agreements) all required consents in
connection with entering into this Agreement and the instruments and documents referenced in
this Agreement to which the City is or shall be a party and the consummation of the transactions
contemplated hereby.
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3.3.4 The individual executing this Agreement and the individual that will
execute the instruments referenced in this Agreement on behalf of the City have, or will have
upon execution thereof, the legal power, right and actual authority to bind the City to the terms
and conditions hereof and thereof.
3.3.5 This Agreement has been duly authorized, executed and delivered by
the City and all documents required in this Agreement to be executed by the City pursuant to this
Agreement shall be, at such time as they are required to be executed by the City, duly authorized,
executed and delivered by the City and are or shall be, at such time as the same are required to be
executed hereunder, valid, legally binding obligations of and enforceable against the City in
accordance with their terms, except as enforceability may be limited by bankruptcy laws or other
similar laws affecting creditors' rights.
3.3.6 Neither the execution or delivery of this Agreement or the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement,
and the certificates, declarations and other documents referenced in this Agreement, nor the
consummation of the transactions in this Agreement contemplated, nor compliance with the
terms of this Agreement and the documents referenced in this Agreement, will violate any
provision of law, any order of any court or Governmental Authority or conflict with or result in
the breach of any terms, conditions, or provisions of, or constitute a default under any bond, note
or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan,
partnership agreement, lease or other agreements or instruments to which the City is a party or
which affect any of the Property or the transactions contemplated by this Agreement.
3.3.7 Except as described in Attachment 4, there is no litigation either
pending or, to the knowledge of the City Representatives, threatened, to which the City is or may
be made a party, or to which the Property, is or may become subject which would reasonably be
expected to prevent or materially impair the ability of the City to carry out its obligations under
this Agreement and upon each Close of Escrow, the Other Agreements then in effect, or to affect
the Property conveyed at such Close of Escrow.
3.3.8 To the knowledge of the "City Representatives for Section 3.3.8,"
between May 2002 and the Effective Date, except as set forth on Attachment IOB there has been
no Release of any Hazardous Materials on the Property. "To the knowledge of the `City
Representatives for Section 3.3.8"' shall mean any knowledge of Jeffrey Parker (or if he is not
then City Manager, the then -current City Manager), David Kendig (or, if he is not then City
Attorney, the then -current City Attorney), John Buchanan (or if he is not then Director of
Economic Development, the then -current Director of Economic Development), Ken Nishikawa
(or, if he is not then the Deputy Director of Public Works/Engineering, the then -current Deputy
Director of Public Works/Engineering), Ken Piguee, and Matt West (or, if he is not then the
Assistant to the City Manager, the then -current Assistant to the City Manager most involved with
the Tustin Legacy project), without any duty of inquiry or any imputed knowledge.
Subject to Section 7.2.1(a)(xi) and 7.3.1 a v , City's representations and warranties set
forth in this Section 3.3 shall be deemed to be restated at each Close of Escrow, and shall survive
each Close of Escrow until the Certificate of Compliance has been issued as to the relevant
Phase, and shall not be merged with any Quitclaim Deed. As used in Article 3 (other than
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Section 3.3.8) "to City's knowledge" and similar phrases means any knowledge of Jeffrey Parker
(or, if he is not then City Manager, the then -current City Manager), David Kendig (or, if he is not
then City Attorney, the then -current City Attorney) and John Buchanan (or if he is not then
Director of Economic Development, the then -current Director of Economic Development) (the
"City Representatives") without any duty of inquiry. Notwithstanding anything to the contrary
contained herein, (a) none of the City Representatives or the City Representatives for
Section 3.3.8 shall be personally liable for any inaccuracy or breach by the City of the
representations and warranties contained in Section 3.3 or elsewhere in this Agreement or in any
of the Other Agreements, and (b) neither Developer nor any other Person shall be entitled to
make a claim for a breach of the City's representations and warranties if the City had disclosed
in writing facts to Developer indicating that the applicable representation and warranty was
incorrect prior to (i) the execution of this Agreement and Developer proceeded with the
execution of this Agreement, or (ii) the relevant Close of Escrow and Developer proceeded with
such Close of Escrow, in either case in spite of such inaccuracy.
4. Conveyance of Property from City to Developer
4.1 Conveyance of Property.
Subject to the terms and conditions set forth in this Agreement, including the satisfaction
of the Closing Conditions set forth in Article 7 in this Agreement, the City agrees to sell to
Developer and Developer agrees to purchase from the City the Development Parcels, together
with all existing improvements, if any, presently located on the Development Parcels, all
appurtenances pertaining to the Development Parcels or such improvements and all permits,
licenses, approvals and authorizations issued by any Governmental Authority in connection with
the Development Parcels (collectively referred to in this Agreement as the "Property"), subject
to all Permitted Exceptions. At each Close of Escrow, the City shall cause the Special
Restrictions to be Recorded against and thereafter shall convey to Developer by Quitclaim Deed
fee title to the Property to be conveyed at such Close of Escrow. Notwithstanding the foregoing:
(a) the term "Property" (and the terms "Phase 1 Property" and
"Phase 2 Property") shall exclude the following rights and interest which shall be explicitly
reserved to the City:
(i) Any and all oil, oil rights, minerals, mineral rights, natural
gas, 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 Development
Parcels together with the perpetual right of drilling, mining, exploring for and storing in and
removing the same from the Development Parcels or any other land, including the right to
whipstock or directionally drill and mine from lands other than the Development Parcels, oil or
gas wells, tunnels and shafts into, through or across the subsurface of the Development Parcels
and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and
beneath or beyond the exterior limits thereof, and to re -drill, re -tunnel, equip, maintain, repair,
deepen and operate any such well or mines; but without, however, the right to enter upon or use
the surface of the Development Parcels in the exercise of such rights or otherwise adversely
affect the use or operation of the Development Parcels as anticipated by this Agreement or the
structural integrity of any improvements on the Development Parcels; and
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(ii) Any and all water, water rights or interests therein
appurtenant or relating to the Development Parcels or owned or used by the City in connection
with or with respect to the Development Parcels 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,
re -drill and remove the same from or in the Development Parcels, to store the same beneath the
surface of the Development Parcels and to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by the City; but without, however, the right to
enter upon or use the surface of the Development Parcels in the exercise of such rights or
otherwise adversely affect the use or operation of the Development Parcels as anticipated by this
Agreement or the structural integrity of any improvements on the Development Parcels.
(b) the reservation by the City of the rights and interests in
Sections 4.1(a)(i) and Ciij shall not be deemed to limit Developer's right to drive piles, construct
caissons, foundations, basements and other subsurface improvements for the purpose of
constructing the Project, and otherwise engage in subsurface construction activity in order to
construct the Project.
4.2 Purchase Price.
4.2.1 Phase 1 Purchase Price. As consideration for the sale of the Phase 1
Property by the City to the Developer, at the Phase 1 Property Close of Escrow Developer shall
pay to the City in immediately available funds the amount of Twenty -Five Million, Nine
Hundred Eighty -Four Thousand, Eight Hundred Forty -Seven and No/100 Dollars
($25,984,847.00) (the "Phase 1 Property Purchase Price"). The maximum development
envelope which may be constructed on the Phase 1 Property as a result of this conveyance shall
be 390,440 GBA; provided that this conveyance grants no right to development except as
permitted by the Applicable Approvals and such development shall be permitted only upon
approval of all Entitlements and Development Permits required by the City in its Governmental
Capacity for such development and in accordance with the requirements of this Agreement and
the Other Agreements.
4.2.2 Phase 2 Purchase Price. As consideration for the sale of the Phase 2
Property to Developer by the City, at the Phase 2 Property Close of Escrow, Developer shall pay
to the City in immediately available funds the amount indicated on Attachment 28, which shall
be in the amount of Thirty -One Million, Three Hundred Ninety Thousand, Six Hundred Forty
Three and No/100 Dollars ($31,390,643.00) if the Phase 2 Property Close of Escrow takes place
within the twelve (12) month period following the Phase 1 Property Close of Escrow (the "First
Option Year"), and shall be increased in each subsequent Option Year to the amount indicated
for such year on Attachment 28 (the "Phase 2 Property Purchase Price"). The maximum
development envelope which may be constructed on the Phase 2 Property as a result of this
conveyance shall be 479,560 GBA; provided that this conveyance grants no right to development
except as permitted by the Applicable Approvals and such development shall be permitted only
upon approval of all Entitlements and Development Permits required by the City in its
Governmental Capacity for such development and in accordance with the requirements of this
Agreement and the Other Agreements.
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4.3 Payment of Purchase Price.
4.3.1 Purchase Price Deposit. Within two (2) Business Days following
approval of this Agreement by the City, and as a condition to its effectiveness, Developer shall
deliver an earnest money deposit of One Million and No/100 Dollars ($1,000,000.00) to Escrow
Holder (which amount, together with all interest earned thereon, shall be referred to herein as the
"Purchase Price Deposit"). The Purchase Price Deposit shall be held by Escrow Holder in
escrow in an interest-bearing account approved by City and Developer and disposed of in
accordance with the terms and conditions of this Agreement; provided, however, that Developer
may elect to apply any unapplied portion of the City Costs Deposit held by the City at such time
to the Purchase Price Deposit. The Purchase Price Deposit shall constitute security to the City
for the Phase 1 Property Close of Escrow.
4.3.2 Application of Purchase Price Deposit. After expiration of the Due
Diligence Period, the Purchase Price Deposit shall be nonrefundable except as otherwise
expressly provided in Sections 15.1.3 and 15.4.3 and shall be applied only to the Phase 1
Property Purchase Price as set forth in Section 4.3.4 below, or shall be liquidated damages to the
City in the event of certain Defaults by Developer as further set forth in Section 15.2 of this
Agreement.
4.3.3 Option to Purchase Phase 2 Property. The provisions of this
Section 4.3.3 shall apply to acquisition of the Phase 2 Property, which may be acquired by
Optionee if at all by exercise of the Option following the Phase 1 Property Close of Escrow. The
term "Optionee" shall mean the Person holding and having the right to exercise the Option
and/or to acquire the Phase 2 Property pursuant to the Option from time to time under this
Agreement, and shall, prior to any Phase Transfer, be the Developer, and subsequent to any
Phase Transfer, the Phase 2 Developer. The Option shall not be Transferrable prior to its
exercise except to a Developer Affiliate in accordance with Section 2.2.2(fl. Notwithstanding
any other provision of this Agreement: (x) if this Agreement shall terminate prior to the Phase 1
Property Close of Escrow for any reason, the Option and all rights of Optionee in and to Phase 2
shall likewise terminate, (y) the Option shall automatically terminate and shall be of no further
force and effect in the event that the Option is Transferred to any Person that is not a Developer
or a Phase 2 Developer hereunder or, unless authorized by Section 2.2.2(f), is Transferred prior
to occurrence of all of the following (1) the Phase 1 Property Close of Escrow, (2) Completion of
the Minimum Horizontal Improvements, and (3) the exercise of the Option, and (z) from and
after any Phase Transfer authorized by this Agreement, the Phase 2 Developer shall be the sole
and exclusive Optionee.
(a) Provided that Optionee, concurrently with the Phase 1 Property
Close of Escrow, delivers to the City the sum of Two Dollars ($2.00) ("First Option Payment")
as initial Option consideration, Optionee shall have an option to acquire the Phase 2 Property
(the "Option'), which Option shall remain in effect for the First Option Year as the same may be
extended as described in Section 4.3.3(b), for a total period not to exceed ten years from the
Phase 1 Property Close of Escrow ("Option Term"), and which may be exercised by Optionee
only upon satisfaction of the conditions set forth in Section 4.3.3(d). Notwithstanding any other
provision of this Agreement to the contrary, (a) the Option Term may not be further extended
once the Option has been exercised and (b) regardless of whether any Phase Transfer has or has
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not occurred, (i) if this Agreement terminates prior to the Phase 1 Property Close of Escrow, the
Option shall automatically terminate upon termination of this Agreement, and (ii) if this
Agreement terminates as to the Phase 1 Provisions following the Phase 1 Property Close of
Escrow (other than any termination due to issuance of a Certificate of Compliance for Phase 1)
but prior to the Phase 2 Property Close of Escrow, then the Option shall automatically terminate
upon termination of the Phase 1 Provisions if either (A) no Phase Transfer has occurred or
(B) the Optionee and the Phase 1 Developer are Related Parties.
(b) Provided that the Option has not then been exercised and remains
in effect, at the expiration of each Option Year until the ninth (9th) anniversary of the Phase 1
Property Close of Escrow, Optionee shall have the right to extend the Option Term for an
additional one year period by (i) providing written notice to the City of its intent to so extend
delivered not more than sixty (60) calendar days nor less than thirty (30) calendar days prior to
the expiration of the then -effective Option Term and (ii) providing a concurrent Option Payment
to the City in the amount required to extend the Option Term for that period, which Option
Payment varies year by year and shall be in the amount set forth in Attachment 28 for the
applicable year; provided that, Optionee shall not have the right to extend the Option for any
additional Option Year if at the time such exercise is required hereunder in order to be effective,
(A) Optionee is then in Material Default under this Agreement or in default past all applicable
notice and cure periods under the Other Agreements, or (B) following any Phase Transfer, the
Phase 1 Developer is then in Material Default under this Agreement or in default past all
applicable notice and cure periods under the Other Agreements.
(c) The Option Payment shall be paid by Optionee as a Cash Option
Payment or, prior to a Phase Transfer, may be paid by Optionee by application of available
Option Credit as further described in Section 4.3.3(e) and (fj), provided that from and after any
Phase Transfer, the use of Option Credits to fund Option Payments shall not be available and the
provisions of Section 4.3.3(g) shall apply. In no event shall Optionee have a right to prepay any
required Option Payment or to accelerate the extension of the Option Term by application of
Option Credit (even if the amount of the Option Credit Remainder otherwise would be sufficient
to permit such acceleration) or to extend the Option Term by more than one twelve (12) month
period at any time. The aggregate sum of the First Option Payment and each Cash Option
Payment paid to the City (excluding from such calculation any Option Payment deemed paid by
application of Option Credit) shall collectively be referred to herein as the "Total Cash Option
Payments."
(d) The Option shall be exercisable by Optionee only upon satisfaction
of the conditions precedent set forth in this Section 4.3.3(d) and shall be exercised by Optionee's
delivery of written notice of such exercise to the City on or before the date that is sixty (60) days
prior to the expiration of the then -current Option Term, with an accompanying certification by an
officer of Optionee that all conditions precedent to exercise of the Option have been satisfied.
The following shall be conditions precedent to exercise by Optionee of the Option and to the
Phase 2 Property Close of Escrow:
(i) the requirements set forth in Section 4.6.2(c), (d) and e)
shall have been satisfied with respect to Phase 2;
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(ii) one of the following threshold conditions shall have been
satisfied as of the date of the Option exercise (and as a condition to the Phase 2 Property Close of
Escrow, shall remain satisfied as of the date of such Close of Escrow): (A) Leases or Transfer
Agreements shall have been executed with End Users for not less than 232,050 GBA within the
Minimum Phase 1 Vertical Improvements, or (B) Optionee is under binding contract (which may
be subject to contingencies related to financing, conveyance, or construction) to sell or lease to a
Build -to -Suit User within the Phase 2 Project which will lease or own at least 100,000 GBA of
Office Uses;
(iii) the Phase 1 Property Close of Escrow shall have occurred;
(iv) unless otherwise approved by the City pursuant to
Section 2.2.7, LPCC (or an Affiliate of LPCC) has the Operating Rights and Responsibilities;
(v) Developer shall have caused the Basic Concept Plans for
Phase 2, if different from those previously approved by the City, to be prepared and submitted to
the City for approval;
(vi) City shall have issued the Phase 2 Applicable Approvals;
(vii) Optionee shall not then be in Default under this Agreement
or in default under any of the Other Agreements; and
(viii) If a Phase Transfer has occurred, Phase 1 Developer shall
not then be in Default under this Agreement or in default under any of the Other Agreements.
(e) If during the Option Term and prior to the exercise of the Option
for the Phase 2 Property Close of Escrow, Developer (or following a Phase Transfer, Phase 1
Developer) (such Person, the "Working Developer") Completes a usable segment of the
Reimbursable Phase 2 Improvements, as determined by the City Department of Public Works
applying the standards for acceptance of improvements set forth in the Reimbursement
Agreement, then promptly following Completion of such work, Working Developer shall
provide the City with the cost to Working Developer for design and construction of such
completed usable segment, together with such evidence of expenditure as required by the City to
substantiate the costs acceptable to the City in its reasonable discretion. The City shall determine
the amount of the "Total Option Credit" which shall be equal to the actual costs to Working
Developer of each completed usable segment substantiated and acceptable to the City
Department of Public Works applying the standards for acceptance of improvement costs set
forth in the Reimbursement Agreement; provided, in the event that Working Developer fails to
Complete any useable segment within the time period set forth in the Schedule of Performance,
the City shall have the right to offset against the Total Option Credit (and thereby reduce the
amount of Option Credit and reimbursement, if any, that may be due pursuant to
Section 4.3.3.(1)) any direct and indirect costs, including staff and third party costs, that the City
incurs as a result of Working Developer's failure to complete such work or the delay in
performance of the work beyond the dates set forth in the Schedule of Performance.
(f) For so long as the Working Developer is the Optionee, the
following shall apply: With respect to each timely extension of the Option requested by
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Optionee in writing, the City and Optionee shall first apply any available Total Option Credit to
"pay" the Option Payment then due. The Total Option Credit shall be reduced in each year in
which the Option is extended by Optionee by the amount of the Option Payment otherwise due
from Optionee to City to extend the Option Term in that year as shown on Attachment 28 (each,
an "Option Credit") and the remaining amount of the Total Option Credit, after taking into
account such cumulative reductions, is referred to as the "Option Credit Remainder". By way
of example only, and as further shown on Attachment 28 (Table 2, Example 1), if the Total
Option Credit is $2,800,000, then if Optionee chooses to request the first Option extension
(which it shall request prior to the end of the First Option Year), the Option Payment of
$100,000 then due to the City shall be deemed paid by application of Option Credit in the
amount of $100,000, the Total Cash Option Payments shall be $0 and the Option Credit
Remainder shall be $2,700,000. In the second year, upon request for extension of the Option
Term by Optionee, the Option Credit Remainder ($2,700,000) shall again be reduced by the
amount of the Option Payment (then $200,000) due to the City, which shall be deemed paid by
application of an Option Credit in the amount of $200,000, and the Total Cash Option Payments
shall be $0 and the Option Credit Remainder shall be $2,500,000, but the foregoing shall not
reduce the Phase 1 Property Purchase Price. Once the Option Credit Remainder reaches $0, each
remaining Option Payment (or portion thereof) for which no Option Credit Remainder is
available shall be made as a Cash Option Payment, such that, for the example shown in
Attachment 28 (Table 2, Example 1), the Option Payments in years 8 ($800,000) and 9
($900,000) would, if paid to the City in accordance with the requirements of this Agreement, be
applicable to the Phase 2 Property Purchase Price.
(g) Following a Phase Transfer, the following shall apply: With
respect to each timely extension of the Option requested by Optionee in writing, Optionee shall
pay to the City the Option Payment then due as a Cash Option Payment. To the extent that
(i) the City receives a Cash Option Payment for an extension from Optionee and (ii) there
remains an Option Credit Remainder due to the Working Developer and (iii) the Working
Developer is not then in Default under this Agreement, then the City shall, within sixty (60)
calendar days following its receipt of the Cash Option Payment, pay to the Working Developer
to which any Option Credit Remainder is due, an amount (the "City Option Payment") equal to
the lesser of (x) the then -remaining Option Credit Remainder and (y) the amount of the Option
Payment received by the City from Optionee in that year. The Total Option Credit shall be
reduced in each year in which the Option is extended by Optionee by the amount of the City
Option Payment paid by the City to the Working Developer, and the remaining amount of the
Total Option Credit, after taking into account such cumulative reductions and any prior
cumulative reductions pursuant to Section 4.3.3(f), is referred to as the "Option Credit
Remainder". If, for any reason, the City does not receive a Cash Option Payment in any year,
the City shall have no obligation to pay the City Option Payment or any other amounts to the
Working Developer unless specifically required to do so by Section 4.3.3(h) and i).
(h) Developer acknowledges and agrees on behalf of itself and each
and every future Phase 1 Developer and Phase 2 Developer, that (i) regardless of whether or not
there has been a Phase Transfer, the provisions of Section 15.3 shall apply in the case of any
lapse, termination or expiration of the Option following the Phase 1 Property Close of Escrow
with respect to refund or retention by the City of the Cash Option Payments made to the City as
of such date by Optionee and (ii) regardless of whether or not the Cash Option Payments of
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Optionee are refundable pursuant to Section 15.3, upon a lapse, termination or expiration of the
Option, the Working Developer shall be entitled to payment on account of the Reimbursable
Phase 2 Improvements in the amount of the Option Credit Remainder if and only if each of the
following are true:
(A) the Option has lapsed, expired and/or terminated
only because of any one of the following: (1) Optionee has elected not to extend the Option
pursuant to Section 4.113 W and the Option has not then been timely exercised or (2) the Option
has been timely exercised but the Phase 2 Property Close of Escrow does not take place either
due to (aa) the failure of a condition precedent set forth in Section 7.3.1 outside of the control of
Optionee (including due to the City's election or deemed election not to cure a Disapproved
Exception as set forth in Section 6.3), and, if a Phase Transfer has occurred and Phase 1
Developer and Optionee are Related Parties, outside the control of Phase 1 Developer, and not
resulting from the action or inaction of any such Party, or (bb) a Default by the City as set forth
in Section 15.4.1, and
(B) neither this Agreement nor the Option has been
terminated as a result of a Default by Developer or Optionee, and
(C) Working Developer is not, at the time of the
lapse, termination or expiration of the Option or failure to timely close following exercise of the
Option, in Material Default under the terms of this Agreement or in default past any applicable
notice and cure period under any then effective Other Agreement; provided that if the Working
Developer is in Potential Default at the time that such funds would otherwise be due, the City
shall have the right to withhold the funds then due until the end of the cure period therefor, and
shall remit such funds to Working Developer at the end of such cure period if and only if
Working Developer has cured such Default), and
(D) If Working Developer and Optionee are Related
Parties, Optionee shall not then be in Material Default under this Agreement or in default past
any applicable notice and cure period under any of the Other Agreements; provided that if the
Working Developer is in Potential Default at the time that such funds would otherwise be due,
the City shall have the right to withhold the funds then due until the end of the cure period
therefor, and shall remit such funds to Working Developer at the end of such cure period if and
only if Working Developer has cured such Default.
By way of example only, if the Total Option Credit is $2.8
million, and, prior to any Phase Transfer, Optionee chooses to request the first Option extension
(which it shall request prior to the end of the First Option Year), the Option Payment of
$100,000 then due to the City shall be deemed paid by application of Option Credit in the
amount of $100,000, the Total Cash Option Payments shall be $0 and the Option Credit
Remainder shall be $2.7 million. If, prior to the date upon which the next Option Payment is due,
a Phase Transfer takes place, then upon request for extension of the Option Term by the
Optionee, the Optionee shall pay to the City the Option Payment of $200,000 in cash, and within
sixty (60) calendar days following City receipt thereof, the City shall pay such funds to the
Working Developer, which shall reduce the amount of the Option Credit Remainder (from the
prior $2.7 million) by the amount of the $200,000 Cash Option Payment to $2.5 million and the
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Option Credit Remainder shall be $2.5 million. If, at that point, the Option shall terminate, or if,
following exercise of the Option, the Phase 2 Property Close of Escrow shall fail to occur for any
reason other than Default by the City, the Optionee shall not be entitled to a repayment of its
Cash Option Payment. If the failure to close Escrow with respect to the Phase 2 Property is as a
result of a Default by the City under Section 15.4.1, then the Phase 2 Developer shall be entitled
to a repayment of its Cash Option Payment in the amount of $200,000. In either case, if any
reimbursement on account of the Phase 2 Reimbursable Improvements is then due to the
Working Developer pursuant to this Section 4.3.3(h), the amount of reimbursement to the
Working Developer shall be equal to the Option Credit Remainder of $2.5 million, which shall
be paid in accordance with Section 4.3.3(1).
(i) If the City is obligated pursuant to Section 4.3.3(h) to make any
payment of the Option Credit Remainder to Working Developer, then the City shall pay to the
Working Developer an amount equal to the then -existing Option Credit Remainder as follows:
the lesser of (i) the amount of the then -existing Option Credit Remainder, and (ii) Nine Hundred
Ninety -Nine Thousand Nine Hundred Ninety -Nine Dollars ($999,999.00) shall be paid within
sixty (60) calendar days following the termination of the Option or termination of the Escrow for
the Phase 2 Property for any reason set forth in Section 4.3.3(h)(ii)(A), and the unpaid balance (if
any) of the Option Credit Remainder shall be paid within one (1) calendar year following the
termination of the Option or failure of the Phase 2 Property Close of Escrow to occur for any
reason set forth in in Section 4.3.3(h)(ii)(A). As a condition to such payment, Working
Developer and Optionee shall each execute and deliver to the City a bill of sale transferring to
City all right, title and interest of Working Developer and Optionee in and to the Reimbursable
Phase 2 Improvements (or any usable segment thereof) and waiving claims to any further
payment on account of the Reimbursable Phase 2 Improvements.
0) Whether or not there is a Phase Transfer, it is the intent of the
Parties that at the Phase 2 Property Close of Escrow, the purchaser of the Phase 2 Property, and
not the City, shall be obligated to pay for the Reimbursable Phase 2 Improvements. To achieve
this, upon the Phase 2 Property Close of Escrow, if the Phase 2 Property Close of Escrow occurs
prior to any Phase Transfer, Developer shall receive no credit against the Phase 2 Property
Purchase Price for Option Credits applied to extend the Option Term, and if the Phase 2 Property
Close of Escrow occurs following any Phase Transfer, Phase 2 Developer shall receive no credit
against the Phase 2 Property Purchase Price for (i) Option Credits applied by the Working
Developer to extend the Option Term or (ii) Cash Option Payments made by Phase 2 Developer
to the City to the extent that the City made corresponding City Option Payments to Working
Developer pursuant to Section 4.3.3(g). Further, upon the Phase 2 Property Close of Escrow,
whether or not there has been a Phase Transfer, the City shall have no obligation to make any
further payments on account of Reimbursable Phase 2 Improvements, and in no event shall
Working Developer be entitled to any payment or credit from City related to the Reimbursable
Phase 2 Improvements, including any portion of the Total Option Credit or Option Credit
Remainder then remaining unpaid.
(k) In the event a Transfer has occurred and City payment is due
pursuant to this Section 4.3.3 or Section 15.3 or 15.4 and there is a dispute regarding the Person
to which any payment pursuant to this Section 4.3.3 or Sections 15.3 or 15.4 (but only to the
extent that the provisions of Section 15.3 become applicable as specifically referenced therein) is
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due from the City, the City shall have the right to satisfy such obligation by either itself
interpleading, or causing any third party on City's behalf, to interplead in a court of law the
amount due and thereafter City shall be deemed released from all of its obligations with respect
to Phase 2 and/or the provisions of this Agreement relating to Phase 2, the Phase 2 Provisions
shall terminate and City shall have no further liability with respect thereto to any Person,
provided that, for avoidance of doubt, the termination of the Phase 2 Provisions shall specifically
exclude, during the continuation of the Phase 1 Provisions, the obligations of the City under this
Agreement, if any, to the Phase 1 Developer with respect to the Phase 2 Property during the
City's ownership thereof, and provided further that if the Option has lapsed, expired or
terminated because of a Default by the City as set forth in Section 15.4.1, such interpleader shall
not release the City from its obligations to pay the amounts set forth in Sections 15.4.3(b)
and (c).
4.3.4 Payment of the Balance of each Purchase Price and Other
Amounts Due at Close of Escrow. No later than one (1) Business Day prior to the relevant
Close of Escrow, Developer shall deposit the following amounts with Escrow Holder:
(a) in the case of the Phase 1 Property Close of Escrow, the "Phase 1
Property Closing Payment", which shall be equal to (i) the Phase 1 Property Purchase Price
less the Purchase Price Deposit and less the Extension Payment, if any; plus (ii) any additional
amount as is necessary to cover any outstanding City Transaction Expenses incurred by the City
through the Phase 1 Property Close of Escrow plus (iii) all closing costs to be paid by Developer
pursuant to Sections 7.5.1(b), 7.5.1 c) and 7.5.41 as adjusted for any net credits or debits to the
City for closing costs and/or prorations in accordance with Sections 7.5.1(a), 7.5.1(c) and 7.5.4;
and
(b) in the case of the Phase 2 Property Close of Escrow, the "Phase 2
Property Closing Payment", which shall be calculated as follows:
(i) Provided that the Phase 2 Property Close of Escrow takes
place prior to a Phase Transfer, the Phase 2 Property Closing Payment shall be equal to (A) the
Phase 2 Property Purchase Price, adjusted pursuant to Section 4.2.2, less the Total Cash Option
Payments paid by Developer to the City to such date (but, for avoidance of doubt, without
reduction for Total Option Credit or Option Credit Remainder); plus (B) such additional amount
as is necessary to cover any outstanding City Transaction Expenses incurred by the City through
the Phase 2 Property Close of Escrow plus (C) all closing costs to be paid by Developer
pursuant to Sections 7.5.1(b), 7.5.1 c) and 7.5.4, as adjusted for any net credits or debits to the
City for closing costs and/or prorations in accordance with Sections 7.5.1(a), 7.5.1(c) and 7.5.4.
(ii) If the Phase 2 Property Close of Escrow takes place
following a Phase Transfer, the Phase 2 Property Closing Payment payable by the Phase 2
Developer shall be equal to (A) the Phase 2 Property Purchase Price, adjusted pursuant to
Section 4.2.2, less (13)(1) the Total Cash Option Payments paid by the Phase 1 Developer to the
City to such date (but, for avoidance of doubt, without reduction for Total Option Credit or
Option Credit Remainder) and (2) the Total Cash Option Payments paid by the Phase 2
Developer but only to the extent Total Cash Option Payments paid by the Phase 2 Developer
exceed the amount of City Option Payments paid by City or due to Working Developer from
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City pursuant to Section 4.3.3(g)) (but, for avoidance of doubt, without reduction for Total
Option Credit or Option Credit Remainder); plus (C) such additional amount as is necessary to
cover any outstanding City Transaction Expenses incurred by the City through the Phase 2
Property Close of Escrow plus (D) all closing costs to be paid by Developer pursuant to
Sections 7.5.1(b), 7.5.1 c), and 7.5.4, as adjusted for any net credits or debits to the City for
closing costs and/or prorations in accordance with Sections 7.5.1(a), 7.5.1(c) and 7.5.4.
4.3.5 Payments in Immediately Available Funds. Funds delivered to the
City or Escrow Holder under this Agreement shall be in the form of cash, wire transfer (to such
account as the City or Escrow Holder notifies Developer in writing), or by cashier's check drawn
on good and sufficient funds on a federally chartered bank and made payable to the order of City
or Escrow Holder, as the case may be.
4.4 Escrow and Joint Escrow Instructions.
Upon execution of this Agreement by Developer and the City, Developer and the City
shall each deliver three (3) executed original counterparts of this Agreement to Escrow Holder.
For purposes of this Agreement, the "Opening of Escrow" shall be the date that Escrow Holder
receives executed original counterparts to this Agreement signed by Developer and the City.
Upon the written acceptance of this Agreement by Escrow Holder, this Agreement shall
constitute the joint escrow instructions of Developer and the City to Escrow Holder to open an
escrow (the "Escrow"). Upon Escrow Holder's receipt of the Purchase Price Deposit and
Escrow Holder's written acceptance of this Agreement, Escrow Holder is authorized to act in
accordance with the terms of this Agreement. Developer and the City shall execute Escrow
Holder's general escrow instructions upon request, with such modifications thereto as Developer
and the City may reasonably require; provided, however, if there is any conflict or inconsistency
between such general escrow instructions and this Agreement, this Agreement shall control.
Escrow Holder shall not prepare any further escrow instruction restating or amending this
Agreement unless specifically so instructed by the City and Developer in writing. Any
supplemental escrow instructions must be in writing and signed by the City and Developer and
accepted by the Escrow Holder to be effective.
4.5 Investigation; Property Conveyed "As -Is."
4.5.1 Investigation.
(a) Due Diligence Review. Developer shall have the right to conduct
Developer's own investigation of the Property pursuant to Section 5.1 of this Agreement. If
Developer proceeds to the Phase 1 Property Close of Escrow, Developer represents and warrants
to the City that Developer will have satisfied itself that it has determined that all matters related
to the Property and the Project are acceptable to Developer, including, the state of title (subject
only to the Permitted Exceptions), the physical condition thereof, the physical condition of
structures, if any, located upon the Development Parcels and, as applicable, the accessibility and
location of utilities, and all mechanical, plumbing, sewage, and electrical systems located
therein, suitability of soils, environmental and other investigations regarding the Property. Prior
to the expiration of the Due Diligence Period Developer will have reviewed all items that in the
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Developer's sole judgment affect or influence the Developer's purchase and use of the Property
and the Developer's willingness to consummate the transactions described by this Agreement.
(b) Opportunity to Evaluate. Developer acknowledges and agrees
that, as of each Close of Escrow:
(i) Its determination to enter into this Agreement constitutes
Developer's agreement that Developer, in consummating the transactions described in this
Agreement:
(A) has been given the opportunity to inspect the
Property and to review the information and documentation provided by the City to Developer
and affecting the Property, including the environmental condition of the Property, or otherwise
obtained by Developer in connection with its due diligence of the Property, and is relying solely
on its own investigation of the Property, including such investigation prior to execution of this
Agreement, and review of such information and documentation in determining the physical,
economic and legal condition of the Property, and not on any information, representation or
warranty provided by the City or any agents or representatives of the City;
(B) has performed its own assessment of the Property,
including the environmental condition of the Property, the presence of Hazardous Materials on
the Property, the suitability of the soil for improvements to be constructed, the implications of
land use restrictions on the development plan for the Project and the Property and the
consequences of any subsequently discovered contamination on or adjacent to the Property, and
(C) has been provided with access to all information in
the possession of the City which it has requested.
(ii) Information provided to Developer by or on behalf of the
City with respect to the Property was obtained from a variety of sources and that the City has not
made any independent investigation or verification of such information and makes no
representations as to the accuracy or completeness of such information; and Developer is
satisfied with the nature and extent of its permissible investigation of the physical condition and
other matters relating to the Property and is willing to consummate the transactions described by
this Agreement.
(iii) Without limiting the generality of the foregoing, Developer
acknowledges and agrees that: (A) it has been provided with access to (x) all environmental
reports and statements listed on Attachment l0A and all reports either attached to or referenced
in the Memorandum of Agreement and Federal Deeds, (y) the FOST and (z) the Environmental
Baseline Survey (the "EBS") which is incorporated into the FOST by reference; (B) it shall
perform its own assessment of the environmental condition of the Property, the presence of
Hazardous Materials on the Property, the suitability of the soil for improvements to be
constructed, the implications of the land use restrictions on the development plan for the Project
and the Property and the consequences of any subsequently discovered contamination on the
Property; and (C) it shall review the Navy produced or identified documentation, including that
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listed on Attachment 10A (items 1-9 only), reflecting the Navy's knowledge of the
environmental condition of the Property.
(c) Nothing in this Section 4.5.1 shall in any way limit the City's
representations or warranties set forth in Sections 3.3 or 18.11.2 of this Agreement, or the
covenants or obligations of the City set forth in Sections 6.3, 6.5, 8.2.4, 8.3.5, 8.13, 8.14 or 8.15
of this Agreement.
4.5.2 AS -IS; WHERE -IS.
(a) No Representations or Warranties. Developer recognizes that the
City would not sell the Property except on an "AS, IS, WHERE IS, WITH ALL FAULTS" basis,
and Developer acknowledges that the City has made no representations or warranties of any kind
whatsoever (excepting only those representations and warranties of the City expressly set forth in
Sections 3.3 and 18.11.2 of this Agreement), either express or implied in connection with any
matters with respect to the Property or any portion thereof.
(b) Acknowledgement. Developer's determination to enter into this
Agreement constitutes Developer's agreement that Developer, in consummating the transactions
described in this Agreement is buying the Property in an "AS IS, WHERE IS, WITH ALL
FAULTS" condition, in its present state and condition and with all faults, if any. Without
limiting the generality of the foregoing provisions, Developer further acknowledges and agrees
that, except as otherwise specifically provided in Sections 3.3 and 18.11.2 of this Agreement,
City makes no representations, warranties, or guaranties of any kind or character in connection
with the transaction contemplated by this Agreement, whether express or implied, oral or written,
past, present or future, whether by the City or any of its agents, elected or appointed officials,
representatives or employees, of concerning or with respect to:
(i) the value of the Property or the income to be derived from
the Property;
(ii) the existence or nonexistence of any liens, easements,
covenants, conditions, restrictions, claims or encumbrances affecting the Property (including any
of the foregoing arising from or related to the Entitlements or any of the Other Agreements);
(iii) the suitability of the Property for any and all future
development, uses and activities which Developer may conduct thereon, including the
development of the Project described in this Agreement and the Other Agreements;
(iv) the ability of the City or any third party to complete, or
likelihood of the completion of, any of the improvements and infrastructure described by the
General Plan, the Reuse Plan, the Specific Plan, the Tustin Legacy Backbone Infrastructure
Program or any other plan or policy of the City or any other Governmental Authority;
(v) the compliance with or enforcement by the City or any
third party of the Reuse Plan, the General Plan, the Specific Plan, the Special Restrictions, the
CC&Rs, the Tustin Legacy Backbone Infrastructure Program or any other agreement or
governmental restriction or plan affecting Tustin Legacy by the City or any third party;
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purpose of the Property;
Property;
(vi) the habitability, merchantability or fitness for a particular
(vii) the manner, quality, state of repair or lack of repair of the
(viii) the nature, quality or condition of the Property including
water, soil and geology;
(ix) the compliance of or by the Property and/or its operation in
accordance with the Entitlements or any Governmental Requirement, including the National
Environmental Policy Act, CEQA and the Americans with Disabilities Act of 1990;
(x) the manner or quality of the construction or materials, if
any, incorporated into the Property;
(xi) the presence or absence of Hazardous Materials, including
asbestos or lead paint at, on, under, or adjacent to the Property or any other portion of the
Development Parcels or Tustin Legacy;
(xii) the content, completeness or accuracy of the information,
documentation, studies, reports, surveys and other materials, delivered to Developer in
connection with the review of the Property and the transactions contemplated in this Agreement
and the Other Agreements;
(xiii) the conformity of the existing improvements on the
Property and/or at Tustin Legacy, if any, to any plans or specifications therefor;
(xiv) compliance of the Property with past, current or future
Governmental Requirements relating to zoning, subdivision, planning, building, fire, safety,
health or environmental matters and/or covenants, conditions, restrictions or deed restrictions;
(xv) the deficiency of any undershoring or of any drainage to,
on or from the Development Parcels or any other portion of Tustin Legacy;
(xvi) the condition of any adjoining land owned by the City,
including the property covered by the Landscape Installation and Maintenance Agreement and
the property covered by the Roadway and Utility Easement Agreement and the adjoining City
Park and any improvements thereon;
(xvii) the fact that all or a portion of the Property may be located
on or near an earthquake fault line or falls within an earthquake fault zone established under the
Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 262 1-2630 or
within a seismic hazard zone established under the Seismic Hazards Mapping Act, California
Public Resources Code, Sections 2690-2699.6 and Sections 3720-3725;
(xviii) the existence or lack of vested land use, zoning or building
entitlements affecting the Property;
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(xix) the construction or lack of construction of Tustin Legacy or
if constructed, the construction of Tustin Legacy in accordance with design guidelines, plans and
specifications previously or to be prepared therefor;
(xx) the conditions, covenants and restrictions imposed or to be
imposed upon the Property or any portion thereof under this Agreement, the Other Agreements
or the Entitlements;
(xxi) the contents of the Memorandum of Agreement, the
Federal Deeds, the Base Closure Law and the FOST; and
(xxii) any other matters.
Nothing in this Section 4.5.2(b) shall in any way limit the City's representations or warranties set
forth in Sections 3.3 or 18.11.2 of this Agreement, or the covenants or obligations of the City set
forth in Sections 6.3, 6.5, 8.2.4, 8.3.5, 8.13, 8.14, or 8.15 of this Agreement.
(c) Environmental Condition of the Property; Restrictions. Without
limiting the generality of the foregoing provisions, except as set forth in Section 3.3.81 the City
makes no representation or warranty as to the environmental condition of the Property or any
portion thereof, the Navy's obligations with respect to the environmental condition of the
Property or the adequacy or accuracy of any environmental report that has been rendered.
Developer acknowledges and agrees that (i) there may be some residual contamination on the
Property as a result of Navy historic activities; (ii) the Navy has agreed to accept certain limited
responsibility for any contamination it caused, including any contamination discovered after
transfer from the Navy, in accordance with existing Governmental Requirements including the
National Defense Authorization Act For Fiscal Year 1993 as amended (Public Law No. 102-434)
Section 330 and Section 120(h) of the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. § 9620(h); and the deed restrictions contained in the Federal Deeds
are binding upon successors and assigns of the City and are enforceable by DTSC pursuant to a
conveyed property right from the Navy to DTSC.
(d) Federal Deeds and Memorandum of Agreement. Developer
acknowledges and agrees that the purchase of the Property is subject to the terms and conditions
expressly set forth in the Memorandum of Agreement, the Federal Deeds and the Permitted
Exceptions. From and after each Close of Escrow, Developer agrees, to assume and faithfully
perform any covenants running with the land and obligations set forth in the Federal Deeds as
obligations to be performed by "Grantee or its successors or assigns" with respect to the Property
acquired by Developer and such obligations shall run with the land and be binding upon
Developer and each Successor Owner for the period of their ownership and for the Additional
Liability Period.
(e) No Unauthorized Representations. No Person acting on behalf of
the City is authorized to make, and by execution hereof, Developer acknowledges that no Person
has made, any representation, agreement, statement, warranty, guarantee or promise regarding
the Property, the Project or the transactions contemplated in this Agreement or the past, present
or future zoning, land use entitlements, construction, physical condition, presence or extent of
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Hazardous Materials or other status of the Property except as may be expressly set forth in this
Agreement or in any of the Other Agreements. 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 or in any of the Other Agreements will be valid or binding on
the City. Nothing in this Section is intended to affect in any manner the validity of the
Entitlements and Development Permits obtained by Developer with respect to the Property.
(f) Release. Developer, on behalf of itself and each Successor Owner
and every Person claiming by, through or under Developer or any Successor Owner (each a
"Releasing Party"), hereby waives, as of the Effective Date, and agrees to waive, as of each
Close of Escrow, the right of each Releasing Party to recover from, and fully and irrevocably
releases, the City and its elected and appointed officials, employees, agents, attorneys, affiliates,
representatives, contractors, successors and assigns (individually, a "Released Party" and
collectively, the "Released Parties") from any and all Claims that Developer or any Releasing
Party may now have or hereafter suffer or acquire arising from or related to: (i) any Due
Diligence Information, (ii) any condition of the Property or any current or future improvement
thereon, known or unknown by any Releasing Party or any Released Party, including as to the
extent or effect of any grading of the Development Parcels; (iii) 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 Property, or any portion thereof, (iv) the
existence, Release, threatened Release, presence, storage, treatment, transportation or disposal of
any Hazardous Materials at any time on, in, under, or from, the Property or any current or future
improvement thereon or any portion thereof, (v) Claims of or acts or omission to act of 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, or from, about, or adjacent to the
Property or any current or future improvement thereon, including any Investigation or
Remediation at or about the Property or any current or future improvement thereon; and/or
(vi) arising from or related to the Tustin Legacy Backbone Infrastructure Program, any
community facilities district or the cost or extent thereof, or the amount of the Project Fair Share
Contribution or any community facilities district assessment against the Property, Development
Parcels and/or Improvements described in this Agreement; provided that the foregoing release by
the Releasing Parties shall not extend to (A) any breach by the City of any of the representations
or warranties of the City set forth in Sections 3.3 or 18.11.2 of this Agreement or any of the
Other Agreements, (B) any breach by the City of any of the covenants or obligations set forth in
this Agreement or any Other Agreement, (C) any Claim that is the result of the gross negligence
or willful misconduct of the City, (D) any actions of the City or any of the Released Parties
affecting a portion of the Property which occur following the Close of Escrow with respect to
such portion of the Property, or (E) any Claim arising with respect to the Development Permits,
Applicable Approvals and Phase 2 Applicable Approvals, if any, approved by the City in its
Governmental Capacity. This release includes Claims of which Developer is presently unaware
or which Developer does not presently suspect to exist which, if known by Developer, would
materially affect Developer's release of the Released Parties. Developer 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 OR HER FAVOR AT THE TIME OF
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EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR."
In this connection and to the extent permitted by law, Developer on behalf of itself, and the other
Releasing Parties hereby agrees, represents and warrants, which representation and warranty
shall survive each Close of Escrow and the termination of this Agreement and shall not be
merged with any Quitclaim Deed, that (x) it 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, (y) the waivers and releases in this
Section 4.5.2(f) have been negotiated and agreed upon in light of that realization and
(z) Developer, 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 to the extent set forth above which might in any way be included as a material
portion of the consideration given to the City by Developer in exchange for the City's
performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES
THAT (A) IT HAS READ AND FULLY UNDERSTANDS THE
PROVISIONS OF THIS SECTION, (B) IT HAS HAD THE
CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT
ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN
THIS SECTION.
CITY'S INITIALS DEVELOPER'S INITIALS
From and after the Phase 1 Property Close of Escrow with respect to the Phase 1 Property and
from and after the Phase 2 Property Close of Escrow with respect to the Phase 2 Property, this
release shall be an equitable servitude and a covenant running with the land comprising each
such Parcel for the benefit of the City Benefited Property and the City and Developer and the
Successor Owners owning all or any portion of each such Parcel and all Persons claiming by,
through or under Developer or any Successor Owner of each such Parcel or any portion thereof
for the period of such Person's interest in the applicable Parcel or any portion thereof and for the
Additional Liability Period if any, applicable to such Person and to further evidence its
effectiveness with respect to Developer and the Successor Owners of the Development Parcels,
shall be included in its entirety in each Quitclaim Deed.
4.6 Covenants; Preconditions to Close of Escrow.
The provisions of this Section 4.6 are covenants of Developer for the benefit of the City,
are conditions precedent to the Phase 1 Property Close of Escrow and the Phase 2 Property Close
of Escrow, as further described in this Section 4.6 and in Sections 7.2.2 and 7.3.2, as applicable,
and shall, for the benefit of the City, be satisfied by Developer not later than the times specified
for such conditions below or in the applicable Schedule of Performance.
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4.6.1 Developer Financing Plan. As of the Effective Date, Developer has
provided the City with a Financing Plan (the "Financing Plan") containing: (a) a financial pro
forma and development budget for the Project setting forth a cash flow projection for operation
of the Project and sources and uses of funds and evidencing the Developer's plan to obtain the
debt and equity required to construct and operate the Project and to meet its other obligations
under this Agreement; and (b) a cost breakdown for all Development Costs anticipated to be
incurred for the development of the Project based upon government permits and approvals and
any design documents and plans approved to such date. Within forty five (45) Business Days
prior and as a condition precedent for the benefit of the City to (i) the Phase 1 Property Close of
Escrow, Developer shall provide an update to the Financing Plan for Phase 1 (the "Phase 1
Financing Plan") to achieve the Minimum Phase 1 Improvements and (ii) each of the exercise
of the Option for Phase 2, and the Phase 2 Property Close of Escrow, Developer shall provide an
update to the Financing Plan for Phase 2 (the "Phase 2 Financing Plan") to achieve the
Minimum Phase 2 Improvements, in each case identifying revisions to the information
previously provided and providing actual sources and uses of funds, and shall, as to each
financing plan, certify to the City either that the original Financing Plan remains true and correct
or, as modified to reflect Developer's expectation as to available funding and costs, remains
sufficient to pay through issuance of the Certificate of Compliance for such Phase, all
Development Costs of such Phase of the Project and all other costs for the construction,
marketing and lease of the Improvements as described in the Scope of Development for such
Phase, including, in the case of Phase 1 (and in the case of Phase 2, to the extent not then
completed in Phase 1), the Minimum Horizontal Improvements. As a condition to each Close of
Escrow for the benefit of the City, the City shall have the right in its sole discretion to approve or
disapprove the updated Financing Plan. As a condition to each Transfer pursuant to
Section 2.2.3(a) or b), the Transferee shall provide an updated Financing Plan to the City for the
portions of the Project to be acquired by the Transferee (and the Transferor shall, as a condition
of such Transfer, provide an updated Financing Plan or otherwise certify to the City that the
then -existing Financing Plan remains true and correct), which shall be subject to review and
approval by the City in its sole discretion.
4.6.2 Additional Assurances of Developer; Joint Venture Agreements.
(a) Developer shall, substantially concurrently with the execution of
this Agreement, but in all events on or before the Effective Date, and as a condition to each
Transfer pursuant to Section 2.2.3(a) or b), the proposed Transferee shall:
(i) cause Alcion Real Estate Partners Master Fund III, L.P. and
Alcion Real Estate Partners Strategic Parallel Fund III, L.P., collectively, or such other equity
investor(s) approved by the City in its sole discretion (the "Phase 1 Equity Investor") to
provide the City with an Original Equity Investor Certificate and the accompanying matters
described in Section 4.6.2(e) below; provided that the certificates of good standing and tax good
standing of Phase 1 Equity Investor described in Section 4.6.2(e) shall have been issued within
thirty (30) calendar days prior to the required date of delivery; and
(ii) cause the applicable Joint Venture Agreement to have been
executed and delivered to the City and as delivered, such Joint Venture Agreement: (A) shall
have been approved by the City in its sole discretion, (B) shall have been made and executed by
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LPCC (or an Affiliate of LPCC) as the holder of the Operating Rights and Responsibilities
unless otherwise agreed by the City in its sole discretion pursuant to Transfer approved by the
City pursuant to Section 2.2.3 or Section 2.2.71 and by the Phase 1 Equity Investor, (C) shall be
dated as of or prior to the Effective Date, or if delivered in connection with a proposed Transfer,
the proposed Transfer Date and (D) shall evidence that the parties thereto have agreed to fund the
Development Costs as described in Section 4.6.2(d).
(b) Phase 1. Prior and as a condition precedent to the Phase 1 Property
Close of Escrow for the benefit of the City:
(i) The Phase 1 Joint Venture Agreement shall remain in full
force and effect and unmodified, or if modified Developer shall have provided the City with any
and all modifications, which shall have been approved by the City in its sole discretion, and the
Phase 1 Joint Venture Agreement shall satisfy the requirements set forth in Section 4.6.2(d);
(ii) Unless otherwise approved by the City in accordance with
Section 2.2.3 or 2.2.7, LPCC (or an Affiliate of LPCC) shall have the Operating Rights and
Responsibilities;
(iii) Developer shall have updated the Financing Plan described
in Section 4.6.1 and provided to the City the Phase 1 Financing Plan in accordance with
Section 4.6.1 and the Phase 1 Financing Plan shall have been approved by the City; and
(iv) The Phase 1 Guarantor shall have delivered a Guaranty in
accordance with and meeting the requirements of Section 4.6.3 and 4.7.
(c) Phase 2. Prior and as a condition precedent to the Phase 2 Property
Close of Escrow, for the benefit of the City:
(i) Developer shall have caused the Phase 2 Joint Venture
Agreement to be executed and delivered and as delivered (A) shall have been approved by the
City in its sole discretion, (B), shall have been made and executed by LPCC (or an Affiliate of
LPCC) as the holder of the Operating Rights and Responsibilities unless otherwise agreed by the
City in its sole discretion pursuant to Transfer approved by the City pursuant to Section 2.2.3(a)
or (b) or Section 2.2.7 and made by a Person Controlled by an Affiliate of Alcion, or another
equity investor approved by the City in its sole discretion in accordance with
Section 2.2.3(a) or (b) ("Phase 2 Equity Investor"), (C) shall be dated as of or prior to the date
of exercise of the Option, and (D) shall evidence that the parties thereto have agreed to fund the
Development Costs as described in Section 4.6.2(d);
(ii) Unless otherwise approved by the City in accordance with
Section 2.2.3(a) or (b) or Section 2.2.7, LPCC (or an Affiliate of LPCC) shall have the Operating
Rights and Responsibilities;
(iii) Developer shall have updated the Financing Plan described
in Section 4.6.1 and provided to the City the Phase 2 Financing Plan in accordance with
Section 4.6.1 and the Phase 2 Financing Plan shall have been approved by the City; and
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(iv) The Phase 2 Guarantor shall have delivered a Guaranty in
accordance with and meeting the requirements of Section 4.6.3 and 4.7.
(d) Each Joint Venture Agreement (or other documents provided by
Equity Investor for the benefit of the City and approved by the City in its sole discretion) shall
provide evidence that the Equity Investor has provided Developer with a binding contractual
commitment to invest sufficient equity, when combined with the other sources and uses set forth
in the Phase 1 Financing Plan or the Phase 2 Financing Plan, as applicable, to fund all
Development Costs for the applicable Phase as described in the Financing Plan for such Phase
including:
(i) Developer's costs and expenses necessary to obtain the
Applicable Approvals, Phase 2 Applicable Approvals and Development Permits and to comply
with the other obligations of Developer under this Agreement required to be satisfied prior to the
Phase 1 Property Close of Escrow, or the Phase 2 Property Close of Escrow, as applicable,
including with respect to Phase 2, payment of the Option Payments,
(ii) acquisition of the applicable Phase of the Property;
(iii) all costs of development of the applicable Phase of the
Project and the financing (including interest), construction, marketing and sale or Lease of all
Improvements in such Phase as further described in the Scope of Development through issuance
of a Certificate of Compliance, including brokerage fees incurred in the leasing, sale and
financing of the Project; and
(iv) Developer's costs and expenses to perform and satisfy all
the covenants of the Developer with respect to the applicable Phase of the Property contained in
this Agreement and the Other Agreements;
(e) When required by this Agreement, Developer shall deliver a
certification in favor of the City from the chief financial officer or other appropriate authorized
officer of the Equity Investor for each Phase in the form attached as Attachment 13B (the
"Original Equity Investor Certificate") confirming Equity Investor has provided Developer
with a binding contractual commitment to fund the development of the applicable Phase of the
Project in accordance with the Joint Venture Agreement applicable to such Phase and that such
Joint Venture Agreement is in full force and effect and has not been modified, and will not be
modified, amended or terminated without the prior consent of the City, in its sole discretion; and
certifying as to the authority of such Equity Investor's officer to bind Equity Investor and
authorization to execute the Joint Venture Agreement and to the accuracy and correctness of and
attaching the following for the applicable Phase and Equity Investor;
(i) A certificate of formation and California foreign entity
registration (if applicable) for Equity Investor;
(ii) Evidence of authority of the individual(s) executing the
Joint Venture Agreement to bind Equity Investor and to execute the Joint Venture Agreement;
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(iii) Copies of all resolutions or other necessary actions, if any,
taken by Equity Investor to authorize the execution of the Joint Venture Agreement; and
(iv) Certificates of good standing and tax good standing, issued
within thirty (30) calendar days of the date of delivery of the Joint Venture Agreement to the
City, by the Secretary of State and the applicable taxing authority of the state in which the Equity
Investor is formed and by the California Secretary of State (if registration is required by
applicable law).
4.6.3 Guaranty of Developer Obligations; Phase 1 Guaranty and Phase 2
Guaranty
(a) Substantially concurrently with, but in all events prior to the Phase
1 Property Close of Escrow, and as a condition precedent thereto for the benefit of the City,
Developer shall cause the Phase 1 Guarantor to deliver to the City, and substantially concurrently
with, but in all events prior to the Phase 2 Property Close of Escrow, and as a condition
precedent thereto for the benefit of the City, Developer shall cause the Phase 2 Guarantor to
deliver to the City, the following instruments as applicable to the Phase:
(i) A fully executed and effective Guaranty which shall remain
in effect until the issuance of the Certificate of Compliance for the applicable Phase and shall
guarantee, among other things:
(A) Upon the Close of Escrow for the applicable Phase,
payment of all Development Costs for the Completion of the Improvements for such Phase,
including, for avoidance of doubt, (1) with respect to the Phase 1 Parcel, Completion of the
Phase 1 Horizontal Improvements and the Minimum Phase 1 Vertical Improvements on the
Phase 1 Parcel, including the Minimum Horizontal Improvements to be constructed or caused to
be constructed by Developer upon the Phase 1 Parcel, the Phase 2 Parcel and off -sites, and
(2) with respect to the Phase 2 Parcel, Completion of the Minimum Phase 2 Improvements for
such Phase;
(B) Developer's obligations with respect to the Ongoing
Matters;
(C) The indemnities and other obligations of Developer
pursuant to Sections 4.3.3(e) and (i), 4.5.2(f), 5.5, 8.8, 8.9, 8.11, 8.12, 10.1, 10.2, 11.1 (including
payment of all deductible amounts), and 18.11.1 of this Agreement;
(D) The costs and expenses incurred by the City, if any,
in enforcement by the City of its rights and/or remedies under this Agreement with respect to
non-performance by Developer of its obligations of Developer under this Agreement and the
Other Agreements, including the exercise by the City of the Right of Repurchase or Right of
Reversion with respect thereto, but excluding the Repurchase Price applicable to any Reacquired
Property actually acquired by the City pursuant to the Right of Repurchase; provided that the
City shall be entitled to retain the Reacquired Property so acquired in its entirety,
notwithstanding any contribution or payment made by Developer, or by any Guarantor; and
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(E) Attorneys' fees and costs incurred by the City in
connection with the enforcement of the Guaranty; and
(ii) A declaration certified by the chief financial officer or
other appropriate authorized officer of the applicable Guarantor (the "Guarantor Certificate")
certifying as to the authority of such Guarantor's authorized officer to bind Guarantor and
authorization to execute the Guaranty and to the accuracy and correctness of and attaching the
following for the applicable Phase and Guaranty and attaching copies of the following: (w) a
certificate of formation and California foreign entity registration (if required by applicable law)
for Guarantor; (x) evidence of authority of the individual(s) executing the Guaranty to bind
Guarantor and to execute the Guaranty, (y) copies of resolutions or other necessary actions taken
by Guarantor to authorize the execution of the Guaranty, if any; and (z) certificates of good
standing and tax good standing issued by the Secretary of State of the state in which Guarantor is
formed and by the California Secretary of State (if required by applicable law), within thirty (30)
calendar days of the applicable Close of Escrow.
(b) In the event of a Transfer by Initial Developer of all of its interests
in this Agreement pursuant to Section 2.2.3(a), the obligations imposed upon any Guarantor
hereunder under any Guaranty shall, as a condition to such Transfer, be either retained in full by
such Guarantor or be assumed by a guarantor meeting the requirements of Section
2.2.3(a)(iv)(B) and approved by the City in its sole discretion. Upon each subsequent Transfer to
a Developer prior to the issuance of a Certificate of Compliance for which Developer desires to
replace its existing Guaranty as permitted by Section 2.2.3(a)(iv)(B) or Section 2.2.3(b)(iv)(C),
and as a condition to the City's review and approval, in its sole discretion, of the proposed
guarantors and proposed Guaranty, Developer shall cause the proposed guarantors to deliver
evidence of the financial capacity of the proposed guarantors, authority of the proposed
guarantors to provide the Guaranty, and copies of all documents evidencing formation, good
standing and authority requested by the City. If the City is not satisfied with the financial status
of the proposed guarantor, then the City shall be entitled to obtain the financial information of
other members and/or partners of the proposed development entity (and their respective
members, partners, shareholders and/or other owners at each tier until substantial assets are
identified) and such other financial information as the City may request to demonstrate such
guarantor's and Developer's financial capacity and capability to perform its obligations under
this Agreement.
4.6.4 Entitlements; Phase 2 Applicable Approvals. Developer or Phase 2
Developer (as applicable) shall have applied for and obtained the Phase 2 Applicable Approvals
prior and as a condition to its exercise of the Option. Developer's or Phase 2 Developer's (as
applicable) application for the Phase 2 Applicable Approvals shall be consistent with the Scope
of Development and the terms and conditions of this Agreement. Nothing contained in this
Agreement shall relieve Developer or Phase 2 Developer from any obligations imposed by the
City on Developer in connection with the Entitlements, the Applicable Approvals and, if
applicable, the Phase 2 Applicable Approvals, the recording of the phased final Subdivision
Map, including any bonding requirements related thereto, and the Development Permits.
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4.6.5 Insurance. Developer shall have obtained and delivered to the City a
binder or certificate evidencing the insurance as and when required by Article 11 effective upon
the mutual execution of this Agreement by Developer and the City.
4.6.6 Declaration of Ownership; Additional Documentation. Developer,
prior to the date of execution of this Agreement and again concurrently with each respective
Close of Escrow (and as a condition precedent thereto for the benefit of the City), and each
Transferee or Controlling Party, prior to or concurrently with a Transfer or Transfer of Control,
as applicable, shall provide to the City:
(a) a declaration certified by the chief financial officer or other
appropriate authorized officer of authorized to execute documents on behalf of Developer,
Transferee or Controlling Party, as applicable that the following documentation submitted by
such entity to the City is true and correct and attaching copies of:
(i) a certificate of formation, California foreign entity
registration (if registration is required by applicable law), and a fully executed limited liability
company or limited partnership agreement or bylaws of such entity (including any amendments
thereto) or other formation documents, as applicable;
(ii) copies of all resolutions or other necessary actions taken by
such entity to authorize the execution of this Agreement, if applicable, and any other documents
or instruments required by this Agreement;
(iii) certificates of good standing and tax good standing issued
by the Secretary of State and the applicable taxing authority in the state in which Developer (or
Transferee, as applicable) is formed or incorporated and by the California Secretary of State (if
registration is required by applicable law) within thirty (30) calendar days of the Effective Date;
and
(iv) a copy of any Fictitious Business Name Statement, as
published and filed with the Clerk of Orange County; and
(b) except in the case of a Permitted Transfer, a certification by such
entity that the Phase 1 Financing Plan or the Phase 2 Financing Plan, as applicable, as the same
may have been updated in accordance with the requirements of Section 4.6.1, remains true and
correct in all material respects.
4.7 Guarantor Illiquidity Event.
4.7.1 Liquid Reserves. Developer shall cause each Guarantor to maintain
sufficient liquid reserves to fully discharge its obligations under the Guaranty executed by such
Guarantor and to provide replacement financial assurances in the event Guarantor's liquid
reserves fall below an amount adequate to fully discharge its obligations under such Guaranty.
Without limiting the foregoing, it is contemplated that each Permitted Mortgage will be
supported by guarantors that are the same as the Guarantors under this Agreement, and that the
documents executed by Developer and the guarantees provided to each Permitted Mortgagee in
connection with each Construction Loan will contain provisions requiring each such guarantor to
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achieve at the time the Permitted Mortgage is made and maintain until the earlier of payment in
full or earlier termination of the Construction Loan or issuance of a Certificate of Compliance for
the Phase for which the Permitted Mortgage is made, various covenants relating to liquidity,
including the following (the "Liquidity Covenants"): (a) Net Worth and Liquidity minimums
and, if and only if required by the Permitted Mortgagee, other financial covenants and tests
intended to assess and assure the financial wherewithal of Guarantor, that in each case are
established in good faith by the Permitted Mortgagee and Guarantor; (b) agreement to furnish the
Permitted Mortgagee under the Permitted Mortgages with certain financial reports on a
reasonably frequent basis (such as quarterly), containing the above required financial information
at stated intervals as provided in each Permitted Mortgage to assure there has been no Guarantor
Illiquidity Event, and (c) in the event of a Guarantor Illiquidity Event, requiring that each
Guarantor provide the Permitted Mortgagee with an acceptable replacement or supplemental
guarantor or additional security. The Liquidity Covenants shall be incorporated into the
Guaranty prior to the applicable Close of Escrow.
4.7.2 Reporting of Guarantor Illiquidity Events. Developer shall, or shall
cause each Guarantor to, make available to the City such financial reports as Guarantor, or
Developer on behalf of Guarantor, furnishes to the Permitted Mortgagees at the same time as
they are required to be furnished to each Permitted Mortgagee under the applicable Permitted
Mortgage. Each Permitted Mortgage shall provide that in the event that any Guarantor fails to
satisfy a Liquidity Covenant or any Guarantor is the subject of any of the events or actions
described in Section 2.2.5 (each, a "Guarantor Illiquidity Event"), Permitted Mortgagee shall
notify the City in writing of the Guarantor Illiquidity Event within five (5) Business Days after
the occurrence thereof. In addition, Developer shall and shall require each Guarantor to,
independently notify the City in writing within five (5) Business Days from its receipt of notice
from any Permitted Mortgagee of a Guarantor Illiquidity Event or at such earlier date as
Developer or any Guarantor has knowledge that a Guarantor Illiquidity Event has occurred. The
occurrence of a Guarantor Illiquidity Event shall be a Potential Default under this Agreement
which Guarantor Illiquidity Event shall be deemed to commence upon the earlier of the date of
delivery by the Permitted Mortgagee, Guarantor or Developer of the aforesaid notice or if no
notice is provided, the date upon which the required notice was to have been provided to comply
with the foregoing. The failure of Developer to deliver or cause others to deliver the financial
reporting information to the City as required by Section 4.7.1Lb) or this Section 4.7.2 when due
shall be a Potential Default of Developer under this Agreement.
4.7.3 Substitution of Security. If (a) the guarantors under each Permitted
Mortgage or Permitted Mortgages are the same as the Guarantors under this Agreement and
(b) each Permitted Mortgage contains Liquidity Covenants that provide that Developer shall, in
the event of a Guarantor Illiquidity Event, provide the Permitted Mortgagee with substitute or
additional security or guarantors, then within one hundred and eighty (180) calendar days
following the date of commencement of the Guarantor Illiquidity Event as specified in
Section 4.7.21 Developer shall for the benefit of the City and whether or not required by the
Permitted Mortgagee: (i) cause the Guarantor to supplement the security furnished by it in a
manner meeting the requirements of the Permitted Mortgage, and cause the City to be furnished
with the same additional security as furnished to the Permitted Mortgagee or (ii) provide the City
with alternate security meeting the requirements of Section 4.7.4(b)(ii). Failure of Developer to
provide substitution of security to the City within such one hundred and eighty (180) calendar
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day period shall be a Material Default under this Agreement and the time period to cure such
Default prior to its becoming a Material Default shall not be extended for Force Majeure Delay.
4.7.4 No Permitted Mortme Liquidity Covenants. To the extent that any
Mortgage proposed to be entered into does not contain the Liquidity Covenants or is guaranteed
by guarantors other than Guarantor, then, if such Mortgage is proposed at Close of Escrow, as a
condition to Close of Escrow for the benefit of the City, and if such Mortgage is proposed to be
entered into subsequent to Close of Escrow for a Phase or Building Pad for which a Certificate of
Compliance has not been Recorded, as a condition to City's approval of such Mortgage as a
Permitted Mortgage: (a) Developer shall cause Guarantor to agree, in writing, to the following
alternative Net Worth and Liquidity standards for the benefit of the City—Guarantor shall meet,
at the time the Permitted Mortgage is made, and maintain until issuance of the Certificate of
Compliance for the Phase it guarantees, a Net Worth of not less than One Hundred Million
Dollars ($100,000,000.00) and Liquidity of not less than Twenty Five Million Dollars
($25,000,000.00) ("Minimum Liquidity Standards"), and (b) Developer, Guarantor and City
shall enter into a written agreement upon terms approved by each in its sole discretion,
establishing the procedures by which (i) Guarantor shall furnish specified financial reports to the
City on a regular basis to assure that the Minimum Liquidity Standards are met and that none of
the events or actions described in Section 2.2.5 with respect to the Guarantor have occurred (the
failure of any such standard being, a "City Guarantor Illiquidity Event"); (ii) in the event of a
City Guarantor Illiquidity Event, within sixty (60) calendar days following the notice from City
of a City Guarantor Illiquidity Event, Guarantor shall supplement its Net Worth and Liquidity to
meet the Minimum Liquidity Standards or Developer shall be required to provide the City with
additional security satisfactory to the City by (A) providing the City with a Guaranty in the form
and substance of the Guaranty, or otherwise acceptable to the City in its sole discretion, from a
replacement or supplemental guarantor or guarantors acceptable to the City in its sole discretion,
or (B) furnishing the City with another form of security such as a pledge of specified assets or
completion bond, in each case in a manner meeting the requirements of the City in its sole
discretion. The City shall have the right, but not the obligation, to provide written notice to
Developer of the occurrence of a City Guarantor Illiquidity Event and the provision of such
notice shall constitute a declaration by the City of a Developer Potential Default. The failure of
Developer to provide substitute security for the Guaranty within the required time frame shall
constitute a Material Default under this Agreement
4.7.5 DDA Amendment to Address Liquidity Covenants. Any
amendment of the DDA required to facilitate establishment of the procedures and process
described in Section 4.7.4 shall be an administrative amendment to the DDA, approval of which
is hereby delegated to the City Manager or designee.
5. Developer's Due Diligence Investigation.
5.1 Due Diligence Period.
Developer acknowledges that while the City has been negotiating this Agreement with
Developer, Developer has had access to the Property within which to undertake such physical
inspections and other investigations of, and inquiries concerning, the Property as may be
necessary to allow Developer to evaluate the physical characteristics of the Property, including
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partial storm drain improvements as well as such other matters as may be deemed by Developer
to be reasonably necessary to generally evaluate the Property and determine the feasibility and
advisability of Developer's purchase and redevelopment of the Property with the Project. In
addition to the due diligence investigation previously conducted by Developer, Developer shall
have an additional period of time as identified herein to undertake specific additional inspections
and investigations as are necessary and specifically permitted herein to allow Developer to
continue to evaluate the feasibility and advisability of Developer's purchase of the Property.
Developer's obligation to consummate this transaction shall be contingent upon Developer's
express written approval, in Developer's sole discretion, of the results of such inspection,
examination and other due diligence with regard to the Property and its suitability for
construction of the Project and the feasibility and advisability of Developer's purchase and
redevelopment of the Property as Developer may elect to conduct during the period commencing
on the Effective Date and ending on the date which is sixty (60) calendar days following the
Effective Date at 4:00 P.M. Pacific Time (the "Due Diligence Period"). Developer
acknowledges and agrees that the Due Diligence Period is adequate time to complete such
investigation. As further described in Section 5.3 of this Agreement, Developer may give City
written notice (the "Diligence Termination Notice") on or before the end of the Due Diligence
Period stating whether Developer elects to terminate this Agreement or waive its due diligence
contingency and proceed to the Close of Escrow with respect to the Project and the Property,
subject to the other terms and conditions set forth in this Agreement. Although Close of Escrow
with respect to the Property may occur concurrently or in two separately timed closings, any
waiver of due diligence contingency or Diligence Termination Notice under this Section 5.1 shall
apply to the entirety of the Property.
5.2 No Financing Contingency.
Developer represents and warrants that it has examined its ability to purchase the
Property and to develop the Project, including Developer's ability to finance the Project.
Accordingly, Developer acknowledges and agrees that Developer's purchase of the Property is
subject to no financing contingency whatsoever with respect to either private or public financing
and that its acquisition of third party financing for the Project is not a condition precedent to
Developer's obligation to purchase the Property.
5.3 Termination of Agreement.
If Developer elects to terminate this Agreement on or before the end of the Due Diligence
Period (or is deemed to have terminated this Agreement in accordance with the last sentence of
this Section 5.3) pursuant to its termination rights set forth in Sections 5.1 or 6_3, then this
Agreement shall automatically terminate on the date of such election or deemed election, as
applicable, and thereafter, neither Party shall have any further obligations under this Agreement
(subject to the provisions that expressly survive the termination of this Agreement); provided,
however that, Escrow Holder shall return the Purchase Price Deposit to Developer, less
Developer's share of any title and escrow cancellation fees of Escrow Holder and outstanding
City Transaction Expenses to the extent not covered by the City Costs Deposit, if any. If
Developer fails to give the Diligence Termination Notice on or before the end of the Due
Diligence Period, then Developer will be deemed to have disapproved the Due Diligence matters
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and shall be deemed to have delivered a Diligence Termination Notice and elected to terminate
this Agreement pursuant to Section 5.1.
5.4 Limited License.
The City grants to Developer, for use by Developer and the Developer Representatives, a
limited and revocable license to enter upon the Development Parcels for purposes of
(a) conducting Developer's due diligence inspection and/or (b) obtaining data and making
surveys and tests necessary to carry out this Agreement, provided that, prior to the effectiveness
of such license, Developer shall: (i) deliver to the City written evidence that Developer has
procured the insurance required for such license under Sections 11.1 and 11.2; (ii) give the City
twenty-four (24) hours telephonic, electronic mail or written notice of any intended access which
involves work on the Development Parcels or may result in any impairment of the use of the
Property or any portion thereof or any adjacent property by any then -current owners, occupants,
or contractors; (iii) access the Property in a safe manner; (iv) conduct no environmental testing,
sampling, invasive testing, or boring without the written consent of the City (not to be
unreasonably either withheld, conditioned or delayed by action of the City); (v) not authorize any
dangerous or hazardous condition to be created or caused on the Property; (vi) comply with all
Governmental Requirements and obtain all permits required in connection with such access; and
(vii) conduct inspections and testing during normal business hours and only after obtaining the
City's prior consent if required under this Section 5.4, which shall not be either unreasonably
withheld, conditioned, or delayed by action of the City. This limited license shall commence on
the Effective Date, may be revoked by the City during the continuation of any Default by
Developer, or upon termination of this Agreement by any Party, and shall be automatically
revoked and terminated upon the earlier to occur of (a) a delivery or deemed delivery by
Developer of a Diligence Termination Notice, (b) termination of this Agreement, (c) the Phase 1
Property Outside Closing Date or (d) the Phase 1 Property Close of Escrow; provided that this
limited license shall not be used for construction purposes, and one or more licenses meeting the
requirements of Section 8.2.4 shall be required for construction of the Minimum Horizontal
Improvements on the Phase 2 Parcel prior to the Phase 2 Property Close of Escrow and for due
diligence by Developer on the Phase 2 Parcel.
5.5 Indemnity.
Developer, on behalf of itself and each Successor Owner, hereby agrees to protect,
indemnify, defend and hold harmless the City Indemnified Parties from and against any and all
Claims arising during the term of the limited license described in Section 5.4, to the extent
arising from or related to: (a) the acts and omissions of Developer and/or the Developer
Representatives arising from or related to the presence, activities or work on or use of the
Development Parcels or from the exercise of the license provided in Section 5.4 by Developer or
the Development Representatives, including with respect to any inspections, surveys, tests,
Investigations and studies carried out by Developer or the Developer Representatives on the
Development Parcels or on adjacent properties as part of the work plan or investigation, (b) entry
onto the Development Parcels by Developer or the Developer Representatives in connection with
this Agreement, (c) bodily injury to or death of any person (including any employee or contractor
of the City Indemnified Parties) or damage to or loss of use of property resulting from such acts
or omissions of Developer or any Developer's Representative in connection with this
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Agreement, and (d) a Release of Hazardous Materials existing on the Development Parcels prior
to Close of Escrow caused by the acts of Developer or any Developer Representatives; provided
that the foregoing indemnity shall not apply to (1) the extent caused by the gross negligence or
willful misconduct of the City or any City Indemnified Party; or (2) the discovery by Developer
of any pre-existing environmental conditions on the Development Parcels not caused by or
contributed to by Developer or the Developer Parties. Developer shall keep the Development
Parcels free and clear of all Construction Liens related to Developer's inspection and/or
Investigation of the Property. The indemnification by Developer set forth in this Section 5.5
shall survive (A) each Close of Escrow and shall not be merged into any Quitclaim Deed, and
(B) any termination of this Agreement prior to the occurrence of the Phase 2 Property Close of
Escrow. Nothing in this Section shall in any way limit or relieve Developer from its obligations,
covenants and indemnities under this Agreement or the Other Agreements with respect to any
Phase arising following the Close of Escrow for such Phase.
5.6 Review of Certain Records and Materials.
The City shall, within ten (10) Business Days of the Effective Date, provide Developer
with copies of all City -produced or commissioned plans, reports, studies, investigations and
other materials the City may have in its possession that are pertinent to the Property and/or
development of the Project; provided that except as set forth in Section 3.3 the City makes no
representation, warranty or guaranty regarding the completeness or accuracy of such plans,
reports, studies, investigations and other materials. Developer shall also have the right to enter
the City's offices to review files and materials, including the right to examine those books,
records and files of the City relating to the environmental and other condition of the Property
which the City determines based upon the advice of counsel are not subject to attorney-client or
other privilege. The City agrees to make all such books, records, and files available to the
Developer and the Developer's attorneys, accountants, and other representatives at City Hall any
time during business hours on Business Days upon reasonable notice from the Developer.
5.7 Communications with City and Third Parties.
From and after the Effective Date, the Developer's and the Developer Representatives'
communications with the City shall be directly with the City Manager, who shall be the
administrator of this Agreement on behalf of the City, and such other employees, consultants,
and attorneys of the City from time to time as the City Manager may designate. In addition,
Developer shall have the right to communicate with staff of other public agencies; and with third
parties to all agreements affecting the Property in connection with the Developer's proposed
purchase of the Property, and Developer's development of the Project. The City staff shall have
the right, but not the obligation, to attend and participate in any and all meetings with other
public agencies, with regards to the Project. Upon request of the City, the Developer shall
promptly provide the City with a copy of each material item of correspondence (including
emails, letters, facsimiles, and any enclosures and attachments) sent to or received by the
Developer from other public agencies, or members of the general public, in connection with
entitlement, community, or governmental approval of the Project, provided, however, that
Developer shall not be obligated to deliver any such materials that based upon advice of counsel
are determined to be subject to attorney-client or other privilege.
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6. Title; Survey.
6.1 Survey by Developer.
Prior to the end of the Due Diligence Period, Developer, at Developer's sole cost and
expense, shall have obtained a survey for the Property ("Survey") prepared by a licensed
surveyor ("Surveyor"), which Survey shall be certified by the Surveyor to the City, Developer
and the Title Company. The Survey shall depict: (a) the location of all existing improvements
(if any), existing perimeter improvements (if any), and easements, roads, rights-of-way and
encroachments located within twenty (20) feet of the boundary of the Development Parcels,
(b) all other Permitted Exceptions susceptible to depiction on a map or survey identified by
reference to the recording information applicable to the documents creating them, and (c) any
portion of the Development Parcels lying within a flood hazard area.
6.2 Permitted Exceptions.
Developer, at Developer's sole cost and expense, has caused the Title Company to
prepare and deliver to Developer and the City with respect to the Development Parcels the
preliminary title report(s) attached as Attachment 4 and may cause the Title Company to issue
additional preliminary title reports (collectively, the "Preliminary Title Reports") based upon
which the Title Company may issue an extended American Land Title Association Owner's
Policy for each Parcel (collectively, the "ALTA Policy") to Developer in the amount of the
Purchase Price of the applicable Parcel and such additional amounts as Developer may request of
Title Company. During the Due Diligence Period, Developer shall review the Preliminary Title
Reports and the other relevant documents referenced below, and may object to matters set forth
in the Preliminary Title Reports and request that the Title Company and/or the City remove from
the Title Policy those exceptions to title disapproved by Developer in the Preliminary Title
Reports. The "Permitted Exceptions" to title shall include the following: (a) all matters set
forth on the Preliminary Title Reports attached as Attachment 4, or set forth on the Survey, and
not otherwise deleted (or agreed to be deleted) from the Preliminary Title Reports attached as
Attachment 4 nor endorsed over (or agreed to be endorsed over) by the Title Company; (b) the
Other Agreements that are to be recorded pursuant to Section 7.5.5(b); and (c) all covenants,
restrictions and encumbrances, liens, exceptions, leases, restrictions, deed restrictions and
qualifications expressly set forth in or permitted or contemplated by this Agreement or the Other
Agreements.
6.3 Supplemental Title Reports.
If, after the end of the Due Diligence Period and prior the Close of Escrow for a Parcel,
the Title Company discloses additional matters that affect title to such Parcel, then within
ten (10) Business Days after Developer's receipt of any report issued by the Title Company
concerning the Property (a "Supplemental Title Report"), Developer shall cause to be provided
to the City a copy of such Supplemental Title Report and shall specify in writing Developer's
disapproval of any item or exception shown on such Supplemental Title Report not previously
included in the Preliminary Title Reports and that is not acceptable to Developer ("Disapproved
Exception") together with Developer's suggested cure thereof (to the extent capable of being
cured); provided, however, that Disapproved Exceptions may not include any such item or
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exception that was previously made a Permitted Exception, arises pursuant to this Agreement or
otherwise has been approved by Developer. Failure of the Developer to disapprove any item or
exception shown on any such Supplemental Title Report on or before the expiration of such
ten (10) Business Day period shall be deemed to be an approval of the matters set forth in such
Supplemental Title Report. If Developer designates a Disapproved Exception, then the City
shall have the right, but not the obligation, to (x) remove or cure the Disapproved Exception to
the satisfaction of the Developer, or (y) subject to Section 6.5, elect not to cure such Disapproved
Exception. If the City fails to notify the Developer of the City's election to remove or cure such
Disapproved Exception within ten (10) Business Days after the City's receipt of the Developer's
notice of disapproval, the City shall be deemed to have elected not to cure such Disapproved
Exception. If the City elects or is deemed to have elected not to cure any such Disapproved
Exception then the Developer's exclusive remedy shall be: (i) to accept such Disapproved
Exception and proceed to take title to the Property in the manner set forth in this Agreement and
without either deduction or offset to the Purchase Price, and waive such Disapproved Exception
without cause of action hereunder against the City (unless City's election or deemed election not
to cure a Disapproved Exception is a breach of City's obligations as set forth in Section 6.5(a) or
Section 8.15 (as such section relates to title matters), in which event Developer's remedies shall
be limited to those set forth in Sections 18.5.3(b) and 18.5.4), or (ii) to provide written notice to
the City within five (5) Business Days after the City's election or deemed election, of the
Developer's election to terminate this Agreement and the Escrow, in which case the Purchase
Price Deposit to the extent previously paid by the Developer shall be refunded to Developer in
accordance with Section 5.3 and this Agreement shall terminate or if the Phase 1 Property Close
of Escrow shall have occurred prior to issuance of a Supplemental Title Report for the Phase 2
Parcel, then upon exercise by Developer of its rights under this clause (ii), this Agreement shall
terminate only as to the Phase 2 Provisions and the Phase 2 Parcel (for avoidance of doubt,
provided that for so long as the Phase 1 Provisions remain in effect and the City shall remain the
owner of the Phase 2 Property, the termination of the Phase 2 Provisions shall not affect the
obligations of the City under this Agreement, if any, to the Phase 1 Developer with respect to the
Phase 2 Property), and the Agreement shall remain in full force and effect with respect to
Property conveyed to Developer that was not the subject of the Supplemental Title Report. In
the event Developer shall not have terminated the applicable Escrow under clause (ii) of the
preceding sentence, then all matters and exclusions or exceptions from title insurance coverage
shown in such Supplemental Title Report which Developer shall have accepted (or been deemed
to have accepted) pursuant to this Section 6.3 (other than those which the City caused or created
or has agreed to cure as provided in this Section 6.3), together with all Permitted Exceptions
described in Section 6.2 shall be deemed "Permitted Exceptions".
6.4 ALTA Policy; Endorsements.
It shall be a condition precedent to Developer's obligation to close Escrow that the Title
Company issue the ALTA Policy with a policy amount no less than the Purchase Price for the
Property being acquired and subject only to the Permitted Exceptions. Developer shall have the
right, at its sole expense, to request and obtain additional ALTA coverage for the value of the
development cost of the Project and any title endorsements as Developer deems necessary (the
"Developer Title Endorsements"); provided that the issuance of such additional ALTA
Coverage and the Developer Title Endorsements shall not delay any Close of Escrow and shall
not be a condition precedent to any Close of Escrow. Developer shall pay for (a) all costs
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attributable to the ALTA Policy other than the premium attributed to so-called standard coverage
in the amount of the Purchase Price for the Property being acquired, (b) the cost of all Developer
Title Endorsements and (c) the cost of a lender's policy of title insurance, if any.
6.5 Mandatory City Obligations with Respect to Title. Notwithstanding anything
to the contrary in this Agreement, the City shall (a) remove from title all exceptions caused or
created by the City that are not Permitted Exceptions and (b) deliver the Property to Developer
free and clear of all monetary liens other than (i) liens for real property taxes that are not yet
delinquent and (ii) liens, including Construction Liens, caused by or arising from or related to
acts of Developer or work performed by or on behalf of Developer upon the Property.
7. Close of Escrow.
7.1 Time and Place of Close of Escrow.
7.1.1 Phase 1 Property Close of Escrow. The Phase 1 Property Close of
Escrow shall take place on that date which is twenty (20) Business Days following the last to
occur of the satisfaction (or waiver by the Developer) of the Developer Phase 1 Property Closing
Conditions set forth in Sections 7.2.1(c) through (W hereof and the satisfaction (or waiver by the
City) of the City Phase 1 Property Closing Conditions set forth in
Sections 7.2.2(c) through Ch) hereof (the "Phase 1 Property Closing Date"), but in no event
later than August 31, 2017, which date shall be not be subject to extension for Force Majeure
Delay but shall be subject to the extensions contemplated by Sections 7.2.1(1) and 7.2.2(j), and
the last sentence of this Section 7.1.1, if applicable, and further subject to the provisions of
Section 15.1.2(c) (the "Phase 1 Property Outside Closing Date"). The Phase 1 Property Close
of Escrow shall be subject to the satisfaction (or waiver by the Party benefited by such condition)
of all of the conditions set forth in Section 7.2, and shall take place at the offices of Escrow
Holder, or at such other place that the City selects. Developer shall have the option to extend the
Phase 1 Property Closing Date by six (6) months upon the payment to the City of Two Hundred
Fifty Thousand Dollars ($250,000.00) (the "Extension Payment"), which Extension Payment
shall be non-refundable but shall be applicable to the Phase 1 Purchase Price at the time of the
Phase 1 Property Close of Escrow.
7.1.2 Phase 2 Property Close of Escrow. Upon the exercise of the Option
by Developer, which shall be subject to the conditions to such exercise set forth in
Section 4.3.3(d), the Phase 2 Property Close of Escrow shall take place on that date which is
(a) no less than sixty (60) calendar days following the exercise by Developer of the Option and
(b) twenty (20) Business Days following the last to occur of the satisfaction (or waiver by
Developer) of the Developer Phase 2 Property Closing Conditions set forth in
Sections 7.3.1(c) through fW hereof and the satisfaction (or waiver by the City) of the City
Phase 2 Property Closing Conditions set forth in Section 7.3.2(c) through W hereof (the "Phase
2 Property Closing Date") but in no event prior to the Phase 1 Property Close of Escrow nor
later than sixty (60) calendar days after the last day of the Option Term in which the Option was
exercised (without giving effect to any further extensions), which date shall be not be subject to
extension for Force Majeure Delay (but shall be subject to the extensions contemplated by
Sections 7.3.1(1) and 7.3.2 1 if applicable) (the "Phase 2 Property Outside Closing Date").
The Phase 2 Property Close of Escrow shall be subject to the satisfaction (or waiver by the Party
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benefited by such condition) of all of the conditions set forth in Section 7.3, and shall take place
at the offices of Escrow Holder, or at such other place as the City selects.
7.1.3 Termination. In the event that the Phase 1 Property Close of Escrow
does not occur on or prior to the Phase 1 Property Outside Closing Date, then, subject to the
provisions of Article 15 or any written agreement by the Parties (each in its sole discretion) to
extend the Phase 1 Property Outside Closing Date, this Agreement shall terminate in its entirety
as of the Phase 1 Property Outside Closing Date. In the event that the Phase 2 Property Close of
Escrow does not occur on or prior to the Phase 2 Property Outside Closing Date, then, subject to
the provisions of Article 15 or any written agreement by the Parties (each in its sole discretion)
to extend the Phase 2 Property Outside Closing Date, this Agreement shall terminate as of the
Phase 2 Property Outside Closing Date solely as to the Phase 2 Property and the Phase 2 Project.
7.2 Conditions Precedent to Phase 1 Property Close of Escrow.
7.2.1 Developer Phase 1 Property Closing Conditions. Developer's
obligation (a) to purchase the Phase 1 Property and (b) to complete all requirements for the Phase
1 Property Close of Escrow is subject to and conditioned upon the satisfaction of, or Developer's
express written waiver of, each of the following conditions to the Phase 1 Property Close of
Escrow ("Developer Phase 1 Property Closing Conditions") on or before the Phase 1 Property
Closing Date.
(a) Document Deliveries. Not later than two (2) Business Days prior
to the Phase 1 Property Close of Escrow, the City shall have executed and delivered to Escrow
Holder the following documents, in each case (where applicable) substantially in the form and
substance of the instruments attached as Attachments to this Agreement, unless otherwise agreed
by the Parties, each in its sole discretion:
(i) if not previously Recorded, the Memorandum of DDA,
acknowledged and in Recordable form;
Recordable form;
(ii) the Special Restrictions for Phase 1, acknowledged and in
(iii) a Quitclaim Deed for the Phase 1 Property, acknowledged
and in Recordable form;
(iv) if not previously Recorded (and provided that it is then
effective as a matter of law), the DA acknowledged and in Recordable form;
(v) the Landscape Installation and Maintenance Agreement
acknowledged and in Recordable form;
(vi) the Roadway and Utility Easement Agreement,
acknowledged and in Recordable form;
(vii) the License Agreements;
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(viii) a reimbursement agreement by and between Developer and
the City, in form and substance acceptable to Developer and City, each in its sole discretion, with
respect to the Reimbursable Tustin Legacy Improvements listed on Attachment 8, which include
construction of certain street improvements and installation of certain utilities (the
"Reimbursement Agreement");
(ix) a federal "FIRPTA" Affidavit executed by the City;
(x) California's Real Estate Withholding Exemption Certificate
Form 593-C;
(xi) a reaffirmation of the City's representations and warranties
set forth in Sections 3.3 and 18.11.21 in the form attached hereto as Attachment 17, which
reaffirmation shall identify any representation or warranty which is not, or no longer is, true and
correct and explaining the state of facts giving rise to the change. In no event shall the City be
liable to Developer for, or be deemed to be in Default under this Agreement by reason of, any
breach of representation or warranty which results from any change that (A) occurs between the
Effective Date and the date of Close of Escrow, and (B) is expressly permitted under the terms of
this Agreement or is beyond the reasonable control of the City to prevent. The occurrence of a
change in a representation and warranty shall, if materially adverse to Developer or the Phase 1
Property, as determined by Developer in Developer's reasonable business judgment, constitute
the non -fulfillment of a Developer Phase 1 Property Closing Condition, unless such matter is
cured at least three (3) Business Days prior to the Phase 1 Property Close of Escrow (as such
period may be extended pursuant to Section 7.2.1(1)). If, despite changes or other matters
described in the City's reaffirmation certificate, the Phase 1 Property Close of Escrow occurs, the
City's representations and warranties set forth in Sections 3.3 and 18.11.2 of this Agreement
shall be deemed to have been modified by all statements made in such certificate;
(xii) 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 individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of the City to act for and/or bind the City as may be
reasonably required by Title Company and/or Developer; and
(xiii) such other documents or instruments as Escrow Holder
may reasonably request to consummate the transaction contemplated in this Agreement.
(b) Title Policy. Subject to Section 6.3, the Title Company shall be
unconditionally prepared to issue the ALTA Policy to Developer in no less than the amount of
the Phase 1 Property Purchase Price for the Phase 1 Property and subject only to the Permitted
Exceptions.
(c) Pre -Existing Obligations. Except as approved by Developer in
writing or constituting a Permitted Exception, there shall exist no leases, contracts or rights of
occupancy or other agreements or contracts with respect to the Property (but excluding the
provisions of the Federal Deeds and the Memorandum of Agreement) entered into by the City
that shall survive the Phase 1 Property Close of Escrow.
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(d) Applicable Approvals. The Applicable Approvals shall have been
issued and shall not have expired, the Entitlement Approval Date shall have occurred and a final
map for the Phase 1 Property shall have been Recorded.
(e) Grading and Building Permits. Provided that Developer has
submitted complete applications (i.e., meeting all City requirements for issuance) for (a) rough
and precise grading permits in accordance with the Approved Plans for Phase 1 and (b) all
building permits for the Minimum Phase 1 Improvements, then, and only then, as a condition to
Close of Escrow, City shall be prepared to issue such permits, subject only to the payment of
applicable fees required in connection with the issuance of such permits and to Developer
acquiring title to the Phase 1 Property.
(f) No Casualty or Condemnation. There shall not have occurred any
casualty or condemnation with respect to the Phase 1 Property and no condemnation shall be
threatened with respect to the Phase 1 Property.
(g) No Litigation. No litigation shall be threatened or pending which
seeks to prevent or materially impair the development or operation of the Phase 1 Project, or any
part thereof, according to the terms of this Agreement and the Other Agreements.
(h) Progress Towards City Park Completion. The City shall have
delivered written evidence to Developer, in form and substance satisfactory to Developer, that
the plans for the first phase of the City Park are substantially complete (provided that such
evidence shall be deemed provided if the City has issued a request for bids from contractors for
construction of the City Park).
(i) Representations and Warranties. Subject to Section 7.2. 1 (a)(xi),
the City's representations and warranties set forth in Sections 3.3 and 18.11.2 shall be true and
correct as of the Phase 1 Property Close of Escrow.
0) Default. The City shall not be in Default of any covenant or
agreement to be performed by the City under this Agreement, or, if the City is in Default on the
expected Phase 1 Property Closing Date, Developer shall have provided the City with written
notice and the City shall have cured such Default within ten (10) Business Days of such notice,
and, for one such extension only, the Phase 1 Property Closing Date and the Phase 1 Property
Outside Closing Date shall be extended to allow such cure within such ten (10) Business Day
period, or such later period as Developer may elect pursuant to Section 15.4.1(d).
7.2.2 City Closing Conditions. The City's obligations to deliver the
Quitclaim Deed for the Phase 1 Property and to complete all requirements for the Phase 1
Property Close of Escrow are subject to and conditioned upon the satisfaction of, or the City's
written waiver of, each of the following conditions to the Phase 1 Property Close of Escrow
("City Phase 1 Property Closing Conditions") on or before the Phase 1 Property Closing Date:
(a) Developer Closing Payment. Not later than one (1) Business Day
prior to the Phase 1 Property Close of Escrow, Developer shall deliver to Escrow:
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(i) the Phase 1 Property Closing Payment (provided that City
made the document deliveries required under Section 7.2.1(a) within two (2) Business Days prior
to the Phase 1 Property Close of Escrow); and
(ii) any other costs explicitly set forth in this Agreement as
costs to be paid by Developer at such Close of Escrow.
(b) Document Deliveries. Developer's execution and delivery to
Escrow Holder of the following documents, in each case (where applicable) substantially in the
form and substance of the instruments attached as Attachments to this Agreement, unless
otherwise agreed by the Parties, each in its sole discretion, which documents Developer shall
deliver to the Escrow not later than two (2) Business Days prior to the Phase 1 Property Close of
Escrow:
(i) acceptance of the Special Restrictions for Phase 1,
acknowledged and in Recordable form;
(ii) acceptance of the Quitclaim Deed for the Phase 1 Property,
acknowledged and in Recordable form;
(iii) if not previously Recorded (and provided that it is then
effective as a matter of law), the DA acknowledged and in Recordable form;
(iv) the CC&Rs, acknowledged and in Recordable form;
(v) the Landscape Installation and Maintenance Agreement,
acknowledged and in Recordable form;
(vi) the Roadway and Utility Easement Agreement,
acknowledged and in Recordable form;
(vii) the License Agreements;
(viii) the Reimbursement Agreement;
(ix) a Phase 1 Guaranty executed by Phase 1 Guarantor in
substantially the form and substance of that attached hereto as Attachment 14 or as otherwise
agreed by Phase 1 Guarantor and the City each in its sole discretion and a legal opinion as to due
authorization and enforceability from counsel for Guarantor in substantially the form and
substance of that attached hereto as Attachment 30;
(x) a reaffirmation of Developer's representations and
warranties set forth in Sections 2.1, 3.1, 4.5.1(a), 4.5.2(t), 5.2 and 18.11.1 in the form attached
hereto as Attachment 18, which reaffirmation shall identify any representation or warranty which
is not, or no longer is, true and correct and explaining the state of facts giving rise to the change.
In no event shall Developer be liable to the City for, or be deemed to be in Default under this
Agreement by reason of, any breach of representation or warranty which results from any change
that (A) occurs between the Effective Date and the date of Close of Escrow, and (B) is expressly
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permitted under the terms of this Agreement or is beyond the reasonable control of the
Developer to prevent. The occurrence of a change in a representation and warranty shall, if
materially adverse to the City, as determined by the City in the City's reasonable business
judgment, constitute the non -fulfillment of a City Phase 1 Property Closing Condition, unless
such matter is cured at least three (3) Business Day prior to the Phase 1 Property Close of
Escrow (as such period may be extended pursuant to Section 7.2.2(1)). If, despite changes or
other matters described in Developer's reaffirmation certificate, the Phase 1 Property Close of
Escrow occurs, Developer's representations and warranties set forth in this Agreement shall be
deemed to have been modified by all statements made in such certificate;
(xi) a declaration certified by an officer of Developer in the
form attached hereto as Attachment 18 that the documentation submitted by Developer to the
City pursuant to Section 4.6.6 prior to the Effective Date is true and correct in all material
respects as of the Phase 1 Property Close of Escrow together with certificates of good standing of
Developer, issued by the California Secretary of State within thirty (30) calendar days of the
Closing Date.
(xii) a declaration certified by the chief financial officer or other
appropriate authorized officer of Phase 1 Guarantor in the form of the Guarantor Certificate
attached hereto as Attachment 13A;
(xiii) an Original Equity Investor Certificate certified by the chief
financial officer or other appropriate authorized officer of the Phase 1 Equity Investor in the
form and substance of Attachment 13B, or if such declaration has previously been delivered by
Phase 1 Equity Investor pursuant to Section 4.6.2, a certification in the form of Attachment 13C
certifying as to the truth and correctness of in all material respects of the Original Equity Investor
Certificate,
(xiv) with respect to a Construction Loan secured by a Permitted
Mortgage with a Permitted Mortgagee, a Subordination Agreement executed and acknowledged
by Developer and Permitted Mortgagee and in Recordable Form;
(xv) such proof of Developer'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 individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of Developer to act for and/or bind Developer as may be
reasonably required by Title Company and/or the City; and
(xvi) such other documents or instruments as Escrow Holder
may reasonably request to consummate the transaction contemplated in this Agreement.
(c) Subdivision Map and Construction Bond. A final map for the
Phase 1 Property shall be Recorded and if not previously delivered in connection with such
Recording or required pursuant to then effective subdivision improvement agreement, a
Construction Bond with respect to the Phase 1 Horizontal Improvements insuring the
Completion of such Phase 1 Horizontal Improvements.
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(d) Applicable Approvals. The Applicable Approvals shall have been
issued and shall not have expired, and the Entitlement Approval Date shall have occurred.
(e) Grading and Building Permits. Developer shall have submitted
complete applications (i.e., meeting all City requirements for issuance) for (a) rough and precise
grading permits in accordance with the Approved Plans for Phase 1, and (b) all building permits
for the Minimum Phase 1 Improvements, and City shall be prepared to issue such permits,
subject only to the payment of applicable fees required in connection with the issuance of such
permits and to Developer acquiring title to the Phase 1 Property.
(f) Financial Capability. Developer shall have caused the conditions
precedent to Phase 1 Property Close of Escrow set forth in Section 4.6 to be satisfied and shall be
in compliance with the requirements of Sections 8.5.1 and 8.5.2 and there shall have been (i) no
material adverse changes (as determined by the City in accordance with Section 4.6 of this
Agreement) in the financial condition of any of the Developer, the Phase 1 Equity Investor, or
the Phase 1 Guarantor since the City approved the same; (ii) no change in ownership of
Developer, the Phase 1 Equity Investor or the Phase 1 Guarantor since the City approved the
same, or if there are changes, then except as permitted by Section 2.2.2, such changes shall have
been approved by the City in accordance with Section 2.2.3, and (iii) no change to the form and
substance of any Transfer Agreements and/or Ground Lease previously approved by the City and
applicable to Phase 1, as applicable, without the prior written consent of the City thereto.
(g) Construction Loan Closing. The Permitted Mortgagee(s) for the
Construction Loan and Developer shall be prepared to close the Construction Loan substantially
concurrently with the Phase 1 Property Close of Escrow, all conditions thereto other than transfer
of the Phase 1 Property shall have been satisfied, there shall be no default under the contracts and
agreements applicable thereto, the loan documents shall satisfy the requirements of
Sections 17.1.2(a) and 17.3, Developer shall have provided to the City written verification from
Escrow confirming that the deed(s) of trust to be recorded in conjunction with the closing of the
Construction Loan, if any, has/have been fully executed and acknowledged and in Recordable
form and deposited into Escrow by the Permitted Mortgagee(s) for the Construction Loan,
substantially in the amount set forth in the Phase 1 Financing Plan approved by the City pursuant
to Section 4.6.1.
(h) Insurance. The Developer shall have provided to the City evidence
of insurance as and to the extent required by Article 11.
(i) Representations and Warranties. Subject to Section 7.2.2(b)(x),
Developer's representations and warranties set forth in Sections 3.1 and 18.11.1 shall be true and
correct as of the Phase 1 Property Close of Escrow.
0) Default. Developer shall not be in Default of any covenant or
agreement to be performed by Developer under this Agreement, or, if Developer is in Default on
the expected Phase 1 Property Closing Date, City shall have provided Developer with written
notice and Developer shall have cured such Default within ten (10) Business Days of such
notice, and, for one such extension only, the Phase 1 Property Closing Date and the Phase 1
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Property Outside Closing Date shall be extended to allow such cure within such ten (10)
Business Day period.
7.3 Conditions Precedent to Phase 2 Property Close of Escrow.
7.3.1 Developer Phase 2 Property Closing Conditions. Upon exercise by
Developer of the Option (which shall occur in accordance with Section 4.3.3(d)), Developer's
obligation (a) to purchase the Phase 2 Property and (b) to complete all requirements for the Phase
2 Property Close of Escrow is subject to and conditioned upon the satisfaction of, or Developer's
express written waiver of, each of the following conditions to the Phase 2 Property Close of
Escrow ("Developer Phase 2 Property Closing Conditions") on or before the Phase 2 Property
Closing Date.
(a) Document Deliveries. Not later than two (2) Business Days prior
to the Phase 2 Property Close of Escrow, the City shall have executed and delivered to Escrow
Holder the following documents, in each case (where applicable) substantially in the form and
substance of the instruments attached as Attachments to this Agreement, unless otherwise agreed
by the Parties, each in its sole discretion:
(i) the Special Restrictions for Phase 2, acknowledged and in
Recordable form;
(ii) a Quitclaim Deed for the Phase 2 Property, acknowledged
and in Recordable form;
(iii) a federal "FIRPTA" Affidavit executed by the City;
(iv) California's Real Estate Withholding Exemption Certificate
Form 593-C;
(v) a reaffirmation of the City's representations and warranties
set forth in Sections 3.3 and 18.11.21 in the form attached hereto as Attachment 17, which
reaffirmation shall identify any representation or warranty which is not, or no longer is, true and
correct and explaining the state of facts giving rise to the change. In no event shall the City be
liable to Developer for, or be deemed to be in Default under this Agreement by reason of, any
breach of representation or warranty which results from any change that (A) occurs between the
Effective Date and the date of Close of Escrow, and (B) is expressly permitted under the terms of
this Agreement or is beyond the reasonable control of the City to prevent. The occurrence of a
change in a representation and warranty shall, if materially adverse to Developer or the Property,
as determined by Developer in Developer's reasonable business judgment, constitute the non-
fulfillment of a Developer Phase 2 Property Closing Condition, unless such matter is cured at
least three (3) Business Days prior to the Phase 2 Property Close of Escrow (as such period may
be extended pursuant to Section 7.3.1(1)). If, despite changes or other matters described in the
City's reaffirmation certificate, the Phase 2 Property Close of Escrow occurs, the City's
representations and warranties set forth in Sections 3.3 and 18.11.2 of this Agreement shall be
deemed to have been modified by all statements made in such certificate;
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(vi) 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 individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of the City to act for and/or bind the City as may be
reasonably required by Title Company and/or Developer; and
(vii) such other documents or instruments as Escrow Holder
may reasonably request to consummate the transaction contemplated in this Agreement.
(b) Title Policy. Subject to Section 6.3, the Title Company shall be
unconditionally prepared to issue the ALTA Policy to Developer for the Phase 2 Property in no
less than the amount of the Phase 2 Property Purchase Price and subject only to the Permitted
Exceptions.
(c) Pre -Existing Obligations. Except as approved by Developer in
writing or constituting a Permitted Exception, there shall exist no leases, contracts or rights of
occupancy or other agreements or contracts with respect to the Phase 2 Property (but excluding
the provisions of the Federal Deeds and the Memorandum of Agreement) entered into by the
City that shall survive the Phase 2 Property Close of Escrow.
(d) Entitlements. All Entitlements required to be approved by the City
shall have been approved, which Entitlements shall not have expired or shall have been extended
on the same terms as the Entitlements in effect as of the Effective Date and in all events (i) such
Entitlements shall remain effective for a period of two (2) years following the issuance thereof or
for the term of the DA as applicable to Phase 2 (as applicable), subject to any extensions of time
mutually agreed upon by City and Developer, and (ii) all periods to challenge, review or appeal
the Entitlements (including by litigation or referendum) shall have expired without any
challenge, review or appeal, or if there is a challenge, review or appeal, a final non -appealable
resolution of the challenge or appeal shall have been issued upholding the approval of the
Entitlements without any material changes to the original conditions of such approval.
(e) Phase 2 Applicable Approvals; Subdivision Map. The Phase 2
Applicable Approvals shall have been issued and shall not have expired and the Entitlement
Approval Date with respect to the Phase 2 Applicable Approvals shall have occurred and,
provided that Developer has submitted a complete final Subdivision Map for the Phase 2 Parcel
for consideration by the City meeting all of the City's requirements for recordation (other than
any signature required from any third party at the time of final map recordation that was not
required to have been obtained prior to the approval by the City of the tentative map), such final
map shall have been Recorded.
(f) Grading and Building Permits. Provided that Developer has
submitted complete applications (i.e., meeting all City requirements for issuance) for (a) rough
and precise grading permits in accordance with the Approved Plans for Phase 2 and (b) all
building permits for the Minimum Phase 2 Improvements, then, and only then, as a condition to
Close of Escrow, City shall be prepared to issue such permits, subject only to the payment of
applicable fees required in connection with the issuance of such permits and to Developer
acquiring title to the Phase 2 Property.
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(g) No Casualty or Condemnation. There shall not have occurred any
casualty or condemnation with respect to the Phase 2 Property and no condemnation shall be
threatened with respect to the Phase 2 Property.
(h) No Litigation. No litigation shall be threatened or pending which
seeks to prevent or materially impair the development or operation of the Phase 2 Project, or any
part thereof, according to the terms of this Agreement and the Other Agreements.
(i) Representations and Warranties. Subject to Section 7.3.1(a)(y), the
City's representations and warranties set forth in Sections 3.3 and 18.11.2 shall be true and
correct as of the Phase 2 Property Close of Escrow.
0) Default. The City shall not be in Default of any covenant or
agreement to be performed by the City under this Agreement, or, if the City is in Default on the
expected Phase 2 Property Closing Date, Developer shall have provided the City with written
notice and the City shall have cured such Default within ten (10) Business Days of such notice,
and, for one such extension only, the Phase 2 Property Closing Date and the Phase 2 Property
Outside Closing Date shall be extended to allow such cure within such ten (10) Business Day
period, or such later period as Developer may elect pursuant to Section 15.4.1(d).
7.3.2 City Closing Conditions. The City's obligation to deliver the
Quitclaim Deed for the Phase 2 Property and to complete all requirements for the Phase 2
Property Close of Escrow is subject to and conditioned upon the satisfaction of, or the City's
written waiver of, each of the following conditions to the Phase 2 Property Close of Escrow
("City Phase 2 Property Closing Conditions") on or before the Phase 2 Property Closing Date.
(a) Payments. Not later than one (1) Business Day prior to the Phase 2
Property Close of Escrow, Developer shall deliver to Escrow:
(i) the Phase 2 Property Closing Payment (provided that City
made the document deliveries required under Section 7.3.1(a) within two (2) Business Days prior
to the Phase 2 Property Close of Escrow); and
(ii) any other costs explicitly set forth in this Agreement as
costs to be paid by Developer at the Phase 2 Property Close of Escrow.
(b) Document Deliveries. Developer's execution and delivery to
Escrow Holder of the following documents, in each case (where applicable) substantially in the
form and substance of the instruments attached as Attachments to this Agreement, unless
otherwise agreed by the Parties, each in its sole discretion, which documents Developer shall
deliver to the Escrow not later than two (2) Business Days prior to the Phase 2 Property Close of
Escrow:
(i) acceptance of the Special Restrictions for Phase 2,
acknowledged and in Recordable form;
(ii) acceptance of the Quitclaim Deed for the Phase 2 Property,
acknowledged and in Recordable form;
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(iii) a supplemental declaration or similar document including
the Phase 2 Parcels in the CC&Rs, acknowledged and in Recordable form;
(iv) a Phase 2 Guaranty executed by the Phase 2 Guarantor(s) in
substantially the form and substance of that attached hereto as Attachment 14 or as otherwise
agreed by the City, Developer and the Phase 2 Guarantor(s), each in its sole discretion and a
legal opinion as to due authorization and enforceability from counsel for Guarantor acceptable to
City in substantially the form and substance of that attached hereto as Attachment 30;
(v) a reaffirmation of Developer's representations and
warranties set forth in in Sections 2.1, 3.1, 4.5.1(a), 4.5.2(t), 5.2 and 18.11.1 in the form attached
hereto as Attachment 18, which reaffirmation shall identify any representation or warranty which
is not, or no longer is, true and correct and explaining the state of facts giving rise to the change.
In no event shall Developer be liable to the City for, or be deemed to be in Default under this
Agreement by reason of, any breach of representation or warranty which results from any change
that (A) occurs between the Effective Date and the date of Close of Escrow, and (B) is expressly
permitted under the terms of this Agreement or is beyond the reasonable control of Developer to
prevent. The occurrence of a change in a representation and warranty shall, if materially adverse
to the City, as determined by the City in the City's reasonable business judgment, constitute the
non -fulfillment of a City Phase 2 Property Closing Condition, unless such matter is cured at least
three (3) Business Days prior to the Phase 2 Property Close of Escrow (as such period may be
extended pursuant to Section 7.3.2(1)). If, despite changes or other matters described in
Developer's reaffirmation certificate, the Phase 2 Property Close of Escrow occurs, Developer's
representations and warranties set forth in this Agreement shall be deemed to have been modified
by all statements made in such certificate;
(vi) a declaration certified by an officer of Developer in the
form attached hereto as Attachment 18 that the documentation previously submitted by
Developer to the City pursuant to Section 4.6.6 is true and correct in all material respects as of
the Phase 2 Property Close of Escrow together with certificates of good standing of Developer,
issued by the California Secretary of State within thirty (30) calendar days of the Closing Date.
(vii) a declaration certified by the chief financial officer or other
appropriate authorized officer of Phase 2 Guarantor in the form of the Phase 2 Guarantor
Certificate in the form attached hereto as Attachment 13131-
(viii)
313;
(viii) an Original Equity Investor Certificate certified by the chief
financial officer or other appropriate authorized officer of the Phase 2 Equity Investor in the
form and substance of Attachment 13B, or if such declaration has previously been delivered by
Phase 2 Equity Investor pursuant to Section 4.6.2, a certification in the form of Attachment 13C
certifying as to the truth and correctness of in all material respects of the Original Equity Investor
Certificate;
(ix) with respect to a Construction Loan that is secured by a
Permitted Mortgage with a Permitted Mortgagee, a Subordination Agreement executed and
acknowledged by Developer and Permitted Mortgagee and in Recordable Form;
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(x) such proof of Developer'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 individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of Developer to act for and/or bind Developer as may be
reasonably required by Title Company and/or the City; and
(xi) such other documents or instruments as Escrow Holder
may reasonably request to consummate the transaction contemplated in this Agreement.
(c) Subdivision Map and Construction Bond. The final Subdivision
Map covering the Phase 2 Parcel shall have been Recorded and if not previously delivered in
connection with such Recording or the Phase 1 Property Close of Escrow, or required pursuant to
then effective subdivision improvement agreement, a Construction Bond with respect to the
Minimum Horizontal Improvements (to the extent not yet Complete) and the Phase 2 Horizontal
Improvements insuring the Completion of such Phase 2 Horizontal Improvements shall have
been delivered.
(d) Phase 2 Applicable Approvals. The Phase 2 Applicable Approvals
shall have been issued and shall not have expired and the Entitlement Approval Date with
respect to the Phase 2 Applicable Approvals shall have occurred.
(e) Threshold Conditions. One of the following threshold conditions
has been met: (A) Leases or Transfer Agreements shall have been executed with End Users for
not less than 232,050 GBA of Office Uses within the Minimum Phase 1 Vertical Improvements,
or (B) Developer or Phase 2 Developer is under binding contract (which may be subject to
contingencies related to financing, conveyance, or construction) to sell or lease to a Build -to -Suit
Users within the Phase 2 Project that will lease or own at least 100,000 GBA of Office Uses.
(f) Grading and Building Permits. Developer shall have submitted
complete applications (i.e., meeting all City requirements for issuance) for (a) rough and precise
grading permits in accordance with the Approved Plans for Phase 2 and (b) all building permits
for the Minimum Phase 2 Improvements, and City shall be prepared to issue such permits,
subject only to the payment of applicable fees required in connection with the issuance of such
permits and to Developer acquiring title to the Phase 2 Property.
(g) Insurance. Developer shall have provided to the City evidence of
insurance as and to the extent required by Article 11.
(h) Financial Capability, Etc. Developer shall have caused the
conditions precedent to the Phase 2 Property Close of Escrow set forth in Section 4.6 to be
satisfied and shall be in compliance with the requirements of Sections 8.5.1 and 8.5.21 and there
shall have been (i) no material adverse changes (as determined by the City in accordance with
Section 4.6 of this Agreement) in the financial condition of any of the Developer or the Phase 2
Guarantor since the City approved the same; (ii) no change in ownership of Developer, the Phase
2 Equity Investor or the Phase 2 Guarantor since the City approved the same, or if there are
changes, then except as permitted by Section 2.2.2, such changes shall have been approved by
the City in accordance with Section 2.2.3 and (iii) no change to the form and substance of any
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Transfer Agreements and/or Ground Lease previously approved by the City and applicable to
Phase 2, as applicable, without the prior written consent of the City thereto.
(i) Construction Loan Closing. The Permitted Mortgagee(s) for the
Construction Loan and Developer shall be prepared to close the Construction Loan substantially
concurrently with the Phase 2 Property Close of Escrow, all conditions thereto other than transfer
of the Phase 2 Property shall have been satisfied, there shall be no default under the contracts and
agreements applicable thereto, the loan documents shall satisfy the requirements of
Section 17.1.2(a) and 17.3, and Developer shall have provided to the City written verification
from Escrow confirming that the deed of trust(s) to be recorded in conjunction with the closing
of the Construction Loan, if any, has/have been fully executed and acknowledged and in
Recordable form and deposited into Escrow by the Permitted Mortgagee(s) for the Construction
Loan substantially in the amount set forth in the Phase 2 Financing Plan approved by the City
pursuant to Section 4.6.1.
0) Phase 1 Property Close of Escrow. The Phase 1 Property Close of
Escrow shall have occurred.
(k) Representations and Warranties. Subject to Section 7.3.2(b)(y),
Developer's representations and warranties set forth in Section 3.1 and 18.11.1 shall be true and
correct as of the Phase 2 Property Close of Escrow.
(1) Default. Phase 2 Developer shall not be in Default of any
covenant or agreement to be performed by Phase 2 Developer under this Agreement and, if the
Phase 1 Developer and the Phase 2 Developer are the same Person or Related Parties, then
neither the Phase 1 Developer nor the Phase 2 Developer shall be in Default of any covenant or
agreement to be performed by Developer under this Agreement, and if as a result of any Default
by Phase 1 Developer or Phase 2 Developer on the Phase 2 Property Closing Date, this condition
is not satisfied, City shall have provided Phase 2 Developer with written notice and the Default
shall be cured within ten (10) Business Days of such notice, and, for one such extension only, the
Phase 2 Property Closing Date and the Phase 2 Property Outside Closing Date shall be extended
to allow such cure within such ten (10) Business Day period.
7.4 Additional Closing Requirements.
In addition to the provisions of Sections 7.2 and 7.31 upon each Close of Escrow the
following shall occur:
(a) Closing Cost Statement. Escrow Holder shall deliver at least seven
(7) Business Days prior to each Close of Escrow a statement of costs to each Party and at least
two (2) Business Days prior to each Close of Escrow each of the Parties shall approve such
statement as being consistent with the provisions of Section 7.5 below.
(b) Closing Certificate. Each Party shall submit to Escrow Holder a
certificate stating that all applicable Closing Conditions for its benefit have been satisfied or
waived.
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7.5 Procedures for Conveyance.
7.5.1 Costs and Expenses. The costs and expenses of each Close of
Escrow shall be allocated as follows:
(a) City's Costs. The City shall pay (i) the portion of the premium for
the ALTA Policy attributable to the so-called standard owner's policy coverage portion thereof
(CLTA) in the amount of the Purchase Price for the Property being acquired; (ii) one-half (1/2)
of all Escrow fees and costs; (iii) all documentary transfer taxes, if any; and (iv) the City's share
of prorations, if any.
(b) Developer's Costs. Developer shall pay (i) the entire cost of any
extended coverage in excess of the premium for the standard CLTA coverage in the amount of
the Purchase Price for the Property being acquired, any other title policy and any Developer Title
Endorsements, (ii) the entire cost of the Survey and any additional land surveys obtained by
Developer in connection with the foregoing; (iii) document recording charges for the Special
Restrictions, the Quitclaim Deed, the CC&Rs, the Roadway and Utility Easement Agreement,
the Landscape Installation and Maintenance Agreement, the Subordination Agreement(s), if
applicable, and all other Recorded documents; (iv) one-half (1/2) of all Escrow fees and costs;
and (v) Developer's share of prorations. Developer shall pay the fees of all consultants and
employees (including lawyers and environmental, engineering and land use consultants) engaged
by it.
(c) Other Costs. All costs and expenses related to each Close of
Escrow and the transfer of the Property to Developer not otherwise allocated in this Agreement
shall be allocated between the Parties in accordance with the customary practice in Orange
County, California.
(d) City's Removal of Liens. City shall pay all amounts necessary to
cause the removal of any monetary liens that are the obligations of the City to remove pursuant
to Section 6.5(b).
7.5.2 Possession. The City shall deliver to Developer possession of the
Phase 1 Property at the Phase 1 Property Close of Escrow and the Phase 2 Property, at the
Phase 2 Property Close of Escrow.
7.5.3 Deliveries to Developer Upon Close of Escrow. The City agrees to
deliver to Developer, on or prior to each Close of Escrow, outside of Escrow, the following
items:
(a) Records and Plans. To the extent in the City's possession,
originals or copies of those records and plans with respect to the Property conveyed that will
affect such Property after the Close of Escrow.
(b) Licenses and Permits. To the extent in the City's possession,
originals or copies of all licenses and permits affecting the Property conveyed.
7.5.4 Prorations.
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(a) General. Rentals, revenues and other income, if any, from the
Property conveyed shall be prorated on a cash basis as of 11:59 P.M. Pacific Time on the day
preceding each Close of Escrow. Tax payments shall be prorated in accordance with
Section 7.5.4(b).
(b) Taxes. Developer shall be responsible for all taxes, assessments,
fees and charges imposed by any Governmental Authority with respect to the Property conveyed
and all existing and future improvements thereon from and after each Close of Escrow. If, after
any Close of Escrow, any real estate taxes or possessory interest taxes are assessed against any
conveyed parcel pertaining to the period prior to such Close of Escrow, the City agrees to contact
the applicable taxing authority and seek recognition and enforcement of its tax exemption. The
provisions of this Section 7.5.4(b) shall survive each Close of Escrow and shall not merge into
any Quitclaim Deed.
(c) Method of Proration. All prorations shall be made in accordance
with customary practice in Orange County, except as otherwise expressly provided in this
Agreement. Developer and the City agree to cause a schedule of prorations to be prepared prior
to each Close of Escrow. Such prorations, if and to the extent known and agreed upon as of each
Close of Escrow, shall be paid by Developer to the City (if the prorations result in a net credit to
the City) or by the City to Developer (if the prorations result in a net credit to Developer) by
increasing or reducing the cash to be paid by Developer at each Close of Escrow. Any such
prorations not determined or not agreed upon as of each Close of Escrow shall be paid by
Developer to the City, or by the City to Developer, as the case may be, in cash as soon as
practicable following each Close of Escrow (but in no event later than sixty (60) days after such
Close of Escrow). A copy of the schedule of prorations as agreed upon by Developer and the
City shall be delivered to Escrow Holder at least three (3) Business Days prior to each Close of
Escrow. All prorations provided for in this Section 7.5.4(c) shall be on an "actual day" basis and
a three hundred sixty-five (365) day year.
7.5.5 Disbursements and Other Actions by Escrow Holder. At each
Close of Escrow and subject to the satisfaction or waiver by the benefited party of the applicable
Closing Conditions to such Close of Escrow described in Sections 7.2 and 7.31 Escrow Holder
shall promptly undertake all of the following in the manner indicated below:
(a) Funds. Debit or credit all matters addressed in Section 7.5.1 and
prorate all matters addressed in Section 7.5.4 and disburse to the City the Purchase Price for the
Property being acquired (as adjusted pursuant to this Agreement) and all other sums comprising
the Phase 1 Property Closing Payment at the Phase 1 Property Close of Escrow and the Phase 2
Property Closing Payment at the Phase 2 Property Close of Escrow as set forth in the Escrow
closing statement approved by the Parties.
(b) Recording. Cause to be Recorded, in the following order: (i) at the
Phase 1 Property Close of Escrow, the Memorandum of DDA, (if not yet Recorded) which shall
be Recorded against all of the Development Parcels, and (ii) thereafter (A) at the Phase 1
Property Close of Escrow, the Phase 1 Special Restrictions and the Phase 1 Property Quitclaim
Deed (each of which shall be recorded against the Phase 1 Property only); the Roadway and
Utility Easement Agreement and the Landscape Installation and Maintenance Agreement (each
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of which shall be Recorded against the entirety of the Property) and thereafter, the CC&Rs, and,
if applicable, the Subordination Agreement (each of which shall be Recorded against the Phase 1
Parcel only) and (B) at the Phase 2 Property Close of Escrow, the Phase 2 Special Restrictions
the Phase 2 Property Quitclaim Deed, the Supplemental Declaration or similar document
including the Phase 2 Parcel in the CC&Rs, and, if applicable, the Subordination Agreement
(each of which shall be Recorded against the Phase 2 Parcel only), and, in each case, thereafter,
any other documents that Developer and the City may mutually direct, or that may be required
by the terms of this Agreement to be Recorded, obtain conformed copies thereof and distribute
same to Developer and the City.
(c) Title Policy. Direct the Title Company to issue the ALTA Policy
to Developer in the amount not less than the Purchase Price for Property being conveyed and
subject only to the Permitted Exceptions. Concurrently with the issuance of the ALTA Policy,
the Title Company shall provide the Developer Title Endorsements, provided that the issuance of
such Developer Title Endorsements shall not be a condition to any Close of Escrow except for
those endorsements that the City agreed to obtain in order to cure any Disapproved Exceptions or
Survey matters.
(d) Delivery of Documents to Developer and City. Deliver to each
Party original counterparts (and conformed copies, if applicable) of all then -Recorded
documents, the FIRPTA Affidavit, the California Form 593-W and any other documents (or
copies thereof) deposited into Escrow by Developer or the City pursuant hereto, and deliver to
the Parties a certified copy of their respective Escrow closing statements.
(e) Other Actions. Take such other actions as the Parties direct
pursuant to mutually executed supplemental Escrow instructions.
7.5.6 Notice. All communications from the Escrow Holder shall be directed
to the addresses and in the manner established in Section 18.6 for notices, demands and
communications between the Parties.
8. Development of the Property and Additional Covenants of Developer and
Com. Scope of Development.
8.1.1 Requirement to Develop the Project. The Scope of Development
attached to this Agreement as Attachment 8 sets forth the overall conceptual plan for the Project
and development of the Development Parcels, including design, development, and construction
of the Improvements as may be required by the Entitlements and Development Permits. The
Project shall be designed and constructed in a manner consistent with the Scope of Development,
the Entitlements and the Site Plan attached as Attachment 3B (as the same may be modified with
approval of the City Manager in his or her Proprietary Capacity and otherwise in compliance
with the City Code), the Approved Plans, the Design Guidelines and all Governmental
Requirements, as further described below. The Parties acknowledge that the Scope of
Development depicts one possible plan for development, and that Developer shall not be
obligated to construct all of the improvements included within the Scope of Development,
provided that, without limiting any other requirement of the Schedule of Performance:
Developer shall be obligated within the time periods for performance set forth in the Schedule of
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Performance: (i) from and after the Phase 1 Property Close of Escrow, to construct and
Complete the Phase 1 Horizontal Improvements and the Minimum Phase 1 Vertical
Improvements and (ii) from and after the Phase 2 Property Close of Escrow, to construct and
Complete the portion of the Phase 2 Horizontal Improvements and Minimum Phase 2 Vertical
Improvements associated with that Phase, and (iii) to use commercially reasonable efforts to
attract tenants for each of Phase 1 and Phase 2. Until the issuance of a Certificate of Compliance
as to the applicable portion of the Property, no Person shall be permitted or authorized to
undertake the construction of any Vertical Improvements on the Development Parcels or any
portion thereof for which a Certificate of Compliance has not yet been issued, unless such Person
is: (i) the Initial Developer, (ii) a Transferee under a Permitted Transfer; (iii) an End User,
pursuant to a Transfer approved by the City to the extent the City has the right to approve the
same pursuant to this Agreement, and if such End User is required by this Agreement to enter
into a City Non -Disturbance and Attornment Agreement, such End User shall have satisfied such
obligation; or (iv) a Person approved by the City as a Transferee pursuant to Section 2.2.3 and
otherwise meeting the requirements of Section 2.2.3, including assumption in writing of all
obligations of Developer under this Agreement and the Other Agreements pursuant to an
Assignment. The foregoing restriction on Person's carrying out construction does not apply to
tenant improvements constructed in a Leasable Space.
8.1.2 Control of Site Development. Developer shall have control over the
design and layout of the Horizontal Improvements (other than the Reimbursable Tustin Legacy
Improvements and the Reimbursable Phase 2 Improvements) and over the Vertical
Improvements (including height, shape and location of the Vertical Improvements and special
landscaping and art features) and over the special uses to be incorporated therein, subject to
(a) the Approved Plans, the Design Guidelines, Development Permits and Entitlements,
including any conditional use permit necessitated by particular proposed uses or design features
and (b) the design approval provisions set forth in Section 8.4 for the benefit of the City, which
are undertaken by the City in its Proprietary Capacity.
8.1.3 Proiect Development Costs. Developer hereby agrees that all costs
associated with planning, designing and constructing the Project, preparing the Property and
constructing all Improvements and tenant improvements thereon, including all hard costs, soft
costs, the cost of services, fees, assessments, exactions, dedications, cost overruns, profit,
overhead, consultants' fees, brokerage fees associated with obtaining Construction Loans and
entering into Leases and or sales agreements with End Users, legal fees, financing fees and costs,
including principal payments and interest payments (whether or not paid through loan proceeds),
wages required to be paid to any person employed by Developer, any Transferee, contractor or
subcontractor, including the costs of the Project Fair Share Contribution and Tax B (collectively,
the "Development Costs"), shall be the responsibility of Developer or such Transferee, in any
case without any cost or liability to the City.
8.1.4 Compliance with Governmental Requirements and Other
Requirements. The Project shall be consistent with the development concept set forth in the
Scope of Development and shall be developed and maintained in accordance with this
Agreement and all Governmental Requirements (subject to Section 1.6 of this Agreement),
including the Specific Plan, the Reuse Plan, the Entitlements, the Approved Plans, the
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Development Permits, the Design Guidelines, the Memorandum of Agreement and the Federal
Deeds.
8.1.5 Construction of Specific Proiect Components.
(a) Horizontal Improvements. Developer acknowledges and agrees
that it shall be responsible for design and construction of certain infrastructure to support the
development of the Project to the extent described in the Scope of Development attached to this
Agreement as Attachment 8 and in the depiction of Horizontal Improvements attached to this
Agreement as Attachment 9 and as otherwise required by the Approved Plans, the Entitlements,
the Development Permits, the Design Guidelines, all Governmental Requirements and all
requirements of private utility purveyors. Developer shall Complete the Minimum Horizontal
Improvements (other than cap paving of any portions of the roadway located on the
Development Parcels) prior to the earlier of the Phase 2 Property Close of Escrow or the Transfer
of all or any portion of Developer's interest in Phase 1 or Phase 2 or any portion thereof without
the consent of the City in its sole discretion, unless otherwise permitted pursuant to Section
2.2.2 . The Horizontal Improvements, including the Minimum Horizontal Improvements, for
each Phase shall be commenced and diligently prosecuted to Completion in accordance with the
Schedule of Performance as further described in Section 8.2.1.
(b) Vertical Improvements. Following the Phase 1 Property Close of
Escrow, Developer shall construct or cause the construction of the Phase 1 Vertical
Improvements and following the Phase 2 Property Close of Escrow, Developer shall construct or
cause the construction of the Phase 2 Vertical Improvements associated with such Phase, in each
case, in accordance with the respective Schedule of Performance, the Scope of Development, the
Approved Plans, the Design Guidelines or other plans and specifications prepared by Developer
and approved by the City, the Entitlements, the Development Permits, the Design Guidelines,
and all other Governmental Requirements (subject to Section 1.6).
8.2 Timing and Conditions of Proiect Development.
8.2.1 Schedule of Performance. The Schedule of Performance attached as
Attachment 7 sets forth the schedule for submissions, approvals and actions, including the design
and development of the Project and construction of the Improvements. The Parties acknowledge
and agree that, subject to Section 18.7, time is of the essence with respect to the dates set forth in
the Schedule of Performance. Accordingly, subject to Force Majeure Delay, following
conveyance of any portion of the Property by the City, Developer shall promptly begin and
thereafter diligently prosecute to completion within the time specified in the Schedule of
Performance all steps required by the Schedule of Performance applicable to the Property so
acquired, including design, construction and development of the Improvements.
8.2.2 Extensions. Subject to Section 18.7, the City may, in its sole
discretion and upon written request from Developer, extend the time specified in the Schedule of
Performance. Any such agreed upon changes shall be within the limitations of the Specific Plan,
the Entitlements, and all other Governmental Requirements (subject to Section 1.6). To be
effective, any extensions shall be requested in writing by Developer and evidenced by written
notice from the City Manager or the City Manager's designee.
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8.2.3 Proiect Phases. The City acknowledges and agrees that the Project
may be constructed and Completed in two phases, comprising the Phase 1 Project and the Phase
2 Project. Each Phase shall be commenced and Completed in accordance with the Schedule of
Performance and upon Completion thereof, each Phase shall comply with all Governmental
Requirements (subject to Section 1.6), including all Specific Plan requirements and Entitlement
conditions of approval for development on the Property, without reliance upon Improvements to
be constructed in future Phases. Subject to the foregoing, the City agrees to cooperate in good
faith with Developer to implement this Agreement, so as to permit development of the Project in
two phases, including by providing Developer with a license, or other right of access pursuant to
the License Agreements as set forth in Section 8.2.4 below.
8.2.4 Limited Licenses. At the Phase 1 Property Close of Escrow (and
provided that the Phase 2 Property Close of Escrow does not occur substantially concurrently),
the City shall provide to Developer the following limited and revocable licenses to enter upon
the portions of the Development Parcels continued to be owned by the City: (a) a limited license
for performance by Developer of construction, including grading, construction of the Minimum
Horizontal Improvements and installation of utilities on the Phase 2 Parcel, pursuant to a license
agreement in substantially the form and substance of the agreement attached as Attachment 25A,
or as otherwise mutually approved by the City and Developer each in its sole discretion, (b) a
limited license for the performance by Developer of property due diligence, pursuant to a license
agreement in substantially the form and substance of the agreement attached as Attachment 25B,
and (c) a limited Phase 1 construction staging and construction parking license on the Phase 2
Parcel pursuant to a license agreement in substantially the form and substance of the agreement
attached as Attachment 25C, or as otherwise mutually approved by the City and Developer each
in its sole discretion (collectively, the "License Agreements"). Improvements in public right of
way shall require that Developer apply for encroachment permits which shall be issued by the
City in its Governmental Capacity.
8.3 Land Use Matters.
8.3.1 Subdivision. Developer at its sole cost and expense shall (a) cause the
Parcels within each Phase and the Building Pads within each Phase to be legally described and
(b) to the extent required by the Subdivision Map Act and the City Code, file and prosecute
applications to create separate legal parcels for the Parcels and Building Pads in each Phase.
Accordingly Developer has submitted for the City's approval, as part of the Applicable
Approvals, a Subdivision Map which contemplates the filing of phased final maps, and a final
map for the Phase 1 Property is anticipated to be Recorded prior to the Phase 1 Property Close of
Escrow.
8.3.2 Required Entitlements. Developer shall, at its sole cost and expense,
use its commercially reasonable efforts to process, obtain, and maintain all Entitlements to assure
that the design, construction, use, operation, maintenance, repair and replacement of the
Improvements is carried out in accordance with the provisions of this Agreement, and is
permitted by the Entitlements and all other Governmental Requirements. Developer's
application for Entitlements shall reflect the terms of this Agreement, shall require and be subject
to the review processes of the City in its Governmental Capacity with respect to the specific
approvals listed on Attachment 26 ("Applicable Approvals") and any later Entitlements
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requested by Developer. Without limiting the foregoing, in developing and constructing the
Project, Developer shall ensure that the Project complies with all applicable development
standards in the Specific Plan, the City Code and with all building codes, landscaping, signage
and parking requirements, except as may be permitted through conditional use permits, variances
and modifications, and with the applicable provisions of the Design Guidelines. Developer
acknowledges that the Specific Plan establishes a non-residential total trip estimate for the
Property and that the Project shall be required to comply with such estimate. When and if
Developer or Phase 2 Developer (as applicable) chooses to pursue development of Phase 2,
Developer or Phase 2 Developer (as applicable) shall use its commercially reasonable efforts to
timely submit all applications and materials required by the City to deem the Phase 2 Applicable
Approvals applications "complete" and shall use its commercially reasonable efforts to timely
process and obtain all of the Phase 2 Applicable Approvals required for the Project and to cause
the Entitlement Approval Date for the Phase 2 Applicable Approvals to occur prior to and as a
condition to exercise the Option.
8.3.3 Development Permits. Developer, at its sole cost and expense, shall
process, obtain, and maintain all Development Permits required for the construction and use of
the Horizontal Improvements (including on-site and off-site Horizontal Improvements) and all
Vertical Improvements for each Parcel or portion of such Parcel as is required to develop such
Phase and shall maintain all such Development Permits in effect to assure that the design,
construction, use, operation, maintenance, repair and replacement of the Improvements is carried
out in accordance with the provisions of this Agreement, the Entitlements and all other
Governmental Requirements.
8.3.4 Agreement Does Not Grant Entitlements. Nothing in this
Agreement shall be construed or interpreted as committing the City to approve or undertake any
action that requires the independent exercise of discretion by the City in its Governmental
Capacity, including any approval of any Entitlement or Development Permit application for
which Developer applies for after the date of this Agreement. This Agreement does not (a) grant
any land use entitlement to Developer, (b) supersede, nullify or amend any condition which may
be imposed by the City in its Governmental Capacity or in connection with Entitlement for the
Project or the Property (including approval of the City in its Governmental Capacity of any
conditional use permit review which may be necessitated by particular proposed uses or design
features of End Users), (c) guarantee to Developer or any other party any profits from the
development of the Property, or (d) amend any Governmental Requirements of the City. The
issuance or approval of any Entitlement not issued or approved on or prior to the Effective Date
or any Development Permit described in this Agreement shall be done by the City in its
Governmental Capacity and the failure of the City to issue or approve any such matters shall not
be a Default. Nothing contained in this Agreement shall be deemed to waive the right of the City
to act in its Governmental Capacity with respect to the consideration and approval of the
Entitlements and all other permits, licenses and approvals requested by Developer from time to
time in connection with the Project nor shall it entitle Developer to any Entitlement,
Development Permit or other City approval necessary for the development of the Project, or to
the waiver of any applicable City requirements relating thereto, and the failure of the City to
issue or approve any Entitlement described in this Agreement, including to certify or approve
any CEQA document, to approve any required Applicable Approval, Phase 2 Applicable
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Approval or other Entitlement or Development Permit shall not be a default of the City under
this Agreement.
8.3.5 Cooperation of City. Consistent with this Agreement, the City
agrees, without cost or other liability to the City or any commitment of the City to approve or
conditionally approve any Entitlements required for the full implementation of this Agreement,
to assist and cooperate with Developer in its efforts to process the Entitlements and the
applications and materials (if any) submitted for the Phase 2 Applicable Approvals. The City
will use good faith efforts to expedite review of applications for the Entitlements, Phase 2
Applicable Approvals, and Development Permits that are to be issued by the City and other
submissions made by Developer where reasonably appropriate in order to meet the deadlines set
forth in the Schedule of Performance or to allow exercise of the Option, and will assist and
cooperate with Developer in its efforts to process such Development Permits, Entitlements,
applications for the Phase 2 Applicable Approvals and other submissions. Without limiting any
other provision of this Agreement, the Developer shall pay all permit fees and other fees and
costs normally charged by the City in connection with application for and review and approval of
Development Permits and Entitlements.
8.3.6 CEQA Requirements. The Parties acknowledge and agree that
CEQA is applicable to discretionary actions associated with the development of the Project. The
Developer agrees to cooperate with the City in obtaining information to determine the
environmental impact of the Project, if any. The, Developer acknowledges that the City shall
prepare any supplemental environmental information, if any, as may need to be completed in
order to effect compliance with CEQA, as determined by the City in its sole discretion, and
Developer shall be responsible to pay all costs incurred by the City to prepare or to cause its
consultants to prepare such environmental documents and shall enter into such agreements to pay
such costs as the City shall require.
8.3.7 Entitlement Conditions. Developer acknowledges and agrees that
the City in its Governmental Capacity may require satisfaction of certain conditions and
dedication of certain property in connection with approval of any Entitlements.
8.3.8 Payment of Fees. Without limiting any other provision of this
Agreement, unless already paid pursuant to Section 1.8.4, Developer shall pay (a) all fees, costs
and deposits normally charged by the City in connection with application for and review and
approval of Development Permits and Entitlements, (b) any fees or costs incurred by the City in
complying with CEQA or the State CEQA implementing regulations; (c) any costs to review or
approve any Entitlement or Development Permit applications or submittals by Developer to the
City in connection with the Project.
8.4 Design Approval.
8.4.1 Design Review. It is understood and agreed by Developer that the
quality, character and uses proposed for the Project are of particular importance to the City. In
furtherance of the development of the Project and the foregoing, the City, acting in its
Governmental Capacity, shall require Concept Plan and Design Review approval as part of the
Entitlements. In addition, in its Proprietary Capacity as the current owner of the real property
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that is the subject of this Agreement and of substantial portions of Tustin Legacy, the City will
require review and approval of the Basic Concept Plan for the Project as further set forth in this
Section 8.4. Review of design documents by the City in its Proprietary Capacity only shall be
subject to time periods set forth below.
8.4.2 Plan Development and Cost. All plans and specifications for the
Project shall be prepared by Developer at Developer's sole cost and expense and subject to the
requirements set forth in this Article 8.
8.4.3 Process for Governmental Review. The Parties acknowledge that
the City, acting in its Governmental Capacity, shall have the right to review all plans,
specifications and submissions, including any changes therein, through its normal plan review
and Entitlement process and that the City may exercise its governmental discretion in review of
any of the plans, specifications and submissions. Developer has previously submitted to the City
a preliminary site plan for the Project (the "Site Plan"), a copy of which is attached as
Attachment 3131 graphically depicting the overall plan for development of the Improvements on
the Property, the Building layouts, proposed Building Pads, Common Area, parking, and access
on and related to each Building Pad, conceptual Building renderings and setting forth the
Phasing plan. Within the timeframe shown in the Schedule of Performance, Developer shall
submit for approval by the City in its Governmental Capacity, final design drawings and related
documents conforming to the requirements of the City Code, the Specific Plan and the Design
Guidelines. The Community Development Department is authorized pursuant to City Code to
approve minor changes to Building plans after approval by the City, provided such changes do
not significantly reduce the quality of the development concept or the design and materials to be
used in enhancing the architecture and aesthetics of the Improvements.
8.4.4 Coordination. Developer and the Project Architect shall meet with
representatives of the City to review and come to a clear understanding of the planning and
design criteria required by the City. During the preparation of all plans and specifications for the
Project, staff of the City and Developer shall hold regular progress meetings to coordinate the
preparation, submission and review of such plans. The staff of the City and Developer shall
communicate and consult as frequently as necessary to facilitate prompt and speedy
consideration of Developer's submittals.
8.4.5 Proprietary Review. Prior to the Effective Date, Developer has
caused the Basic Concept Plans to be prepared and submitted to the City for approval. Prior and
as a condition to its exercise of the Option, Developer shall have caused the Basic Concept Plans
for Phase 2, if different from those previously approved by the City, to be prepared and
submitted to the City for approval. The City in its Proprietary Capacity shall have the right of
reasonable architectural review of all Basic Concept Plans in accordance with Section 8.4.6,
including with respect to exterior elevations, exterior materials (including selections and colors)
and the size, bulk and scale for all Buildings, the phasing of the Project and the product mix,
which shall include, unless otherwise agreed by the City, only Office Uses, Food Hall Uses, and
other Retail Uses. Developer acknowledges and agrees that the City's Community Development
Department is responsible for reviewing the working drawings and issuing recommendations
with respect to the appropriate Entitlements. The exercise by the City Manager's office of its
right to inspect or review the concept plans, drawings and related documents for development of
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the Project: (a) shall be an exercise of the City's Proprietary Capacity and not its Governmental
Capacity; (b) shall not constitute an approval by the City of any Entitlements; (c) shall not
constitute a determination by the City of the engineering or structural design, sufficiency or
integrity of the improvements contemplated by such plans, drawings and related documents, and
(d) shall not constitute a determination by the City of the compliance of such plans, drawings and
related documents with any applicable building codes, safety features and standards. Any
inspection or approval of plans and drawings made or granted pursuant to this Agreement shall
not constitute an inspection or approval of the quality, adequacy or suitability of such plans,
specifications or drawings, nor of the labor, materials, services or equipment to be furnished or
supplied in connection therewith. Developer acknowledges and agrees that the City in its
Proprietary Capacity may approve or disapprove Basic Concept Plans and design review plans in
order to satisfy the City's obligation to promote the sound development and redevelopment of
land, to promote a high level of design that will impact development surrounding the Project, and
to provide an environment for the social, and economic well-being of the citizens of the City and
that the City is not constrained or limited to act solely within its governmental discretion,
authority, or capacity. Developer shall not be entitled to damages or compensation as a result of
the City's disapproval, conditional approval, or failure to approve or disapprove Basic Concept
Plans in its Proprietary Capacity.
8.4.6 Process for Proprietary Review. Developer shall submit two sets of
Basic Concept Plans for the Improvements to the City. Such sets of Basic Concept Plans shall be
submitted in writing over the signature of Developer or a representative duly authorized by
Developer in writing. If the City approves such Basic Concept Plans, the City shall endorse its
approval on one set of such Basic Concept Plans and return them to Developer. The City shall
conclusively be deemed to have given its approval to such sets of Basic Concept Plans unless,
prior to fifteen (15) Business Days after the City's receipt of such sets of Basic Concept Plans,
the City gives written notice of disapproval to Developer specifying in reasonable detail each
item that the City disapproves and the reasons for such disapproval. If necessary, Developer
shall make changes in response to the City's notice of disapproval and resubmit such Basic
Concept Plans to the City for review and approval in accordance with the provisions of this
Section 8.4.6 (and in such case the City's review period shall be ten (10) Business Days).
8.4.7 Approved Plans. The Approved Plans shall govern development of
the Improvements on the Development Parcels. In addition to any other rights to approve or
disapprove the construction level drawings in its Governmental Capacity, the City may
disapprove such documents if they are not consistent with the Entitlements and the Basic
Concept Plan previously approved, do not represent a logical or commercially reasonable
implementation thereof, and/or do not provide for construction of approximately the same square
footage as set forth therein. Developer shall not construct any Improvements on the Property
unless the same are shown in the Approved Plans or unless the prior written consent of the City
in its Proprietary Capacity and, if necessary, the approval of the City in its Governmental
Capacity are obtained to any modification thereof. To the extent of any inconsistencies between
the plans identified in the Scope of Development or the Site Plan and the Approved Plans, the
Approved Plans shall govern and control as to the development of the Property.
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8.5 Financial Status.
8.5.1 Financial Capability. After the Phase 1 Property Close of Escrow,
and thereafter until issuance of the Certificate of Compliance for each Parcel, Developer shall
continue to be responsible for demonstrating to the City its financial capacity and capability to
perform its obligations under this Agreement. In addition to the requirements set forth in
Sections 4.6.1, 4.6.2, and 4.6.4, as applicable, following Close of Escrow for each Parcel, until
issuance of a Certificate of Compliance for such Parcel, Developer a shall submit annually, on
the anniversary of the applicable Closing Date, a date -down of the Phase 1 Financing Plan and
Phase 2 Financing Plan, respectively, and shall include therein any modifications required to
reflect changes to the Project during such period.
8.5.2 Guaranty. Developer, on behalf of itself and each Successor Owner,
hereby agrees that the Phase 1 Guaranty (or, if applicable, any replacement Guaranty provided
and approved by the City pursuant to this Agreement) shall not be amended, modified or
terminated prior to issuance of a Certificate of Compliance for the Phase 1 Project and the
Phase 2 Guaranty (or, if applicable, any replacement Guaranty provided and approved by the
City pursuant to this Agreement) shall not be amended, modified or terminated prior to issuance
of a Certificate of Compliance for the Phase 2 Project without the prior written consent of the
City in its sole discretion.
8.6 Proiect Budget Statement.
Developer understands and agrees that the City reserves the right to reasonably request at
any time prior to the issuance of a Certificate of Compliance for a Phase (but not more frequently
than quarterly) a Project Budget Statement with respect to such Phase. If requested by the City,
Developer shall submit such Project Budget Statement within thirty (3 0) calendar days following
the later of Developer's receipt of the City's request therefor and the expiration of the applicable
quarter. Notwithstanding the foregoing, the delivery of such Project Budget Statement shall be
for informational purposes only and in no event shall the City be entitled to declare a Potential
Default or Material Default, or exercise any of its remedies pursuant to this Agreement, based on
the contents of such Project Budget Statement absent an actual Potential Default or Material
Default under one of the other covenants or obligations of Developer set forth in this Agreement.
All Project Budget Statements submitted by Developer in response to request by the City shall be
subject to the confidentiality provisions set forth in Section 18.23.
8.7 Backbone Infrastructure Improvements.
8.7.1 Developer Acknowledgements. Developer acknowledges and agrees
that: (a) the development of the Project, together with the development of the remainder of
Tustin Legacy, will contribute to the need for Tustin Legacy backbone infrastructure located off
of the Development Parcels, including Tustin Legacy roadway improvements; traffic and
circulation mitigation to support the Tustin Legacy project; domestic and reclaimed water;
sewer; telemetry; storm drains and flood control channels; utilities backbone (electricity, gas,
telephone, cable, telecommunications, etc.) (as such program is in effect as of the Effective Date,
the "Tustin Legacy Backbone Infrastructure Program"); (b) a portion of the Purchase Price
will be allocated to development by the City of the Tustin Legacy Backbone Infrastructure
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Program on behalf of the Project, as further described below; (c) Developer has had an
opportunity to review the budgets, plans and projections developed by the City in connection
with the Tustin Legacy Backbone Infrastructure Program and the studies prepared by the City in
connection therewith; (d) there is an essential nexus between the imposition on the Project of the
Project Fair Share Contribution and a legitimate governmental interest; and (e) the Project Fair
Share Contribution is roughly proportional to and reasonably and rationally related to the
impacts that will be caused by development of the Project.
8.7.2 Proiect Fair Share Contribution. The Purchase Price is inclusive of
the obligation to pay the fair share of the Tustin Legacy Backbone Infrastructure Program (the
"Project Fair Share Contribution") to be contributed by Developer with respect to the Project
and no further obligation shall be imposed on Developer of the Project in connection with the
Fair Share Contribution. Developer waives its right to fund all or any portion of such
contribution pursuant to Special Tax "A" for the development of facilities within the Tustin
Legacy Backbone Infrastructure Program ("Tax A") or pursuant to other community facilities
district, and the City agrees that Tax A shall not be applicable to the Property or the
Improvements thereon and Developer shall have no obligation or liability on account thereof.
Developer acknowledges and agrees that its development plan for the Project will not require use
of community facility district proceeds and that neither assessment district nor community
facilities district proceeds will be used to reimburse Developer for its Development Costs,
including Project Fair Share Contribution or Project specific infrastructure costs.
8.7.3 CFD for Services. Developer acknowledges that the City has formed
a community services district for services to fund a portion of the City essential services,
including police and fire protection, ambulance and paramedic services, recreation programs and
services, street sweeping, traffic signal maintenance and the maintenance of City -owned parks,
parkways and open spaces and other City services and facilities at Tustin Legacy by forming a
community facilities district pursuant to which is imposed a Special Tax "B" ("Tax B"). Tax B
shall be in lieu of any other assessments, special taxes, fees or charges by the City that may
otherwise be charged on account of the types of services covered thereby. Notwithstanding the
foregoing sentence, the City shall not be prohibited by the terms of this Agreement from
subjecting the Development Parcels and/or the Improvements thereon to any increase in ad
valorem real property tax pursuant to a City of Tustin -wide election, provided that nothing herein
shall be construed to constitute a waiver by Developer of its right or ability to dispute or oppose
passage of a City of Tustin -wide bond or tax, the proposed formation or amendment of any
special district or taxing authority, or the imposition of any tax by such special district or taxing
authority, or any amendment to the Rate and Method of Apportionment for Tax B, or its right to
dispute any Development Parcel's assessed value. Developer acknowledges and agrees that the
term of Tax B imposed upon the Property and the Improvements thereon shall be perpetual and
shall not be time limited in any manner unless determined by the City in its sole discretion.
8.7.4 Master Marketing Program Fees. Developer acknowledges that the
City (in its Proprietary Capacity) requires that all builders within Tustin Legacy contribute a
master marketing fee towards the marketing of Tustin Legacy by the City. In complete
satisfaction of such obligation by Developer, Developer shall pay to the City through Escrow
Holder at the Phase 1 Property Close of Escrow a one-time master marketing fee of Fifty
Thousand Dollars ($50,000.00). The City acknowledges and agrees that this payment shall
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satisfy all obligations of Developer to contribute to the master marketing program or any future
master marketing program and that Developer shall have no additional obligations on account
thereof after the payment of such fee.
8.7.5 Other Fees and Assessments. Developer acknowledges and agrees
that in addition to City fees, fees may be imposed by other Governmental Authorities with
jurisdiction over the Project and/or the Property and payment of any such fees and assessments
shall be at Developer's sole cost, including (a) the Foothill/Eastern Corridor Fee, (b) the Santa
Ana/Tustin Transportation System Improvement Area (TSIA) fee, (c) state -mandated school
impact fees by the School District, (d) Orange County School Facility Bonds (Measure G and
Measure L), and (e) utility meter and connection fees.
8.8 Development Covenants.
Developer, on behalf of itself and Successor Owners, hereby covenants and agrees as
follows:
8.8.1 Developer shall maintain throughout the term of this Agreement,
sufficient equity, capital and firm binding commitments for financing necessary to (a) pay
through Completion, all costs of development, construction, marketing, sale and/or leasing,
operation and management of all the Improvements as defined in the Scope of Development to
be built on any Parcel acquired by Developer; and (b) enable Developer to perform and satisfy
all the covenants of Developer contained in this Agreement, the Quitclaim Deed(s), the CC&Rs
and the Special Restrictions.
8.8.2 The development of the Project shall be done in a professional and
competent manner. Developer shall perform, and shall cause all others carrying out work on the
Development Parcels to perform, all work required to construct and Complete the Improvements
and the Project and related work in accordance with the Approved Plans, the Entitlements, the
Development Permits, the applicable Design Guidelines and all Governmental Requirements and
at the level of quality set forth in the Scope of Development.
8.8.3 The Developer shall be responsible for the timeliness and quality of all
work performed and materials and equipment furnished in connection with the Project, whether
the work, materials and equipment are performed and furnished by the Developer or through
subcontractors, sub -subcontractors (of all tiers) and suppliers.
8.8.4 Developer shall not place, or allow to be placed, on its interests in the
Property, Improvements, or any portion thereof, any Mortgage or encumbrance of lien, including
any Construction Lien, not authorized by this Agreement.
8.8.5 Developer shall, within thirty (30) calendar days following receipt of
notice thereof, cause to be removed or bonded against (such bonding to be by the provision of
bonds satisfying California statutory requirements) any and all mechanic's liens, stop notices
and/or bonded stop notices that are recorded and/or served by contractors, subcontractors (of all
tiers) and suppliers in connection with the Project, including construction of Improvements on
the Property and on adjoining City -owned Property or performance of other work in connection
therewith, including conducting investigations, or causing the foregoing to be carried out
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("Construction Liens"). Notwithstanding the foregoing, Developer may contest the amount,
validity or application, in whole or in part, of any such Construction Liens; subject, however, to
the further requirement that neither the Property nor any Improvements nor any part or interest in
either thereof would be in any danger of being sold, forfeited, attached or lost pending the
outcome of such proceedings. If any such contest is finally resolved against Developer, then
Developer shall promptly pay the amount required to be paid, together with all interest and
penalties accrued thereon. Developer hereby agrees to indemnify, defend and hold the City
Indemnified Parties free and harmless from and against any and all Claims arising from or
related to failure to pay for construction of Improvements or other work related to the Project
including costs to remove or bond any Construction Liens. The indemnity set forth in this
Section 8.8.5 shall survive the termination of this Agreement.
8.9 City Rights of Access.
In addition to any rights it may have in its Governmental Capacity, representatives of the
City shall have the reasonable right of access to all portions of the Property, upon reasonable
prior notice to Developer, without charges or fees, at normal construction hours during the period
of construction for the purposes of this Agreement, including the inspection of the work being
performed in constructing the Improvements. The City agrees to indemnify, defend and hold
Developer harmless for any and all Claims arising out of any such non-governmental inspection
or other activity on the Property or the Project by the City, or its agents, employees or
contractors permitted pursuant to this Section 8.9, except to the extent caused by the gross
negligence or willful misconduct of Developer. The indemnity set forth in this Section 8.9 shall
survive the termination of this Agreement as to inspections or activities arising on the Property
prior to termination of this Agreement as to such portion of the Property.
8.10 Disclaimer of Responsibility by City and Exculpation.
8.10.1 Disclaimer of Responsibility. The City neither undertakes nor
assumes nor will have any responsibility or duty to Developer, any Successor Owner or to any
other third party to review, inspect, supervise, pass judgment upon or inform Developer, any
Successor Owner or any third party of any matter in connection with the development or
construction of Improvements, whether regarding the quality, adequacy or suitability of the
plans, any labor, service, equipment or material furnished for development of the Project, any
Person furnishing same, or otherwise. Developer, any Successor Owner and all third parties
shall rely upon its or their own judgment regarding such matters, and any review, inspection,
supervision, exercise of judgment or information supplied to Developer, any Successor Owner or
to any third party by the City in connection with such matter is for the public purpose of
developing the Project, and neither Developer nor any Successor Owner nor any third party is
entitled to rely thereon.
8.10.2 Exculpation. The City shall not be liable in damages to Developer or
to any owner, lessee, any licensee or other Person, on account of (a) any approval or disapproval
by the City, including by the City Manager or the City Manager's designee whether made in the
Governmental Capacity or Proprietary Capacity of the City of any design documents, including
any Basic Concept Plans, whether or not defective or whether or not in compliance with
applicable laws or ordinances; (b) any construction, performance or nonperformance by
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Developer or any owner, lessee, licensee or other Person of any work on the Property, whether or
not pursuant to Approved Plans or whether or not in compliance with applicable laws or
ordinances; (c) any mistake in judgment, negligence, action or omission in exercising its rights,
powers and responsibilities hereunder in connection with Section 8. 10.1 and clauses (a) and
(b) of this Section 8.10.2; and/or (d) the enforcement or failure to enforce any of the provisions
of this Agreement. Every Person who makes design submittals for approval agrees by reason of
such submittal, and Developer and every Successor Owner of the Property or any portion thereof
agrees by acquiring title thereto or an interest therein, not to bring any suit or action against the
City seeking to recover any such damages and expressly waives any such claim or cause of
action for such damages which it would otherwise be entitled to assert. The review of any design
submittals shall not constitute the assumption of any responsibility by, or impose any liability
upon, the City as to the accuracy, efficacy, sufficiency or legality thereof nor decrease or
diminish any liability, duties, responsibilities, or obligations of Developer under this Agreement
or otherwise.
8.10.3 No Supervision or Control. The City (whether acting in its
Governmental Capacity or its Proprietary Capacity) does not have any right, and hereby
expressly disclaims any right, of supervision or control over the architects, designers, engineers
or persons responsible for drafting or formulating of the plans, drawings and related documents
of Developer.
8.10.4 Survival. The provisions of this Section 8.10 shall survive the
termination of this Agreement.
8.10.5 City Responsibility. Nothing in this Section 8.10 shall in any way
limit the City's representations or warranties set forth in Sections 3.3 or 18.11.2 of this
Agreement, or the covenants or obligations of the City set forth in Sections 8.2.4, 8.3.5, 8.13,
8.14 or 8.15 of this Agreement.
8.11 Local, State and Federal Laws.
Developer shall carry out the construction of the Project, including all Improvements,
subject to Section 8.1.4 and in conformity with all Governmental Requirements (subject to
Section 1.6 of this Agreement), including all applicable federal and State labor laws and
regulations and shall investigate the applicability of and, if and to the extent applicable, pay
prevailing wages meeting the requirements of such laws and regulations; provided that
Developer reserves the right to reasonably contest such laws and regulations. Developer hereby
agrees that, with respect to the Project, Developer shall be fully responsible for determining
whether the foregoing wage requirements are applicable and agrees to indemnify, defend and
hold the City and its elected and appointed officials, employees, agents, attorneys, affiliates,
representatives, contractors, successors and assigns free and harmless from and against any and
all Claims arising from or related to compliance by Developer or Developer's officers, directors,
employees, agents, representatives, consultants and/or contractors (at every tier) in construction
of the Project with the prevailing wage requirements imposed by any applicable federal and State
labor laws.
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8.12 Liens, Taxes and Assessments.
Developer shall pay prior to delinquency all real estate taxes and assessments assessed
and levied on or against all portions of the Property subsequent to the conveyance thereof by the
City to Developer. Developer shall remove, or shall have removed, any levy or attachment made
on its interests in the Property (or any portion thereof), or shall assure the satisfaction thereof
within thirty (30) calendar days following receipt of notice thereof. Nothing contained in this
Agreement shall be deemed to prohibit Developer from contesting the validity or amount of any
tax or assessment or to limit the remedies available to Developer in respect thereto. Developer
hereby agrees to indemnify, defend and hold the City and its elected and appointed officials,
employees, agents, attorneys, affiliates, representatives, contractors, successors and assigns free
and harmless from and against any and all Claims arising with respect to or related to payment of
taxes and assessments assessed or levied against the Property. The indemnity set forth in this
Section 8.12 shall survive the termination of this Agreement.
8.13 Non -Compete Covenant.
City acknowledges and agrees that it is advantageous to have a variety of types of uses
and developments, as contemplated by the Disposition Strategy, constructed in Tustin Legacy.
Consistent with the Disposition Strategy, the ultimate success of the Phase 1 Project (and, if
developed, the Phase 2 Project) will be enhanced by certain covenants of the City not to dispose
of Affected TL Land (as defined below) for the types of development that would be directly
competitive with the Office Uses approved for the Property as part of the Applicable Approvals
until each of the Phase 1 Project and the Phase 2 Project have been allowed to stabilize their
tenant base. "Affected TL Land" shall mean land within the boundaries of Tustin Legacy that
as of the Effective Date is either (i) owned in fee by the City or (ii) is subject to a ground lease
by the City pursuant to LIFOC agreement(s) with the Navy; provided that the Affected TL Land
shall not include (x) Disposition Parcel 1C (comprising the land affected by the Regency Centers
transaction) and (y) any land subject to LIFOC if upon LIFOC termination such land is not
conveyed by the Navy to the City. Accordingly, the City hereby covenants and agrees as follows
with respect to the Affected TL Land:
(a) Any binding agreement(s) (including any exclusive negotiation
agreement(s), disposition and development agreements, purchase agreements, leases, and/or
ground leases) that the City enters into in its Proprietary Capacity during either of the Phase 1
Non -Compete Period or the Phase 2 Non -Compete Period with third parties other than
governmental entities (including federal, state, regional and local agencies, school and/or college
districts) for the Affected TL Land (each a "Binding Agreement") shall be consistent with the
following restrictions ("Restrictions"): (i) during the Phase 1 Non -Compete Period, the City
shall (A) not approve scope(s) of development for any Binding Agreement(s) unless such
scope(s) of development shall limit the amount of Office Uses (in the overall aggregate on the
Affected TL Land) that can be developed on land to be sold or leased by the City pursuant to
such Binding Agreement(s) during the Phase 1 Non -Compete Period to one hundred and fifty
thousand (150,000) square feet of rentable space for Office Uses, which Office Uses must be
located solely in one or more Mixed Use Building(s) (as defined below) and (B) prohibit during
the Phase 1 Non -Compete Period construction of improvements for which the intended use is
Office Uses to the extent construction of such improvements would (1) cause an exceedance of
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the allowable square feet of rentable space for Office Uses as described in Section 8.13(a)(i)(A)
and/or (2) result in Office Uses on the Affected TL Land in a manner that exceeds that described
in Section 8.13(a)(i)(A) and (ii) during the Phase 2 Non -Compete Period, the City shall (A) not
approve scope(s) of development for any Binding Agreement(s) unless such scope(s) of
development shall limit the amount of Office Uses (in the overall aggregate on the Affected TL
Land) that can be developed on land to be sold or leased by the City pursuant to such Binding
Agreement(s) during the Phase 2 Non -Compete Period to one hundred thousand (100,000)
square feet of rentable space for Office Uses, or if no Office Uses are built during the Phase 1
Non -Compete Period, two hundred thousand (200,000) square feet of rentable space for Office
Uses, which Office Uses in either case must be located solely in one or more Mixed Use
Buildings and (B) prohibit during the Phase 2 Non -Compete Period construction of
improvements for which the intended use is Office Uses to the extent construction of such
improvements would (1) cause an exceedance of the allowable square feet of rentable space for
Office Uses described in Section 8.13(a)(ii)(A) and/or (2) result in Office Uses on the Affected
TL Land in a manner that exceeds that described in Section 8.13(a)(ii)(A). During each of the
Phase 1 Non -Compete Period and the Phase 2 Non -Compete Period (but not for any period
between the termination of the Phase 1 Non -Compete Period and the commencement of the
Phase 2 Non -Compete Period), the City shall as a condition to the transfer or conveyance of any
stand-alone pads or parcels pursuant to any Binding Agreement pertaining to the Affected TL
Land, impose the Restrictions on the use of such property to be transferred or conveyed. The
term Office Uses as used in this Section shall not include retail, hotel, entertainment/sports
facilities, residential, live/work or loft uses or meeting rooms and the Restrictions shall not apply
to any such uses.
(b) The Restrictions shall apply only during each of the Phase 1 Non -
Compete Period and the Phase 2 Non -Compete Period and not during any period prior to,
between or following such periods or during any period in which Developer is in Material
Default under this Agreement and the Restrictions shall not apply with respect to any use for
which a building permit application is filed during the time period in which the Restrictions are
not applicable, even if the Phase 1 Non -Compete Period or Phase 2 Non -Compete Period
subsequently becomes effective prior to issuance of such building permit or construction of the
building.
(c) If during the Phase 2 Non -Compete Period (x) an End User
approaches the City, Developer or any other Person that is a party to a Binding Agreement
seeking to lease or purchase contiguous office space for which such End User has completed
initial (conceptual) space planning, and (y) Phase 2 does not have rentable square footage (using
the BOMA definition of "rentable square feet") at least equal to eighty-five percent (85%) of the
expressed requirement of such End User per such space plan that has not already been leased or
sold to other End Users at Phase 2, then notwithstanding any other provision of this Agreement,
the Restrictions shall automatically be deemed to be waived and not applicable with respect to
the sale or lease of land by the City to any Person (including such End User or a Person
proposing to develop office uses at Tustin Legacy) for purposes of development of office uses
for the proposed End User. Developer shall promptly refer any such End User to the City. In
order to allow the City to comply with the requirements of this Section, Developer shall
promptly upon written request made by the City from time to time specifying the amount of
square footage requested by a proposed End User, confirm in writing to the City the available
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amount of rentable square footage in Phase 2 on a building by building basis. If Developer shall
fail to respond to any such written request by City within fifteen (15) calendar days, City may
issue a second written request to Developer. Upon failure of Developer to respond to such
second written request within a fifteen (15) calendar day time period, the Restrictions shall be
deemed to be waived as to such End User.
(d) As used herein, "Mixed Use Building" shall mean a separate
building in which 100% of the leasable ground floor space is occupied by a use other than Office
Uses (provided, however, that a medical office use that is a Prohibited Use under this Agreement
is also permitted). "Phase 1 Project Stabilization" shall mean that Leases or Transfer
Agreements have been executed with End Users for not less than 315,000 GBA within Phase 1,
and the "Phase 1 Non -Compete Period" shall be the period of time commencing on October 1,
2016 and ending on the date that is the earlier to occur of (i) Phase 1 Project Stabilization or
(ii) October 1, 2020. As used herein, the term "Phase 2 Project Stabilization" shall mean that
Leases or Pad Transfer purchase and sale agreements have been executed with End Users for not
less than 360,000 GBA within Phase 2, and the "Phase 2 Non -Compete Period" shall be the
period of time commencing on the exercise of the Option and ending on the date that is the
earlier to occur of (i) Phase 2 Project Stabilization and (ii) three (3) years from the Phase 2
Property Close of Escrow.
(e) If City breaches the Restrictions, fails to incorporate the
Restrictions into the Binding Agreement(s), fails to enforce the Restrictions, or amends or
waives the Restrictions, and provided that the Developer is not then in Material Default under
this Agreement, then Developer's sole remedies shall be the right to bring an action in equity
against the City for injunctive relief and specific performance of this Agreement.
(f) Nothing herein shall restrict the right of the City (i) to enter into
Binding Agreements in its Proprietary Capacity with respect to sale or lease of the Affected TL
Land consistent with the foregoing Restrictions, or (ii) to act in its Governmental Capacity in any
manner, or (iii) to convey or lease land to any Governmental Authority or other government
agency for any purpose. Upon the termination of each of the Phase 1 Non -Compete Period and
the Phase 2 Non -Compete Period, the Restrictions shall be of no further force and effect as to the
City or any Person, whether a party to a Binding Agreement or otherwise.
8.14 City Park Completion.
The City anticipates that it will construct, in two phases, a City owned park on
approximately 26 acres of land located adjacent to the Phase 1 Parcel as further depicted on
Attachment 29 ("City Park"). The City shall use good faith efforts to commence the first phase
of the City Park following the Phase 1 Property Close of Escrow and to complete the first phase
in a commercially reasonable time frame, subject to Force Majeure Delay. Developer is
obligated to construct certain utilities to and across the City Park as a component of the
Minimum Horizontal Improvements as further described on Attachment 8 and depicted on
Attachment 9. Developer acknowledges that commencement of the second phase of the City
Park cannot occur until such utility work is complete. Upon commencement by Developer of
construction of the Phase 1 Vertical Improvements, the City shall use good faith efforts to
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commence and complete the second phase of the City Park in a commercially reasonable time
frame, subject to Force Maj eure Delay.
8.15 City's Activities on Development Parcels.
8.15.1 From the Effective Date until the earlier of the Phase 1 Property Close
of Escrow, the Phase 1 Property Outside Closing Date or the termination of this Agreement, the
City shall not, without Developer's prior consent, take or refrain from taking any action in its
Proprietary Capacity, including without limitation entering into any agreements with respect to
the Phase 1 Property that could bind Developer or the Property after the Phase 1 Property Close
of Escrow, which would reasonably be expected to have a material adverse effect on title to, or
the physical condition of, the Phase 1 Property.
8.15.2 From the Effective Date until the earlier of the Phase 2 Property Close
of Escrow, the Phase 2 Property Outside Closing Date, the lapse, expiration and/or termination
of the Option or the Option Term, or the termination of this Agreement as to the Phase 2
Provisions, the City shall not, without Developer's prior consent, take or refrain from taking any
action in its Proprietary Capacity, including without limitation entering into any agreements with
respect to the Phase 2 Property that could bind Developer or the Property after the Phase 2
Property Close of Escrow, which would reasonably be expected to have a material adverse effect
on title to, or the physical condition of, the Phase 2 Property.
9. Certificate of Compliance. Certificate of Compliance Defined.
Upon satisfaction of the Conditions Precedent set forth in Sections 9.2 and 9.3, as
applicable, and upon written request therefor from Developer setting forth evidence of
satisfaction of such conditions, the City shall deliver to Developer or its respective Successor
Owner owning fee title, upon request therefor by the Developer or such Successor Owner with
respect to the development of the entirety of Phase 1 or the entirety of Phase 2, a "Certificate of
Compliance" with respect to such Phase. Each Certificate of Compliance shall be substantially
in the form and substance of the Certificate of Compliance set forth on Attachment 15 and in
such form as to permit it to be Recorded. In addition, upon the Completion thereon of the
Improvements described below, the City shall issue a "Partial Certificate of Compliance" as to
(a) any Building Pad that has been Transferred in fee to a Pad Transferee that is an End User or
(b) any Completed Building(s) and associated Building Pad(s) for which a binding contract to
purchase has been executed by and between Developer and a proposed Successor Owner prior to
issuance of the Certificate of Compliance but for which the Transfer shall not take place until the
Certificate of Compliance has been issued, in each case upon satisfaction of the Conditions
Precedent below, in which event the Minimum Phase 1 Improvements or Minimum Phase 2
Improvements, as applicable required for satisfaction of the Conditions Precedent for such
Partial Certificate of Compliance shall be comprised of. (i) the Minimum Horizontal
Improvements (in their entirety), (ii) the remaining Phase 1 Horizontal Improvements or Phase 2
Horizontal Improvements required for development of the applicable Building Pad as determined
to the satisfaction of the City in its sole discretion and (iii) the Minimum Phase 1 Vertical
Improvements or Minimum Phase 2 Vertical Improvements for such Building Pad, which shall
be equal to the minimum GBA for such Building Pad approved by the City in its Design Review
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approval as part of the Applicable Approvals or, with respect to Phase 2, pursuant to any Phase 2
Applicable Approval, or, in either case, any later Entitlements granted by the City.
9.2 Conditions Precedent for Phase 1 Parcel Certificate of Compliance.
With respect to a request for the issuance of any Certificate of Compliance within the
Phase 1 Parcel for which Developer is entitled to request such certificate pursuant to Section 9. 1,
(i) the City shall issue such Certificate of Compliance when each of the following has occurred
and Developer has certified in writing, for the benefit of the City, as to the occurrence, truth and
correctness of each of the following items with respect to the Parcel or Building Pad for which
such Certificate of Compliance has been requested, and (ii) in connection with any request for a
Partial Certificate of Compliance, other than with respect to the Minimum Horizontal
Improvements, which must be completed in their entirety, the deliverables in clauses
(a) through (e) below shall be only with respect to the Building Pad for which such Certificate of
Compliance is being requested:
(a) Completion of each of the following (collectively, the "Minimum
Phase 1 Improvements"): (i) the Minimum Horizontal Improvements; (ii) the remaining
Phase 1 Horizontal Improvements required for construction and operation of the Minimum Phase
1 Vertical Improvements; and (ii) the Minimum Phase 1 Vertical Improvements, except that with
respect to a request for a Partial Certificate of Compliance for any Building Pad, the Minimum
Phase 1 Improvements for the applicable Building Pad shall be as described in Section 9.1;
(b) Issuance of a certificate of substantial completion for the Minimum
Phase 1 Vertical Improvements by the Project Architect(s) for such Improvements;
(c) Final inspection of the Minimum Phase 1 Improvements by or on
behalf of the City and determination by the City that such Improvements have been Completed
in conformance with this Agreement, including the Entitlements, the Approved Plans and all
Governmental Requirements;
(d) Issuance of certificates of occupancy or the equivalent sign -off for
a Building core and shell, exterior staircases and balcony systems and common restrooms, by the
City for the Buildings comprising the Minimum Phase 1 Vertical Improvements; provided that
nothing contained in this Agreement shall require that any interior tenant improvements to be
constructed under any Lease be completed in order to satisfy the terms of this Section 9.2 or as a
condition to issuance of a Certificate of Compliance. The City shall issue a Certificate of
Compliance notwithstanding that any interior tenant improvements have not been completed;
(e) Written release or bonding in accordance with California law of all
Construction Liens against the Phase 1 Parcel and, with respect to the Phase 1 Improvements
located on the Phase 2 Parcel, the Phase 2 Parcel from the general contractor and all
subcontractors (at all tiers) constructing the Phase 1 Improvements, or the statutory period for
filing liens with respect to the Phase 1 Horizontal Improvements and Phase 1 Vertical
Improvements having expired without any such Construction Liens being filed;
(f) Payment to the City of all funds then owing to the City under this
Agreement, and, if applicable, the Other Agreements by Developer, provided that in the event of
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a Partial Certificate of Compliance to be issued to a Pad Transferee that is an End User, only
payment by the applicable Pad Transferee of all funds then owing to the City from such Pad
Transferee under this Agreement and the Other Agreements shall be required; and
(g) No Default by Developer or, subject to the terms of any City Non -
Disturbance and Attornment Agreement then in effect, any Pad Transferee that is an End User
under this Agreement or default under any of the Other Agreements shall have occurred and be
continuing except that (i) following the Phase 2 Property Close of Escrow, this requirement shall
not apply with respect to the Phase 2 Provisions, and (ii) notwithstanding any default(s) by such
Pad Transferee, if Developer is not then in Default under this Agreement or default under any of
the Other Agreements and the Minimum Phase 1 Improvements have been Completed, then
Developer may obtain a Certificate of Compliance or Partial Certificate of Compliance,
notwithstanding the default by such Pad Transferee. For avoidance of doubt, if such Pad
Transferee is in Default under this Agreement or in default under the Other Agreements and the
Minimum Phase 1 Improvements have not then been Completed, then during the pendency of
such Pad Transferee default, no Certificate of Compliance shall be issued to Pad Transferee or
Developer.
9.3 Conditions Precedent for Phase 2 Parcel Certificate of Compliance.
With respect to a request for the issuance of any Certificate of Compliance within the
Phase 2 Parcel for which Developer is entitled to request such certificate pursuant to Section 9. 1,
(i) the City shall issue such Certificate of Compliance when each of the following has occurred
and Developer has certified in writing, for the benefit of the City, as to the occurrence, truth and
correctness of each of the following with respect to such Parcel or Building Pad for which such
Certificate of Compliance has been requested, and (ii) in connection with any request for a
Partial Certificate of Compliance, other than with respect to the Minimum Horizontal
Improvements, which must be completed in their entirety, the deliverables in clauses (a) through
(e) below shall be only with respect to the Building Pad for which such Certificate of
Compliance is being requested:
(a) Completion of each of the following ("Minimum Phase 2
Improvements"): (i) the Minimum Horizontal Improvements (which shall have been
Completed as part of Phase 1 but must be Completed as a condition to issuance of any Phase 2
Certificate of Compliance); (ii) the Phase 2 Horizontal Improvements required for construction
and operation of the Minimum Phase 2 Vertical Improvements; and (ii) the Minimum Phase 2
Vertical Improvements for such Phase; except that with respect to a request for a Partial
Certificate of Compliance for any Building Pad, the Minimum Phase 2 Improvements for the
applicable Building Pad shall be as described in Section 9.1;
(b) Issuance of a certificate of substantial completion for the
applicable portion of the Minimum Phase 2 Vertical Improvements by the Project Architect(s)
for such Improvements;
(c) Final inspection of the applicable portion of the Minimum Phase 2
Improvements by or on behalf of the City and determination by the City that such Improvements
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have been Completed in conformance with this Agreement, including the Entitlements, the
Approved Plans and all Governmental Requirements;
(d) Issuance of certificates of occupancy or the equivalent sign -off for
a Building core and shell, exterior staircases and balcony systems and common restrooms, by the
City for the Buildings comprising the applicable portion of the Minimum Phase 2 Vertical
Improvements; provided that nothing contained in this Agreement shall require that any interior
tenant improvements to be constructed under any Lease be completed in order to satisfy the
terms of this Section 9.3 or as a condition to issuance of a Certificate of Compliance. The City
shall issue a Certificate of Compliance notwithstanding that any interior tenant improvements
have not been completed;
(e) Written release or bonding in accordance with California law of all
Construction Liens against the Phase 2 from the general contractor and all subcontractors (at all
tiers) constructing the Phase 2 Improvements, or the statutory period for filing liens with respect
to the Phase 2 Horizontal Improvements and Phase 2 Vertical Improvements having expired
without any such Construction Liens being filed;
(f) Payment to the City of all funds then owing to the City under this
Agreement, and, if applicable, the Other Agreements by Developer, provided that in the event of
a Partial Certificate of Compliance to be issued to a Pad Transferee that is an End User, only
payment by the applicable Pad Transferee of all funds then owing to the City from such Pad
Transferee under this Agreement and the Other Agreements shall be required; and
(g) No Default by Developer or, subject to the terms of any City Non -
Disturbance and Attornment Agreement then in effect, any Pad Transferee that is an End User
under this Agreement or default under any of the Other Agreements shall have occurred and be
continuing except that (i) following the Phase 2 Property Close of Escrow, this requirement shall
not apply with respect to the Phase 1 Provisions, and (ii) notwithstanding any default(s) by such
Pad Transferee, if Developer is not then in Default under this Agreement or default under any of
the Other Agreements and the Minimum Phase 2 Improvements have been Completed, then
Developer may obtain a Certificate of Compliance or Partial Certificate of Compliance,
notwithstanding the default by such Pad Transferee. For avoidance of doubt, if such Pad
Transferee is in Default under this Agreement or in default under the Other Agreements and the
Minimum Phase 2 Improvements have not then been Completed, then during the pendency of
such Pad Transferee default, no Certificate of Compliance shall be issued to Pad Transferee or
Developer.
9.4 Conclusive Presumption.
Each Certificate of Compliance shall be, and shall so state, conclusive determination of
satisfactory completion of the obligations of Developer to construct pursuant to this Agreement
the portions of the Project on the Parcel to which such Certificate pertains.
9.5 Not Evidence.
Issuance by the City of a Certificate of Compliance is not a Notice of Completion as
referred to in Section 8182 of the California Civil Code.
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9.6 City Obligations.
The City shall not unreasonably withhold, condition, or delay issuance of any Certificate
of Compliance when all the Conditions Precedent thereto are satisfied. If the City refuses or fails
to issue such Certificate of Compliance after written request from Developer (or Pad Transferee
that is an End User, if applicable) provided each of the conditions established in Section 9.1 and
in Sections 9.2 or 9.3, as applicable, have been satisfied, the City shall, within ten (10) Business
Days of the written request, provide a written statement which details the reasons the City
refused or failed to issue such Certificate of Compliance. The statement shall also contain a
statement of the actions that Developer (or a Pad Transferee that is an End User, if applicable)
must take to obtain a Certificate of Compliance, as the case may be.
9.7 Effect of Certificate of Compliance; Termination of Agreement.
Except as set forth in this Section 9.7 and any Certificate of Compliance issued by the
City, after the Recording of a Certificate of Compliance with respect to any Phase (or portion
thereof if applicable), any Person then owning or thereafter purchasing, leasing, or otherwise
acquiring any interest in the Parcel subject to the Certificate of Compliance or the Improvements
thereon (or any portion thereof) shall not (because of such ownership, purchase, lease or
acquisition) incur any obligation or liability under this Agreement with respect to such
Improvements, except that such Party shall continue to be bound by the Other Agreements in
each case to the extent set forth therein. Issuance of the Certificate of Compliance shall not
waive any rights or claim that the City might have against any party for latent or patent defects in
design, construction or similar matters under any applicable law, nor shall it be evidence of
satisfaction of any of Developer's obligations to others not a party to this Agreement. The
Certificate of Compliance shall be in such form as to permit it to be Recorded. Upon Recording
of the Certificate of Compliance, this Agreement shall terminate in its entirety with respect to the
Project and Property to which such Certificate of Compliance applies, except that:
(a) the provisions of Section 4.5.2, including the release set forth
therein, shall survive in perpetuity to the extent set forth in the Quitclaim Deed for such
Property;
(b) the provisions of Section 11. 1.4 shall survive until the expiration of
the time period for provision of the environmental insurance policy described thereby.
(c) the releases and indemnities set forth in Sections 4.5.2(f), 5.5,
8.8.5, 8.9, 8.11, 8.12, 10.1, 10.2 and 18.11 shall remain in effect and shall bind the indemnifying
party and its successors and assigns to the extent set forth in the Quitclaim Deed for such
Property; and
(d) any and all obligations contained in the Federal Deeds shall
survive in perpetuity to the extent set forth therein, unless such obligations are released by the
Federal Government.
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10. Indemnification and Environmental Provisions.
10.1 Developer's Indemnification for Non -Environmental Matters.
From and after the Effective Date, as a material part of the consideration for this
Agreement, to the maximum extent permitted by law, Developer, on behalf of itself and its
successors and assigns hereunder and each and every Person claiming by, through or under
Developer or any Successor Owner, hereby agrees to indemnify, protect, defend, assume all
responsibility for and hold harmless the City and its appointed and elected officials, agents,
attorneys, affiliates, employees, contractors and representatives (collectively referred to as the
"City Indemnified Parties"), with counsel reasonably acceptable to the City, from and against
any and all Non -Environmental Claims to the extent caused by, resulting or arising from the
following during the period of Developer's ownership of the Property or any portion thereof and
any Additional Liability Period applicable thereto, and with respect to those obligations of a
Transferor described in clause (d) of the definition of "Ongoing Matters" set forth on
Attachment 1, except that with respect to clauses (b), (c), (e) and (f) below, the obligation of
Developer shall commence as to each Phase upon the Close of Escrow with respect to such
Phase:
(a) The marketing, sale or use of the Property owned by Developer or
Developer Affiliate in any way;
(b) All acts and omissions of Developer, or any Developer
Representative, Developer Affiliate, Pad Transferee or Space Tenant in connection with the
Project, the Property, or any portion of any of the foregoing;
(c) Any plans or designs for Improvements prepared by or on behalf
of Developer, any Developer Affiliate, Pad Transferee or Space Tenant 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 of any representation or warranty of Developer or resulting from any Potential Default or
Material Default, by Developer under this Agreement;
(e) The non-performance or breach by Developer, any Developer
Representative, Developer Affiliate, Pad Transferee or Space Tenant of any term or condition of
this Agreement; and
(f) Any development or construction of any Improvements by
Developer, any Developer Representative, Developer Affiliate, Pad Transferee or Space Tenant
whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment
or material furnished to the Property, any Person furnishing the same, or otherwise.
Notwithstanding the foregoing, the foregoing shall not apply to and Developer shall not be
obligated to indemnify any of the City Indemnified Parties to the extent of the gross negligence
or willful misconduct of the City Indemnified Parties or any breach of any of the City's
representations, warranties, covenants or obligations set forth in this Agreement or the Other
Agreements. The indemnification provisions in this Section 10.1 shall not apply to
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Environmental Claims. Developer's indemnification obligations to the City regarding any
Environmental Claims are exclusively addressed in Section 10.2. The foregoing indemnity shall
be included in each Special Restrictions and shall run with the land in accordance with
Section 10.3 below.
10.2 Developer's Environmental Indemnification.
10.2.1 As a material part of the consideration for this Agreement, and
effective as to the Property or any portion thereof, but only with respect to the Property or such
portion thereof to which the Developer has then acquired fee title, Developer on behalf of itself
and Successor Owners and each and every Person claiming by, through or under Developer or
any Successor Owner, hereby agrees that Developer and each Successor Owner shall, to the
maximum extent permitted by law, indemnify, protect, defend (with counsel reasonably
acceptable to the City), assume all responsibility for and hold harmless the City Indemnified
Parties from and against any and all Claims resulting or arising from or in any way connected
with (i) the existence, Release, threatened Release, presence, storage, treatment, transportation
and/or disposal of any Hazardous Materials on, in, under, from, or about any such acquired
portion or portions of said lands, 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, and (ii) non-performance or breach by Developer of
its obligations under Sections 10.4, 10.5, 10.7, 11.1.4 or 11.2 (provided that as to Section 11.2,
only to the extent applicable to the environmental insurance required in Section 11.1.4 of this
Agreement) (collectively, "Environmental Claims"); provided that neither Developer nor any
Successor Owner shall be responsible (and such indemnity shall not apply) (a) to the extent
caused by the gross negligence, fraud or willful misconduct of the City Indemnified Parties, or
(b) to the extent caused by any breach of the City's representations, warranties, covenants or
obligations set forth in this Agreement or any Other Agreements relating directly to the
environmental matters giving rise to the Environmental Claim, or (c) to any claim for a civil or
criminal penalty based upon an alleged violation of any Environmental Law by the City arising
out of actions or inactions between May 2002 and the Close of Escrow on the applicable Parcel.
This environmental indemnity shall be included in the Special Restrictions provided that such
indemnity (x) shall not be binding upon Tenants who are End Users under Space Leases and
(y) shall not be deemed to limit in any manner the rights and/or remedies that Developer may
have against the Federal Government.
10.2.2 Notwithstanding anything contained herein and without limiting or
relieving Developer or any Successor Owner of its obligations under this Agreement, the City
agrees that with respect to any Environmental Claims tendered by any one (1) or more of the
City Indemnified Parties under this Agreement for which Developer has the obligation to
indemnify the City pursuant to the terms of this Agreement, the City Indemnified Parties shall
seek recourse for such Environmental Claims under the Developer's insurance coverage required
by Article 11 of this Agreement as well as any other applicable insurance coverage maintained
by third parties for the benefit of the City, in each case only to the extent such insurance could
reasonably be determined to be applicable to the type, extent, value and location of the
Environmental Claim being made. The City shall thereafter use reasonable commercial efforts to
prosecute its Environmental Claim for coverage with such insurer(s). To the extent that
insurance is determined by the City not to be reasonably applicable the Environmental Claim or,
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if after six (6) months from tender of the Claim to the insurer, despite such efforts, insurance
proceeds are not available to cover all or a portion of the Claim or if such Environmental Claim
is earlier denied by the insurance carrier, then Developer shall defend and indemnify the City
Indemnified Parties for the full amount of the Environmental Claim not covered by the insurance
but only to the extent Developer has such obligations in this Agreement. If an insurer(s) to
which an Environmental Claim is tendered declines to defend, or fails to timely defend the
Environmental Claim within the six (6) month time period described above, then Developer shall
defend and indemnify against such Environmental Claim to the extent it has such obligations in
this Agreement. However, if for any Environmental Claim for which the City has reasonably
concluded that insurance is applicable to such Claim and the City has not received insurance
proceeds after six (6) months as described above, then the City shall continue to use reasonable
commercial efforts to pursue such insurance until the insurance carrier finally pays out on all or
part of such Claim and/or denies all or the remaining portion of such Claim. At any time after
six (6) months have passed since the original tender of a Claim to an insurer by the City as
described herein if the insurer has not paid out on all or any part of the claim, the City shall
advise the Developer and Developer in its sole discretion may decide to pay for the legal fees
and expenses associated with filing and prosecuting litigation against such insurance carrier. If
Developer decides to pay such legal fees and expenses, the City shall proceed with such
litigation at Developer's expense as further set forth below. Developer shall have the right to
select counsel to represent the City in connection with the prosecution of such Environmental
Claim in litigation. Any fees and expenses of such litigation will be borne by the Developer and
any monetary recovery from such litigation shall first be applied to reimburse the Developer for
any fees and expenses paid by Developer to defend and indemnify the City for such Claim, and
second, to the extent there remains additional money recovered after such payments, then such
additional monetary recovery shall be applied to reimburse the City for any incurred fees and
expenses that were part of the Environmental Claim but were not reimbursed by the Developer.
Finally, to the extent any additional money is recovered after the payments described above, then
such additional monetary recovery shall be applied to reimburse the Developer for its litigation
fees and expenses incurred in prosecuting the Environmental Claim against the insurance carrier.
As used in this Section 10.2.2, "reasonable commercial efforts" shall not include the initiation or
prosecution of a lawsuit.
10.3 Duration of Indemnities.
The indemnities set forth in this Article 10 shall become effective upon each Close of
Escrow and shall survive each Close of Escrow to the extent set forth herein and in any Special
Restrictions
10.4 Claim Response.
In the event that following the Close of Escrow for any portion of the Property or Parcel
and for so long as Developer remains the fee title holder of such portion of the Property or
Parcel, any Environmental Agency or other third party brings, makes, alleges, or asserts a Claim,
arising from or related to any actual, threatened, or suspected presence or Release of Hazardous
Materials on or about such portion of the Property or Parcel or any Improvements thereon,
including any Claim for Investigation or Remediation on such portion of the Property or Parcel
or such Improvements, or such Environmental Agency or other third party orders, demands, or
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otherwise requires that any Investigation or Remediation be conducted on such Property or
Parcel or with respect to Improvements thereon, Developer shall promptly upon its receipt of
notice thereof, notify the City in writing and thereafter shall promptly and responsibly evaluate
and respond to such Claim as provided in Section 10.5 below. Further, upon receipt of such
Claim, order, demand or requirement, Developer shall take such reasonable measures, as
necessary or appropriate, to reasonably attempt to dissuade such Environmental Agency or other
third party from bringing, making, alleging, or asserting any Claim against the City arising from
or related to the presence or any actual, threatened, or suspected Release of Hazardous Material
on or about such Property, Parcel or such Improvements, including any Claim for Investigation
or Remediation on such Property, Parcel or Improvements; provided, however, that Developer
shall have no obligation pursuant to this sentence with respect to any Claim, order, demand or
requirement arising from or related to any actual, threatened or suspected Release of Hazardous
Material to the extent caused by the gross negligence, fraud or willful misconduct of the City
Indemnified Parties or any breach of any of the City's representations, warranties, covenants or
obligations set forth in this Agreement or any Other Agreements relating to environmental
matters.
10.5 Release Notification and Remedial Actions.
If, after the Close of Escrow with respect to a component of the Property or the
Development Parcels and for so long as the Developer remains the fee title holder of such
component of the Property or the Development Parcels, the presence or any Release of a
Hazardous Material is discovered on such Property or Parcel or any Improvements thereon in
such quantities or concentrations that require notifying an Environmental Agency of such
discovery, and regardless of the cause, Developer shall with respect to such Property, Parcel
and/or Improvements promptly provide written notice (or in the event of emergency, telephonic
notice, followed by written notice) of any such Release to the City. To the extent that any
Environmental Agency (other than the City) is requiring that the City Remediate such Release
and the Developer acknowledges that it is obligated to assume responsibility or indemnify the
City with respect to such Release pursuant to Section 10.2 or there is a good faith dispute
between the City and Developer as to whether Developer is obligated to assume responsibility or
indemnify the City with respect to such condition or Release pursuant to Section 10.2, then
Developer shall (a) Investigate and/or Remediate the condition or Release in compliance with
and to the extent required by Environmental Laws and such Environmental Agency; (b) take
such other reasonable action as is necessary to have the full use and benefit of the Property as
contemplated by this Agreement; and (c) provide the City with satisfactory evidence of the
actions taken as required in this Section. To the extent that any Environmental Agency (other
than the City) is requiring that the City Remediate such condition or Release and the City
acknowledges that Developer is not obligated to assume responsibility or indemnify the City
with respect to such condition or Release pursuant to Section 10.2 or no Environmental Agency
(other than the City) is requiring that the City Remediate such condition or Release, then (as
between Developer and the City under this Agreement) Developer may elect in its sole discretion
whether to Remediate such condition or Release and/or pursue any rights that Developer has
against any Person (including the Federal Government and the City) with respect to such
condition or Release. The foregoing shall be without prejudice to Developer's or the City's
rights against any responsible party or against the Federal Government pursuant to Section 330,
Fiscal Year 1993, National Defense Authorization Act Public Law 102-484 or Section 120(h) of
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the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9620(h), and without compromising the applicability of any insurance coverage in regard to
such Release. The City and Developer will coordinate any remediation action with appropriate
environmental insurance carriers so as not to compromise coverage for the costs of such actions.
Nothing set forth herein requires Developer to perform any obligation of the Federal
Government and nothing set forth herein shall be deemed to limit or impair (or take any action
that might limit or impair) in any manner the rights and/or remedies that Developer or City may
have against the Federal Government or any other rights and/or remedies of Developer.
10.6 Conflict with Section 330 and Other Federal Government Obligations.
Notwithstanding anything to the contrary contained in this Article 10, in the event that
any actions required to be taken by Developer pursuant to this Article 10 could potentially result
in Developer losing rights, or are contrary to any rights, which it otherwise would have pursuant
to Section 330, Fiscal Year 1993, National Defense Authorization Act Public Law 102-484 or
otherwise against the Federal Government, then the City and Developer shall meet in order to
determine the proper course of action to be taken by Developer. The course of action to be
agreed upon shall protect the City's interest in the Project and Tustin Legacy, while retaining for
Developer its rights pursuant to Section 330 or otherwise against the Federal Government to the
maximum extent reasonable under the circumstances. Notwithstanding the foregoing, nothing
set forth in this Section 10.6 relieves Developer with respect to Developer's environmental
responsibilities and obligations and environmental indemnification of Developer to the City in
this Agreement.
10.7 Insurance and Indemnification.
Notwithstanding anything contained herein and without limiting or relieving Developer
or any Successor Owner of its obligations under this Agreement, the City agrees that with
respect to any Claims tendered by any one (1) or more of the City Indemnified Parties under this
Agreement for which Developer has the obligation to indemnify the City pursuant to the terms of
this Agreement, the City Indemnified Parties shall seek recourse for such Claims under the
Developer's insurance coverage required by Article 11 of this Agreement as well as under any
other applicable insurance coverage maintained by or for the benefit of the City, in each case
only to the extent such insurance could reasonably be determined to be applicable to the type,
extent, value and location of the Claim being made. The City shall thereafter use reasonable
commercial efforts to prosecute its Claim for coverage with such insurer(s). To the extent that
insurance is determined by the City not to be reasonably applicable the Claim or, if after six (6)
months from tender of the Claim to the insurer, despite such efforts, insurance proceeds are not
available to cover all or a portion of the Claim or if such Claim is earlier denied by the insurance
carrier, then Developer shall defend and indemnify the City Indemnified Parties for the full
amount of the Claim not covered by the insurance but only to the extent Developer has such
obligations in this Agreement. If an insurer(s) to which a Claim is tendered declines to defend,
or fails to timely defend the Claim within the six (6) month time period described above, then
Developer shall defend and indemnify against such Claim to the extent it has such obligations in
this Agreement. However, if for any Claim for which the City has reasonably concluded that
insurance is applicable to such Claim and the City has not received insurance proceeds after
six (6) months as described above, then the City shall continue to use reasonable commercial
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efforts to pursue such insurance until the insurance carrier finally pays out on all or part of such
Claim and/or denies all or the remaining portion of such Claim. At any time after 6 months have
passed since the original tender of a Claim to an insurer by the City as described herein if the
insurer has not paid out on all or part of the claim, Developer in its sole discretion may decide to
pay for the legal fees and expenses associated with filing and prosecuting litigation against such
insurance carrier. If Developer decides to pay such legal fees and expenses, the City shall
proceed with such litigation at Developer's expense as further set forth below. Developer shall
have the right to select counsel to represent the City in connection with the prosecution of such
Claim in litigation. Any fees and expenses of such litigation will be borne by the Developer and
any monetary recovery from such litigation shall first be applied to reimburse the Developer for
any fees and expenses paid by Developer to defend and indemnify the City for such Claim, and
second, to the extent there remains additional money recovered after such payments, then such
additional monetary recovery shall be applied to reimburse the City for any incurred fees and
expenses that were part of the Environmental Claim but were not reimbursed by the Developer.
Finally, to the extent any additional money is recovered after the payments described above, then
such additional monetary recovery shall be applied to reimburse the Developer for its litigation
fees and expenses incurred in prosecuting the Claim against the insurance carrier. As used in
this Section 10.7, "reasonable commercial efforts" shall not include the initiation or prosecution
of a lawsuit.
11. Insurance.
11.1 Required Insurance.
Without limiting the City's rights to indemnification, Developer shall procure and
maintain, at its own cost and expense and furnish or cause to be furnished to the City, evidence
of the following policies of insurance (complying with the requirements set forth below) naming
the Developer as insured and, with respect to insurance provided pursuant to Sections 11.1.1
and 11.1.4, the additional insureds specified below. Unless otherwise specified below, all
insurance required below shall be obtained by Developer upon the date specified below and shall
be kept in force with respect to each such component of the Property and the Project until
issuance of a Certificate of Compliance with respect thereto. Upon sale or Ground Lease of any
Building Pad to a Pad Transferee, such Pad Transferee may provide the insurance required by
this Article 11 (except for Section 11. 1.4) with respect to the portion of the Property Leased or
sold to it and the Improvements thereon and in such case Developer shall not be required to carry
duplicative insurance, and Developer shall continue to maintain the insurance required by this
Article 11 with respect to all portions of the Development Parcels and Improvements not sold or
Ground Leased to an End User. Notwithstanding anything contained in Sections 11.1.1
and 11. 1.2 to the contrary, each of the requirements set forth in this Article 11 may be satisfied
through Developer's or an affiliated entity's umbrella insurance policies.
11.1.1 Liability Insurance. Commencing upon the Effective Date,
Developer shall maintain or cause to be maintained commercial general liability insurance,
subject to the standard terms, exclusions, and conditions of said policy, to protect against loss
from liability imposed by law for damages on account of personal injury, including death
therefrom, suffered or alleged to be suffered by any Person or Persons whomsoever on or about
the Property and the business of Developer on the Property, or in connection with the operation
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thereof, resulting directly or indirectly from any acts or activities of Developer or anyone directly
or indirectly employed or contracted with or acting for Developer, or under its respective control
or direction, and also to protect against loss from liability imposed by law for damages to any
property of any third party occurring on or about the Property or related to the Project and the
business of Developer on the Property, or in connection with the operation thereof, caused
directly or indirectly by or from acts or activities of Developer or any Person acting for
Developer, or under its control or direction. Such insurance shall also provide for and protect the
City against incurring any legal cost in defending Claims for alleged loss. Such insurance shall
be maintained in full force and effect with respect to each Parcel until issuance of a Certificate of
Compliance for such Parcel and so long thereafter as necessary to cover any claims of damages
suffered by Persons or property prior to issuance of a Certificate of Compliance for the Project,
resulting from any acts or omissions of Developer, Developer's employees, agents, contractors,
suppliers, consultants or other related parties. The amount of insurance required hereunder shall
include comprehensive general liability and personal injury with limits of at least Five Million
Dollars ($5,000,000.00) and automobile liability with limits of at least Two Million Dollars
($2,000,000.00) combined single limit per occurrence. The insurance shall be issued by a
company authorized, approved, or qualified by the Insurance Department of the State of
California and rated A -/VII or better (if an admitted carrier) or A -VIII (if offered, by a surplus
line broker), by the latest edition of Best's Key Rating Guide. Subject to the prior approval of
the City Attorney and City Risk Manager, such insurance may be provided by an umbrella
insurance policy otherwise meeting the requirements of this Article 11.
An Accord certificate evidencing the foregoing and providing the following
endorsements signed by the authorized representative of the underwriter and approved by the
City shall be delivered within seven (7) Business Days following the Effective Date and annually
(upon request from the City) evidencing renewals of each policy until issuance of a Certificate of
Compliance for the Project. The endorsements shall provide as follows: (a) designate the
designate "the City of Tustin and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees" as additional insureds on the commercial general liability
policies; (b) the commercial general liability insurance coverage shall be primary, and not
contribute with any insurance or self-insurance maintained by the City, and (c) a waiver of
subrogation for the benefit of the City. The procuring of such insurance and the delivery of
policies, certificates or endorsements evidencing the same shall not be construed as a limitation
of Developer's obligation to indemnify the City Indemnified Parties as set forth herein.
11.1.2 Workers' Compensation Insurance. Commencing upon the
Effective Date, Developer shall obtain, and thereafter maintain or cause to be maintained,
workers' compensation insurance issued by a responsible carrier authorized, approved, or
qualified under the laws of the State of California to insure employers against liability for
compensation under the workers' compensation laws now in force in California, or any laws
hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers'
compensation insurance shall cover all Persons employed by Developer in connection with the
Project and shall cover liability within statutory limits for compensation under any such act
aforesaid, based upon death or bodily injury claims made by, for or on behalf of any Person
incurring or suffering injury or death in connection with the Project or the operation thereof by
Developer. Notwithstanding the foregoing, Developer may, in compliance with the laws of the
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State of California and in lieu of maintaining such insurance, self -insure for workers'
compensation in which event Developer shall deliver to the City evidence that such self-
insurance has been approved by the appropriate State authorities. Developer shall also furnish
(or cause to be furnished) to the City from time to time evidence satisfactory to the City that any
contractor with whom it has contracted for performance of work on the Property or otherwise
pursuant to this Agreement carries workers' compensation insurance required by law. The
insurance policy, by endorsement signed by an authorized representative of the underwriter, shall
contain a waiver of subrogation. The insurance provided for under this Section 11. 1.2 shall be
issued by a company rated B -/VIII or better or from the State Compensation Fund.
11.1.3 Builder's Risk Insurance. Upon the commencement of construction
by Developer of any Improvements and continuing until such time as the City delivers a
Certificate of Compliance with respect to a Parcel, Developer shall obtain, or shall cause its
contractor to obtain, and thereafter maintain a builder's risk policy or a property insurance policy
including a sublimit for property under the course of construction with respect to the
improvements constructed on such Parcel or in connection with development of such Parcel or
maintain comparable coverage through a property policy. Such insurance shall be maintained in
an amount not less than one hundred percent (100%) of the full insurable value of the
Improvements to be constructed on or in connection with development of such Parcel. The
insurance provided for under this Section 11.1.3 shall be provided by insurer(s) licensed,
qualified, or approved to do business in the State of California and with a Best's rating of B/NR
or better.
11.1.4 Environmental Insurance. From and after the Phase 1 Property
Close of Escrow, Developer shall obtain and shall thereafter maintain environmental insurance
coverage for the Property, including coverage for loss, remediation expense and legal defense
expenses, and naming "the City of Tustin and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees" as additional insureds to address pollution risks at the Property.
Such policy shall include coverage relating to unknown pre-existing conditions and/or conditions
that are first discovered during development after the Effective Date on the Development
Parcels. From and after the Phase 2 Property Close of Escrow, Developer shall obtain either (a)
an extension of the term of such policy for an additional period of five (5) years from the date of
such Close of Escrow for the Phase 2 Property or (b) a new policy of environmental and
pollution legal liability insurance coverage for the Phase 2 Property meeting the requirements of
this Section. Any such policy shall comply with the following minimum requirements:
(a) The policy shall be written by the insurance company selected
by Developer and approved by the City, which approval shall not be unreasonably withheld, and
which insurer(s) shall have a Best's rating of A -/VII or better. Indian Harbor Insurance (a
Subsidiary of XL Capital) is hereby approved by the City and deemed to meet this condition;
(b) The policy shall provide at least Five Million Dollars
($5,000,000.00) in total coverage and with at least Five Million Dollars ($5,000,000.00) per
claim, subject to a maximum One Million Dollar ($1,000,000.00) deductible per claim, to protect
against Claims and loss from liability relating to unknown conditions for a 5 -year term with an
extended reporting period of at least 24 months; and
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(c) The policy shall be paid for in full at the time of issuance and
shall be endorsed as non -cancelable without the written consent of each of Developer and the City
in its sole discretion to such cancellation and, to the extent available, shall contain a waiver of
subrogation for the benefit of the City Indemnified Parties. The unwillingness of an insurance
company to provide a waiver of subrogation for the benefit of the City Indemnified Parties shall
be a reasonable basis for the City to withhold approval of the insurance company under
Section 11.1.4(a) unless such unwillingness is the common position of insurance carriers in the
market (defined to mean that Developer cannot find an insurance carrier willing to waive such
subrogation or cannot find an insurance carrier willing to waive such subrogation without
charging a material increase in the premium for such insurance, over the premium that would be
charged absent such waiver. A "material" increase for purposes of this clause (c) shall mean an
increase of 20% or more.) Developer's obligation to maintain environmental insurance pursuant
to this Section 11.1.4 shall survive the termination of this Agreement following the Phase 1
Property Close of Escrow for the term required for such insurance policy pursuant to
Section 11.1.4(b).
11.2 General Insurance Requirements.
11.2.1 For all policies or certificates, an authorized representative of
Developer, or other Person required to obtain insurance hereunder ("Insured Party"), or its
insurance broker shall notify the City within thirty (30) calendar days after its knowledge of any
cancellation, termination or modification of such policies.
11.2.2 The term "full insurable value" as used in this Article 11 shall mean
the cost determined by mutual agreement of the Parties (excluding the cost of excavation,
foundation and footings below the lowest floor and without deduction for depreciation) of
providing similar Improvements of equal size and providing the same habitability as the
Improvements immediately before such casualty or other loss, but using readily -available
contemporary components, including the cost of construction, architectural and engineering fees,
and inspection and supervision.
11.2.3 All insurance provided under this Article 11 shall be for the benefit of
the City and any additional Parties that the Developer may require. Developer shall, and shall
cause each Insured Party, (a) to timely pay all premiums for such insurance and, at its sole cost
and expense, to comply and secure compliance with all insurance requirements necessary for the
maintenance of such insurance, and (b) to submit certificates evidencing such insurance to the
City on an Accord form within seven (7) Business Days following the Effective Date, or, with
respect to coverage required by Section 11.1.41 each Close of Escrow, and with respect to
coverage required by Section 11.1.3, commencement of construction. Upon request by the City,
within seven (7) calendar days, if practicable, after expiration of any such policy, certificates
evidencing renewal policies shall be submitted to the City.
11.2.4 If Developer fails to procure or to cause any Insured Party to procure
and maintain insurance as required by this Agreement, the City shall have the right, at the City's
election, and upon ten (10) calendar days' prior written notice to Developer, to procure and
maintain such insurance. The premiums paid by the City shall be treated as a loan, due from
Developer, to be paid on the first calendar day of the month following the date on which the
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premiums were paid. The City shall give prompt notice of the payment of such premiums,
stating the amounts paid and the name of the insured(s).
11.2.5 Since the insurance policies required by Section 11.1.4 will not be
effective until after each Close of Escrow, the evidence of insurance to be delivered by
Developer to the City at each Close of Escrow shall be limited to a binder evidencing that the
insurance required by Section 11. 1.4 will become effective following such Close of Escrow.
12. Covenants and Restrictions.
The following covenants and restrictions shall be set forth in the Special Restrictions and
shall run with the land for the duration set forth below and in the Special Restrictions for the
benefit of the City in its Proprietary Capacity. The Special Restrictions may contain additional
covenants and restrictions as further set forth therein.
12.1 Prohibited Uses.
Developer covenants and agrees for itself and each Successor Owner and each and every
Person claiming by through or under Developer or any Successor Owner that:
(a) During the term of this Agreement and any additional term set
forth in the Special Restrictions, the Property shall be used only for Office Uses, Retail Uses, and
Food Hall Uses and otherwise in accordance with the requirements of this Agreement and the
Special Restrictions.
(b) Neither Developer nor any Successor Owner nor any Person
claiming by through or under Developer or any Successor Owner including any Pad Transferee
or Tenant shall use the Development Parcels or any portion thereof for any Prohibited Use.
(c) The Developer and its Successor Owners and all Pad Transferees
and Tenants shall be subject to the covenants, conditions and restrictions set forth in the
Quitclaim Deed applicable to the Property, the Special Restrictions and the CC&Rs.
12.2 Maintenance Covenant.
12.2.1 Maintenance Standards. Developer, on behalf of itself and its
successors and assigns hereunder, hereby covenants and agrees, from and after each Close of
Escrow that Developer shall during its period of ownership of any portion of the Development
Parcels and for any Additional Liability Period, maintain the Development Parcels and the
Improvements thereon owned by it consistent with the following requirements:
(a) Prior to commencement of construction, Developer shall be
responsible, at its sole cost and expense, (i) to secure and maintain the Development Parcels in a
clean, safe and secure condition, in compliance with all applicable laws, (ii) to abate weeds and
other hazards and nuisances on such portion of the Development Parcels as are not then under
construction, (iii) to erect and maintain barricades and fencing, and provide security, in each case
with respect to the Development Parcels and as reasonably necessary to protect the public and
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any Improvements already constructed, and (iv) to maintain (in compliance with all
Environmental Laws) erosion control on the Development Parcels.
(b) From the date of commencement and during the continuance of
construction of any Improvements on the Development Parcels, Developer shall maintain the
Development Parcels and the Improvements thereon then under construction consistent with
normal and customary construction industry practice.
(c) From and after the issuance of a certificate of occupancy for any
Improvements on the Development Parcels, while this Agreement is in effect, Developer shall
maintain all Improvements owned by Developer on the Development Parcels not then under
construction in a clean, sanitary, orderly and attractive condition, subject to reasonable wear and
tear, change or damage by casualty or condemnation. Developer shall be required to meet the
standard for the quality of maintenance of the Improvements on the Development Parcels
required by this Section regardless of whether or not a specific item of maintenance is listed
below, except that, in each case, and notwithstanding anything in this Section to the contrary,
Developer shall not have any maintenance obligation with respect to any items owned or
controlled by (or on property owned or maintained by) a utility franchisee, any lighting or
landscape district or by the City. Representative items of maintenance shall include:
(i) maintenance and repair on a regular schedule, of Buildings and improvements, private streets,
roads, drives, sidewalks, utilities, Common Area, landscaping, hardscaping and fountains;
(ii) regular inspection for graffiti or damage or deterioration or failure, and reasonably prompt
(or, in the case of graffiti, within 48 hours) repainting or repair or replacement of all surfaces,
fencing, walls, equipment, etc., as necessary; (iii) emptying of trash receptacles and removal of
litter; (iv) regular sweeping of private streets, roadways and sidewalks throughout the
Development Parcels; (v) fertilizing, irrigating, trimming and replacing vegetation as necessary;
(vi) cleaning exterior windows on a regular basis; (vii) painting the Buildings on a regular
program and prior to the deterioration of the painted surfaces; and (viii) conducting roof
inspections on a regular basis and maintaining roofs in a leak free and weather tight condition.
The level of quality of the operation and maintenance activities shall be similar to those provided
with respect to the buildings at the Campus at Playa Vista.
12.2.2 Maintenance Responsibilities. Developer shall have the right to
subcontract its maintenance responsibilities under this Agreement to a reputable property
management company or other third party that has an interest in one or more of the Parcels,
provided that such subcontracting shall not relieve Developer of any liability for its obligations
under this Section 12.2.
12.2.3 City Rights to Maintain. In the event Developer or any Successor
Owner fails to maintain the Improvements or landscaping on the Development Parcels or any
portion thereof in accordance with the standard for the quality of maintenance set forth in this
Section or the Special Restrictions after thirty (30) calendar days have elapsed from City's
written notice of same, the City or its designee shall have the right but not the obligation to enter
the Property upon reasonable written notice to Developer or its Successor Owners, correct any
such failure, and hold Developer, or such Successor Owner, responsible for the reasonable cost
thereof, and such cost, until paid, shall constitute a lien on the applicable portion of the Property
as and to the extent described in Section 16.2.
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12.3 Landscape Installation and Maintenance Agreement and Roadway and
Utility Easement Agreement; Additional Agreements.
Concurrently with the Phase 1 Property Close of Escrow, Developer and the City shall
enter into (a) a Landscape Installation and Maintenance Agreement, the form and substance of
which shall be agreed to by the City and Developer each in its sole discretion (the "Landscape
Installation and Maintenance Agreement") pursuant to which Developer on behalf of itself
and each Successor Owner shall agree to undertake the landscape and maintenance obligations
with respect to the City right of way fronting on the public streets adjacent to the Development
Parcels and certain adjoining portions of the Development Parcels as further set forth therein for
the benefit of the City and its Successor Owners at no cost to the City and (b) a Roadway,
Landscape and Utility Easement Agreement, the form and substance of which shall be agreed by
the City and Developer each in its sole discretion ("Roadway and Utility Easement
Agreement"), pursuant to which Developer on behalf of itself and each Successor Owner shall
agree to construct and cause to be maintained certain roadways, comprising the portions of Flight
Way and Airship Avenue within the Development Parcels, certain utilities and storm drains
thereon and therein, and adjoining landscaping, as further set forth therein and providing a
reciprocal easement agreement granting reciprocal easements for vehicular, pedestrian and
bicycle ingress and egress, and utility access, at no cost to the City. Developer acknowledges
and agrees that the form of the Landscape Installation and Maintenance Agreement and the form
of the Roadway and Utility Easement Agreement shall, together with the form of the Pad
Transferee Non -Disturbance and Attornment Agreement described in Section 2.2.3(c)(iii)(B
require the approval of the City Council and that the approval of the City Council, in its sole
discretion, to each such document shall be a condition precedent to the Phase 1 Property Close of
Escrow for the benefit of the City. City acknowledges and agrees that the approval of the form
of each such document by Developer shall be a condition precedent to the Phase 1 Property
Close of Escrow for the benefit of the Developer. Upon approval by the City Council and
Developer of all of the foregoing forms of agreement, the approved agreements shall be attached
to and memorialized in an amendment to the DDA approved by the City Council and Developer
and executed by each of the Parties, and the Roadway and Utility Easement Agreement so
approved shall be deemed to be attached to this Agreement as Attachment 21, the Landscape
Installation and Maintenance Agreement shall be deemed to be attached to this Agreement as
Attachment 27 and the Pad Transferee Non -Disturbance and Attornment Agreement shall be
deemed to be attached to this Agreement as Attachment 22.
12.4 Duration of Covenants.
The covenants in Sections 12.1 and 12.2.2 shall be included in the Special Restrictions,
shall run with the land and shall remain in force and effect with respect to each Parcel until the
date which is the twenty-fifth (25th) anniversary of the Recording of the last Certificate of
Compliance for such Parcel, unless released at an earlier date by the City in writing. The
covenants set forth in Section 12.2.1 shall remain in effect only until CC&Rs addressing
maintenance requirements in substance substantially similar to those set forth in Section 12.2. 1.
are approved by the City, executed and Recorded and the covenants set forth in Section 12.3
shall remain in effect only until the Landscape Installation and Maintenance Agreement and the
Roadway and Utility Easement Agreement are each executed and Recorded. The Special
Restrictions shall run with the land, shall survive each Close of Escrow, and shall not be merged
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into any Quitclaim Deed, and shall survive any termination of this Agreement following each
Close of Escrow.
12.5 Obligation to Refrain from Discrimination.
Developer covenants and agrees for itself and each Successor Owner, that there shall be
no discrimination against or segregation of any person, or group of persons, on account of sex,
race, color, religion, ancestry, national origin, disability, medical condition, marital status, or
sexual orientation in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property
or in development of the Project, nor shall Developer 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, sub -lessees or vendees of the Property or in
development of the Project or any part thereof.
12.6 Deed Restrictions/Covenants Running with the Land.
The obligations of Developer set forth in this Agreement, the Special Restrictions and
each Quitclaim Deed shall be covenants running with the land, shall be binding upon Developer,
each Successor Owner and each and every Person claiming by, through or under Developer or
any Successor Owner for the benefit of the City, its Governmental Successors and the City
Benefited Property.
12.7 Priority of Agreement and Special Restrictions.
This Agreement, including the City Lien, the Right of Repurchase and the Right of
Reversion contained herein, the Memorandum of DDA, the Special Restrictions, the Roadway
and Utility Easement Agreement, and the Landscape Installation and Maintenance Agreement
shall be superior in priority to all Mortgages.
13. CC&Rs.
As a condition precedent to the Phase 1 Property Close of Escrow, Developer shall
prepare and submit to the City for approval, in its sole discretion, a set of covenants, conditions
and restrictions, together with other requirements included in the conditions of approval for each
Subdivision Map for the Project as approved by the City (the "CC&Rs"). Among other things
and without limitation, the CC&Rs shall establish (a) access, parking, and maintenance
easements, including pedestrian and vehicular access to the portion of Flight Way located on
private property and to Airship Avenue, in favor of the owners of Phase 1 and Phase 2,
Developer, each Pad Transferee, each Space Tenant and other permitted users as further set forth
in the CC&Rs; (b) certain use restrictions; and (c) the mechanism for sharing costs for
maintenance, repair and replacement of the Common Area and Common Area Improvements
between the Phase 1 Parcel owner(s) and the Phase 2 Parcel owner(s). The CC&Rs shall be
Recorded against the Phase 1 Parcel at the Phase 1 Property Close of Escrow, and shall be
Recorded against the Phase 2 Parcel at the Phase 2 Property Close of Escrow. From and after the
Phase 1 Property Close of Escrow, Developer and each Successor Owner of the Development
Parcels shall be responsible for all costs associated with maintenance and repair of the
Improvements owned by such party, and the City shall have no liability therefor, provided,
however, that except as set forth in this Agreement, any License Agreements, Roadway and
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Utility Easement Agreement, Landscape Installation and Maintenance Agreement,
Reimbursement Agreement or with respect to construction of the Minimum Horizontal
Improvements, Developer and each Successor Owner shall have no responsibility for costs
associated with the Phase 2 Property prior to the Phase 2 Property Close of Escrow. The CC&Rs
shall provide that the foreclosure of any Mortgage will not terminate the CC&Rs.
14. Potential Defaults and Material Defaults.
14.1 Potential Defaults.
Except as otherwise provided in this Agreement, in the event either Party (the
"Defaulting Party") fails to perform, or delays in the performance of, any obligation, in whole
or in part, required to be performed by the Defaulting Party as provided in this Agreement (a
"Potential Default"), the other Party (the "Injured Party") may give written notice of such
Potential Default to the Defaulting Party (the "Default Notice"), which Default Notice shall state
the particulars of the Potential Default. The Parties agree to cooperate in good faith and meet
and confer regarding each Potential Default.
14.2 Material Defaults.
14.2.1 Monetary Defaults. Notwithstanding any other provision of this
Agreement, if a Party fails to pay the other Party any sum as and when required to be paid
pursuant to this Agreement and the Injured Party gives the Defaulting Party a Default Notice of
such nonpayment, such nonpayment shall be a Potential Default. The Defaulting Party shall
have a period of fifteen (15) calendar days after the date the Default Notice is received, or
deemed to have been received, within which to cure the Potential Default by making the required
payment; the period to cure such Potential Default shall not be extended by Force Majeure
Delay. In the event a Potential Default for nonpayment is not cured within said fifteen (15)
calendar day period, the Potential Default shall become a "Material Default" that shall be
deemed to have occurred upon the expiration of the cure period.
14.2.2 Non -Monetary Defaults. With respect to non -monetary defaults
under this Agreement, a Potential Default shall become a "Material Default" in the event the
Potential Default is not cured, at the Defaulting Party's expense, (a) within thirty (30) calendar
days after the date the Default Notice is received, or deemed to have been received by the
Defaulting Party, or (b) if such cure cannot be reasonably accomplished within such thirty (30)
calendar day period, within ninety (90) calendar days after the date the Default Notice is
received, or deemed to have been received by the Defaulting Party, but only if the Defaulting
Party has commenced such cure within such thirty (30) calendar day period and diligently
pursues such cure to completion, or (c) within such longer period of time as may be expressly
provided in this Agreement or as mutually agreed to in writing between the Parties with respect
to the Potential Default. Except as set forth in Sections 4.7 and 14.2.3 and the proviso at the end
of Section 16.4.1(e), the time periods set forth in this Section 14.2.2 to cure a Potential Default
shall be extended by Force Majeure Delay. Following written notice and failure to cure within
the time periods set forth above, each Potential Default shall become a Material Default that shall
be deemed to have occurred upon the expiration of the applicable cure period. Notwithstanding
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anything in the foregoing to the contrary, the Defaulting Party may cure a Material Default at
any time prior to the date the Injured Party exercises its remedy for the Material Default.
14.2.3 Transfer Defaults. Notwithstanding the foregoing, any Transfer or
any Transfer of Control in violation of the provisions of Article 2 shall be null and void and shall
in all events be a Material Default under this Agreement as of the date of the Transfer by the
violating party, without notice or cure period and shall not be subject to extension for Force
Majeure Delay, except that with respect to involuntary Construction Liens for which the notice
and cure periods set forth in Section 14.2.2 shall apply, in order to enable Developer to comply
with the provisions of Section 8.8.5.
14.2.4 Interest. If a monetary Material Default occurs under this Agreement,
then in addition to any other remedies conferred upon the Injured Party pursuant to this
Agreement, the Defaulting Party shall pay to the Injured Party, in addition to all principal
amounts due, interest on such principal amounts at the Default Rate, for the period from the date
such payment or part thereof was due until the date the same is paid.
14.2.5 No Waiver. Failure or delay by an Injured Party to deliver a Default
Notice shall not constitute a waiver of any Default, nor shall it change the time of Default.
Except as otherwise expressly provided in this Agreement, any failure or delay by either Party in
asserting any of its rights and remedies as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies. Delays by either Party in asserting any of its rights
and remedies shall not deprive either Party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or
remedies.
14.3 Due Diligence Information; Products.
14.3.1 Destruction of Due Diligence Information. Developer shall use
commercially reasonable efforts to return to the City all hard copy written Due Diligence
Information in Developer's possession: (a) pertaining to the Property within five (5) Business
Days following (i) termination of this Agreement prior to the Phase 1 Property Close of Escrow
or (ii) the Phase 1 Property Outside Closing Date, if the Close of Escrow for the Phase 1
Property shall not have taken place on or before such date, or (b) pertaining to the Phase 2
Property following (i) termination of this Agreement as to the Phase 2 Property prior to the
Phase 2 Property Close of Escrow or (ii) the Phase 2 Property Outside Closing Date, if the Close
of Escrow for the Phase 2 Property shall not have taken place on or before such date. The
obligation to return Due Diligence Information to the City under this Section is without
representation or warranty of any kind by Developer. The Developer does not provide the City
any assurances that electronic information will be irretrievably eradicated, and in no event shall
Developer be obligated to destroy company -wide electronic back-up tapes in order to destroy
Due Diligence Information. The Developer shall not be obligated to destroy any Developer
Excluded Information and the Developer shall be entitled to retain one copy of any Due
Diligence Information as is necessary to comply with any legal or regulatory requirements.
14.3.2 Surrender of Transferable Products. In connection with the
proposed Project, Developer shall be preparing or causing to be prepared architectural and other
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products, surveys, plans, reports, tests, studies and investigations with respect to the Property and
the proposed Project (collectively, "Products"). All Products shall be prepared at Developer's
sole cost and expense. If (a) this Agreement is terminated for any reason other than a Default by
the City prior to the Phase 1 Property Close of Escrow or (b) if either the Phase 1 Property
Outside Closing Date or the Phase 2 Property Outside Closing Date shall pass without the Close
of Escrow for such Property having taken place and this Agreement shall terminate as to either
such Property, then, with respect to all Products with respect to the portion of the Property for
which this Agreement has terminated, other than financial or economic estimates, projections
and evaluations; studies and information related to potential tenants, lenders and investors; and
any confidential or proprietary information of Developer or its equity partner(s) (the Products not
subject to such exclusions are collectively the "Transferable Products"), the City may request
that Developer, for consideration to be mutually agreed, transfer Developer's rights to any or all
of the Transferable Products identified by the City, but in no event shall the cost to the City
exceed Five Thousand Dollars ($5,000.00). Upon such request, Developer shall deliver to the
City copies of all Transferable Products requested by the City together with a bill of sale
therefor, provided that Developer makes no representation, warranty or guaranty of any kind,
whether express or implied, including without limitation regarding the completeness or accuracy
of the Transferable Products, and Developer does not covenant to convey the copyright or other
ownership rights of third parties thereto. Such Transferable Products shall thereupon be free of
all claims or interests and other liens and encumbrances of Developer. Upon the City's acquiring
Developer's rights to any or all of the Transferable Products, the City shall be permitted to use,
grant, license or otherwise dispose of such Transferable Products to any Person for development
of the Project or any other purpose; provided, however, that Developer shall have no liability
whatsoever to the City or any transferee of title to the Transferable Products in connection with
the use of the Transferable Products. Notwithstanding anything to the contrary herein, the
Developer shall only be obligated to transfer any Transferable Products to the extent that the
Developer owns the rights to the same pursuant to its contract with the preparer thereof, provided
that the Developer shall use commercially reasonable efforts to secure ownership of Transferable
Products pursuant to such contracts.
14.3.3 Survival. The provisions of this Section 14.3 shall survive the
termination of this Agreement in its entirety or as to any portion of the Property except that it
shall terminate upon the issuance of a Certificate of Compliance therefor.
15. Nonoccurrence of a Condition at Close of Escrow.
The following provisions govern the failure to occur of Close of Escrow for either the
Phase 1 Property or the Phase 2 Property for reason of non-occurrence of a Closing Condition or
Default by either Party. Notwithstanding any other provision of this Agreement,
(a) Any failure of a Closing Condition for the benefit of either Party to
be satisfied at or prior to a Close of Escrow shall not, on its own, constitute a Default by either
Party hereunto absent a Default under a separate covenant, obligation, representation or warranty
set forth in this Agreement or any Other Agreement;
(b) In the event of a termination of all or a portion of this Agreement,
except as provided in Section 15.4.2, under no circumstances shall Developer have any right or
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claim to, or against, the Project or Property or any portion thereof for which this Agreement is
terminated and the Option, whether or not then exercised, shall automatically terminate as of the
date of the termination of this Agreement;
(c) In the event of a termination of the City's obligation to sell either
the Phase 1 Property or the Phase 2 Property pursuant to this Agreement (including the
termination of the Option or the right of Developer to exercise the Option with respect to the
Phase 2 Property), the City shall have the right to market and sell such Property to third parties
without restriction, but shall remain obligated to comply with the provisions of Section 8.13 (if
then applicable); and
(d) The termination of this Agreement or the Phase 1 Provisions or the
Phase 2 Provisions pursuant to Article 15 shall constitute a waiver of any rights or Claims either
Party may have against the other pursuant to this Agreement or against the Property or the
Improvements, or portion thereof to which the termination applies, but shall not terminate or
release any liability or obligations of either Party to comply with any obligations under this
Agreement pursuant to this Article 15 which remain in effect or which are expressly stated to
survive a termination of this Agreement.
15.1 Failure of a Condition to Phase 1 Property Close of Escrow Absent a Default.
15.1.1 Failure of a Condition to Phase 1 Property Close of Escrow
Generally.
(a) If the Phase 1 Property Close of Escrow does not occur on or
before 5:00 p.m. Pacific Time on the earlier of the Phase 1 Property Closing Date (as extended as
contemplated by Section 7.2.1(1) or 7.2.2 ' and the last sentence of Section 7.1.1, if applicable)
or the Phase 1 Property Outside Closing Date, because of the failure to occur of a Phase 1
Property Closing Condition for the benefit of either Party for reasons other than a Default by a
Party, then the Party for whose benefit the failed Closing Condition was intended may, by
delivery of written notice to the other Party and to the Escrow Holder, terminate this Agreement.
(b) It is the intent of the Parties that even if (i) the Phase 2 Property
Close of Escrow has not then occurred, (ii) the time period for close of escrow for the Phase 2
Property has not expired, and (iii) no Party is then in Default with respect to the Phase 2 Property
Close of Escrow and (iv) irrespective of whether there has been a Transfer of any portion of
Developer's interest to a Phase 2 Developer, that upon termination under Section 15.1.1(a) or
Section 15.1.2, this Agreement shall terminate in its entirety as to both the Phase 1 Provisions
and the Phase 1 Project and as to the Phase 2 Provisions and the Phase 2 Project.
(c) In the event either Developer or the City is in Default as of the
Phase 1 Property Closing Date the Party in Default shall not have the right to terminate the
Agreement pursuant to this Section 15.1.
15.1.2 Failure of a Condition to Phase 1 Property Close of Escrow for
Litigation or Referendum. In the event the Phase 1 Property Close of Escrow is extended for
any of the reasons set forth in this Section 15.1.2 not caused by a Default by either Party, then:
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(a) In the event a final non -appealable decision in any litigation
brought by a third party or approval of a referendum or initiative results in the inability of the
City to convey all or any portion of the Phase 1 Property to Developer, or results in the inability
of Developer to perform its material obligations hereunder despite Developer's commercially
reasonable efforts to do so, either Party shall have the right, upon thirty (30) calendar days' prior
written notice to the other Party and the Escrow Holder, to terminate this Agreement.
(b) In the event litigation, referendum, or initiative brought by a third
party remains pending on the Phase 1 Property Outside Closing Date and (i) such ongoing
challenge prevents the City from conveying all or any portion of the Phase 1 Property to
Developer, or (ii) such ongoing challenge is the cause of Developer's inability to perform its
material obligations hereunder despite Developer's commercially reasonable efforts to do so, or
(iii) such ongoing challenge could reasonably be expected to result in a material adverse effect
on Developer's ability to develop or operate all or any portion of the Phase 1 Property, either
Party shall have the right, upon thirty (30) calendar days' written notice to the other Party and the
Escrow Holder, to terminate this Agreement.
(c) In the event that the circumstances creating the right of termination
in Sections 15.1.2(a) or (W above has been cured during the thirty (30) calendar day period
described in each such Section, the right to terminate with respect to such circumstances shall
likewise be extinguished. In addition, if Developer provides the City with written notice that
Developer will indemnify, defend and hold harmless the City in any litigation or will challenge
such referendum or initiative identified in Section 15.1.2(a) or fl2) above, then, the City shall not
have the right to terminate this Agreement and the Phase 1 Property Outside Closing Date shall
be extended for as long as the Developer continues such defense or challenge.
15.1.3 Return of Purchase Price Deposit Prior to Phase 1 Property Close
of Escrow. Upon any termination of this Agreement or the Phase 1 Provisions pursuant to
Section 15.1.1(a) or 15.1.2 prior to the Phase 1 Property Close of Escrow and provided that
neither Party is then in Default under this Agreement, each Party shall pay one-half (1/2) of
Escrow Holder's normal cancellation charges and Escrow Holder shall return the Purchase Price
Deposit to Developer less any amounts due and owing to the City with respect to City
Transaction Expenses and for which the City Cost Deposit then funded pursuant to Section 1.8 is
insufficient. The termination of the obligations of the Parties with respect to the Phase 1
Property Close of Escrow shall relieve both parties of all of their respective liabilities and
obligations with respect to this Agreement except for the rights and remedies for a separate
breach, if any, of the confidentiality and/or indemnification provisions set forth in Sections 5.5
and 18.23 of this Agreement and/or the provisions of Section 14.3.
15.2 DEFAULT OF DEVELOPER RESULTS IN FAILURE OF PHASE 1
PROPERTY CLOSE OF ESCROW.
IF THE PHASE 1 PROPERTY CLOSE OF ESCROW DOES NOT TAKE PLACE ON OR
BEFORE 5:00 P.M., PACIFIC TIME, ON THE CLOSING DATE ESTABLISHED BY THIS
AGREEMENT FOR SUCH CLOSE OF ESCROW, SOLELY AS A RESULT OF A DEFAULT
BY DEVELOPER (INCLUDING FAILURE TO DELIVER THE DELIVERABLES
REQUIRED PURSUANT TO SECTION 7.2.2(b), OR TO DELIVER SUFFICIENT FUNDS
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TO CAUSE THE CLOSING TO OCCUR IN A TIMELY MANNER, IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 7, THEN THE PARTIES ACKNOWLEDGE AND
AGREE BY INITIALING THIS AGREEMENT IN THE SPACE PROVIDED BELOW THAT:
(i) THE PURCHASE PRICE DEPOSIT PROVIDED FOR IN
SECTION 4.3.1 OF THIS AGREEMENT AND THE OTHER SUMS DESCRIBED IN THIS
PARAGRAPH BEAR A REASONABLE RELATIONSHIP TO THE DAMAGES WHICH
THE PARTIES ESTIMATE MAY BE SUFFERED BY THE CITY AS THE RESULT OF THE
DEVELOPER'S DEFAULT UNDER THIS AGREEMENT THAT RESULTS IN THE
FAILURE OF THE PHASE I PROPERTY CLOSE OF ESCROW, WHICH DAMAGES
WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO QUANTIFY, THAT SUCH
DEPOSIT CONSTITUTES A REASONABLE ESTIMATE OF THE CITY'S DAMAGES IN
SUCH EVENT, AND THAT THE REMEDY PROVIDED FOR IN THIS AGREEMENT IS
NOT A PENALTY OR FORFEITURE AND IS A REASONABLE LIMITATION ON
DEVELOPER'S POTENTIAL LIABILITY AS A RESULT OF SUCH DEFAULT;
PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL PRECLUDE THE CITY
FROM RETAINING ALL REIMBURSEMENTS IT HAS PREVIOUSLY RECEIVED FROM
DEVELOPER FOR THE CITY TRANSACTION EXPENSES AND RETAINING AND
COLLECTING FROM DEVELOPER ANY ADDITIONAL AMOUNTS THEN DUE TO THE
CITY ON ACCOUNT OF DDA TRANSACTION EXPENSES INCURRED BY THE CITY TO
THE DATE OF TERMINATION OF THIS AGREEMENT;
(ii) DEVELOPER SHALL PAY THE FULL AMOUNT OF
ESCROW HOLDER'S CHARGES;
(iii) DEVELOPER SHALL COMPLY WITH THE
REQUIREMENTS OF SECTION 14.3 AND SHALL INDEMNIFY THE CITY AS
PROVIDED IN SECTION 5.5: AND
(iv) THE CITY SHALL HAVE THE RIGHT TO
TERMINATE THIS AGREEMENT AND THE ESCROW IN ITS ENTIRETY BY
DELIVERING WRITTEN NOTICE TO THE DEVELOPER AND TO ESCROW HOLDER,
WHEREUPON THIS AGREEMENT SHALL TERMINATE AND THE CITY SHALL BE
RELEASED FROM ITS OBLIGATIONS HEREUNDER, AND ESCROW HOLDER SHALL
DISBURSE THE PURCHASE PRICE DEPOSIT AND ALL ACCRUED INTEREST
THEREON TO THE CITY, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE
THE CITY'S SOLE AND EXCLUSIVE REMEDY HEREUNDER FOR SUCH DEFAULT,
EXCEPT FOR THE RIGHTS AND REMEDIES FOR A SEPARATE BREACH, IF ANY, OF
THE CONFIDENTIALITY AND/OR INDEMNIFICATION PROVISIONS SET FORTH IN
SECTIONS 5.5 AND 18.23 OF THIS AGREEMENT AND/OR THE PROVISIONS OF
SECTION 14.3. THE CITY'S RIGHT TO TERMINATE THIS AGREEMENT IN ITS
ENTIRETY AS AFORESAID SHALL APPLY IRRESPECTIVE OF WHETHER THERE HAS
BEEN A TRANSFER OF ANY PORTION OF DEVELOPER'S INTEREST UNDER THIS
AGREEMENT TO A PHASE 2 DEVELOPER.
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Initials of City
Initials of Developer
15.3 FAILURE OF PHASE 2 PROPERTY CLOSE OF ESCROW.
IF THE PHASE 1 PROPERTY CLOSE OF ESCROW HAS TAKEN PLACE AND
EITHER (a) THE OPTION LAPSES, EXPIRES AND/OR TERMINATES FOR ANY REASON
(INCLUDING AS A RESULT OF DEVELOPER'S ELECTION NOT TO EXTEND THE
OPTION, DEFAULT BY DEVELOPER AND/OR TERMINATION OF THIS AGREEMENT
OR EXERCISE BY THE CITY OF ITS RIGHT OF REPURCHASE OR RIGHT OF
REVERSION WITH RESPECT TO PHASE 1) OR (b) DEVELOPER EXERCISES THE
OPTION AS TO PHASE 2, AND THE PHASE 2 PROPERTY CLOSE OF ESCROW DOES
NOT TAKE PLACE ON OR BEFORE THE EARLIER OF THE PHASE 2 PROPERTY
CLOSING DATE OR THE PHASE 2 PROPERTY OUTSIDE CLOSING DATE FOR ANY
REASON OTHER THAN A DEFAULT OF THE CITY AS SET FORTH IN SECTION 15.4.1,
THE PARTIES ACKNOWLEDGE AND AGREE BY INITIALING THIS AGREEMENT IN
THE SPACE PROVIDED BELOW THAT NOTWITHSTANDING ANY OTHER PROVISION
OF THIS AGREEMENT:
(i) THE OPTION SHALL, TO THE EXTENT NOT THEN
TERMINATED, IMMEDIATELY TERMINATE WITHOUT FURTHER ACTION BY THE
PARTIES, AND THE AGGREGATE OF ALL CASH OPTION PAYMENTS MADE TO
SUCH DATE (EXCLUDING CASH OPTION PAYMENTS THAT HAVE BEEN PAID BY
CITY TO WORKING DEVELOPER PURSUANT TO SECTION 4.3.3(g)) SHALL BE
FORFEITED TO THE CITY AS A NON-REFUNDABLE OPTION PAYMENT AND
DEVELOPER SHALL BE DEEMED TO HAVE CONVEYED TO THE CITY ALL RIGHT,
TITLE AND INTEREST OF DEVELOPER, IF ANY, IN AND TO THE REIMBURSABLE
PHASE 2 IMPROVEMENTS WHICH CONVEYANCE SHALL BE MADE WITHOUT COST
OR EXPENSE TO THE CITY UNLESS THE PROVISIONS OF SECTION 4.3.3
OTHERWISE REQUIRE (AND OPTIONEE AND WORKING DEVELOPER AND ALL
OTHERS REQUIRED TO DO SO PURSUANT TO SECTION 4.3.3(1) SHALL EACH
EXECUTE AND DELIVER TO THE CITY A BILL OF SALE IN CONNECTION WITH
SAME), WHICH TOGETHER SHALL BE THE CITY'S SOLE COMPENSATION IN ALL
EVENTS FOR A FAILURE OF SUCH PHASE 2 PROPERTY CLOSE OF ESCROW TO
OCCUR EXCEPT FOR THE CITY RIGHTS AND REMEDIES FOR A SEPARATE
BREACH, IF ANY, OF THE CONFIDENTIALITY AND/OR INDEMNIFICATION
PROVISIONS SET FORTH IN SECTIONS 5.5 AND 18.23 OF THIS AGREEMENT AND/OR
THE PROVISIONS OF SECTION 14.3.
(ii) THE REMEDIES DESCRIBED IN SECTION 15.3(1)
ABOVE SHALL BE THE EXCLUSIVE REMEDIES TO THE CITY FOR THE DAMAGES
SUFFERED BY THE CITY AS THE RESULT OF THE FAILURE OF THE PHASE 2
PROPERTY CLOSE OF ESCROW; PROVIDED THAT NOTHING HEREIN SHALL
PRECLUDE THE CITY FROM RETAINING ALL REIMBURSEMENTS IT HAS
PREVIOUSLY RECEIVED FROM DEVELOPER FOR THE CITY TRANSACTION
EXPENSES AND COLLECTING FROM DEVELOPER ANY ADDITIONAL AMOUNTS
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THEN DUE TO THE CITY ON ACCOUNT OF DDA TRANSACTION EXPENSES
INCURRED BY THE CITY TO THE PHASE 2 PROPERTY OUTSIDE CLOSING DATE;
(iii) DEVELOPER SHALL PAY THE FULL AMOUNT OF
ESCROW HOLDER'S CHARGES;
(iv) DEVELOPER SHALL COMPLY WITH THE
REQUIREMENTS OF SECTION 14.3 AND SHALL INDEMNIFY THE CITY AS
PROVIDED IN SECTION 5.5; AND
(v) THE PHASE 2 PROVISIONS SHALL TERMINATE
WHEREUPON THE CITY SHALL BE RELEASED FROM ITS OBLIGATION HEREUNDER
TO SELL THE PHASE 2 PROPERTY TO THE DEVELOPER THE PHASE 2 PROPERTY
SHALL NOT BE ENCUMBERED BY THIS AGREEMENT AND EXCEPT AS SET FORTH
IN SECTION 4.3.3(h) AND (i) AND THIS SECTION, EACH PARTY SHALL BE RELIEVED
OF ALL OF ITS RESPECTIVE LIABILITIES AND OBLIGATIONS WITH RESPECT TO
PHASE 2 UNDER THIS AGREEMENT; PROVIDED THAT FOR SO LONG AS THE PHASE
1 PROVISIONS REMAIN IN EFFECT AND THE CITY SHALL REMAIN THE OWNER OF
THE PHASE 2 PROPERTY, THE TERMINATION OF THE PHASE 2 PROVISIONS SHALL
NOT AFFECT THE OBLIGATIONS OF THE CITY UNDER THIS AGREEMENT, IF ANY,
TO THE PHASE 1 DEVELOPER WITH RESPECT TO THE PHASE 2 PROPERTY.
(vi) NOTHING HEREIN SHALL RELIEVE THE
DEVELOPER (OR, IN THE EVENT A PHASE TRANSFER HAS TAKEN PLACE, PHASE 1
DEVELOPER) FROM ITS OBLIGATION TO COMPLY WITH THE PHASE 1 PROVISIONS
INCLUDING THE OBLIGATION TO CONSTRUCT THE MINIMUM HORIZONTAL
IMPROVEMENTS OR LIMIT THE CITY'S REMEDIES WITH RESPECT TO SUCH
PROVISIONS, AND THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL
REMAIN IN FULL FORCE AND EFFECT WITH RESPECT TO ALL PROPERTY
PREVIOUSLY CONVEYED BY THE CITY PURSUANT TO THIS AGREEMENT.
Initials of City Initials of Developer
15.4 Failure to Close; Default of City.
15.4.1 If any Close of Escrow does not occur on or before 5:00 p.m., Pacific
Time, on or before the applicable Closing Date, solely as a result of a Default by the City in the
performance of its obligations under this Agreement with respect to such Close of Escrow, then,
as the sole remedy of Developer with respect to such Default by the City, and available to
Developer only so long as Developer is not in Default, Developer shall have the right, by
providing notice to the City, within twenty (20) Business Days after the Closing Date, of its
election to do so, either: (a) to purchase the relevant Property pursuant to this Agreement
notwithstanding such Default by the City and to waive all of Developer's rights with respect to
such Default, other than those Defaults described in Section 6.5(a) and Section 8.15, for which
Developer's remedies shall be limited as set forth in Sections 18.5.3(b) and 18.5.4, (b) with
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respect to the Phase 1 Property Close of Escrow only, to terminate this Agreement and cancel the
Escrow, in which case the provisions of Section 15.4.3(a), (b), and (c) shall apply; (c) with
respect to the Phase 2 Property Close of Escrow only (and provided Optionee has properly
exercised the Option only), to terminate (i) its obligation to acquire the Property to be conveyed
at the Phase 2 Property Close of Escrow and (ii) the Phase 2 Provisions, in which case the
provisions of Section 15.4.3(b) and (c) shall apply; or (d) with respect to any such Close of
Escrow, to elect to extend the applicable Closing Date for an additional period (over and above
the time period set forth in Section 7.2.1(j) or Section 7.3.1(i), as applicable) of fifty (50)
calendar days in order to provide the City with time to cure such Default (and in such event the
City shall use commercially reasonable efforts to cure the same during such extension period).
Notwithstanding the foregoing, in the event that all applicable City Closing Conditions have
been waived by the City in writing or satisfied (except with respect to any applicable City
Closing Condition which is not satisfied as a result of a Default by the City), and the City fails to
deliver any of the materials described in Section 7.2.1(a) or Section 7.3.1(a) or otherwise fails to
proceed with either Close of Escrow in breach of this Agreement within ten (10) Business Days
after Developer has delivered into Escrow a written notice that Developer is prepared to
consummate the transaction and proceed to Close of Escrow, Developer shall have the right to
bring an action in equity against the City or subsequent owners, lessors or sub -lessors of the
Property for specific performance of this Agreement, including Article 7, provided, that, except
as specifically set forth in this Section 15.4.1, Developer specifically waives any right to receive
any monetary award as a result of the City's Default.
15.4.2 In the event the City receives timely notice of Developer's election
pursuant to Section 15.4.1 to purchase (a) the Phase 1 Property or (b) pursuant to Close of
Escrow to take place concurrently with or following the Phase 1 Property Close of Escrow, the
Phase 2 Property, then as applicable, notwithstanding the Default by the City, Developer shall
(a) with respect to the Phase 1 Property Close of Escrow, deliver the Phase 1 Property Closing
Payment and all other deliverables required by this Agreement and (b) with respect to the
Phase 2 Property Close of Escrow, deliver the Phase 2 Property Closing Payment and all other
deliverables required by this Agreement into Escrow no later than ten (10) Business Days after
the City's receipt of said notice and, provided that the City Phase 1 Property Closing Conditions
or the City Phase 2 Property Closing Conditions, as applicable, have been satisfied, the Close of
Escrow for such Property shall occur on that date which is eleven (11) Business Days after the
City's receipt of such notice.
15.4.3 Termination.
(a) In the event the City is in Default of this Agreement and receives
timely notice from Developer pursuant to Section 15.4.1 of Developer's election to terminate this
Agreement with respect to the Phase 1 Property, then Developer's election to terminate this
Agreement with respect to the Phase 1 Property shall terminate the entirety of this Agreement,
including the Phase 1 Provisions and the Phase 2 Provisions (regardless of whether the
Developer has then Transferred all or any portion of Phase 2 to a Phase 2 Developer), the City
shall pay the full amount of Escrow Holder's charges, and Developer shall be entitled to a full
refund of its Purchase Price Deposit which refund shall be Developer's sole and exclusive
remedy hereunder for the failure of the Phase 1 Property Close of Escrow.
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(b) In the event the City is in Default of this Agreement with respect to
the Phase 2 Property Close of Escrow and receives timely notice of Optionee's election not to
proceed to Close of Escrow as to the Phase 2 Property pursuant to Section 15.4.1 and to
terminate the Phase 2 Provisions: (a) the Phase 2 Provisions of this Agreement shall terminate as
to all portions of the Phase 2 Property (provided that for so long as the Phase 1 Provisions remain
in effect and the City shall remain the owner of the Phase 2 Property, the termination of the
Phase 2 Provisions shall not affect the obligations of the City under this Agreement, if any, to the
Phase 1 Developer with respect to the Phase 2 Property), (b) City shall pay the full amount of
Escrow Holder's charges, and (c) Optionee shall be entitled to a full refund of the aggregate of
all Cash Option Payments it has previously paid to the City, if any, and applicable to the pending
Phase 2 Property Close of Escrow, which refund shall be Optionee's sole and exclusive remedy
hereunder for the failure of the Phase 2 Property Close of Escrow. The City may satisfy its
obligation to refund Cash Option Payments by interpleader of Cash Option Payments received
by it in accordance with Section 4.3.3(k).
(c) In all cases, and with respect to a termination of this Agreement
with respect to the Phase 1 Property and/or the Phase 2 Property, none of Developer, Phase 1
Developer or Phase 2 Developer shall be entitled to pursue an action against the City for
damages or other remedies as a result of the Default by the City, provided that if the provisions
of Section 4.3.3(h) apply and require payment by the City of the Option Credit Remainder, then
Working Developer shall be entitled to receive any payment then due pursuant to
Section 4.3.3(h) and i) and upon receipt thereof, Working Developer shall execute and deliver a
bill of sale to the City in accordance with Section 4.3.3(1).
15.4.4 In the event Developer has elected to purchase the Phase 1 Property or
the Phase 2 Property pursuant to this Section 15.4, but fails to deliver the Phase 1 Property
Closing Payment or the Phase 2 Property Closing Payment, as applicable, into Escrow and to
satisfy the other Closing Conditions with respect to such Close of Escrow for the benefit of the
City no later than ten (10) Business Days after the City's receipt of said notice, then the City
shall have the right: (a) if the Phase 1 Property Close of Escrow shall not then have occurred, to
terminate this Agreement by providing written notice of its election to terminate to Developer,
such termination to be in accordance with the provisions of Section 15.4.3, or (b) if the Phase 1
Property Close of Escrow shall have occurred, to terminate the portions of this Agreement
applicable to the Phase 2 Property (i.e., the Phase 2 Provisions), by providing written notice of its
election to terminate to Developer, such termination to be in accordance with the provisions of
Section 15.4.3.
15.4.5 The termination of this Agreement pursuant to this Section 15.4 shall
not (a) terminate the right of Developer to recover amounts due to it as provided in
Section 15.4.3 and (b) terminate or release any liability or obligations of Developer to indemnify
the City as provided in Section 5.5 or to comply with Section 14.3. In the event of a termination
as provided in Section 15.4.3 or 15.4.4, under no circumstances shall Developer have any right
or claim to, or against, the Property or any portion thereof. The termination of this Agreement
pursuant to this Section 15.4 shall constitute a waiver of any and all rights and Claims either
Party may have with respect to this Agreement, except as expressly provided in this Section 15.4.
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16. Remedies for Defaults After the Close of Escrow.
16.1 General Remedies.
In addition to any other rights and remedies that the City may have at law or in equity
that are not specifically restricted by this Agreement, in the event Developer or any Pad
Transferee is in Material Default with respect to any obligation of Developer under this
Agreement following the Phase 1 Property Close of Escrow, and prior to the issuance of the
Certificate of Compliance with respect to such Property, the City may do any one or more of the
following:
(a) The City may record a lien against the Property owned by
Developer or Pad Transferee, as applicable, in accordance with Section 16.2.
(b) The City may sue for damages it may have incurred (subject to any
limitations on damages set forth in Section 18.5.1).
(c) The City may seek to specifically enforce the obligations of
Developer or the Pad Transferee or otherwise bring an action at law or in equity to enforce its
rights under this Agreement.
(d) Subject to Section 17.6, the City may exercise its Right of
Repurchase pursuant to Section 16.3.
(e) Subject to Section 17.6, in the event of a Reversion Action Trigger
only, the City may exercise its Right of Reversion pursuant to Section 16.4.
Upon and after termination of the City's Right of Repurchase and Right of Reversion pursuant to
Sections 16.3 and 16.4, the City agrees to provide Developer with such documentation, including
recordable evidence of such termination, as Developer reasonably requires to reflect that the City
no longer has such rights with respect to the applicable Property or portion thereof.
Notwithstanding anything to the contrary set forth herein, following the conveyance by City to
Developer of the Phase 2 Property, in no event shall the Phase 1 Project and the Phase 2 Project
be cross -defaulted with one another hereunder.
16.2 Lien Rights.
Developer, on behalf of itself, each Successor Owner and each and every Person claiming
by, through or under Developer or any Successor Owner for the benefit of the City and its
successors and assigns hereby agrees that the delinquent amount of any payments due hereunder,
together with any late charges or interest due on any such delinquent payment, attorneys' fees,
experts' fees and consultants' fees and collection costs and the cost of in-house staff time
(including City overhead and administrative costs) related to such delinquent payment shall, to
the greatest extent permitted by applicable law, be a lien and charge upon the Property and shall
be a continuing lien upon the Property in favor of the City effective upon Recording of the
Memorandum of DDA (the "City Lien"), which lien and charge shall be paramount to the lien
and charge of each and every Mortgage, Construction Lien and other lien upon or affecting the
Property (and, subject to the rights of a Permitted Mortgagee under Section 17.6.2, the City shall
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have the right to foreclose the City Lien with respect to any Property so encumbered by such
lien).
16.3 Right of Repurchase.
For the period described in Section 16.3.3, the City shall have the right (the "Right of
Repurchase"), from time to time, at any time after the date that Developer became in Material
Default and after the expiration of any applicable notice and cure periods in favor of a Mortgagee
with respect to such Material Default to (re)purchase, enter and possess the following
("Reacquired Property"): (a) all or any portion of the Phase 1 or Phase 2 Property (as
applicable), (b) any Improvements thereon, (c) all applicable Entitlements and other
development rights, consents, authorizations, variances, waivers, licenses, permits, certificates
and approvals from any governmental or quasi -governmental authority, and (d) all other
appurtenant rights applicable to the respective Property, including the interest in any ground
leases encumbering the respective Property. A Right of Repurchase with respect to all or a
portion of the Phase 1 Property shall not result in a Right of Repurchase with respect to all or a
portion of the Phase 2 Property, and vice versa. The Reacquired Property designated by the City
shall be acquired by the City for the Repurchase Price and otherwise in accordance with this
Section 16.3. In the event the City exercises its Right of Repurchase as to any Reacquired
Property as provided in this Section 16.3, this Agreement shall terminate with respect to the
Reacquired Property as of the date of the quitclaim deed conveying to the City title to the
Reacquired Property; provided that the provisions of this Section 16.3 shall survive the
termination of this Agreement.
16.3.1 Exercise of Right of Repurchase. The City may exercise its Right of
Repurchase by delivering written notice to Developer stating that the City is exercising its Right
of Repurchase and specifying the Reacquired Property; provided that such notice is delivered at
least ninety (90) calendar days prior to the date on which the City requires Developer to convey
the Property to the City pursuant to the Right of Repurchase and otherwise in accordance with
this Section 16.3.
16.3.2 Process. If the City is entitled to and timely elects to repurchase any
designated Reacquired Property, the Parties shall: (a) within five (5) Business Days after the
date of the City's notice of election to exercise the Right of Repurchase, open an escrow with an
escrow agent designated by the City for the purchase and sale, and shall execute an escrow
agreement that shall provide that Developer shall pay all costs of the escrow and shall include
such usual and ordinary terms as are reasonably required by the escrow agent and by the
transaction; (b) no later than five (5) Business Days after the opening of escrow, Developer shall
place into the escrow appropriate quitclaim deeds and bill of sale conveying fee title to the
Reacquired Property; and (c) no later than eighty-five (85) calendar days after the opening of the
escrow, the City shall deposit into the escrow an amount equal to the Repurchase Price. The
escrow shall close, and title to the Reacquired Property shall be conveyed to the City, and the
Repurchase Price paid to the Developer or the Approved Foreclosure Purchaser or its successor
in interest no later than five (5) Business Days after the City has deposited into escrow the
Repurchase Price. Concurrently with the close of escrow, Developer shall comply with its
obligations under Section 14.3. Nothing herein shall restrict the right of the City to terminate its
exercise of the Right of Repurchase at any time prior to the close of escrow The Parties agree
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that the amount of reduction in the Repurchase Price as compared with the Purchase Price is
justified in that it bears a reasonable relationship to the damages which the Parties estimate may
be suffered by the City as the result of the Developer's Material Default in the performance of its
obligations under this Agreement, which damages would be impractical or extremely difficult to
quantify, and that the remedy provided for herein is not a penalty or forfeiture, and is a
reasonable limitation on the Developer's potential liability as a result of Developer's default.
16.3.3 Termination of Right of Repurchase. The Right of Repurchase shall
remain in effect from the Close of Escrow with respect to any portion of the Property until the
Recording by the City of a Certificate of Compliance with respect thereto. In the event that
Developer or any Person on behalf of Developer either (a) cures the Material Default which is
the basis for the City's exercise of its Right of Repurchase, but excluding any Transfer in
violation of this Agreement, or (b) Completes the Phase 1 Project or the Phase 2 Project, as
applicable, prior to the closing of escrow on such Right of Repurchase, such Right of Repurchase
shall cease and terminate with respect to such Material Default only. With respect to any
Material Defaults for which the City seeks to exercise the Right of Repurchase and which, by
their nature, are not curable (which shall include, by way of example only, and not as a
limitation, the failure to give notice or provide evidence of insurance prior to entering the
Parcel), but excluding any Transfer in violation of this Agreement and any Material Default
under the Schedule of Performance (except as set forth in clause (b) above, in which case the
preceding sentence shall apply), such Default shall be deemed cured if Developer takes the
required action promptly following Developer's becoming aware of such failure and the City is
not adversely affected by such Default, has not relied on the performance of the applicable
provision of this Agreement that is the subject of such Default to the detriment of the City or
suffered any actual damage as a result of such Default.
16.3.4 Release of Liability. In the event the City exercises its Right of
Repurchase, such purchase shall release each of City and the Developer owning the Reacquired
Property from all liability and obligations under this Agreement and the Other Agreements with
respect to the Reacquired Property except for the following obligations of Developer, from
which Developer shall not be released and which in addition shall continue to be "Guaranteed
Obligations" as such term is defined in each Guaranty provided in connection with the
acquisition of the Reacquired Property by Developer: (a) Ongoing Matters and any other
obligations of Developer that are addressed by the terms of the Guaranty; (b) the release
provided for the benefit of the City pursuant to Section 4.5.2(f); (c) the obligation to return any
written Due Diligence Information to the City as provided in Section 14.3; (d) the obligation to
indemnify, defend and hold harmless the City Indemnified Parties as provided in Article 10 for
matters arising or related to the period of time prior to the conveyance of the Reacquired
Property to the City; (e) Developer's obligation to indemnify, defend and hold harmless the City
Indemnified Parties as provided in Section 5.5 as to a Parcel for matters arising or related to the
period prior to the Close of Escrow for such Parcel, and such liability and obligations shall
survive the close of escrow and shall not be merged into the quitclaim deed, it being
acknowledged and agreed that all other obligations under this Agreement related to the
Reacquired Property shall be released and terminated as of the date on which the Required
Property is conveyed to the City. In no event shall the Guaranty provided at the Close of Escrow
for the relevant phase (or any Guaranty approved by the City in its sole discretion as a
replacement for such original Guaranty) to secure the obligations of Developer under this
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Agreement and the Other Agreements with respect to the portion of the Property containing the
Reacquired Property be released or terminated as a result of the exercise by the City of the Right
of Repurchase. Following the close of escrow with respect to the Reacquired Property, under no
circumstances shall Developer have any right or claim to, or against, the Reacquired Property.
Notwithstanding the purchase of the Reacquired Property by the City as provided in this
Section 16.3, this Agreement shall remain in full force and effect with respect to the portions of
the Property not purchased by the City.
16.3.5 Rights of Third Parties. The Right of Repurchase shall be a lien and
encumbrance on the Property that shall be paramount to the lien and charge of (a) any Mortgage
upon the Parcels or Improvements, except that with respect to a lien that is a Construction Loan
secured by a Permitted Mortgage, the implementation of the Right of Repurchase shall be subject
to the terms of the Subordination Agreement, and the Repurchase Price paid by the City
hereunder shall be paid directly to the applicable Permitted Mortgagee (or, if there shall be more
than one Permitted Mortgagee, to the Permitted Mortgagee that the City has been notified is the
holder of the first priority Permitted Mortgage encumbering the applicable Property), and (b) all
other liens including Construction Liens that may attach to the Development Parcels or the
Improvements thereon. The Right of Repurchase shall not defeat or render invalid or limit any
rights or interests provided in easements, covenants, conditions or restrictions in favor of third
parties (i.e., Persons other than Developer or Developer Affiliates) granted pursuant to Transfers
approved by the City (or constituting Permitted Transfers) and Recorded on the portion of the
Property for which the City exercises its rights under this Section 16.3. The Reacquired Property
acquired by the City shall be delivered to the City at close of escrow free and clear of all
Mortgages including Permitted Mortgages and all other liens, including Construction Liens
(other than City Liens and Lien Release Amounts that are actually deducted from the Repurchase
Price paid by the City), and subject only to (w) the Permitted Exceptions in effect at the time of
the original Close of Escrow for such Property, (x) utility easements and/or roadway easements,
(y) other matters affecting title consented to or requested by any Governmental Authority with
respect to the Property in connection with development of the Property, or requested by the City
and any covenants recorded in order to comply with the Entitlements, and (z) the DA and Other
Agreements recorded in accordance with the terms of this Agreement.
16.4 Right of Reversion.
In the event of the occurrence of any Reversion Action Trigger (defined in
Section 16.4. 1) in addition to its other rights or remedies as a result of the occurrence of any such
Reversion Action Trigger, and notwithstanding that the Reacquired Property may be encumbered
by Construction Liens and/or Permitted Mortgages, the City shall have the right, during the time
period set forth in Section 16.4.1, on the terms and subject to the conditions set forth in this
Section 16.4, to re-enter and take possession of the applicable Reacquired Property or any
portion thereof and to revest title thereto in the City (the "Right of Reversion') which right shall
be exercised only in accordance with the terms of this Section 16.4. Notwithstanding anything to
the contrary contained herein, prior to the Phase 2 Property Close of Escrow, if the Optionee and
Phase 1 Developer are Related Parties, the exercise by the City of the Right of Reversion with
respect to Phase 1 or any portion thereof shall terminate the Option as further set forth in
Section 16.4.1. In all other cases, the Phase 1 Project and the Phase 2 Project shall not be cross -
defaulted with one another hereunder, and the Right of Reversion with respect to all or a portion
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of the Phase 1 Property shall not result in a Right of Reversion with respect to all or a portion of
the Phase 2 Property, and vice versa. Any revesting of the Reacquired Property by the City
whether based on voluntary action of Developer or otherwise after notice by the City of its intent
to exercise the Right of Reversion is referred to herein as a "Reversion Event" and, for
avoidance of doubt, the Reversion Event shall occur on the date upon which fee title to the
Reacquired Property vests in the City. Subject to the time limitations for exercise of the Right of
Reversion set forth in Section 16.4.8, the City shall be entitled to exercise the Right of Reversion
at any time on or after the occurrence of any of any one or more of the Reversion Action
Triggers; provided that the City has complied with the conditions to such reversion set forth in
Section 16.4.2. The occurrence of a Revision Action Trigger shall be a Material Default under
this Agreement.
16.4.1 Certain Defaults Triggering the Right of Reversion. The Right of
Reversion shall remain in effect with respect to each Phase from the Close of Escrow with
respect to such Phase until the Equity Completion Date applicable to such Phase, provided that
prior to the Phase 2 Property Close of Escrow, if the Optionee and Phase 1 Developer are
Related Parties, then upon the exercise by the City of the Right of Reversion with respect to
Phase 1 or any portion thereof the Option and the Phase 2 Provisions shall be suspended and
upon the occurrence of the Reversion Event, the Option and the Phase 2 Provisions shall be
deemed to have terminated and to be of no further force or effect (provided that for so long as the
Phase 1 Provisions remain in effect and the City shall remain the owner of the Phase 2 Property,
the termination of the Phase 2 Provisions shall not affect the obligations of the City under this
Agreement, if any, to the Phase 1 Developer with respect to the Phase 2 Property), and the
provisions of Section 15.3 shall apply. In all other cases, exercise by the City of the Right of
Reversion with respect to a Phase shall not apply with respect to or affect the rights of the
Developer of the other Phase unless the City specifically exercised the Right of Reversion with
respect to such other Phase or portion thereof following a Reversion Action Trigger with respect
to such other Phase. The City may exercise the Right of Reversion if it elects to do so with
respect to only the Parcel affected by the Material Default and any Improvements thereon and all
applicable Entitlements and other development rights, consents, authorizations, variances,
waivers, licenses, permits, certificates and approvals from any Governmental Authority or quasi -
Governmental Authority, and all other appurtenant rights applicable thereto upon the occurrence
of any of the following (each, a "Reversion Action Trigger," and the date on which the
Reversion Action Trigger occurs shall be referred to herein, as the "Reversion Action Trigger
Date").
(a) Developer fails to (i) commence construction of the Minimum
Horizontal Improvements within six (6) months after the Construction Period Commencement
Date for the Phase 1 Parcel, or (ii) to Complete the Minimum Horizontal Improvements (other
than the final cap/pave for the roadways on the Property) within twenty-four (24) months after
the Construction Period Commencement Date for the Phase 1 Parcel, as each such date may be
extended for Force Majeure Delay;
(b) Developer fails to commence construction of the Minimum
Phase 1 Vertical Improvements within twelve (12) months after the Construction Period
Commencement Date for the Phase 1 Parcel, as such date may be extended for Force Majeure
Delay;
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(c) Developer fails to commence construction of the Phase 2
Horizontal Improvements within six (6) months after the Construction Period Commencement
Date for the Phase 2 Parcel as such date may be extended for Force Majeure Delay.
(d) Developer fails to commence construction of the Minimum
Phase 2 Vertical Improvements within twelve (12) months after the Construction Period
Commencement Date for the Phase 2 Parcel, as such date may be extended for Force Majeure
Delay;
(e) Developer fails to Complete construction (i) of the Minimum
Phase 1 Vertical Improvements within forty-eight (48) months after the Construction Period
Commencement Date for the Phase 1 Parcel as such date may be extended for Force Majeure
Delay or (ii) of the Minimum Phase 2 Vertical Improvements within forty-eight (48) months
after the Construction Period Commencement Date for the Phase 2 Parcel as such date may be
extended for Force Majeure Delay; provided that in each case, such Completion date shall not
under any circumstances be later than the date that is sixty (60) months after the Close of Escrow
for such Parcel (which date shall not be extended for Force Majeure Delay);
(f) Developer commits physical waste on the Property or any portion
thereof and such becomes a Material Default in accordance with the notice and cure provisions
of Section 14.2, subject to extension for Force Maj eure Delay;
(g) Developer abandons or substantially suspends (except for
suspensions resulting from Force Majeure Delay) construction of the Phase 1 Project or the
Phase 2 Project, as applicable, for a period of one hundred eighty (180) consecutive calendar
days, and such becomes a Material Default in accordance with the notice and cure provisions of
Section 14.2. Nothing in this Section 16.4.1(g) shall extend the terms of Section 16.4.1(a), (b),
c or d above;
(h) The occurrence of a Developer Insolvency Event; or
(i) With respect to any Guarantor which has provided a Guaranty to
the City, the occurrence of a Guarantor Illiquidity Event or a City Guarantor Illiquidity Event,
unless Developer shall, within the time period required thereby, provide substitute security
meeting the requirements of Section 4.7; or
0) Material Default arises because of a voluntary or involuntary
Transfer or Transfer of Control.
16.4.2 Conditions to Exercise of the Right of Reversion. The City shall be
entitled to exercise the Right of Reversion at any time on or after the applicable Reversion
Action Trigger Date by providing written notice to Developer that the City elects to exercise its
Right of Reversion, which notice shall state the date for the Reversion Event. The Reversion
Event shall not take place until the earlier of (a) the date that is thirty (30) calendar days after
Developer has had the opportunity to address the City Council at a public meeting regarding the
Reversion Action Trigger or (b) if there is a Permitted Mortgage encumbering the Parcel, the
expiration of the time period set forth in Section 17.6.3 for cure by the Permitted Mortgage of
any Default resulting from a Reversion Action Trigger. In the event that, prior to the Reversion
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Event, Developer, any Permitted Mortgagee with respect to the portion of the Property to which
the Right of Reversion is applicable or any other Person on behalf of Developer either (x) cures
the Reversion Action Trigger which is the basis for the City's exercise of its Right of Reversion
or (y) Completes the Phase 1 Project or the Phase 2 Project, as applicable, prior to the date of the
Reversion Event, such Right of Reversion shall cease and terminate with respect to such
Reversion Action Trigger only.
16.4.3 Exercise and Effect of Right of Reversion.
(a) Cooperation. If the City exercises its Right of Reversion in
accordance with the provisions of this Agreement, Developer and each Permitted Mortgagee
shall use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable law to consummate the revesting of the
Reacquired Property in the name of the City, including the execution and delivery of such other
documents, certificates, agreements, deeds and other writings and the taking of such other
actions as may be reasonably necessary to consummate such revesting and the other provisions
of this Section 16.4.
(b) Effect on Mortgages other than Permitted Mortgages and
Construction Liens. A Reversion Event shall foreclose, defeat and render invalid each and every
Construction Lien and Mortgage other than a Permitted Mortgage and upon the occurrence of a
Reversion Event all Construction Liens and Mortgages other than Permitted Mortgages
Recorded against or affecting all or any portion of the Reacquired Property shall be deemed to be
automatically released and of no further force and effect with respect to the Reacquired Property.
(c) Effect on Permitted Mortgages. Concurrent with the Reversion
Event, the City shall fully satisfy each and every Permitted Mortgage affecting the Reacquired
Property, by paying to the Permitted Mortgagees, in the aggregate, the lesser of (a) the aggregate
Permitted Mortgage Unpaid Balances of all Permitted Mortgages and (b) Two Million Dollars
($2,000,000) per Phase, which amount has been determined to be a reasonable estimation of the
advances, costs and expenses incurred or to be incurred by the Permitted Mortgagees, in the
aggregate, for each Phase prior to the Equity Completion Date for such Phase, or by causing such
amounts to be paid by any third party, including any guarantor.
(d) Interpleader. The City shall have the right to satisfy its obligation
pursuant to Section 16.4.3(c) by either interpleading, or causing any third party on City's behalf,
including Guarantor, to interplead in a court of law the sums due and thereafter City and the
Reacquired Property shall be deemed released from and the City shall be released from and have
no further liability with respect to any Permitted Mortgagee of the Reacquired Property or
Permitted Mortgage encumbering the Reacquired Property.
(e) Effect. If the City pays or interpleads the amount specified in
Section 16.4.3(c), concurrently with the Reversion Event and the deposit of such amount with
the court or payment of such amount to Permitted Mortgagee, (1) the Reversion Event shall
foreclose, defeat and render invalid each and every Permitted Mortgage encumbering the
Reacquired Property and upon the occurrence of a Reversion Event all Permitted Mortgages
Recorded against or encumbering all or any portion of the Reacquired Property shall be deemed
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to be automatically released and of no further force and effect with respect to the Reacquired
Property and (2) promptly thereafter, each Permitted Mortgagee shall take all steps individually
and collectively required to Record evidence of such release and termination with respect to each
Permitted Mortgage encumbering all or any portion of the Reacquired Property.
16.4.4 Sale of Reacquired Property. Upon the revesting in the City of title
to the Reacquired Property, the City shall use commercially reasonable efforts to resell the
Reacquired Property as soon and in such manner as the City shall find feasible, in accordance
with applicable State law, if any, and consistent with the objectives of this Agreement, to a
qualified and responsible Person or Persons (as determined by the City in its sole discretion).
Upon such resale of the Reacquired Property, or any part thereof, the proceeds thereof shall be
applied in the following order and amounts to the extent of funds available and the City shall
have no liability to Developer or any Person to the extent the balance is insufficient to pay any or
all of the following amounts nor shall the City have any obligation to make payments to any
Person except in accordance with the priorities and obligations set forth below:
(a) Delinquencies. First, to repayment in full of all delinquent tax and
delinquent assessment liens with respect to the portion of the Reacquired Property sold;
(b) City Liens. Second, to repayment in full of City Liens and to
reimburse the City for all costs and expenses incurred by the City in connection with the
recapture, management, maintenance, repair, and resale of the Reacquired Property, or any part
thereof and the enforcement of City's rights under this Agreement and the Other Agreements
including City's exercise of the Right of Reversion, taxes, assessments, and other delinquent
liens, if any, whether arising before or after the acquisition by the City of the Reacquired
Property.
(c) Release of Liens. Third, to release all Claims affecting the
Reacquired Property, including Claims asserted with respect to Construction Liens and/or
Mortgages, in such amounts as may be determined by the City in its sole discretion to be
required to satisfy such Claims or to reinstate service or work on the Reacquired Property, utility
charges with respect to the Reacquired Property; any payments made or necessary to be made to
discharge or prevent from attaching or being made any subsequent encumbrances or liens due to
obligations, Defaults or acts of Developer or any Successor Owner or each and every Person
claiming by, through or under Developer or any Successor Owner; any expenditures made or
obligations incurred with respect to the making or completion of the agreed improvements or any
part thereof on the Reacquired Property; all costs of sale and marketing, including reasonable
brokers' fees and costs incurred in the marketing and sale of the Reacquired Property; all legal
fees and expenses; all escrow and title fees and costs; all survey and due diligence fees and costs;
and any amounts otherwise owing to the City or any third party by Developer and/or any
Successor Owner) with respect to the foregoing, in each case (x) whether arising prior to or
following the acquisition by the City of the Reacquired Property and (y) only to the extent that
the foregoing are not fully foreclosed or other terminated by or as a result of the exercise by the
City of the Right of Reversion;
(d) Reimbursement to Developer. Fourth, to reimburse Developer in
the amount of the Repurchase Price as determined in clause (a) of the definition thereof, after
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deducting therefrom: (i) all amounts paid to Permitted Mortgagees or interplead by the City
pursuant to Section 16.4.3(c) and (ii) all amounts paid pursuant to Section 16.4.4(a), (b), and (c),
in each case to the extent such amounts are not already deducted as part of the formula in clause
(a) of the Repurchase Price; and
(e) Balance Retained by the City. Any balance remaining after such
reimbursements shall be retained by the City as its property.
The City shall have the right to satisfy its obligation pursuant to this Section 16.4.4 by either
interpleading, or causing any third party on City's behalf, including purchaser, to interplead in a
court of law the sums due. Upon sale of the Reacquired Property and distribution of the
proceeds of such sale in accordance with the foregoing or interpleader of proceeds as aforesaid,
the City shall be released from all liability and obligations under this Agreement and/or the Other
Agreements with respect to the Reacquired Property.
16.4.5 Release of Liability. In the event the City exercises its Right of
Reversion then upon the occurrence of the Reversion Event and compliance with the
requirements of Sections 16.4.3, the City and the Developer owning the Reacquired Property
shall each be released from all liability and obligations under this Agreement and the Other
Agreements with respect to the Reacquired Property except for (a) the obligation of the City to
comply with Section 16.4.4. upon sale of the Reacquired Property and (b) the following
obligations of Developer, from which Developer shall not be released and which in addition shall
continue to be "Guaranteed Obligations" as such term is defined in each Guaranty provided in
connection with the acquisition of the Reacquired Property by Developer: (a) Ongoing Matters
and any other obligations of Developer that are addressed by the terms of the Guaranty; (b) the
release provided for the benefit of the City pursuant to Section 4.5.2(f); (c) the obligation to
return any written Due Diligence Information to the City as provided in Section 14.3; (d) the
obligation to indemnify, defend and hold harmless the City Indemnified Parties as provided in
Article 10 for matters arising or related to the period of time prior to the conveyance of the
Reacquired Property to the City; (e) Developer's obligation to indemnify, defend and hold
harmless the City Indemnified Parties as provided in Section 5.5 as to a Parcel for matters arising
or related to the period prior to the Close of Escrow for such Parcel, and such liability and
obligations shall survive the close of escrow and shall not be merged into the quitclaim deed, it
being acknowledged and agreed that all other obligations under this Agreement related to the
Reacquired Property shall be released and terminated as of the date on which the Required
Property is conveyed to the City. In no event shall the Guaranty provided at the Close of Escrow
for the relevant phase (or any Guaranty approved by the City in its sole discretion as a
replacement for such original Guaranty) to secure the obligations of Developer under the DDA
and the Other Agreements with respect to the portion of the Property containing the Reacquired
Property be released or terminated as a result of the exercise by the City of the Right of
Reversion. Following the close of escrow with respect to the Reacquired Property, under no
circumstances shall Developer or any Permitted Mortgagee have any right or claim to, or against,
the Reacquired Property. Notwithstanding the revesting of the Reacquired Property by the City
as provided in this Section 16.4, this Agreement shall remain in full force and effect with respect
to the portions of the Property not revested by the City.
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16.4.6 Rights of Third Parties. The Right of Reversion shall be a lien and
encumbrance on the Property that shall be paramount to the lien and charge of (a) any Mortgage
upon the Parcels or Improvements, except that with respect to a lien that is a Construction Loan
secured by a Permitted Mortgage, the implementation of the Right of Reversion shall be subject
to the terms of the Subordination Agreement, if any, and (b) all other liens including
Construction Liens that may attach to the Development Parcels or the Improvements thereon.
The Right of Reversion shall not defeat or render invalid or limit any rights or interests provided
in easements, covenants, conditions or restrictions in favor of third parties (i.e., Persons other
than Developer or Developer Affiliates) granted pursuant to Transfers approved by the City (or
constituting Permitted Transfers) and Recorded on the portion of the Property for which the City
exercises its rights under this Section 16.4. The Reacquired Property shall be delivered to the
City at close of escrow free and clear of (a) all Mortgages that are not Permitted Mortgages,
(b) all Permitted Mortgages if the payments described in Section 16.4.3(c) are made, and (c) all
other Liens, including Construction Liens and subject only to (w) the Permitted Exceptions in
effect at the time of the original Close of Escrow for such Property, (x) utility easements and/or
roadway easements, (y) other matters affecting title consented to or requested by any
Governmental Authority with respect to the Property in connection with development of the
Property, or requested by the City and any covenants recorded in order to comply with the
Entitlements, and (z) the DA and Other Agreements recorded in accordance with the terms of
this Agreement.
16.4.7 Continuation of Agreement. This Agreement shall remain in full
force and effect with respect to portions of the Property not revested in the City, but the
termination of this Agreement shall be effective as of the date title to any portion of the Property
and/or any Improvements thereon are revested in the City.
16.4.8 Termination of Right of Reversion. The right of the City to exercise
the Right of Reversion with respect to any Phase of the Project or the Property comprising such
Phase shall terminate and be of no further force and effect upon the occurrence of the Equity
Completion Date with respect to such Phase.
16.4.9 Waiver of Certain Matters. Developer hereby (a) acknowledges that
it has reviewed and understands the implications of each of the following sections of the
California Code of Civil Procedure and (b) agrees that the City may exercise any and all of the
rights contained in this Section 16 without such exercise constituting an "action" under any of
Sections 580a, 580b, 580d, or 726 of the Code of Civil Procedure or any case interpreting any of
said Sections or any doctrine or defense based in whole or in part on such sections of the Code of
Civil Procedure and Developer hereby waives its right to assert and agrees not to assert any
position or defense based in whole or in part upon such sections of the Code of Civil Procedure
and hereby waives any benefit of such sections of the Code of Civil Procedure as might
otherwise apply.
16.5 Cooperation of Developer.
If the City exercises its Right of Repurchase or Right of Reversion in accordance with the
provisions of this Agreement, Developer shall use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things reasonably necessary or desirable
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under applicable law to consummate the repurchase or revesting of the Reacquired Property, as
the case may be, including the execution and delivery of such other documents, certificates,
agreements, deeds and other writings and the taking of such other actions as may be reasonably
necessary to consummate such transactions.
17. Mortmes and Mort2a2ee Protection.
17.1 Transfers to Permitted Mortmee.
17.1.1 Generally.
(a) Prior to the Recording of the relevant Certificate of Compliance,
Developer shall be permitted to Mortgage the Phase 1 Property and the Phase 2 Property only as
set forth in this Article 17. Any Mortgage or other encumbrance of the Parcel in violation of this
Section 17.1 shall be a prohibited Transfer and a Material Default by Developer.
(b) Prior to the Recording of the relevant Certificate of Compliance,
neither this Agreement, nor the Development Parcels (nor any portion thereof) for which a
Certificate of Compliance has not been Recorded nor the Improvements thereon, shall be cross -
collateralized with any other contract or real or personal property, nor shall this Agreement or the
Development Parcels (or any portion thereof) for which a Certificate of Compliance has not been
Recorded or the Improvements thereon serve as additional security for any other loan by a
Mortgagee, nor any other debt of Developer. Developer may elect to separately finance Phase 1
and Phase 2. Developer may collaterally assign its interest in this Agreement with respect to a
Phase to a Permitted Mortgagee pursuant to a Permitted Mortgage if required as a condition to
the making of a Construction Loan with respect to such Phase, provided that any such financing
shall be subject to, and shall comply with, all the terms and conditions of this Agreement,
including the limitations on cross -default set forth in Section 17.1.1(c).
(c) A Permitted Mortgage otherwise permitted by this Agreement may
not include as collateral any real property other than the Property and may not be cross -
collateralized or cross defaulted with any other Mortgage encumbering property that is not
collateral for the Permitted Mortgage nor may any Construction Loan or Permitted Mortgage
securing such loan cross-collateralize the Phase 1 Parcel and the Phase 2 Parcel, and each of the
Phase 1 Parcel and Phase 2 Parcel shall be separately collateralized, such that a default by
Developer with respect to Phase 1 or Phase 2 shall not trigger or be considered a default
thereunder with respect to the other Phases of the Project.
(d) Prior to Recording of a Certificate of Compliance as to a Parcel,
Developer shall not convey the Property associated with such Parcel or any portion thereof to a
third party for purposes of a sale-leaseback transaction.
(e) Prior to the Recording of a Certificate of Compliance with respect
to a Phase, Developer shall not encumber any Parcel or any portion thereof or any Improvements
thereon with any Mortgage, unless such Mortgage is a Permitted Mortgage made by a Permitted
Mortgagee that secures a Construction Loan (and no other loan or obligation) that has been
approved by the City in its sole discretion as complying with the requirements of this Agreement
and in all particulars satisfying each and every requirement of this Article 17.
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(f) Except as set forth in Section 17.1.1(g) with respect to Building
Pads for a Build -to -Suit User, in the aggregate there may be no more than two Construction
Loans with respect to the Phase 1 Property and no more than two Construction Loans with
respect to the Phase 2 Property and each such Construction Loan shall be secured by the entirety
of the applicable Phase excluding portions for which a Certificate of Compliance has been issued
or for which the provisions of Section 17.1.1(g) apply. In the aggregate, the Construction Loans
with respect to each of Phase 1 and Phase 2 shall meet the following requirements: (i) the total
loan to cost ratio at the time of the encumbrance of the applicable Phase of the Property
(counting both Construction Loans on any Phase if there is more than one Construction Loan on
that Phase) shall not exceed sixty five percent (65%) and no second Construction Loan shall be
permitted if at the time the second Construction Loan is proposed the first Construction Loan
meets or exceeds such loan to cost ratio with respect to the applicable Phase, (ii) the terms of
each Construction Loan shall be consistent with the Financing Plan approved by the City for the
applicable Phase, (iii) neither the Property nor the Improvements thereon shall serve as collateral
for any loan other than the Construction Loans described in this Section, and (iv) there shall be
no other Mortgages.
(g) With respect solely to a Construction Loan for a Building Pad for
which Developer has either sold or leased to, or is under binding contract (which may be subject
to contingencies related to financing, conveyance, or construction) to sell or lease to, a Build -to -
Suit User, and which is not secured by or has been released from the Construction Loans
described in Section 17.1.1(fl, the provisions of Section 17.1.l(f) shall apply except that (i) there
shall be no more than one (1) Construction Loan with respect to the Building Pad and
Improvements thereon, (ii) neither the Building Pad nor the Improvements thereon shall serve as
collateral for any other loan, including any other Construction Loan and (iii) the Construction
Loan secured by a Permitted Mortgage may exceed the 65% loan to cost ratio at the time of
encumbrance but shall not exceed a loan to cost ratio at the time of encumbrance of eighty
percent (80%).
(h) In order to provide the City with information necessary to inform
its right to confirm, in its sole discretion, that a proposed loan is a Construction Loan, that a
proposed Mortgagee is a Permitted Mortgagee and that a proposed Mortgage is a Permitted
Mortgage pursuant to this Section, Developer shall provide to the City within the time period set
forth in Section 17.1.2:
(i) The names of the proposed Mortgagee, and if not a
Qualified Institutional Lender, the names of the participants;
(ii) Drafts of all proposed documents relating to the proposed
Mortgage;
(iii) Current construction budgets for proposed costs of
construction and related materials such as proposed construction contracts in connection with
Developer's calculations of the relevant loan to cost requirements.
(iv) Such other relevant information as the City may request in
its reasonable discretion in connection with its approval rights under this Agreement.
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17.1.2 Permitted Mortgages. The following shall apply to every Mortgage
made with respect to portions of the Property for which no Certificate of Compliance has been
issued by the City, the Improvements thereon, or any portion thereof:
(a) A Mortgage shall be a Permitted Mortgage under this Agreement
and a Mortgagee shall be a Permitted Mortgagee entitled to a Transfer under this Agreement if
the City determines in its sole discretion that: (i) such Mortgagee is a Qualified Institutional
Lender or (ii) such Mortgagee is a lender that is regularly engaged in the business of making or
owning (or, in the case of a fund advisor or manager, advising or managing with respect to a
fund that is regularly engaged in the business of making or owning) commercial real estate loans
(including mezzanine loans with respect to commercial real estate), originating preferred equity
investments or owning or operating commercial properties, which Person is identified in and
approved by the City in its sole discretion in connection with its approval of the Financing Plan
for the relevant Phase approved by the City in Section 4.6.1; (ii) the Mortgage shall be a
Construction Loan and the terms of the Mortgage and all of the loan documents executed in
connection with the loan shall be consistent with such Financing Plan and the requirements of
Sections 8.5 and 17.1 of this Agreement; (iii) complete copies of all of the loan documents have
been reviewed by the City and the City has determined that such loan documents comply with
the requirement of this Section 17.1 and, if applicable, Section 17.3; and (iv) the loan proceeds
will be used solely to finance the acquisition of the Property and/or construction of the
Improvements and for associated costs and expenses that directly relate to the Project (including
financing costs) and for no other purpose. If requested by a Permitted Mortgagee, the loan
documents shall include a Subordination Agreement executed by the Permitted Mortgagee and
the City and acknowledged in recordable form, which agreement shall be in the form and
substance of the Subordination Agreement attached hereto as Attachment 24 unless otherwise
agreed by the City and such Permitted Mortgagee, each in its sole discretion, which shall be
Recorded at the Close of Escrow for the portion of the Property being so encumbered,
immediately after the Permitted Mortgage is Recorded.
(b) At least fifteen (15) Business Days prior to entering into any
Mortgage, Developer shall deliver to the City drafts (and at least five (5) Business Days prior to
entering into any Mortgage, Developer shall cause to be made available to the City proposed
Mortgagee's loan documents in substantially the form and substance of the final forms of such
documents, red -lined to show changes from the drafts reviewed by the City; and shall cause to be
made available final forms or indicate no change in the previously submitted forms prior to the
execution thereof), including all documents and guaranties securing the interest of the
Mortgagee, and such other information as may be reasonably requested by the City to confirm
the matters that require the City's determinations described in this Section 17.1.2. The City shall
determine in its sole discretion whether the loan documents for a proposed Permitted Mortgage
comply with the requirements of this Agreement, including:
(i) Whether the proposed Mortgagee is a Qualified
Institutional Lender or, if the proposed Mortgagee is not a Qualified Institutional Lender,
whether the proposed Mortgagee was identified and approved in connection with the City's
approval of the relevant Financing Plan and in each case whether the proposed Mortgagee is a
Permitted Mortgagee and whether the proposed Mortgage is a Permitted Mortgage.
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(ii) Whether the Mortgage proposed by Developer complies
with the terms of this Agreement.
17.2 Acknowledgment by City of Permitted Mort2a2ee.
Within fifteen (15) Business Days following the Developer's delivery of the loan
documents and information required under Section 17.1.2: (a) the City shall acknowledge
receipt of the same and receipt of the address of any Mortgagee (or proposed Mortgagee), (b) the
City shall confirm in writing to Developer whether the proposed Mortgagee is a Permitted
Mortgagee, or explain why the City considers the proposed Mortgagee not to be a Permitted
Mortgagee, and (c) the City shall confirm in writing to Developer whether it has determined if
the loan documents comply with the requirements of Sections 17.1 and 17.3 or explain why the
City considers the loan documents not to comply.
17.3 Chante in Loan Documents.
Following approval by the City of loan documents in connection with its approval
of a Permitted Mortgage, but prior to closing of the Construction Loan evidenced by such loan
documents, Developer shall not modify or agree to modify those loan documents without the
prior written approval of the City, in its sole discretion. In addition, as to each Mortgage,
Developer shall, within five (5) Business Days following execution of same, provide written
notice to the City, in accordance with Section 18.6, of each and every instrument which effects
or purports to effect an amendment, modification, waiver, postponement, extension, replacement,
renewal or termination of any of the loan documents associated with such Mortgage or other
terms and conditions of the loan, which notice shall include a full and complete copy of each
such instrument. Notwithstanding its receipt of such notice, the City shall not be bound by any
amendment, modification, waiver, postponement, extension, replacement, renewal or termination
of any of the loan documents associated with any Mortgage unless it shall have given its prior
written consent thereto; provided that nothing herein shall obligate Developer to seek City's
consent nor City to grant such consent.
17.4 Initial Notice.
Developer or any Permitted Mortgagee shall provide the City notice, in accordance with
the provisions of Section 18.6, of the name and address of such Mortgagee, and shall cause to be
made available a copy of the executed loan documents for such Mortgage, but the failure to
provide such notice shall not affect the protections provided for under this Agreement to any
Permitted Mortgagee.
17.5 Foreclosure Transfers.
If a Permitted Mortgagee or its affiliate acquires any Foreclosed Collateral as a result of a
Foreclosure, the provisions of Section 17.6 and the Subordination Agreement, if any, shall be
applicable to such acquisition and the rights and obligations of such Permitted Mortgagee or its
affiliate. With respect to a Transfer to an Approved Foreclosure Transferee, the provisions of
Section 2.2.2(h) shall apply. No Transfer to a Foreclosure purchaser that is not an Approved
Foreclosure Purchaser shall be a Permitted Transfer and Transfers to all other purchasers at
Foreclosure shall be subject to the provisions of Section 2.2 and/or 2.2.3 and shall require the
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consent of the City in its sole discretion to be effective and any such Transfer shall be void and
of no force and effect if City consent is not obtained prior to the Transfer. All of the provisions
contained in this Agreement shall be binding upon and benefit any Person which acquires title to
all or any portion of the Property, including as a result of Foreclosure and provided that such
Person either is an Approved Foreclosure Transferee or is subsequently approved by the City in
writing as aforesaid and assumes the obligations of Developer under this Agreement in
accordance with Section 2.2.2(h) or Sections 2.2 and 2.2.31 the City shall recognize such
Transferee as Developer under this Agreement.
17.6 Mort2a2ee Protections.
Each Permitted Mortgagee of a then -existing Permitted Mortgage affecting a portion of
the Property which has provided notice to the City as required by Section 17.4 shall, until its
Permitted Mortgage is satisfied of record or until written notice of satisfaction is given by the
Permitted Mortgagee to the City or it ceases to be a Permitted Mortgagee, be entitled to the
following:
17.6.1 Provision of concurrent notice of any default by any Party hereunder;
provided, however, that a failure of a Party to deliver a concurrent copy of such notice of default
to the Permitted Mortgagee shall not affect in any way the validity of the notice of default as it
relates to the defaulting Party, but in any subsequent proceedings arising from or related to the
notice of default with respect to which there was a failure to provide the requested concurrent
notice to the Permitted Mortgagee, the interest of the Permitted Mortgagee and its lien upon the
affected Property shall not be affected in any way until such time as it has received proper notice
and all cure periods with respect thereto have expired, and provided, further, the giving of any
notice of default or the failure to deliver a copy to any Permitted Mortgagee shall in no event
create any liability on the part of the Person so declaring a default.
17.6.2 The right, but not the obligation, at any time prior to the earlier to
occur of the consummation of the Right of Repurchase and/or the Reversion Event, the
foreclosure of the City Lien or the termination of this Agreement and without payment of any
additional penalty or assumption of the obligations of Developer under this Agreement, to cure
or remedy such Potential Default or Material Default, to effect any insurance, to pay any
amounts due to the City, to make any repairs or improvements, to do any other act or thing
required of Developer under this Agreement and to do any act or thing which may be necessary
and proper to be done in the performance and observance of this Agreement to prevent
termination of this Agreement. To carry out the foregoing, Developer hereby agrees that from
and after Close of Escrow for the applicable Parcel until acquisition of such Parcel or any portion
thereof by the City pursuant to the Right of Repurchase or Right of Reversion or otherwise, such
Permitted Mortgagee and its agents and contractors shall have full access to the Parcel for
purposes of accomplishing any of the foregoing. Any of the foregoing done by such Permitted
Mortgagee shall be as effective to prevent a termination of this Agreement, foreclosure of the
City Lien or the exercise by the City of the Right of Repurchase or the Right of Reversion as the
same would have been if done by Developer.
17.6.3 Notwithstanding any other provision of this Agreement to the contrary,
if any Material Default shall occur which, pursuant to any provision of this Agreement, entitles
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the City to terminate this Agreement as to a Phase or any portion thereof following Close of
Escrow with respect thereto, and/or to exercise its Right of Repurchase or Right of Reversion,
the City shall not be entitled to terminate this Agreement or to exercise its Right of Repurchase
or Right of Reversion unless (a) the City, following the expiration of any periods of time given
Developer in this Agreement to cure such Material Default, shall have given written notice to
such Permitted Mortgagee stating the City's intent to terminate this Agreement or exercise the
Right of Repurchase or Right of Reversion (a "Notice to Mortgagee"), and (b) such Permitted
Mortgagee shall fail to do any of the following:
(a) within one hundred and eighty (180) calendar days after delivery
of the Notice to Mortgagee, cure the Material Default if the same consists of the nonperformance
by Developer of any covenant or condition of this Agreement requiring the payment of money
by Developer to the City, other than payments required under Sections 4.2 or Article 7 (provided,
however, that nothing set forth in this Agreement shall restrict or limit the right of City to
exercise its Governmental Capacity remedies with respect to the Entitlements or any bond issues
in favor of the City); and
(b) if the Material Default is not of the type described in
Section 17.6.3(a), either, in such Permitted Mortgagee's sole discretion, (i) cure such Material
Default, if the same is capable of being cured within a one hundred and eighty (180) calendar
day period, or (ii) or if such Material Default is not capable of cure without ownership or control
of the Property or is not of a nature that it can be cured within such one hundred and eighty (180)
day period, commence a Foreclosure within one hundred and eighty (180) days after delivery of
the Notice to Mortgagee, and thereafter diligently pursue to completion, steps and proceedings to
such Foreclosure; provided that except as extended by Section 17.6.4, such Foreclosure shall be
completed within a maximum of one (1) year following the commencement of such Foreclosure
proceeding. Any Material Default which does not involve a covenant or condition of this
Agreement requiring the payment of money by Developer to the City shall be deemed cured if
any Permitted Mortgagee shall diligently pursue to completion a Foreclosure in accordance with
the time periods set forth above, and shall, upon acquiring fee title to all or any portion of the
Property, thereafter undertake its obligations (if any) with respect such portion of the Property
pursuant to Section 17.6.2. For the avoidance of doubt, (A) any Default by the Developer that
due to passage of time is not susceptible to cure by the Approved Foreclosure Transferee upon its
acquisition of the Foreclosed Collateral shall be deemed waived, and (B) following a
Foreclosure, the entity that is then the Developer shall not be in default hereunder with respect to
any failure to meet any time requirement in the Schedule of Performance that has expired as of
the date of the Foreclosure, and the applicable Approved Foreclosure Transferee and the City
shall endeavor to agree in good faith on a revised Schedule of Performance to be applicable to
such Approved Foreclosure Transferee following such Foreclosure giving due regard to the
circumstances in existence at such time.
17.6.4 If such Permitted Mortgagee is prohibited from commencing or
prosecuting Foreclosure by any process or injunction issued by any court or by reason of any
action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving
Developer or any direct or indirect owner of Developer (other than any such process, injunction
or court action occurring in response to any negligence or misfeasance of Permitted Mortgagee),
the times specified in Section 17.6.3(b)(ii) for commencing or prosecuting a Foreclosure or other
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proceedings relating to insolvency shall be extended for the period of the prohibition; provided
that the Permitted Mortgagee shall have fully cured any Material Default required by Section
17.6.3 b i above and shall continue to perform and/or cure all such obligations as and when the
same fall due. Notwithstanding anything to the contrary in this Section 17.6, if the Foreclosure
is not consummated on or before the date that is eighteen (18) months after the date of the Notice
to Mortgagee, then at any time after such date (which shall not be extended by any Bankruptcy
of Developer or any Force Majeure Delay), the City may (in its sole discretion) consummate a
Right of Repurchase or Reversion Event if such action is otherwise permitted by this Agreement.
17.6.5 No Permitted Mortgagee shall have the right to use the failure of the
City to provide notice to any other Mortgagee as a claim, defense or estoppel to application of
these provisions with respect to such Permitted Mortgagee's Permitted Mortgage.
17.7 Failure of Permitted Mortmee to Cure.
If Developer shall have failed to cure any Material Default following the applicable Close
of Escrow within the time periods for such cure set forth in Article 14, and any notice required
by Section 17.6.1 to a Permitted Mortgagee was properly given, and such Permitted Mortgagee
has not cured or commenced to cure as required by Section 17.6.3, the City may, at its option,
upon thirty (30) calendar days' written notice to Developer and such Permitted Mortgagee either:
(a) purchase the Reacquired Property pursuant to the Right of Repurchase set forth in
Section 16.3; (b) subject to the conditions to exercise of such reversion set forth in
Section 16.4.2, exercise its Right of Reversion with respect to Reacquired Property pursuant to
Section 16.4 or (c) exercise any other rights or remedies provided to the City by this Agreement.
17.8 Condemnation or Insurance Proceeds.
Except as otherwise expressly set forth in this Agreement, the rights of any Permitted
Mortgagee pursuant to its Permitted Mortgage to receive condemnation or insurance proceeds
which are otherwise payable to such Permitted Mortgagee or to a Party which is its mortgagor
shall not be impaired. All awards and proceeds payable to Developer in connection with a
condemnation of all or any applicable portion of the Property shall be applied as required
pursuant to the terms and conditions of the applicable loan documents executed in connection
with the Permitted Mortgage; provided nothing herein shall affect or apply awards or proceeds
payable to the City.
17.9 Loss Payable Endorsement to Insurance Policy.
The City agrees that the name of any Permitted Mortgagee (or in the event there is a lead
Mortgagee with respect to a Permitted Mortgage, the lead Mortgagee only) may be added as the
primary loss payee to the "Loss Payable Endorsement" attached to any and all insurance policies
required to be carried by Developer under this Agreement, and that all such insurance proceeds
payable to Developer shall be applied as required pursuant to the terms and conditions of the
applicable loan documents executed in connection with the Permitted Mortgage, provided that
nothing herein shall affect or apply to insurance proceeds payable to the City.
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17.10 Subordination Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the rights of the
Parties and any Permitted Mortgagee(s) hereunder shall be subject in all cases to the terms of any
Subordination Agreement(s) executed by the City. In the event of any specific conflict in the
language between this Agreement and the Subordination Agreement, the Subordination
Agreement shall control.
17.11 Constructive Notice and Acceptance.
Until such time as a Certificate of Compliance is Recorded with respect to the Property
and subject to the provisions of Article 2 or this Article 17 and the terms of any Subordination
Agreement, all of the provisions contained in this Agreement shall be binding upon and benefit
any Person who acquires fee title to a portion of the Property that has not received a Certificate
of Compliance. Upon acquisition of fee title to an interest in the Property or any portion thereof
by a Person, other than a Permitted Mortgagee which is not assuming the obligations of
Developer under this Agreement, acquiring title through Foreclosure, the acquiring Person and
the City shall meet and confer in good faith to revise the Schedule of Performance as reasonably
necessary to provide adequate time for such Person to satisfy the obligations of Developer
hereunder.
17.12 Bankruptcy Affecting the Developer.
Developer and City hereby agree that this Agreement (including the Right of Repurchase
and Right of Reversion contained herein), the Quitclaim Deed(s) and the Other Agreements shall
contain and consist of covenants running with the land and that neither this Agreement, the
Quitclaim Deed(s) or the Other Agreements shall be subject to rejection in bankruptcy, and
Developer hereby waives its rights to reject this Agreement, Quitclaim Deed(s) and the Other
Agreements in bankruptcy. If, notwithstanding the foregoing, the Developer, as debtor in
possession, or a trustee in bankruptcy for Developer seeks to and does reject this Agreement, the
Quitclaim Deeds or the Other Agreements in connection with any proceeding involving
Developer under the United States Bankruptcy Code or any similar state or federal statute for the
relief of debtors (a "Bankruptcy Proceeding"), then without waiver of any right of the City to
challenge such rejection, the Parties hereby agree for the benefit of the City and each and every
Permitted Mortgagee that such rejection shall, subject to the written acceptance by the most
senior Permitted Mortgagee, be deemed the Developer's assignment of this Agreement, the
rights under the Quitclaim Deeds and the Other Agreements and the Property corresponding
thereto to the most senior Permitted Mortgagee or its nominee or designee in the nature of an
assignment in lieu of foreclosure. Upon such deemed assignment accepted by the Permitted
Mortgagee holding the senior Permitted Mortgage with respect to the affected Property, subject
to compliance with Section 2.2, and subject to the terms and conditions of Section 17.6.6 hereof,
the same shall constitute a Foreclosure and such Permitted Mortgagee (or an affiliate thereof
designated by such Permitted Mortgagee) shall be deemed to be the Mortgagee Purchaser under
this Agreement as if the Bankruptcy Proceeding had not occurred.
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17.13 Notice and Cure Rights of City.
Following the occurrence of an event of default under any Mortgage, the holder of the
Mortgage shall promptly notify the City of the occurrence of such event of default, which
notification shall be provided to the City contemporaneously with the delivery to Developer or
its Assignee of any notice of default under any of Mortgage documents. The City shall have the
right, but not the obligation, during the cure periods which apply to Developer pursuant to the
Mortgage documents to cure default by Developer relative to the Mortgage. If the City elects to
cure Developer's default, the Developer shall reimburse the City for all direct and actual costs
and expenses incurred by the City in curing the default and any amounts paid by the City in
curing such Developer's default shall, the extent not paid by Developer, be secured by the City
Lien against the Development Parcels under this Agreement.
18. General Provisions.
18.1 Applicable Law; Consent to Jurisdiction; Service of Process.
This Agreement shall be governed by, interpreted under, construed and enforced in
accordance with the laws of the State of California, irrespective of California's choice -of -law
principles. Developer and City agree that any disputes arising between them in connection with
this Agreement or in connection with or under any instrument, agreement or document provided
for or contemplated by this Agreement, including in connection with the execution of this
Agreement, a Close of Escrow or any other matter arising under, related to or in connection with
this Agreement (including a determination of any and all issues in such dispute, whether of fact
or of law) shall be tried and litigated exclusively in the Superior Court of the County of Orange,
State of California, in any other appropriate court of that county, or in the United States District
Court for the Central District of California. This choice of venue is intended by Developer and
the City to be mandatory and not permissive in nature, thereby precluding the possibility of
litigation between or among Developer and the City with respect to or arising out of or related to
this Agreement in any jurisdiction other than that specified in this Section 18.1. Each Party
hereby waives any right that it may have to assertforum non conveniens or similar doctrine or to
object to venue with respect to any proceeding brought in accordance with this Section 18. 1, and
stipulates that the State and federal courts located in the County of Orange, State of California,
shall have in personam jurisdiction and venue over each of them for the purpose of litigating any
dispute, controversy or proceeding arising out of or related to this Agreement. Each Party
hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action
against it as contemplated by this Section 18.1 by means of registered or certified mail, return
receipt requested, postage prepaid, to its address for the giving of notices as set forth in this
Agreement, or in the manner set forth in Section 18.6 of this Agreement pertaining to notice.
Any final judgment rendered against a Party in any action or proceeding shall be conclusive as to
the subject of such final judgment and may be enforced in other jurisdictions in any manner
provided by law.
18.2 Legal Fees and Costs.
If any Party to this Agreement institutes any action, suit, counterclaim or other
proceeding for any relief against another Party, declaratory or otherwise (collectively an
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"Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any
inaccuracies or material omissions in connection with any of the covenants, representations,
warranties or obligations on the part of the other Party to this Agreement, then the Prevailing
Party in such Action shall be entitled to have and recover of and from the other Party all costs
and expenses of the Action, including (a) the Prevailing Party's reasonable attorneys' fees (which,
if the Prevailing Party is the City, shall be payable at the actual contractual hourly rate for the
City's litigation counsel at the time the fees were incurred, and which with respect to both the
City and the Developer shall in no event be more than $200 per hour) and (b) costs actually
incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or
award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued
on the commencement of such Action and shall be paid whether or not such Action is prosecuted
to a Decision. Any Decision entered in any final judgment shall contain a specific provision
providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees
and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing
such judgment. For the purposes of this paragraph, Costs shall include in addition to Costs
incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs,
expenses and expert fees and costs incurred in the following: (a) post judgment motions and
collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party
examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
"Prevailing Party" within the meaning of this Section 18.2 includes a Party who agrees to
dismiss an Action in consideration for the other Party's payment of the amounts allegedly due or
performance of the covenants allegedly breached, or obtains from a court of competent
jurisdiction substantially the relief sought by such Party.
18.3 Memorandum of DDA; Modifications or Amendments.
The Parties shall cause the Memorandum of DDA to be Recorded promptly following the
Effective Date of this Agreement, payment of the Deposit and satisfaction by Developer of the
requirements specified in Section 4.6.1(a). No amendment, change, modification or supplement
to this Agreement shall be valid and binding on any of the Parties unless it is in writing and
signed by each of the Parties hereto. From time to time the Parties (with the City Manager or his
or her designee having delegated authority to act on behalf of the City) may by mutual written
agreement (in the Parties' sole and absolute discretion) update any of the Attachments (other
than Attachments 1, 2A, 2B and 5) and substitute such updated Attachment for the Attachment
attached hereto as of the Effective Date, and such substitution shall not be deemed an
amendment of this Agreement as a whole nor require the Recording of an amendment of the
Memorandum of DDA.
18.4 Further Assurances.
Each of the Parties hereto shall execute and deliver, any and all additional papers,
documents, or instruments, and shall do any and all acts and things reasonably necessary or
appropriate in connection with the performance of its obligations hereunder in order to carry out
the intent and purposes of this Agreement.
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18.5 Rights and Remedies Are Cumulative; Limitation on Damages.
18.5.1 Cumulative Remedies. Except with respect to rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are
cumulative, and the exercise by either Party of one or more such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the
same Material Default or any other Material Default by the other Party. Except as otherwise
specifically set forth in this Agreement, and subject to Section 18.5.2, wherever a Party has a
right to damages for the Material Default of another Party and/or a right of indemnification under
this Agreement: (a) such damages shall be limited to direct (actual) damages for the Material
Default of the other Party, and such indemnification shall be limited to direct actual losses of
such Party and (b) each of the Parties, on behalf of itself and its successors and assigns, hereby
expressly waives, releases and relinquishes any and all right to any expectation, anticipation,
indirect, consequential, exemplary or punitive damages or losses (it being understood that
consequential or punitive damages owed by such Party to a third party shall constitute direct
actual damages or losses of such Party).
18.5.2 Limitation on Damages Payable by the City. Developer
acknowledges that the City would not have entered into this Agreement if the City could become
liable for significant damages under or with respect to this Agreement and the Other
Agreements. Consequently, and notwithstanding any other provision of this Agreement, except
for (a) the monetary damages that may arise from the City's obligations referenced below in
Section 18.5.31 and (b) the payment of attorneys' fees and court costs in accordance with
Section 18.2, the City shall not be liable in damages under this Agreement or any Other
Agreement to Developer or to any Successor Owner and Developer hereby waives any and all
rights to claim damages of any kind or nature from the City except as set forth in Section 18.5.3.
18.5.3 Special Circumstances Where Damages may be Payable by the
Com. The limitations set forth in Section 18.5.2 shall not preclude Developer from seeking
(a) payment of amounts which the City is obligated to pay to Developer or Escrow Holder
pursuant to Sections 1.8, 4.3.3(h) and (i), 7.5.1, 7.5.4, 14.3.2, 15.1.3, 15.3, 15.4.3 or 18.2 of this
Agreement, provided that (i) the provisions of Section 18.5.1 shall apply to such claims and
payments, and (ii) Developer shall not be entitled to any damages in addition to the actual
amounts owed by City to Developer pursuant to this Agreement or the Other Agreements, or
(b) damages which arise out of a breach of the City's representations and warranties contained in
Sections 3.3 or 18.11.2 of this Agreement or breach of the City's covenants set forth in
Sections 6.5(a) and 8.15 of this Agreement, provided that the amount of any damages payable
pursuant to this subsection (b) shall be the lesser of (x) actual damages, or (y) Five Hundred
Thousand Dollars ($500,000.00) or (c) damages that arise out of the exercise of any of the rights
reserved to the City pursuant to Section 4.1(a)(i) or Ciij and as the same shall be included in each
Quitclaim Deed.
18.5.4 Right to Specific Performance. In the event the City is in Material
Default with respect to a portion of the Property conveyed to Developer or any obligation of City
under this Agreement following Close of Escrow with respect to the Property so conveyed,
Developer shall be entitled to seek specific performance or injunctive relief in order to enforce
Developer's rights pursuant to this Agreement. For purposes of clarity, in the event that the City
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is obligated to pay any amounts to Developer pursuant to this Agreement, including without
limitation pursuant to Sections 1.8 and 7.5.4, and the City fails to pay such amounts to Developer
as and when required by this Agreement, Developer shall be entitled to seek specific
performance of such obligation, notwithstanding the other provisions of this Section 18.5.
18.6 Notices, Demands and Communications between the Parties.
All notices, demands, consents, requests and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed conclusively to have
been duly given (a) when hand delivered to the other Party; (b) three (3) Business Days after
such notice has been sent by U.S. Postal Service via certified mail, return receipt requested,
postage prepaid, and addressed to the other Party as set forth below; (c) the next Business Day
after such notice has been deposited with an overnight delivery service reasonably approved by
the Parties (Federal Express, Overnite Express, United Parcel Service and U.S. Postal Service are
deemed approved by the Parties), postage prepaid, addressed to the Party to whom notice is
being sent as set forth below with next -business -day delivery guaranteed, provided that the
sending Party receives a confirmation of delivery from the delivery service provider; or (d) when
transmitted if sent by facsimile transmission or email to the fax number or email address set forth
below; provided that notices given by facsimile or email shall not be effective unless either (i) a
duplicate copy of such notice is promptly sent by any method permitted under this Section 18.6
other than by facsimile or email (provided that the recipient Party need not receive such
duplicate copy prior to any deadline set forth herein); or (ii) the receiving Party delivers a written
confirmation of receipt for such notice either by facsimile, email or any other method permitted
under this Section. Any notice given by facsimile or email shall be deemed received on the next
Business Day if such notice is received after 5:00 p.m. (recipient's time) or on a non -Business
Day. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
City: Jeffrey C. Parker, City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Fax: (714) 838-1602
Email: jparker@tustinca.org
With a copy to: David Kendig
Woodruff Spradlin & Smart, APC
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com
Developer: David Binswanger
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Fax: (213) 538-0901
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Email: dbinswanger@lpc.com
With a copy to: Parke Miller
Lincoln Property Company Commercial, Inc.
114 Pacifica, Suite 370
Irvine, CA 92618
Fax: (949) 333-2131
Email: pmiller@lpc.com
With a copy to: Gregory S. Courtwright
Lincoln Property Company Commercial, Inc.
2000 McKinney Avenue, Suite 1000
Dallas, TX 75201
Fax: (214) 740-3460
Email: gcourtwright@lpc.com
With a copy to: Mark Potter
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
E-mail: mpotter@alcionventures.com
With a copy to: Amy Forbes and Douglas Champion
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Suite 4900
Los Angeles, CA 90071
Fax: (213) 229-6151 / (213) 229-6128
E-mail: aforbes@gibsondunn.com / dchampion@gibsondunn.com
With a copy to: Andrew C. Sucoff
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Fax: (617) 523-1231
Email: asucoff@goodwinlaw.com
Any Party may by written notice to the other Party in the manner specified in this
Agreement change the address to which notices to such Party shall be delivered.
18.7 Delay.
18.7.1 Definition of Force Majeure Delay. "Force Majeure Delay" shall
mean the occurrence of any of the following events when such event is beyond the control of the
First Party and such Party's officers, directors, employees, contractors, consultants, agents and
representatives and is not due to an act or omission of such Party or its officers, directors,
employees, contractors, consultants, agents or representatives, which directly, materially and
adversely affects (a) the ability of the First Party to meet its non -monetary obligations under this
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Agreement, including the deadlines imposed by the Schedule of Performance, or (b) the ability
of Developer to Complete the Project, and which events (or the effect of which events)
reasonably could not have been avoided by due diligence and use of commercially reasonable
efforts by the Party claiming Force Majeure Delay:
(a) Civil Unrest. An epidemic, blockade, quarantine, rebellion, war,
insurrection, act of terrorism, strike or lock -out, riot, act of sabotage, civil commotion, act of a
public enemy, freight embargo, or lack of transportation;
(b) Unforeseeable Conditions. Reasonably unforeseeable physical
condition of the Property including the presence of Hazardous Materials;
(c) Casualty. Fire, earthquake or other casualty, in each case only if
causing material physical destruction or damage on the Property;
(d) Litigation. Any lawsuit seeking to restrain, enjoin, challenge or
delay any issuance of any Entitlement or seeking to restrain, enjoin, challenge, or delay
construction of the Project, which is defended by the claiming Party, provided however that the
foregoing shall not apply to a Party's performance regarding the Close of Escrow, which are
governed by Sections 7 and 15;
(e) Change of Law. The passage of a referendum or initiative that
results in the inability of the First Party to perform its material obligations hereunder;
(f) Change in Governmental Requirements. Any change in
Governmental Requirements or adoption of any new Governmental Requirements which is
materially inconsistent with Governmental Requirements in effect as of the Effective Date, as
described in the DA, and which applies to the Property or the Project after taking into account
the provisions of the DA; and
(g) Weather. Unusually severe weather conditions not reasonably
anticipatable for the City of Tustin, based upon U.S. Weather Bureau climatological reports for
the months included plus a report indicating average precipitation, temperature, etc. for the last
ten (10) years from the nearest reporting station.
18.7.2 Limitation. The term "Force Majeure Delay" shall be limited to the
matters listed in Section 18.7.1 above and specifically excludes from its definition the following
matters which might otherwise be considered Force Majeure Delay:
(a) Entitlements. The suspension, termination, interruption, denial or
failure to obtain or nonrenewal of any Entitlement, permit, license, consent, authorization or
approval which is necessary for the development of the Project, except for any such matter
resulting from a lawsuit or referendum as described in Section 18.7.1(d).
(b) Previously Proposed Changes in Governmental Requirements.
Any change in Governmental Requirements which was proposed prior to the Effective Date.
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(c) Failure to Perform Obligations. Failure of Developer or any
Successor Owner or other Person to perform any obligation to be performed by Developer or any
Successor Owner or such other Person hereunder as the result of adverse changes in the financial
condition of Developer or such Successor Owner or other Person, as applicable.
(d) Failure to Provide Financial Security. Failure of Developer or any
Successor Owner to provide financial security required by this Agreement when due or to submit
evidence of financing of the Project or failure to perform any obligation to be performed by
Developer or any Successor Owner or other Person hereunder as the result of adverse changes in
market conditions.
(e) Failure to Submit Required Documentation. Failure of the First
Party to submit documentation as and when required by this Agreement.
(f) Failure to Submit Basic Concept Plan or Other Plans and
Entitlements. Failure to submit a Basic Concept Plan and Concept Plan and Design Review
submittals, and/or submittals for other Entitlements required for construction of the
Improvements and/or development of the Project on the Property when required pursuant to the
Schedule of Performance.
(g) Failure to Maintain Required Insurance. Failure to acquire,
maintain and submit evidence of insurance policies as required by Article 11.
(h) Failure to Execute Documents. Failure of the First Party to
execute documents.
(i) All Other Matters. All other matters not caused by the Second
Party and not listed in Section 18.7.2.
18.7.3 Procedure. If any Party (the "First Party") believes that it is entitled
to an extension of time due to Force Majeure Delay, it shall notify the other Party (the "Second
Party") in writing within thirty (30) calendar days from the date upon which the First Party
becomes aware of such Force Majeure Delay, describing the Force Majeure Delay, when and
how the First Party obtained knowledge thereof, the date the event commenced, the steps the
First Party anticipates taking to respond to such Force Majeure Delay, and the estimated delay
resulting from such Force Majeure Delay and response. The extension for Force Majeure Delay
shall be granted or denied in the Second Party's sole discretion. If the First Party fails to notify
the Second Party in writing of its request for a given Force Majeure Delay within the thirty (30)
calendar days specified above, any extension for such Force Majeure Delay shall be in the sole
discretion of the Second Party.
18.7.4 Extension of Time Periods. Except as otherwise specifically set forth
in this Agreement, all time periods under this Agreement, including the Schedule of Performance
and the dates provided in Section 16.4, relating to non -monetary obligations under this
Agreement shall be extended for Force Majeure Delay in accordance with this Section 18.7.
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18.7.5 Reversion Action Dates. Notwithstanding any other provision of this
Agreement to the contrary, the Reversion Action Trigger Date shall not be extended for Force
Maj eure Delays except to the extent specifically provided in Section 16.4.1.
18.8 Conflict of Interest.
No appointed or elected official or employee of the City shall have any personal interest,
direct or indirect, in this Agreement nor shall any official or employee participate in any decision
relating to the Agreement which affects his interests or the interests of any corporation,
partnership, or association in which he is directly or indirectly interested.
18.9 Non -liability of City Officials and City or Developer Employees.
No elected or appointed official, representative, employee, agent, consultant, legal
counsel or employee of the City shall be personally liable to Developer, or any successor in
interest in the event of any Default or breach by the City for any amount which may become due
to Developer or successor or on any obligation under the terms of this Agreement. No
representative, agent, consultant, legal counsel or employee of Developer shall be personally
liable to the City, or any successor in interest in the event of any Default or breach by Developer
for any amount which may become due to the City or successor or on any obligation under the
terms of this Agreement.
18.10 Consents and Approvals.
18.10.1 Consent. In any instance in which a Party shall be requested to
consent to or approve of any matter with respect to which such Party's consent or approval is
required by any of the provisions of this Agreement, such consent or approval shall be given in
writing. In addition, whenever not expressly otherwise stated: (a) the City, when acting in its
Governmental Capacity shall be permitted to utilize its sole discretion with respect to matters
requiring its approval except as otherwise specified in any applicable Governmental
Requirements; (b) the City, when acting in its Proprietary Capacity shall not unreasonably
withhold, condition or delay its approvals with respect to matters requiring its approval
hereunder; and (c) Developer shall not unreasonably withhold, delay or condition its consent
with respect to matters requiring its approval hereunder.
18.10.2 Deemed Submitted. Any matter required by this Agreement to be
submitted to the City shall be deemed submitted upon the submittal to the City Manager or his or
her designee.
18.10.3 Action Taken. Following its approval by the City, this Agreement
shall be administered by the City Manager or the City Manager's designee. Except where the
terms of this Agreement expressly require the approval of a matter or the taking of any action by
the City Council, any matter to be approved by the City shall be deemed approved, and any
action to be taken by the City shall be deemed taken, upon the written approval by the City
Manager (or the City Manager's designee). The City Manager or the City Manager's designee
shall have the authority to issue interpretations, clarifications and confirmations with respect to
this Agreement and to determine whether any action requires the approval of the City Council.
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All waivers, amendments or modifications of this Agreement shall require the approval of the
City Council.
18.11 No Real Estate Commissions.
18.11.1 Developer Representation and Indemnity. Developer represents
that it has engaged CBRE as Developer's broker for leasing to End Users of the Phase 1 Project.
Developer represents that it has engaged no broker, agent or finder in connection with this
Agreement or the transactions identified in this Agreement or the Other Agreement, other than as
set forth in the immediately preceding sentence or as otherwise disclosed to the City in writing
prior to the Effective Date. Developer hereby agrees to indemnify and hold the City and its
elected and appointed officials, employees and representatives harmless from any losses and
liabilities arising from or in any way related to any claim by CBRE as Developer's leasing
broker with respect to the Phase 1 Project and any claim by any broker, agent, or finder including
CBRE retained or alleged to have been retained by any Person regarding this Agreement or the
Other Agreements or for sale, leasing or development of the Project or the transactions identified
in this Agreement or the Other Agreements except with respect to the retention by City of CBRE
or another broker as described in Section 18.11.2.
18.11.2 City Representation and Indemnity. The City represents that it has
retained CBRE as the City's broker with respect to the sale of the Property, and that it has not
and shall not engage any other broker, agent, or finder in connection with this Agreement, the
Other Agreements, development of the Project or the transactions identified in this Agreement or
the Other Agreements unless it shall first notify Developer in writing. City hereby agrees to
indemnify and hold Developer harmless from any losses and liabilities arising from or in any
way related to any claim by CBRE as the City's broker solely with respect to commissions due
for the sale of the Property pursuant to this Agreement and any claim by any broker, agent, or
finder retained by City for which City provides a written acknowledgement as aforesaid.
18.12 Date and Delivery of Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the Parties intend
that this Agreement shall be deemed effective, executed and delivered for all purposes under this
Agreement and for the calculation of any statutory time periods based on the date an agreement
between the Parties is effective, executed and/or delivered, as of the Effective Date.
18.13 Constructive Notice and Acceptance.
Every Successor Owner and each and every Person claiming by, through or under
Developer or any Successor Owner is and shall be conclusively deemed to have consented and
agreed to every provision contained herein, whether or not any reference to this Agreement is
contained in the instrument by which such Person acquired an interest in the Project or Property.
18.14 Survival of Covenants.
The covenants and indemnities expressly specified in this Agreement shall survive the
closing of the transactions contemplated hereby for any Phase until the earlier to occur of
(a) termination of this Agreement with respect to such Phase, or (b) the issuance of a Certificate
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of Compliance with respect to such Phase, unless otherwise expressly provided for in this
Agreement.
18.15 Construction and Interpretation of Agreement.
18.15.1 Construction. The language in all parts of this Agreement shall in all
cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for
or against any Party. The Parties hereto acknowledge and agree that this Agreement has been
prepared jointly by the Parties and has been the subject of arm's length and careful negotiation
over a considerable period of time, that each Party has been given the opportunity to
independently review this Agreement with legal counsel, and that each Party has the requisite
experience and sophistication to understand, interpret, and agree to the particular language of the
provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the
interpretation of this Agreement, this Agreement shall not be interpreted or construed against the
Party preparing it. The provisions of California Civil Code Section 1654 are specifically waived
by each Party hereto.
18.15.2 Effect of Invalidity or Unenforceability. If any term or provision of
this Agreement, the deletion of which would not adversely affect the receipt of any material
benefit by any Party hereunder, shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby and each other term
and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law. It is the intention of the Parties hereto that in lieu of each clause or provision of this
Agreement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement an
enforceable clause or provision as similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible.
18.15.3 Captions. The captions of the articles, sections, subsections and
clauses in this Agreement are inserted solely for convenience and under no circumstances are
they or any of them to be treated or construed as part of this instrument.
18.15.4 References to Articles, Sections, Paragraphs, Subsections,
Exhibits, Attachments and Schedules. Unless otherwise indicated, references in this
Agreement to articles, sections, paragraphs, subsections, clauses, exhibits, attachments and
schedules are to the same contained in or attached to this Agreement and all attachments and
schedules referenced in this Agreement are incorporated in this Agreement by this reference as
though fully set forth in this Section.
18.15.5 Gender, Singular and Plural. As used in this Agreement and as the
context may require, the singular includes the plural and vice versa and the masculine gender
includes the feminine and vice versa.
18.15.6 Includes and Including. As used in this Agreement the words
"include" and "including" mean, respectively, "include, without limitation" and "including,
without limitation".
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18.16 Time of Essence.
Time is of the essence with respect to all provisions of this Agreement in which a definite
time for performance is specified; provided that the foregoing shall not be construed to limit or
deprive a Party of the benefits of any cure period or Force Majeure Delay expressly provided for
in this Agreement.
18.17 Fees and Other Expenses.
Except as otherwise provided in this Agreement, each of the Parties hereto shall pay its
own fees and expenses, including attorneys' fees, experts' fees and consultants' fees and costs, in
connection with negotiation and preparation of this Agreement and compliance with its terms.
18.18 No Partnership.
Nothing contained in this Agreement shall be deemed or construed to create a
partnership, joint venture or any other relationship between the Parties hereto other than
purchaser and seller according to the provisions contained in this Agreement, or cause the City to
be responsible in any way for the debts or obligations of Developer.
18.19 Binding Effect.
This Agreement and terms, provisions, promises, covenants, conditions and restrictions
contained herein shall be binding upon and shall inure to the benefit of the Parties hereto and
their respective heirs, legal representatives, successors and assigns.
18.20 No Third Party Beneficiaries.
This Agreement has been made and entered into solely for the benefit of the Parties to
this Agreement and their respective successors and permitted assigns. Nothing in this
Agreement confers any rights or remedies on any other Person. Nothing in this Agreement
relieves or discharges the obligation or liability of any third Persons to any Parties to this
Agreement.
18.21 Counterparts.
This Agreement may be executed in two or more separate counterparts, each of which,
when so executed, shall be deemed to be an original. Such counterparts shall, together,
constitute and shall be one and the same instrument. This Agreement shall not be effective until
the execution and delivery by the Parties of at least one set of counterparts. The Parties agree to
recognize execution of this Agreement by facsimile or other electronically transmitted
signatures. The Parties hereby authorize each other (and Escrow Holder) to detach and combine
original signature pages and consolidate them into a single identical original. Any one of such
completely executed counterparts shall be sufficient proof of this Agreement.
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18.22 Duplicate Originals, Entire Agreement and Waivers.
18.22.1 Duplicate Originals. This Agreement is executed in three (3)
duplicate originals, each of which is deemed to be an original.
18.22.2 Entire Agreement. This Agreement, including the Attachments
hereto, together with the Other Agreements, constitute the entire agreement between the Parties
with respect to the subject matter hereof. This Agreement and the Other Agreements supersede
and replace any and all prior agreements, proposed agreements, negotiations and
communications, oral or written, relating to the subject matter hereof and contain the entire
agreement between the Parties as to the subject matter hereof and any and all prior agreements,
understandings or representations between the Parties and/or any Developer Affiliate are hereby
terminated and canceled in their entirety. Each Party hereby acknowledges that no other Party
hereto, nor its agents or attorneys, has made any promises, representations or warranties
whatsoever, expressed or implied, not contained in this Agreement or the Other Agreements, to
induce such Party to execute this Agreement, and each Party acknowledges that it has not
executed this Agreement in reliance on any such promise, representation or warranty not
contained in this Agreement or any Other Agreements. For the avoidance of doubt, this
Agreement shall terminate and supersede the City's selection process for Cornerstone under the
Disposition Strategy, the responses of Developer or any Developer Affiliate in connection
therewith and the ENA, except that this Agreement does not supersede Sections 3.7, 4.5.2, 4.5.3,
10. 1, and 10.12 of the ENA which shall remain in effect with respect to claims arising during or
related to the term of the ENA.
18.22.3 No Waiver. No waiver of any provision or consent to any action
under this Agreement shall constitute a waiver of any other provision or consent to any other
action, whether or not similar. No waiver or consent shall constitute a continuing waiver or
consent or commit a Party to provide a waiver in the future except to the extent specifically set
forth in writing. All waivers of the provisions of this Agreement must be in writing and signed
by the appropriate authorities for the City and Developer and all amendments hereto must be in
writing and signed by the appropriate authorities of the City and Developer.
18.23 Confidentiality.
18.23.1 Public Records Act. Subject to the provisions of the California
Public Records Act (Government Code Section 6250 et seq.) (the "Public Records Act"), which
governs the City's use and disclosure of its agreements and records, the City and the Developer
hereby agree that each shall keep confidential information provided by the other and
denominated as confidential and will not disclose any such information to any Person without
obtaining the prior written consent of the other Party, except that (a) the City shall have the right
to disclose any information contained in any third party reports produced or obtained by the
Developer and required to be disclosed by it pursuant to law, (b) Developer shall have the right
to disclose any Developer Excluded Information, (c) the City shall have the right to disclose any
City Excluded Information, (d) Developer shall have the right to disclose to its consultants,
members, and their respective consultants and members, any information to the extent necessary
or desirable in connection with Developer's due diligence on the Property and performance of its
obligations under this Agreement and the Other Agreements, (e) City shall have the right to
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disclose to its officials, employees and City retained consultants and representatives all
information received by it from Developer as required to perform its obligations under this
Agreement and the Other Agreements, and (f) either Party shall have the right to disclose any
information to the extent that it is legally required or compelled to do so provided that (to the
extent permitted) it provides the other Property with prior notice of such disclosure obligation
and cooperates with such other Party (at no cost or liability to the cooperating Party) in any
attempts to obtain confidential treatment of such disclosed information. Developer's obligations
pursuant to this Section 18.23 shall terminate upon the earlier of (i) termination of this
Agreement, (ii) the Phase 2 Property Close of Escrow or (iii) if the Phase 2 Property Close of
Escrow has not then occurred, the Phase 2 Property Outside Closing Date. Except with respect
to material described in Section 18.23.2, the City's obligations pursuant to this Section 18.23
shall terminate upon the earlier of (x) the Phase 2 Property Close of Escrow or (y) if the Phase 2
Property Close of Escrow has not then occurred, the Phase 2 Property Outside Closing Date.
18.23.2 Financial Information. Developer shall identify with specificity any
submitted financial documents (including loan and equity financing documents and Guarantor
information) which Developer wants the City to maintain as confidential documents and a
statement as to why the request is consistent and complies with the provisions of the Public
Records Act. The City shall not disseminate such information and shall take all reasonable steps
to maintain such confidentiality unless otherwise required by law. The City's staff, agents,
negotiators and consultants may review the statements as necessary as long as such parties agree
to maintain the confidentiality of such statements.
18.23.3 Cooperation. In the event that the City obtains a request pursuant to
the provisions of the Public Records Act to disclose any of Developer's information which the
City is required to keep confidential pursuant to the terms of this Agreement, the City shall
provide Developer with prompt written notice thereof and the City and Developer shall
cooperate at Developer's sole cost and expense to seek to avoid disclosure of such matters to the
extent legally permissible pursuant to the provisions of the Public Records Act.
18.24 Proprietary and Governmental Roles; Actions by Parties.
Except where clearly and expressly provided otherwise in this Agreement, the capacity of
the City in this Agreement shall be as owner, lessor, assembler, redeveloper and/or seller of
property only ("Proprietary Capacity"), and any obligations or restrictions imposed by this
Agreement on the City, shall be limited to that capacity and shall not relate to, constitute a
waiver of, supersede or otherwise limit or affect the exercise by the City of its governmental
authority with respect to any matter related to this Agreement which shall include the regulation
and entitlement of the Property pursuant to Governmental Requirements, including enacting
laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and
administrative or enforcement functions of each pursuant to federal, state or local law
("Governmental Capacity"). In addition, nothing in this Agreement shall supersede or waive
any discretionary or regulatory approvals required to be obtained from the City under applicable
Governmental Requirements.
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18.25 Performance of Acts on Business Days.
In the event that the final date for payment of any amount or performance of any act
under this Agreement falls on a day other than a Business Day, such payment may be made or
act performed on the next succeeding Business Day.
[Signature page follows]
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IN WITNESS WHEREOF, the City and Developer have signed this Agreement as of the
date first set forth above.
Dated:
ATTEST:
IM
Erica Rabe, City Clerk
APPROVED AS TO FORM
IM
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP
Tustin Special Real Estate Counsel
IM
Amy E. Freilich
Dated:
"CITY"
City of Tustin
By:
Jeffrey C. Parker
City Manager
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"DEVELOPER"
Flight Venture LLC
By:
Name:
Title:
Dated:
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JOINDER OF ESCROW HOLDER
The undersigned is joining this Agreement to evidence its agreement to receive, hold and
disburse the Purchase Price Deposit in accordance with the terms of this Agreement and
otherwise to comply with the escrow instructions set forth in this Agreement.
FIRST AMERICAN TITLE INSURANCE
COMPANY
0
Name:
Title:
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LIST OF ATTACHMENTS
ATTACHMENT 1
GLOSSARY OF DEFINED TERMS
ATTACHMENT 2A
LEGAL DESCRIPTION OF PHASE 1 PARCEL AND PHASE 2
PARCEL
ATTACHMENT 2B
PARCEL MAP NO. 2015-168
ATTACHMENT 3A
VESTING TENTATIVE TRACT MAP NO. 18003
ATTACHMENT 3B
SITE PLAN, BUILDING PAD PLAN & COMMON AREA
ATTACHMENT 4
PRELIMINARY TITLE REPORT
ATTACHMENT 5
CITY BENEFITED PROPERTY
ATTACHMENT 6
FORM OF CITY ESTOPPEL
ATTACHMENT 7
SCHEDULE OF PERFORMANCE
ATTACHMENT 8
SCOPE OF DEVELOPMENT
ATTACHMENT 9
DEPICTION OF HORIZONTAL IMPROVEMENTS
ATTACHMENT IOA
LIST OF ENVIRONMENTAL REPORTS AND STATEMENTS
ATTACHMENT IOB
"CITY ACTIVITIES" - HAZARDOUS MATERIALS
RELEASES ON OR AFTER MAY 2002
ATTACHMENT I IA
FORM OF QUITCLAIM DEED PHASE 1 PROPERTY
ATTACHMENT I IB
FORM OF QUITCLAIM DEED PHASE 2 PROPERTY
ATTACHMENT 12
FORM OF MEMORANDUM OF DDA
ATTACHMENT 13A
FORM OF GUARANTOR CERTIFICATE
ATTACHMENT 13B
FORM OF ORIGINAL EQUITY INVESTOR CERTIFICATE
ATTACHMENT 13C
FORM OF EQUITY INVESTOR CERTIFICATE OF DATE
DOWN
ATTACHMENT 14
FORM OF GUARANTY
ATTACHMENT 15
FORM OF CERTIFICATE OF COMPLIANCE
ATTACHMENT 16A
FORM OF ASSIGNMENT AND ASSUMPTION
AGREEMENT -GENERAL
ATTACHMENT 16B
FORM OF PHASE TRANSFER ASSIGNMENT AND
ASSUMPTION AGREEMENT
ATTACHMENT 17
FORM OF CITY DATE DOWN CERTIFICATE REGARDING
REPRESENTATIONS AND WARRANTIES
ATTACHMENT 18
FORM OF DEVELOPER DATE DOWN CERTIFICATE
REGARDING REPRESENTATIONS AND WARRANTIES
ATTACHMENT 19
LIST OF PROHIBITED USES
ATTACHMENT 20
FORM OF DECLARATION OF SPECIAL RESTRICTIONS
ATTACHMENT 21
FORM OF ROADWAY AND UTILITY EASEMENT
AGREEMENT (TO BE ATTACHED PRIOR TO PHASE 1
PROPERTY CLOSE OF ESCROW)
ATTACHMENT 22
FORM OF PAD TRANSFEREE NON -DISTURBANCE AND
ATTORNMENT AGREEMENT (TO BE ATTACHED PRIOR
TO PHASE 1 PROPERTY CLOSE OF ESCROW)
ATTACHMENT 23
FORM OF CITY NON -DISTURBANCE AND ATTORNMENT
AGREEMENT -SPACE LEASES
ATTACHMENT 24
FORM OF SUBORDINATION AGREEMENT
ATTACHMENT 25A
FORM OF LICENSE AGREEMENT FOR SITE
DEVELOPMENT
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ATTACHMENT 25B FORM OF LICENSE AGREEMENT FOR PHASE 2 DUE
DILIGENCE
ATTACHMENT 25C FORM OF LICENSE AGREEMENT (STAGING AND
CONSTRUCTION PARKING)
ATTACHMENT 26 APPLICABLE APPROVALS
ATTACHMENT 27 FORM OF LANDSCAPE INSTALLATION AND
MAINTENANCE AGREEMENT (TO BE ATTACHED PRIOR
TO PHASE I PROPERTY CLOSE OF ESCROW)
ATTACHMENT 28 PHASE 2 PROPERTY PURCHASE PRICE AND OPTION
PAYMENT SCHEDULE
ATTACHMENT 29 CITY PARK EXHIBIT
ATTACHMENT 30 FORM OF GUARANTY OPINION
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ATTACHMENT I
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following capitalized terms shall have the following
meanings:
"Action" shall have the meaning set forth in Section 18.2.
"Agreement" shall mean this Tustin Legacy Disposition and Development Agreement
for Cornerstone I including all Attachments attached hereto.
"Additional Liability Period" shall mean, with respect to any Developer, the period of
ownership of the Property and/or the Project or any portion thereof by any Developer Affiliate or
any successor to such Developer Affiliate acquiring pursuant to Section 2.2.2(a) orfes; provided
that in no event shall termination of the Additional Liability Period remove, reduce or modify the
liability of Developer or its Developer Affiliates for Ongoing Matters.
"Affected TL Land" shall have the meaning set forth in Section 8.13.
"Affiliate of Alcion shall mean any Person (a) for which at least two (2) of the
following individuals are together the Controlling Person: (i) Mark Potter, (ii) Eugene DelFavero
or (iii) Martin Zieff, (b) that is within the Alcion family of funds and (c) which has sufficient
equity capital pledged to the Project described by this Agreement to fund (i) if prior to any Close
of Escrow, (1) all Option Payments that may be due from time to time and (2) the Purchase Price
for the Property remaining to be acquired and (ii) the amount identified as the required equity
contribution of Developer under the Phase 1 Financing Plan or Phase 2 Financing Plan, as
applicable, approved by the City for all Development Costs associated with that Phase, provided
that in no event shall the amount described in clause (c) above be required to exceed One
Hundred and Fifty Million Dollars ($150,000,000.00) for each Phase of the Project.
"Affiliate of LPCC" shall mean any Person that Controls, is Controlled by, or is under
Common Control with LPCC.
"ALTA Policy" shall mean an ALTA extended coverage owner's policy of insurance as
such term is used in Section 6.2.
"Applicable Approvals" shall have the meaning set forth in Section 8.3.2.
"Approved Foreclosure Transferee" shall have the meaning set forth in Section
2.2.3 (h).
"Approved Plans" shall mean, collectively: (a) the Applicable Approvals and, if
applicable, the Phase 2 Applicable Approvals required by the City, which govern development of
improvements on the Property, including approval of plans by the City in its Governmental
Capacity pursuant to the Concept Plan and Design Review process; (b) the Basic Concept Plans
approved by the City in its Proprietary Capacity pursuant to Section 8.4.7 of the Agreement; and
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(c) approval by the City of construction level drawings as required to obtain the Entitlements and
Development Permits.
"Approved Phase Transferee" shall have the meaning set forth in Section 2.2.3(b)(i).
"Assignment" shall mean an Assignment and Assumption Agreement in the form and
substance of the agreement attached as Attachment 16A which shall be required to be executed
by the Transferor and Transferee and consented to by the City, with respect to an assignment and
assumption of Developer's interest in both Phase 1 and Phase 2 pursuant to Section 2.2.2 or
2.2.3 a or with respect to a Transfer to a Pad Transferee that is an End User pursuant to Section
2.2.2 or 2.2.3(c) or an Assignment and Assumption Agreement in the form and substance of the
agreement attached as Attachment 16B which shall be required to be executed by Phase
Transferor and Phase Transferee and consented to by the City, with respect to assignment of a
Phase pursuant to Section 2.2.2 or 2.23(b).
"Bankruptcy Proceeding" shall have the meaning set forth in Section 17.12.
"Base Closure Law" shall have the meaning set forth in Section 1.1.1.
"Basic Concept Plan" shall mean the submittals by Developer to the City for purposes of
satisfaction of the Concept Plan and Design Review approval and shall include the Phasing and
proposed product mix, provided that Basic Concept Plan submittals shall be reviewed by the City
in its Proprietary Capacity (as opposed to the Concept Plan and Design Review submittals which
are reviewed by the City Development Department under the Governmental Capacity of the
City.)
"Binding Agreement" shall have the meaning set forth in Section 8.13(a).
"Building" shall mean each building and structure on any Development Parcels.
"Building Pad" shall mean any legally subdivided lot comprising a portion of the
Development Parcels (other than parcels for roadways to be owned by a property owners'
association) depicted on Attachment 3B and proposed to be owned by a Person (as defined
below) other than the City.
"Build -to -Suit User" shall mean either (a) a Pad Transferee that is an End User and that
will acquire in fee or pursuant to Ground Lease, one or more Building Pads and Buildings that it
will occupy upon Completion thereof, or (b) a Space Tenant that will Lease and occupy, upon
Completion thereof, not less than eighty-five percent (85%) of each such Building, and in each
case that shall occupy not less than 62,500 GBA in one or more Buildings (provided that the
square footage set forth in this definition shall not modify the threshold condition requiring
100,000 GBA for exercise of the Option or Phase 2 Property Close of Escrow).
"Business Day(s)" shall mean any day on which City Hall is open for business and shall
specifically exclude Saturday, Sunday or a legal holiday.
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"Cash Option Payment" shall mean the amount of any Option Payment paid to the City
in cash or immediately available funds and shall expressly exclude the value of any Option
Credit utilized to offset a required cash payment for extension of the Option.
"CC&Rs" shall have the meaning set forth in Article 13.
"CEQA" shall mean 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 SeMc ., respectively.
"Certificate of Compliance" shall mean a certificate to be issued with respect to each
Phase upon Completion by Developer of all of the Improvements and satisfaction of all
additional Conditions Precedent thereto with respect to the Property or relevant portion of the
Property, as described in Article 9 of this Agreement. The term Certificate of Compliance shall
mean and include a Partial Certificate of Compliance issued as to any Building Pad as further
described in Article 9.
"City" shall mean the City of Tustin and each assignee or successor to the City's rights,
powers and responsibilities as described in Section 1.4.1.
"City Attorney" shall mean the individual appointed by the City Council as "City
Attorney."
"City Benefited Property" shall mean the properties owned by the City and its
governmental successors and assigns described on Attachment 5 attached hereto.
"City Code" shall mean the Tustin City Code for the City of Tustin, California, as the
same may be amended from time to time.
"City Costs Deposit" shall have the meaning set forth in Section 1.8.2.
"City Council" shall mean the City Council of the City of Tustin which serves as the
City's legislative body.
"City Estoppel" shall mean an estoppel certificate substantially in the form and
substance of that attached hereto as Attachment 6, to be executed and delivered by the City to a
Transferee, a Successor Owner, and/or a Mortgagee.
"City Excluded Information" shall mean information that is (a) known by the City prior
to the disclosure thereof by Developer or its officers, employees, agents, attorneys, affiliates,
representatives, contractors, successors or assigns, (b) developed by or on behalf of the City
without the use of any confidential information provided by Developer or its officers, employees,
agents, attorneys, affiliates, representatives, contractors, successors or assigns, (c) disclosed to
the City by a third party other than Developer or any of its officers, employees, agents, attorneys,
affiliates, representatives or contractors, or (d) known to the public through no act or fault of the
City in violation of this Agreement.
"City Guarantor Illiquidity Event" shall have the meaning set forth in Section 4.7.4.
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"City Hall" shall mean the seat of government for the City of Tustin, presently located at
300 Centennial Way, Tustin, California.
"City Indemnified Parties" shall have the meaning set forth in Section 10.1.
"City Lien" shall have the meaning set forth in Section 16.2.
"City Manager" shall mean Mr. Jeffrey Parker, or his successor in such capacity, or
other designee as identified in writing by the City Manager.
"City Non -Disturbance and Attornment Agreement" shall mean a recognition non-
disturbance and attornment agreement and estoppel certificate to be executed and delivered by
the City to a Transferee which shall be substantially in the form and substance of the Agreement
that is attached to this Agreement as Attachment 22 prior to the Phase 1 Property Close of
Escrow (with respect to Pad Transferees) or Attachment 23 (with respect to Space Leases) or as
otherwise agreed by the parties thereto, each in its sole discretion.
"City Option Payment" shall have the meaning set forth in Section 4.3.3(g).
"City Park" shall have the meaning set forth in Section 8.14.
"City Phase 1 Property Closing Conditions" shall have the meaning set forth in
Section 7.2.2.
"City Phase 2 Property Closing Conditions" shall have the meaning set forth in
Section 7.3.2.
"City Representatives" shall have the meaning set forth in Section 3.3.8.
"City Transaction Expenses" shall have the meaning set forth in Section 1.8.3.
"Claim" or "Claims" shall mean 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), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
"Close of Escrow" shall mean the close of escrow for the Property and the transfer of fee
title to the Property by the City to Developer pursuant to one or more Quitclaim Deeds, and
execution and Recording (to the extent that such Other Agreements are to be Recorded pursuant
to the terms of Section 7.5.5(b)) of Quitclaim Deed(s) and the Other Agreements and additional
documents associated therewith, as more fully set forth in Article 7, which shall take place on the
applicable Closing Date, and which shall take place in one or more closings.
"Closing Conditions" shall mean, with respect to the Phase 1 Property Close of Escrow,
the Developer Phase 1 Property Closing Conditions and the City Phase 1 Property Closing
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Conditions and with respect to the Phase 2 Property Close of Escrow, the Developer Phase 2
Property Closing Conditions and the City Phase 2 Property Closing Conditions.
"Common Area" shall mean those portions of the Property depicted on Attachment 3B,
as the precise locations of which may be adjusted in writing by the parties hereto.
"Common Area Improvements" shall mean the driveways, parking lots and parking
structures, internal street lighting, Parcel perimeter landscaping and open space plazas as
approved in the Approved Plans, as will be further described in the CC&Rs.
"Complete" and "Completion" shall mean, with respect to the Project or, if the Project is
constructed in Phases, with respect to a given Phase, or if a Building Pad is eligible for its own
Certificate of Compliance, such Building Pad, the point in time when all of the following shall
have occurred with respect to the Project, such Phase or such Building Pad: (a) the
Improvements with respect thereto have been substantially completed in accordance with this
Agreement; (b) the issuance of a certificate of occupancy for core and shell, exterior staircase
and balcony systems and common restrooms by the City or, to the extent a certificate of
occupancy is not required by or available from the City for a particular Improvement, the
equivalent inspection, signoff or other permit activity with respect to such Improvement, (c) the
Recording of a Notice of Completion (California Civil Code Section 8182) by Developer, its
Successor Owner or such Party's contractor; (d) a certification by the Project Architect that such
Improvements (with the exception of minor "punch list" items) have been completed in a good
and workmanlike manner and substantially in accordance with the Approved Plans and
specifications; and (e) all contractors, subcontractors, laborers, suppliers, Architects, and
engineers who performed work on the relevant Improvements either (i) shall have been paid in
full and shall have executed final unconditional lien waivers or (ii) any mechanic's and/ or
materialmen's liens that have been recorded or stop notices that have been delivered have been
paid, settled or otherwise extinguished, discharged, released, waived, bonded around or insured
against, or (iii) the statutory period for filing liens with respect to such Improvements shall have
expired without any liens being filed.
"Concept Plan and Design Review" shall mean collectively the concept plan review
required by the Specific Plan and the site plan and design review approvals required by the City
Code, which shall be part of the Entitlements.
"Conditions Precedent" shall mean, with respect to a Certificate of Compliance for the
Phase 1 Parcel and the Phase 1 Project, the conditions precedent to issuance of such certificate
set forth in Section 9.2, and with respect to a Certificate of Compliance for the Phase 2 Parcel
and the Phase 2 Project, the conditions precedent to issuance of such certificate set forth in
Section 9.3.
"Construction Bond" shall mean both a labor and material bond and a payment and
performance bond, each in a sum of not less than one hundred percent (100%) of the scheduled
cost of construction of the Improvements required to be bonded, and guaranteeing due and
punctual performance and completion (within the respective times provided in the Schedule of
Performance) in accordance with the applicable Approved Plans that specifically describe the
work to be performed in sufficient detail for the issuance of such bond(s), and including all
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obligations of and to subcontractors, sub -subcontractors and other Persons with respect to the
work covered by such bond, and naming the City as a co -obligee. Said bonds, if issued, shall be
issued by an insurance company which is licensed to do business in California and named in the
current list of "Surety Companies Acceptable on Federal Bonds" as published in the Federal
Register by the Audit Staff Bureau of Accounts, U.S. Treasury Department and for amounts
which are not in excess of the acceptable amount set forth on such list for the respective surety.
The insurance company shall have a rating equivalent to a Best rating of A or FSC rating of 9.
"Construction Liens" shall have the meaning set forth in Section 8.8.5.
"Construction Loan" shall mean a loan approved by the City in its sole discretion as
meeting the requirements of this Agreement including Section 17.1.1(f) and W, as applicable,
and that is secured by a Mortgage Recorded against title to all or any portion of the Development
Parcels that has been approved by the City in its sole discretion as a Permitted Mortgage. A
Construction Loan may not include a Mezzanine Financing component unless approved by the
City in its sole discretion.
"Construction Period Commencement Date" shall mean with respect any Phase, the
date that is ninety (90) calendar days following the Close of Escrow for such Phase.
"Control" "Controlled" or "Controlling", as used with respect to any Person, shall
mean the possession, directly or indirectly (including through one or more intermediaries), of the
power to direct or cause the direction of the management and policies of such Person, including
through the ownership or control of voting securities, partnership interests, membership interests,
or other equity interests, acting as the manager of a limited liability company, or otherwise.
Notwithstanding the foregoing, the right of a Person to participate directly or indirectly
(including through one or more intermediaries) in significant management decisions of another
Person, without more, does not constitute "Control" if such Person with the right to participate in
decisions does not also possess, directly or indirectly (including through one or more
intermediaries), the power to direct or cause the direction of the management and policies of
such other Person.
"Controlling Person" shall mean (a) any Person who Controls Developer and (b) any
Person who Controls a Controlling Person. Notwithstanding the foregoing, if a Person has the
right to participate directly or indirectly (including through one or more intermediaries) in
significant management decisions of Developer, such Person shall not be deemed to be a
Controlling Person unless such Person also possesses, directly or indirectly (including through
one or more intermediaries), the power to direct or cause the direction of the management and
policies of Developer. The Controlling Person as of the Effective Date is collectively two or
more of the following individuals: (i) Mark Potter, (ii) Eugene DelFavero or (iii) Martin Zieff.
"Costs" shall have the meaning set forth in Section 18.2.
"DA" shall mean a Development Agreement, if any, entered into by the Parties with
respect to the Development Parcels, pursuant to Government Code Section 65864 et seq.
"DDA Transaction Expenses" shall mean the City's predevelopment and
implementation costs incurred in connection with this Agreement, the Other Agreements and/or
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the Project, and each and every component thereof, and shall include (a) City staff costs; and (b)
the costs of third party consultants, legal counsel, appraisers, financial, engineering and other
consultants and any other expenditures required in connection with the implementation,
amendment, modification and/or termination of this Agreement and/or the Other Agreements
(including any requested modification to the attachments thereto; the review and approval of
requested Transfers, Transferees, Permitted Mortgages and Permitted Mortgages and
documentation submitted by Developer or any proposed Transferee or Mortgagee in connection
therewith); and the provision of estoppel certificates, certificates of compliance and the like,
occurring at any time from the Effective Date until, as to each of the Phase 1 Parcel and the
Phase 2 Parcel, the issuance of a Certificate of Compliance for such Parcel. The DDA
Transaction Expenses shall not include costs or fees incurred by the City for processing of the
Applicable Approvals and the Phase 2 Applicable Approvals.
"Decision" shall have the meaning set forth in Section 18.2.
"Default" shall mean a Potential Default and/or Material Default, as the context requires.
"Default Notice" shall have the meaning set forth in Section 14.1.
"Default Rate" shall mean an interest rate of eight percent (8%) per annum, compounded
annually, but in no event in excess of the maximum legal rate.
"Defaulting Party" shall have the meaning set forth in Section 14.1.
"Design Guidelines" means those certain Cornerstone I Design Guidelines prepared by
the City dated November 6, 2014 as the same may be amended or modified by the City Manager,
or the City Manager's designee, from time to time.
"Designated Developer" shall have the meaning set forth in Section 2.2.7.
"Developer" shall mean Flight Venture LLC, a Delaware limited liability company, as of
the Effective Date of the Agreement, and each and every Successor Owner following any
Transfer or Transfer of Control pursuant to a Permitted Transfer or any other Transfer or
Transfer of Control approved by the City, as described in Section 2.2.
"Developer Affiliate" shall mean a Person for which any Affiliate of Alcion is the
Controlling Person.
"Developer Excluded Information" shall mean information that is (a) known by
Developer prior to the disclosure thereof by the City or its elected and appointed officials,
employees, agents, attorneys, affiliates, representatives, contractors, successors or assigns,
(b) developed by or on behalf of Developer without the use of any confidential information
provided by the City or its officers, employees, agents, attorneys, affiliates, representatives,
contractors, successors or assigns, (c) disclosed to Developer by a third party other than the City
or any of its elected and appointed officials, employees, agents, attorneys, affiliates,
representatives or contractors, or (d) known to the public through no act or fault of Developer in
violation of this Agreement.
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"Developer Insolvency Event" shall have the meaning set forth in Section 2.2.5.
"Developer Knowledge Parties" shall have the meaning set forth in Section 3.1.
"Developer Phase 1 Property Closing Conditions" shall have the meaning set forth in
Section 7.2.1.
"Developer Phase 2 Property Closing Conditions" shall have the meaning set forth in
Section 7.3.1.
"Developer Representatives" shall mean the Developer and its officers, directors,
employees, agents, representatives, Space Tenants, prospective tenants, prospective purchasers,
contractors, and other Persons accessing the Development Parcels or property owned by the City
by, through or with the permission or under the direction or auspices of Developer.
"Developer Title Endorsements" shall have the meaning set forth in Section 6.4.
"Development Costs" shall have the meaning set forth in Section 8.1.3.
"Development Parcel(s)" shall mean, individually or collectively as the context may
require, the Phase 1 Parcel and/or the Phase 2 Parcel.
"Development Permits" shall mean all ministerial permits, certificates and approvals
which may be required by the City or any other Governmental Authority for the development
and construction of the improvements for the Project, including any engineering permits, grading
permits, foundation permits, construction permits, encroachment permits, building permits or
other permits as may be necessary pursuant to Chapter 4 of the Specific Plan and/or the City
Code and which shall be obtained and maintained in each case in accordance with this
Agreement, the DA, the Applicable Approvals, and if applicable, the Phase 2 Applicable
Approvals, and any required environmental mitigation.
"Diligence Termination Notice" shall have the meaning set forth in Section 5.1.
"Disapproved Exception" shall have the meaning set forth in Section 6.3.
"Disposition Strategy" shall have the meaning set forth in Section 1.1.5.
"DTSC" shall mean the California Department of Toxic Substances Control.
"Due Diligence Information" shall mean any and all information or documentation
relating to the Property furnished to Developer by the City, or its elected and appointed officials,
employees, agents, attorneys, affiliates, representatives, contractors or consultants, in connection
with Developer's due diligence pursuant to Section 5.1 of this Agreement.
"Due Diligence Period" shall have the meaning set forth in Section 5.1.
"EBS" shall have the meaning set forth in Section 4.5. 1 (b)(iii).
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"Effective Date" shall have the meaning set forth in the first paragraph of this Agreement
and if no date is set forth in that location shall be the date of City Council approval of this
Agreement (even if executed subsequent to such date).
"ENA" shall mean that certain Exclusive Agreement to Negotiate (Cornerstone I) entered
into by the City and LPCC dated June 2, 2015 as the same may have been amended from time to
time.
"ENA Deposit" shall have the meaning set forth in Section 1.8.1.
"ENA Transaction Expenses" shall have the meaning set forth in Section 1.8.1.
"End User" shall mean a Person operating a business in any Improvement including any
Building or Leasable Space, whether such Person is (a) a Pad Transferee that holds a fee interest
in a Building Pad, a Ground Lease interest as a Tenant in a Building Pad, or (b) a Space Tenant
that holds a leasehold interest in a Leasable Space or is leasing office space in a Building.
"Entitlement Approval Date" shall mean, as to Phase 1, the date on which all of the
Applicable Approvals for the Property listed on Attachment 26 have been granted by the City
and, as to Phase 2, the date on which all of the Phase 2 Applicable Approvals have been granted
by the City, and in each case including all periods to challenge, review or appeal the relevant
approvals (including by litigation or referendum) have expired without any challenge, review or
appeal, or if there is a challenge, review or appeal, a final non -appealable resolution of the
challenge or appeal is issued upholding the approval of the relevant approvals without any
material changes to the original conditions of such approval.
"Entitlements" shall mean the City General Plan, the Specific Plan and the discretionary
land use approvals and entitlements legally required by the City or any other Governmental
Authority as a condition of subdivision and development of the Property and construction of
Improvements and shall include the Applicable Approvals and, upon issuance thereof, the Phase
2 Applicable Approvals, but shall specifically exclude Development Permits.
"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub -entities, including
any Regional Water Quality Control Board, the State Water Resources Control Board, DTSC,
the South Coast Air Quality Management District, and the California Air Resources Board; the
City; any Fire Department or Health Department with jurisdiction over the Property; and/or any
other federal, State, regional or local governmental agency or entity that has or asserts
jurisdiction over Hazardous Substance Releases or the presence, use, storage, transfer,
manufacture, licensing, reporting, permitting, analysis, disposal or treatment of Hazardous
Materials in, on, under, about, or affecting the Project, the Development Parcels or any
Improvements thereon.
"Environmental Claims" shall have the meaning set forth in Section 10.2.
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regulations, requirements, orders, directives, guidelines, or permit conditions, in existence
as of the Effective Date or as later enacted, promulgated, issued, modified or adopted, regulating
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or relating to Hazardous Materials, and all applicable judicial, administrative and regulatory
decrees, judgments and orders and common law, including those relating to industrial hygiene,
public safety, human health, or protection of the environment, or the reporting, licensing,
permitting, use, presence, transfer, treatment, analysis, generation, manufacture, storage,
discharge, Release, disposal, transportation, Investigation or Remediation of Hazardous
Materials. Environmental Laws shall include the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et SeMc .)
("CERCLA"); the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901 et SeMc .) ("RCRA"); the federal Water Pollution Control Act, as amended,
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
"Equity Completion Date" shall mean (a) with respect to Phase 1, the date upon which
the Developer shall have expended, solely in furtherance of the development of the Project
including the entitlement and acquisition of the Phase 1 Property, the construction of the Phase 1
Improvements, payment of Option Payments, and for associated costs and expenses that directly
relate to the Phase 1 Project (including financing costs), (i) the amount identified as the required
equity contribution of Developer under the Phase 1 Financing Plan approved by the City for all
Development Costs associated with such Phase, or (ii) such lesser amount approved by the City
in its sole discretion and (b) with respect to Phase 2, the date upon which the Developer shall
have expended, solely in furtherance of the development of the Project including the entitlement
and acquisition of the Phase 2 Property, the construction of the Phase 2 Improvements, payment
of Option Payments, and for associated costs and expenses that directly relate to the Phase 2
Project (including financing costs) and all other Development Costs associated with such Phase,
(i) the amount identified as the required equity contribution of Developer under the Phase 2
Financing Plan approved by the City, or (ii) such lesser amount approved by the City in its sole
discretion.
"Escrow" shall have the meaning set forth in Section 4.4.
"Escrow Holder" shall mean First American Title Insurance Company.
"Equity Investor" shall mean, individually or collectively as the context may require, the
Phase 1 Equity Investor and/or the Phase 2 Equity Investor.
"Extension Payment" shall have the meaning set forth in Section 7.1.1.
"Federal Deeds" shall mean (a) that certain Quitclaim Deed D and Environmental
Restriction Pursuant to Civil Code Section 1471 dated May 13, 2002, that was recorded on May
14, 2002 as Instrument Number 20020404594, and (b) that certain Quitclaim Deed for Parcels
III -D -S, III -D-6, III -D-7, III -D-8 and III -G-4 dated January 12, 2006, that was Recorded on
February 8, 2006 as Instrument Number 2006000089845.
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"Federal Government" shall mean the United States of America (including the Navy),
by and through the Secretary of the Navy, or designee.
"Final EIS/EIR" shall have the meaning set forth in Section 1.1.2.
"Financing Plan" shall have the meaning set forth in Section 4.6.1.
"FIRPTA Affidavit" shall mean an affidavit in form reasonably satisfactory to
Developer certifying that the City is not a "foreign person" under the federal Foreign Investment
in Real Property Tax Act of 1980.
"First Option Payment" shall have the meaning set forth in Section 4.3.3(a).
"First Option Year" shall have the meaning set forth in Section 4.2.2.
"First Party" shall have the meaning set forth in Section 18.7.3.
"Food Hall Building" is defined in Section 1.3.2.
"Food Hall Uses" means a combination of one or more of the following uses or similar
uses to be operated in the Food Hall Building: multiple food and beverage -oriented retail uses,
restaurants, artisanal and specialty purveyors, small food shops, an indoor farmer's market or
grocery store, food stations for eating, test kitchens, culinary -related educational space, a wine
shop or beer garden, and a common seating area, but specifically excluding Prohibited Uses.
"Foreclosure" shall mean (a) a judicial or non judicial foreclosure under a Permitted
Mortgage that encumbers Developer's interest in the Property, (b) a UCC foreclosure (or other
applicable foreclosure procedure) under a Permitted Mortgage that encumbers the direct and/or
indirect ownership interest in Developer, and/or (c) any transfer or conveyance of the Property or
the direct and/or indirect ownership interest in Developer in lieu of a foreclosure described in
clauses (a) and (b) resulting in a termination of the lien of the affected Permitted Mortgage and
all junior encumbrances.
"Foreclosed Collateral" is defined in Section 2.2.2(h).
"Force Majeure Delay" shall have the meaning set forth in Section 18.7. 1. as limited by
Section 18.7.2.
"FOST" shall mean the Department of Navy findings and determinations that the
Development Parcels were suitable for transfer to the City, pursuant to the documents entitled
"Final Finding of Suitability to Transfer For Southern Parcels 4-8, 10-12, 14, and 42, and Parcels
25, 26, 30-33, 37, and Portions of 40 and 41 Marine Corps Air Station Tustin, California" dated
September 28, 2001 and "Finding of Suitability to Transfer Carve -Out 3, Portions of Carve -Out
5, and Carve -Out 7 Former Marine Corps Air Station Tustin, California" dated April, 2005.
"GAAP" shall mean generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and the American
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Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (FASB).
"Full Insurable Value" shall have the meaning set forth in Section 11.2.2.
"GBA" shall mean the gross square footage of a Building calculated in accordance with
City Code requirements, and shall be consistent with the gross square footage amounts set forth
in the Entitlements.
"General Plan" shall mean the most current general plan for the City of Tustin.
"Governmental Authority" shall mean any and all federal, State, county, municipal and
local governmental and quasi -governmental bodies and authorities (including the United States
of America, the State of California and any political subdivision, public corporation, district,
college and/or school district, joint powers authority or other political or public entity) or
departments thereof having or exercising jurisdiction over either or both of the Parties, the
Project, the Property or other property upon which Developer is obligated to construct
Improvements or such portions of the foregoing as the context indicates.
"Governmental Capacity" shall have the meaning set forth in Section 18.24.
"Governmental Requirements" shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines and other requirements issued by any Governmental Authority
having jurisdiction over, governing, applying to or otherwise affecting either or both of the
Parties, the Project, the Improvements, the Property and/or other property upon which Developer
is obligated to construct Improvements or any component thereof and including the City Code,
the Specific Plan, the Entitlements, the Development Permits and the Approved Plans, in all
events subject to Section 1.6 of this Agreement.
"Governmental Successor" shall mean any Successor Owner of the City Benefited
Property that is a governmental entity.
"Ground Lease" shall mean a lease of real property comprising all or a portion of a
Parcel to an End User for construction and/or occupancy of one or more Buildings thereon.
"Guarantor" shall mean the Phase 1 Guarantor and/or the Phase 2 Guarantor, as the
context shall require.
"Guarantor Certificate" shall have the meaning set forth in Section 4.6.3(aXW.
"Guarantor Illiquidity Event" shall have the meaning set forth in Section 4.7.2.
"Guaranty" means a guaranty, in substantially the form and substance of the guaranty
attached as Attachment 14 or as otherwise approved by the City in its sole discretion in which
the City is a named beneficiary, made by the specified guarantors and guarantying payment for
all Development Costs (except as may be specifically excluded by the terms of the Guaranty) the
faithful performance and completion (within the respective times provided in this Agreement) of
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the respective portions of the Project and the Improvements, or components thereof, and the
other matters described herein in accordance with this Agreement.
"Hazardous Materials" shall mean and include the following:
(a) "Hazardous Substance", "Hazardous Material', "Hazardous Waste",
or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901 et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a
"Restricted Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the
California Health and Safety Code;
(c) "Hazardous Material', "Hazardous Substance", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281, 25316, 25501,
25501.1, 117690 or 39655 of the California Health and Safety Code;
(d) "Oil' or a "Hazardous Substance" listed or identified pursuant to
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any
other hydro carbonic substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous
Waste", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California
Code of Regulations;
(f) Listed by the State of California as a chemical known by the State to cause
cancer or reproductive toxicity pursuant to Section 25249.8(a) of the California Health and
Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public agency to be remediated,
including remediation which such law or public agency requires in order for the property to be
put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual,
whether or not the presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsections 136 et sec.;
(j) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsections 2601 et seq.;
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(k) Any radioactive material including any "source material", "special nuclear
material", "by-product material", "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel" or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, California Health and Safety Code Section 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor
Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
"Horizontal Improvements" shall mean (a) the Minimum Horizontal Improvements and
(b) all grading work, infrastructure improvements and utilities required to be constructed or
installed on or in connection with the development of the Property as further described in the
Scope of Development and depicted on Attachment 9 comprised of. (i) on-site and off-site
infrastructure improvements including roadways, drives, alleyways, sidewalks, curb cuts and
landscaping, (ii) development of and/or upgrade to existing utility infrastructure (whether on-site
or off-site) required to serve the portion of the Property then under development to the boundary
of each Building Pad, (iii) Common Area Improvements on the Parcel then under development
excluding parking lots and parking structures and (iv) all dry and wet utility extensions sidewalks
and drives, walls, fences and landscaping on a Building Pad, and shall include all improvements
required by Parcel Map No. 2015-168 and Vesting Tentative Tract Map No. 18003, each and
every Entitlement condition and Development Permit and all other Governmental Requirements
as a condition to development of the Project, all as generally described in Attachment 8 and
depicted on Attachments 3A, 3B and 9.
"Improvements" shall mean the Horizontal Improvements and the Vertical
Improvements.
"Independent Contract Consideration" shall have the meaning set forth in
Section 1.8.2.
"Initial Developer" shall have the meaning set forth in Section 1.4.2.
"Injured Party" shall have the meaning set forth in Section 14.1.
"Insured Party" shall have the meaning set forth in Section 11.2.1.
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property, or any other property upon which Developer is required to
construct Improvements, including the air, soil, surface water, and groundwater, and the
surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
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"Joint Venture Agreement" shall mean the Phase 1 Joint Venture Agreement and/or the
Phase 2 Joint Venture Agreement, as applicable.
"Key Employees" shall mean the following employees of LPCC: David Binswanger and
Gregory Courtwright.
"Landscape Installation and Maintenance Agreement" shall have the meaning set
forth in Section 12.3.
"Leasable Space" shall mean any Building or demised portion of a Building that is
Leased or is intended to be Leased, but shall exclude Building Pads.
"Lease" shall mean, as a noun, an agreement between Developer and a Space Tenant or
Pad Transferee to lease, sublease or license a Building Pad or any portion thereof or any
Building or portion thereof thereon, including any Ground Lease or Space Lease, and, as a verb,
shall mean the leasing by Developer of any Building Pad or Vertical Improvement or portion
thereof, including any space within a Building, to a Space Tenant.
"License Agreements" shall have the meaning set forth in Section 8.2.4.
"Lien Release Amounts" shall mean the amounts required to be paid to third parties to
clear all monetary liens (including all Construction Liens) and Mortgages (other than Permitted
Mortgages) that encumber the Reacquired Property on the date of a Reversion Event or the date
of the close of escrow pursuant to the Right of Repurchase and which, with respect to taxes and
assessments, are then due and payable.
"Liquidity" shall mean cash, marketable securities and other cash equivalents and the
aggregate amount of uncalled capital commitments of a Guarantor's direct and/or indirect limited
partners.
"Liquidity Covenants" shall have the meaning set forth in Section 4.7.1.
"LPCC" shall mean Lincoln Property Company Commercial, Inc., a Texas corporation.
"Material Default" shall have the meaning set forth in Sections 14.2.1 and 14.2.2.
"MCAS Tustin" shall have the meaning set forth in Section 1.1.1.
"Memorandum of Agreement" shall have the meaning set forth in Section 1.1.3.
"Memorandum of DDA" shall mean a memorandum of record of this Agreement to be
Recorded against the Property on or about the Effective Date substantially in the form and
substance of the memorandum attached to the Agreement as Attachment 12.
"Mezzanine Financing" shall mean a loan that is secured by a pledge of the equity
interests in the Developer or any entity in the chain of ownership of the Developer.
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"Minimum Horizontal Improvements" shall mean that portion of the Horizontal
Improvements comprised of (a) the rough grading work for Phase 1 and the precise grading work
for the Phase 1 Improvements; (b) those certain on-site and off-site above -grade and below -grade
infrastructure improvements and utilities and utility systems required to be constructed or
installed on or in connection with the development of the Property as further described as the
"Minimum Horizontal Improvements" set forth in Attachment 8 (as the same may be further
depicted on Attachment 9) and (c) the Minimum Landscape Improvements.
"Minimum Landscape Improvements" shall mean the landscaping and hardscaping
improvements required to be built in connection with Phase 1 as further described in
Attachment 8 and depicted on the Minimum Landscape Improvements exhibit attached thereto.
"Minimum Liquidity Standards" shall have the meaning set forth in Section 4.7.4.
"Minimum Phase 1 Improvements" shall have the meaning set forth in Section 9.2(a).
"Minimum Phase 1 Vertical Improvements" shall have the meaning set forth in
Section 1.3.2.
"Minimum Phase 2 Improvements" shall have the meaning set forth in Section 9.3(a).
"Minimum Phase 2 Vertical Improvements" shall have the meaning set forth in
Section 1.3.2.
"Mixed Use Building" shall have the meaning set forth in Section 8.13(d).
"Mortgage" shall mean any indenture of mortgage or deed of trust, hypothecation,
pledge, assignment for security purposes, bond, grant of taxable or tax exempt funds from a
governmental agency or other security interest affecting the Development Parcels or any portion
thereof or any documents constituting or relating to a sale-leaseback transaction, together with all
loan documents related thereto, but excluding any community facilities districts, assessment
districts, landscape and lighting districts or other assessments created or imposed by any
Governmental Authority.
"Mortgagee" shall mean any mortgagee, beneficiary, secured party (or any agent for one
or more lenders acting in any of the foregoing capacities) under any indenture of mortgage, deed
of trust, trustee of bonds, pledge and security agreement, or similar security instrument.
"Navy" shall mean the United States Department of Navy.
"Net Worth" shall mean the net worth of Guarantor which shall be determined, as to
each of the Phase 1 Guarantor and the Phase 2 Guarantor, separately, based on (x) the fair market
value of the assets of each of the Persons comprising Guarantor (including the aggregate amount
of uncalled capital commitments from such Persons' direct and/or indirect limited partners, and
intangible assets including goodwill, intellectual property, licenses, organizational costs, deferred
amounts, covenants not to compete, unearned income, restricted funds, investments in
subsidiaries or other Affiliates, intercompany receivables and accumulated depreciation), less
(y) all liabilities of the Persons comprising Guarantor (as determined in accordance with GAAP).
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"Non -Environmental Claims" shall mean all Claims brought by third -parties that are
not Environmental Claims.
"Notice of Completion" shall mean the notice of completion filed by Developer after the
Completion of each Improvement, pursuant to California Civil Code Section 8182.
"Notice to Mortgagee" shall have the meaning set forth in Section 17.6.3.
"Office Uses" shall mean a structure or portion of a structure (in a mixed-use project)
used primarily for conducting professional and general office uses (as defined in the City Code,
including the types of office uses permitted in the Professional District (PR) zone), as well as
production spaces, and work spaces of establishments that are in the business of the
development, publishing, production, editing, or distribution of creative property, including but
not limited to advertising, architectural services, broadcasting, communications, computer
software design, media content, entertainment, engineering, fashion design, film distribution,
graphic design, interior design, internet content, landscape design, photography, and similar uses,
but specifically excluding all Prohibited Uses. Office Uses may include up to 7,000 GBA of
meetings rooms and conference facilities provided on a stand-alone basis (i.e., independent of
any other specific End User) in the Phase 1 Project. Notwithstanding the foregoing, meetings
rooms, conference facilities, screening theaters, creative facilities (i.e., video production spaces,
recording studios, or performance venues) ancillary to a specific End User shall also be
considered an office use. Office Uses may also include a maximum of one stand-alone building
on the Property devoted to educational or school uses.
"Ongoing Matters" shall mean the following matters for which a Transferor shall remain
responsible following any Transfer (including, as to a Phase Transfer, with respect to the
Transferred Phase):
(a) matters or circumstances (including any payment obligations) which relate to or
arose during the period that such Transferor is or was Developer hereunder and for the
Additional Liability Period applicable hereunder;
(b) the releases set forth in Section 4.5.2(f) or in the Other Agreements only for
matters arising during or related to the period that such Transferor was Developer hereunder and
for the Additional Liability Period applicable hereunder;
(c) the indemnities and other obligations of Developer pursuant to Sections 4.3.3(e)
and i), 4.5.2(f), 5.5, 8.8, 8.9, 8.11, 8.12, 10.1, 10.2 and 18.11.1 of this Agreement and under the
Other Agreements to the extent arising or related to the period that such Transferor was
Developer and for the Additional Liability Period applicable hereunder and (ii) arising or related
to periods subsequent to the Transfer Date if due to the acts or omissions of Developer and/or
any Developer Affiliate or Developer Representative or for which Developer may have liability
pursuant to Sections 2.2.2(a) and b); and
(d) the obligations of Developer under this Agreement or the Other Agreements
which relate to any other portion of the Project that is not subject to such Transfer and as to
which Developer has not been theretofore released in accordance with this Agreement.
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"Opening of Escrow" shall have the meaning set forth in Section 4.4.
"Operating Rights and Responsibilities" shall mean -the authority and responsibility for
day to day management of the Project (or the Phase of the Project that has been acquired from
the City pursuant to this Agreement), including overseeing development, construction, leasing,
and operation of the Project (or such Phase).
"Option" shall have the meaning set forth in Section 4.3.3(a).
"Option Credit" shall have the meaning set forth in Section 4.3.3 Q.
"Option Credit Remainder" shall have the meaning set forth in Section 4.3.3(1) or g),
as applicable.
"Option Payment" shall mean the amount due and payable by Developer to the City in
order to extend the Option Term each year for an additional year and shall be determined by
reference to Attachment 28.
"Option Term" shall have the meaning set forth in Section 4.3.3(a
"Option Year" shall meant the First Option Year and each succeeding twelve month
period following the First Option Year for which Developer obtains an extension of the Option
pursuant to Section 4.3.3(b). In no event shall there be more than ten Option Years under the
Agreement.
"Optionee" shall have the meaning set forth in Section 4.3.3.
"Original Equity Investor Certificate" shall have the meaning set forth in
Section 4.6.2(e).
"Original Joint Venture Agreement" shall mean the agreement(s) between Alcion
Flight Investors LLC, Alcion Flight Strategic LLC, and LO Flight LLC dated December 23,
2015, as the same may be amended or modified with the approval of the City in its sole
discretion.
"Other Agreements" shall mean the Quitclaim Deed(s), the Special Restrictions, the
Memorandum of DDA, the Roadway and Utility Easement Agreement, the Landscape
Installation and Maintenance Agreement, the CC&Rs, the License Agreements and the DA.
"Pad Transfer" shall mean any Transfer including sale or Ground Lease of the fee
interest in a Building Pad.
"Pad Transferee" shall mean a Person to whom Developer has Transferred a Building
Pad pursuant to a Pad Transfer (i.e., pursuant sale or Ground Lease of the fee interest therein).
"Pad Transferee Non -Disturbance and Attornment Agreement" shall mean the
Recognition, Non -Disturbance and Attornment Agreement for Pad Transferees described in
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Section 2.2.3(c)(iii)(B), the form of which shall, upon approval thereof by City and Developer in
accordance with Section 12.3, be attached to this Agreement as Attachment 22.
"Parcel" shall mean, individually, either the Phase 1 Parcel or the Phase 2 Parcel.
"Parcels" shall mean, collectively, the Phase 1 Parcel and the Phase 2 Parcel.
"Partial Certificate of Compliance" shall mean a Certificate of Compliance for a
portion of the Phase 1 Property or the Phase 2 Property issued by the City upon satisfaction of
the Conditions Precedent therefor set forth in Sections 9.2 or 9.3 as applicable, and shall be
issued in the form attached as Attachment 15 unless otherwise agreed by the Parties.
"Parties" shall mean the City and Developer, collectively.
"Party" shall mean either of the City or Developer, individually, as parties to this
Agreement.
"Permitted Exceptions" shall have the meaning set forth in Section 6.2 as may be
modified by Section 6.3.
"Permitted Mortgage" shall mean a deed of trust, bonds, or other conveyance of a
security interest in one or more of the Parcel(s), the Property or any portion thereof, in favor of a
Permitted Mortgagee. A "Permitted Mortgage" shall not include a pledge of equity interests in
connection with a Mezzanine Financing.
"Permitted Mortgage Unpaid Balance" shall mean the amount of unpaid principal and
accrued and unpaid interest due to the Permitted Mortgagees under the Construction Loan as of
the date of the notice from City to Developer exercising the Right of Repurchase under
Section 16.3 or Right of Reversion under Section 16.4.
"Permitted Mortgagee" shall mean a Mortgagee, and any successor or assign of such
Mortgagee having all right, title and interest in and to the loan documents, and in each case
meeting the criteria set forth in Section 17.1.2 and accordingly entitled to the Permitted
Mortgagee protections provided by this Agreement. For purposes of any acts under a Permitted
Mortgage with respect to and/or following a Foreclosure thereunder, "Permitted Mortgagee"
means such Permitted Mortgagee or any wholly-owned subsidiary thereof designated by the
Permitted Mortgagee to take title to the foreclosed property. The participation, securitization or
assignment of a loan (or any portion thereof) by a Permitted Mortgagee (acting in an individual
capacity or as agent for other lenders) shall not give rise to any requirement that each lender
participating in such participation, securitization or assignment itself be a Permitted Mortgagee
(acting in an individual capacity or as agent for other lenders), so long as (a) at the inception of
the loan, the originating lender (or, if the loan is held by more than one lender, the "lead lender"
or agent lender (or similar title) is a Permitted Mortgagee, and (b) at the time of any subsequent
assignment of the loan, the lead lender or agent lender (or similar title) is a Permitted Mortgagee.
"Permitted Transfer" shall have the meaning set forth in Section 2.2.2.
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"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
"Phase" shall mean Phase 1 or Phase 2, individually.
"Phase Assignment" shall have the meaning set forth in Section 2.2.3(b).
"Phase Transfer" shall have the meaning set forth in Section 2.2.3(b).
"Phase Transferee" shall mean a Transferee acquiring the entirety of Initial Developer's
or a subsequent Developer's interest in and to either (a) the Phase 1 Project, the Phase 1 Property
and the Improvements thereon and the Phase 1 Provisions, or (b) the Phase 2 Project, the Phase 2
Property and the Improvements thereon and the Phase 2 Provisions, in each case pursuant to
Section 2.2.2 or 2.2.3(b), excluding only (i) those portions of the Property previously Transferred
by a Developer to Pad Transferees or Space Tenants and (ii) Transfers pursuant to
Section 2.2.2(d).
"Phase Transferor" shall mean a Developer Transferring all of its interests in and to
either (a) the Phase 1 Project, the Phase 1 Property and the Improvements thereon and the Phase
1 Provisions, or (b) the Phase 2 Project, the Phase 2 Property and the Improvements thereon and
the Phase 2 Provisions, in each case to an Approved Phase Transferee pursuant to Section 2.2.2
or 2.2.3(b), excluding only those portions of the Property previously Transferred by a Developer
to End Users or Space Tenants.
"Phase 1" or "Phase 1 Project" shall mean the construction installation and development
of the Phase 1 Improvements Project on the Phase 1 Property and shall include the development
of the Minimum Horizontal Improvements upon the Phase 2 Property and off site property, when
required to be performed by the Developer as part of the Phase 1 Improvements and shall include
the Phase 1 Property when the context so requires.
"Phase 1 Developer" shall mean the Developer holding the right, title and interest of
Developer under this Agreement in and to the Phase 1 Provisions, the Phase 1 Property and the
Phase 1 Project without concurrently holding any right, title or interest in or to the Phase 2
Provisions, the Phase 2 Property and the Phase 2 Project.
"Phase 1 Equity Investor" shall mean have the meaning set forth in Section 4.6.2(a)(i).
"Phase 1 Financing Plan" shall have the meaning set forth in Section 4.6.1.
"Phase 1 Guarantor" shall mean (a) Alcion Real Estate Partners Master Fund III, L.P.
and Alcion Real Estate Partners Strategic Parallel Fund III, L.P., collectively, or (b) such other
Person with assets meeting the requirements of the City and sufficient, in the determination of
the City in its sole discretion, to secure the development, construction and maintenance
obligations of Developer or any Transferee with respect to Phase 1 under this Agreement,
including the Minimum Horizontal Improvements.
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"Phase I Guarantor Certificate" shall mean a Guarantor Certificate issued by the Phase
1 Guarantor.
"Phase 1 Guaranty" shall mean the Guaranty issued in connection with the Phase 1
Property Close of Escrow as described in Section 4.6.3.
"Phase 1 Horizontal Improvements" shall mean the Horizontal Improvements required
in connection with development, construction and operation of the Phase 1 Project which shall
include the entirety of the Minimum Horizontal Improvements.
"Phase 1 Improvements" shall mean the Phase 1 Horizontal Improvements, including
the Minimum Horizontal Improvements, and the Phase 1 Vertical Improvements.
"Phase 1 Joint Venture Agreement" shall mean the Original Joint Venture Agreement
or such other agreement approved by the City in its sole discretion (such as a limited partnership,
limited liability company or similar agreement) pursuant to which Developer is governed, which
shall establish the rights and obligations of the Persons executing such agreement with respect to
Operating Rights and Responsibilities of Developer and provision of equity funding meeting the
requirements of the Financing Plan and, as applicable, the Phase 1 Financing Plan; provided that
unless otherwise agreed by the City in its sole discretion pursuant to Sections 2.2.3, 2.2.7
or 4.6.2, an Affiliate of LPCC shall have the Operating Rights and Responsibilities under the
Phase 1 Joint Venture Agreement.
"Phase 1 Non -Compete Period" shall have the meaning set forth in Section 8.13.
"Phase 1 Obligations" shall mean those obligations of the Developer of Phase 1 with
respect to the Phase 2 Parcel for which the Phase 1 Developer shall remain liable and shall not be
released following a Phase Transfer, notwithstanding the assignment to and assumption of such
obligations by a Phase 2 Developer, and shall be comprised of. (a) construction and Completion
of the Minimum Horizontal Improvements and the maintenance of the landscaping and
hardscaping as further described in the Landscape Installation and Maintenance Agreement and
the Roadway and Utility Easement Agreement, including those Improvements required to be
constructed on the Phase 1 Parcel, the Phase 2 Parcel and on public right of way; (b) the
obligations of Phase 1 Developer set forth in the License Agreements, if any; (c) all obligations
of Developer and Phase Transferee prior to the Phase 2 Property Close of Escrow and the
delivery by an Approved Phase Transferee of the Phase 2 Guaranty and the Phase 2 Assignment,
to the extent such obligations are not released by the City in connection with a Transfer, and
(d) the Ongoing Matters.
"Phase 1 Parcel" shall mean that certain real property legally described as the Phase 1
Parcel on Attachment 2A and depicted as Parcel 1 on Attachment 2B, which may be further
subdivided as depicted on Attachment 3A into Lots 1-10, inclusive, of Vesting Tentative Tract
Map No. 18003 (as said lots may be re -subdivided or otherwise modified from time to time).
"Phase 1 Project Stabilization" shall have the meaning set forth in Section 8.13(d).
"Phase 1 Property" shall mean the Phase 1 Parcel together with all existing
improvements, if any, presently located thereon, all appurtenances pertaining thereto and all
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permits, licenses, approvals and authorizations issued by any Governmental Authority in
connection therewith, but excluding therefrom the reserved rights and interests of the City as
specified in Section 4.1(a).
"Phase 1 Property Close of Escrow" shall mean the Close of Escrow with respect to the
Phase 1 Property.
"Phase 1 Property Closing Date" shall have the meaning set forth in Section 7.1.1.
"Phase 1 Property Closing Payment" shall have the meaning set forth in
Section 4.3.4(a).
"Phase 1 Property Outside Closing Date" shall have the meaning set forth in
Section 7.1.1.
"Phase 1 Property Purchase Price" shall have the meaning set forth in Section 4.2.1.
"Phase 1 Provisions" shall mean the provisions of this Agreement and of the Other
Agreements in effect from time to time, applicable to Phase 1, the Phase 1 Project, the Phase 1
Property and/or the Improvements then constructed or to be constructed thereon.
"Phase 1 Vertical Improvements" shall mean the Vertical Improvements required in
connection with development, construction and operation of the Phase 1 Project as further
defined in Section 1.3.2(b)(i).
"Phase 2" or "Phase 2 Project" shall mean the construction installation and development
of the Phase 2 Improvements on the Phase 2 Property and shall include the Phase 2 Property
when the context so requires.
"Phase 2 Applicable Approvals" shall mean Site Plan and Design Review for Phase 2
and such other Entitlements required by the City as a condition to development of Phase 2.
"Phase 2 Developer" shall mean the Developer holding the right, title and interest of
Developer under this Agreement in and to the Phase 2 Provisions, the Phase 2 Property and the
Phase 2 Project without concurrently holding any right, title or interest in or to the Phase 1
Provisions, the Phase 1 Property and the Phase 1 Project.
"Phase 2 Equity Investor" shall mean have the meaning set forth in Section 4.6.2(c)(i).
"Phase 2 Financing Plan" shall have the meaning set forth in Section 4.6.1.
"Phase 2 Guarantor" shall mean a Person or Persons with assets meeting the
requirements of the City and sufficient, in the determination of the City in its sole discretion, to
secure the development, construction and maintenance obligations of Developer or any
Transferee of Phase 2 under this Agreement.
"Phase 2 Guarantor Certificate" shall mean a Guarantor Certificate issued by the Phase
2 Guarantor.
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"Phase 2 Guaranty" shall mean the Guaranty issued in connection with the Phase 2
Property Close of Escrow as described in Section 4.6.3(a), which shall be made by Phase 2
Guarantor in the form and substance of the instrument attached hereto as Attachment 14 or
otherwise in a form acceptable to the City in its sole discretion and meeting the requirements of
Centinn 4 6 1
"Phase 2 Horizontal Improvements" shall mean the Horizontal Improvements required
in connection with development, construction and operation of the Phase 2 Project, which shall
include the Minimum Horizontal Improvements to the extent the same are not completed by the
Phase 1 Developer in accordance with the requirements of the DDA or this Agreement.
"Phase 2 Improvements" shall mean, collectively, the Phase 2 Horizontal Improvements
and the Phase 2 Vertical Improvements.
"Phase 2 Joint Venture Agreement" shall mean the Original Joint Venture Agreement
or such other agreement approved by the City in its sole discretion (such as a limited partnership,
limited liability company or similar agreement) pursuant to which the Phase 2 Developer is
governed, which shall establish the rights and obligations of the Persons executing such
agreement with respect to Operating Rights and Responsibilities of the Phase 2 Developer and
provision of equity funding meeting the requirements of the Financing Plan and, as applicable,
the Phase 2 Financing Plan; provided that unless otherwise agreed by the City in its sole
discretion pursuant to Sections 2.2.3, 2.2.7 or 4.6.2, an Affiliate of LPCC shall have the
Operating Rights and Responsibilities under the Phase 2 Joint Venture Agreement.
"Phase 2 Non -Compete Period" shall have the meaning set forth in Section 8.13(d).
"Phase 2 Parcel" shall mean that certain real property legally described as the Phase 2
Parcel on Attachment 2A and depicted as Parcel 1 on Attachment 2B, which may be further
subdivided as depicted on Attachment 3 into Lots 11-20, inclusive, of Vesting Tentative Tract
Map No. 18003 (as said lots may be re -subdivided or otherwise modified from time to time).
"Phase 2" or "Phase 2 Project" shall mean construction and installation of the Phase 2
Improvements on the Phase 2 Parcel.
"Phase 2 Project Stabilization" shall have the meaning set forth in Section 8.13(d).
"Phase 2 Property" shall mean the Phase 2 Parcel, together with all existing
improvements, if any, presently located thereon, all appurtenances pertaining thereto and all
permits, licenses, approvals and authorizations issued by any Governmental Authority in
connection therewith, but excluding therefrom the reserved rights and interests of the City as
specified in Section 4.1(a).
"Phase 2 Property Close of Escrow" shall mean the Close of Escrow with respect to the
Phase 2 Property.
"Phase 2 Property Closing Date" shall have the meaning set forth in Section 7.1.2.
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"Phase 2 Property Closing Payment" shall have the meaning set forth in
Section 4.3.4(b).
"Phase 2 Property Outside Closing Date" shall have the meaning set forth in
Section 7.1.2.
"Phase 2 Property Purchase Price" shall have the meaning set forth in Section 4.2.2.
"Phase 2 Provisions" shall mean the provisions of this Agreement and of the Other
Agreements in effect from time to time, applicable to Phase 2, the Phase 2 Project, the Phase 2
Property and/or the Improvements then constructed or to be constructed thereon and shall
include, prior to the Phase 2 Property Close of Escrow, the Option, to the extent not then lapsed,
expired or terminated.
"Phase 2 Vertical Improvements" shall mean the Vertical Improvements required in
connection with development, construction and operation of the Phase 2 Project, as further
defined in Section 1.3.2(b)(ii).
"Phases" shall mean, collectively, Phase 1 and Phase 2.
"Potential Default" shall have the meaning set forth in Section 14.1.
"Preliminary Title Reports" shall have the meaning set forth in Section 6.2.
"Prevailing Party" shall have the meaning set forth in Section 18.2.
"Products" shall have the meaning set forth in Section 14.3.2.
"Prohibited Use" shall mean any use, whether by Developer or any Tenant, Pad
Transferee, End User or any other Person, which is set forth on Attachment 19.
"Project" shall have the meaning set forth in Section 1.3.2.
"Project Architect" shall mean Rios Clemente Hale and House & Robertson, and if not
such other architect proposed by Developer with experience in designing facilities similar to
those proposed for the Project, and approved by the City.
"Project Budget Statement" shall mean a document delivered by Developer to the City
which shows, as of the end of the immediately preceding quarter, (a) the fees paid through the
end of such prior quarter and estimated fees to be paid prior to Completion of the Project in
connection with the development and construction of the Project, (b) out-of-pocket costs spent
through the end of such prior quarter and estimated out-of-pocket costs to be paid prior to
Completion of the Project, in each case for each of the major categories of hard and soft costs for
the development and construction of the Project, and (c) with respect to any Permitted Mortgage,
the remaining available balance under the Construction Loan associated with such Permitted
Mortgage.
"Project Fair Share Contribution" shall have the meaning set forth in Section 8.7.2.
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"Property" shall have the meaning set forth in Section 4.1(a).
"Proprietary Capacity" shall have the meaning set forth in Section 18.24.
"Purchase Price" shall mean the Phase 1 Purchase Price and the Phase 2 Purchase Price,
individually or collectively, as the context shall require.
"Purchase Price Deposit" shall be an earnest money deposit delivered by Developer to
the City within two (2) Business Days following approval of this Agreement by the City as
described in Section 4.3.1.
"Qualified Foreclosure Purchaser" shall mean any Person, other than a Permitted
Mortgagee or affiliate thereof, which subsequently acquires Foreclosed Collateral and which the
City has approved in writing prior to a Foreclosure as satisfying the following criteria: (a) shall
be controlled by a Designated Developer or any other developer of office buildings for which the
entity and one or more of its key employees shall have not less than ten (10) years of experience
developing commercial office buildings in the State of California containing not less than an
aggregate of one million square feet of net rentable of space of which no building shall contain
less than 75,000 net rentable square feet of contiguous space; (b) the entity or a substantial
portion of the affiliates of such entity have not been the subject of any of the events or actions
described in Section 2.2.5 within the preceding eighteen (18) months prior to the date of the
foreclosure; (c) shall be licensed to do business in the State of California; (d) no Person that is
the proposed Transferee, nor its Controlling Person nor any key employee thereof shall have
been indicted or convicted for any felony or crime involving moral turpitude, shall have been
debarred by any public entity in California or shall have engaged in litigation with the City or
any other governmental entity within the preceding five (5) years (other than tax contests or
litigation unrelated to development) where such party was not the successful litigant; and
(e) shall have a Net Worth of not less than $100 Million Dollars and Liquidity of not less than
$25 Million Dollars or shall have its obligations under this Agreement guaranteed by a party that
has a Net Worth or Liquidity meeting the foregoing requirements, or (ii) such other Person as
may be approved by the City in its sole discretion prior to the Foreclosure.
"Qualified Institutional Lender" shall mean one or more of the following that is not
then the subject of a bankruptcy proceeding: (a) a nationally chartered bank, national association,
federal association bank, savings and loan association, investment bank, state chartered bank,
lending institution, pension fund, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund, or other
institutional lender which is duly established and in the business of financing the size and type of
development contemplated hereunder and which has a minimum of Three Billion Five Hundred
Million Dollars ($3,500,000,000.00) of assets on its most recent balance statement or such lesser
amount as may be approved by the City, in its sole discretion, at the time of the City's approval
of the Financing Plan for the relevant Phase; or (b) any governmental agency or joint powers
authority or indentured trustee acting for or on behalf of such Person.
"Quarterly Leasing Report" shall have the meaning set forth in Section 2.2.4(b).
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"Quitclaim Deed" shall mean the Quitclaim Deed to be executed and delivered by the
City at each Close of Escrow to convey all of the City's right, title, and interests in the Property
then to be conveyed (subject to Sections 4.1 and 7 and the terms of this Agreement) to
Developer. Each Quitclaim Deed shall be in substantially the form and substance of the
quitclaim deed attached hereto as Attachment 11, acknowledged and in Recordable form.
"Reacquired Property" shall have the meaning set forth in Section 16.3 and shall be
applicable in the case of an election by the City to repurchase pursuant to the Right of
Repurchase or to revest pursuant to the Right of Reversion.
"Record", "Recording" and "Recorded" shall mean to record the specified instrument,
or the current or past recording of the specified instrument, in the official records of Orange
County, California.
"Recordable" shall mean with respect to any document, that such document has been
acknowledged and is otherwise in a form that would permit the Recording thereof.
"Reimbursable Phase 2 Improvements" shall mean those certain Minimum Horizontal
Improvements so designated on Attachment 8 to be constructed by Developer on or servicing the
Phase 2 Property that are designated on Attachment 8 as being reimbursable by City to
Developer, if and only to the extent required by the terms and conditions of this Agreement.
"Reimbursable Tustin Legacy Improvements" shall mean those certain Minimum
Horizontal Improvements so designated on Attachment 8 to be constructed by Developer that are
designated on Attachment 8 as being reimbursable by City to Developer in accordance with the
terms and conditions of this Agreement and, if executed, the Reimbursement Agreement but
shall specifically exclude the removal and replacement of portions of Barranca Parkway that
have previously been capped/paved by the City.
"Reimbursement Agreement" shall have the meaning set forth in Section 7.2. 1 (a)(viii
"Related Parties" shall mean Persons owning either Phase 1 or Phase 2 or any portion
thereof following a Phase Transfer that are Developer Affiliates, or are any otherwise related
because any of such Persons is any one or more of the following: (i) an Affiliate of Alcion,
(ii) an Affiliate of LPCC, or (iii) a Person Controlled by, Controlling or under common Control
with Alcion or LPCC. Further, notwithstanding any other provision of this Agreement, even if
one of the foregoing tests are not met, the Persons owning Phase 1 and Phase 2 shall be deemed
to be Related Parties when the Person Controlling one such Phase, has, due to a spousal, familial
or employment relationship, or intertwined business interests, including holding a position as a
principal, officer, director, manager, employee, or other ownership interest in one or both
entities, the ability to substantially influence one or more of Persons holding an ownership,
management or operating position in the other Phase, provided that the Person subject to such
influence in turn has the power to direct or cause the direction of the management and policies of
the Person Controlling such other Phase, including through the ownership or control of voting
securities, partnership interests, membership interests, or other equity interests, acting as the
manager of a limited liability company, or otherwise.
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"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Released Party" and "Released Parties" shall have the meanings set forth in
Section 4.5.2(f).
"Releasing Party" shall have the meaning set forth in Section 4.5.2(f).
"Remediate" or "Remediation' shall mean any response or remedial action as defined
under Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
"Repurchase Price" shall mean:
(i) if a Foreclosure has not occurred, an amount equal to (x) the greater of: (a) the
Purchase Price paid by Developer to the City for the Phase comprising the Reacquired Property,
less the amount $8.53 per square foot of land comprising the Reacquired Property (which is
equal to the per square foot component of the Purchase Price for each Parcel attributable to the
Project Fair Share Contribution, which the Parties agree shall not be repayable as part of the
Repurchase Price) plus the hard and soft costs incurred by the then -current Developer in
construction of the Vertical Improvements on the Reacquired Property, provided that if the
portion of the land comprising the Reacquired Property is less than all of the Parcel of which it is
a component, the Repurchase Price for the land that is included in the Reacquired Property shall
be determined on a per square foot basis based on the original Purchase Price per square foot of
land for the Phase containing the Reacquired Property and the Repurchase Price for the Vertical
Improvements shall be based on the actual hard and soft costs incurred by Developer in
construction of the Vertical Improvements located on the land included in the Reacquired
Property or (b) the Permitted Mortgage Unpaid Balance, and (y) in each case less the Lien
Release Amounts and the amount of the City Liens, if any; or
(ii) if a Foreclosure has occurred and the Reacquired Property has been acquired by
an Approved Foreclosure Transferee, (A) the amount so paid by the applicable Approved
Foreclosure Transferee that acquired the Foreclosed Collateral (but not in excess of the amount
that would have otherwise been payable pursuant to clause (i)(a) above), plus (B) all hard and
soft costs incurred by such Approved Foreclosure Transferee in construction of the Vertical
Improvements on the Reacquired Property.
"Restrictions" shall have the meaning set forth in Section 8.13(a).
"Retail Uses" means all retail uses permitted by the Specific Plan that do not constitute
Prohibited Uses under this Agreement.
"Reuse Plan" shall have the meaning set forth in Section 1.1.1.
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"Reversion Action Trigger" shall have the meaning set forth in Section 16.4.1.
"Reversion Action Trigger Date" shall have the meaning set forth in Section 16.4.1.
"Reversion Event" shall have the meaning set forth in Section 16.4.
"Right of Repurchase" shall have the meaning set forth in Section 16.3.
"Right of Reversion" shall have the meaning set forth in Section 16.4.
"Roadway and Utility Easement Agreement" shall have the meaning set forth in
Section 12.3.
"Schedule of Performance" shall mean the document attached as Attachment 7 to the
Agreement, as the same may be revised or extended from time to time in accordance with this
Agreement, setting forth the dates and time periods for submissions, approvals and actions,
including the construction and Completion of the Improvements.
"School District" shall mean Santa Ana Unified School District, comprising the school
district in which the Development Parcels are located.
"Scope of Development" shall mean the description of the Project and Improvements
attached as Attachment 8 to the Agreement.
"Second Party" shall have the meaning set forth in Section 18.7.3.
"Site Plan" shall mean the site plan attached hereto as Attachment 3B.
"SLUR" shall have the meaning set forth in Section 2.2.3(c)(vi).
"Space Lease" shall mean each Lease by an End User for a portion of an improved
Building located on the Development Parcels, not including a Ground Lease.
"Space Tenant" shall mean any Tenant under any Space Lease in a Building owned by
Developer or any Developer Affiliate.
"Special Restrictions" shall mean the Declaration of Special Restrictions substantially in
the form and substance of the document attached hereto as Attachment 20, to be executed by the
City and acknowledged in Recordable form and Recorded against the conveyed Development
Parcels at each Close of Escrow immediately prior to the Recording of the Quitclaim Deed.
"Specific Plan" shall mean the WAS Tustin Specific Plan/Reuse Plan, as amended, and
as the same may be further amended from time to time.
"State" shall mean the State of California.
"Subdivision Map" shall have the meaning set forth in Section 1.2.
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"Subordination Agreement" shall mean a subordination agreement between the City
and a Permitted Mortgagee, if any, in the form and substance of the agreement set forth as
Attachment 24, or as otherwise agreed by the City and Permitted Mortgagee, each in its sole
discretion.
"Successor Owner" shall mean (a) with respect to a Transfer of the Development Parcels
or any portion thereof, each and every Person owning or acquiring fee title to or having a Ground
Lease interest in all or any portion of such Property, and (b) with respect to the City Benefited
Property, each and every Governmental Successor owning or acquiring fee title to all or any
portion of the City Benefited Property.
"Supplemental Title Report" shall have the meaning set forth in Section 6.3.
"Survey" shall have the meaning set forth in Section 6.1.
"Surveyor" shall have the meaning set forth in Section 6.1.
"Tax A" shall have the meaning set forth in Section 8.7.2.
"Tax B" shall have the meaning set forth in Section 8.7.3.
"Tenant" shall mean any Person who Leases any land and/or space on the Development
Parcels.
"Title Company" shall mean First American Title Insurance Company.
"Total Cash Option Payments" shall have the meaning set forth in Section 4.3.3(c).
"Total Option Credit" shall have the meaning set forth in Section 4.3.3(e).
"Transfer" shall mean (a) the transfer, sale, assignment, gift, hypothecation, mortgage,
pledge or encumbrance, or other similar conveyance by Developer of this Agreement, the
Project, the Property and/or the Improvements thereon, or any portion thereof or interest therein,
whether voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; and
(b) the granting by Developer of any Mortgage, lien or other encumbrance and/or the execution
of any installment land sale contract or similar instrument affecting all or a portion of the Project,
the Property, the Improvements thereon, or any portion thereof or interest therein and shall also
include Transfer of Control of Developer or any conversion of Developer to an entity form other
than that of Developer at the time of execution of this Agreement.
"Transfer Agreements" shall mean a purchase and sale agreement between Developer
and a Transferee and related agreements concerning acquisition and development of a portion of
the Property and the Improvements located thereon, and, to the extent this Agreement contains
requirements for, or requires City approval of, terms and provisions contained in such Transfer
Agreement, such requirements have been satisfied and such terms and approval have been
approved by the City in its sole discretion.
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"Transfer of Control" shall mean, with respect to Developer or Developer's Controlling
Person, the occurrence, directly or indirectly, in a single transaction or a series of transactions, of
any of the following:
(a) the conveyance, sale, assignment, transfer or disposition of all or
substantially all of that Person's (or its Controlling Person's) assets, stock, membership or
partnership interests or other equity interests;
(b) the dissolution, merger, reorganization, share exchange, recapitalization,
restructuring or consolidation of that Person (or its Controlling Person), other than a transaction
that would result in all of the voting securities of that Person (or its Controlling Person)
outstanding immediately prior thereto to continue to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) at least 50.01% of the
combined voting power of all of the voting securities of that Person (or its Controlling Person) or
such surviving entity outstanding immediately after such transaction; and
(c) the acquisition by any "Person" or "Group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) of an aggregate of 50.01%
or more of the beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934) of the issued and outstanding voting securities or other equity interests of
that Person (or its Controlling Person), where such acquiring "Person" or "Group" did not
directly or indirectly (or through an affiliate) already Control or own at least 50.01% of the
voting securities or other equity interests of such Person (or its Controlling Person).
"Transferable Products" shall have the meaning set forth in Section 14.3.2.
"Transferee" shall mean any Person to which a Transfer is made, including any
Successor Owner, Developer Affiliate or Mortgagee, any Phase Transferee and any Pad
Transferee or Tenant under a Ground Lease.
"Transferor" shall mean any Person that is a Developer under this Agreement which
Transfers all or any portion of its interest in and to this Agreement, the Project, the Property and
or the Improvements thereon, including by Transfer to a Successor Owner, Developer Affiliate
or Mortgagee, any Phase Transferee and any Pad Transferee or Tenant under a Ground Lease.
"Transferred Phase" shall have the meaning set forth in Section 2.2.3(b).
"Tustin Legacy" shall have the meaning set forth in Section 1.1.3.
"Tustin Legacy Backbone Infrastructure Program" shall have the meaning set forth in
Section 8.7.1.
"Vertical Improvements" shall mean all of the Buildings, landscaping and other
improvements, including parking lots and parking structures and tenant improvements, other
than the Horizontal Improvements, to be constructed or installed on the Property, consistent with
the Specific Plan, the Reuse Plan, the Approved Plans, the Entitlements, the Design Guidelines
and the Development Permits and as further defined in Section 1.3.2(b).
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"Working Developer" shall have the meaning set forth in Section 4.3.3(e).
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ATTACHMENT 2A
LEGAL DESCRIPTION OF
PHASE 1 PARCEL AND PHASE 2 PARCEL
Phase 1 Parcel: Parcel 1 as shown on Parcel Map 2015-168, filed for record in the Office of the
Recorder of the County of Orange, California on November 7, 2016 in Book 388 of Maps at
Pages 26-27.
Phase 2 Parcel: Parcel 2 as shown on Parcel Map 2015-168, filed for record in the Office of the
Recorder of the County of Orange, California on November 7, 2016 in Book 388 of Maps at
Pages 26-27.
Tustin Cornerstone I DDA Art 2A Legal ATTACHMENT 2A City of Tustin/Flight Ventures LLC
Descrip of Phase 1 Parcel & Phase 2 Parcel 11- 1
7-16 FINAL.docx.docx
ATTACHMENT 2B
PARCEL MAP NO. 2015-168
[see map attached]
Tustin Cornerstone I DDA ATTACHMENT 2B City of TustinTlight Venture LLC
-I-
DUPLICATE
TS
SHEET1 706 WES GROSS
MEA: 39.705 ACRES (ROSS
PARCEL MAP N0. 2015-168
NU.BE7® PARCELS: 2
LETIMED PARCELS: 1
IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA
BEING A SUBDIVISION OF ALL OF LOTS 6 THROUGH 11, INCLUSIVE. AND LETTERED LOTS "E", "F`,
"J", "K", "DD", "II°, "JJ" AND "KK", TOGETHER WITH PORTIONS OF LETTERED LOTS "H', "S",
"AA', "B8", "CC" AND "00" OF TRACT NO. 17144 FILED IN BOOK 906, PAGES 5 THRDJGHI 14,
INCLUSIVE, OF MISCELLANEOUS (AAPS AND BY THAT CERTAIN CERTIFICATE OF CORRECTION
RECORDED DECEMBER 21, 2015 AS INSTRUMENT NO. 2015000642502 OF OFFICIAL RECORDS, ALL IN
THE OFFICE OF THE COUNTY RECORDER CF SAID ORANGE COUNTY,
VALLIAM 0. COX L& 8679 IOMJ= DATE OF SURVEY: BEPMOER 2016
INTORMATIONAL
'FOR FINANCE ADO] CONVEYANCE PURPOSES ONLY'
OWNE9$dIP!X"FICATE
WE. THE UNDERSIGED. BEING ALL PARTIES HAVING ANY RECORD TITLE INTEREST IN THE LAM
COVETED BY THIS WAP. DO HEREBY CONSENT TO THE PREPARATION AND RECORDATION OF SAID MAP,
AS 914M WITHIN THE DISTINCTIVE BODER LITE.
THE CITY OF TUSTIN, A CAL! IA MUNICIPAL CORPORAL ON
C
JFFF1tfVjARKER
CIV LANA„
NOTARY AgSNOWLEDGMENT
A NOTARY PUBLIC OR OTHER OFFICER COMPLETING THIS CERTIFICATE VLRIFIES ONLY THE IDENTITY OF THE
INDIVIWAL WIC SIGHED THE DOCUENT TD WHICH THIS CERTIFICATE IS ATTAOEp, AHA NOT TIE
TRJHFLLNFSS, AC6RACY, 6E VALIDITY OF THAT DOCUNOT.
STATE OF CALIFORNIA )
155
C"TY 6 0' )
ON 7 Rr". ARL _ BEFORE ME. AbA N. &8n- A NOTARY PLOLRC,
PERSONALLY APPEARED
PLD PROVEDTO ME: ON THE BASISSATISFACTCRY EVIDENCE 10 BE THE PERSOI(8) WhM NAW W SS/ARE
SUBSCRIBEDTO THE
WITHIN INSTRUMENT AND A0(NOWLEOCFD TO ME RUT W/9CAPIX EXECUTED THE SATE IN
HIS/iEPo4
HL3R AUi}T3RIZED LAPACITY(41H), AM THAI BY HISIWO FHEHA S1GIkTUREi.>!') ON THE INSTRLNENT
THE T{RSONISY). OR THE ENTITY UPON BEHALF OF WHICH THE PERSCN(Zj ACTED. EXECUTED TIE INSTR".
I CERTIFY UNDER PENALTY OF PERJURY G.ER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING
PARAGRAPH 15 TRUE " CDPTiCT,
WITNESS MY NRAHR MY PRINCIPAL PACE CF BUSINESS IS
51WTURE _(i/YLf IN ,OfAA919 COIXTY.
&1, Al R. Ai.. AW COMMISSION EXPIRES $�1
(NAME PRINTED) COMMISSION ND 9107,?
SIGNATURE OMISSIONS
MAMANT To tW PRUvisim ON SECTION 66436(a)(3)(A)E(C) OF TIE SLUDIVIS10H MAP ACT, THE
FOLLOWING SIGNATURES RACE BFIN OMITTED,
1. SOUTHERN CALIFORNIA EDISON COMPANY, HEADER OF AN EASEMENT FOR ELECTRICAL SYSTEMS,
COMMUNICATION SYSTEMS AM INCIDENTAL Pl%POSE$, NECORCB7 ,AIDE 25, 2014 AS INSTRUMENT M.
2014000249989 OF OFFICIAL RECORDS
ACCEPTED AM FILED AT THE
REDDEST IF
FE ST M AA T IMPl1VY
DATE
TIME #
INSTRUMENT M. 1
BOOK 388_ PACE 26
HCOR HILM
CDLINTY CLERK -RECORDER
DEPUTY
SURVEYOR'S STATEMENT
THIS IAP WAS PREPARED BY It OR UNDER MY DIRECTION AND IS BASED UPON A FIELD SRVEY IN
MWORNAME WITH TIE REONIRELENTS OF THE SUSQIVNSION YM ACT AND LOCAL DMINANE AT
THE REOLEST OF LPC WEST. LLL IN SEPTEMBER. 2015. I HEREBY STATE THAT ALL MDIEACWS ARE
OF THE CHARACTER FPD OCCUPY THE POSITIONS INDICATED, ON THAT THEY WILL BE SET IN SLUT
POSITIONS WITHIN 90 DAYS AFTER ACCEPTANCE OF IMPROVEIETRS, AM THAT SAID MN..NENTS Aw
SUFFICIENT TO ENABLE THE SURVEY TO BE RETRACED. I HEREBY STATE THAT THIS PARCEL WAP
%H8 TANTIALLY CONFORYS TO THE CONDITIONALLY APPROVED TENTATIVE MAP, IF ANY.
IAINp
+�y5w s �
"ek-- 4 12,0F -Rap IE7S
WILLIAM G. CCX, LS. 6673 DATE
NTY SURVEYOR'S STATEMENT
I HEREBY STATE THAT IHAVE EXAMINED THIS MAP AND HAVE FOM THAT ,ALL MAPPING
PROVISIONS OF THE SAM lyISIGN MAP ACT HAVE BEEN CDWILILD WITH AM I AM SATISFIED SAID
ANAP IS TEOENICALLY CORRECT,
CATER THIS I*T DAY OF��'` 2D.
KEVIN R. HILLS. C0JM SLAVEYOR
L, S. 6617 tN+O
ci
KCVIM R,MHILL6 C"TY 60RVEYCW L.G 641-7
I HEREBY STATE THAT I HAVE EXAMINED THIS MAP AND HAVE FOH7 IT TC BE SUBTEAMRALLY IN
CONFORMANCEWITH THE HAVE
MAP. IF REWIRED. AS FILED WIIN, AMENDED AND APRRDWO
BY THE CITY PLANNING COMMISSION; THAT ALL PROVISIONS OF THE SUBDIVISION WAP ACT,AND
CT Ly STADIVISIiIN REGULATIONS HAVE BEEN COMPLIED WITH.
DATED THIS DAY OF . 20A
M�
5. 5 AIX, R.C.E. 54837
O! CT PUBLIC WORMS/CITY ENGINEER •`
Y TUSTIN
REGISTRATION EXPIRES: 12/31/2017 MOH ":
• SPIV •T � .*c
� �r
oA
CERTIFICATE OE APPROVAL
ON W AIF OF THE CITY COUNCIL, 1'LR90NR TO TUSTIN CITY CODE SECTION 9325, ARA IN
AMORRNME WITH SECTION 66456(0) 9F THE SUBDIVISION MAP ACT, I HEREBY APPROVE THIS MAP.
I ALSO HEREBY CERTIFY THAT THE CITY HAS APPROVED SRR.ECT MAP PURSUANT TO TIE
PRUVISICNS OF SECTION 66436(e)(3)(A) OF THE 9.BDIv[SION IAP ACT,
RATED THIS I -S:5- DAY OF !d& ALIF 2D4
ELIZABETH BINSACK
DIRECTOR OF 0OWMJNITY LEYELOPADJ
2. THE UNITED STATES OF AMERICA, "XOER OFEASEMENTS FOR ACCESS AND INCIDENTAL PUWem STATE OF CALIFORNIA J
RECORED MAY 14, 2002 AS INSTRUNENT HO. 200204044594, RE RECORDED APRIL 9, 2003 AS )SS
INSIRLWENT NO. 2003D00392128, AND RECORDED FEBRUARY B. 2006 AS INGTRAENI NO, 2006W0 045. COUNTY OF ORANGE )
ALL OF OFFICIAL RECORDS; AND EASEMENTS FOR ACCESS, INGRESS. EGRESS. FLOOD CONTROL AND
INCO W" PURPOSES COTTAIAEO IN THE DEED FROM TUSTIN PUBLIC FINANCING ALfTHORITY TO THE I HEREBY CERTIFY THAT ACmDIW TO THE RECORDS OF NY OFFICE, THERE ARE NO LIENS
CITY OF TUSTIN WwRIDEC OCTOBER 4, 2006 AS IN6TR,AENR NO. 2006000661919 OF OFFICIAL REDOHDS. AGAINST THE LAM CNITOD UY THIS MAP ON ANY PART THEREOF FOR OFAIO STATE, COUNTY,
(EASEMENTS ARE BLANKET FN NATURE AND NOT PATTED 1 -MON.) MUNI L IPAL OR LOCAL TAXES OR SPECIAL ASSESSMUMS EDLI.ECTLD AS TAXES, EXCEPT TAXES OR
SPECIAL ASSESS'ENTS COLLECTED AS IA)0 NOT YET PANLE.
3. THE CITY CF TUSTIN. HOLDER OF DIL AND MINERAL RIGHTS. AND WATER RIGHTS, RECORDED JI.AE 19.
2007 AS INSTRUMENT NO. 20070D0390804 OF OFFICIAL RECORDS, AND DO CERTIFY TO THE RECORDER OF ORANGE COUNTY THAT THE PROVISIONS OF THE SUBDIVISION
OAP ACT HAVE BEEN COMPLIED WITH REGNNDING DOM17S TO SEEM PAYMENT OF TAXES OR
SPECIAL ASSESSMENTS LECTED AS 7 S T LAI. COYDIED BY THIS MAP.
CRIED THIS DAY SP
4ARI I FRFIOENRIOR BY:
CNkNTY TREA9INER-TAX COLLECTOR TREAS.REA 9DOLVDTOR
148751(148290)
Tustin Cornerstone I DDA ATTACHMENT 213 City of Tustin/Flight Venture LLC
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SITE PLAN, BUILDING PAD PLAN & COMMON AREA
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Tustin Cornerstone I DDA ATTACHMENT 3B City of Tustin/Flight Venture LLC
Page 1 of 2
ATTACHMENT 3B
SITE PLAN, BUILDING PAD PLAN & COMMON AREA
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ATTACHMENT 4
PRELIMINARY TITLE REPORT
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 4 City of Tustin/Flight Venture LLC
FINAL.docx -1-
Form No. 1068-2
ALTA Plain Language Commitment
November 10, 2016
Commitment No.: NCS-737045-SAl
Page Number: 1
ATTACHMENT 4
Preliminary Title Report
First American Title Company
National Commercial Services
18500 Von Karman Ave, Suite 600
Irvine, CA 92612
Parke Miller
Lincoln Property Company
5 Hutton Center Drive, Suite 120
Santa Ana, CA 92707
Phone: (714)338-1569
Fax: (714)338-1565
Customer Reference: Lincoln
Title Officer: Greg Franke Title Assistant:
Phone: (909)510-6233 Phone:
Email: gfranke@firstam.com Email:
Order Number: NCS -737045 -SAI
Escrow Officer: Daisy Howell
Phone: (949)885-2467
Email: dhowell@firstam.com
Amendment #7
11/10/2016
Erin West
(909)510-6200
ewest@firstam.com
FirstAmerican Title Insurance Company
Tustin Cornerstone I DDA ATTACHMENT 4 Page 1 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Property:
Vacant Land, Tustin, CA
Attached please find the following item(s):
Commitment
Commitment No.: NCS-737045-SAl
Page Number: 2
Thank You for your confidence and support. We at First American Title Insurance Company maintain the
fundamental principle:
Customer First.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 2 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2 Commitment No.: NCS-737045-SAl
ALTA Plain Language Commitment Page Number: 3
First American Title Insurance Company
INFORMATION
The Title Insurance Commitment is a legal contract between you and the company. It is issued to show
the basis on which we will issue a Title Insurance Policy to you. The Policy will insure you against certain
risks to the land title, subject to the limitations shown in the policy.
The Company will give you a sample of the Policy form, if you ask.
The Commitment is based on the land title as of the Commitment Date. Any changes in the land title or
the transaction may affect the Commitment and the Policy.
The Commitment is subject to its Requirements, Exceptions and Conditions.
This information is not part of the title insurance commitment.
TABLE OF CONTENTS
Agreement to Issue Policy
Schedule A
Page
3
1. Commitment Date 4
2. Policies to be Issued, Amounts and Proposed Insured 4
3. Interest in the Land and Owner 4
4. Description of the Land 4
Schedule B-1 - Requirements
Schedule B-2 - Exceptions
Conditions
YOU SHOULD READ THE COMMITMENT VERY CAREFULLY.
If you have any questions about the Commitment,
please contact the issuing office.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 3 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2 Commitment No.: NCS-737045-SAl
ALTA Plain Language Commitment Page Number: 4
COMMITMENT FOR TITLE INSURANCE
Issued by
First American Title Insurance Company
Agreement to Issue Policy
We agree to issue a policy to you according to the terms of this Commitment.
When we show the policy amount and your name as the proposed insured in Schedule A, this
Commitment becomes effective as of the Commitment Date shown in Schedule A.
If the Requirements shown in this Commitment have not been met within six months after the
Commitment Date, our obligation under this Commitment will end. Also, our obligation under this
Commitment will end when the Policy is issued and then our obligation to you will be under the Policy.
Our obligation under this Commitment is limited by the following:
The Provisions in Schedule A.
The Requirements in Schedule B-1.
The Exceptions in Schedule B-2.
The Conditions.
This Commitment is not valid without Schedule A and Sections 1 and 2 of Schedule B.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 4 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
SCHEDULE A
Commitment Date: October 18, 2016 at 7:30 A.M.
Commitment No.: NCS-737045-SAl
Page Number: 5
2. Policy or Policies to be issued: Amount
(A) ALTA Standard Owner's Policy $TBD
Proposed Insured:
To Be Determined
(B) ALTA Loan Policy
Proposed Insured:
3. (A) The estate or interest in the land described in this Commitment is:
Fee Simple
(B) Title to said estate or interest at the date hereof is vested in:
The City of Tustin, a California municipal corporation
4. The land referred to in this Commitment is situated in the City of Tustin, County of Orange, State
of California, and is described as follows:
PARCELS 1 AND 2 OF PARCEL MAP NO. 2015-168, AS SHOWN BY PARCEL MAP ON FILE IN
BOOK 388, PAGES 26 AND 27, INCLUSIVE, OF PARCEL MAPS, RECORDS OF ORANGE COUNTY,
CALIFORNIA;
EXCEPTING THEREFROM 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 LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING,
MINING, EXPLORING FOR AND STORING IN AND REMOVING THE SAME FROM THE LAND OR
ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND
MINE FROM LANDS OTHER THAN THE LAND, OIL OR GAS WELLS, TUNNELS AND SHAFTS INTO,
THROUGH OR ACROSS THE SUBSURFACE OF THE LAND AND TO BOTTOM SUCH WHIPSTOCKED
OR DIRECTIONALLY DRILLED WELLS TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND
THE EXTERIOR LIMITS THEREOF, AND TO REDRILL, RE -FUNNEL, 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 LAND, AS
RESERVED IN THE DEED FROM THE CITY OF TUSTIN, CALIFORNIA, RECORDED JUNE 19, 2007
AS INSTRUMENT NO. 2007000390804 OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ANY AND ALL WATER, WATER RIGHTS OR INTERESTS THEREIN
APPURTENANT OR RELATING TO THE LAND OR OWNED OR USED BY THE GRANTOR IN
CONNECTION WITH OR WITH RESPECT TO THE LAND (NO MATTER HOW ACQUIRED BY THE
GRANTOR) WHETHER SUCH WATER RIGHTS SHALL BE RIPARIAN, OVERLYING,
Tustin Cornerstone I DDA ATTACHMENT 4 Page 5 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Commitment No.: NCS-737045-SAl
Page Number: 6
APPROPRIATIVE, LITTORAL, PERCOLATING, ADJUDICATED, STATUTORY OR CONTRACTUAL,
TOGETHER WITH THE PERPETUAL RIGHT AND POWER TO EXPLORE, DRILL, REDRILL AND
REMOVE THE SAME FROM OR IN THE LAND, TO STORE THE SAME BENEATH THE SURFACE OF
THE LAND 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 LAND IN THE EXERCISE OF SUCH
RIGHTS, AS RESERVED IN THE DEED FROM THE CITY OF TUSTIN, CALIFORNIA, RECORDED
JUNE 19, 2007 AS INSTRUMENT NO. 2007000390804 OF OFFICIAL RECORDS.
APN(S): 430-271-41; 42; 43; 44; 45; 46; 47; 60; 61; 62; 63; 64; 68; 69, and portions of APNS
430-271-66, 430-271-67, 430-271-65, 430-271-70 and 430-271-48
Tustin Cornerstone I DDA ATTACHMENT 4 Page 6 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
SCHEDULE B
SECTION ONE
REQUIREMENTS
The following requirements must be met:
Commitment No.: NCS-737045-SAl
Page Number: 7
(A) Pay the agreed amounts for the interest in the land and/or the mortgage to be insured.
(B) Pay us the premiums, fees and charges for the policy.
(C) Documents satisfactory to us creating the interest in the land and/or the mortgage to be insured
must be signed, delivered and recorded.
(D) You must tell us in writing the name of anyone not referred to in this Commitment who will get
an interest in the land or who will make a loan on the land. We may then make additional
requirements or exceptions.
(E) Releases(s) or Reconveyance(s) of Item(s): None
(F) Other: None
(G) You must give us the following information:
1. Any off record leases, surveys, etc.
2. Statement(s) of Identity, all parties.
3. Other: None
The following additional requirements, as indicated by "X", must be met:
[X] (H) Provide information regarding any off -record matters, which may include, but are not
limited to: leases, recent works of improvement, or commitment statements in effect
under the Environmental Responsibility Acceptance Act, Civil Code Section 850, et seq.
The Company's Owner's Affidavit form (as provided by company) must be completed and
submitted prior to close in order to satisfy this requirement. This Commitment will then
be subject to such further exceptions and/or requirements as may be deemed necessary.
[] (I) An ALTA/ACSM survey of recent date, which complies with the current minimum standard
detail requirements for ALTA/ACSM land title surveys, must be submitted to the Company
for review. This Commitment will then be subject to such further exceptions and/or
requirements as may be deemed necessary.
[] (J) The following LLC documentation is required:
(i) a copy of the Articles of Organization
(ii) a copy of the Operating Agreement, if applicable
(iii) a Certificate of Good Standing and/or other evidence of current Authority to Conduct
Business within the State
(iv) express Company Consent to the current transaction
Tustin Cornerstone I DDA ATTACHMENT 4 Page 7 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Commitment No.: NCS-737045-SAl
Page Number: 8
[] (K) The following partnership documentation is required :
(i) a copy of the partnership agreement, including all applicable amendments thereto
(ii) a Certificate of Good Standing and/or other evidence of current Authority to Conduct
Business within the State
(iii) express Partnership Consent to the current transaction
[X] (L) The following corporation documentation is required:
(i) a copy of the Articles of Incorporation
(ii) a copy of the Bylaws, including all applicable Amendments thereto
(iii) a Certificate of Good Standing and/or other evidence of current Authority to Conduct
Business within the State
(iv) express Corporate Resolution consenting to the current transaction
[X] (M) Based upon the Company's review of that certain partnership/operating agreement dated
Not disclosed for the proposed insured herein, the following requirements must be met:
Any further amendments to said agreement must be submitted to the Company, together
with an affidavit from one of the general partners or members stating that it is a true
copy, that said partnership or limited liability company is in full force and effect, and that
there have been no further amendments to the agreement. This Commitment will then
be subject to such further requirements as may be deemed necessary.
[] (N) A copy of the complete lease, as referenced in Schedule A, #3 herein, together with any
amendments and/or assignments thereto, must be submitted to the Company for review,
along with an affidavit executed by the present lessee stating that it is a true copy, that
the lease is in full force and effect, and that there have been no further amendments to
the lease. This Commitment will then be subject to such further requirements as may be
deemed necessary.
[X] (0) Approval from the Company's Underwriting Department must be obtained for issuance of
the policy contemplated herein and any endorsements requested thereunder. This
Commitment will then be subject to such further requirements as may be required to
obtain such approval.
[] (P) Potential additional requirements, if ALTA Extended coverage is contemplated hereunder,
and work on the land has commenced prior to close, some or all of the following
requirements, and any other requirements which may be deemed necessary, may need to
be met:
[] (Q) The Company's "Indemnity Agreement I" must be executed by the appropriate parties.
[] (R) Financial statements from the appropriate parties must be submitted to the Company for
review.
[] (S) A copy of the construction contract must be submitted to the Company for review.
[] (T) An inspection of the land must be performed by the Company for verification of the phase
of construction.
[] (U) The Company's "Mechanic's Lien Risk Addendum" form must be completed by a Company
employee, based upon information furnished by the appropriate parties involved.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 8 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
SCHEDULE B
SECTION TWO
EXCEPTIONS
Commitment No.: NCS-737045-SAl
Page Number: 9
Any policy we issue will have the following exceptions unless they are taken care of to our satisfaction.
The printed exceptions and exclusions from the coverage of the policy or policies are set forth in Exhibit A
attached. Copies of the policy forms should be read. They are available from the office which issued this
Commitment.
This item has been intentionally deleted.
2. General and special taxes and assessments for the fiscal year 2016-2017 are exempt. If the
exempt status is terminated an additional tax may be levied. A.P. No.: 430-271-41 THROUGH
48; 430-271-56; 430-271-59 THROUGH 430-271-61 AND 430-271-63 THROUGH 70.
3. The lien of special tax assessed pursuant to Chapter 2.5 commencing with Section 53311 of the
California Government Code for Community Facilities District No. 13-01, as disclosed by Notice of
Special Tax Lien recorded May 16, 2013 as Instrument No. 2013000296640 of Official Records.
4. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with
Section 75 of the California Revenue and Taxation Code.
5. The terms and provisions contained in the document entitled "Short Form Notice of Agreement"
recorded May 14, 2002 as Instrument No. 20020404589 of Official Records.
6. Easement, Covenants, Conditions and Matters pertaining to the condition of the land contained in
the deed from The United States of America, as Grantor, to The City of Tustin, California, as
Grantee, recorded May 14, 2002 as Instrument No. 20020404594 of Official Records. Reference
being made to the document for full particulars.
Document re-recorded April 09, 23003 as Instrument No. 2003000392129 of Official Records.
7. The fact that the land lies within the boundaries of the MCAS Tustin Redevelopment Project Area,
as disclosed by the document recorded June 18, 2003 as Instrument No. 2003000710836 of
Official Records.
8. The conditions, character and definition disclosed in the Quitclaim Deed from the United States of
America, acting by and through the Department of the Navy, Grantor, to the City of Tustin,
California, as Grantee, recorded February 08, 2006 as Instrument No. 2006000089845 of Official
Records.
9. Easements, Covenants and Conditions contained in the deed from Tustin Public Financial
Authority, a joint powers authority organized and existing under the laws of the State of
California, as Grantor, to City of Tustin, California, as Grantee, recorded October 04, 2006 as
Instrument No. 2006000661919 of Official Records. Reference being made to the document for
full particulars.
10. This item has been intentionally deleted.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 9 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
11. This item has been intentionally deleted.
12. This item has been intentionally deleted.
Commitment No.: NCS-737045-SAl
Page Number: 10
13. Abutter's rights of ingress and egress to or from Barranca Parkway and Armstrong Avenue
except at street intersections and approved access locations have been dedicated or relinquished
on the filed Map.
14. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace,
reconstruct, inspect and remove at any time and from time to time underground electrical supply
systems and communications systems and incidental purposes, recorded June 25, 2014 as
Instrument No. 2014000249989 of Official Records.
In Favor of: Southern California Edison Company, a corporation
Affects: As described therein
15. This item has been intentionally deleted.
16. Any facts, rights, interests or claims which would be disclosed by a correct ALTA/ACSM survey.
17. Abutter's rights of ingress and egress to or from Barranca Parkway and Armstrong Avenue have
been dedicated or relinquished on Parcel Map No. 2015-168.
Tustin Cornerstone I DDA ATTACIIMENT 4 Page 10 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
7— INFORMATIONAL NOTES
The property covered by this report is vacant land.
Commitment No.: NCS-737045-SAl
Page Number: 11
2. According to the public records, there has been no conveyance of the land within a period of
twenty-four months prior to the date of this report, except as follows:
None
3. This preliminary report/commitment was prepared based upon an application for a policy of title
insurance that identified land by street address or assessor's parcel number only. It is the
responsibility of the applicant to determine whether the land referred to herein is in fact the land
that is to be described in the policy or policies to be issued.
The map attached, if any, may or may not be a survey of the land depicted hereon. First American Title
Insurance Company expressly disclaims any liability for loss or damage which may result from reliance
on this map except to the extent coverage for such loss or damage is expressly provided by the terms
and provisions of the title insurance policy, if any, to which this map is attached.
*****To obtain wire instructions for deposit of funds to your escrow file please
contact your Escrow Officer. *****
Tustin Cornerstone I DDA ATTACHMENT 4 Page 11 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
CONDITIONS
Commitment No.: NCS-737045-SAl
Page Number: 12
1. DEFINITIONS
(a)"Mortgage" means mortgage, deed of trust or other security instrument.
(b)"Public Records" means title records that give constructive notice of matters affecting the title
according to the state law where the land is located.
2. LATER DEFECTS
The Exceptions in Schedule B - Section Two may be amended to show any defects, liens or
encumbrances that appear for the first time in the public records or are created or attached between the
Commitment Date and the date on which all of the Requirements (a) and (c) of Schedule B - Section One
are met. We shall have no liability to you because of this amendment.
3. EXISTING DEFECTS
If any defects, liens or encumbrances existing at Commitment Date are not shown in Schedule B, we may
amend Schedule B to show them. If we do amend Schedule B to show these defects, liens or
encumbrances, we shall be liable to you according to Paragraph 4 below unless you knew of this
information and did not tell us about it in writing.
4. LIMITATION OF OUR LIABILITY
Our only obligation is to issue to you the Policy referred to in this Commitment, when you have met its
Requirements. If we have any liability to you for any loss you incur because of an error in this
Commitment, our liability will be limited to your actual loss caused by your relying on this Commitment
when you acted in good faith to:
comply with the Requirements shown in Schedule B - Section One
or
eliminate with our written consent any Exceptions shown in Schedule B - Section Two.
We shall not be liable for more than the Policy Amount shown in Schedule A of this Commitment and our
liability is subject to the terms of the Policy form to be issued to you.
5. CLAIMS MUST BE BASED ON THIS COMMITMENT
Any claim, whether or not based on negligence, which you may have against us concerning the title to
the land must be based on this commitment and is subject to its terms.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 12 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
' I First American Title
Commitment No.: NCS-737045-SAl
Page Number: 13
Privacy Information
We Are Committed to Safeguarding Customer Information
In order to better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we will do with such
information - particularly any personal or financial information. We agree that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our
subsidiaries we have adopted this Privacy Policy to govern the use and handling of your personal information.
Applicability
This Privacy Policy governs our use of the information that you provide to us. It does not govern the manner in which we may use information we have obtained from any other source, such as
information obtained from a public record or from another person or entity. First American has also adopted broader guidelines that govern our use of personal information regardless of its source.
First American calls these guidelines its Fair Information Values.
Types of Information
Depending upon which of our services you are utilizing, the types of nonpublic personal information that we may collect include:
• Information we receive from you on applications, forms and in other communications to us, whether in writing, in person, by telephone or any other means;
• Information about your transactions with us, our affiliated companies, or others; and
• Information we receive from a consumer reporting agency.
Use of Information
We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your information to nonaffiliated parties
except: (1) as necessary for us to provide the product or service you have requested of us; or (2) as permitted by law. We may, however, store such information indefinitely, including the period
after which any customer relationship has ceased. Such information may be used for any internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of
nonpublic personal information listed above to one or more of our affiliated companies. Such affiliated companies include financial service providers, such as title insurers, property and casualty
insurers, and trust and investment advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies and escrow companies. Furthermore,
we may also provide all the information we collect, as described above, to companies that perform marketing services on our behalf, on behalf of our affiliated companies or to other financial
institutions with whom we or our affiliated companies have joint marketing agreements.
Former Customers
Even if you are no longer our customer, our Privacy Policy will continue to apply to you.
Confidentiality and Security
We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you to those individuals and
entities who need to know that information to provide products or services to you. We will use our best efforts to train and oversee our employees and agents to ensure that your information will be
handled responsibly and in accordance with this Privacy Policy and First American's Fair Information Values. We currently maintain physical, electronic, and procedural safeguards that comply with
federal regulations to guard your nonpublic personal information.
Information Obtained Through Our Web Site
First American Financial Corporation is sensitive to privacy issues on the Internet. We believe it is important you know how we treat the information about you we receive on the Internet.
In general, you can visit First American or its affiliates' Web sites on the World Wide Web without telling us who you are or revealing any information about yourself. Our Web servers collect the
domain names, not the e-mail addresses, of visitors. This information is aggregated to measure the number of visits, average time spent on the site, pages viewed and similar information. First
American uses this information to measure the use of our site and to develop ideas to improve the content of our site.
There are times, however, when we may need information from you, such as your name and email address. When information is needed, we will use our best efforts to let you know at the time of
collection how we will use the personal information. Usually, the personal information we collect is used only by us to respond to your inquiry, process an order or allow you to access specific
account/profile information. If you choose to share any personal information with us, we will only use it in accordance with the policies outlined above.
Business Relationships
First American Financial Corporation's site and its affiliates' sites may contain links to other Web sites. While we try to link only to sites that share our high standards and respect for privacy, we are
not responsible for the content or the privacy practices employed by other sites.
Cookies
Some of First American's Web sites may make use of "cookie" technology to measure site activity and to customize information to your personal tastes. A cookie is an element of data that a Web site
can send to your browser, which may then store the cookie on your hard drive.
FirstAm.com uses stored cookies. The goal of this technology is to better serve you when visiting our site, save you time when you are here and to provide you with a more meaningful and
productive Web site experience.
Fair Information Values
Fairness We consider consumer expectations about their privacy in all our businesses. We only offer products and services that assure a favorable balance between consumer benefits and consumer
privacy.
Public Record We believe that an open public record creates significant value for society, enhances consumer choice and creates consumer opportunity. We actively support an open public record
and emphasize its importance and contribution to our economy.
Use We believe we should behave responsibly when we use information about a consumer in our business. We will obey the laws governing the collection, use and dissemination of data.
Accuracy We will take reasonable steps to help assure the accuracy of the data we collect, use and disseminate. Where possible, we will take reasonable steps to correct inaccurate information.
When, as with the public record, we cannot correct inaccurate information, we will take all reasonable steps to assist consumers in identifying the source of the erroneous data so that the consumer
can secure the required corrections.
Education We endeavor to educate the users of our products and services, our employees and others in our industry about the importance of consumer privacy. We will instruct our employees on
our fair information values and on the responsible collection and use of data. We will encourage others in our industry to collect and use information in a responsible manner.
Security We will maintain appropriate facilities and systems to protect against unauthorized access to and corruption of the data we maintain.
Form 50 -PRIVACY (9/1/10)
Tustin Cornerstone I DDA
Page 1 of 1 Privacy Information (2001-2010 First American Financial Corporation)
ATTACHMENT 4 Page 13 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
Commitment No.: NCS-737045-SAl
ALTA Plain Language Commitment Page Number: 14
EXHIBIT A
LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (BY POLICY TYPE)
1. CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - 1990
SCHEDULE B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on
real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notice of such
proceedings, whether or not shown by the records of such agency or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land
or which may be asserted by persons in possession thereof.
3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and
which are not shown by the public records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims
or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the public records.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or
expenses which arise by reason of:
1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations)
restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of
any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or
any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or
governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a
defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date
of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding
from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without
knowledge.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant,-
(b)
laimant;(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in
writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for
the estate or interest insured by this policy.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or
failure of any subsequent owner of the indebtedness, to comply with applicable "doing business" laws of the state in which the land is
situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the
insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.
6. Any claim, which arises out of the transaction vesting in the insured the estate or interest insured by their policy or the transaction creating
the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws.
2. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B - 1970
SCHEDULE OF EXCLUSIONS FROM COVERAGE
1. Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or
prohibiting the occupancy, use or enjoyment of the land, or regulating the character, dimensions or location of any improvement now or
hereafter erected on the land, or prohibiting a separation in ownership or a reduction in the dimensions of area of the land, or the effect of
any violation of any such law, ordinance or governmental regulation.
2. Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at
Date of Policy.
3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed or agreed to by the insured claimant; (b) not
known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such
claimant acquired an estate or interest insured by this policy and not disclosed in writing by the insured claimant to the Company prior to the
date such insured claimant became an insured hereunder; (c) resulting in no loss or damage to the insured claimant; (d) attaching or
created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had
paid value for the estate or interest insured by this policy.
3. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B - 1970
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth
in paragraph 2 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
Tustin Cornerstone I DDA ATTACHMENT 4 Page 14 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2 Commitment No.: NCS-737045-SAl
ALTA Plain Language Commitment Page Number: 15
This policy does not insure against loss or damage by reason of the matters shown in parts one and two following:
Part One
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land
or by making inquiry of persons in possession thereof.
3. Easements, claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and
which are not shown by public records.
5. Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to
water.
6. Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public
records.
4. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1970
WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE
SCHEDULE OF EXCLUSIONS FROM COVERAGE
1. Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or
prohibiting the occupancy, use or enjoyment of the land, or regulating the character, dimensions or location of any improvement now or
hereafter erected on the land, or prohibiting a separation in ownership or a reduction in the dimensions or area of the land, or the effect of
any violation of any such law ordinance or governmental regulation.
2. Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at
Date of Policy.
3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed or agreed to by the insured claimant, (b) not
known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such
claimant acquired an estate or interest insured by this policy or acquired the insured mortgage and not disclosed in writing by the insured
claimant to the Company prior to the date such insured claimant became an insured hereunder, (c) resulting in no loss or damage to the
insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent insurance is afforded herein as to any statutory
lien for labor or material or to the extent insurance is afforded herein as to assessments for street improvements under construction or
completed at Date of Policy).
4. Unenforceability of the lien of the insured mortgage because of failure of the insured at Date of Policy or of any subsequent owner of the
indebtedness to comply with applicable "doing business" laws of the state in which the land is situated.
5. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1970
WITH REGIONAL EXCEPTIONS
When the American Land Title Association Lenders Policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy, the exclusions
set forth in paragraph 4 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage by reason of the matters shown in parts one and two following:
Part One
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land
or by making inquiry of persons in possession thereof.
3. Easements, claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and
which are not shown by public records.
5. Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to
water.
6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public
records.
6. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1992
WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or
expenses which arise by reason of:
1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations)
restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of
any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or
any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or
governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy;
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a
defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date
of Policy.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 15 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2 Commitment No.: NCS-737045-SAl
ALTA Plain Language Commitment Page Number: 16
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding
from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without
knowledge.
3. Defects, liens, encumbrances, adverse claims, or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in
writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured
mortgage over any statutory lien for services, labor or material or the extent insurance is afforded herein as to assessments for street
improvements under construction or completed at date of policy); or
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or
failure of any subsequent owner of the indebtedness, to comply with the applicable "doing business" laws of the state in which the land is
situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the
insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.
6. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of
the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date
of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy
the insured has advanced or is obligated to advance.
7. Any claim, which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of
federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on:
(i) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or
(ii) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination; or
(iii) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential
transfer results from the failure:
(a) to timely record the instrument of transfer; or
(b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor.
7. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1992
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth
in paragraph 6 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said
land or by making inquiry of persons in possession thereof.
3. Easements, claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and
which are not shown by public records.
5. Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to
water.
6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public
records.
S. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 1992
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or
expenses which arise by reason of:
I. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations)
restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of
any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or
any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or
governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a
defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date
of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding
from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without
knowledge.
3. Defects, liens, encumbrances, adverse claims, or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in
writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
Tustin Cornerstone I DDA ATTACHMENT 4 Page 16 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Commitment No.: NCS-737045-SAl
Page Number: 17
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured
by this policy.
4. Any claim, which arises out of the transaction vesting in the insured the estate or interest insured by this policy, by reason of the operation
of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on:
(i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or
(ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential
transfer results from the failure:
(a) to timely record the instrument of transfer; or
(b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor.
9. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 1992
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth
in paragraph 8 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
Part One:
I. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land
or by making inquiry of persons in possession thereof.
3. Easements, claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and
which are not shown by public records.
5. Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to
water.
6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public
records.
ALTA RESIDENTIAL TITLE INSURANCE POLICY (6-1-87)
EXCLUSIONS
In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and expenses resulting from:
1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning
ordinances and also laws and regulations concerning:
(a) and use
(b) improvements on the land
(c) and division
(d) environmental protection
This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date.
This exclusion does not limit the zoning coverage described in Items 12 and 13 of Covered Title Risks.
2. The right to take the land by condemning it, unless:
(a) a notice of exercising the right appears in the public records on the Policy Date
(b) the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking
3. Title Risks:
(a) that are created, allowed, or agreed to by you
(b) that are known to you, but not to us, on the Policy Date -- unless they appeared in the public records
(c) that result in no loss to you
(d) that first affect your title after the Policy Date -- this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks
4. Failure to pay value for your title.
5. Lack of a right:
(a) to any land outside the area specifically described and referred to in Item 3 of Schedule A OR
(b) in streets, alleys, or waterways that touch your land
This exclusion does not limit the access coverage in Item 5 of Covered Title Risks.
11. EAGLE PROTECTION OWNER'S POLICY
CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE - 1998
ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE - 1998
Covered Risks 14 (Subdivision Law Violation). 15 (Building Permit). 16 (Zoning) and 18 (Encroachment of boundary walls or fences) are subject to
Deductible Amounts and Maximum Dollar Limits of Liability
Tustin Cornerstone I DDA ATTACHMENT 4 Page 17 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
EXCLUSIONS
Commitment No.: NCS-737045-SAl
Page Number: 18
In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and expenses resulting from:
1. Governmental police power, and the existence or violation of any law or government regulation. This includes ordinances, laws and
regulations concerning:
a. building b. zoning
c. land use d. improvements on the land
e. land division f. environmental protection
This exclusion does not apply to violations or the enforcement of these matters if notice of the violation or enforcement appears in the
Public Records at the Policy Date.
This exclusion does not limit the coverage described in Covered Risk 14, 15, 16, 17 or 24.
2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion
does not apply to violations of building codes if notice of the violation appears in the Public Records at the Policy Date.
3. The right to take the Land by condemning it, unless:
a. a notice of exercising the right appears in the Public Records at the Policy Date; or
b. the taking happened before the Policy Date and is binding on You if You bought the Land without Knowing of the taking.
4. Risks:
a. that are created, allowed, or agreed to by You, whether or not they appear in the Public Records;
b. that are Known to You at the Policy Date, but not to Us, unless they appear in the Public Records at the Policy Date;
c. that result in no loss to You; or
d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.d, 22, 23, 24 or 25.
5. Failure to pay value for Your Title.
6. Lack of a right:
a. to any Land outside the area specifically described and referred to in paragraph 3 of Schedule A; and
b. in streets, alleys, or waterways that touch the Land.
This exclusion does not limit the coverage described in Covered Risk 11 or 18.
12. THIRD GENERATION EAGLE LOAN POLICY AMERICAN LAND TITLE ASSOCIATION EXPANDED COVERAGE RESIDENTIAL LOAN
POLICY (1/01/08)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or
expenses which arise by reason of:
1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating,
prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement
erected on the Land; (iii) the subdivision of land; or(iv) environmental protection; or the effect of any violation of these laws, ordinances, or
governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or
16.
(b)Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d),
14 or 16.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed or agreed to by the Insured Claimant;
(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in
writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11,
16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or
(e) resulting in loss or damage which would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing business
laws of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the
Insured Mortgage and is based upon usury, or any consumer credit protection or truth -in -lending law. This Exclusion does not modify or limit
the coverage provided in Covered Risk 26.
6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the
Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This
Exclusion does not modify or limit the coverage provided in Covered Risk 11.
7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of
Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25.
8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with
applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6.
13. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 2006
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or
expenses that arise by reason of:
1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating,
prohibiting, or relating to
Tustin Cornerstone I DDA ATTACHMENT 4 Page 18 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Commitment No.: NCS-737045-SAl
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land;
(iii) the subdivision of land; or
(iv) environmental protection;
Page Number: 19
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the
coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant;
(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed
in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11,
13, or 14); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing -
business laws of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the
Insured Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law.
6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating
the lien of the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy.
7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of
Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage
provided under Covered Risk 11(b).
14. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 2006
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set
forth in paragraph 13 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such
proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or
that may be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate
and complete land survey of the Land and not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims
or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records.
15. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 2006
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys'
fees or expenses which arise by reason of:
(a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating,
prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land;
(iii) the subdivision of land; or
(iv) environmental protection;or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a)
does not modify or limit the coverage provided under Covered Risk 5.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 19 of 20 City of Tustin/Flight Venture LLC
Form No. 1068-2
ALTA Plain Language Commitment
Commitment No.: NCS-737045-SAl
Page Number: 20
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant;
(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed
in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risks 9
and 10); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title.
4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors rights laws, that the transaction vesting
the Title as shown in Schedule A, is
(a) a fraudulent conveyance or fraudulent transfer; or
(b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy.
5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of
Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.
16. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 2006
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the
exclusions set forth in paragraph 15 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason
of:
1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real
property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such
proceedings, whether or not shown by the records of such agency or by the Public Records.
2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or
that may be asserted by persons in possession of the Land.
3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate
and complete land survey of the Land and not shown by the Public Records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims
or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records.
Tustin Cornerstone I DDA ATTACHMENT 4 Page 20 of 20 City of Tustin/Flight Venture LLC
ATTACHMENT 5
DESCRIPTION OF CITY BENEFITED PROPERTY
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 5 City of Tustin/Flight Venture LLC
FINAL.docx -I-
LEGAL DESCRIPTION
LOT C OF TRACT MAP NO. 17404, PER MAP
FILED IN BOOK 907, PAGES 6 THROUGH 42,°o
MISCELLANEOUS MAPS IN THE OFFICE OF THE
COUNTY RECORDER OF ORANGE COUNTY
ATTACHMENT 5
TUSTI N LEGACY
CITY BENEFITED PROPERTY
ATTACHMENT 6
FORM OF CITY ESTOPPEL
20
[Transferee/Permitted Mortgagee]
Attn:
Re: Tustin Legacy Cornerstone I
Ladies and Gentlemen:
The undersigned is writing this letter to you ("Transferee") regarding that certain office
project ("Project") that [has been] [may be] constructed on the land legally described on
Exhibit "A" attached hereto ("Parcel').
The City of Tustin, a municipal corporation of the State of California (the "City") and
Flight Venture LLC, a Delaware limited liability company ("Developer") entered into that
certain Tustin Legacy Disposition and Development Agreement Cornerstone 1 dated as of
, 2016 (the "DDA"), relating to the conveyance from the City to Developer of
that certain real property legally described on Exhibit "B" attached hereto ("Development
Parcels"). All initially capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the DDA.
{Information provided in this paragraph and the paragraph below should relate only to
the Parcel for which the estoppel is requested and the term "Property Documents" should
include only the applicable documents:} The City has executed that certain Declaration of
Special Restrictions for Phase 1 [Add correct title] dated , recorded in the
Official Records against title to the Development Parcels on as Instrument No.
(the "Phase 1 Special Restrictions") [and that certain Declaration of Special
Restrictions for Phase 2 [Add correct title], dated recorded in the Official
Records against title to the Development Parcels on as Instrument No.
] ([individually, the "Phase 2 Special Restrictions" and collectively with the Phase
1 Special Restrictions,] the "Special Restrictions"), which include, among other matters, certain
requirements regarding the use and maintenance of the Development Parcels and set forth those
provisions of the DDA that survive the issuance of a Certificate of Compliance with respect to
the Project.
The City has executed that certain Quitclaim Deed for Tustin Legacy Cornerstone I
Phase 1 and Covenants, Conditions and Restrictions, Including Environmental Restriction
Pursuant to Civil Code Section 1471 dated , recorded in the Official Records
against title to the Development Parcels on as Instrument No. (the
Tustin Cornerstone I DDA Art 6 Form of City ATTACHMENT 6 City of Tustin/Flight Venture LLC
Estoppel 11-10-2016 FINAL.docx 1
"Phase I Quitclaim Deed") [and that certain Quitclaim Deed for Tustin Legacy Cornerstone I
Phase 2 and Covenants, Conditions and Restrictions, Including Environmental Restriction
Pursuant to Civil Code Section 1471, dated which was recorded in the Official
Records against title to the Parcel on as Instrument No. ]
([individually the "Phase 2 Quitclaim Deed" and collectively with the Phase 1 Quitclaim Deed,
the "Quitclaim Deeds")], which Quitclaim Deed conveyed to Developer the fee title to the
Development Parcels, subject to certain restrictions and limitations set forth in the Quitclaim
Deed.
Developer
and the City executed that certain Development Agreement, dated
recorded in the Official Records against title to the Development Parcels on
as Instrument No. (the "DA").
Developer and the City executed that certain Landscape Installation and Maintenance
Agreement dated recorded in the Official Records against title to the
Development Parcels on as Instrument No.
(the "Landscape Agreement"), and that certain Roadway Landscape and Utility Easement
Agreement dated recorded in the Official Records against title to the
Development Parcels on as Instrument No.
(the "Roadway and Utility Easement")
The DDA, the Memorandum of DDA, the Special Restrictions, the DA, the Quitclaim
Deeds, the Landscape Agreement and the Roadway and Utility Easement are collectively
referred to herein as the "Property Documents".
You have informed the undersigned City that Developer intends to Transfer its interest in the
Development Parcels [or specify portion thereof) or a direct or indirect interest therein to
Transferee on or around the date of this letter (the "Transaction").
By its execution of this letter, the City hereby confirms to Transferee that:
1. Except as set forth on Attachment 1 to this letter, the Property Documents are in
full force and effect and have not been modified, supplemented or amended, whether orally or in
writing, and have not been assigned or otherwise transferred by the City to any other person or
entity.
2. To the best of the City's knowledge, except as set forth on Attachment 2 to this
letter: (i) there are no defaults of Developer (including, without limitation, no Potential Defaults
and no Material Defaults) under any of the Property Documents nor any facts which now, or
after the giving of notice or the passage of time, or both, would constitute a default (including,
without limitation, a Potential Default or Material Default) under any of the Property Documents
or which would entitle the City to then exercise any of its rights or remedies under any of the
Property Documents, including, without limitation, its Right of Reversion or Right of
Repurchase pursuant to the DDA with respect to the Parcel; and (ii) the City has no claim of
breach, counterclaim, lien or offset presently existing against Developer, the Project, the
Development Parcels, including the Parcel under any of the Property Documents.
Tustin Cornerstone I DDA Art 6 Form of City ATTACHMENT 6 City of Tustin/Flight Venture LLC
Estoppel 11-10-2016 FINAL.docx 2
As used in this letter, the phrase "to the best of the City's knowledge" and words of like
import, mean that the facts in question are actually known (as opposed to imputed, inquiry or
constructive knowledge) to the representative of the City signing below, based upon such
individual's own knowledge after a reasonable review of the relevant records and files in the
possession of the City.
The undersigned acknowledges that Transferee [INCLUDE ONLY IF APPLICABLE: and
Transferee's prospective lender, and their participating lenders], may rely upon this letter in
entering into the proposed Transaction. This letter is written in connection only with the
proposed Transaction and may be relied upon only by Transferee [INCLUDE ONLY IF
APPLICABLE: and Transferee's prospective lender, and their participating lenders] as to the
matters addressed herein. This letter may not be relied upon by any other party or for any other
purpose without the express written consent of the City. This certificate shall be binding upon
the City and its successors and assigns.
[Signature page follows]
CITY OF TUSTIN
Dated: 20 By: _
Name:
City Manager
Tustin Cornerstone I DDA Art 6 Form of City ATTACHMENT 6 City of Tustin/Flight Venture LLC
Estoppel 11-10-2016 FINAL.docx 3
Exhibit "A"
Legal Description of the Parcel
Tustin Cornerstone I DDA Art 6 Form of ATTACHMENT 6 City of Tustin/Flight Venture LLC
City Estoppel 11-10-2016 FINAL. docx Exhibit "A"
Exhibit "B"
Legal Description of Development Parcels
Tustin Cornerstone I DDA Art 6 Form of ATTACHMENT 6 City of Tustin/Flight Venture LLC
City Estoppel 11-10-2016 FINAL. docx Exhibit `B"
Attachment 1
Modifications, Supplements or Amendments to Property Documents
[enter "None " if there are no qualifications]
Tustin Cornerstone I DDA Art 6 Form of ATTACHMENT 6 City of Tustin/Flight Venture LLC
City Estoppel 11-10-2016 FINAL. docx Attachment 1
Attachment 2
Qualifications to Matters Confirmed in Estoppel
[enter "None " if there are no qualifications]
Tustin Cornerstone I DDA Art 6 Form of City ATTACHMENT 6 City of TustinTlight Venture LLC
Estoppel 11-10-2016 FINAL.docx Attachment 2
ATTACHMENT 7
SCHEDULE OF PERFORMANCE
Note: References herein made to "DDA" shall mean the Tustin Legacy Disposition and
Development Agreement (Cornerstone I) of which this Attachment is a part. Except as
otherwise noted, all capitalized terms within the DDA and the Attachments shall retain the
meaning as defined in the DDA. Any dates identified in this attachment are intended to
reflect the provisions of the DDA. For purposes of determining any Potential Default or
Material Default, Section 14 of the DDA shall apply. In addition, to the extent any of the
terms and provisions of this Attachment are inconsistent with or otherwise are in conflict
with the terms and provisions of the DDA or the Other Agreements, the DDA or Other
Agreements, as applicable, shall control.
A. Phase 1
ACTION
DATE
Project Design & Permitting
1. Phase 1 Property Close of Escrow (Section
Subject to the terms and conditions set
7.1.1)
forth in the DDA, not later than August
31, 2017, subject to the extensions
contemplated by Sections 7.2.10),
7.2.20) and the last sentence of Section
7.1.1, if applicable, and further subject
to the provisions of Section 15.1.2(c));
provided, however, in the event the
Phase 1 Property Close of Escrow takes
place prior to the Phase 1 Property
Outside Closing Date, all events
described in this Schedule of
Performance, the DDA and the Other
Agreements triggered from the Phase 1
Property Close of Escrow shall be
triggered from the actual Phase 1
Property Close of Escrow date.
2. Developer submittal of grading plans, and
Prior and as a condition to the Phase 1
required documents sufficient to allow the
Property Close of Escrow (and in all
City to issue a rough grading permit for Phase
events, not less than two (2) Business
1 and infrastructure plans, utility plans,
Days prior to the Phase 1 Property
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx 1
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx e)
landscape plans for the Minimum Horizontal
Close of Escrow).
Improvements on Phase 2 and adjacent City
owned Property (Section 7.2.2(e))
3.
Developer submittal of infrastructure plans,
No later than ninety (90) calendar days
utility plans, landscape plans, first phase final
following the Construction Period
map, and related documents for the Phase 1
Commencement Date for Phase 1, as
Horizontal Improvements other than the
such date may be extended for Force
Minimum Horizontal Improvements (which
Majeure Delay.
are addressed in item 2 above) to allow the
City, Irvine Ranch Water District, Orange
County Fire Authority and utility companies
to issue permits for the aforementioned Phase
1 Horizontal Improvements (Section 8.1.1)
4.
Developer submittal of construction plans and
No later than thirty (30) calendar days
related documents to the City for the
after the Construction Period
Minimum Phase 1 Vertical Improvements
Commencement Date for Phase 1.
(Section 8.1.1)
Construction
5.
Developer commences rough grading
On or before the Construction Period
Commencement Date for Phase 1.
6.
Developer commences construction of Phase
Within sixty (60) calendar days after
1 Horizontal Improvements, including, for
the Construction Period
avoidance of doubt, the Minimum Horizontal
Commencement Date for Phase 1, as
Improvements) (Section 8.1.5(a))
such date may be extended for Force
Majeure Delay.
7.
Developer Completes construction of the
Within twenty one (2 1) months after the
Minimum Horizontal Improvements (other
Construction Period Commencement
than the final cap/pave for the roadways on
Date for Phase 1, as such date may be
the Property)
extended for Force Majeure Delay-,.
8.
Developer commences construction of the
Within six (6) months after the
Minimum Phase 1 Vertical
Construction Period Commencement
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx e)
Improvements (Section 8.1.5(b))
Date for Phase 1, as such date may be
Project Design & Permitting
extended for Force Majeure Delay.
9. Developer Completes construction of Phase 1
Within thirty six (36) months from the
Horizontal Improvements and Minimum
Construction Period Commencement
Phase 1 Vertical Improvements
Date for Phase 1, which period may be
exercise by Developer of the Option
extended by Force Majeure Delay to a
and (b) twenty (20) Business Days
maximum of forty eight (48) months.
Certificate of Compliance
10. Developer submittal of request for issuance of
Within thirty (30) Business Days after
the Phase 1 Parcel Certificate of Compliance
completion of the Minimum Phase 1
(Section 9.2)
Improvements, and satisfaction of the
other conditions precedent set forth in
Section 9.2.
11. City approves the Phase 1 Parcel Certificate
Within ten (10) Business Days of the
of Compliance or provides notice to
request.
Developer of any deficiencies that exist
(Section 9.6)
12. City causes Recording of the Phase 1 Parcel
Within five (5) Business Days
Certificate of Compliance (Section 9.7)
following City issuance of the
Certificate of Compliance.
B. Phase 2
ACTION
DATE
Project Design & Permitting
1. Phase 2 Property Close of Escrow
Subject to the terms and conditions set
(Section 7.1.2)
forth in the DDA, (a) no less than sixty
(60) calendar days following the
exercise by Developer of the Option
and (b) twenty (20) Business Days
following the last to occur of the
satisfaction (or waiver by Developer) of
the Developer Phase 2 Property Closing
Conditions set forth in Sections 7.3.1(c)
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx I
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx A
through (h) of the DDA and the
satisfaction (or waiver by the City) of
the City Phase 2 Property Closing
Conditions set forth in Section 7.3.2(c)
through 0) of the DDA, but in no event
prior to the Phase 1 Property Close of
Escrow nor later than sixty (60)
calendar days after the last day of the
Option Term in which the Option was
exercised (without giving effect to any
further extensions), which date shall be
not be subject to extension for Force
Majeure Delay (but shall be subject to
the extensions contemplated by
Sections 7.3. 10) and 7.3.2(1) of the
DDA, if applicable); provided,
however, in the event the Phase 2
Property Close of Escrow takes place
prior to the Phase 2 Property Outside
Closing Date, all events described in
this Schedule of Performance, the DDA
and the Other Agreements triggered
from the Phase 2 Property Close of
Escrow shall be triggered from the
actual Phase 2 Property Close of
Escrow date.
2. Developer submittal of (a) rough and precise
Prior and as a condition to the Phase 2
grading plans, and required documents
Property Close of Escrow (and in all
sufficient to allow the City to issue a rough
events, not less than two (2) Business
grading permit for Phase 2 and (b) all
Days prior to the Phase 2 Property
building permits for the Minimum Phase 2
Close of Escrow).
Improvements, and City shall be prepared to
issue such permits, subject only to the
payment of applicable fees required in
connection with the issuance of such permits
and to Developer acquiring title to the Phase 2
Property. (Section 7.3.2(f))
3. Developer submittal of infrastructure plans,
No later than ninety (90) calendar days
utility plans, landscape plans, second phase
following the Construction Period
final map, and related documents for the
Commencement Date for Phase 2, as
Phase 2 Horizontal Improvements to allow
such date may be extended for Force
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx A
the City, Irvine Ranch Water District, Orange
County Fire Authority and utility companies
to issue permits for the aforementioned Phase
2 Horizontal Improvements Section 8.1.1)
Construction
M
0
7
Developer commences rough grading
Majeure Delay.
On or before the Construction Period
Commencement Date for Phase 2.
Developer commences construction of Phase I Within sixty (60) calendar days after
2 Horizontal Improvements, including, if not
previously completed in Phase 1 in
accordance with the Schedule of
Performance, the Minimum Horizontal
Improvements (Section 8.1.5(a))
Developer commences construction of the
Minimum Phase 2 Vertical Improvements
(Section 8.1.5(b))
Developer Completes construction of Phase 2
Horizontal Improvements and Minimum
Phase 2 Vertical Improvements including, if
not previously completed in Phase 1 in
accordance with the Schedule of
Performance, the Minimum Horizontal
Improvements
Certificate of Compliance
8. Developer submittal of request for issuance of
the Phase 2 Parcel Certificate of Compliance
(Section 9.3)
9. City approves the Phase 2 Parcel Certificate
of Compliance or provides notice to
Developer of any deficiencies that exist
(Section 9.6)
the Construction Period
Commencement Date for Phase 2, as
such date may be extended for Force
Majeure Delay.
Within six (6) months after the
Construction Period Commencement
Date for Phase 2, as such date may be
extended for Force Majeure Delay.
Within thirty six (36) months from the
Construction Period Commencement
Date for Phase 2, which period may be
extended by Force Majeure Delay to a
maximum of forty eight (48) months.
Within thirty (30) Business Days after
completion of the Minimum Phase 2
Improvements, and satisfaction of the
other conditions precedent set forth in
Section 9.2.
Within ten (10) Business Days of the
request.
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx AZ
10. City causes Recording of the Phase 2 Parcel Within five (5) Business Days
Certificate of Compliance (Section 9.7) following City issuance of the
Certificate of Compliance.
Tustin Cornerstone I DDA Art 7 Schedule of Attachment 7 City of Tustin/Flight Venture LLC
Performance 11-08-2016 (agd) FINAL.docx 6
ATTACHMENT 8
SCOPE OF DEVELOPMENT
Initially capitalized terms used but not defined in this Scope of Development shall have the
meanings set forth in the DDA to which this Scope of Development is attached.
Developer shall develop a creative office project, known as Flight at Tustin Legacy
(Cornerstone I), that shall be subject to the minimum requirements set forth below and in the
DDA and may include up to 870,000 square feet of Gross Building Area (GBA) which shall be
divided between two phases to be developed separately. Major infrastructure improvements
required for the Project shall be developed under Phase 1. The two separate Project phases are
described as follows:
1. Phase 1 — Developer shall construct a minimum of 369,500 GBA of commercial
development on the Phase 1 Property containing (i) not less than 358,000 GBA of Office
Uses comprised of buildings Al, A2, B and C (large campus) and any two or more of
buildings E, F, G and H (small campus) as depicted on the Site Plan attached as
Attachment 3B to the DDA, (ii) approximately 11,500 GBA of Food Hall Uses within a
separate stand-alone building, and (iii) parking as required by City Code, of which not
less than 50% shall be structured parking, which are collectively described as the
Minimum Phase 1 Vertical Improvements as defined in the DDA and more particularly
described below. Phase 1 Improvements are to be constructed on the Phase 1 Parcel,
containing approximately 17.543 acres in total and as depicted on the Site Plan attached
as Attachment 3B to the DDA and which is proposed to be further subdivided into Lots
1-10 as depicted on Attachment 3A to the DDA; provided that a portion of the Phase 1
Improvements included in the Minimum Horizontal Improvements shall be constructed
on the Phase 2 Parcel and certain adjacent City -owned public right-of-way. In no event
shall the total Vertical Improvements in Phase 1 exceed 390,440 GBA. The Horizontal
Improvements associated with Phase 1 development are further described in Section 11 of
this Scope of Development.
2. Phase 2 — Should Developer exercise its Option and purchase the Phase 2 Property,
Developer shall construct not less than 400,000 GBA of Office Uses (Minimum Phase 2
Vertical Improvements) and parking as required by City Code, of which not less than
50% shall be structured parking, as more particularly described below. In no event shall
the total Vertical Improvements in Phase 2 exceed 479,560 GBA. Phase 2 Improvements
are to be constructed on the Phase 2 Parcel, containing approximately 21.195 acres and as
depicted on the Site Plan attached as Attachment 3B to the DDA and which is proposed
to be further subdivided into Lots 11-21 as depicted on Attachment 3A to the DDA;
provided that if the Minimum Horizontal Improvements are not constructed as part of
Phase 1, a portion of the Phase 2 Improvements comprising the Minimum Horizontal
Improvements shall be constructed on the Phase 1 Parcel and certain adjacent City -owned
public right-of-way. The Horizontal Improvements associated with Phase 2 development
are further described in Section 11 of this Scope of Development.
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 1
The Property is zoned as MCAS Tustin Specific Plan District (SP1) and is located within
Planning Areas 9-12, Neighborhood E, of the MCAS Tustin Specific Plan with a Land Use Plan
designation of Commercial Business and General Plan Land Use designation of MCAS Tustin
Specific Plan. The Property is bounded on the south by Barranca Parkway, on the west by Flight
Way (future roadway to be constructed by Developer), on the north and west by Legacy Park,
and on the north and east by Armstrong Avenue.
L Vertical Improvements:
Phase 1
Office uses within Phase 1 of the Project will consist of a large office campus comprising four
(4) buildings and a small office campus comprising four (4) buildings. Parking for the Flight
Phase 1 development will consist of a surface parking lot, structured parking, and private on -
street parking. A minimum of 50% of the City Code required parking shall be contained within
parking structures to be constructed by the Developer.
Large Office Campus — Buildings Al, A2, B, and C constitute the large office campus
consisting of approximately 332,438 GBA and shall be constructed as part of the Minimum
Phase 1 Vertical Improvements. In accordance with the Site Plan, Buildings Al and B will be
located north of Flight Way and Buildings A2 and C will be located south of Flight Way (private
street) adjacent to Barranca Parkway. All buildings are of steel frame construction with four (4)
stories in height. Buildings Al and A2 are identical buildings consisting of approximately
73,718 GBA. Buildings B and C provide approximately 74,636 GBA and 110,366 GBA
respectively.
Small Office Campus — Buildings E, F, G, and H are located at the northernmost area of Phase
1 adjacent to Tustin Legacy Park and together comprise approximately 39,500 GBA. Not less
than two of these buildings shall be constructed as part of the Minimum Phase 1 Vertical
Improvements. Clustering of the buildings creates niche spaces between them to allow for an
exterior working environment.
Buildings E and F each provide approximately 6,500 GBA, but differ slightly in height and
design. Buildings G and H each provide approximately 13,250 GBA within varying footprints,
heights and design.
Food Hall & Conference Center — An approximately 11,970 GBA food hall building
(Building D1), which can accommodate up to 12 food and beverage related tenants, shall be
constructed as part of the Minimum Phase 1 Vertical Improvements and will be located adjacent
to Tustin Legacy Park along the western boundary of the Flight Phase 1 development. Directly
adjacent to the food hall is an approximately 6,532 GBA conference center (Building 132) which
will provide restroom facilities to serve both buildings. While shared facilities are designed for
the buildings, the conference center is considered an Office Use under the DDA and is not
required to be constructed as part of the Minimum Phase 1 Vertical Improvements. However,
should the buildings not be constructed simultaneously, a redesign of the Food Hall Building
would likely be required.
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 2
Retail — Each of the Phase 1 Vertical Improvements and the Phase 2 Vertical Improvements may
include up to 15,000 GBA of Retail Uses (excluding the Food Hall Building), provided that the
amount of Retail Uses in both Phase 1 and Phase 2 do not exceed 15,000 GBA in the aggregate.
In no event shall the total Vertical Improvements in Phase 2 exceed 479,560 GBA.
Parking — A total of approximately 1,544 parking spaces shall be provided to serve the Flight
Phase 1 development. The majority of parking for the Flight Phase 1 development is located
within a four level (3 -story) parking structure providing approximately 1,158 parking spaces to
be located south of Flight Way (private street). An additional approximately 54 space surface
parking lot will also be provided on the portion of the Phase 1 Parcel south of Flight Way
(private street). An approximately 219 space surface parking lot will be provided between
buildings on the Phase 1 Parcel to the north of Flight Way. On -street (private) parking spaces
along Airship Avenue, Flight Way, and internal drive aisles are anticipated to provide 113
parking spaces.
Phase 2
Vertical Improvements associated with Phase 2 of the Flight development will provide a
minimum 400,000 GBA of development of Office Uses. At this time specific development plans
are not known and will be reviewed under a subsequent Design Review entitlement process.
Flight Phase 2 development will require a design compatible with that of Phase 1 utilizing
similar materials and construction methods in order to ensure project continuity and provide a
cohesive creative office campus development. A minimum of 50% of the City Code required
parking for Phase 2 shall be provided in above or below -ground parking structures.
II. Horizontal Improvements:
Horizontal Improvements shall mean (a) the Minimum Horizontal Improvements including the
Minimum Landscape Improvements and (b) all grading work, infrastructure improvements, and
utilities necessary to serve the development associated with the Vertical Improvements under
development in the relevant Phase, as approved in the Entitlements for such Phase of the Project,
including without limitation, all on-site and off-site roadway improvements (Armstrong Avenue,
Barranca Parkway, and Flight Way), private drives (Airship Avenue and portions of Flight Way
within the Development Parcels), sidewalks, curbing, landscaping, hardscaping and irrigation,
drainage facilities, and utility infrastructure, inclusive of extensions and laterals within the
Building Pads in such Phase, as generally depicted within Attachment 9 to the DDA and required
by the Subdivision Map, the Entitlement conditions and Development Permits and all other
Governmental Requirements as a condition to development of such Phase of the Project. All
Common Area Improvements on the Parcel under development, other than parking lots and
parking structures, are included as Horizontal Improvements; parking lots and parking structures
are treated as Vertical Improvements under the DDA.
Developer shall be responsible for the entire scope of work for design and construction of any
Phase of the Project acquired by Developer, which includes, but is not limited to all surveying,
rough and precise grading, import and export of dirt as required, dewatering, asphalt paving,
including any necessary overlays, driveways, sidewalks, concrete, curb and gutter, landscaping,
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 3
all traffic control, striping and signage and other work to construct improvements in accordance
with Tustin City standards and as required in the Final EIS/EIR, or City of Irvine Standards as
applicable. Horizontal Improvements are more particularly described as follows:
A. Grading: Clear, grub, and rough and precise grade legal lots and other required areas per
the Entitlement conditions, Development Permits and all other Governmental
Requirements for development of the relevant Phase, including the necessary
undercutting, import, export, compaction of soils and delivery of certified Building Pads.
B. Utilities: Installation of new and relocation of existing utilities to serve the Vertical
Improvements to be constructed on the relevant Phase as required by the Entitlement
conditions, Development Permits and all other Governmental Requirements for
development of the relevant Phase, including, but not limited to domestic and reclaimed
water, sewer, storm drain, electrical, gas, telephone, cable, telemetry, and other
communication infrastructure. Utility extensions to individual Buildings and facilities
within the relevant Phase. All utilities shall be underground.
C. Roadways: Paved and striped roadways and private drives for the relevant Phase,
inclusive of City Code required signage. Required curb and gutter, catch basins, drive
aprons, driveways, street lighting, supporting infrastructure for parking lot lighting,
traffic signals, deceleration/acceleration lanes, bus turnouts, and other supporting
infrastructure for the relevant Phase per code standards.
D. Sidewalk and Parkway: Installation of sidewalk and parkway improvements for the
relevant Phase on private property and within the public right-of-way including
landscaping and irrigation.
E. Water Treatment and Drainage Facilities: Installation of all drainage and treatment
facilities such as stormwater planter boxes, bioswales, modular wetland units as required
per the approved Water Quality Management Plan for the relevant Phase.
F. Landscape & Hardscape: Significant landscape and hardscape improvements will be
required to serve the Flight Phase 1 development, including plant palette transitions,
pedestrian access and access to the City Park, all as set forth in the Entitlement
conditions, Development Permits and all other Governmental Requirements for
development of Phase 1. Remaining Phase 2 landscape and hardscape improvements not
completed within Phase 1 development shall be at a minimum the same quality as
provided within Phase 1. The landscape and hardscape improvements shall include the
"Minimum Landscape Improvements" as the same are defined below.
Minimum Horizontal Improvements
A significant portion of the Horizontal Improvements associated with the Flight development,
described in the DDA as "Minimum Horizontal Improvements" will occur during construction of
Phase 1 although such Improvements may be required to be constructed on the Phase 1 Parcel,
the Phase 2 Parcel or on City -owned public right-of-way. Many of these improvements are
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 4
necessary to serve Phase 1 or will provide enhanced access to the Phase 1 development. The
"Minimum Horizontal Improvements" for the Flight development (Cornerstone I), which are
required to be constructed during the first phase of development, are categorized into three
separate groupings as follows and as further described on the Tables in Section III of this Scope
of Development:
1. Non -Reimbursable Phase 1 Minimum Horizontal Improvements. Except as
specifically otherwise set forth in items 2 and 3 below, all Minimum Horizontal
Improvements necessary to serve the Phase 1 development shall be Development Costs
and shall be borne solely by the Developer. For avoidance of doubt, reconstruction of
existing public right-of-way facilities or realignment of existing utilities for the benefit of
the Flight Phase 1 development shall not be reimbursable expenses and the costs
associated with these improvements shall be borne solely by the Developer;
2. "Reimbursable Phase 2 Improvements". Reimbursable Phase 2 Improvements are
comprised of the portions of the Minimum Horizontal Improvements that the Parties have
agreed are attributable to the Phase 2 Project which shall be Development Costs for
which Developer shall, under certain circumstances specified in the DDA, receive
reimbursement, at actual cost, from the City following completion of usable segments,
and
3. "Reimbursable Tustin Legacy Improvements". Reimbursable Tustin Legacy
Improvements are comprised of portions of the Minimum Horizontal Improvements
within the public right-of-way and portions of the storm drain and sewer utilities through
the City Park (Tustin Legacy Park) and Phase 1 which shall be Development Costs for
which Developer shall, upon completion in accordance with a Reimbursement
Agreement to be entered into by City and Developer, receive reimbursement, at actual
cost, from the City, in accordance with the terms of that agreement and the allocation
formula set forth below.
"Minimum Landscape Improvements"
The landscape, hardscape and irrigation improvements within the areas depicted on the
Minimum Landscape Improvement exhibit to this Attachment 8, including along the adjacent
perimeter streets and entries to the Parcels (Flight Way (public), Barranca Parkway, and
Armstrong Avenue within both the public right-of-way, landscape setback areas, and other areas
as depicted thereon and within the public access easements depicted on Tract Map No. 18003
along Airship Avenue (Private Drive 2) and Flight Way (Private Drive 1 - within Phase 1 only),
which shall be constructed in accordance with the Approved Plans and are required to be
constructed as part of the Minimum Horizontal Improvements.
Developer shall design and construct the Minimum Horizontal Improvements within the time
periods required by the DDA, including the Schedule of Performance attached thereto as
Attachment 7. Developer shall obtain a minimum of three (3) bids for all Reimbursable Phase 2
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 5
and Tustin Legacy Improvements with contractor selection subject to the review and approval of
the City, in its sole discretion.
The following allocation formulas shall apply to the Minimum Horizontal Improvements:
• Reimbursable Phase 2 Improvements which are shared Minimum Horizontal
Improvements between Phase 1 and Phase 2 of the Flight development shall be allocated
between Phase 1 and Phase 2 on a proportional basis determined by land area of each
phase (Phase 1 (45.3%) vs. Phase 2 (54.7%)).
• The storm drain improvement as identified in Areas 4 and 6 of the Below -Grade
Minimum Horizontal Improvements table below is one of the Reimbursable Tustin
Legacy Improvements, but the cost of such improvement shall be a shared cost that will
be allocated on a proportional basis with City (Reimbursable Tustin Legacy
Improvements) responsible for 54.7% of the cost and Developer (Phase 1) responsible for
45.3% of the cost.
• The reimbursement cost associated with the traffic signal located on Barranca Parkway at
Flight Way (formerly Aston) identified as Item 12 in Area 4 of the Above -Grade
Minimum Horizontal Improvements table in Section III below shall be allocated on a
proportional basis with the City (Reimbursable Tustin Legacy Improvements) responsible
for 75% of the cost and Developer (Phase 1) responsible for 25% of the cost.
• The Reimbursable Tustin Legacy Improvements (other than the storm drain
improvements in Areas 4 and 6 and the traffic signal located on Barranca Parkway at
Flight Way described in the two immediately preceding bullet points, which shall be
allocated as set forth in such bullet points) shall be allocated 100% to the City, and all
Reimbursable Tustin Legacy Improvements shall be subject to the Reimbursement
Agreement to be entered into by City and Developer.
• Except as otherwise set forth in this Section II or Section III below, all costs to construct
and Complete the Phase 1 Project, and if Developer exercises the Option and purchases
Phase 2, all costs to construct and Complete the Phase 2 Project, shall be Development
Costs and shall be paid in full by the Developer of the relevant Phase.
III. Minimum Horizontal Improvements Description and Cost Allocation Tables
The Minimum Horizontal Improvements are generally described in the following line item tables
and depicted on the attached horizontal infrastructure site plans. The following Minimum
Horizontal Improvements have been segregated by above -grade versus below -grade
improvements. Numbered area headings and line items correspond with the map exhibits
attached to and comprising part of this Attachment 8 to the DDA. Line items represent general
scope of work categories. Construction tasks associated with accomplishing the line items will
vary as needed; however, the attributable reimbursement responsibility or proportional share to
carry out such improvements will not change. Should a discrepancy arise pertaining to the
required construction tasks necessary to accomplish the Reimbursable Phase 2 Improvements or
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 6
the Reimbursable Tustin Legacy Improvements for which Developer requests reimbursement
pursuant to the DDA or the Reimbursement Agreement, the City shall have final authority, in its
sole discretion, to approve reimbursable expenses.
Table 1: Above -Grade Minimum Horizontal Improvements
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
Development 11-7-2016 (agd) FINAL.docx 7
Non -Reimbursable
Phase 1
17.55 Acres
45.3%
Reimbursable
Phase 2 Tustin Legacy
21.19 Acres
54.7%
Area 1 - Armstrong Ave between Barranca Pkwy and Warner Ave
1. Remaining Roadway Improvements
X
2. Sidewalk Improvements
a Airship Ave to Warner Ave (west side only)
b Barranca Pkwyto Airship Avenue along Phase 2 Boundary
X
X
3. Permanent Landscape Improvements
a Barranca Pkwyto Airship Avenue along Phase 2 Boundary
X
4. Interim Landscape Improvements
a Barranca Pkwyto Airship Avenue along Phase 2 Boundary
X
Area 2 - Airship Ave between Barranca Pkwy and Armstrong Ave
5. Roadway Improvements
X
X
6. Sidewalk Improvements
X
X
7. Permanent Landscape Improvements
X
X
8. Pedestrian Access to Legacy Park through Lot 1 ofTract Map No. 18003
X
Area 3 - Flight Way (private) between Airship Ave and Armstrong Ave
9. Roadway Improvements
X
X
10. Sidewalklmprovements (North side only)
X
X
Area 4 - Flight Way (public) between Barranca Pkwy and Food Hall Bldg.
11. Roadway Improvements
X
12. Traffic Signal at Barranca Pkwy
X (25%)
X (75%)
13. Left Turn Pocket and Median Reconfiguration on Barranca Pkwy to Flight Way
X
14. Sidewalk Improvements
X
15. Permanent Landscape Improvements (Flightside only)
X
Area 5 - Barranca Pkwy between Flight Way and Armstrong Ave
16. Right Turn Lane to Airship Ave and Flight Way(public)
X
17. Sidewalkand Parkway Improvements
X
18. Permanent Landscape Improvements Phase I (Flight Wayto Airship Ave)
X
19. Permanent Landscape Improvements Phase 2 (Airship Ave toArmstrong Ave)
X
20. Interim Landscape Improvements
X
Area 6 - Portion of Flight Way (private) east of Airship Ave near Food Hall
21. Roadway Improvements
X
22. Sidewalk Improvements
X
23. Permanent Landscape Improvements
X
Area 8 - Portion of Flight Way rivate east of Airship Ave
24. Roadway Improvements
X
25. Sidewalk Improvements
X
26. Permanent Landscape Improvements I
X
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
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Table 2: Below -Grade Minimum Horizontal Improvements
THE FOLLOWING EXHIBITS ARE ATTACHED AND FORM A PART OF THIS SCOPE
OF DEVELOPMENT / ATTACHMENT 8 TO THE DDA
EXHIBIT 1 -ABOVE-GRADE MINIMUM HORIZONTAL IMPROVEMENTS
EXHIBIT 2 -BELOW -GRADE MINIMUM HORIZONTAL IMPROVEMENTS
EXHIBIT 3 -MINIMUM LANDSCAPE IMPROVEMENTS
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
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Non -Reimbursable
Phase 1
17.55 Acres
45.3%
Reimbursable
Phase 2 Tustin Legacy
21.19 Acres
54.7%
Area 1 - Armstrong Ave between Barranca Pkwy and Warner Ave
1. Sewer
X
X
2. Recycled Water
X
X
3. Storm Drain
X
X
Area 2 - Airship Ave between Barranca Pkwy and Armstrong Ave
4. Sewer
X
X
5. Domestic Water
X
X
6. Recycled Water
X
X
7. Storm Drain
X
X
Area 3 - Flight Way (private) between Airship Ave and Armstrong Ave
8. Sewer
X
X
9. Domestic Water
X
X
10. Recycled Water
X
X
11. Storm Drain
X
X
Area 4 - Flight Way (public) between Barranca Pkwy and Food Hall Bldg.
12. Domestic Water
X
13. Storm Drain
X (45.3%)
X (54.7%)
Area 5 - Barranca Pkwy between Flight Way and Armstrong Ave
14. Storm Drain
X
Area 6 - Flight Way (private) adjacent to Food Hall
15. Sewer
X
16. Domestic Water
X
17. Recycled Water
X
18. Storm Drain
X (45.3%)
X (54.7%)
Area 7 - Tustin Legacy Park Utilities
19. Sewer
X
20. Storm Drain
X
Area 8 - Flight Way (private) between Food Hall and Airship Ave
21. Sewer
X
22. Domestic Water
X
23. Recycled Water
X
24. Storm Drain
X
THE FOLLOWING EXHIBITS ARE ATTACHED AND FORM A PART OF THIS SCOPE
OF DEVELOPMENT / ATTACHMENT 8 TO THE DDA
EXHIBIT 1 -ABOVE-GRADE MINIMUM HORIZONTAL IMPROVEMENTS
EXHIBIT 2 -BELOW -GRADE MINIMUM HORIZONTAL IMPROVEMENTS
EXHIBIT 3 -MINIMUM LANDSCAPE IMPROVEMENTS
Tustin Cornerstone I DDA Art 8 Scope of ATTACHMENT 8 City of Tustin/Flight Venture LLC
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ATTACHMENT 8 -EXHIBIT 1
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Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 9 City of Tustin/Flight Venture LLC
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ATTACHMENT 10A
LIST OF ENVIRONMENTAL REPORTS AND STATEMENTS
1. Department of Navy "Final Environmental Baseline Survey" dated March 2001
2. Department of Navy findings and determinations that the Development Parcels were suitable
for transfer to the City, pursuant to the document entitled "Finding of Suitability to Transfer
For Parcels Southern Parcels 4-8, 10-12, 14, and 42 and Parcels 25, 26, 30-33, 37, and
Portions of 40 and 41 Marine Corps Air Station Tustin, California" dated September 28,
2001
Memorandum of Agreement between the United States of America and the City of Tustin for
the Conveyance of a Portion of the Former Marine Corps Air Station Tustin dated as of May
13, 2002.
4. "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.
5. Quitclaim Deed D and Environmental Restriction Pursuant to Civil Code Section 1471 dated
May 13, 2002, that was Recorded on May 14, 2002 as Instrument Number 20020404594
6. Department of Navy findings and determinations that the Development Parcels were suitable
for transfer to the City, pursuant to the document entitled "Final Finding of Suitability to
Transfer Carve -Out 3, Portions of Carve -Out 5, and Carve -Out 7 Former Marine Corps Air
Station Tustin, California" dated April 2005
7. Quitclaim Deed for Parcels III -D-5, III -D-6, III -D-7, III -D-8, and III -G-4 dated January 12,
2006, that was Recorded on February 8, 2006 as Instrument Number 2006000089845
8. "Final Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) Five -Year Review Report for Former Marine Corps Air Station Tustin" dated
October 2011
9. Background Metals Information for Former MCAS Tustin
"Draft Final Background Concentrations of Metals Issue Paper Marine Corps Air
Station Tustin, California" dated October 1996
b. "Proposed Site Specific Preliminary Remediation Goal for Cadmium Tustin Legacy
Community Partners LLC Former Marine Corps Air Station" letter from Pacific
States Environmental Contractors Inc. dated May 4, 2009
c. "Background for Acceptable Cadmium Soil Concentration at MCAS Tustin" memo
from Pacific States Environmental Contractors Inc. dated June 16, 2011.
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-1-
Other Environmental Documents
1. TLCP Directory Files
a. Construction
i. Bid Docs
1. Private Bids
a. N -E Local
Sewer and Water 52502-9034
i.
Addendum Ito 525029033&9034
ii.
Area E wet utilities pre bid agenda
iii.
Bid Schedule C 52502-9034 NE wets
iv.
Bid _Estimate Comparison (Curb,Gutter,Paving)
v.
Bid _Estimate Comparison
vi.
FINAL BID SPREAD
vii.
INVITATION TO BID
viii.
NE Wet Utilities 52502-9034
ix.
Schedule B Base for 52502-9034 NE Local Sewer
& Water
x.
Schedule I
xi.
Schedule N Dump Site
xii.
Schedule O Discharge Point
xiii.
Schedule P Flow of Soils
b. Rough Grade Area E
i.
Approval form
ii.
Area E Grading Bid _1
iii.
Area E pre bid agenda
iv.
Bid acceptance
v.
Bid spread
vi.
Clarification Memo from Pre-bid
vii.
Conceptual Grading -02
viii.
Construction Pipe Crossing Details
ix.
Copy of Schedule C Area E Grading rev 2 Reed
Thomas
x.
Copy of Schedule C Area E Grading (revBid-
BMangano5-11FINAL) Sukut
xi.
Grading -Bid CompositeExhibit_1
xii.
Rough grade bid specs area e
xiii.
Schedule A, Rough Grade Area E
xiv.
Schedule C, Area E Grading
xv.
Survey Specs Schedule D
c. Warner Ave SD 52101-9031 sta 10+42_29+50
i.
Schedule A 52101-9033 Warner Storm Drain
ii.
Schedule B Base for 52101-9033 Warner Storm
Drain
iii.
Schedule C 52101-9033 Warner Storm Drain
iv.
Schedule E 52101-9033 Warner Storm Drain
v.
Schedule H 52101-9033 Warner Storm Drain
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-2-
vi. Schedule 152101-9033 Warner Storm Drain
vii. Schedule J
viii. Schedule N 52101-9033 Warner Storm Drain
ix. TLCP Bid Instructions 52101-9033 Warner Storm
Drain
x. Warner Storm Drain 52101-9033 Contract Base
2. Public Bids
a. Armstrong
Ave Storm Drain 52102-9045
i.
Amsrong Storm Drain 52102-9045
ii.
RCB Water Stop drawing
iii.
Request for Proposals Public Armstrong Storm
Drain
iv.
Schedule A 52102-9045
v.
Schedule B Base for Armstrong SD 52102-9045
vi.
Schedule C 52102-9045 Armstrong Storm Drain
vii.
TLCP Bid Instructions for Armstrong Box
b. Armstrong
Street Improvements
i.
Armstrong Street Improvements 52102
ii.
Request for Proposal Armstrong St Imp 52102
iii.
Schedule A 52101-9031
iv.
Schedule B Armstrong ST Imp 52-102
v.
Schedule C Armstrong ST Imp 52102-+
vi.
Schedule G for Armstrong St Imp
vii.
Schedule H- Armstrong St Imp
viii.
Schedule J
ix.
Schedule L 52102
x.
Schedule M 52-102
xi.
Schedule N 52-102
xii.
TLCP Bid Instructions Armstrong Avenue 52102-
x. Barranca Channel Improvements 5210
i.
Barranca Tech Specs
ii.
Contract Base for Barranca Channel Improvements
iii.
Request for Proposals Barranca Channel RCB
iv.
Schedule A for Barranca Channel Imp.pdf
v.
Schedule B Base for barranca channel
vi.
Schedule C Barranca Channel
vii.
Schedule E-Barranca Channel Imp.pdf
viii.
Schedule G for Barranca Channel Improvements
ix.
Schedule H- Barranca Channel.prf
x.
Schedule I for Barranca Channel
xi.
Schedule M for Barranca Channel
Improvements. pdf
xii.
Schedule N for Barranca Channel.pdf
xiii.
TLCP Bid Instructions Barranca channel imp
ii. Contracts
1. Aman Environmental
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-3-
a. Contract # 52500-9004
i. Co #1
ii. CO #2
iii. CO #3
iv. CO #4
v. CO #5
vi. CO #6
vii. CO #7
Viii. CO #8
ix. CO #9
x. Executed Contract #52500-9004
2. Hydro Sprout, Inc
a. Contract # 52500-9067
i. CO #1
ii. Executed Contract 52500-9067
3. NMG
a. Contract #52101-9054
i. CO #1
ii. Executed Contract 52101-9054
b. Contract #52162-9021
i. CO #1
ii. Executed Contract 52162-9021
c. Contract # 52500-9025
i. CO #1
ii. CO #2
iii. Executed Contract 52500-9025
d. Contract # 52500-9026
i. CO #1
ii. CO #2
iii. CO #3
iv. Executed Contract 52500-9026
e. Contract # 52500-9055
i. Executed Contract 52502-9055
f Contract # 52500-9056
i. Executed Contract 52500-9056
4. Pacific States
a. Contract # 52162-2428
i. CO #1
ii. Executed Contract 52162-2428
b. Contract # 52500-9024
i. CO #1
ii. CO #2
iii. CO #3
iv. CO #4
v. CO #7
Vi. CO #8
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-4-
Vii.
CO #10
viii.
Executed Contract 52500-9024
c. Contract # 52500-9035
i.
CO #1
ii.
CO #2
iii.
CO #3
iv.
CO #4
v.
CO #5
vi.
CO #6
vii.
Executed Contract 52500-9035
d. Contract # 52500-9068
i.
Executed Contract #52500-9068
am-PITI-TO
a.
Contract #52500-9022
i. Executed Contract 52500-9022
b.
Contract #52502-9036
i. Executed Contract #52502-9036
6. Reed Thomas
a.
Contract # 52162-9016
i. CO #1
ii. CO #2
iii. CO #3
iv. CO #4
v. CO #5
vi. CO #6
vii. Executed Contract 52162-9016
b.
Contract # 52500-9018
i. CO #1
ii. CO #2
iii. CO #3
iv. CO #4
v. CO #5
vi. CO #6
vii. CO #7
Viii. CO #8
ix. Executed Contract 52500-9018
c.
Contract # 52500-9030
i. CO #1
ii. Executed Contract 52500-9030
d.
Contract # 52500-9044
i. CO #1
ii. CO #2
iii. Executed Contract #52500-9044
e.
Contract # 52500-9071
i. Executed Contract #52500-9071
7. Sanders Hydroseeding
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-5-
a. Contract #52500-9042
i. CO #1
ii. Executed Contract 52500-9042
8. So Cal Pipeline
a. Contract # 52101-9033
i. CO #1
ii. CO #2
iii. Executed Contract 52101-9033
b. Contract # 52102-9048
i. Executed Contract 52102-9048
c. Contract # 52502-9034
i. CO #1
ii. CO #2
iii. Executed Contract 52502-9034
iii. Demo
1. Misc
a. 060217 Bldg Inventory
b. 061115 RBF Carnegie Encroachment Exhibit
iv. Field Work
1. 070319 Grading -Bid CompositeExhibit_1
2. 070326 Construction Pipe Crossing Details
3. 080605 NE earthwork verification JUNE 2008
v. Mapping
1. NE FM
a. 080402 Tract 17144
b. 090616—Final TM 17144 — 3rd Plan Check Comments
2. NE TTM
a. Sector B Conditions
i. 0613104742 001
ii. Approval of tentative tract map 17144
b. Approved TTM 17144
3. Tract 17026
a. 060927 Tract 17026—recorded
b. Sheett 03 only
vi. Permits
1. City of Tustin
a. 060707 demo utilities and bldgs.
b. 070912 mass grade permit
c. 080602 rough grade area e
d. 080929 storm drain NE permit
e. 090827 Permit Rider — Dispatch Transport
2. Jurisdictional Permits
a. Armstrong Jurisdictional Permits
i. 060417 Armstrong 404
ii. 060418-7099856
iii. 060418 Armstrong 401
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-6-
iv. 060418 Armstrong 1600
b. IRWD-will serve
i. 080811 NE IRWD Will Serve letter
c. Legacy Park Jurisdictional Permits
i. CDFG 1600
1. 070622_1600 CITY comments
2. 070626_1600 City Attorney Comments
3. 070725 SARW_Mitigation Cost—letter
4. 070725_1600 Final_signed
5. 070808 SAWA fee paid
6. 070814 LtrReport_Riparian
7. 090109_CDFG Amendment partial
execution
8. 090804 Responsibility Matrix_COI and
TLCP_comments
ii. Transfers
1. Barranca Channel work by Ivine
a. 090825 Board 401 Transfer Package
b. 090825 CDFG 1602 Transfer
Package
c. 090827 Corps 404 Transfer Package
d. 090828 CDFG 1602 Signature Page
e. signatures
vii. SWPPP
1. As Builts
a. 2010 Onsite SWPPP Exhibit
b. Binderl
c. SWPPP Exhibit K_l 1x17
d. SWPPP Exhibit K_large format
2. Document
a. SWPPP —Tustin Legacy TT17026
3. Permits
a. 061013 WDID C343986
b. 061102 H&A copy of SARWQCB Const General
Permittees letter
c. 070306 LandW New Permit 877303_2
d. 080429_Change of Information 2 of 2
e. 080429_Change of Information 1 of 2
f 080625_Notice of Termination_ Approved_ Demo Phase
g. 080625_Notice of Termination_Approved_TRR
h. 090305 City WDID C343986
i. 090309 TLCP WDID C349224
j. 100628 Notice of Termination_Approved_Construction
viii. Utilities
1. 2009 NE Street& Storm Drain As Builts
b. Due Diligence
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-7-
i. Phase 1 ESA Assessment
1. Phase
1 Conveyance
a.
Tustin Phase I ESA — Phase 1 Figure 1-2
b.
Tustin Phase I ESA — Phase 1 Figures
c.
Tustin Phase I ESA — Phase 1 Tables
d.
Tustin Phase I ESA — Phase 1
ii. Property Ownership
1. 071012 EC Ownership
2. Ownership_Tract 17026 (2007-11-26)
3. Ownership_Tract 17026 (2007-11-26) with AC
iii. Title Reports
1. 2009 TR
a.
(1) 2009 Report Tract 17026
b.
(2.1)2006 — Tract 17026
c.
2.2)2007_Certificate of Correction
(2.2)2007 —
d.
(2.3) 2009_Assessor Parcel
e.
(3) 1964_Avigation Easement
f.
(4) 1971_IRWD
g.
(5) 2002_Quitclaim Parcel D
h.
(6) 2002_Quitclaim Parcels I -D1, I-134
i.
(7.1)2003 — Notice of RDA
j.
(7.2) 2007_evised Notice of RDA
k.
(8) 2006_City and TLCP DDA
1.
(9) 2006_Quitclaim Parcels II -H -10,11,10B -1,10C
m.
(10) 2006 Authority Quitclaim Deed and Restrictions
n.
(11) 2007_City and TLCP DDA Amendments
o.
(12) 2007_Quitclaim Phase I
p.
(13) 2007_Special Restrictions
q.
(14) 2007_City and TLCP DA
r.
(15.1)2007 Bank Note
s.
—
(15.2) 2009_ank Note 1st Amendment
t.
(15.3) 2009_Bank Note 2nd Amendment
u.
(16) 2007_Subordination Agreement
v.
(17) Disclosure Statement
c. Engineering
i. Geotechnical
1. 04007-01 NMG — General Project Design
a.
060824
b.
070205
c.
070719
d.
070906
e.
071112
f.
071211
g.
080425
2. 04007-08 NMG — Neighborhood E Rough Grading
a.
100702
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-8-
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-9-
b. M071009
c. RGO80228
d. RGO80229
e. RGO80402
f. RGO80703
g. RG080703a
ii. NE
1.
2009 NE Street& Storm Drain As Builts
2.
NE Capital IRWD Code 4976
3.
NE Capital Sewer
4.
NE IRWD Non -Capital DW & SS
5.
NE SIP 5th PC
d. Environmental Condition
i. Soil Remediation
1.
Reports
a. 2010_Soil Report XL Submittal
i. Appendix B Notifications
1. DTSC
a. 2 B 566 Notification
ii. Appendix C 1166 Reports
1. 2007 2008 Report
a. 2 Final 1166 Report for Oct 18
iii. Report -6-3 XEL Submitl
2.
SMP
a. City Comments and Response
i. 090309_Ltr to Navy from City_SMP
ii. 090326 City comments on SMP
iii. 090326_City comments on SMP _EC notes
iv. 090403_ltr from City with Navy Ltr
v. 090406_ RTC_ EC_ v2
vi. 090427 SMP Comments
vii. 090512_Ltr_CS_Response to SMP_EC
viii. 090514_Ltr_CS_SMP _EC SJW Rev (2)
ix. 090518_Ltr_Matt West Response to SMP
Comments_0 (2)
b. Misc Exhibits
i. 1150PermitInfo
ii. 2009 Cont. Lic
iii. DDA Sections on Notification
iv. Exhibit LP Neighborhoods
v. OCSD Permit 54-281 (dewatering)
vi. PSEC Tustin — Appendix J — Voluntary Cleanup
Agreement
vii. PSEC Tustin SMP Appendx A Summary of Suspect
RECs Figures
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-9-
viii.
Rule 1166-SCAQMD Permit -11-4-08 (Soil
Contamination)
ix.
WDID C343986
c. SMP Final
i.
FINAL —PSEC Tustin SMP — Rev 8.1 August 2009
ii.
MCAS Tustin Comments draft smp 82509
iii.
Negative Declaration TLCP
iv.
Notice of Determination TLCP
v.
Site Management Plan and Remocal Action Work
Plan Approval Letter TLCP
vi.
SMP IS 6.25.2009
2. TLCP Files Outside of TLCP Directory
a. DDA & Termination
i. TLC DDA (full)
ii. TLCP Termination and Settlement Agreement
b. Demo
iii. TLCP Demolition Permit B06-0333 (Inspection Records)
iv. TR 17026 — TLCP Demo Plan
v. Bulk Asbestos and Lead Based Paint Survey
b. Grading
i. N -E Geotechnical Report
ii. N -E Grading Cert for Carnegie, C St and D St
iii. NE Grading Cert for lots 6-11, J,L&M
iv. TR 17026 Mass Grading Plan
c. TLCP Insurance
v. Correspondence — TLCP Insurance Policy 2011-2016
vi. TLCP Insurance Policy 2011-2016
d. VCA and Termination
vii. VCA between TLCP and DTSC
viii. VCA Termination (TLCP090110)
3. Other Relevant Files
a. Aerials
i. August 2007 Aerial
ii. February 2008 Aerial
b. May 11 Sampling (Sampling performed at request of LPQ
i. Fig 1, Sample Location Map
ii. Fig 2, Soil Sample Locations — SP2
iii. Fig 3, Soil Sample Locations — SP3
iv. Fig 4, Soil Sample Locations — SP4
v. Memo01 NE SP Samples 5-23-16 (1)
c. N -E 2011 Soil Remediation Report
i. DTSC Response to Soil Remediation Report (Neighborhood E) 21 June
2011
ii. Soil Remediation Report N -E March, 2011
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-10-
d. N -E No Further Action Letters
i. DTSC No Further Action (2016)
ii. RWQCB No Further Action (2016)
e. N -E Import Backup
i. Legacy Import 091813
ii. TSI -144 Report
iii. TSI -146 Report -r
f. Sema Construction License (05-006)
i. 05-006, Amend 1
ii. 05-006, Amend 2
iii. 05-006, Amend 3
iv. 05-006 SEMA
v. Amend No 41tr
g. Street Improvement Plans
i. Armstrong Ave Plans
ii. Barranca Pkwy Widening Plans
h. Vestar Dewatering License (06-001)
i. License 06-001
ii. License Cover— Vestar 06-001, Amend#2
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-11-
A071v* 1006
TABLE 1
List of Developer Deliverables
Backbone Reaches
J LJZ—
.tiv
118
Aquatic Center in Master Developer Community Park
rh
640
_
X
X
Concepts Only
6
Armstrong - Barranca to Warner
100, 102
X
X
X
49
Armstrong/South Loo NEW
150A
X
X
82
Backbone Storm Drain Overall
700
X
X
31
Barranca - Tustin Ranch Rd. to Redhill
154
X
X
87
Barranca Channel - Redhill to south of Tustin Ranch Road
510
X
X
X
86
Barranca Channel Detention Basin/Sports Fields at
500
X
X
X
42
Barranca/Armstrong UPGRADE
100A
X
8
BRIDGE - Tustin Ranch Road N. Vlaencia Loop to North end of Bridge including ramp
140, 142.202
X
X
13
Brid a East Connector over Santa Ana Santa Fe Channel to Edin er
204
X
X
15
BRIDGE Moffett Road over Peters Canyon Channel
136
X
X
133
Community Entry Signage
690
X
X
117
Commun ity Park; Master Developer Area 46 acres
604
X
X
12
East Connector - No Valencia Loop to West End of Bridge over Channel
116, 118, 120
X
Concepts Only
65A
East Connector/North Loop Road NE
122A
X
X
wlin NG Conce t Plan
34
East Side Redhill - Barranca to Warner
160
X
X
wlin NG Conce t Plan
35
East Side Redhill - Warner to Valencia Loop
162
X
Win NG Concept Plan
37
Edinger/East Connector
204A
X
Concepts Only
64
Edinger/Ramp( NEW
140B
X
X
jw/in NG Concept Plan
130
Legacy Arch Structures in Linear Park
626
X
X
wlin NG Concept Pian
111b
Legacy Park Dry Utility Backbone Total All utilities
750
X
X
w/in NG Concept Plan
121
Linear Park Neihborhood G OS6, OS7b
607
X
w/in NG Concept Plan
122
Linear Park; Master Developer Area D inc uding water feature
610
X
X
X
14
Moffett - N Valencia Loo2 to West end of Bridge aver Channel
136
X
X
w/in NG Concept Plan
60
MoffettlNorth Loo NEW
136A
X
X
X
11
N Valencia Loo - West Connector to Tustin Ranch
112
X
16
N. Valencia Loo - Tustin Ranch to Moffett
114, 122, 126
X
115
Neighborhood Park - Neighborhood G Park 01 OS11
600
X
wlin NG Concept Plan
116
Neighborhood Park; Master Developer Area G Park 02
602
X
X
Win NG Concept Plan
126
Other Public -owned Open Space Master Developer Area E
617
X
X
92
PCC Mitigation
591
X
X
X
79
Peters Canyon Channel from RR to Edinger Ave
504,506
X
83
Ptimp Station
520
X
45
Redhill/Warner
162A
X
X
94
Resource Aqency Mitigation Master Developer
592
X
X
91
Resources Agency Mitigation Im vt's - Peters Cyr RR to Edinger
590
X
89
Selenium Treatment Facility,551,552
X
356
SHIPPO Study
295
X
35C
Sound Mti ation - Warner from Harvard to Culver
290
X
29
South Loo - Tustin Ranch Road to Armstrong 4 Lanes
150
X
X
wlin ND Concept Plan
119
Tennis Center in Master Developer Community Park
642
X
X
Concepts Only
65e
TS - Signal Controllers
298A, 299'A
X
9A
Tustin Ranch RoadlWainut
X
55
Tustin Ranch Road/Moffett NEW
142A
X
62
Tustin Ranch Road/Ram NEW
140A
X
52
Tustin Ranch RoadlSouth Loo New
144A
X
56
Tustin Ranch RoadNalencia NEW
1426 I
X
X
63
Tustin Ranch RoadlWalnui UPGRADE
202A
X
54
Tustin Ranch Road/Warner Ave North New
144C
X
53
Tustin Ranch RoadlWarner Ave South NEW
144B
X
23
Warner Armstrong to Tustin Ranch Rd.
146,148
X
50
WamerlArea G Street NEW - NOTE: TBD perTLCP la
148A
X
X
48
Warner/Armstrong NEW
146A
X
X
90
1 Water Quality Treatment Systems
561.662
X
Loral Infrastructure
! t.�°'!',�,V'
Y `? ' :v
_ _ .. � �• i \(�^
_
_
_
.. C�1-1-tom �:.
Local Infrastructure - Overall
1000
X
Local Infrastructure - Phase i -D South
1110
X
Local Infrastructure Neighborhood D South
1210
X
Local Infrastructure - Phase 1-E
1120
X
X
Local Infrastructure - Phase 2-D North
1206
X
Local Infrastructure Neighborhood D Ph 3
1300
X
Local Infrastructure Nei hborhood G Ph 1
1130
X
Local Infrastructure Neighborhood G Ph 2
1230
X
772
Local Park, South Linear - Park Area D Loi A OS -5
1113
X
X
None
Local Park, Focal Park Area D
1116
X
X
510,773
Local Park, Linear Park Area E Loi I OS2 OS3a, OS3b
1124
X
X
512
Local Park, Greenbelt Area E, OS23, OS24a, OS24b
1127
X
X
219
Local, Area G HOA Recreation Center OS 19
1132
X
667
Local Park, Linear Park Area G OS7a, OSB, OS9
1133
X
wlin NG Conce t Plan
220,221,223
Local Park, Focal Park Area G OS17, OSI 8
1134
X
wlin NG Conce t Plan
218
Local Park, Connecting Park Area G OS20, OS21
1135
X
Win NG Concept Plan
226,227,666
Local Ed e1O en Space Trail Phase 1-G OS26, OS27, OS28
1136
X
wlin NG Concept Plan
None
Local Park, Focal Park Area DIE OS 12
1216
X
jw/in NG Concept Plan
222,224
Local Park, Focal Park Area G Ph 2 OS15. OS16
1234
X
wlin NG Concept Pian
225,228
Local Park, Connecting Park Area G Ph 2 OS22
1235
X
w/in NG Concept Plan
665
Local Trails Ph 2 Area G OS25
1236
X
w/in NG Conce t Plan
None
Loral Park Focal Park Ph 3 Area D
1316
X
216
Nei borhood Park NG Ph. 2
602
X
w/in NG Concept Plan
213
Signage
X
X
14
Arches
1239
X
67
Pump Station
X
6
Water Quality
X
129
BRIDGE Tustin Ranch over Linear Parklvehicular and
624
X
X
Concepts Only
126
Pedestrian BRIDGE - Armstron lLinearPark
622
X
X
127
Pedestrian BRIDGE - Warner/Unear Park
620
X
X
Disposition and Development Agreement Attachment "I OA" City of Tustin/Flight Venture LLC
-12-
Legacy Park
TABLE 2�
DEVELOPER DELIVERABLES
Las? updated: 08104110
PLANS CONSULTANT Document Date DOCUMENT FORM
Electronic Hard Copy
CONSTRUCTION
Bid Documents
RBF
10!02/2006
Centex Forms
2007-2009
Construction/Bid DocslCentex Forms —
City Bid Documents
2007-2009
ConstructlonlBid DoWC!ty Bid Docs —
IRWD Capitol Bids
2007-2009
Construction/Bid DocsIIRWD Capitol Blds
Misc Backup
— 2007-2009
Constructionl6id Doeslmisc backup —
Pre -qualification Bid Documents
– 2007-2009
ConstruetiorlBld DocslPre-Qualifcation Bid Does —
Private Bid Documents
2007-2009
ConsWctionlBid DocslPrivate bids
Legacy Park Demolition Plan Overall
RBF
10!02/2006
—
CA
Legacy Park Demolition Plan Pavement
RBF
05/3112006
—
C.2
Legacy Park Demol'Rion Plan Building
RBF
01/10/2007
Hunsaker na
C.2
Legacy Park Demolition Plan IRWD
RBF
02/08/2008
—
C.2
PhotoslMisc
2007
ConstructionlDemo
—
Field Work - Mise Documents
2007-2009
Construction/Field Work
—
Permits
City of Tustin
na
Gon&trucLon/PermitsICiIv of Tustin
IRWD
na
ConstructionlPetmitsfIRWD
—
Jurisdidional - i.e. Corps 404 1600
—
na
Construction/Permits/Jurisdictional Permits
C.3
OC Sanitation District
na
Construdi—n-armitsfOran a County Sanitiation District
--
Waste Disposal Authority
na
ConstructiorlPermitslWaste Disposal Auth ---
Spec and Plan Book
na
ConstructicrYS ec and Plan Book PDF Scans --
SWPPP
Document
Hunsaker na
CcnstructienISWPPP1Document
$WPPP As Built)
Hunsaker na
ConstructionlSWPPP1As Builts C.6
Permits(including N.O.T.
na
ConstructionISWPPPIPermits —
Utilities i
Notice of Termination CondructionlUtilities ---
eee a
�I
DUE DILIGENCE INFORMATION
ALTA Survey Hunsaker — DueDil.1
Base Files -- 2003.2004 DueDilBase Files
FEIRIFEIS (includes Addendum) — 1999-2006 DUeOIJIFFIR-FF15
Environmental Site Assessment aka: Phase 1
Lot 4 Hotel Site West Environmental 2008 DueDillPhase 1 ESA Assessment
"''�'� I ispoMMM aricve o merifAgreement
Attachment "I OA"
-13-
City of Tustin/Flight Venture LLC Page 1
Legacy Park
TABLE 2
DEVELOPER DELIVERABLES
Last Updated. 08104110
PLANS
CONSULTANT
Document Date
DOCUMENT FORM
Electronic
Hard Copy
EARTHWORK
Hunsaker&RBF
2006-2007
En ineerin !Earthwork
GEOTECHNICAL
General Project Design
NMG
2004-2008
EnclineeringlGeotechnical
—
Grading for TRR Embankment
NMG
11/03/2006
En ineerin !Geotechnical
--
Evaluation of Import Materials
NMG
2006
En ineerin !Geotechnical
TRR Brid a Desi n
NMG
2007
Engineering/Geotechnical
Peters Canyon Wash Design
NMG
2007-2008
Engineering/Geotechnical
—
NE Rough Grade
NMG
2007-2010
Engineering/Geotechnical
Barranca Channel Design
NMG
2007
Engineering/Geotechnical
Moffett Avenue Bridge Design
NMG
2007-2008
Engineering/Geotechnical
TRR North Embankment
NMG
2007-2008
En ineerin !Geotechnical
—
Armstrong Avenue Street Improvements
NMG
08118!2008
Engineering/Geotechnical
Armstrong Pedestrian Bridge Design
NMG
2008-2009
En ineerin !Geotechnical
Warner Avenue Pedestrian Bridge Design
NMG
04/1612008
En ineerin !Geotechnical
—
Memo
NMG
2006-2007
En ineerin !Geotechnical
GRADING -Mass Grade
PERF
Hunsaker
1011212009
En heerEn Gradin !Mass Gradin
Mass Gradin Rev. 1
Hunsaker
06/15109
En ineerin Gradin !Mass GradTng
E.MG. 1
GRADING -Rough Gradin
Rough Gradin -TTM 17144
RBF
02!0612007
E.RG.1
Rough Gradin - TTM 17201
RBF
4116108
En ineerin !Gradin Rou h Grading
E.RG.1/2
Rough Gradin - TTM 17206
Hunsaker
4117108
E.RGA
Rough Gradin - Composite Certification - NE
—
1116109
E.RG.1
GRADING - US Navy PERFS
Hunsaker
1 011 212 0 09
En ineerin !Gradin !Mass Gradin
HANGAR
2004-2007
En ineerin !Hari ars
HYDROLOGY
2007-2008
Engineering/Hydrology
MOFETT DRIVE
Moffett Bride
RBF
10/18/2007
Engineering/Moffett
Street Plans 1st Plancheck Redlines
RBF
0311012008
En incerin (Moffett
E.M.1
NE
Storm Drain - Local
RBF
2008
E.NE.1
IRWD Capital Improvement Plans - Phase 1
RBF
2008
E.NE.1
IRWD Capital Improvement Plans
RBF
2006
E.NE.1
Street- Ph. 1 5th Plancheck Redlines
RBF
06/04/2009
Engineering/NF
E.NE.2
Landscape Plans N -E Interior Streets
RBF
2008
Planning/Landscape/NE
E.NE.1
Street Light Location WE
RBF
2008
E.NE.1
NE Siorm Drain As Built
RBF
2009
En ineerin INE
C.5
NG
Fire Master Plan
Fire Safe Planning
01/10/2008
—
E,G.1
Storm Drein
Hunsaker
1/8/2009
E.G.1
Moffett Drive
RBF
3110108
E.G.1
Santa AnafSanta Fe Channel Exhibit
Hunsaker
10/22/2007
E.G.2
Valencia Ave Street Improvements
Hunsaker
06104/2009
E.G.4
Moffett Avenue Bridge Engineers Estimate
RBF
2121108
E.G.3
Moffett Avenue Special Provisions
2007
E.G.3
PETERS CANYON CHANNEL
Exhibits
RBF
0911512006
En ineerin Peters Canyon Channel
Hydrology
RBF
05116/2008
EngineeringlPeters Canyon Channel
—
Misc(permits, county's report)
—
2007-2009
EngineeringlPeters Canyon Channel
—
OCFCD Comments
—
2007
Engineering/Peters Canyon Channel
—
eters Canyon Channel Plans
RBF
09/2112007
Engineering/Peters Canyon Channel
RED HILL
Storm Drain
RBF
3112108
E.RH.1
Street Plans
RBF
3111108
E.RH.1
Street Plans 1 st Plancheck Redlines
RBF
03/1112008
Ea ineerin /Red Hill
E.RH.2
Landscape Plans
RBF
3111108
E.RH.1
RUNOFF MANAGEMENT PLAN ROMP
ROMP
RBF
1212004
En ineerin (ROMP
SUB -AREA MASTER PLAN SAMP
SAMP
RBF
0412008
En ineerin !SAMP
SANTA-ANAIFE CHANNEL
OCFCD Approval Letter
06/2712007
En ineerin !Santa Ana -Santa Fe Channel
Culvert Exhibit
Hunsaker
03/1812008
En ineerin (Santa Ana -Santa Fe Channel
Design & Hydraulic
Hunsaker
03/1912007
Engineering/Santa Ana -Santa Fe Channel
TRAFFIC SIGNALS
Wamer/Armslrong 8th Plancheck Redlines
RBF
07/2012009
Engineering/Traffic Signals
E.T8.1
Wamerf'G" Street 4th Plancheck Redlines
RBF
07/20/2009
En ineerin lrraffic Si nals
E.TS.2
Wamed"E" St.
RBF
6/W09,7120/09
Armsiron !Came le aka: "C" Street or South Loo
RBF
05/0712009
E.TS.1
Armsiron /Came ie aka: "C" Street or South Loo - Redlines
RBF
02/14/2008
En Ineann i Traffic Si nats
E.TS.1
Barranca/Armstron
RBF
06/05/2009
Red Hill/Carne ie
RBF
0311112008
E.TS.1
Red HillNalencia
RBF
03/11/2009
E.TS.1
Red HilllWarner
RBF
03/11/2C09
E.TS.1
TRR/Loop Ramp
RBF
12/23/2008
E.TS.1
Edinger/LoopEdinger/Loop Ramp
RBF
05/07/2009
E.TS.1
Edinger/LoopEdinger/Loop Ramp 3rd Plancheck Redlines
RBF
07/20/2009
En ineerin raffic Si nam
E.TS.2
TRRNalencia
RBF
05/07/2009
E.TS.2
TRRNalencia 3rd Plancheck Redlines
RBF
07/20/2009
En ineerin lrraffic Signals
E.TS.2
TRR/Walnut
RBF
05/07/2009
E.TS.2
TRR1Watnut 3rd Plancheck Redlines
RBF
07/20/2009
En ineerEn raffic Signals
E.TS.2
TRR/South Loo (Legacy Road
RBF
12/23/2008
T.TS.2
TRR/South Loo (Legacy Road - Redlines
RBF
0211112008
En ineerin !traffic Signals
E.TS.2
TRR/Warner South
RBF
7113/09,9115/09
TRR/Warner North
RBF
7113/09T 9115109
"'STuebIngpi osi�ion an °c �S veto inert A reement PHe®�
p g Attachment "l0A" City of Tustin/Flight Venture LLC
-14-
Legacy Park
TABLE 2
DEVELOPER DELIVERABLES
Last updated: 418/04/10
PLANS
CONSULTANT
Document Date
DOCUMENT FORM
Electronic
Hard Copy
TRR
Stone Drain - Off-site (n10 Valencia
RBF
0510812009
En ineerin ITRRffRR Plans
E.TRR.4
Street Plans (slo Valencia
RBF
12123/2008
E.TRR.2
Street Plans No Valencia
RBF
05107/2009
E.TRR.2
Street Plans (n]o Valencia - 1 st plancheck redlines
RBF
1210612007
Street Plaris No Valencia - 3rd lancheck redlines
RBF
07120/2009
En ineerin /TRRURR Plans
E.TRR.5
Landscape (s;o Valencia
RBF
0711512009
Plannin 1Landsca efTRR
E.TRR.1
Landscape No Valencia
RBF
05108/2009
Plannin rLandsca rTRR
E.TRR.1
IRWD Capital Improvements SS -DW -RW -CAP
RBF
E.TRR.1
Geotechnical
NMG
2006
EngineerinqjGeotechnical
TRR and Ram - Hydrology Report
RBF
2009
E.TRR.3
TRR (slo Valencia - Property Owner Surveys
Hunsaker
2007
En ineerin ITRRIResidential
E.TRR.3
TRR No Valencia - Soil Samplinq
Pacific States
2008
Duel:)NSoil Romediation
E.TRR.3
South Embankment Foundation Plan wlPotholin Nates 3 copies)
E.TRR.4
Access Road Conflict Exhibit
RBF
2007-2008
En ineerin ffRRIMise
E.TRR.4
Existing Wall Exhibit
Hunsaker
2008
En ineerin 1TRR1Rosidential
E.TRRA
Legals for ROW and TGE
RBF
2008
Engineerinpri-MI-egals for ROW
Edinger Ramp Study
Hunsaker
2009
En ineerin /TRWTRR Plans
E.TRR.2
Regulatory Permits
2008
En ineerin frRR/Re Mato Permits
SCRRA-OCTA
2008
Fn ineerin rrRR/SCRRA-OCTA
TRR Meeting/Coordination
2007-2008
En ineerin 1TRRIMeetin s
UTILITIES
Exhibits - Composites
2006-2008
En ineerin !Utilities
NE Area Dry Utility Composite
Power Plus
0610812007
En ineerin !Utilities
IRWD
52502-9041 NE Capitol im .Bid
2008
En ineerin lUtilitiesllRWD
IRWD Agreements
2007-2009
En ineerin lUtilitiesllRWD
IRWD Bid Documents
2007
En ineerin 111tilities IRWD
IRWD Well Sites
2006-2010
En ineerin lUtilitiesllRWD
Misc (regional needs analysis, TTM 17144 Letter SAMP rev
2006-2006
En ineerin lUtilitiesllRWD
MWD OC -58
2008
Fn ineerin !Utilities
WARNER
Pedestrian Bride
2008-2009
En ineerin !Warner
Street Plans
RBF
08129107
E,W.1
Street Plans 4th Plancheck Redlines
RBF
06/02/2009
En ineerin 1WarnerlWarner Street
E.W.1
WATER QUALITY MASTER PLAN QMP)
01/2312008
En ineerin !Warner
Environmental Condition
Soil Remediation
Public Participation Plan PPP - PPP Interviews Public Notice Materials
West Environmental
2009
Environmental CondiVon/Soil Remediatlen/PPP
Remediation Pictures
2009
Environmental Cen&tionlSoil Remediation/Remediation Pictures
Reports
Pacific States
2009-2010
Environmental ConditionlSoil RomediationlRe arts
SMP - SMP Final City Comments Misc Exhibits & RTC
Pacific States
2009
Environmental Condition/Soil RemediationlSMP
XL - Submittals and Corres ondance
2009-2010
Environmental ConditionlSoil RemedraVanlXL
Oversi ht Report
Bureau Veritas
0612010
Environmental Condition/Soil Romediationl0versi ht Reports
US Navy P.emediation
2006-2010
Environmental ConditienfUS Navy Remedlatlon
Logo -Branding
Leclacy Park Logos
Le o -Brandin Le ac Park Logos
Presentations
Branding Presentation
02/1212008
Lc o -Brandin !Presentations
City Presentation
04114=07
Lo o -Brandin !Presentations
MAPPING
NG TTM No. 17254
Hunsaker
7117109
mappingING TTM
M.T7M.1
NE TTM No. 17144
RBF
10/1912007
MaptaingINE TTM
M.TTM.1
ND South TTM No. 17201
RBF
07/2212008
Mapping/111) TTM
M.TTM.1
Tract 17026
—
09/2712006
Ma in !Tract 17026
M.FMA
NE Final Map No. 17144
RBF
3/06/2008
MappingINE FM
M.FM.1
PLANNING
AFFORDALBLE HOUSEING
—
2007 -Oa
Plannin /Affordable Housing
ART PROGRAM
—
2007
Plannin lArt Program
BRIDGES
Armstrong Pod Bride
2007-2009
Plannin IBrid es
Presentations
2006-2007
Planning/Bridges
TRR Ped Bridge
—
2007-2008
Planning/Bridges
Warner Bridge Design Review (6 Copies)
MBH
0512312008
P.ND.2
BUS STOP PLAN
RBF
2007
Plannin /Bus Stop Plan
CC&R
Luce Forward
2008-09
Plannin 1CC&R
DESIGN GUIDELINES
RBF
2007
Plannin !Desi n Guidelines
P.1
LAND USE
—
2009
Plannin !Land Use
LANDSCAPE
Armstrong
RBF
2008-2010
Plannin ll-andsca olAnnstron
Armstrong Redlines (Field Services, SWA, DSL Std plancheck)
RBF
06105/2009
P.L.1
Barranca Parkway
RBF
03/28/2008
Plannin Randsca elBarranca
Barranca Parkway Redlines
RBF
05106/2009
Planning/Landscape/Barranca
P.L.2
Meeting Notes
—
2006-2008
Plannin lLandsca IMoetin Notes
NO (Panel Images)
—
2006
Planning/LandscapeIND
ND Linear Park
EDAWIWhitin Design
07114/2009
Electronic
P.ND.2
NO Plaza (Concept)
Whitin Design Works
07/1412009
P.ND.IIP,ND.2
NE
RBF
2008
Plannin lLandsca BINE
NE Linear Park (Design Review)
EDAW
06/06/2009
Plannin 1Landsca BIND Linear Park
P.ND.1
0&M Manual
EDAW
2009
Planning/Landscape/0 & M Manual
Plant Manual
EDAW
2007
Plannin 1Landsca elPlant Manual
Red Hill
RBF
2008-2009
Planning/1-andscapelRad Hili
Red Hill Redlines
RBF
06/05/2009
Planning/Landscape/Red Hill
P.L.3
Specifications
—
2008
Plannin ILandsca e1S cificatlons
TRR
RBF
2007-2009
Planning/Landscape/TRR
TRR Redlines
RBF
05/08/2009
Plannin 1Landsca erTRR
P.L.4 alb
Warner
RBF
2009
Plannin ILandsca elWarner
Warner Redlines
RBF
06/06/2009
Plannin /Landsca elWarner
P.L.5
""T°'""i%S"osi�iorian°17�°veTo me1i`A reementp Page3 p g Attachment "l0A" City of Tustin/Flight Venture LLC
-15-
Legacy Park
TABLE 2
DEVELOPER DELIVERABLES
Last Updated: 08104110
PLANS
CONSULTANT
Document Date
DOCUMENT FORM
Electronic
Hard Copy
Master Plan Exhibits
Air Views
—
2007-2008
Plannin !Master Plan Exhibits
Illustratives
—
2007-2008
Planning/Master Plan Exhibits
Master Plan Base
—
2007-2009
Plannin !Master Plan Exhibits
ND Planning
Community Park
RBF
07/1012009
Plannin IND Planning/CommunIty Planning/CommunityPark
P.ND.2
Community Park Design Review (6 copies)
RBF
07/10/2009
P.ND.2
Fire Master Plan
Fire Safe Planninq
2006
Ptannfn !Fire Master Plan
High School
PJHM
2008
Plannin IN01ND P€annin IHi h School
Hydrology Report Redlines from 2nd Plancheck (TTM 17201)
RBF
2008
P.ND.2
Implementation Strategy
RBF
2006-2008
Plannin 1NDMD Plannin llm lementaiton Strat
ND Concept Plan
RBF
2009
Plannin IND Planning/Concept Pfan
P.ND.2
ND Linear Park Design Review (6 Copies)
Whitin Design Works
07/13/2009
P.ND.2
Project Q
2008-2009
PlariningIND Plannin !Project 0
Shared Parking
Fehr & Peers
2009
Plannin IND PlanninglShared Parkin
Traffic
AFA
2009
Plannin INS) Plannin !Traffic
NE Planning
Concept PIan
RBF
2007
Plannin NE Plannin Conce t Plan
Entitlement Documents
2007
Plannin INE PlannftjEntitlernent Documents
Traffic Study
AFA
2007
Plannin INE Planningl7raffic Stud
NG Planning
Concept Plan
RBF
07/17/2009
Planning/NG Planning/Concept Plan
Hydrology Report TTM 17254 Redlines
Hunsaker
11/20/2007
P.G.2
Residential Product Exhibits
Misc
20052009
P€annin ING Plannin lResidontial Product
P.G.1
Nei hborhood Studies
Hunsaker
10/2912007
P.G.1
Neighborhood Studies
Hunsaker
02/27/2008
P.G.1
Plotting Plans Phase 1
Hunsaker
1012912007
P.G.1
School Sfte
PJHM
2008
Plannin ING Planning/School Site
Traffic Study
AFA
2008
Manning/NG Planning/Traffic Stud
TTM
RBF
7117/09
Planning/NG Plannin !TTM
TTM Redlines
Hunsaker
03/1112008
P.G.3
SIGNAGE
Master Sign Program Submittals
RSM
7113109
Plannin fSi nae
P.D.2
Temporary Signs
—
2C09
Planning Si na e
Tustin Legacy Master Sign Program
RSM
2006
Plannin !Si na e
SPECIFIC PLAN INTERPRETATIONS
—
2006.07
Planning/SP Inter rotations
SPECIFIC PLAN (2006 & 2007)
—
2006-07
Plannin IS ecMc Plan
STREET NAMES
RSM
2007-08
Ptannfn /Street Names
P.D.2
SUSTAINABILITY
RBF
2007
Planning/Sustainability
TRAFFIC STUDIES
AFA
2006-2009
Planning/Traffic Studies
HJ "ts os°i ion ancii °ve�°�° m"ArA reement
p p g Attachment "l0A" City of Tustin/Flight Venture LLC '°44
-16-
ATTACHMENT lOB
"CITY ACTIVITIES" — HAZARDOUS MATERIALS
HAZARDOUS MATERIALS RELEASES ON OR AFTER MAY 2002
The following identified Hazardous Materials Releases are in the approximate location
and size of piles described on the attached plan:
A. Gravel Pile of unknown origin at Location A on attached plan; removed by City in late
February/early March 2016
B. Construction debris (containing asbestos material) of unknown origin at Location B on
attached plan; removed by City in late February/early March 2016
C. Concrete debris of unknown origin at Location C on attached plan; removed by City
removed by City in late February/early March 2016
D. Soil Pile brought to site by Wermer's Multi -Family Corporation at Location D on
attached plan; remains on Property as of Effective Date
E. Impacted soil from Van Buren Street storm drain construction at Location E on attached
plan; removed by City in late February/early March 2016
Tustin Cornerstone I DDA Art l OB City ATTACHMENT l OB City of TustinTlight Venture LLC
Activities - Hazardous Materials 11-08-16 Page 1 of 2
(adg) FINAL.docx.
i
• 1 /
r r
LocationE— @Em •_- � • � - �
Location D
Location C (SP -1 B) '
1
Location B I
'E'SP-2)
I
I
R
Location A _
♦ (SP -3)
Legend
Site Boundary _
Approximate Size and Locations of Figure
ENVIRON Former/Current Soil & Debris Piles
Lincoln Property Compan
DRAFT Disposition Area 4, Tustin MAS
GRAFTED BY Wisher Date: 11/8/2016 Tustin, CA PROJECT: 04-25347E
Tustin Cornerstone I DDA ATTACHMENT 1013 Page 2 of 2 City of Tustin/Flight Venture LLC
Q
Gravel Pile of unknown origin at location SP -3;
Location A removed by City in late February/early
Q
March 2016
N
0
Construction debris (containing
Ui
Location B asbestos -containing material) of unknown
origin at Location SP -2; removed by City in
ALN
N
late February/early March 2016
o
Concrete debris of unknown origin at
Location C Location SP -4; removed from Site by City in
J
late February/early March 2016
'
Soil Pile brought to site by Wermer's
Location D Multi -Family Corporation at
a
Location SP -1 B; remains on Site
All 6-A-• �� it
Impacted soil from Van Buren Street
storm drain construction at Location SP -1A;
Location E
Notes:
1. Aerial source: ArcGIS Online ESRI Imagery
'k .
o 2
removed City in late February/early
Date of Aerial Photo: 05/14/2014 0 150
300
March 2016
2. Locations A through E as referenced in Attachment
N
10B of the Disposition and Development Agreement Feet
Approximate Size and Locations of Figure
ENVIRON Former/Current Soil & Debris Piles
Lincoln Property Compan
DRAFT Disposition Area 4, Tustin MAS
GRAFTED BY Wisher Date: 11/8/2016 Tustin, CA PROJECT: 04-25347E
Tustin Cornerstone I DDA ATTACHMENT 1013 Page 2 of 2 City of Tustin/Flight Venture LLC
ATTACHMENT IIA
FORM OF QUITCLAIM DEED
PHASE 1 PROPERTY
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE RECORDED
AND TO BE EXEMPT FROM RECORDING
FEES PER GOVERNMENT CODE §6103 AND
§27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Mail Tax Statements to:
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Attention: [ I
Space Above This Line Reserved for Recorder's Use
QUITCLAIM DEED
FOR TUSTIN LEGACY CORNERSTONE I—PHASE 1
AND COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING
ENVIRONMENTAL RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471
This Quitclaim Deed For Tustin Legacy Cornerstone I—Phase 1 and Covenants,
Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471 (this "Quitclaim Deed") is made on this day of , 20 (the
"Quitclaim Date"), by the CITY OF TUSTIN, California, a municipal corporation of the State
of California ("GRANTOR"), in favor of FLIGHT VENTURE LLC, a Delaware limited
liability company ("GRANTEE").
WHEREAS:
A. The United States of America ("Government") and the GRANTOR entered into
that certain Agreement between the United States of America (acting by and
through the Secretary of the Navy or designee) and the City of Tustin, California,
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT 11A City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016 1
FINAL.docx
for the Conveyance of a Portion of the Former Marine Corps Air Station Tustin
("MCAS Tustin"), dated May 13, 2002 ("Conveyance Agreement");
B. Pursuant to the Conveyance Agreement, the Government conveyed property at
the Marine Corps Air Station Tustin (such property, "Grantor Property") to the
GRANTOR pursuant to that certain Quitclaim Deed D and Environmental
Restriction Pursuant to Civil Code Section 1471 dated May 13, 2002, recorded on
May 14, 2002 in the Office of the County Recorder, Orange County, California
("Official Records") as Instrument Number 20020404594 ("Government
Deed").
C. Pursuant to California Civil Code §1471, the Government determined that it is
reasonably necessary to impose certain restrictions on the use of the Grantor
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 Grantor
Property described hereinafter with particularity;
D. The GRANTOR and the GRANTEE entered into the following: (i) that certain
Tustin Legacy Disposition and Development Agreement Cornerstone I, dated as
of , 2016 ("DDA"), providing for the sale and development of a
portion of the Grantor Property; and (ii) that certain Memorandum of Tustin
Legacy Disposition and Development Agreement for Cornerstone I
("Memorandum of DDA") to be recorded in the Official Records of even date
with and immediately prior to the recording of this Quitclaim Deed;
E. The GRANTOR has executed that certain Phase 1 Declaration of Special
Restrictions for Cornerstone I ("Special Restrictions"), consented to by the
GRANTEE, which shall be recorded in the Official Records immediately prior to
the recording of this Quitclaim Deed; and
F. The GRANTOR desires to convey and the GRANTEE desires to acquire a portion
of the Grantor Property to facilitate economic redevelopment in accordance with
that certain MCAS Tustin Reuse Plan adopted by the City Council of the City on
October 17, 1996 and amended in September, 1998 ("Reuse Plan") and approved
by the Government for MCAS Tustin.
1. NOW THEREFORE, the GRANTOR, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby remise, release and forever
quitclaim to the GRANTEE, all of the GRANTOR'S right, title and interest in and to that certain
real property, comprising approximately 17.545 acres, more or less, more particularly described
on Exhibit "A" attached hereto and incorporated herein by this reference ("Land"), together with
all existing improvements, if any, presently located on the Land, all appurtenances pertaining to
the Parcel (as hereinafter defined) or such improvements and all permits, licenses, approvals and
authorizations issued by any governmental authority in connection with the Parcel. The Land,
less and except all of the matters in Section 2 of this Quitclaim Deed, is referred to as
the "Parcel."
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2. EXCEPTING THEREOUT AND THEREFROM, however, and reserving to the
GRANTOR, its successors and assigns, together with the right to grant and transfer all or a
portion of the same, the following rights and interests which are explicitly reserved to
GRANTOR:
2.1 Any and all oil, oil rights, minerals, mineral rights, natural gas, 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 Parcel together with the perpetual
right of drilling, mining, exploring for and storing in and removing the same from the Parcel or
any other land, including the right to whipstock or directionally drill and mine from lands other
than the Parcel, oil or gas wells, tunnels and shafts into, through or across the subsurface of the
Parcel and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under
and beneath or beyond the exterior limits thereof, and to re -drill, re -tunnel, equip, maintain,
repair, deepen and operate any such well or mines; but without, however, the right to enter upon
or use the surface of the Parcel in the exercise of such rights or otherwise adversely affect the use
or operation of the Parcel as anticipated by this Agreement or the structural integrity of any
improvements on the Parcel; and
2.2 Any and all water, water rights or interests therein appurtenant or relating to the
Parcel or owned or used by the City in connection with or with respect to the Parcel 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, re -drill and remove the same from or in the Parcel, to
store the same beneath the surface of the Parcel and to divert or otherwise utilize such water,
rights or interests on any other property owned or leased by the City; but without, however, the
right to enter upon or use the surface of the Parcel in the exercise of such rights or otherwise
adversely affect the use or operation of the Parcel as anticipated by this Agreement or the
structural integrity of any improvements on the Parcel.
Notwithstanding anything to the contrary set forth in this Quitclaim Deed, the reservation
by the GRANTOR of the rights and interests in this Section 2 shall not be deemed to limit the
GRANTEE'S right to drive piles, construct caissons, foundations, basements and other
subsurface improvements and otherwise engage in subsurface construction activity in order to
construct improvements on the Parcel.
3. SUBJECT TO THE FOLLOWING NOTICES, COVENANTS, RESTRICTIONS, AND
CONDITIONS, which shall be binding upon and enforceable against the Parcel and the
GRANTEE, and its successors and assigns, in perpetuity:
3.1 The GRANTEE agrees to accept conveyance of the Parcel subject to all
covenants, conditions, restrictions, easements, rights-of-way, reservations, rights, agreements
and encumbrances of record, including, without limitation, the DDA, the Memorandum of DDA,
and the Special Restrictions, which are covenants running with the land and are binding upon the
GRANTEE and all successors and assigns of the GRANTEE owning all or any portion of Parcel
for the benefit of the GRANTOR and its successors and assigns, unless or until such
responsibilities and obligations are released pursuant to the provisions of the aforesaid
documents, including the release of obligations under the DDA that GRANTEE may obtain
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pursuant to a Certificate of Compliance (as defined and further provided for in the DDA)
executed by the City and recorded against the Parcel.
3.2 The Government Deed conveying the Parcel to the GRANTOR was recorded
prior to recordation of this Quitclaim Deed. The GRANTOR has no knowledge regarding the
accuracy of information provided by the Government regarding the environmental condition of
the Parcel. The Grantor makes no representations or warranties regarding the environmental
conditions of the Parcel except as expressly set forth in Section 3.3.8 of the DDA (which
representations and warranties shall be deemed to expire and be of no further force and effect
upon the recording of a Certificate of Compliance with respect to the Parcel or any earlier
termination of the DDA with respect to the Parcel). The GRANTOR has no knowledge
regarding the accuracy or adequacy of the Government's remediation of the Parcel as provided in
the Government Deed.
3.3 The italicized information below is copied verbatim (except as discussed below)
from Sections 2.2, 2.3, 2.6, 2.8, 2.9 and 3 of the Government Deed conveying a portion of the
Grantor Property to the GRANTOR. To the extent applicable to the Parcel conveyed hereunder,
by acceptance of this Quitclaim Deed, the GRANTEE, on behalf of itself and its successors and
assigns acquiring fee title to all or any portion of the Property, hereby acknowledges and
assumes all responsibilities placed upon the GRANTOR under the terms of the aforesaid
Government Deed solely with respect to the Parcel conveyed hereunder. Within the italicized
information contained in this Section 3.3 only, the term "Grantor" shall mean the Government,
the term "Grantee" shall mean the City of Tustin and the term "Property" shall mean the Grantor
Property, including, without limitation, the Parcel. To avoid confusion, within the italicized
information, the word "Government" has been added in brackets after the word "Grantor", and
the words "City of Tustin" have been added in brackets after the word "Grantee."
2.2 A FOST has been completed and an Environmental Baseline Survey
("EBS') report is referenced in the FOST. The FOST and EBS reference
environmental conditions on the Property and on other property not
subject to this Deed. GRANTEE ["City of Tustin'7 acknowledges that it
has received copies of the EBS and the FOST and that all documents
referenced therein have been made available to GRANTEE ["City of
Tustin' J for inspection and copying.
2.3 Except as otherwise provided herein, or as otherwise provided by law, the
GRANTEE ["City of Tustin'7 acknowledges that it has inspected, is
aware of, and accepts the condition and state of repair of the Property,
and that the Property is conveyed "as is" and "where is" without any
representation, promise, agreement, or warranty on the part of the
GRANTOR ["Government'] regarding such condition and state of repair,
or regarding the making of any alterations, improvements, repairs or
additions. Except for the environmental remediation which may be
required to be undertaken by GRANTOR ["Government'7 pursuant to
paragraph 2.6 below, the GRANTEE ["City of Tustin'7 further
acknowledges that the GRANTOR ["Government'7 shall not be liable for
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any latent or patent defects in the Property except to the extent required
by applicable law.
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. Section 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" [attached to this
Quitclaim Deed as Exhibit `B" and incorporated herein by this reference].
2.6.2. Grant of Covenant [CERCLA 42 U.S.C. Section 9620
(h) (3) (A) (ii) (I)]. 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) (H)J. The GRANTOR ["Government'7 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)]. In
connection with GRANTOR'S ["Government"] covenant in 2.6.3 above and in
connection with ongoing remediation on GRANTOR'S ["Government"] 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'7, 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
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I I A City of Tustin/Flight Venture LLC
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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'] 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 "] 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.
2.8 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
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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.
3.4 The responsibilities and obligations placed upon the GRANTOR by the
Government shall run with the land and be binding on the GRANTEE and all subsequent owners
of the Parcel or any portion thereof, unless and until such responsibilities and obligations are
released pursuant to the provisions set forth in the Government Deed.
3.5 Except as expressly set forth in the representations and warranties contained in
Section 3.3.8 of the DDA (which representations and warranties shall be deemed to expire and
be of no further force and effect upon the recording of a Certificate of Compliance with respect
to the Parcel or any earlier termination of the DDA with respect to the Parcel), and subject to the
terms and conditions thereof, GRANTEE acknowledges that it has examined the Parcel and is
buying the Parcel from the GRANTOR in an "AS IS, WHERE IS, WITH ALL FAULTS"
condition, in its present state and condition and with all faults, which provisions shall survive the
close of escrow related to this transaction and do not merge with this Quitclaim Deed.
4. DDA Provisions.
4.1 Definitions. Pursuant to the DDA, the City has imposed certain covenants,
conditions and restrictions on the Parcel, including the releases contained in Section 4.5.2 of the
DDA, which are set forth verbatim below in italics and each of which is hereby declared to be a
covenant running with the land in perpetuity. Within the italicized language which follows,
section references shall be to sections of the DDA, references to "this Agreement" shall mean the
DDA, references to the "Effective Date" shall mean [insert Effective Date of DDA] and initially
capitalized terms shall have the meanings set forth in Exhibit "C" attached hereto and
incorporated herein by this reference.
4.2 Releases. Section 4.5.2(f) of the DDA provides as follows:
(f) Release. Developer, on behalf of itself and each Successor Owner and every
Person claiming by, through or under Developer or any Successor Owner (each a
"Releasing Party"), hereby waives, as of the Effective Date, and agrees to waive, as
of ... Close of Escrow, the right of each Releasing Party to recover from, and fully and
irrevocably releases, the City and its elected and appointed officials, employees, agents,
attorneys, affiliates, representatives, contractors, successors and assigns (individually, a
"Released Party" and collectively, the "Released Parties") from any and all Claims that
Developer or any Releasing Party may now have or hereafter suffer or acquire arising
from or related to: (i) any Due Diligence Information, (ii) any condition of the Property
or any current or future improvement thereon, known or unknown by any Releasing Party
or any Released Party, including as to the extent or effect of any grading of the
Development Parcels; (iii) 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 Property, or any portion thereof, (iv) the existence, Release,
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT 11A City of Tustin/Flight Venture LLC
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threatened Release, presence, storage, treatment, transportation or disposal of any
Hazardous Materials at any time on, in, under, or from, the Property or any current or
future improvement thereon or any portion thereof, (v) Claims of or acts or omission to
act of 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, or from,
about, or adjacent to the Property or any current or future improvement thereon,
including any Investigation or Remediation at or about the Property or any current or
future improvement thereon; and/or (vi) arising from or related to the Tustin Legacy
Backbone Infrastructure Program, any community facilities district or the cost or extent
thereof, or the amount of the Project Fair Share Contribution or any community facilities
district assessment against the Property, Development Parcels and/or Improvements
described in this Agreement; provided that the foregoing release by the Releasing Parties
shall not extend to (A) any breach by the City of any of the representations or warranties
of the City set forth in Sections 3.3 or 18.11.2 of this Agreement or any of the Other
Agreements, (B) any breach by the City of any of the covenants or obligations set forth in
this Agreement or any Other Agreement, (C) any Claim that is the result of the gross
negligence or willful misconduct of the City, (D) any actions of the City or any of the
Released Parties affecting a portion of the Property which occur following the Close of
Escrow with respect to such portion of the Property, or (E) any Claim arising with respect
to the Development Permits, Applicable Approvals and Phase 2 Applicable Approvals, if
any, approved by the City in its Governmental Capacity. This release includes Claims of
which Developer is presently unaware or which Developer does not presently suspect to
exist which, if known by Developer, would materially affect Developer's release of the
Released Parties. Developer 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 OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR. "
In this connection and to the extent permitted by law, Developer on behalf of itself, and
the other Releasing Parties hereby agrees, represents and warrants, which representation
and warranty shall survive ... Close of Escrow and the termination of this Agreement
and shall not be merged with any Quitclaim Deed, that (x) it 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,
(y) the waivers and releases in this Section 4.5.2(f) have been negotiated and agreed upon
in light of that realization and (z) Developer, 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 to the extent set forth above which
might in any way be included as a material portion of the consideration given to the City
by Developer in exchange for the City's performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
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COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS
SECTION.
CITY'S INITIALS DEVELOPER'S INITIALS
[remaining text of Section 4.5.2(f) of the DDA is intentionally omitted]
4.3 Equitable Servitude. The release set forth in Section 4.2 of this Quitclaim Deed
is hereby declared to be an equitable servitude and a covenant running with the land comprising
the Parcel for the benefit of the City Benefited Property and the City and each Successor Owner
owning all or any portion of such City Benefited Property, burdening the Parcel and GRANTEE
and the Successor Owners owning all or any portion of the Parcel and all Persons claiming by,
through or under GRANTEE or any Successor Owner of the Parcel or any portion thereof (and
for such additional period as may be applicable during the period in which the DDA remains
effective) and to further evidence its effectiveness with respect to GRANTEE and the Successor
Owners of the Parcel has been included in its entirety in this Quitclaim Deed.
5. This Quitclaim Deed is made and accepted upon (a) the covenants, conditions,
restrictions and other matters set forth in the Special Restrictions, and (b) subject to reservations,
covenants and restrictions as set forth in the Government Deed. Each future transfer or
conveyance of the Parcel or any portion thereof shall include notice of the Special Restrictions
and in addition shall include those disclosures and environmental covenants contained in the
Government Deed.
6. The terms of this Quitclaim Deed are hereby agreed and declared by the GRANTEE and
the GRANTOR to be covenants running with the land and enforceable as restrictions and
equitable servitudes against the Parcel, and are hereby declared to be and shall be binding upon
the Parcel and the GRANTEE and all successors and assigns of the GRANTEE owning all or
any portion of the Parcel for the benefit of the City Benefited Property (legally described on
Exhibit "D" attached to this Quitclaim Deed and incorporated herein by this reference) and the
GRANTOR, and the GRANTOR shall retain the right to enforce the restrictions and equitable
servitudes against the Parcel and the same shall be enforceable solely by the GRANTOR
notwithstanding any future transfer of the City Benefited Property or any interest therein or
portion thereof.
{remainder of page is blank; signatures on following page}
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I I A City of Tustin/Flight Venture LLC
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IN WITNESS WHEREOF, the GRANTOR, THE CITY OF TUSTIN, has caused this
Quitclaim Deed to be executed on the day first above written.
CITY OF TUSTIN:
By:
ATTEST:
By:
Erica Rabe,
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Jeffrey C. Parker,
City Manager
{signatures continued on next page}
Tustin Cornerstone I DDA Art I IA Form of ATTACHMENT I IA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016 FINAL.docx S-10
ACKNOWLEDGEMENT OF GRANTEE'S COVENANTS
BY EXECUTING THIS QUITCLAIM DEED BELOW, ON AND AS OF THE DATE
WRITTEN BELOW, GRANTEE HEREBY ACKNOWLEDGES AND ACCEPTS on behalf of
itself and all subsequent owners of the Parcel or any portion thereof: (A) this Quitclaim Deed
and the covenants and agreements of the GRANTEE contained in this Quitclaim Deed and
(B) the Special Restrictions and assumes and agrees to be bound by all of the obligations and
liabilities, covenants, conditions, and restrictions in the Special Restrictions which are the
responsibility of the "Developer'' thereunder.
FLIGHT VENTURE LLC,
a Delaware limited liability company
an
Dated:
Name:
Title:
Tustin Cornerstone I DDA Art I IA Form of ATTACHMENT I IA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016 FINAL.docx S-1
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Art I IA Form of ATTACHMENT I IA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016 FINAL.docx S-2
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
On before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I IA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016 FINAL.docx S-3
Exhibit "A"
Legal Description of Parcel
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I I A City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
Exhibit "A"
FINAL.docx
Exhibit `B"
Description of the Remedial Action Taken by the Government
As Described in the Government Deed
[attached]
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I I A City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
Exhibit "B"
FINAL.docx
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EXHIBIT "C"
DDA Definitions Applicable to Section 4.2 of the Quitclaim Deed
"Agreement" shall mean the DDA as defined in this Quitclaim Deed.
"City" shall mean the GRANTOR as defined in this Quitclaim Deed and each assignee or
successor to the City's rights and powers under this Quitclaim Deed.
"City Benefited Property" shall mean the "City Benefited Property" legally described
on Exhibit "D" to this Quitclaim Deed.
"Claim" or "Claims" shall mean 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), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
"Close of Escrow" shall mean the Quitclaim Date.
"Developer" shall mean the GRANTEE pursuant to this Quitclaim Deed and all
subsequent owners of the Parcel or any portion thereof.
"Development Parcels" shall mean the "Land" as defined in this Quitclaim Deed.
"DA" shall mean the Development Agreement by and between GRANTOR and
GRANTEE with respect to the Parcel Recorded on as Instrument
No.
"Due Diligence Information" shall mean any and all information or documentation
relating to the Property furnished to GRANTEE by GRANTOR, or its elected and appointed
officials, employees, agents, attorneys, affiliates, representatives, contractors or consultants, in
connection with Developer's due diligence pursuant to the DDA.
"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub -entities, including
any Regional Water Quality Control Board, the State Water Resources Control Board, the
Department of Toxic Substances Control, the South Coast Air Quality Management District, and
the California Air Resources Board; the City of Tustin; any Fire Department or Health
Department with jurisdiction over the Property; and/or any other federal, State, regional or local
governmental agency or entity that has or asserts jurisdiction over Hazardous Substance Releases
or the presence, use, storage, transfer, manufacture, licensing, reporting, permitting, analysis,
disposal or treatment of Hazardous Materials in, on, under, about, or affecting the Project, the
Development Parcels or any Improvements thereon.
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I IA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
Exhibit "C"
FINAL.docx
1
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regulations, requirements, orders, directives, guidelines, or permit conditions, in existence
as of [insert Effective Date of DDA] or as later enacted, promulgated, issued,
modified or adopted, regulating or relating to Hazardous Materials, and all applicable judicial,
administrative and regulatory decrees, judgments and orders and common law, including those
relating to industrial hygiene, public safety, human health, or protection of the environment, or
the reporting, licensing, permitting, use, presence, transfer, treatment, analysis, generation,
manufacture, storage, discharge, Release, disposal, transportation, Investigation or Remediation
of Hazardous Materials. Environmental Laws shall include the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.) ("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S.C.
Section 6901 et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended,
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
"Governmental Authority" shall mean any and all federal, State, county, municipal and
local governmental and quasi -governmental bodies and authorities (including the United States
of America, the State of California and any political subdivision, public corporation, district,
joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over GRANTOR and GRANTEE, the Project, the Property or other
property upon which Developer is obligated to construct Improvements or such portions of the
foregoing as the context indicates.
Governmental Successor" shall mean any Successor Owner of the City Benefited
Property that is a governmental entity.
"Hazardous Materials" shall mean and include the following:
(a) "Hazardous Substance", "Hazardous Material', "Hazardous Waste",
or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a
"Restricted Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the
California Health and Safety Code;
(c) "Hazardous Material', "Hazardous Substance", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281, 25316, 25501,
25501.1, 117690 or 39655 of the California Health and Safety Code;
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT 11A City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
Exhibit "C"
FINAL.docx
2
(d) "Oil" or a "Hazardous Substance" listed or identified pursuant to
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any
other hydro carbonic substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous
Waste", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California
Code of Regulations;
(f) Listed by the State as a chemical known by the State to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public agency to be remediated,
including remediation which such law or public agency requires in order for the property to be
put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State Leaking Underground Fuel Tank Field Manual, whether or not
the presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsections 136 et seq.;
0) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsections 2601 et seq.;
(k) Any radioactive material including any "source material", "special nuclear
material", "by-product material", "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel" or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, California Health and Safety Code Section 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor
Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
"Improvements" shall mean the various improvements, including without limitation,
buildings, structures, and accompanying amenities and above and below ground infrastructure
improvements, including, without limitation, utilities, utility extensions, utility systems,
landscaping, hardscaping, storm drains and detention facilities, constructed or to be constructed
on or adjoining the Property by GRANTEE as contemplated by the DDA.
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT 11A City of Tustin/Flight Venture LLC
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Exhibit "C"
FINAL.docx
3
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property, including the air, soil, surface water, and groundwater, and the
surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
"Other Agreements" shall mean this Quitclaim Deed, the Special Restrictions, the
Memorandum of DDA, the Roadway and Utility Easement Agreement, the DA, the Landscape
Installation and Maintenance Agreement and the License Agreements to which the Parcel is
subject and which are Recorded substantially concurrently with the Recording of this Quitclaim
Deed.
"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
"Project" shall mean the construction and installation on the Parcel of the Improvements
(as defined in this Quitclaim Deed).
"Project Fair Share Contribution" shall mean the fair share of the Tustin Legacy
Backbone Infrastructure Program funding paid by the GRANTEE.
"Property" shall mean the "Parcel" as defined in this Quitclaim Deed, together with all
existing improvements, if any, located thereon as of the Effective Date of this Quitclaim Deed.
"Quitclaim Deed" shall mean this Quitclaim Deed.
"Record", "Recording" and "Recorded" shall mean to record the specified instrument,
or the current or past recording of the specified instrument, in the official records of Orange
County California.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Remediate" or "Remediation' shall mean any response or remedial action as defined
under Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
"State" shall mean the State of California.
"Successor Owner" shall mean (a) with respect to a Transfer of the Parcel or any portion
thereof, each and every Person owning or acquiring fee title to or having a ground lease interest
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I TA City of Tustin/Flight Venture LLC
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Exhibit "C"
FINAL.docx
4
in all or any portion of the Parcel and (b) with respect to the City Benefited Property, each and
every Governmental Successor owning or acquiring fee title to all or any portion of the City
Benefited Property.
"Tustin Legacy Backbone Infrastructure Program" shall mean the Tustin Legacy
Backbone Infrastructure Program in effect as of [INSERT DDA EFFECTIVE
DATE].
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I TA City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
Exhibit "C"
FINAL.docx
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Exhibit "D"
Legal Description of City Benefited
Tustin Cornerstone I DDA Art 11A Form of ATTACHMENT I I A City of Tustin/Flight Venture LLC
Quitclaim Deed Phase 1 11-03-2016
FINAL.docx Exhibit "D"
LEGAL DESCRIPTION
LOT C OF TRACT MAP NO. 17404, PER MAP
FILED IN BOOK 907, PAGES 6 THROUGH 42,°o
MISCELLANEOUS MAPS IN THE OFFICE OF THE
COUNTY RECORDER OF ORANGE COUNTY
TUSTI N LEGACY
CITY BENEFITED PROPERTY
Tustin Cornerstone I DDA
ATTACHMENT 11A City of Tustin/Flight Venture LLC
Exhibit "D"
1
ATTACHMENT 11B
FORM OF QUITCLAIM DEED
PHASE 2 PROPERTY
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE RECORDED
AND TO BE EXEMPT FROM RECORDING
FEES PER GOVERNMENT CODE §6103 AND
§27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Mail Tax Statements to:
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Attention: David Binswanger
Space Above This Line Reserved for Recorder's Use
QUITCLAIM DEED
FOR TUSTIN LEGACY CORNERSTONE I—PHASE 2
AND COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING
ENVIRONMENTAL RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471
This Quitclaim Deed For Tustin Legacy Cornerstone I—Phase 2 and Covenants,
Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471 (this "Quitclaim Deed") is made on this day of , 20 (the
"Quitclaim Date"), by the CITY OF TUSTIN, California, a municipal corporation of the State
of California ("GRANTOR"), in favor of FLIGHT VENTURE LLC, a Delaware limited
liability company ("GRANTEE").
WHEREAS:
A. The United States of America ("Government") and the GRANTOR entered into
that certain Agreement between the United States of America (acting by and
through the Secretary of the Navy or designee) and the City of Tustin, California,
Tustin Cornerstone I DDA Art 1113 Form of Quit ATTACHMENT 11B City of Tustin/Flight Venture LLC
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for the Conveyance of a Portion of the Former Marine Corps Air Station Tustin
("MCAS Tustin"), dated May 13, 2002 ("Conveyance Agreement");
B. Pursuant to the Conveyance Agreement, the Government conveyed property at
the Marine Corps Air Station Tustin (such property, "Grantor Property") to the
GRANTOR pursuant to (i) that certain Quitclaim Deed D and Environmental
Restriction Pursuant to Civil Code Section 1471 dated May 13, 2002, recorded on
May 14, 2002 in the Office of the County Recorder, Orange County, California
("Official Records") as Instrument Number 20020404594 ("Government Deed
I -D") and (ii) that certain Quitclaim Deed For Parcels III -D-5, III -D-6, III -D-7,
III -D-8, and III -G-4 dated January 12, 2006, recorded on February 28, 2006 in the
Official Records as Instrument Number 2006-000089845 ("Government Deed
III -D"; collectively with Government Deed I -D, the "Government Deeds").
C. Pursuant to California Civil Code § 1471, the Government determined that it is
reasonably necessary to impose certain restrictions on the use of the Grantor
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 Grantor
Property described hereinafter with particularity;
D. The GRANTOR and the GRANTEE entered into the following: (i) that certain
Tustin Legacy Disposition and Development Agreement Cornerstone I, dated as
of , 2016 ("DDA"), providing for the sale and development of a
portion of the Grantor Property; and (ii) that certain Memorandum of Tustin
Legacy Disposition and Development Agreement for Cornerstone I
("Memorandum of DDA") to be recorded in the Official Records of even date
with and immediately prior to the recording of this Quitclaim Deed;
E. The GRANTOR has executed that certain Phase 2 Declaration of Special
Restrictions for Cornerstone I ("Special Restrictions"), consented to by the
GRANTEE, which shall be recorded in the Official Records immediately prior to
the recording of this Quitclaim Deed; and
F. The GRANTOR desires to convey and the GRANTEE desires to acquire a portion
of the Grantor Property to facilitate economic redevelopment in accordance with
that certain MCAS Tustin Reuse Plan adopted by the City Council of the City on
October 17, 1996 and amended in September, 1998 ("Reuse Plan") and approved
by the Government for MCAS Tustin.
1. NOW THEREFORE, the GRANTOR, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby remise, release and forever
quitclaim to the GRANTEE, all of the GRANTOR'S right, title and interest in and to that certain
real property, comprising approximately 20.92 acres, more or less, more particularly described
on Exhibit "A" attached hereto and incorporated herein by this reference ("Land"), together with
all existing improvements, if any, presently located on the Land, all appurtenances pertaining to
the Parcel (as hereinafter defined) or such improvements and all permits, licenses, approvals and
authorizations issued by any governmental authority in connection with the Parcel. The Land,
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less and except all of the matters in Section 2 of this Quitclaim Deed, is referred to as
the "Parcel."
2. EXCEPTING THEREOUT AND THEREFROM, however, and reserving to the
GRANTOR, its successors and assigns, together with the right to grant and transfer all or a
portion of the same, the following rights and interests which are explicitly reserved to
GRANTOR:
2.1 Any and all oil, oil rights, minerals, mineral rights, natural gas, 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 Parcel together with the perpetual
right of drilling, mining, exploring for and storing in and removing the same from the Parcel or
any other land, including the right to whipstock or directionally drill and mine from lands other
than the Parcel, oil or gas wells, tunnels and shafts into, through or across the subsurface of the
Parcel and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under
and beneath or beyond the exterior limits thereof, and to re -drill, re -tunnel, equip, maintain,
repair, deepen and operate any such well or mines; but without, however, the right to enter upon
or use the surface of the Parcel in the exercise of such rights or otherwise adversely affect the use
or operation of the Parcel as anticipated by this Agreement or the structural integrity of any
improvements on the Parcel; and
2.2 Any and all water, water rights or interests therein appurtenant or relating to the
Parcel or owned or used by the City in connection with or with respect to the Parcel 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, re -drill and remove the same from or in the Parcel, to
store the same beneath the surface of the Parcel and to divert or otherwise utilize such water,
rights or interests on any other property owned or leased by the City; but without, however, the
right to enter upon or use the surface of the Parcel in the exercise of such rights or otherwise
adversely affect the use or operation of the Parcel as anticipated by this Agreement or the
structural integrity of any improvements on the Parcel.
Notwithstanding anything to the contrary set forth in this Quitclaim Deed, the reservation
by the GRANTOR of the rights and interests in this Section 2 shall not be deemed to limit the
GRANTEE'S right to drive piles, construct caissons, foundations, basements and other
subsurface improvements and otherwise engage in subsurface construction activity in order to
construct improvements on the Parcel.
3. SUBJECT TO THE FOLLOWING NOTICES, COVENANTS, RESTRICTIONS, AND
CONDITIONS, which shall be binding upon and enforceable against the Parcel and the
GRANTEE, and its successors and assigns, in perpetuity:
3.1 The GRANTEE agrees to accept conveyance of the Parcel subject to all
covenants, conditions, restrictions, easements, rights-of-way, reservations, rights, agreements
and encumbrances of record, including, without limitation, the DDA, the Memorandum of DDA,
and the Special Restrictions, which are covenants running with the land and are binding upon the
GRANTEE and all successors and assigns of the GRANTEE owning all or any portion of Parcel
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for the benefit of the GRANTOR and its successors and assigns, unless or until such
responsibilities and obligations are released pursuant to the provisions of the aforesaid
documents, including the release of obligations under the DDA that GRANTEE may obtain
pursuant to a Certificate of Compliance (as defined and further provided for in the DDA)
executed by the City and recorded against the Parcel.
3.2 The Government Deeds conveying the Parcel to the GRANTOR were recorded
prior to recordation of this Quitclaim Deed. The GRANTOR has no knowledge regarding the
accuracy of information provided by the Government regarding the environmental condition of
the Parcel. The Grantor makes no representations or warranties regarding the environmental
conditions of the Parcel except as expressly set forth in Section 3.3.8 of the DDA (which
representations and warranties shall be deemed to expire and be of no further force and effect
upon the recording of a Certificate of Compliance with respect to the Parcel or any earlier
termination of the DDA with respect to the Parcel). The GRANTOR has no knowledge
regarding the accuracy or adequacy of the Government's remediation of the Parcel as provided in
the Government Deeds.
3.3 Government Deed I -D. The italicized information below is copied verbatim
(except as discussed below) from Sections 2.2, 2.3, 2.6, 2.8, 2.9 and 3 of Government Deed I -D
conveying a portion of the Grantor Property to the GRANTOR. To the extent applicable to the
Parcel conveyed hereunder, by acceptance of this Quitclaim Deed, the GRANTEE, on behalf of
itself and its successors and assigns acquiring fee title to all or any portion of the Property,
hereby acknowledges and assumes all responsibilities placed upon the GRANTOR under the
terms of the aforesaid Government Deed I -D solely with respect to the Parcel conveyed
hereunder. Within the italicized information contained in this Section 3.3 only, the term
"Grantor" shall mean the Government, the term "Grantee" shall mean the City of Tustin and the
term "Property" shall mean the Grantor Property, including, without limitation, the Parcel. To
avoid confusion, within the italicized information, the word "Government" has been added in
brackets after the word "Grantor", and the words "City of Tustin" have been added in brackets
after the word "Grantee."
2.2 A FOST has been completed and an Environmental Baseline Survey
("EBS') report is referenced in the FOST. The FOST and EBS reference
environmental conditions on the Property and on other property not
subject to this Deed. GRANTEE ["City of Tustin'7 acknowledges that it
has received copies of the EBS and the FOST and that all documents
referenced therein have been made available to GRANTEE ["City of
Tustin' J for inspection and copying.
2.3 Except as otherwise provided herein, or as otherwise provided by law, the
GRANTEE ["City of Tustin'7 acknowledges that it has inspected, is
aware of, and accepts the condition and state of repair of the Property,
and that the Property is conveyed "as is" and "where is" without any
representation, promise, agreement, or warranty on the part of the
GRANTOR ["Government'] regarding such condition and state of repair,
or regarding the making of any alterations, improvements, repairs or
additions. Except for the environmental remediation which may be
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required to be undertaken by GRANTOR ["Government"] pursuant to
paragraph 2.6 below, the GRANTEE ["City of Tustin'7 further
acknowledges that the GRANTOR ["Government"] shall not be liable for
any latent or patent defects in the Property except to the extent required
by applicable law.
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. Section 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" [attached to this
Quitclaim Deed as Exhibit `B-1 " and incorporated herein by this reference].
2.6.2. Grant of Covenant [CERCLA 42 U.S.C. Section 9620
(h) (3) (A) (ii) (I)]. 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) (H)J. The GRANTOR ["Government'7 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)]. In
connection with GRANTOR'S ["Government"] covenant in 2.6.3 above and in
connection with ongoing remediation on GRANTOR'S ["Government"] 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
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action on adjoining property. Neither GRANTEE ["City of Tustin "J, 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 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'7 (1) shall give the GRANTEE ["City of Tustin'7 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'7 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'7 use of the Property. Any
inspection, survey, investigation or other response, corrective or remedial action
undertaken by GRANTOR ["Government'7 will, to the maximum extent practical,
be coordinated with representatives designated by the GRANTEE ["City of
Tustin' ].
In connection with GRANTOR's ["Government "] 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.
2.8 Indemnification Regarding Transferees. The GRANTOR
["Government'7 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'7 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'7 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.
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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.
3.4 Government Deed III -D. The italicized information below is copied verbatim
(except as discussed below) from Sections 2.2 through 2.9 of Government Deed III -D conveying
a portion of the Grantor Property to the GRANTOR. To the extent applicable to the Parcel
conveyed hereunder, by acceptance of this Quitclaim Deed, the GRANTEE, on behalf of itself
and its successors and assigns acquiring fee title to all or any portion of the Property, hereby
acknowledges and assumes all responsibilities placed upon the GRANTOR under the terms of
the aforesaid Government Deed III -D solely with respect to the Parcel conveyed hereunder.
Within the italicized information contained in this Section 3.4 only, the term "Grantor" shall
mean the Government, the term "Grantee" shall mean the City of Tustin and the term "Property"
shall mean the Grantor Property, including, without limitation, the Parcel. To avoid confusion,
within the italicized information, the word "Government" has been added in brackets after the
word "Grantor", and the words "City of Tustin" have been added in brackets after the word
"Grantee."
2.2 A FOST has been completed and an Environmental Baseline Survey ("EBS')
report is referenced in the FOST. The FOST and EBS reference environmental conditions on the
Property and on other property not subject to this Deed. GRANTEE ["City of Tustin']
acknowledges that it has received copies of the EBS and the FOST; that it is aware of the
notifications therein; and that all documents referenced therein have been made available to
GRANTEE ["City of Tustin'] for inspection and copying.
2.3 Except as otherwise provided herein, or as otherwise provided by law, the
GRANTEE ["City of Tustin'] acknowledges that it has inspected, is aware of, and accepts the
condition and state of repair of the Property, and that the Property is conveyed "as is" and
"where is" without any representation, promise, agreement, or warranty on the part of the
GRANTOR ["Government'] regarding such condition and state of repair, or regarding the
making of any alterations, improvements, repairs or additions. Except for the environmental
remediation which may be required to be undertaken by GRANTOR ["Government'] pursuant
to paragraph 2.6 below, the GRANTEE ["City of Tustin'] further acknowledges that the
GRANTOR ["Government'] shall not be liable for any latent or patent defects in the Property
except to the extent required by applicable law.
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 and found or are otherwise presumed to exist in buildings and structures on
the Property. The EBS and FOST disclose the buildings and structures on the Property in which
asbestos or ACM hazards exist or are presumed to exist.
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2.4.2 GRANTEE ["City of Tustin'7 covenants, on behalf of itself, its successor
and assigns, as a covenant running with the land, that it will prohibit occupancy and use of any
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 The GRANTOR ["Government'7 shall provide a notice of release, in
recordable form, to the GRANTEE ["City of Tustin'7 at such time as demolition of any 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 ACMfrom the
Property. The GRANTOR ["Government'7 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 were constructed prior to
1978 and that contain or are presumed to contain LBP. 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 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'7 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'7
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 or 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
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GRANTEE ["City of Tustin'7 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 [6] years of age resides, or is
expected to reside, in such housing) or any zero -bedroom dwelling.
2. S.4 The GRANTEE ["City of Tustin'7 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'7 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 ["City of Tustin'7 has properly
warned, or failed to properly warn, the persons injured.
2. S. S Buildings 212 and 219 on the Property are restricted from residential use
and children are not allowed to occupy these buildings/structures unless the GRANTEE ["City
of Tustin J performs any necessary evaluations(s) and abatement in accordance with all federal,
state, and local laws and other applicable requirements. If GRANTEE ["City of Tustin'7
demolishes these Buildings, GRANTEE ["City of Tustin' ] will be required to demolish these
Buildings in accordance with applicable laws.
2. S. 6 The GRANTOR ["Government'7 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 federal or state 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'7 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.
2.6 CERCLA Notices and Covenants:
2.6.1. Notices: Hazardous Substance Notification. Pursuant to 42 U. S. C.
§962 0(h) (3) (A), and the provisions of 40 C.F.R. part 373, the GRANTOR ["Government'7
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. Section 9620(h). The GRANTOR
["Government'7 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
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
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description of the remedial action taken, if any is contained in Exhibit `B" [attached to this
Quitclaim Deed as Exhibit `B-2 " and incorporated herein by this reference].
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'7 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'7
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"] covenant in 2.6.3 above and in connection with ongoing
remediation on GRANTOR'S ["Government"] property adjacent to the Property, GRANTEE
["City of Tustin'7 agrees on behalf of itself, its successors and assigns, as a covenant running
with the land, that GRANTOR ["Government"], or its agents, employees, contractors and
subcontractors, shall have the right, upon reasonable notice to GRANTEE ["City of Tustin'7, to
enter upon the Property in any case in which a response action, 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. GRANTEE ["City of Tustin'7,
shall not have any claim on account of such entries against GRANTOR ["Government"] or any
of its agents. In exercising its right 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'7 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' ], its successors and assigns, 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'7.
2.7 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.
2.8 Non-Discrimination. GRANTEE ["City of Tustin'7 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
Tustin Cornerstone I DDA Art 11B Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
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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"J 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.
2.9 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.
3.5 The responsibilities and obligations placed upon the GRANTOR by the
Government shall run with the land and be binding on the GRANTEE and all subsequent owners
of the Parcel or any portion thereof, unless and until such responsibilities and obligations are
released pursuant to the provisions set forth in the Government Deeds.
3.6 Except as expressly set forth in the representations and warranties contained in
Section 3.3.8 of the DDA (which representations and warranties shall be deemed to expire and
be of no further force and effect upon the recording of a Certificate of Compliance with respect
to the Parcel or any earlier termination of the DDA with respect to the Parcel), and subject to the
terms and conditions thereof, GRANTEE acknowledges that it has examined the Parcel and is
buying the Parcel from the GRANTOR in an "AS IS, WHERE IS, WITH ALL FAULTS"
condition, in its present state and condition and with all faults, which provisions shall survive the
close of escrow related to this transaction and do not merge with this Quitclaim Deed.
4. DDA Provisions.
4.1 Definitions. Pursuant to the DDA, the City has imposed certain covenants,
conditions and restrictions on the Parcel, including the releases contained in Section 4.5.2 of the
DDA, which are set forth verbatim below in italics and each of which is hereby declared to be a
covenant running with the land in perpetuity. Within the italicized language which follows,
section references shall be to sections of the DDA, references to "this Agreement" shall mean the
DDA, references to the "Effective Date" shall mean [insert Effective Date of DDAJ and initially
capitalized terms shall have the meanings set forth in Exhibit "C" attached hereto and
incorporated herein by this reference.
4.1 Releases. Section 4.5.2(f) of the DDA provides as follows:
(f) Release. Developer, on behalf of itself and each Successor Owner and every
Person claiming by, through or under Developer or any Successor Owner (each a
"Releasing Party"), hereby waives, as of the Effective Date, and agrees to waive, as
of ... Close of Escrow, the right of each Releasing Party to recover from, and fully and
irrevocably releases, the City and its elected and appointed officials, employees, agents,
Tustin Cornerstone I DDA Art 11B Form ATTACHMENT 11B City of Tustin/Flight Venture LLC
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attorneys, affiliates, representatives, contractors, successors and assigns (individually, a
"Released Party" and collectively, the "Released Parties") from any and all Claims that
Developer or any Releasing Party may now have or hereafter suffer or acquire arising
from or related to: (i) any Due Diligence Information, (ii) any condition of the Property
or any current or future improvement thereon, known or unknown by any Releasing Party
or any Released Party, including as to the extent or effect of any grading of the
Development Parcels; (iii) 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 Property, or any portion thereof, (iv) the existence, Release,
threatened Release, presence, storage, treatment, transportation or disposal of any
Hazardous Materials at any time on, in, under, or from, the Property or any current or
future improvement thereon or any portion thereof, (v) Claims of or acts or omission to
act of 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, or from,
about, or adjacent to the Property or any current or future improvement thereon,
including any Investigation or Remediation at or about the Property or any current or
future improvement thereon; and/or (vi) arising from or related to the Tustin Legacy
Backbone Infrastructure Program, any community facilities district or the cost or extent
thereof, or the amount of the Project Fair Share Contribution or any community facilities
district assessment against the Property, Development Parcels and/or Improvements
described in this Agreement; provided that the foregoing release by the Releasing Parties
shall not extend to (A) any breach by the City of any of the representations or warranties
of the City set forth in Sections 3.3 or 18.11.2 of this Agreement or any of the Other
Agreements, (B) any breach by the City of any of the covenants or obligations set forth in
this Agreement or any Other Agreement, (C) any Claim that is the result of the gross
negligence or willful misconduct of the City, (D) any actions of the City or any of the
Released Parties affecting a portion of the Property which occur following the Close of
Escrow with respect to such portion of the Property, or (E) any Claim arising with respect
to the Development Permits, Applicable Approvals and Phase 2 Applicable Approvals, if
any, approved by the City in its Governmental Capacity. This release includes Claims of
which Developer is presently unaware or which Developer does not presently suspect to
exist which, if known by Developer, would materially affect Developer's release of the
Released Parties. Developer 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 OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR. "
In this connection and to the extent permitted by law, Developer on behalf of itself, and
the other Releasing Parties hereby agrees, represents and warrants, which representation
and warranty shall survive ... Close of Escrow and the termination of this Agreement
and shall not be merged with any Quitclaim Deed, that (x) it 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,
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
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(y) the waivers and releases in this Section 4.5.2(f) have been negotiated and agreed upon
in light of that realization and (z) Developer, 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 to the extent set forth above which
might in any way be included as a material portion of the consideration given to the City
by Developer in exchange for the City's performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS
SECTION.
CITY'S INITIALS DEVELOPER'S INITIALS
[remaining text of Section 4.5.2(f) of the DDA is intentionally omitted]
4.2 Equitable Servitude. The release set forth in Section 4.2 of this Quitclaim Deed
is hereby declared to be an equitable servitude and a covenant running with the land comprising
the Parcel for the benefit of the City Benefited Property and the City and each Successor Owner
owning all or any portion of such City Benefited Property, burdening the Parcel and GRANTEE
and the Successor Owners owning all or any portion of the Parcel and all Persons claiming by,
through or under GRANTEE or any Successor Owner of the Parcel or any portion thereof (and
for such additional period as may be applicable during the period in which the DDA remains
effective) and to further evidence its effectiveness with respect to GRANTEE and the Successor
Owners of the Parcel has been included in its entirety in this Quitclaim Deed.
5. This Quitclaim Deed is made and accepted upon (a) the covenants, conditions,
restrictions and other matters set forth in the Special Restrictions, and (b) subject to reservations,
covenants and restrictions as set forth in the Government Deeds. Each future transfer or
conveyance of the Parcel or any portion thereof shall include notice of the Special Restrictions
and in addition shall include those disclosures and environmental covenants contained in the
Government Deeds.
6. The terms of this Quitclaim Deed are hereby agreed and declared by the GRANTEE and
the GRANTOR to be covenants running with the land and enforceable as restrictions and
equitable servitudes against the Parcel, and are hereby declared to be and shall be binding upon
the Parcel and the GRANTEE and all successors and assigns of the GRANTEE owning all or
any portion of the Parcel for the benefit of the City Benefited Property (legally described on
Exhibit "D" attached to this Quitclaim Deed and incorporated herein by this reference) and the
GRANTOR, and the GRANTOR shall retain the right to enforce the restrictions and equitable
servitudes against the Parcel and the same shall be enforceable solely by the GRANTOR
notwithstanding any future transfer of the City Benefited Property or any interest therein or
portion thereof.
{remainder of page is blank; signatures on following page}
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT 11B City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03 -2016 13
(agd) FINAL. docx
IN WITNESS WHEREOF, the GRANTOR, THE CITY OF TUSTIN, has caused this
Quitclaim Deed to be executed on the day first above written.
CITY OF TUSTIN:
By:
ATTEST:
By:
Erica Rabe
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Jeffrey C. Parker,
City Manager
{signatures continued on next page}
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03 -2016
(agd) FINAL. docx S -I
ACKNOWLEDGEMENT OF GRANTEE'S COVENANTS
BY EXECUTING THIS QUITCLAIM DEED BELOW, ON AND AS OF THE DATE
WRITTEN BELOW, GRANTEE HEREBY ACKNOWLEDGES AND ACCEPTS on behalf of
itself and all subsequent owners of the Parcel or any portion thereof: (A) this Quitclaim Deed
and the covenants and agreements of the GRANTEE contained in this Quitclaim Deed and
(B) the Special Restrictions and assumes and agrees to be bound by all of the obligations and
liabilities, covenants, conditions, and restrictions in the Special Restrictions which are the
responsibility of the "Developer" thereunder.
FLIGHT VENTURE LLC,
a Delaware limited liability company
LM
Dated:
Name:
Title:
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03 -2016
(agd) FINAL. docx S-2
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 11B Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03 -2016
(agd) FINAL. docx S-3
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
On before me, ,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Tustin Cornerstone I DDA Att 11B Form ATTACHMENT 11B
of Quit Claim Deed Phase 2 11-03 -2016
(agd) FINAL. docx
S-4
(Seal)
City of Tustin/Flight Venture LLC
Exhibit "A"
Legal Description of Parcel
Tustin Cornerstone I DDA Art 11B Form of ATTACHMENT I I B City of Tustin/Flight Venture LLC
Quit Claim Deed Phase 2 11-03-2016 (agd)
FExhibit "A"
INAL.docx]
Exhibit `B -I"
Description of the Remedial Action Taken by the Government
As Described in Government Deed D -I
[attached]
Tustin Cornerstone I DDA Art 11B Form of ATTACHMENT I IB City of Tustin/Flight Venture LLC
Quit Claim Deed Phase 2 11-03-2016 (agd)
Exhibit "B-1"
FINAL.docx
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Exhibit `B-2"
Description of the Remedial Action Taken by the Government
As Described in Government Deed D -III
[attached]
ATTACHMENT 11B City of Tustin/Flight Venture LLC
Tustin Cornerstone I DDA Art 11B Form of
Quit Claim Deed Phase 2 11-03-2016 (agd) Exhibit "B-2"
FINAL.docx 1
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EXHIBIT "C"
DDA Definitions Applicable to Section 4.2 of the Quitclaim Deed
"Agreement" shall mean the DDA as defined in this Quitclaim Deed.
"City" shall mean the GRANTOR as defined in this Quitclaim Deed and each assignee or
successor to the City's rights and powers under this Quitclaim Deed.
"City Benefited Property" shall mean the "City Benefited Property" legally described
on Exhibit "D" to this Quitclaim Deed.
"Claim" or "Claims" shall mean 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), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
"Close of Escrow" shall mean the Quitclaim Date.
"Developer" shall mean the GRANTEE pursuant to this Quitclaim Deed and all
subsequent owners of the Parcel or any portion thereof.
"Development Parcels" shall mean the "Land" as defined in this Quitclaim Deed.
"DA" shall mean the Development Agreement by and between GRANTOR and
GRANTEE with respect to the Parcel Recorded on as Instrument
No.
"Due Diligence Information" shall mean any and all information or documentation
relating to the Property furnished to GRANTEE by GRANTOR, or its elected and appointed
officials, employees, agents, attorneys, affiliates, representatives, contractors or consultants, in
connection with Developer's due diligence pursuant to the DDA.
"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub -entities, including
any Regional Water Quality Control Board, the State Water Resources Control Board, the
Department of Toxic Substances Control, the South Coast Air Quality Management District, and
the California Air Resources Board; the City of Tustin; any Fire Department or Health
Department with jurisdiction over the Property; and/or any other federal, State, regional or local
governmental agency or entity that has or asserts jurisdiction over Hazardous Substance Releases
or the presence, use, storage, transfer, manufacture, licensing, reporting, permitting, analysis,
disposal or treatment of Hazardous Materials in, on, under, about, or affecting the Project, the
Development Parcels or any Improvements thereon.
Tustin Cornerstone I DDA Art 1113 Form of ATTACHMENT I I B City of Tustin/Flight Venture LLC
Quit Claim Deed Phase 2 11-03-2016 (agd)
Exhibit "C"
FINAL.docx
1
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regulations, requirements, orders, directives, guidelines, or permit conditions, in existence
as of [insert Effective Date of DDA] or as later enacted, promulgated, issued,
modified or adopted, regulating or relating to Hazardous Materials, and all applicable judicial,
administrative and regulatory decrees, judgments and orders and common law, including those
relating to industrial hygiene, public safety, human health, or protection of the environment, or
the reporting, licensing, permitting, use, presence, transfer, treatment, analysis, generation,
manufacture, storage, discharge, Release, disposal, transportation, Investigation or Remediation
of Hazardous Materials. Environmental Laws shall include the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.) ("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S.C.
Section 6901 et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended,
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
"Governmental Authority" shall mean any and all federal, State, county, municipal and
local governmental and quasi -governmental bodies and authorities (including the United States
of America, the State of California and any political subdivision, public corporation, district,
joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over GRANTOR and GRANTEE, the Project, the Property or other
property upon which Developer is obligated to construct Improvements or such portions of the
foregoing as the context indicates.
"Governmental Successor" shall mean any Successor Owner of the City Benefited
Property that is a governmental entity.
"Hazardous Materials" shall mean and include the following:
(a) "Hazardous Substance", "Hazardous Material', "Hazardous Waste",
or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a
"Restricted Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the
California Health and Safety Code;
(c) "Hazardous Material', "Hazardous Substance", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281, 25316, 25501,
25501.1, 117690 or 39655 of the California Health and Safety Code;
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT 11B City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03-2016
(agd) FINAL. docx Exhibit "C"
2
(d) "Oil" or a "Hazardous Substance" listed or identified pursuant to
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any
other hydro carbonic substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous
Waste", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California
Code of Regulations;
(f) Listed by the State as a chemical known by the State to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public agency to be remediated,
including remediation which such law or public agency requires in order for the property to be
put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State Leaking Underground Fuel Tank Field Manual, whether or not
the presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsections 136 et seq.;
0) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsections 2601 et seq.;
(k) Any radioactive material including any "source material", "special nuclear
material", "by-product material", "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel" or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, California Health and Safety Code Section 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor
Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
"Improvements" shall mean the various improvements, including without limitation,
buildings, structures, and accompanying amenities and above and below ground infrastructure
improvements, including, without limitation, utilities, utility extensions, utility systems,
landscaping, hardscaping, storm drains and detention facilities, constructed or to be constructed
on or adjoining the Property by GRANTEE as contemplated by the DDA.
Tustin Cornerstone I DDA Art 11B Form ATTACHMENT 11B City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03-2016
(agd) FINAL. docx Exhibit "C"
3
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property, including the air, soil, surface water, and groundwater, and the
surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
"Other Agreements" shall mean this Quitclaim Deed, the Special Restrictions, the
Memorandum of DDA, the Roadway and Utility Easement Agreement, the DA, the Landscape
Installation and Maintenance Agreement and the License Agreements to which the Parcel is
subject and which are Recorded substantially concurrently with the Recording of this Quitclaim
Deed.
"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
"Project" shall mean the construction and installation on the Parcel of the Improvements
(as defined in this Quitclaim Deed).
"Project Fair Share Contribution" shall mean the fair share of the Tustin Legacy
Backbone Infrastructure Program funding paid by the GRANTEE.
"Property" shall mean the "Parcel" as defined in this Quitclaim Deed, together with all
existing improvements, if any, located thereon as of the Effective Date of this Quitclaim Deed.
"Quitclaim Deed" shall mean this Quitclaim Deed.
"Record", "Recording" and "Recorded" shall mean to record the specified instrument,
or the current or past recording of the specified instrument, in the official records of Orange
County California.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Remediate" or "Remediation' shall mean any response or remedial action as defined
under Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
"State" shall mean the State of California.
"Successor Owner" shall mean (a) with respect to a Transfer of the Parcel or any portion
thereof, each and every Person owning or acquiring fee title to or having a ground lease interest
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in all or any portion of the Parcel and (b) with respect to the City Benefited Property, each and
every Governmental Successor owning or acquiring fee title to all or any portion of the City
Benefited Property.
"Tustin Legacy Backbone Infrastructure Program" shall mean the Tustin Legacy
Backbone Infrastructure Program in effect as of [INSERT DDA EFFECTIVE
DATE].
Tustin Cornerstone I DDA Art 1113 Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03-2016
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Exhibit "D"
Legal Description of City Benefited Property
Tustin Cornerstone I DDA Art 11B Form ATTACHMENT I IB City of Tustin/Flight Venture LLC
of Quit Claim Deed Phase 2 11-03 -2016
(agd) FINAL.docx] Exhibit "D"
LEGAL DESCRIPTION
LOT C OF TRACT MAP NO. 17404, PER MAP
FILED IN BOOK 907, PAGES 6 THROUGH 42,°o
MISCELLANEOUS MAPS IN THE OFFICE OF THE
COUNTY RECORDER OF ORANGE COUNTY
TUSTI N LEGACY
CITY BENEFITED PROPERTY
Tustin Cornerstone I DDA ATTACHMENT IIB City of Tustin/Flight Venture LLC
Exhibit "D"
1
ATTACHMENT 12
FORM OF MEMORANDUM OF DDA
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FROM RECORDING
FEES PER GOVERNMENT
CODE §6103 AND §27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
MEMORANDUM OF
TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT
CORNERSTONE I
This MEMORANDUM OF TUSTIN LEGACY DISPOSITION AND DEVELOPMENT
AGREEMENT CORNERSTONE I (this "Memorandum of DDA") is made as of
2016 (the "Memorandum Effective Date"), by and among the CITY OF TUSTIN, a municipal
corporation of the State of California ("City") and FLIGHT VENTURE LLC, a Delaware
limited liability company ("Developer"), to confirm that the City and the Developer have
entered into that certain Tustin Legacy Disposition and Development Agreement Cornerstone I,
dated as of , 2016 (the "DDA"). The City and the Developer are sometimes
referred to herein individually as a "Party" and collectively as the "Parties." This
Memorandum of DDA has been executed as of the Memorandum Effective Date and recorded in
the Office of the County Recorder, Orange County, California (the "Official Records") to
provide record notice of the execution of the DDA by the Parties. Initially capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to such terms in the DDA.
Real Property Affected by the DDA.
1.1. Development Parcels. The property affected by the DDA consists of the
real property defined in the DDA as the Phase 1 Parcel and the Phase 2 Parcel, each as legally
described and depicted on Exhibit "A" attached hereto and incorporated herein by reference, but
excepting therefrom the matters set forth in Section 2 of the Quitclaim Deeds (as defined below)
(taking into account such exceptions, the "Development Parcels"), together with (a) all existing
improvements, if any, presently located thereon, and (b) all appurtenances pertaining to the
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Development Parcels or such improvements, and (c) all permits, licenses, approvals and
authorizations issued by any Governmental Authority in connection with the Development
Parcels (collectively, the "Property").
1.2. Quitclaim Deed and Conveyance. Under the terms of the DDA, at the
Phase 1 Property Close of Escrow, the Phase 1 Property shall be conveyed by the City to
Developer pursuant to that certain "QUITCLAIM DEED FOR TUSTIN LEGACY
CORNERSTONE I—PHASE 1 AND COVENANTS, CONDITIONS AND RESTRICTIONS,
INCLUDING ENVIRONMENTAL RESTRICTION PURSUANT TO CIVIL CODE SECTION
1471" (the "Phase 1 Property Quitclaim Deed"). In addition, following timely exercise of the
Option (more fully described in Section 2 below) in accordance with its terms by Developer, the
Phase 2 Property shall be conveyed at the Phase 2 Property Close of Escrow pursuant to that
certain "QUITCLAIM DEED FOR TUSTIN LEGACY CORNERSTONE I—PHASE 2 AND
COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING ENVIRONMENTAL
RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471" (the "Phase 2 Property
Quitclaim Deed"; the Phase 1 Property Quitclaim Deed and the Phase 2 Property Quitclaim
Deed each individually a "Quitclaim Deed" and collectively, the "Quitclaim Deeds").
1.3. Special Restrictions. Prior to Recording of the Phase 1 Property Quitclaim
Deed, the City shall execute and Record that certain Declaration of Special Restrictions for
Phase 1 affecting the Phase 1 Property ("Phase 1 Special Restrictions") and prior to Recording
of the Phase 2 Property Quitclaim Deed, the City shall execute and Record that certain
Declaration of Special Restrictions for Phase 2 affecting the Phase 2 Property ("Phase 2 Special
Restrictions," and collectively with the Phase 1 Special Restrictions, the "Special
Restrictions"), each of which shall be acknowledged and accepted by Developer. The DDA,
this Memorandum of DDA, and all covenants, conditions, restrictions and obligations set forth in
(a) the Phase 1 Property Quitclaim Deed and the Phase 1 Special Restrictions shall be binding
upon the portion of the Property conveyed by the Phase 1 Property Quitclaim Deed, and (b) the
Phase 2 Property Quitclaim Deed and the Phase 2 Special Restrictions shall be binding upon the
portion of the Property conveyed by the Phase 2 Property Quitclaim Deed, which unless and
until terminated in accordance with their respective terms, shall govern the use and development
of the Property by Developer.
2. Option. The DDA provides an Option in favor of Developer to acquire the
Phase 2 Property which shall become effective only upon the occurrence of the Phase 1 Property
Close of Escrow. The Option may be extended by Developer annually on the anniversary of the
Phase 1 Property Close of Escrow for a term not to exceed ten (10) years, upon payment made
pursuant to the terms of the DDA. Once the Option is exercised, the Option Term may not be
further extended. The Option shall automatically terminate upon the termination of the DDA
without requirement for further action by the Parties. Further provisions relating to exercise
and/or termination of the Option are set forth in the DDA.
3. Effect of the DDA. The DDA imposes certain obligations, agreements,
covenants, conditions and restrictions with respect to the Development Parcels and with respect
to Developer's and its Successor Owner's acquisition, development, use, operation and ultimate
disposition thereof, that run with the Development Parcels, unless and until terminated in
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accordance with their respective terms, as further set forth in the DDA. Among these obligations
are the following:
(a) Certain restrictions on Transfer (including without limitation, conveyance,
lease and/or assignment) of Developer's interests under the DDA and/or in the Property (and the
Improvements located thereon) or any portion thereof or interest therein, whether voluntary or
involuntary, and certain restrictions on the Transfer of Control of Developer or Developer's
Controlling Person contained in Section 2 of the DDA, that will terminate as to the Development
Parcels subject thereto upon execution and recordation by the City of a Certificate of
Compliance;
(b) Certain restrictions on Mortgages contained in Sections 2.2.8 and 17 of the
DDA, including without limitation, restrictions on encumbrance of the Development Parcels
with a Mortgage, which limitations will terminate as to the Development Parcels subject thereto
upon execution and recordation by the City of a Certificate of Compliance;
(c) The releases contained in Section 4.5.2 of the DDA, which are restated in
each of the Quitclaim Deed(s), and the indemnities and other environmental provisions contained
in Section 10 of the DDA, which are restated in the Special Restrictions, each of which remain in
effect for the term set forth therein and are binding upon Developer and Successor Owners
owning all or any portion of the Development Parcels and all Persons claiming by, through or
under Developer or any Successor Owner of the Development Parcels, as and to the extent set
forth in the respective Quitclaim Deeds and the Special Restrictions;
(d) To the extent provided under the DDA, the indemnities set forth in
Sections 5.5, 8.8.5, 8_9, 8.11, 8.121 10.1, 10.2 and 18.11 of the DDA shall (i) run with the land,
(ii) survive the Close of Escrow and shall not merge into any of the Quitclaim Deed(s), and
(iii) survive the sale of land to each Transferee, including without limitation, each Pad
Transferee.
(e) The Right of Repurchase in favor of the City, contained in Section 16.3 of
the DDA (copied verbatim below), that terminates as to the portion of the Development Parcels
subject thereto upon execution and recordation by the City of a Certificate of Compliance; and
(f) The Right of Reversion in favor of the City contained in Section 16.4 of
the DDA (copied verbatim below), that terminates as to the portion of the Development Parcels
subject thereto as set forth in Section 16.4.8 of the DDA and otherwise upon execution and
recordation by the City of a Certificate of Compliance.
4. Right of Repurchase and Right of Reversion. For ease of reference only, the
following italicized Sections 16.3 and 16.4 are copied verbatim from the DDA and the term
"Repurchase Price" as used herein shall have the meaning set forth in the DDA:
"16.3 Ri,-ht of Repurchase.
For the period described in Section 16.3.3, the City shall have the right (the "Right of
Repurchase'), from time to time, at any time after the date that Developer became in Material
Default and after the expiration of any applicable notice and cure periods in favor of a
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Mortgagee with respect to such Material Default to (re)purchase, enter and possess the
following ("Reacquired Property'): (a) all or any portion of the Phase I or Phase 2 Property
(as applicable), (b) any Improvements thereon, (c) all applicable Entitlements and other
development rights, consents, authorizations, variances, waivers, licenses, permits, certificates
and approvals from any governmental or quasi governmental authority, and (d) all other
appurtenant rights applicable to the respective Property, including the interest in any ground
leases encumbering the respective Property. A Right of Repurchase with respect to all or a
portion of the Phase I Property shall not result in a Right of Repurchase with respect to all or a
portion of the Phase 2 Property, and vice versa. The Reacquired Property designated by the
City shall be acquired by the City for the Repurchase Price and otherwise in accordance with
this Section 16.3. In the event the City exercises its Right of Repurchase as to any Reacquired
Property as provided in this Section 16.3, this Agreement shall terminate with respect to the
Reacquired Property as of the date of the quitclaim deed conveying to the City title to the
Reacquired Property; provided that the provisions of this Section 16.3 shall survive the
termination of this Agreement.
16.3.1 Exercise of Ri,-ht of Repurchase. The City may exercise its Right of
Repurchase by delivering written notice to Developer stating that the City is exercising its Right
of Repurchase and specifying the Reacquired Property; provided that such notice is delivered at
least ninety (90) calendar days prior to the date on which the City requires Developer to convey
the Property to the City pursuant to the Right of Repurchase and otherwise in accordance with
this Section 16.3.
16.3.2 Process. If the City is entitled to and timely elects to repurchase any
designated Reacquired Property, the Parties shall: (a) within five (5) Business Days after the
date of the City's notice of election to exercise the Right of Repurchase, open an escrow with an
escrow agent designated by the City for the purchase and sale, and shall execute an escrow
agreement that shall provide that Developer shall pay all costs of the escrow and shall include
such usual and ordinary terms as are reasonably required by the escrow agent and by the
transaction; (b) no later than five (5) Business Days after the opening of escrow, Developer shall
place into the escrow appropriate quitclaim deeds and bill of sale conveying fee title to the
Reacquired Property; and (c) no later than eighty-five (85) calendar days after the opening of
the escrow, the City shall deposit into the escrow an amount equal to the Repurchase Price. The
escrow shall close, and title to the Reacquired Property shall be conveyed to the City, and the
Repurchase Price paid to the Developer or the Approved Foreclosure Purchaser or its successor
in interest no later than five (5) Business Days after the City has deposited into escrow the
Repurchase Price. Concurrently with the close of escrow, Developer shall comply with its
obligations under Section 14.3. Nothing herein shall restrict the right of the City to terminate its
exercise of the Right of Repurchase at any time prior to the close of escrow The Parties agree
that the amount of reduction in the Repurchase Price as compared with the Purchase Price is
justified in that it bears a reasonable relationship to the damages which the Parties estimate may
be suffered by the City as the result of the Developer's Material Default in the performance of its
obligations under this Agreement, which damages would be impractical or extremely difficult to
quantify, and that the remedy provided for herein is not a penalty or forfeiture, and is a
reasonable limitation on the Developer's potential liability as a result of Developer's default.
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16.3.3 Termination of Ri,-ht of Repurchase. The Right of Repurchase shall
remain in effect from the Close of Escrow with respect to any portion of the Property until the
Recording by the City of a Certificate of Compliance with respect thereto. In the event that
Developer or any Person on behalf of Developer either (a) cures the Material Default which is
the basis for the City's exercise of its Right of Repurchase, but excluding any Transfer in
violation of this Agreement, or (b) Completes the Phase I Project or the Phase 2 Project, as
applicable, prior to the closing of escrow on such Right of Repurchase, such Right of
Repurchase shall cease and terminate with respect to such Material Default only. With respect
to any Material Defaults for which the City seeks to exercise the Right of Repurchase and which,
by their nature, are not curable (which shall include, by way of example only, and not as a
limitation, the failure to give notice or provide evidence of insurance prior to entering the
Parcel), but excluding any Transfer in violation of this Agreement and any Material Default
under the Schedule of Performance (except as set forth in clause (b) above, in which case the
preceding sentence shall apply), such Default shall be deemed cured if Developer takes the
required action promptly following Developer's becoming aware of such failure and the City is
not adversely affected by such Default, has not relied on the performance of the applicable
provision of this Agreement that is the subject of such Default to the detriment of the City or
suffered any actual damage as a result of such Default.
16.3.4 Release of Liability. In the event the City exercises its Right of
Repurchase, such purchase shall release each of City and the Developer owning the Reacquired
Property from all liability and obligations under this Agreement and the Other Agreements with
respect to the Reacquired Property except for the following obligations of Developer, from which
Developer shall not be released and which in addition shall continue to be "Guaranteed
Obligations" as such term is defined in each Guaranty provided in connection with the
acquisition of the Reacquired Property by Developer: (a) Ongoing Matters and any other
obligations of Developer that are addressed by the terms of the Guaranty; (b) the release
provided for the benefit of the City pursuant to Section 4.5.26 ; (c) the obligation to return any
written Due Diligence Information to the City as provided in Section 14.3; (d) the obligation to
indemnify, defend and hold harmless the City Indemnified Parties as provided in Article 10 for
matters arising or related to the period of time prior to the conveyance of the Reacquired
Property to the City; (e) Developer's obligation to indemnify, defend and hold harmless the City
Indemnified Parties as provided in Section 5.5 as to a Parcel for matters arising or related to the
period prior to the Close of Escrow for such Parcel, and such liability and obligations shall
survive the close of escrow and shall not be merged into the quitclaim deed, it being
acknowledged and agreed that all other obligations under this Agreement related to the
Reacquired Property shall be released and terminated as of the date on which the Required
Property is conveyed to the City. In no event shall the Guaranty provided at the Close of Escrow
for the relevant phase (or any Guaranty approved by the City in its sole discretion as a
replacement for such original Guaranty) to secure the obligations of Developer under this
Agreement and the Other Agreements with respect to the portion of the Property containing the
Reacquired Property be released or terminated as a result of the exercise by the City of the Right
of Repurchase. Following the close of escrow with respect to the Reacquired Property, under no
circumstances shall Developer have any right or claim to, or against, the Reacquired Property.
Notwithstanding the purchase of the Reacquired Property by the City as provided in this
Section 16.3, this Agreement shall remain in full force and effect with respect to the portions of
the Property not purchased by the City.
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16.3.5 Ri,-hts of Third Parties. The Right of Repurchase shall be a lien and
encumbrance on the Property that shall be paramount to the lien and charge of (a) any
Mortgage upon the Parcels or Improvements, except that with respect to a lien that is a
Construction Loan secured by a Permitted Mortgage, the implementation of the Right of
Repurchase shall be subject to the terms of the Subordination Agreement, and the Repurchase
Price paid by the City hereunder shall be paid directly to the applicable Permitted Mortgagee
(or, if there shall be more than one Permitted Mortgagee, to the Permitted Mortgagee that the
City has been notified is the holder of the first priority Permitted Mortgage encumbering the
applicable Property), and (b) all other liens including Construction Liens that may attach to the
Development Parcels or the Improvements thereon. The Right of Repurchase shall not defeat or
render invalid or limit any rights or interests provided in easements, covenants, conditions or
restrictions in favor of third parties (i.e., Persons other than Developer or Developer Affiliates)
granted pursuant to Transfers approved by the City (or constituting Permitted Transfers) and
Recorded on the portion of the Property for which the City exercises its rights under this Section
16.3. The Reacquired Property acquired by the City shall be delivered to the City at close of
escrow free and clear of all Mortgages including Permitted Mortgages and all other liens,
including Construction Liens (other than City Liens and Lien Release Amounts that are actually
deducted from the Repurchase Price paid by the City), and subject only to (w) the Permitted
Exceptions in effect at the time of the original Close of Escrow for such Property, (x) utility
easements and/or roadway easements, (y) other matters affecting title consented to or requested
by any Governmental Authority with respect to the Property in connection with development of
the Property, or requested by the City and any covenants recorded in order to comply with the
Entitlements, and (z) the DA and Other Agreements recorded in accordance with the terms of
this Agreement.
16.4 Rikht of Reversion.
In the event of the occurrence of any Reversion Action Trigger (defined in Section 16.4.1)
in addition to its other rights or remedies as a result of the occurrence of any such Reversion
Action Trigger, and notwithstanding that the Reacquired Property may be encumbered by
Construction Liens and/or Permitted Mortgages, the City shall have the right, during the time
period set forth in Section 16.4.1, on the terms and subject to the conditions set forth in this
Section 16.4, to re-enter and take possession of the applicable Reacquired Property or any
portion thereof and to revest title thereto in the City (the "Right of Reversion') which right shall
be exercised only in accordance with the terms of this Section 16.4. Notwithstanding anything to
the contrary contained herein, prior to the Phase 2 Property Close of Escrow, if the Optionee
and Phase I Developer are Related Parties, the exercise by the City of the Right of Reversion
with respect to Phase I or any portion thereof shall terminate the Option as further set forth in
Section 16.4.1. In all other cases, the Phase I Project and the Phase 2 Project shall not be
cross -defaulted with one another hereunder, and the Right of Reversion with respect to all or a
portion of the Phase I Property shall not result in a Right of Reversion with respect to all or a
portion of the Phase 2 Property, and vice versa. Any revesting of the Reacquired Property by
the City whether based on voluntary action of Developer or otherwise after notice by the City of
its intent to exercise the Right of Reversion is referred to herein as a "Reversion Event" and, for
avoidance of doubt, the Reversion Event shall occur on the date upon which fee title to the
Reacquired Property vests in the City. Subject to the time limitations for exercise of the Right of
Reversion set forth in Section 16.4.8, the City shall be entitled to exercise the Right of Reversion
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at any time on or after the occurrence of any of any one or more of the Reversion Action
Triggers; provided that the City has complied with the conditions to such reversion set forth in
Section 16.4.2. The occurrence of a Revision Action Trigger shall be a Material Default under
this Agreement.
16.4.1 Certain Defaults Triguerim- the Right of Reversion. The Right of
Reversion shall remain in effect with respect to each Phase from the Close of Escrow with
respect to such Phase until the Equity Completion Date applicable to such Phase, provided that
prior to the Phase 2 Property Close of Escrow, if the Optionee and Phase I Developer are
Related Parties, then upon the exercise by the City of the Right of Reversion with respect to
Phase I or any portion thereof the Option and the Phase 2 Provisions shall be suspended and
upon the occurrence of the Reversion Event, the Option and the Phase 2 Provisions shall be
deemed to have terminated and to be of no further force or effect (provided that for so long as
the Phase I Provisions remain in effect and the City shall remain the owner of the Phase 2
Property, the termination of the Phase 2 Provisions shall not affect the obligations of the City
under this Agreement, if any, to the Phase I Developer with respect to the Phase 2 Property),
and the provisions of Section 15.3 shall apply. In all other cases, exercise by the City of the
Right of Reversion with respect to a Phase shall not apply with respect to or affect the rights of
the Developer of the other Phase unless the City specifically exercised the Right of Reversion
with respect to such other Phase or portion thereof following a Reversion Action Trigger with
respect to such other Phase. The City may exercise the Right of Reversion if it elects to do so
with respect to only the Parcel affected by the Material Default and any Improvements thereon
and all applicable Entitlements and other development rights, consents, authorizations,
variances, waivers, licenses, permits, certificates and approvals from any Governmental
Authority or quasi -Governmental Authority, and all other appurtenant rights applicable thereto
upon the occurrence of any of the following (each, a "Reversion Action Trigger, " and the date
on which the Reversion Action Trigger occurs shall be referred to herein, as the "Reversion
Action Trigger Date').
(a) Developer fails to (i) commence construction of the Minimum
Horizontal Improvements within six (6) months after the Construction Period Commencement
Date for the Phase I Parcel, or (ii) to Complete the Minimum Horizontal Improvements (other
than the final cap/pave for the roadways on the Property) within twenty-four (24) months after
the Construction Period Commencement Date for the Phase I Parcel, as each such date may be
extended for Force Majeure Delay;
(b) Developer fails to commence construction of the Minimum Phase I
Vertical Improvements within twelve (12) months after the Construction Period Commencement
Date for the Phase I Parcel, as such date may be extended for Force Majeure Delay;
(c) Developer fails to commence construction of the Phase 2
Horizontal Improvements within six (6) months after the Construction Period Commencement
Date for the Phase 2 Parcel as such date may be extended for Force Majeure Delay.
(d) Developer fails to commence construction of the Minimum Phase 2
Vertical Improvements within twelve (12) months after the Construction Period Commencement
Date for the Phase 2 Parcel, as such date may be extended for Force Majeure Delay;
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(e) Developer fails to Complete construction (i) of the Minimum Phase
I Vertical Improvements within forty-eight (48) months after the Construction Period
Commencement Date for the Phase I Parcel as such date may be extended for Force Majeure
Delay or (ii) of the Minimum Phase 2 Vertical Improvements within forty-eight (48) months
after the Construction Period Commencement Date for the Phase 2 Parcel as such date may be
extended for Force Majeure Delay; provided that in each case, such Completion date shall not
under any circumstances be later than the date that is sixty (60) months after the Close of
Escrow for such Parcel (which date shall not be extended for Force Majeure Delay);
(f9 Developer commits physical waste on the Property or any portion
thereof and such becomes a Material Default in accordance with the notice and cure provisions
of Section 14.2, subject to extension for Force Majeure Delay;
(g) Developer abandons or substantially suspends (except for
suspensions resulting from Force Majeure Delay) construction of the Phase I Project or the
Phase 2 Project, as applicable, for a period of one hundred eighty (180) consecutive calendar
days, and such becomes a Material Default in accordance with the notice and cure provisions
of Section 14.2. Nothing in this Section 16.4.1(g) shall extend the terms of Section 16.4.1(a),
(b), (c) or () above;
(h) The occurrence of a Developer Insolvency Event; or
(i) With respect to any Guarantor which has provided a Guaranty to
the City, the occurrence of a Guarantor Illiquidity Event or a City Guarantor Illiquidity Event,
unless Developer shall, within the time period required thereby, provide substitute security
meeting the requirements of Section 4.7; or
0) Material Default arises because of a voluntary or involuntary
Transfer or Transfer of Control.
16.4.2 Conditions to Exercise of the Ri,-ht of Reversion. The City shall be
entitled to exercise the Right of Reversion at any time on or after the applicable Reversion Action
Trigger Date by providing written notice to Developer that the City elects to exercise its Right of
Reversion, which notice shall state the date for the Reversion Event. The Reversion Event shall
not take place until the earlier of (a) the date that is thirty (30) calendar days after Developer
has had the opportunity to address the City Council at a public meeting regarding the Reversion
Action Trigger or (b) if there is a Permitted Mortgage encumbering the Parcel, the expiration of
the time period set forth in Section 17.6.3 for cure by the Permitted Mortgage of any Default
resulting from a Reversion Action Trigger. In the event that, prior to the Reversion Event,
Developer, any Permitted Mortgagee with respect to the portion of the Property to which the
Right of Reversion is applicable or any other Person on behalf of Developer either (x) cures the
Reversion Action Trigger which is the basis for the City's exercise of its Right of Reversion or
(y) Completes the Phase I Project or the Phase 2 Project, as applicable, prior to the date of the
Reversion Event, such Right of Reversion shall cease and terminate with respect to such
Reversion Action Trigger only.
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16.4.3 Exercise and Effect of Ri,-ht of Reversion.
(a) Cooperation. If the City exercises its Right of Reversion in
accordance with the provisions of this Agreement, Developer and each Permitted Mortgagee
shall use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary or desirable under applicable law to consummate the revesting of
the Reacquired Property in the name of the City, including the execution and delivery of such
other documents, certificates, agreements, deeds and other writings and the taking of such other
actions as may be reasonably necessary to consummate such revesting and the other provisions
of this Section 16.4.
(b) EL ect on Mortg es other than Permitted Mortg es and
Construction Liens. A Reversion Event shall foreclose, defeat and render invalid each and
every Construction Lien and Mortgage other than a Permitted Mortgage and upon the
occurrence of a Reversion Event all Construction Liens and Mortgages other than Permitted
Mortgages Recorded against or affecting all or any portion of the Reacquired Property shall be
deemed to be automatically released and of no further force and effect with respect to the
Reacquired Property.
(c) Effect on Permitted Mortgaees. Concurrent with the Reversion
Event, the City shall fully satisfy each and every Permitted Mortgage affecting the Reacquired
Property, by paying to the Permitted Mortgagees, in the aggregate, the lesser o (a) the
aggregate Permitted Mortgage Unpaid Balances of all Permitted Mortgages and (b) Two
Million Dollars ($2, 000, 000) per Phase, which amount has been determined to be a reasonable
estimation of the advances, costs and expenses incurred or to be incurred by the Permitted
Mortgagees, in the aggregate, for each Phase prior to the Equity Completion Date for such
Phase, or by causing such amounts to be paid by any third party, including any guarantor.
(d) Interpleader. The City shall have the right to satisfy its obligation
pursuant to Section 16.4.3(c) by either interpleading, or causing any third party on City's
behalf, including Guarantor, to interplead in a court of law the sums due and thereafter City
and the Reacquired Property shall be deemed released from and the City shall be released from
and have no further liability with respect to any Permitted Mortgagee of the Reacquired
Property or Permitted Mortgage encumbering the Reacquired Property.
(e) Effect. If the City pays or interpleads the amount specified in
Section 16.4.3(c), concurrently with the Reversion Event and the deposit of such amount with
the court or payment of such amount to Permitted Mortgagee, (1) the Reversion Event shall
foreclose, defeat and render invalid each and every Permitted Mortgage encumbering the
Reacquired Property and upon the occurrence of a Reversion Event all Permitted Mortgages
Recorded against or encumbering all or any portion of the Reacquired Property shall be
deemed to be automatically released and of no further force and effect with respect to the
Reacquired Property and (2) promptly thereafter, each Permitted Mortgagee shall take all steps
individually and collectively required to Record evidence of such release and termination with
respect to each Permitted Mortgage encumbering all or any portion of the Reacquired
Property.
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16.4.4 Sale of Reacquired Property. Upon the revesting in the City of title to
the Reacquired Property, the City shall use commercially reasonable efforts to resell the
Reacquired Property as soon and in such manner as the City shall find feasible, in accordance
with applicable State law, if any, and consistent with the objectives of this Agreement, to a
qualified and responsible Person or Persons (as determined by the City in its sole discretion).
Upon such resale of the Reacquired Property, or any part thereof, the proceeds thereof shall be
applied in the following order and amounts to the extent of funds available and the City shall
have no liability to Developer or any Person to the extent the balance is insufficient to pay any
or all of the following amounts nor shall the City have any obligation to make payments to any
Person except in accordance with the priorities and obligations set forth below:
(a) Delinquencies. First, to repayment in full of all delinquent tax and
delinquent assessment liens with respect to the portion of the Reacquired Property sold;
(b) City Liens. Second, to repayment in full of City Liens and to
reimburse the City for all costs and expenses incurred by the City in connection with the
recapture, management, maintenance, repair, and resale of the Reacquired Property, or any
part thereof and the enforcement of City's rights under this Agreement and the Other
Agreements including City's exercise of the Right of Reversion, taxes, assessments, and other
delinquent liens, if any, whether arising before or after the acquisition by the City of the
Reacquired Property.
(c) Release of Liens. Third, to release all Claims affecting the
Reacquired Property, including Claims asserted with respect to Construction Liens and/or
Mortgages, in such amounts as may be determined by the City in its sole discretion to be
required to satisfy such Claims or to reinstate service or work on the Reacquired Property,
utility charges with respect to the Reacquired Property; any payments made or necessary to be
made to discharge or prevent from attaching or being made any subsequent encumbrances or
liens due to obligations, Defaults or acts of Developer or any Successor Owner or each and
every Person claiming by, through or under Developer or any Successor Owner; any
expenditures made or obligations incurred with respect to the making or completion of the
agreed improvements or any part thereof on the Reacquired Property; all costs of sale and
marketing, including reasonable brokers' fees and costs incurred in the marketing and sale of
the Reacquired Property; all legal fees and expenses; all escrow and title fees and costs; all
survey and due diligence fees and costs; and any amounts otherwise owing to the City or any
third party by Developer and/or any Successor Owner) with respect to the foregoing, in each
case (x) whether arising prior to or following the acquisition by the City of the Reacquired
Property and (y) only to the extent that the foregoing are not fully foreclosed or other
terminated by or as a result of the exercise by the City of the Right of Reversion;
(d) Reimbursement to Developer. Fourth, to reimburse Developer in
the amount of the Repurchase Price as determined in clause (a) of the definition thereof, after
deducting therefrom: (i) all amounts paid to Permitted Mortgagees or interplead by the City
pursuant to Section 16.4.3(c) and (ii) all amounts paid pursuant to Section 16.4.4(a), (b),
and(c) in each case to the extent such amounts are not already deducted as part of the formula
in clause (a) of the Repurchase Price; and
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(e) Balance Retained by the City. Any balance remaining after such
reimbursements shall be retained by the City as its property.
The City shall have the right to satisfy its obligation pursuant to this Section 16.4.4 by either
interpleading, or causing any third party on City's behalf, including purchaser, to interplead in
a court of law the sums due. Upon sale of the Reacquired Property and distribution of the
proceeds of such sale in accordance with the foregoing or interpleader of proceeds as
aforesaid, the City shall be released from all liability and obligations under this Agreement
and/or the Other Agreements with respect to the Reacquired Property.
16.4.5 Release of Liability. In the event the City exercises its Right of
Reversion then upon the occurrence of the Reversion Event and compliance with the
requirements of Sections 16.4.3, the City and the Developer owning the Reacquired Property
shall each be released from all liability and obligations under this Agreement and the Other
Agreements with respect to the Reacquired Property except for (a) the obligation of the City to
comply with Section 16.4.4. upon sale of the Reacquired Property and (b) the following
obligations of Developer, from which Developer shall not be released and which in addition
shall continue to be "Guaranteed Obligations" as such term is defined in each Guaranty
provided in connection with the acquisition of the Reacquired Property by Developer:
(a) Ongoing Matters and any other obligations of Developer that are addressed by the terms of
the Guaranty; (b) the release provided for the benefit of the City pursuant to Section 4.5.2(0;
(c) the obligation to return any written Due Diligence Information to the City as provided in
Section 14.3; (d) the obligation to indemnify, defend and hold harmless the City Indemnified
Parties as provided in Article 10 for matters arising or related to the period of time prior to the
conveyance of the Reacquired Property to the City; (e) Developer's obligation to indemnify,
defend and hold harmless the City Indemnified Parties as provided in Section 5.5 as to a Parcel
for matters arising or related to the period prior to the Close of Escrow for such Parcel, and
such liability and obligations shall survive the close of escrow and shall not be merged into the
quitclaim deed, it being acknowledged and agreed that all other obligations under this
Agreement related to the Reacquired Property shall be released and terminated as of the date on
which the Required Property is conveyed to the City. In no event shall the Guaranty provided at
the Close of Escrow for the relevant phase (or any Guaranty approved by the City in its sole
discretion as a replacement for such original Guaranty) to secure the obligations of Developer
under the DDA and the Other Agreements with respect to the portion of the Property containing
the Reacquired Property be released or terminated as a result of the exercise by the City of the
Right of Reversion. Following the close of escrow with respect to the Reacquired Property,
under no circumstances shall Developer or any Permitted Mortgagee have any right or claim to,
or against, the Reacquired Property. Notwithstanding the revesting of the Reacquired Property
by the City as provided in this Section 16.4, this Agreement shall remain in full force and effect
with respect to the portions of the Property not revested by the City.
16.4.6 Ri,-hts of Third Parties. The Right of Reversion shall be a lien and
encumbrance on the Property that shall be paramount to the lien and charge of (a) any
Mortgage upon the Parcels or Improvements, except that with respect to a lien that is a
Construction Loan secured by a Permitted Mortgage, the implementation of the Right of
Reversion shall be subject to the terms of the Subordination Agreement, if any, and (b) all other
liens including Construction Liens that may attach to the Development Parcels or the
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Improvements thereon. The Right of Reversion shall not defeat or render invalid or limit any
rights or interests provided in easements, covenants, conditions or restrictions in favor of third
parties (i.e., Persons other than Developer or Developer Affiliates) granted pursuant to
Transfers approved by the City (or constituting Permitted Transfers) and Recorded on the
portion of the Property for which the City exercises its rights under this Section 16.4. The
Reacquired Property shall be delivered to the City at close of escrow free and clear of (a) all
Mortgages that are not Permitted Mortgages, (b) all Permitted Mortgages if the payments
described in Section 16.4.3(c) are made, and (c) all other Liens, including Construction Liens
and subject only to (w) the Permitted Exceptions in effect at the time of the original Close of
Escrow for such Property, (x) utility easements and/or roadway easements, (y) other matters
affecting title consented to or requested by any Governmental Authority with respect to the
Property in connection with development of the Property, or requested by the City and any
covenants recorded in order to comply with the Entitlements, and (z) the DA and Other
Agreements recorded in accordance with the terms of this Agreement.
16.4.7 Continuation of A,-reement. This Agreement shall remain in full
force and effect with respect to portions of the Property not revested in the City, but the
termination of this Agreement shall be effective as of the date title to any portion of the Property
and/or any Improvements thereon are revested in the City.
16.4.8 Termination of Ri,-ht of Reversion. The right of the City to exercise
the Right of Reversion with respect to any Phase of the Project or the Property comprising such
Phase shall terminate and be of no further force and effect upon the occurrence of the Equity
Completion Date with respect to such Phase.
16.4.9 Waiver of Certain Matters. Developer hereby (a) acknowledges that it
has reviewed and understands the implications of each of the following sections of the California
Code of Civil Procedure and (b) agrees that the City may exercise any and all of the rights
contained in this Section 16 without such exercise constituting an "action " under any of Sections
580a, 580b, 580d, or 726 of the Code of Civil Procedure or any case interpreting any of said
Sections or any doctrine or defense based in whole or in part on such sections of the Code of
Civil Procedure and Developer hereby waives its right to assert and agrees not to assert any
position or defense based in whole or in part upon such sections of the Code of Civil Procedure
and hereby waives any benefit of such sections of the Code of Civil Procedure as might
otherwise apply."
5. Certificates of Compliance. If the Developer satisfies the Conditions Precedent
set forth in Section 9.2 of the DDA with respect to issuance of a Certificate of Compliance for
the Phase 1 Parcel (or any permitted portion thereof) or in Section 9.3 of the DDA with respect
to issuance of a Certificate of Compliance for the Phase 2 Parcel (or any permitted portion
thereof), then the City shall Record the appropriate Certificate of Compliance upon written
request by Developer. The Certificate of Compliance so Recorded shall be binding upon the
Parties to this Memorandum of DDA, their successors and assigns, and shall be deemed, with
respect to the Parcel or portion thereof to which the Certificate of Compliance is applicable, to be
the City's conclusive determination of satisfactory Completion of the Improvements covered by
such Certificate of Compliance and compliance with all other conditions required by the DDA,
subject only to such continuing terms of the DDA referenced in Section 9.7 of the DDA, and/or
Tustin Cornerstone I DDA Art 12 Form of ATTACHMENT 12 City of Tustin/Flight Venture LLC
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the covenants, conditions, restrictions and obligations set forth in this Memorandum of DDA, the
Special Restrictions, the DA, the Roadway Easement and Utility Agreement, the Landscape
Installation and Maintenance Agreement, the CC&Rs and the Quitclaim Deed(s), each of which
shall survive in accordance with its respective terms. For ease of reference only, the following
italicized Section 9.7 is copied verbatim from the DDA:
"9.7 Effect of Certificate of Compliance; Termination of A,-reement.
Except as set forth in this Section 9.7 and any Certificate of Compliance issued by the
City, after the Recording of a Certificate of Compliance with respect to any Phase (or portion
thereof if applicable), any Person then owning or thereafter purchasing, leasing, or otherwise
acquiring any interest in the Parcel subject to the Certificate of Compliance or the Improvements
thereon (or any portion thereof) shall not (because of such ownership, purchase, lease or
acquisition) incur any obligation or liability under this Agreement with respect to such
Improvements, except that such Party shall continue to be bound by the Other Agreements in
each case to the extent set forth therein. Issuance of the Certificate of Compliance shall not
waive any rights or claim that the City might have against any party for latent or patent defects
in design, construction or similar matters under any applicable law, nor shall it be evidence of
satisfaction of any of Developer's obligations to others not a party to this Agreement. The
Certificate of Compliance shall be in such form as to permit it to be Recorded. Upon Recording
of the Certificate of Compliance, this Agreement shall terminate in its entirety with respect to the
Project and Property to which such Certificate of Compliance applies, except that:
(a) the provisions of Section 4.5.2, including the release set forth
therein, shall survive in perpetuity to the extent set forth in the Quitclaim Deed for such
Property;
(b) the provisions of Section IL 1.4 shall survive until the
expiration of the time period for provision of the environmental insurance policy described
thereby.
(c) the releases and indemnities set forth in Sections 4.5.2 , 5.5,
8.8.5, 8.9, 8.11, 8.12, 10.1, 10.2 and 18.11 shall remain in effect and shall bind the
indemnifying party and its successors and assigns to the extent set forth in the Quitclaim Deed
for such Property; and
(d) any and all obligations contained in the Federal Deeds shall
survive in perpetuity to the extent set forth therein, unless such obligations are released by the
Federal Government."
6. DDA and Memorandum of DDA Run with the Land. The DDA and this
Memorandum of DDA, including, without limitation, the provisions of the DDA recited and set
forth above, and all other obligations, agreements, covenants, conditions and restrictions set forth
in the DDA and this Memorandum of DDA are hereby agreed to by the Developer and by the
City to be covenants running with the land and enforceable as equitable servitudes against the
Development Parcels and are hereby declared to be and shall be binding upon the Development
Parcels and Developer and its successors and assigns (who may own all or any portion of the
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Development Parcels) for the benefit of the City and its successors and assigns, subject to the
effects of Recordation of a Certificate of Compliance as provided for in Section 5 above.
7. Priority of DDA and Special Restrictions. The DDA, including without limitation
the City Lien, the Right of Repurchase and the Right of Reversion contained therein, this
Memorandum of DDA, the Special Restrictions, the Roadway and Utility Easement Agreement,
and the Landscape Installation and Maintenance Agreement shall be superior in priority to all
Mortgages.
8. Lien Rights. Under the terms of the DDA, Developer, on behalf of itself, each
Successor Owner and each and every Person claiming by, through or under Developer or any
Successor Owner for the benefit of the City and its successors and assigns agrees that the
delinquent amount of any payments due under the DDA, together with any late charges or
interest due on any such delinquent payment, attorneys' fees, experts' fees and consultants' fees
and collection costs and the cost of in-house staff time (including City overhead and
administrative costs) related to such delinquent payment shall, to the greatest extent permitted by
applicable law, be a lien and charge upon the Property and shall be a continuing lien upon the
Property in favor of the City effective upon Recording of this Memorandum, which lien and
charge shall be paramount to the lien and charge of each and every Mortgage, Construction Lien
and other lien upon or affecting the Property (and, subject to the rights of a Permitted Mortgagee
under Section 17.6.2, the City shall have the right to foreclose the City Lien with respect to any
Property so encumbered by such lien).
9. Acknowledgment and Assumption by Developer. By Recording of this
Memorandum of DDA Developer hereby acknowledges and assumes all responsibilities placed
upon Developer under the terms of the DDA.
10. Public Documents. The documents constituting the DDA are public documents
and may be reviewed at the official offices of the City.
11. Interpretation, Notice. This Memorandum of DDA is prepared for recordation
and notice purposes only and in no way modifies or expands the terms, conditions, provisions
and covenants of the DDA. In the event of any inconsistency between terms, conditions,
provisions and covenants of this Memorandum of DDA and the DDA, the terms, conditions,
provisions and covenants of the DDA shall prevail.
12. Attachments. The Attachments attached to this Memorandum of DDA are hereby
incorporated by this reference into this Memorandum of DDA as though fully set forth in this
Section.
[signature page follows]
Tustin Cornerstone I DDA Art 12 Form of ATTACHMENT 12 City of Tustin/Flight Venture LLC
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IN WITNESS WHEREOF, the City and Developer have executed this Memorandum of
DDA as of the Memorandum Effective Date.
Date:
ATTFSNT
IM
Erica N. Rabe, City Clerk
APPROVED AS TO FORM
IM
David Kendig City Attorney
Armbruster Goldsmith & Delvac LLP
Special Tustin Counsel
0
Amy E. Freilich
"CITY"
CITY OF TUSTIN
Jeffrey C. Parker,
City Manager
{signatures continue on followingpage}
Tustin Cornerstone I DDA Art 12 Form of ATTACHMENT 12 City of Tustin/Flight Venture LLC
Memo of DDA 11-07-16 (agd)
FINAL.docx. docx S-1
Date:
"DEVELOPER"
FLIGHT VENTURE LLC,
a Delaware limited liability company
Name:
Title:
Tustin Cornerstone I DDA Art 12 Form of ATTACHMENT 12 City of Tustin/Flight Venture LLC
Memo of DDA 11-07-16 (agd)
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of Orange
On , before me, , Notary
Public, personally appeared who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
(Seal)
Tustin Cornerstone I DDA Att 12 Form of Memo of ATTACHMENT 12 City ofC%striffffil�V�uruLtC
S-3
DDA 11-07-16 (agd) FINAL.docx.docx eptember , 2015
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of Orange
On , before me, , Notary
Public, personally appeared who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
Tustin Cornerstone I DDA Art 12 Form of ATTACHMENT 12
Memo of DDA 11-07-16 (agd)
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(Seal)
City of Tustin/Flight Venture LLC
EXHIBIT A
Development Parcels Legal Description
Tustin Cornerstone I DDA Art 12 Form Of ATTACHMENT 12 City of Tustin/Flight Venture LLC
Memo Of DDA 11-07-16 (Agd) EXHIBIT "A"
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ATTACHMENT 13A
FORM OF GUARANTOR CERTIFICATE (PHASE 1)
This Certificate is being delivered pursuant to that certain Tustin Legacy Disposition and
Development Agreement Cornerstone I dated as of , 2016 (the "DDA"), by and
between Flight Venture LLC, a Delaware limited liability company ("Developer"), and the City of
Tustin, a municipal corporation of the State of California (the "City"). Capitalized terms used
herein that are not defined herein shall have the meanings specified in the DDA.
The undersigned, on behalf of Alcion Capital GP III, LLC, a Delaware limited liability
company ("Company"), does hereby certify to the City, as of the date hereof:
1. Company is the General Partner of Alcion Capital III, LP, a Delaware limited
partnership, which is the sole member of Alcion Capital Master Fund GP III, LLC, a Delaware
limited liability company, which is the General Partner of Alcion Real Estate Partners Master Fund
III, L.P., a Delaware limited partnership, which is the sole member of Alcion Flight Investors LLC,
a Delaware limited liability company, which is the Managing Member of Developer and owns a
78.22344% interest in Developer. Alcion Real Estate Partners Master Fund III, L.P. is a
"Guarantor" with respect to [Phase I/Phase 2J.
2. Alcion Capital IH LP is also the sole owner of Alcion Capital Strategic III, LLC, a
Delaware limited liability company, which is the General Partner of Alcion Real Estate Partners
Strategic Parallel Fund III, L.P., a Delaware limited partnership, which is the sole owner of Alcion
Flight Strategic LLC, a Delaware limited liability company, which owns a 16.77656% interest in
Developer. Alcion Real Estate Partners Strategic Parallel Fund III, L.P. is a "Guarantor" with
respect to [Phase I/Phase 21. The two Equity Investors, specifically Alcion Real Estate Partners
Master Fund III, L.P. and Alcion Real Estate Partners Strategic Parallel Fund III, L.P., are referred
to collectively as the "Guarantors". All of the foregoing entities with the word "Alcion" in their
name are sometimes referred to collectively herein as the "Alcion Entities".
3. The undersigned member of the Board of Managers of Company has the authority
from Company to execute and deliver this Certificate on behalf of Company as evidenced by the
information attached as Exhibit A.
4. Attached hereto as Exhibit B is a true and correct copy of the Certificate of
Formation of Company and any and all amendments thereto in effect on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of the Operating Agreement
of Company and any and all amendments thereto in effect on the date hereof.
6. Attached hereto as Exhibit D is a true and correct copy of the certificate of good
standing for Company from the Delaware Secretary of State, dated not earlier than thirty (30) days
prior to the date of this Certificate.
7. Neither Guarantor has taken any action looking toward its dissolution, no event,
whether voluntary or involuntary, has occurred that has caused the dissolution of either Guarantor
Tustin Cornerstone I DDA Art 13A Form ATTACHMENT 13A City of TustinTlight Venture LLC
of Phase 1 Guarantor Certificate 11-2-16 1
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and there are no proceedings pending or contemplated for the merger, consolidation, conversion,
dissolution, liquidation or termination of either Guarantor.
8. Neither Guarantor's ability to meet its obligations under the Guaranty is contingent
on third party financing, provided that nothing herein shall prohibit either Guarantor from drawing
funds under a subscription secured line of credit secured by the uncalled capital commitments of
its limited partners in order to meet its obligations under the Guaranty. Each Guarantor has a
combination of, (a) unencumbered cash, cash equivalents, uncalled capital commitments of its
limited partners and marketable securities (that have not been pledged as collateral for any debt or
other obligation) (the "Liquid Assets"), and (b) cash flow from income producing assets (the
"Cash Flow") that, in the aggregate, are sufficient to allow Guarantors to meet their obligations as
and when required under the Guaranty.
This Certificate is being furnished to the City solely to assist it in conducting its
investigation of each Guarantor's financial resources in connection with Guarantor's abilitity to
meet its obligationsunder the Guaranty. Company and each Guarantor acknowledge and agree
that the City intends to rely on the information in this Certificate and this Certificate may be relied
upon by the City for these purposes.
Without the written consent of the Company no Person other than the City may rely on this
Certificate for any purpose.
In no event shall the individual executing this Certificate on behalf of the Company or
Equity Investor have any personal liability hereunder.
[Signature page follows]
Tustin Cornerstone I DDA Art 13A Form ATTACHMENT 13A City of TustinTlight Venture LLC
of Phase 1 Guarantor Certificate 11-2-16 2
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Dated: 2016
ACCEPTED AND AGREED:
ALCION CAPITAL GP III,
a Delaware limited liability company
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
MASTER FUND III, L.P., a Delaware limited
partnership
By: Alcion Capital Master Fund GP III, LLC, a
Delaware limited liability company, its
general partner
Wo
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
STRATEGIC PARALLEL FUND III, LP,
a Delaware limited partnership
By: Alcion Capital Strategic III, LLC, a Delaware
limited liability company, its general partner
RM
Name:
Authorized Signatory
Tustin Cornerstone I DDA Art 13A Form ATTACHMENT 13A City of TustinTlight Venture LLC
of Phase 1 Guarantor Certificate 11-2-16 3
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ATTACHMENT 13B
FORM OF ORIGINAL EQUITY INVESTOR CERTIFICATE
This Certificate is being delivered pursuant to that certain Tustin Legacy Disposition and
Development Agreement Cornerstone I dated as of , 2016 (the "DDA"),
by and between Flight Venture LLC, a Delaware limited liability company ("Developer"),
and the City of Tustin, a municipal corporation of the State of California (the "City").
Capitalized terms used herein that are not defined herein shall have the meanings specified
in the DDA.
The undersigned, on behalf of Alcion Capital GP III, LLC, a Delaware limited
liability company ("Company"), does hereby certify to the City, as of the date hereof:
1. Company is the General Partner of Alcion Capital III, LP, a Delaware
limited partnership, which is the sole member of Alcion Capital Master Fund GP III, LLC,
a Delaware limited liability company, which is the General Partner of Alcion Real Estate
Partners Master Fund III, L.P., a Delaware limited partnership, which is the sole member of
Alcion Flight Investors LLC, a Delaware limited liability company, which is the Managing
Member of Developer and owns a 78.22344% interest in Developer. Alcion Real Estate
Partners Master Fund III, L.P. is an "Equity Investor" with respect to [Phase I/Phase 21.
2. Alcion Capital IH LP is also the sole owner of Alcion Capital Strategic III,
LLC, a Delaware limited liability company, which is the General Partner of Alcion Real
Estate Partners Strategic Parallel Fund III, L.P., a Delaware limited partnership, which is
the sole owner of Alcion Flight Strategic LLC, a Delaware limited liability company,
which owns a 16.77656% interest in Developer. Alcion Real Estate Partners Strategic
Parallel Fund III, L.P. is an "Equity Investor" with respect to [Phase I/Phase 2J. The two
Equity Investors, specifically Alcion Real Estate Partners Master Fund III, L.P. and Alcion
Real Estate Partners Strategic Parallel Fund III, L.P., are referred to collectively as the
"Equity Investors". All of the foregoing entities with the word "Alcion" in their name are
sometimes referred to collectively herein as the "Alcion Entities".
3. The undersigned member of the Board of Managers of Company has the
authority from Company to execute and deliver this Certificate on behalf of Company as
evidenced by the information attached as Exhibit A.
4. Attached hereto as Exhibit B is a true and correct copy of the Certificate of
Formation of Company and any and all amendments thereto in effect on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of the Operating
Agreement of Company and any and all amendments thereto in effect on the date hereof.
6. Attached hereto as Exhibit D is a true and correct copy of the certificate of
good standing for Company from the Delaware Secretary of State, dated not earlier than
Tustin Cornerstone I DDA Art 13B Form ATTACHMENT 13B City of Tustin/Flight Venture LLC
of Orig. Equity Investor Cert. 11-8-16 1
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thirty (30) days prior to the date of this Certificate.
7. Alcion Flight Investors LLC and Alcion Flight Strategic LLC, subsidiaries
of Equity Investors have entered into that certain Limited Liability Company Agreement
with LO Flight LLC dated as of December 23, 2016 (the "Venture Agreement"), pursuant
to which each Equity Investor has agreed to make certain "Contributions" (as defined in
the Venture Agreement) to Developer as equity capital to pay "Project Costs" (as defined
in the Venture Agreement) incurred by Developer, all as more particularly set forth and in
and subject to the terms of the Venture Agreement. Each Equity Investor's commitment to
fund Contributions (as defined in the Venture Agreement) up to that Equity Investor's
Contribution Cap (as defined in the Venture Agreement) is confirmed in the letter from the
Equity Investors to LO Flight LLC, dated , 2016, to which City is a third party
beneficiary, which is attached hereto as Exhibit E and which letter authorizes LO Flight
LLC to provide the letter to the City. Such letter is in full force and effect and has not been
modified, and will not be modified, amended or terminated without the prior consent of the
City, in its sole discretion. All required approvals of or from all of the Alcion Entities
required prior to execution of the letter have been properly obtained.
8. The Venture Agreement was duly executed and delivered by Mark Potter,
an authorized signatory of Alcion Flight Investors LLC and Alcion Flight Strategic LLC,
who had the authority to do so and the Venture Agreement is a valid and binding obligation
of Alcion Flight Investors LLC and Alcion Flight Strategic LLC, and fully enforceable in
accordance with its terms. Such Venture Agreement is in full force and effect and has not
been modified.
9. Neither Equity Investor has taken any action looking toward its dissolution,
no event, whether voluntary or involuntary, has occurred that has caused the dissolution of
either Equity Investor and there are no proceedings pending or contemplated for the
merger, consolidation, conversion, dissolution, liquidation or termination of either Equity
Investor.
10. Neither Equity Investor's ability to make Contributions as and when
required under the Venture Agreement is contingent on third party financing, provided that
nothing herein shall prohibit either Equity Investor from drawing funds under a
subscription secured line of credit secured by the uncalled capital commitments of its
limited partners in order to make Contributions required under the Venture Agreement.
Each Equity Investor has a combination of (a) unencumbered cash, cash equivalents,
uncalled capital commitments of its limited partners and marketable securities (that have
not been pledged as collateral for any debt or other obligation) (the "Liquid Assets"), and
(b) cash flow from income producing assets (the "Cash Flow") that, in the aggregate, are
sufficient to allow Equity Investors to make the Contributions as and when required under
the Venture Agreement.
This Certificate is being furnished to the City solely to assist it in conducting its
investigation of each Equity Investor's financial resources in connection with Equity
Tustin Cornerstone I DDA Art 13B Form ATTACHMENT 13B City of Tustin/Flight Venture LLC
of Orig. Equity Investor Cert. 11-8-16 2
FINAL.docx.docx
Investor's obligation to make Contributions in accordance with the terms of the Venture
Agreement. Company and each Equity Investor acknowledge and agree that the City
intends to rely on the information in this Certificate and this Certificate may be relied upon
by the City for these purposes.
Without the written consent of the Company no Person other than the City may rely
on this Certificate for any purpose.
In no event shall the individual executing this Certificate on behalf of the Company
or Equity Investor have any personal liability hereunder.
[Signature page follows]
Tustin Cornerstone I DDA Art 13B Form ATTACHMENT 13B City of Tustin/Flight Venture LLC
of Orig. Equity Investor Cert. 11-8-16 3
FINAL.docx.docx
Dated: 2016 ALCION CAPITAL GP III,
a Delaware limited liability company
ACCEPTED AND AGREED
M.
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
MASTER FUND III, L.P., a Delaware limited
partnership
By: Alcion Capital Master Fund GP III, LLC, a
Delaware limited liability company, its
general partner
ma
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
STRATEGIC PARALLEL FUND III, LP,
a Delaware limited partnership
By: Alcion Capital Strategic III, LLC, a Delaware
limited liability company, its general partner
Wo
Name:
Authorized Signatory
Tustin Cornerstone I DDA Art 13B Form ATTACHMENT 13B City of Tustin/Flight Venture LLC
of Orig. Equity Investor Cert. 11-8-16 4
FINAL.docx.docx
ATTACHMENT 13C
FORM OF EQUITY INVESTOR DATE DOWN CERTIFICATE
Reference is hereby made to that certain Tustin Legacy Disposition and Development
Agreement Cornerstone I dated as of [ J, 2016 (the "DDA"), by and between Flight
Venture LLC, a Delaware limited liability company, and the City of Tustin, a municipal
corporation of the State of California (the "City"). Capitalized terms used herein that are not
defined herein shall have the meanings specified in the DDA.
This Equity Investor Date Down Certificate (this "Certificate") is being delivered by [insert
entity name of Original Certifier] ("Company") concurrently with the {Phase 1/Phase 21
Property Close of Escrow.
The undersigned does hereby certify to the City, in his or her capacity as an officer of the
Company and for and on behalf of the Company, as follows:
1. [Except as set forth on Exhibit I attached hereto, all/A111 of the matters set forth
in the Original Equity Investor Certificate dated [ J, 2016 attached hereto as
Exhibit A are true and correct in all material respects as of the date hereof.
2. Attached to this Certificate as Exhibit B is a true and correct copy of the
certificate of good standing for the Company from the Delaware Secretary of State, dated not
earlier than thirty (30) days prior to the date of this Certificate.
Without the written consent of the Company: (i) no Person other than the City may rely on this
Certificate for any purpose; and (ii) copies of this Certificate may not be furnished to anyone for
purposes of encouraging such reliance.
In no event shall the individual executing this Certificate on behalf of the Company have any
personal liability hereunder.
{remainder of page is blank signature on next page}
Tustin Cornerstone I DDA Art 13C Form ATTACHMENT 13C City of Tustin/Flight Ventures LLC
of Date Down of Equity Investor Cert 1
(agd)10-20-16 FINAL.docx.docx
Dated:
ALCION CAPITAL GP III, a Delaware
Limited Liability Company
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
MASTER FUND III, L.P., a Delaware
Limited Partnership
By: Alcion Capital Master Fund GP III,
LLC, a Delaware limited liability company,
its general partner
UO -A
Name:
Authorized Signatory
ALCION REAL ESTATE PARTNERS
STRATEGIC PARALLEL FUND III, LP, a
Delaware Limited Partnership
By: Alcion Capital Strategic III, LLC, a
Delaware limited liability company, its
general partner
LO -M
Name:
Authorized Signatory
Tustin Cornerstone I DDA Art 13C Form ATTACHMENT 13C City of Tustin/Flight Ventures LLC
of Date Down of Equity Investor Cert 2
(agd)10-20-16 FINAL.docx.docx
EXHIBIT 1
{If none—enter None}
Tustin Cornerstone I DDA Art 13C Form ATTACHMENT C City of Tustin/Flight Ventures LLC
of Date Down of Equity Investor Cert EXHIBIT I
(agd) 10-20-16 FINAL.docx.docx
EXHIBIT A
Original Certificate of Good Standing
{to be attached}
Tustin Cornerstone I DDA Art 13C Form ATTACHMENT C City of Tustin/Flight Ventures LLC
of Date Down of Equity Investor Cert EXHIBIT A
(agd) 10-20-16 FINAL.docx.docx
EXHIBIT B
Certificates of Good Standing from the State of Delaware
[see attached]
Tustin Cornerstone I DDA Art 13C Form ATTACHMENT C City of Tustin/Flight Ventures LLC
of Date Down of Equity Investor Cert EXHIBIT B
(agd) 10-20-16 FINAL.docx.docx
ATTACHMENT 14
FORM OF GUARANTY
{NOTE: WHEN USED FOR PHASE 2 GUARANTY, REPLACE PHASE I REFERENCES
WITHPIIASE 2, AND DELETE MINIMUMHORIZONTAL IMPROVEMENTS
REQUIREMENTS, IF THEN COMPLETED, AND MAKE OTHER CONFORMING
CHANGES AS REQUIRED}
GUARANTY AGREEMENT
(PHASE 1 PARCEL)
This GUARANTY AGREEMENT (PHASE 1 PARCEL) (this "Guaranty") is made as
of the day of , 20 (the "Effective Date"), by Alcion Real Estate
Partners Master Fund III, L.P., a limited partnership formed under the laws of the State of
Delaware ("Master Fund"), and Alcion Real Estate Partners Strategic Parallel Fund III, L.P., a
limited partnership formed under the laws of the State of Delaware ("Strategic") (Partners and
Strategic may be referred to individually as a "Guarantor" and collectively as "Guarantors"), in
favor of the CITY OF TUSTIN, a public body, corporate and politic ("City").
R arital e
A. Flight Venture LLC, a Delaware limited liability company ("Flight Venture"), has
entered into that certain Tustin Legacy Disposition and Development Agreement Cornerstone 1,
dated as of (including all Attachments thereto, which as may be amended,
updated or modified from time to time are referred to collectively as "DDA") under which
Developer would acquire the Phase 1 Property (as defined in the DDA). Initially capitalized terms
used and not defined herein shall have the meanings set forth in the DDA.
B. Concurrently with the delivery of this Guaranty, Flight Venture has assigned the
DDA to Flight Phase I Owner LLC, a Delaware limited liability company ("Developer"), and
Developer is acquiring the Phase 1 Property under the DDA. Under the terms of the DDA,
Developer will be required to perform certain design work and construct certain Improvements
including, among other items, Completion of. (1) the Phase 1 Horizontal Improvements, including
the Minimum Horizontal Improvements to be constructed or caused to be constructed in Phase 1
by the Developer of Phase 1 on the Phase 1 Parcel, the Phase 2 Parcel and certain off-site locations
as more fully described in the DDA, and (2) the Minimum Phase 1 Vertical Improvements on the
Phase 1 Parcel.
C. Master Fund owns 100% of Alcion Flight Investors, LLC, a Delaware limited
liability company, which in turn is the owner of 78.22344% of Flight Venture. Flight Venture is
the sole member of Developer, and thus Master Fund has a substantial interest in Developer and
will derive benefit from the acquisition of the Property and the development and sale or lease of
the Project. Strategic owns 100% of Alcion Flight Strategic LLC, a Delaware limited liability
company, which in turn owns 16.77656% of Flight Venture, and thus Strategic has a substantial
interest in Developer and will derive benefit from the acquisition of the Property and the
development and sale or lease of the Project.
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx I
Agreements
For good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce City to convey the Phase 1 Parcel to Developer, City has
required that the Guarantors execute and deliver this Guaranty to City. Each of the Guarantors
hereby jointly and severally makes the guaranties, obligations, covenants and agreements set forth
below in this Guaranty.
Section 1. Guaranty.
1.1 Payment and Completion Obligations. The Guarantors absolutely and
unconditionally guarantee the items set forth in Section 1.1.1 and 1. 1.2 below.
1.1.1 Guarantors shall pay any and all costs, including all Development
Costs, required and cause any and all work to be performed as may be required to carry out and
Complete (as such term is defined in the DDA) each of the following elements of the Project if
Developer shall fail to timely perform its obligations under the DDA (collectively, the
"Completion Obligations"):
(a) Design, construction and Completion of the required
Improvements for Phase 1, including, for avoidance of doubt, Completion of the Phase 1
Horizontal Improvements and the Minimum Phase 1 Vertical Improvements on the Phase 1 Parcel,
and further including the Minimum Horizontal Improvements to be constructed or caused to be
constructed by Developer on the Phase 1 Parcel, the Phase 2 Parcel and certain off-site locations as
more particularly described in the DDA in accordance with all Governmental Requirements,
Entitlements and the requirements of the DDA, including the Scope of Development attached
thereto as Attachment 8. It is specifically agreed that the Guarantor's obligations for Payment of
all Development Costs for design, construction and Completion of the Minimum Horizontal
Improvements shall include the Minimum Horizontal Improvements upon the Phase 2 Parcel. It is
further agreed that the obligations of Guarantors to pay for the design, construction and completion
of the Minimum Horizontal Improvements upon the Phase 2 Parcel shall remain in effect
notwithstanding the fact that Developer is not the owner of the Phase 2 Parcel and notwithstanding
the issuance by any third party of a guaranty of Minimum Horizontal Improvements delivered in
connection with the Phase 2 Improvements;
(b) Developer's obligations with respect to the Ongoing
Matters; and
(c) The indemnities and other obligations of Developer
pursuant to Sections 4.11W, 4.5.2(f),5.5 8.8 8.9 8.11 8.12 10.1 10.2 11.1 (including payment
of all deductible amounts) and 18.11.1 of the DDA, including, to the extent applicable, during the
Additional Liability Period.
The guarantee of the Completion of the foregoing work and the performance of the foregoing
obligations shall be an absolute obligation of Guarantors in the event that Developer fails to
commence or Complete, in a lien -free condition (as required by the DDA), construction of the
foregoing work within the time period set forth in the Schedule of Performance (subject to any
extension permitted by the DDA for Force Maj eure Delay), and such obligation shall be joint and
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 2
several with any obligation of the Phase 2 Developer under the DDA to construct and complete the
Minimum Horizontal Improvements on the Phase 2 Parcel in the event that Developer Defaults in
its obligation to so construct and complete the Minimum Horizontal Improvements.
1.1.2 The Guarantors also absolutely and unconditionally guarantee that
Guarantors shall pay any and all costs required and cause any and all work to be performed as may
be required to carry out the following obligations if Developer shall fail to timely perform its
obligations under the DDA (collectively, the "Payment Obligations" and collectively with the
Completion Obligations, the "Payment and Completion Obligations"), including the following:
(a) Payment of all of the costs and expenses incurred by the City
arising in connection with the exercise by the City of any or all of its remedies under the DDA and
the Other Agreements with respect to Developer, the work covered by Section 1.1 hereof, the
Phase 1 Parcel or any Improvements thereon. The foregoing shall specifically include any costs
and expenses incurred by the City arising from its exercise of the Right of Repurchase or Right of
Reversion with respect to the Phase 1 Parcel as provided in Sections 16.3 and 16.4 of the DDA,
respectively, including without limitation any amount paid by City to a Permitted Mortgagee
pursuant to Section 16.4.3(c) of the DDA. Without limiting the foregoing, such amounts shall
specifically include any amount paid by City to obtain the release of any and all Construction
Liens and/or Mortgages, including Permitted Mortgages, as well as any amounts paid to obtain the
release of any other liens that came into existence as a result of Developer's actions or inactions
and any outstanding taxes and assessments; but excluding the Repurchase Price applicable to any
Reacquired Property actually acquired by the City pursuant to the Right of Repurchase; provided
that the City shall be entitled to retain the Reacquired Property so acquired in its entirety,
notwithstanding any contribution or payment made by Developer, or by Guarantors pursuant to
this Guaranty. Guarantors acknowledge and agree that the foregoing obligation of Guarantors to
pay costs and expenses incurred by the City arising from its exercise of its rights under
Sections 16.3 and 16.4 of the DDA shall continue notwithstanding the partial release of liability of
Developer under Sections 16.3.4 and 16.4.5 of the DDA;
(b) Payment of all of the costs and expenses incurred by the
City, if any, in enforcement by the City of its remedies under the DDA and the Other Agreements
with respect to Developer, the work covered by Section 1. 1.2 hereof, the Phase 1 Parcel, and/or
any Improvements on the Phase 1 Parcel and the Phase 2 Parcel with respect to the Minimum
Horizontal Improvements; and
(c) Payment of all of the Development Costs incurred to cause
the timely Completion of the work referred to in Section 1. 1.2 hereof, such that the Phase 1 Parcel
(and the Phase 2 Parcel with respect to the Minimum Horizontal Improvements) shall be in a
lien -free condition as required by the DDA.
1.2 Payment of Enforcement Costs. In addition to its obligations in Section 1. 1.,
the Guarantors agree to pay all costs and expenses incurred by City, including reasonable
attorneys' fees and costs, court costs and all other litigation expenses (including reasonable expert
witness fees, costs of depositions and other discovery, travel expenses, exhibit preparation, and
courier, postage, communication and document copying expenses), in enforcing this Guaranty (the
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 3
"Enforcement Payment Obligation"). The provisions of this Section 1.2 shall survive the
termination of this Guaranty.
1.3 Performance of Work. The work required for Guarantor to satisfy its
Payment and Completion Obligations: (a) shall be performed in accordance with the Scope of
Development and within the time periods set forth in the Schedule of Performance all as and to the
extent set forth in the DDA; provided, however, that if the time periods set forth in the Schedule of
Performance have expired, the City and Guarantors shall meet and confer in good faith to revise
the Schedule of Performance as reasonably necessary to provide adequate time to Guarantors to
satisfy its obligations hereunder; (b) shall be performed in accordance with the other requirements
for construction of the Project set forth in the DDA; and (c) shall be diligently pursued by the
Guarantors to Completion of the Project and issuance of a Certificate of Compliance for the
Phase 1 Parcel.
1.4 Guaranteed Obligations. "Guaranteed Obligations" means the Payment
and Completion Obligations and the Enforcement Payment Obligation. For the avoidance of
doubt, notwithstanding that the definition of "Development Costs" at Section 8.1.3 of the DDA
includes "financing fees and costs, including principal payments and interest payments (whether
or not paid through loan proceeds)," this Guaranty shall not be construed as a guaranty in favor of
any Mortgagee of any obligations of the Borrower under or in connection with any Mortgage.
Nothing in this Section shall abrogate any obligations of Guarantor pursuant to this Guaranty to
pay to City any amounts paid by City to any Mortgagee pursuant to the DDA or any of the Other
Agreements, including, but not limited to, any amounts referred to in Section 1.1.2(a) above.
Section 2. Performance of Payment and Completion Obligations upon Default by
Developer.
2.1 Default by Developer. If Developer is in Material Default under the DDA
with respect to any of the Guaranteed Obligations, then City may, but shall not be obligated to,
deliver written notice to the Guarantors (a "Guaranty Notice"), that is designed to provide notice
to Guarantors of such default. The Guarantors, promptly after receipt of the Guaranty Notice shall
perform their Payment and Completion Obligations and the Enforcement Payment Obligation,
provided that the Guarantors do not need to commence any such performance obligations until
receipt of a Guaranty Notice. The Guarantors will take whatever actions may be necessary to
perform the Guaranteed Obligations, including the following:
2.1.1 Diligently and expeditiously proceed to ensure the Completion of
the Project at the Guarantors' sole cost and expense, at the times (subject to Section 1.3 hereof) set
forth in the DDA and subject to the other terms and conditions set forth in the DDA;
2.1.2 To the extent unpaid, fully pay and discharge all Development Costs
incurred or required to be incurred in connection with the Completion of the Project; and
2.1.3 Pay any amounts necessary to release and discharge any
mechanics', material providers' or other liens that may exist or come into existence in connection
with the Phase 1 Parcel or the Completion of the Minimum Horizontal Improvements on both the
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 4
Phase 1 Parcel and the Phase 2 Parcel, or in the alternative contest the same subject to the terms
and conditions set forth in the DDA.
2.2 Difficulty or Expense of Completion of the Project Does Not Excuse
Guarantors or Guaranty. Each Guarantor's obligations under this Guaranty will remain in full
force and effect until the Guaranteed Obligations are fully and finally performed, regardless of
whether the Guarantor or any other Person determines that Completion of the Project is difficult,
more expensive than originally intended, or involves "Unanticipated Expense or Delay" (defined
below). "Unanticipated Expense or Delay" includes any event or circumstance that would make
the Completion of the Project more costly or would delay the Completion of the Project, such
events and circumstances specifically including the following matters: (a) a casualty that affects
the Parcel or any Improvements that may have been constructed; (b) the discovery of
unanticipated soils conditions or Hazardous Materials in, on, or under the Parcel (provided that the
foregoing shall not waive the City's obligation to pursue environmental insurance under
Section 10.2.1 of the DDA); (c) Governmental Requirements or court orders applicable to the
Project; (d) any lack of debt or equity financing for Development Costs; (e) any change in market
conditions and (f) other events or circumstances beyond the control of Developer or the
Guarantors relating to the Project other than the City's non-performance of its obligations under
the DDA.
2.3 No Discharge until Completion. It is the intent of the Guarantors and City
that the obligations and liabilities of the Guarantors hereunder are absolute, irrevocable and
unconditional under any and all circumstances and that until the Guaranteed Obligations are fully
and finally performed, the obligations and liabilities of either Guarantor hereunder shall not be
discharged or released, in whole or in part, by any act or occurrence that might, but for the
provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor.
The Guaranteed Obligations shall be deemed to be fully and finally performed for purposes of this
Guaranty and this Guaranty shall terminate on the date on which the Certificate of Compliance is
recorded by the City with respect to the entirety of the Phase 1 Parcel.
Section 3. Absolute, Irrevocable and Unconditional Guaranty.
3.1 Irrevocable Guaranty. This Guaranty is an absolute, irrevocable and
unconditional guaranty of performance. To the extent permitted by applicable law, this Guaranty
shall be effective as a waiver of, and each Guarantor hereby expressly waives, any right to which
the Guarantor may otherwise have been entitled, whether now existing under statute, at law or in
equity, or arising under any statute enacted after the date hereof or arising under any doctrine of
law or equity promulgated after the date hereof to require City to take prior recourse or
proceedings against any collateral, security or Person. It shall not be necessary for City, in order to
enforce such payment or performance by the Guarantor, first to institute suit or pursue or exhaust
any rights or remedies against Developer, the Phase 2 Developer, the Phase 2 Guarantor(s) or any
other Person liable on such indebtedness or for such performance, or to enforce any rights against
any security given to secure such indebtedness or performance, or to join Developer or any other
Person liable for the performance of the Guaranteed Obligations or any part thereof in any action
to enforce this Guaranty, or to resort to any other means of obtaining performance of the
Guaranteed Obligations.
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 5
3.2 Demand Against the Guarantor. City may bring suit or make a demand
against Developer or against either Guarantor or any other parties who have signed this Guaranty
or any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or
more of them, separately or together, without impairing the rights of City against either Guarantor.
3.3 Independent Guaranty. The obligations of the Guarantors under this
Guaranty are independent of and in addition to the obligations and liabilities of Developer and any
Phase 2 Developer under the DDA and under the Other Agreements. This Guaranty is
independent of (and shall not be limited by) any other guaranty now existing or hereafter given by
either Guarantor, or any other Person under or in connection with the Property, the Improvements,
the DDA or the Other Agreements. The liability of each Guarantor under this Guaranty is in
addition to any and all other liability the Guarantor may have in any other capacity with respect to
Developer, including, if applicable, any direct or indirect ownership or control of any debt and/or
equity securities of Developer or any Controlling Person of the Developer.
Section 4. Certain Agreements and Waivers by the Guarantors.
4.1 Waivers. Each Guarantor agrees that, except in the event of full
performance of the Guaranteed Obligations, (a) neither City's rights or remedies nor the
Guarantor's obligations under the terms of this Guaranty shall be released, diminished, impaired,
reduced or affected by any one or more of the following events, actions, facts, or circumstances,
(b) to the extent permitted by applicable law, each Guarantor waives any rights, claims or defenses
arising from any such events, actions, facts, or circumstances, and (c) the liability of each
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(a) any limitation on the liability of, or recourse against, any
other Person, including City, in the DDA or any of the Other Agreements or arising under any law;
(b) any claim or defense that this Guaranty was made without
consideration or is not supported by adequate consideration or that the obligations of the Guarantor
hereunder exceed or are more burdensome than those of Developer under the DDA;
(c) the taking or accepting of any other security or guaranty for,
or right of recourse with respect to, any or all of the Guaranteed Obligations;
(d) any release, surrender, abandonment, exchange, alteration,
sale or other disposition, subordination, deterioration, waste, failure to protect or preserve,
impairment, or loss of, or any failure to create or perfect any lien or security interest with respect
to, or any other dealings with, any collateral or security at any time existing or purported, believed
or expected to exist in connection with any or all of the Guaranteed Obligations, or any impairment
of either Guarantor's recourse against any Person or collateral;
(e) whether express or by operation of law, any partial release of
the liability of either Guarantor hereunder (except to the extent expressly so released by City with
respect to this Guaranty) or any complete or partial release of Developer or any other Person liable,
directly or indirectly, for the performance of any or all of the Guaranteed Obligations;
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 6
(f) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of
Developer or any other Person at any time liable for the performance of any or all of the
Guaranteed Obligations;
(g) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of either
Guarantor or its respective successors or assigns;
(h) either with or without notice to or consent of either
Guarantor, any renewal, extension, modification, supplement, subordination or rearrangement of
the terms of any or all of the Guaranteed Obligations and/or the DDA or any of the Other
Agreements or any other agreements that may have been executed by Developer, City or any third
party affecting the obligations of Developer or City under the DDA, or performance (including
changes with respect to the construction of the Improvements) or any other terms thereof, or any
waiver, termination, or release of, or consent to departure from, any of the DDA, the Other
Agreements, any other agreements that may have been executed by Developer, City or any third
party affecting the obligations of Developer or City under the DDA or any other guaranty of any or
all of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or compromise that
may be granted from time to time by City to Developer or to any other Person at any time liable for
the performance of any or all of the Guaranteed Obligations;
(i) any neglect, lack of diligence, delay, omission, failure, or
refusal of City to take or prosecute (or in taking or prosecuting) any action for the collection or
enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action
to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security
therefor, or to exercise (or in exercising) any other right or power with respect to any security
therefor, or to take or prosecute (or in taking or prosecuting), or any failure to sell or otherwise
dispose of in a commercially reasonable manner any collateral securing any or all of the
Guaranteed Obligations;
(j) any failure of City to notify either Guarantor of any creation,
renewal, extension, rearrangement, modification, supplement, subordination, or assignment of the
DDA or any of the Other Agreements or any of the Guaranteed Obligations or any part thereof, or
of any release of or change in any security, or of the occurrence or existence of any Material
Default, or of any other action taken or refrained from being taken by City against Developer or
any security or other recourse, or of any new agreement between City and Developer, it being
understood that except as expressly set forth in this Guaranty, City shall not be required to give
either Guarantor any notice of any kind under any circumstances with respect to or in connection
with the Guaranteed Obligations, any and all rights to other notice either Guarantor may have
otherwise had being hereby waived by the Guarantors, and except for notices(s) expressly required
to be delivered to Guarantor under this Guaranty, each Guarantor shall be responsible for obtaining
for itself information regarding Developer and any collateral, including any changes in the
business or financial condition of Developer or any collateral, and each Guarantor acknowledges
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 7
and agrees that City shall have no duty to notify either Guarantor of any information which City
may have concerning Developer or any collateral;
(k) the existence of any claim, counterclaim, set-off or other
right that either Guarantor may at any time have against Developer, City, or any other Person,
whether or not arising in connection with this Guaranty, the DDA, or any Other Agreements;
(1) the unenforceability of all or any part of the Guaranteed
Obligations against Developer, whether because the Guaranteed Obligations exceed the amount
permitted by law or violate any usury or other law (subject to the provisions of Section 12 below),
or because the Persons creating the Guaranteed Obligations acted in excess of their authority, or
because of a lack of validity or enforceability of or defect or deficiency in the DDA or the Other
Agreements, or because Developer has any valid defense, claim or offset with respect thereto, or
because Developer's obligation ceases to exist by operation of law, or because of any other reason
or circumstance, it being agreed that each Guarantor shall remain liable hereon regardless of
whether Developer or any other Person be found not liable on the Guaranteed Obligations, or any
part thereof, for any reason (and regardless of any joinder of Developer or any other party in any
action to obtain payment or performance of any or all of the Guaranteed Obligations);
(m) any order, ruling or plan of reorganization emanating from
proceedings under Title 11 of the United States Code with respect to Developer or any other
Person, including any extension, reduction, composition, or other alteration of the Guaranteed
Obligations, whether or not consented to by City, or any action taken or omitted by City in any
such proceedings, including any election to have City's claim allowed as being secured, partially
secured or unsecured, any extension of credit by City in any such proceedings or the taking and
holding by City of any security for any such extension of credit;
(n) any other condition, event, omission, action that would in
the absence of the provisions of this Section 4 result in the release or discharge of either Guarantor
from the performance or observance of any obligation, covenant or agreement contained in this
Guaranty or any other agreement;
(o) any notice to either Guarantor of the existence of or the
extending to Developer of any grace or cure period for the performance of any of the Guaranteed
Obligations or any failure to provide notice thereof,
(p) any defense of waiver, release, discharge in res judicata,
statute of frauds, fraud, or ultra vires acts that may be available to Developer in respect of the DDA
or any of the Other Documents;
(c) to the fullest extent permitted by law: (A) any defense
arising as a result of City's election, in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code; and (B) without limiting the
generality of any other provision hereof, all rights and benefits that might otherwise be available to
either Guarantor under California Civil Code Sections 2787 through 2855, inclusive, including
without limitation any rights of subrogation, reimbursement, indemnification, and contribution
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and any other rights and defenses that are or may become available to the Guarantor by reason of
such provisions of the California Civil Code;
(r) the benefit of any statute of limitations affecting the liability
of either Guarantor under this Guaranty or the enforcement of this Guaranty, including any rights
arising under Section 359.5 of the California Code of Civil Procedure;
(s) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Developer in respect of the Guaranteed Obligations or
either Guarantor in respect of this Guaranty; and/or
(t) any early termination of any of the Guaranteed Obligations,
except as expressly agreed to in writing by City, it being agreed that, among other things, the
partial release of liability of Developer under Section 16.3.4 and Section 16.4.5 of the DDA shall
not relieve either Guarantor from its obligation to pay all costs and expenses incurred by the City
in its exercise of its rights under Section 16.3 and Section 16.4 of the DDA.
Notwithstanding each Guarantor's foregoing waivers, Guarantors shall be entitled
to credit against the Guaranteed Obligations any of Developer's actual payment or performance of
such obligations, but without exoneration of either Guarantor in the event that the City accepts
something other than prompt and full performance of any of the Guaranteed Obligations by
Developer.
4.2 Additional Waivers.
4.2.1 Without limiting any of the waivers contained in Section 4.1, to the
extent permitted by applicable law, each of the Guarantors waives all rights and defenses that the
Guarantor may have because some or all of Developer's obligations may be, or may be deemed to
be, secured by real property. This means, among other things:
(a) The City may collect from either Guarantor without first
foreclosing on any real or personal property collateral pledged by Developer or any Phase 2
Developer.
(b) If the City forecloses on any real property collateral pledged
by Developer or any Phase 2 Developer: (i) the amount of the obligation owed to the City may be
reduced only by the net price for which that collateral is sold at the foreclosure sale or proceedings,
even if the collateral is worth more than the sale price and (ii) the City may collect from either
Guarantor even if the City, by foreclosing on the real property collateral, has destroyed any right
the Guarantor may have to collect from the Developer.
This is an unconditional and irrevocable waiver of any rights and defenses either Guarantor may
have because the Developer's obligations may be, or may be deemed to be, secured by real
property. These rights and defenses include, but are not limited to, any rights or defenses based
upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.
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4.2.2 Without limiting any of the waivers contained in Section 4. 1, each
Guarantor hereby waives any rights or defenses the Guarantor may have in respect of his or her
obligations as a guarantor by reason of any election of remedies by the creditor.
4.2.3 Without limiting the generality of any other waiver or provision of
this Guaranty, each Guarantor waives any and all benefits or defenses under California Civil Code
Sections 2899 and 3433, Chapter 2 of Title 14 of the California Civil Code and California
Commercial Code Section 3605.
4.3 Preferences. In the event any payment by Developer or any other Person to
City is held to constitute a preference, fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other reason City is required to refund such
payment or pay the amount thereof to any other party, such payment by Developer or any other
party to City shall not constitute a release of either Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release,
surrender or discharge by City of this Guaranty or of the Guarantor or the prior expiration of this
Guaranty), as the case may be, with respect to, and this Guaranty shall apply to, any and all
amounts so refunded by City or paid by City to another Person which amounts shall constitute part
of the Guaranteed Obligations), and any interest paid by City and any attorneys' fees, costs and
expenses paid or incurred by City in connection with any such event.
4.4 Defenses. Each Guarantor waives, to the extent permitted by applicable
law, all rights and defenses arising out of an election of remedies by City, including exercise by the
City of its Right of Reversion upon occurrence of a Reversion Event or a repurchase of the
Property pursuant to City's Right of Repurchase, even though such election of remedies may have
destroyed such Guarantor's rights of subrogation and reimbursement against Developer by
operation of California Code of Civil Procedure Section 580d or otherwise.
4.5 Anti -Deficiency Waivers. Each Guarantor waives, to the extent permitted
by applicable law, (a) any defenses the Guarantor may have by reason of an election of remedies
by City, and (b) any rights or defenses the Guarantor may have by reason of protection afforded to
Developer with respect to the Guaranteed Obligations pursuant to the anti -deficiency or other laws
of California limiting or discharging Developer's obligations, including California Code of Civil
Procedure Sections 580a, 580b, 580d or 726.
4.6 Waiver of Notice of Acceptance. Each Guarantor waives notice of
acceptance of this Guaranty.
4.7 No Limitation on Waivers. No provision or waiver in this Guaranty shall be
construed as limiting the generality of any other provision or waiver contained in this Guaranty.
All of the waivers contained herein are irrevocable and unconditional and are intentionally and
freely made by the Guarantor.
Section 5. Subordination.
If, for any reason whatsoever, Developer is now or hereafter becomes indebted, directly or
indirectly to either Guarantor including, without limitation, by operation of California Civil Code
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Sections 2847 and 2848, or any successor statutes or similar law (any such indebtedness being
referred to as the "Subordinated Debt"):
(a) The Subordinated Debt and all interest thereon and all liens,
security interests and rights now or hereafter existing with respect to property of Developer
securing the Subordinated Debt shall, at all times, be subordinate in all respects to the Guaranteed
Obligations and to all liens, security interests and rights now or hereafter existing to secure the
Guaranteed Obligations, until the Guaranteed Obligations have been paid or performed in full;
(b) Neither Guarantor shall be entitled to enforce or receive
payment, directly or indirectly, of any of the Subordinated Debt until the Guaranteed Obligations
have been fully and finally performed; provided, however, that so long as no Material Default
under the DDA or the Other Agreements shall have occurred and be continuing, Guarantor shall
not be prohibited from receiving such, (i) reasonable management fees or reasonable salary from
Developer, and (ii) distributions from Developer in an amount equal to any income taxes imposed
on such Guarantor which are attributable to Developer's income from the Property;
(c) In the event of receivership, bankruptcy, reorganization,
arrangement or other debtor relief or insolvency proceedings involving Developer as debtor, City
shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder
and shall have the right to receive directly from the receiver, trustee or other custodian, dividends
and payments that are payable upon any obligation of Developer to the Guarantor now existing or
hereafter arising, and to have all benefits of any security therefor, until the Guaranteed Obligations
have been fully and finally performed. If, notwithstanding the foregoing provisions, either
Guarantor should receive any payment, claim or distribution that is prohibited as provided above
in this Section 5, the Guarantor shall pay the same to City immediately, the Guarantor hereby
agreeing that it shall receive the payment, claim or distribution in trust for City and shall have
absolutely no dominion over the same except to pay it immediately to City; and
(d) Each Guarantor shall promptly upon request of City from
time to time execute such documents and perform such acts as City may require to evidence and
perfect its interest and to permit or facilitate exercise of its rights under this Section 5, including
execution and delivery of proofs of claim, further assignments and security agreements, and
delivery to City of any promissory notes or other instruments evidencing indebtedness of
Developer to the Guarantor. All promissory notes, accounts receivable ledgers or other evidences,
now or hereafter held by either Guarantor, of obligations of Developer to either Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced thereby is subordinated
under and is subject to the terms of this Guaranty.
Section 6. Other Liability of the Guarantor or Developer.
6.1 If either Guarantor is or becomes liable, by endorsement or otherwise, for
any indebtedness owing by Developer to City other than under this Guaranty, such liability shall
not be in any manner impaired or affected hereby, and the rights of City hereunder shall be
cumulative of any and all other rights that City may have against the Guarantor. If Developer is or
becomes obligated to City for any liabilities or indebtedness other than or in excess of the
Guaranteed Obligations, any payment received or recovery realized upon such other liabilities or
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indebtedness of Developer to City may be applied by City to such other liabilities or indebtedness.
6.2 Net Worth and Liquidity Covenants.
(a) [ {If contained in Permitted Mortgage: } Per Section 4.7.1
of the DDA, if Net Worth and Liquidity Covenants and/or financial reporting requirements
meeting the requirements of DDA Section 4.7.1 are set forth in the Permitted Mortgage, then they
are to be inserted here, and, if and only if contained in the Permitted Mortgage, other financial
covenants and tests intended to assess and assure the financial wherewithal of Guarantor, such
other financial covenants and tests shall be inserted here l {If not contained in Permitted
Mortgage, or if guarantors of Permitted Mortgage are entities other than Guarantor: } As of the
Effective Date, Guarantors collectively have, and during the term of this Guaranty shall maintain,
a Net Worth of not less than One Hundred Million Dollars ($100,000,000.00) and Liquidity of not
less than Twenty -Five Million Dollars ($25,000,000.00) (collectively, the "Minimum Liquidity
Standards").] As used in this Guaranty, the term "Net Worth" shall mean the net worth of
Guarantor which shall be determined based on (x) the fair market value of the assets of each of the
Persons comprising Guarantor (including the aggregate amount of uncalled capital commitments
from such Persons' direct and/or indirect limited partners, and intangible assets including
goodwill, intellectual property, licenses, organizational costs, deferred amounts, covenants not to
compete, unearned income, restricted funds, investments in subsidiaries or other Affiliates,
intercompany receivables and accumulated depreciation), less (y) all liabilities of the Persons
comprising Guarantor (as determined in accordance with GAAP), and the term "Liquidity" shall
mean cash, marketable securities and other cash equivalents and the aggregate amount of uncalled
capital commitments of such Guarantor's direct and/or indirect limited partners.
(b) [ {If financial reporting requirements meeting the
requirements of DDA Section 4. 71 are contained in Permitted Mortgage, then insert the
following: } Each Guarantor shall make available to City such financial reports as it furnishes to
the Permitted Mortgagees under the Permitted Mortgages at the same time as they are required to
be furnished to each Permitted Mortgagee under the applicable Permitted Mortgage. In the event
that Guarantors fail to satisfy a Liquidity Covenant or any Guarantor is the subject of any of the
events or actions described in Section 2.2.5 of the DDA (each, a "Guarantor Illiquidity Event"),
Guarantor shall notify the City in writing within five (5) Business Days from its receipt of notice
from any Permitted Mortgagee of a Guarantor Illiquidity Event or at such earlier date as Developer
or any Guarantor has knowledge that a Guarantor Illiquidity Event has occurred.] [{If not
contained in Permitted Mortgage, or if guarantors of Permitted Mortgage are entities other
than Guarantor: } Per Section 4.7.4 of the DDA, provisions agreed upon by Developer,
Guarantor and City, each in its sole discretion, to be inserted, establishing the procedures by
which (i) Guarantor shall furnish specified financial reports to the City on a regular basis to
assure that the Minimum Liquidity Standards are met and that none of the events or actions
described in Section 2.2.5 of the DDA with respect to the Guarantor have occurred (the failure of
any such standard being, a "City Guarantor Illiquidity Event'). In the event of a City Guarantor
Illiquidity Event, within sixty (60) calendar days following the notice from City of a City
Guarantor Illiquidity Event, Guarantor shall supplement its Net Worth and Liquidity to meet the
Minimum Liquidity Standards or Developer shall be required to provide the City with additional
security satisfactory to the City by (A) providing the City with a Guaranty in the form and
substance of the Guaranty, or otherwise acceptable to the City in its sole discretion, from a
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replacement or supplemental guarantor or guarantors acceptable to the City in its sole discretion,
or (B) furnishing the City with another form of security such as a pledge of specified assets or
completion bond, in each case in a manner meeting the requirements of the City in its sole
discretion. Failure of Guarantor to provide such substitute security within the required time
frame shall constitute a default by Guarantor under this Guaranty.]
(c) [ {If (a) the guarantors under each Permitted Mortgage or
Permitted Mortgages are the same as the Guarantors under this Guaranty and (b) each
Permitted Mortgage contains Liquidity Covenants that provide that Developer shall, in the event
of a Guarantor Illiquidity Event, provide the Permitted Mortgagee with substitute or additional
security or guarantors: } Within one hundred and eighty (180) calendar days following the date of
commencement of the Guarantor Illiquidity Event as specified in Section 6.2(b) above, Guarantor
shall, for the benefit of the City and whether or not required by the Permitted Mortgagee, (i) cause
the Guarantors to supplement the security furnished by it in a manner meeting the requirements of
Section 6.2(a) above or (ii) provide the City with additional security satisfactory to the City by (A)
providing the City with a guaranty in the form and substance of this Guaranty, or otherwise
acceptable to the City in its sole discretion, from a replacement or supplemental guarantor or
guarantors acceptable to the City in its sole discretion, or (B) furnishing the City with another form
of security such as a pledge of specified assets or completion bond, in each case in a manner
meeting the requirements of the City in its sole discretion. Failure of Guarantor to provide
substitution of security to the City within such one hundred eighty (180) calendar day period shall
be a default under this Guaranty.]
Section 7. City Assigns, Disclosure of Information.
This Guaranty is for the benefit of City and City's successors and assigns, and in the event
of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred
with such Guaranteed Obligations. Each Guarantor waives notice of any transfer or assignment of
the Guaranteed Obligations or any part thereof.
Section 8. Binding Effect, Successor and Assigns, Joint and Several.
This Guaranty is binding not only on each Guarantor, but also on the Guarantor's
successors and assigns. All obligations of either Guarantor hereunder are joint and several
obligations.
Section 9. Governing Law.
The validity, enforcement, and interpretation of this Guaranty, shall for all purposes be
governed by and construed in accordance with the laws of the State of California (without regard
to its conflicts of law principles) and applicable United States federal law, and is intended to be
performed in accordance with, and only to the extent permitted by, such laws. Each Guarantor and
City agree that any disputes arising between them in connection with this Guaranty or in
connection with or under any instrument, agreement or document provided for or contemplated by
this Guaranty, including in connection with the execution of this Guaranty, the Guaranteed
Obligations or any other matter arising under, related to or in connection with this Guaranty
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(including a determination of any and all issues in such dispute, whether of fact or of law) shall be
tried and litigated exclusively in the Superior Court of the County of Orange, State of California, in
any other appropriate court of that county, or in the United States District Court for the Central
District of California. This choice of venue is intended by each Guarantor and City to be
mandatory and not permissive in nature, thereby precluding the possibility of litigation between or
among the Guarantor and City with respect to or arising out of this Guaranty in any jurisdiction
other than that specified in this Section 9. Each party hereby waives any right that it may have to
assert forum non convemens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this Section 9, and stipulates that the State and federal
courts located in the County of Orange, State of California, shall have in personam jurisdiction and
venue over each of them for the purpose of litigating any dispute, controversy or proceeding
arising out of this Guaranty. Each party hereby authorizes and accepts service of process sufficient
for personal jurisdiction in any action against it as contemplated by this Section 9 by means of
registered or certified mail, return receipt requested, postage prepaid, to its address for the giving
of notices as set forth in this Guaranty, or in the manner set forth below for notices. Any final
judgment rendered against a party in any action or proceeding shall be conclusive as to the subject
of such final judgment and may be enforced in other jurisdictions in any manner provided by law.
Section 10. Invalidity of Certain Provisions.
If any provision of this Guaranty or the application thereof to any Person or circumstance
shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the
remaining provisions of this Guaranty nor the application of such provision to any other Person or
circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such provision to other Persons or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.
Section 11. Costs and Expenses of Enforcement.
Each Guarantor agrees to pay to City within fifteen (15) calendar days after written
demand all costs and expenses incurred by City in seeking to enforce City's rights and remedies
under this Guaranty, including court costs, costs of alternative dispute resolution and reasonable
attorneys' fees, whether or not suit is filed or other proceedings are initiated hereon. All such costs
and expenses incurred by City shall constitute a portion of the Guaranteed Obligations hereunder,
shall be subject to the provisions hereof with respect to the Guaranteed Obligations and shall be
payable by the Guarantors within fifteen (15) calendar days after written demand by City. In the
event of any suit or proceeding to adjudicate or resolve any dispute in connection with this
Guaranty, the prevailing party shall be entitled to recover its reasonable attorneys' fees which shall
be payable at the actual contractual hourly rate for City's litigation counsel at the time the fees
were incurred, but in no event more than $200 per hour and costs, court costs and all other
litigation expenses (including reasonable expert witness fees, costs of depositions and other
discovery, travel expenses, exhibit preparation, and courier, postage, communication and
document copying expenses).
Section 12. No Usury.
It is not the intention of City or the Guarantor to obligate the Guarantors to pay interest in
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excess of that lawfully permitted to be paid by the Guarantors under applicable law. Should it be
determined that any portion of the Guaranteed Obligations or any other amount payable by the
Guarantors under this Guaranty constitutes interest in excess of the maximum amount of interest
that the Guarantor, in its capacity as guarantor, may lawfully be required to pay under applicable
law, the obligation of the Guarantor to pay such interest shall automatically be limited to the
payment thereof in the maximum amount so permitted under applicable law. The provisions of
this Section shall override and control all other provisions of this Guaranty and of any other
agreement between the Guarantors and City.
Section 13. Rebresentations_ Warranties. and Covenants of the Guarantor.
Each Guarantor hereby represents, warrants, and covenants that: (a) the Guarantor has a
financial interest in Developer and will derive a material and substantial benefit, directly or
indirectly, from the developing the Project and from the making of this Guaranty by the Guarantor;
(b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against the
Guarantor subject to the effect of bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and limitations imposed by general
principles of equity and applicable law; (c) the Guarantor is not, and the execution, delivery and
performance by the Guarantor of this Guaranty will not cause the Guarantor to be, in violation of
or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under
any agreement or restriction by which the Guarantor is bound or affected; (d) the Guarantor is duly
organized, validly existing, and in good standing under the laws of the state of its organization and
has full power and authority to enter into and perform this Guaranty; (e) except as may have been
previously disclosed to City in writing, there is no litigation pending or, to the knowledge of the
Guarantor, threatened by or before any tribunal against or affecting the Guarantor; (f) all financial
statements and information heretofore furnished to City by the Guarantor do, and all financial
statements and information hereafter furnished to City by the Guarantor will, fully and accurately
present the condition (financial or otherwise) of Guarantor as of their dates and the results of the
Guarantor's operations for the periods therein specified, and, since the date of the most recent
financial statements of the Guarantor heretofore furnished to City, no material adverse change has
occurred in the financial condition of the Guarantor, nor, except as heretofore disclosed in writing
to City, has the Guarantor incurred any material liability, direct or indirect, fixed or contingent that
would materially adversely affect Guarantor's ability to perform obligations hereunder; (g) after
giving effect to this Guaranty, the Guarantor is solvent, is not engaged or about to engage in
business or a transaction for which the property of the Guarantor is an unreasonably small capital,
and does not intend to incur or believe that it will incur debts that will be beyond its ability to pay
as such debts mature; (h) the Guarantor has read and fully understands the provisions contained in
the DDA and the Other Agreements. The Guarantor's representations, warranties and covenants
are a material inducement to City to convey the Property and enter into the Other Agreements and
shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other
event affecting Developer, any Person, or any security for all or any part of the Guaranteed
Obligations.
Section 14. Notices.
All notices, requests, consents, demands and other communications required or which any
party desires to give hereunder or under the DDA shall be in writing and, unless otherwise
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specifically provided in the DDA, shall be deemed sufficiently given or furnished if delivered by
personal delivery, by nationally recognized overnight courier service, or by certified United States
mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this
Guaranty or in the DDA (unless changed by similar notice in writing given by the particular party
whose address is to be changed) or by facsimile. Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the case of courier or mail,
as of the date of first attempted delivery at the address and in the manner provided herein, or, in the
case of facsimile, upon receipt; provided that service of a notice required by any applicable statute
shall be considered complete when the requirements of that statute are met. Notwithstanding the
foregoing, no notice of change of address shall be effective except upon actual receipt. This
Section shall not be construed in any way to affect or impair any waiver of notice or demand
provided in this Guaranty, the DDA or the Other Agreements or to require giving of notice or
demand to or upon any Person in any situation or for any reason.
Section 15. Cumulative Rights.
All of the rights and remedies of City under this Guaranty, the DDA and the Other
Agreements are cumulative of each other and of any and all other rights at law or in equity, and the
exercise by City of any one or more of such rights and remedies shall not preclude the
simultaneous or later exercise by City of any or all such other rights and remedies. No single or
partial exercise of any right or remedy shall exhaust it or preclude any other or further exercise
thereof, and every right and remedy may be exercised at any time and from time to time. No
failure by City to exercise, or delay in exercising, any right or remedy shall operate as a waiver of
such right or remedy or as a waiver of any Material Default. No notice to or demand on either or
both of the Guarantors in any case shall of itself entitle either Guarantor to any other or further
notice or demand in similar or other circumstances. No provision of this Guaranty or any right or
remedy of City with respect hereto, or any default or breach, can be waived, nor can this Guaranty
or either Guarantor be released or discharged in any way or to any extent, except specifically in
each case by a writing intended for that purpose (and which refers specifically to this Guaranty)
executed and delivered by City to the Guarantor.
Section 16. Subrogation.
Neither Guarantor shall have any right of subrogation under the DDA or the Other
Agreements or any right to participate in any security for the Guaranteed Obligations or any right
to reimbursement, exoneration, contribution, indemnification or any similar rights, until the
Guaranteed Obligations have been fully and finally discharged in accordance with Section 2.3
above, and each Guarantor hereby waives all of such rights. Neither Guarantor shall exercise any
rights that it may acquire by way of subrogation under this Guaranty, by virtue of any payment
made hereunder or otherwise, until all the Guaranteed Obligations have been paid or performed in
full. If any amount is paid to either Guarantor on account of such subrogation rights before the
Guaranteed Obligations have been paid or performed in full, the amount will be held in trust for the
benefit of City and will immediately be paid to City to be credited and applied upon the
Guaranteed Obligations, whether matured or unmatured, in such order as City, in its sole and
absolute discretion, determines. Until the Guaranteed Obligations are paid or performed in full,
any indebtedness of Developer to either Guarantor is hereby subordinated to all obligations and
liabilities of Developer to City arising out of or related to the DDA.
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Section 17. Time of Essence.
Time shall be of the essence in this Guaranty with respect to all of each Guarantor's
obligations hereunder.
Section 18. Bankruptcy of Developer.
The obligations of each Guarantor under this Guaranty will continue to be effective, or be
automatically reinstated: (a) if the performance or the payment, in whole or in part, of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned by City (as a
preference, fraudulent conveyance or otherwise) upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of City, the Guarantor, Developer or any other Person, or (b) upon or
as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers
with respect to Developer, either Guarantor, or any other Person, or any substantial part of its
property, or otherwise, all as though such payments had not been made. If a Default has occurred
and continues or exists under or with respect to the DDA or if any default occurs under this
Guaranty or with respect to any of the Guaranteed Obligations at such time as City is prevented by
reason of the pendency against either of the Guarantors, Developer or any other Person of a case or
proceeding under a bankruptcy or insolvency law, each Guarantor agrees that this Guaranty and
the Guaranteed Obligations will be deemed to have been declared in default or accelerated with the
same effect as if this Guaranty and the Guaranteed Obligations had been declared in default and
accelerated in accordance with their respective terms. Each Guarantor will immediately perform
or pay the Guaranteed Obligations as required under this Guaranty without further notice or
demand.
Section 19. Entire Agreement, Counterparts; Construction.
This Guaranty embodies the entire agreement between City and the Guarantors with
respect to the guaranty by the Guarantors of the Guaranteed Obligations. This Guaranty
supersedes all prior agreements and understandings, if any, with respect to the guaranty by the
Guarantors of the Guaranteed Obligations. This Guaranty shall be effective upon execution by the
Guarantors and delivery to City. This Guaranty may not be modified, amended or superseded
except in a writing signed by City and the Guarantors referencing this Guaranty by its date and
specifically identifying the portions hereof that are to be modified, amended or superseded. This
Guaranty has been executed in a number of identical counterparts, each of which shall be deemed
an original for all purposes and all of which constitute, collectively, one agreement. As used
herein, the words "include" and "including" shall be interpreted as if followed by the words
"without limitation."
[Signatures appear on the followingpage]
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Flight Venture LLC
Guaranty 11-7-16 FINAL.docx 17
IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of the
date first written above.
Address of Guarantor: ALCION REAL ESTATE PARTNERS MASTER
FUND, III, L.P.
One Post Office Square
Suite 3150 By: Alcion Capital Master Fund GP III, LLC,
Boston, MA 02109 a Delaware limited liability company,
Attention: Eugene DelFavero its General Partner
By:
Name:
Authorized Signatory
Address of Guarantor_: ALCION REAL ESTATE PARTNERS
STRATEGIC PARALLEL FUND III, L.P.
One Post Office Square
Suite 3150 By: Alcion Capital Strategic III, LLC,
Boston, MA 02109 a Delaware limited liability company,
Attention: Eugene DelFavero its General Partner
By:
Name:
Authorized Signatory
Tustin Cornerstone I DDA Art 14 Form of ATTACHMENT 14 City of Tustin/Cornerstone I (Phase 1)
Guaranty 11-7-16 FINAL. docx 18
ATTACHMENT 15
CERTIFICATE OF COMPLIANCE
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FROM RECORDING
FEES PER GOVERNMENT
CODE §6103 AND §27383.
Recording requested by and
when recorded mail to:
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER'S USE
[PARTIAL] CERTIFICATE OF COMPLIANCE FOR
[PHASE I PARCEL/PHASE 2 PARCEL/
PARCEL OF TRACT MAP NO. 18003 [specify Building Pad]]
This [PARTIAL] CERTIFICATE OF COMPLIANCE ("Certificate of Compliance") is
made as of , 20 by the CITY OF TUSTIN, a municipal corporation
of the State of California ("City"), in favor of ("Developer"), with
reference to the following matters:
A. The City and Flight Venture LLC, a Delaware limited liability company ("Initial
Developer"), entered into that certain Tustin Legacy Disposition and Development Agreement
Cornerstone I, dated as of , 2016 (the "DDA").
B. The DDA is evidenced by that certain Memorandum of Tustin Legacy
Disposition and Development Agreement Cornerstone I (the "Memorandum of DDA"), dated
as of and recorded on that date in the Office of the County Recorder, Orange
County, California (the "Official Records") as Instrument No. with
respect to certain real property legally described on Exhibit A attached hereto and incorporated
herein by this reference (the "Development Parcels"). All initially capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the DDA.
C. Pursuant to and as further described in the DDA, the Developer agreed to acquire,
develop, and construct certain Improvements comprising the Project on the Development
Parcels.
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 1
FINAL.docx.docx
D. Pursuant to Section 9 of the DDA, the City agreed to issue, upon written request
therefor by the Developer, a [Partial] Certificate of Compliance in recordable form upon
satisfaction of the Conditions Precedent to issuance thereof set forth in [Section 9.2/9.31 of the
DDA.
[E. [Applicable to Certain Building Pads Only—specify particular situation [clause
(a) or (b) for which issuance qualifies:} In addition, upon the Completion thereon of the
Improvements described below and the Conditions Precedent to issuance thereof set forth in
[Section 9.2/9.3], the City agreed to issue a "Partial Certificate of Compliance" as to (a) any
Building Pad that has been Transferred in fee to a Pad Transferee that is an End User or (b) any
Completed Buildings) and associated Building Pads) for which a binding contract to purchase
has been executed by and between Developer and a proposed successor owner prior to issuance
of the Certificate of Compliance but for which the Transfer shall not take place until the
Certificate of Compliance has been issued, in each case upon satisfaction of the Conditions
Precedent thereto set forth in [Section 9.2/9.31, in which event the Minimum Phase I
Improvements or Minimum Phase 2 Improvements, as applicable, required for satisfaction of the
Conditions Precedent for such Partial Certificate of Compliance shall be comprised of.- (i) the
Minimum Horizontal Improvements (in their entirety), (ii) the remaining Phase I Horizontal
Improvements or Phase 2 Horizontal Improvements required for development of the applicable
Building Pad as determined to the satisfaction of the City in its sole discretion and (iii) the
Minimum Phase I Vertical Improvements or Minimum Phase 2 Vertical Improvements for such
Building Pad, which shall be equal to the minimum GBA for such Building Pad approved by the
City in its Design Review approval as part of the Applicable Approvals or pursuant to any later
Entitlements.]
JE/F]. The City has determined that the [Developer/End User] has satisfied the
Conditions Precedent set forth in [Section 9.2/9.3] of the DDA for the City's issuance of a
[Partial] Certificate of Compliance with respect to the [Phase I Property/Phase 2
Property/Building Pad] and Improvements as legally described on Exhibit B attached hereto and
incorporated herein by this reference (the "Certified Parcel"). For avoidance of doubt, this
[Partial] Certificate of Compliance applies only with respect to the Certified Parcel, and does
not apply to the any other portion of the Development Parcels or any Improvements thereon.
NOW, THEREFORE, the City certifies as follows:
1. This [Partial] Certificate of Compliance covers and applies to the Certified Parcel
and that portion of the Improvements and the [Phase I Project / Phase 2 Project/Building
Improvements] constructed thereon [as depicted and described on Exhibit C attached hereto and
incorporated herein by this reference (the "Certified Improvements')].
2. This [Partial] Certificate of Compliance shall be deemed conclusive evidence of
the City's determination that the Developer of the [Phase I Project /Phase 2 Project/Building
Improvements] has satisfactorily Completed construction and development with respect to the
Improvements comprising the [Phase I Project /Phase 2 Project/Building Improvements] and
has satisfied all Conditions Precedent set forth in [Section 9.2/9.31 of the DDA for issuance of
this [Partial] Certificate of Compliance.
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 2
FINAL.docx.docx
3. A [Partial] Certificate of Compliance shall have the effect set forth in Section 9
of the DDA and in other applicable provisions of the DDA with respect to the Certified Parcel
[and the Certified Improvements thereon only].
4. Upon recordation of this [Partial] Certificate of Compliance, the DDA shall
terminate as to the Certified Parcel and shall be of no further force and effect with respect to the
Certified Parcel, and any Person then owning or thereafter purchasing, leasing, or otherwise
acquiring any interest in the Certified Parcel shall not (because of such ownership, purchase,
lease, or acquisition) incur any obligation or liability under the DDA with respect to the Certified
Parcel and/or the Certified Improvements, except that the following recorded documents shall
survive the termination of the DDA, each in accordance with its terms, as to the Certified
Improvements and the Certified Parcel, and all Persons owning, leasing, or occupying the
Certified Parcel and/or the Certified Improvements shall continue to be bound by the following
recorded documents, to the extent provided for in such documents, which shall survive the
termination of the DDA (each in accordance with its terms), shall not merge with any deed on
any transfer of any portion of the Certified Parcel, and shall survive the issuance of this [Partial]
Certificate of Compliance as and to the extent indicated in the referenced documents:
(a) The Declaration of Special Restrictions [for Phase I/Phase 2] dated
201 and recorded on 201 in the Official Records as Instrument
No.
(b) The Development Agreement dated 201_ and recorded on
20 in the Official Records as Instrument No. ;
(c) The Quitclaim Deed(s) dated 201_ and recorded on
201 in the Official Records as Instrument No. ;
(d) The provisions of Section 9.7 of the DDA which, as set forth in the
Memorandum of DDA, expressly survive the termination of the DDA;
(e) The Landscape Installation and Maintenance Agreement dated
201 and recorded on 201 in the Official Records as Instrument
No.
(f) The Roadway and Utility Easement Agreement dated , 201
and recorded on , 201 in the Official Records as Instrument No.
(g) The License Agreements; and
(h) The CC&Rs dated 201_ and recorded on
20 1 in the Official Records as Instrument No.
5. Notwithstanding any other provision of the DDA to the contrary or the issuance
or recordation of this [Partial] Certificate of Compliance and the termination of the DDA as to
the Certified Parcel as a result thereof, issuance of this [Partial] Certificate of Compliance shall
not waive any rights or claim that the City may have against any Person or party for latent or
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of TustinTlight Venture LLC
Cert. of Compliance 11-8-16 3
FINAL.docx.docx
patent defects in design, construction or similar matters under any applicable law with respect to
construction of the Improvements, including without limitation, the Horizontal Improvements
(whether located on or off of the Certified Parcel), or any other rights or remedies of the City
available at law or in equity, nor shall it be evidence of satisfaction of any of the Developer's
obligations to third parties who are not a party to the DDA.
6. This [Partial] Certificate of Compliance is not a Notice of Completion as referred
to in California Civil Code Section 8182.
7. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the documents executed by the City and Developer.
{remainder of page is blank / signatures on following page }
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 4
FINAL.docx.docx
IN WITNESS WHEREOF, the City has caused this Certificate of Compliance to be duly
executed by its officer duly authorized as of the date first above written.
Dated:
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
ACCEPTED AND AGREED:
PHASE 1 DEVELOPER/PHASE 2
DEVELOPER/END USER
By:
Name:
Title:
[SIGNATURE MUST BE
NOTARIZED]
CITY OF TUSTIN:
By:
Jeffrey C. Parker,
City Manager
ATTEST:
By:
Erica Rabe
City Clerk Services Supervisor
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16
FINAL.docx.docx S-1
EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PARCELS
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 EXHIBIT A
FINAL.docx.docx
EXHIBIT B
LEGAL DESCRIPTION OF CERTIFIED PARCEL
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 EXHIBIT B
FINAL.docx.docx
EXHIBIT C
DESCRIPTION/DEPICTION OF COMPLETED IMPROVEMENTS
Tustin Cornerstone I DDA Art 15 Form of ATTACHMENT 15 City of Tustin/Flight Venture LLC
Cert. of Compliance 11-8-16 EXHIBIT C
FINAL.docx.docx
ATTACHMENT 16A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT — GENERAL
(FOR SECTIONS 2.2.2 and 2.2.3(a) TRANSFERS) WHERE ENTIRETY OF
TRANSFEROR'S REMAINING INTEREST IN THE PROPERTY IS BEING
TRANSFERRED
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT AND ASSUMPTION AGREEMENT
(Cornerstone 1)
This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is made as
of , 20 (the "Assignment Effective Date") by and between
("Transferor"), and , a ("Transferee"),
[{to be inserted only in connection with a Transfer that is not a Permitted Transfer:} with the
consent of the CITY OF TUSTIN, a municipal corporation of the State of California (the
"City')], with reference to the following matters:
A. The City and Flight Venture LLC, a Delaware limited liability company
("Developer") entered into that certain Tustin Legacy Disposition and Development Agreement
Cornerstone I dated as of , 2016 (the "DDA"), relating to the conveyance from
the City to Developer of that certain real property legally described on Exhibit "A" attached
hereto (the "Development Parcels") and the subsequent development of the Development
Parcels by Developer, all as more particularly set forth in the DDA. All initially capitalized
terms not otherwise defined in this Assignment shall have the meanings ascribed to such terms in
the DDA. Developer and the City executed that certain Memorandum of Tustin Legacy
Disposition and Development Agreement Cornerstone I (the "Memorandum of DDA"), dated
, which was recorded in the Office of the County Recorder, Orange County,
California (the "Official Records") against title to the Development Parcels on
as Instrument No. , and provided record notice of the DDA.
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 1
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B. The City has executed that certain Declaration of Special Restrictions for
Cornerstone I (Phase 1 Parcel) dated , recorded in the Official Records against
title to the Development Parcels on as Instrument No. (the "Phase
1 Special Restrictions") [and that certain Declaration of Special Restrictions for Cornerstone I
(Phase 2 Parcel), dated recorded in the Official Records against title to the
Development Parcels on as Instrument No. , (individually, the
"Phase 2 Special Restrictions" and collectively with the Phase I Special Restrictions,] the
"Special Restrictions") which includes, among other matters, certain requirements regarding the
use and maintenance of the Development Parcels and sets forth those provisions of the DDA that
survive the issuance of a Certificate of Compliance with respect to the Project.
C. The City has executed that certain Quitclaim Deed for Cornerstone I and
Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471 dated recorded in the Official Records against title to the
Development Parcels on as Instrument No. (the "Phase 1
Quitclaim Deed"), [{include if conveyance of Phase 2 has occurredl and that certain
Quitclaim Deed for Cornerstone I and Covenants, Conditions and Restrictions, Including
Environmental Restriction Pursuant to Civil Code Section 1471, dated , which
was recorded in the Official Records against title to the Parcel on as Instrument
No. (individually the "Phase 2 Quitclaim Deed" and collectively with the Phase I
Quitclaim Deed,] the "Quitclaim Deed'), which Quitclaim Deed conveyed to Developer the fee
title to the Development Parcels, subject to certain restrictions and limitations set forth in the
Quitclaim Deed.
C
Developer and the City executed that certain Development Agreement dated
recorded in the Official Records against title to the Development Parcels on
as Instrument No. (the "DA").
E. Developer and the City executed that certain Landscape Installation and
Maintenance Agreement dated , recorded in the Official Records against title
to the Development Parcels on as Instrument No.
(the "Landscape Agreement"), and that certain Roadway, Landscape and
Utility Easement Agreement dated recorded in the Official Records against title to
the Development Parcels on as Instrument No. (the
"Roadway and Utility Easement")
F. The DDA, the Memorandum of DDA, the Special Restrictions, the DA, the
Quitclaim Deed, the Landscape Agreement, and the Roadway and Utility Easement, in each case
including all Exhibits and attachments thereto and in each case including all amendments to any
of the foregoing through the Assignment Effective Date, are collectively referred to herein as the
"Property Documents".
G. Pursuant to the DDA, Developer agreed to develop and construct on the
Development Parcels certain Improvements comprising the Project [{unless Transfer is to a
Permitted Transferee, insert the following.] and pursuant to the DDA, Developer has
Completed the Minimum Horizontal Improvements, Completion of which is a condition
precedent under the DDA to the Transfer described by this Assignment.]
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 2
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H. Concurrently with the execution and delivery of this Assignment, Transferor is
conveying to Transferee that portion of the Development Parcels comprised of that certain real
property legally described on Exhibit B attached hereto, including all Improvements, if any,
located thereon, all appurtenances pertaining thereto and all permits, licenses, approvals and
authorizations issued by any Governmental Authority in connection therewith, for purposes of
construction and operation by Transferee of the Project and other Transferee Improvements
(defined below) on the Transfer Property, the ("Transfer Property"), and for sale of same, and
Transferee will develop the Transfer Property in accordance with the requirements of the DDA,
including, without limitation, the Scope of Development and the Schedule of Performance, and
the other Property Documents.
I. The DDA imposes certain covenants, conditions, payment obligations and
restrictions on the Development Parcels and, prior to the filing of a Certificate of Completion,
the DDA restricts Developer's ability to transfer ownership and/or control of the Development
Parcels, the Project, the Improvements and/or Developer's obligations with respect to the Project
(including, without limitation, Developer's obligations with respect to the off-site infrastructure
improvements), all as set forth in the DDA.
J. Transferor desires to convey the Transfer Property to Transferee and to assign to
Transferee all of Transferor's right, title and interest in and to the Property Documents with
respect to the Transfer Property (the "Transfer Event") [{to be inserted only in connection with
a Transfer that is not a Permitted Transferal to have such assignment approved by the City, and
to have Transferee approved by the City as a "Transferee " (as that term is defined in and used
in Section 2 of the DDA)]. Pursuant to Section 2 of the DDA (including without limitation,
Section 2.2.3(a) of the DDA with respect to a Transfer of a Transferor's entire interest) a
Transfer must include, among other things, the execution and delivery of an Assignment and
Assumption Agreement. Transferor and Transferee are entering into this Assignment in order to
fulfill the obligations of Transferor and Transferee as a Transferee under Section 2 of the DDA.
Simultaneously with this Transfer Event, Transferee will be acquiring the Transfer
Property from Transferor pursuant to and in accordance with the terms of the DDA.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Transferor and Transferee agree as follows:
1. Assignment.
1.1 As of the Assignment Effective Date, Transferor hereby assigns, conveys,
transfers, bargains, grants, sells and sets over to Transferee, as and to the extent owned or held
by Transferor, the following (collectively, the "Assigned Interests"):
(a) All right, title and interest of "Developer" under the Property Documents;
(b) Those rights and obligations of Transferor as the "Developer" under the
Property Documents including, without limitation, (i) the obligation to construct and
Complete the Horizontal Improvements, including the [[insert only if conveyance is
pursuant to Permitted Transfer and is permitted by DDA to take place prior to
completion.] Minimum Horizontal Improvements] and the [Minimum Phase I Vertical
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 3
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Improvements /Minimum Phase 2 Vertical Improvements] and all other Improvements
on or required in connection with development of the Transfer Property when and as
required by the Property Documents which Transferee shall be obligated to carry out in a
timely manner in accordance with the Schedule of Performance in the DDA; [Revise
foregoing as applicable], (ii) the obligation to maintain the Improvements located on the
Transfer Property in accordance with the Property Documents, and (iii) any and all
additional corresponding rights, obligations, conditions, limitations and restrictions under
the Property Documents imposed upon or with respect to the Transfer Property (and all
Improvements thereon) arising from and after the Assignment Effective Date, including,
without limitation, the rights, obligations, conditions, limitations, releases, indemnities
and restrictions contained within the DDA;
(c) All Entitlements and Development Permits and other development rights
relating to the Transfer Property;
(d) [[If Minimum Horizontal Improvements are not Complete, add the
following:} The obligations retained by Transferor with respect to the construction and
Completion of the work described in the Landscape Agreement, which Transferee shall
be obligated to carry out only to the extent Transferor fails to perform such obligations in
a timely manner in accordance with the Schedule of Performance in the DDA;
(e) All plans, specifications, maps, drawings, and other renderings owned by
Transferor and relating to the Transfer Property, the Project and the Entitlements
pertaining thereto; [and]
(f) All warranties, claims, and any similar rights of Transferor relating to and
benefiting the Transfer Property or the rights and interests transferred pursuant to this
Assignment; [and]
(g) [[include only if Transfer Parcel comprises all of the Development
Parcels] All intangible rights, goodwill, and similar rights relating to the Project and/or
the Transfer Parcel.]
(h) [Insert any additional specific rights or obligations being assigned or
assumed by the Transferee. The assignment should generally be limited to those
matters related to development construction, maintenance of the Project and the
Transfer Property.}
1.2 The Assigned Interests together with the Transfer Property are collectively
referred to in this Assignment as the "Assigned Property."
2. Assumption
2.1 Transferee, on behalf of itself and its successors and assigns, from and after the
Assignment Effective Date, hereby assumes and receives the Assigned Property and Transferee
agrees with Transferor (and such agreement is expressly also made for the benefit of the City and
may be directly enforced by the City) as follows, in each case, to the extent relating to the period
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
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from and after the Assignment Effective Date {NOTE: the following to be revised as
appropriate if obligations of Developer under the DDA have been completed}:
(a) Transferee accepts and expressly assumes all of the Assigned Property and
all of the obligations, conditions, limitations and restrictions imposed upon the Transfer
Property and/or the Transferor with respect to the Transfer Property under the Property
Documents, and Transferee expressly assumes and shall be subject to all the obligations,
conditions, limitations and restrictions to which Transferor and/or the Transfer Property
is subject under or by reason of the Property Documents.
(b) Transferee expressly assumes and shall be subject to all the obligations,
conditions, limitations and restrictions to which Transferor and/or the Assigned Property
are subject by reason of the Entitlements related to the Transfer Property;
(c) Upon and subject to the terms and provisions of the Property Documents,
Transferee expressly assumes and shall be subject to all the obligations to perform,
construct, install and Complete any and all of the Improvements, specifically including
without limitation, the Minimum Horizontal Improvements located on or affecting the
Transfer Property {and: Insert any additional assumed construction obligations}
(collectively, the "Transferee Improvements") in accordance with the Entitlements, the
Approved Plans, the Scope of Development and within the time periods specified in the
Schedule of Performance.
(d) Upon and subject to the terms and provisions of the Property Documents,
Transferee shall pay and perform all obligations of "Developer" under the DDA and the
other Property Documents that relate to the Assigned Property, including, without
limitation, the following obligations: (i) the obligation to construct and Complete all
Improvements to be constructed on the Transfer Property in accordance with the Scope of
Development and within the time periods specified in the Schedule of Performance;
(ii) the obligation to pay all sums required to be paid by "Developer" as set forth in the
Property Documents in connection with the ownership and/or development of the
Assigned Property, to the extent such amounts have not been paid as of the Assignment
Effective Date; and (iii) the obligation to develop the Transfer Property in full
compliance with all then -existing Entitlements and the Approved Plans; and (iv) as a
condition precedent to this Assignment, the obligation of the Controlling Person of the
Transferee to deliver to the City a Guaranty (or if such Controlling Person is not
approved by the City as the Guarantor, another Person approved by the City in its sole
discretion as the Guarantor in accordance with Section 4.6 of the DDA).
(e) For the avoidance of doubt, upon the execution and delivery of this
Assignment, Transferee shall be deemed to have assumed and shall be obligated to
comply with and perform: (i) all obligations of Transferee as described in this
Assignment and (ii) all obligations of "Developer" under this Assignment and the
Property Documents with respect to the Transfer Property and the Improvements thereon.
(f) {Insert any additional obligations to be assumed by Transferee.}
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
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2.2 For avoidance of doubt, and without limiting the generality of the foregoing,
Transferee hereby agrees: (a) that Transferee has hereby assumed and shall be subject to and
obligated to perform in accordance with or otherwise comply with the requirements of the
Property Documents, and (b) that it shall be subject to all rights and remedies of the City under
the Property Documents, including without limitation, the Right of Repurchase and the Right of
Reversion set forth in the DDA.
2.3 Transferee hereby acknowledges and agrees, for the benefit of Transferor and
City that it shall remain fully responsible to perform and satisfy all of the obligations and
liabilities assumed by Transferee pursuant to Section 2.1 and 2_2 above regardless of any of the
following:
(a) the value of the Assigned Property or the income to be derived from the
Assigned Property;
(b) the existence or non-existence of any liens, easements, covenants,
conditions, restrictions, claims or encumbrances affecting the Assigned Property
(including without limitation any of the foregoing arising from or related to the
Entitlements or any of the Property Documents);
(c) the suitability of the Assigned Property for any and all future
development, uses and activities which Transferee may conduct or Transferor or any
prior Developer under the Property Documents may have conducted thereon, including,
without limitation, the development of the Project as described in the Property
Documents and this Assignment;
(d) the ability of the City or any third party to complete, or likelihood of the
completion of, any of the improvements and infrastructure described by the General Plan,
the Reuse Plan, the Specific Plan, the Tustin Legacy Backbone Infrastructure Program or
any other plan or policy of the City or any other Governmental Authority;
(e) the compliance by the City or any third party with or enforcement of the
Reuse Plan, the General Plan, the Specific Plan, the Special Restrictions, the CC&Rs, the
Tustin Legacy Backbone Infrastructure Program or any other agreement or governmental
restriction or plan affecting Tustin Legacy by the City or any third party;
(f) the habitability, merchantability or fitness for a particular purpose of the
Assigned Property;
(g) the manner, quality, state of repair or lack of repair of the Assigned
Property;
(h) the nature, quality or condition of the Assigned Property including without
limitation, water, soil and geology;
(i) the compliance of or by the Assigned Property and/or its operation in
accordance with any of the Entitlements or any Governmental Requirements, including
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 6
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without limitation, the National Environmental Policy Act, CEQA and the Americans
with Disabilities Act of 1990;
0) the manner or quality of the construction or materials, if any, incorporated
into any part of the Transfer Property or the Improvements;
(k) the presence or absence of Hazardous Materials, including without
limitation, asbestos or lead paint at, on, under, or adjacent to the Transfer Property or any
other portion of the Development Parcels or Tustin Legacy;
(1) the content, completeness or accuracy of the information, documentation,
studies, reports, surveys and other materials, delivered to Transferee by Transferor or
others in connection with Transferee's review of the Assigned Property and the
transactions contemplated in the Property Documents or this Assignment;
(m) the conformity of the existing improvements on the Transfer Property, the
Development Parcels and/or at Tustin Legacy, if any, to any plans or specifications
therefor;
(n) compliance of the Assigned Property with past, current or future
Governmental Requirements relating to zoning, subdivision, planning, building, fire,
safety, health or environmental matters and/or covenants, conditions, restrictions or deed
restrictions;
(o) the deficiency of any undershoring or of any drainage to, on or from the
Transfer Property or any other portion of Tustin Legacy;
(p) the condition of any adjoining land owned by the City, including without
limitation the property covered by the Landscape Agreement and the property covered by
the Roadway and Utility Easement and any improvements thereon;
(q) the fact that all or a portion of the Transfer Property may be located on or
near an earthquake fault line or falls within an earthquake fault zone established under the
Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 2621-
2630 or within a seismic hazard zone established under the Seismic Hazards Mapping
Act, California Public Resources Code Sections 2690-2699.6 and Sections 3720-3725;
(r) the existence or lack of vested land use, zoning or building entitlements
affecting the Assigned Property;
(s) the construction or lack of construction of Tustin Legacy or if constructed,
the construction of Tustin Legacy in accordance with design guidelines, plans and
specifications previously or to be prepared therefor;
(t) the conditions, covenants and restrictions imposed or to be imposed upon
the Assigned Property or any portion thereof under the Property Documents or the
Entitlements;
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 7
General 11-10-16 FINAL.docx
(u) the contents of the Memorandum of Agreement, the Federal Deeds, the
Base Closure Law and the FOST; and
(v) any other matters.
3. !Release/ Continuing Liability! under the DDA
[{Delete (not applicable) for Transfer to Permitted Transferee% Delete (not applicable)
if terms of Section 2.2.3(a)(iv) for release of Transferor are not met] As of the Assignment
Effective Date, Transferor shall be released from all obligations under the Property Documents
with respect to the Transfer Property, the construction and Completion of the Vertical
Improvements, and the other obligations expressly assumed by the Transferee hereunder;
provided, however, that notwithstanding the assignment in Section I of this Assignment, the
assumption in Section 2 of this Assignment, and the City's consent attached to this Assignment,
Transferor shall not be released from the obligations identified in Section 2.2.3(a)(iv) of the
DDA.]
{Include the following language if Affiliate Transfer or Terms for release of
Transferor under Section 2.2.3(a)(iv) are not met] Notwithstanding the Transfer described in
this Assignment, Transferor acknowledges that it shall not be relieved or released from its
obligations as "Developer" under the Property Documents, Transferor shall remain fully liable
under the Property Documents for all matters and obligations arising prior to the Assignment
Effective Date, and Transferor and Transferee shall have joint and several liability with respect
to the obligations of Developer under the Property Documents arising from and after the
Assignment Effective Date and the City shall be entitled to look to Transferor to fully comply
with this Agreement as though there had not been a Transfer. Further, Transferor shall not be
relieved or released from the Ongoing Matters unless and until Transferor is expressly released
in writing by the City; and nothing in this paragraph (3) shall limit Transferor's liability during
any applicable Additional Liability Period.
4. Indemnity.
Transferee shall indemnify, protect, defend, assume all responsibility for and hold
harmless Transferor and its members, officers, agents, affiliates, employees, contractors,
consultants, and representatives (collectively referred to as the "Transferor Indemnified
Parties") with counsel reasonably acceptable to Transferor, from and against any and all Claims
arising from or relating to Transferee's failure to perform its obligations under, or otherwise
comply with, the DDA, any of the Property Documents, or this Assignment. [This section may
be modified if the purchase and sale documentation between Transferor and Transferee
provides for different language with respect to indemnification.]
5. No Waiver or Modification.
Nothing contained in this Assignment shall modify in any way any other provisions of
the Property Documents and/or the Entitlements. Transferee acknowledges that it is taking title
to and is assuming the Assigned Property subject to, among other things, the rights of the City
and Developer as described in the Property Documents.
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 8
General 11-10-16 FINAL.docx
6. Additional Documents.
Transferor and Transferee shall each execute and deliver to the other party, upon demand,
such further documents, instruments and conveyances, and shall take such further actions as are
reasonably necessary or desirable to effectuate the intent and purposes of this Assignment.
7. Representations and Warranties of Transferee.
Transferee represents and warrants to the City as follows:
7.1 Transferee has the necessary experience, financial experience and qualifications
necessary to perform as Transferee pursuant to this Assignment and the Property Documents to
construct and complete the Project, and, without limiting the foregoing, Transferee is
experienced in the development, management, and leasing of commercial projects of the size and
type described in the Property Documents and understands the process and requirements
associated with projects such as the Project described herein.
7.2 Transferee's acquisition of the Property, development of the Project and its other
undertakings pursuant to this Assignment and the Property Documents are for the purpose of
timely development of the Development Parcels in accordance with the Schedule of Performance
attached to the DDA and not for speculation or land holding.
7.3 Transferee is a [ J [company], duly organized, and validly existing
and in good standing under the laws of the State of ,] is duly qualified to do
business and in good standing in the State of California and each other jurisdiction where the
operation of its business or its ownership of property or the performance of Transferee's
obligations under this Assignment and the Property Documents make such qualification
necessary.
7.4 Transferee has (or will have prior to the date by which a particular step is required
to be taken or performance of a particular obligation is required to be commenced pursuant to
this Assignment or any of the Property Documents) all requisite power and authority required to
enter into this Assignment and the instruments referenced in this Assignment and the Property
Documents, to assume and perform the obligations of "Developer" under the Property
Documents, to consummate the transaction contemplated hereby and to take any steps
contemplated thereby or hereby, and to perform its obligations hereunder and thereunder.
7.5 Transferee has obtained (or will have obtained prior to the date by which a
particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Assignment or any Property Documents) all required consents in
connection with entering into this Assignment and the instruments and documents referenced in
this Assignment and the Property Documents, assuming and performing the obligations of
"Developer" under the Property Documents to which Transferee is or shall be a party and the
consummation of the transactions contemplated hereby and thereby.
7.6 The individuals executing this Assignment and the individuals that will execute
the instruments referenced in this Assignment and the Property Documents on behalf of
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 9
General 11-10-16 FINAL.docx
Transferee have, or will have upon execution thereof, the legal power, right and actual authority
to bind Transferee to the terms and conditions hereof and thereof.
7.7 This Assignment has been duly authorized, executed and delivered by Transferee
and all documents required in this Assignment or the Property Documents to be executed by
Transferee pursuant to this Assignment or the Property Documents shall be, at such time as they
are required to be executed by Transferee, duly authorized, executed and delivered by Transferee
and are or shall be, at such time as the same are required to be executed hereunder, valid, legally
binding obligations of and enforceable against Transferee in accordance with their terms, except
as enforceability may be limited by bankruptcy laws or other similar laws affecting creditors'
rights.
7.8 Neither the execution or delivery of this Assignment, the documents referenced in
this Assignment or the Property Documents, nor the incurring of the obligations set forth in this
Assignment or the Property Documents and the certificates, declarations and other documents
referenced in this Assignment and the Property Documents, nor the consummation of the
transactions contemplated in this Assignment or the Property Documents, nor compliance with
the terms of this Assignment and the documents referenced in this Assignment or the Property
Documents, will violate any provision of law or any order of any court or Governmental
Authority to which Transferee is subject or conflict with or result in the breach of any terms,
conditions, or provisions of, or constitute a default under any bond, note, or other evidence of
indebtedness or any contract, indenture, mortgage, deed of trust, loan partnership agreement,
lease or other agreements or instruments to which Transferee or any of its members are a party
and which affect the Property or the transactions contemplated by this Assignment or the
Property Documents.
7.9 No attachments, execution proceedings, assignments of benefit to creditors,
bankruptcy, reorganization or other proceedings are pending or, to the best of Transferee's
knowledge, threatened against Transferee or its members.
7.10 Transferee is relying solely upon its own inspections and investigations in
proceeding with this Assignment and the assumption of the Property Documents and the
transactions contemplated hereby and thereby, and is not relying on the accuracy or reliability of
any information provided to it by the City, on any oral or written representation (excepting only
those representations and warranties of the City as of the Effective Date (as such term is defined
in the DDA) expressly set forth in Sections 3.3 and 18.11.2 of the DDA) or on the non -disclosure
of any facts or conclusions of law made by the City, or any of its elected and appointed officials,
officials, employees, agents, attorneys or representatives made in connection with this
Assignment or the Property Documents. In making such investigation and assessment,
Transferee has been provided access to any persons, records or other sources of information
which it has deemed appropriate to review and it has thereafter completed such investigation and
assessment. Without limiting the generality of the foregoing provisions, Transferee
acknowledges that, except as set forth in Section 3.3.8 of the DDA, the City has not made and
will not make any representations or warranties concerning the condition of the Property, the
compliance or non-compliance of the Property or any portion thereof with Environmental Laws
or the existence or non-existence of Hazardous Materials in relation to the Property or any
portion thereof or otherwise.
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 10
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7.11 To Transferee's knowledge, there are no adverse conditions or circumstances, no
pending or threatened litigation, governmental action, or other condition which could prevent or
materially impair Transferee's ability to develop the Transfer Property and the Project as
contemplated by the terms of this Assignment and the Property Documents.
7.12 Except as set forth in this Assignment and the Property Documents, Transferee
has not paid or given, and will not pay or give, any third Person any money or other
consideration for obtaining this Assignment, other than the normal cost of conducting business
and cost of professional services such as architects, engineers and attorneys.
7.13 All reports, documents, instruments, information and forms of evidence delivered
by Transferee to the City concerning or related to this Assignment and the Property Documents
and the transactions contemplated hereby and thereby are, to the best of Transferee's knowledge,
accurate and correct and sufficiently complete at the time of submission to give the City true and
accurate knowledge of the subject matter, and do not contain any misrepresentation or omission.
7.14 Prior to the Assignment Effective Date, Transferee has delivered evidence of
equity capital and financial capacity to comply with the obligations of Transferee under this
Assignment and the Property Documents required to be satisfied under the DDA in the form of
the information specified in Section 2.2.3(a)(ii) of the DDA and including a binding contractual
commitment to fund from the Equity Investor if required by the DDA ("Financial
Information"). The Financial Information remains true and correct as of the Assignment
Effective Date and has not been amended or modified. Based on the Financial Information,
Transferee has, as of the Assignment Effective Date, the equity capital and financial capacity, to
comp.ly with the obligations of Transferee under this Assignment and the Property Documents
required to be satisfied under the DDA
7.15 Prior to the Assignment Effective Date and as a condition to the consent of the
City to the Assignment, Transferor and Transferee, as the proposed "Developer", have executed
and delivered that certain [Purchase and Sale Agreement/Ground Lease , dated
, 201 and [add all other agreement executed or proposed to be executed by
Transferor and Transferee in connection with the Transfer, development, use and maintenance of
the Transfer Property) (the "Conveyance Document[sJ ), a copy of [each off which has been
delivered by Transferor to the City. The Conveyance Document[s]: [is/are] in full force and
effect and [has/have] not been amended, modified or terminated. Transferee shall provide notice
to the City of all amendments, modifications or proposed terminations by Transferor or
Transferee of the Conveyance Document[s or any one thereof] and shall not amend, modify or
terminate [the/any] Conveyance Document[s or any one thereof], without the prior consent of
City in its sole discretion where required by this Agreement or the DDA. Transferee
acknowledges that, notwithstanding the execution by Transferee and Transferor of the
Conveyance Document[s], the City has the right, in its sole discretion to approve and/or
disapprove (1) Transferee as "Developer" under the Property Documents; (2) all provisions of
the Conveyance Documents to confirm that such provisions are not inconsistent with the
requirements of the DDA and the Property Documents; (3) any encumbrances established by or
provisions of the Conveyance Document[s] that would purport to establish covenants running
with the land, equitable servitudes or other matters that could have the effect of binding
successors in interest to Transferee, including the City, acquiring an interest in the Transfer
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 1 1
General 11-10-16 FINAL.docx
Property or the Transfer Interests and (4) any other matters as further set forth in Section 2.2.3(b)
and/or Section 4.6 of the DDA, as applicable. [Foregoing is applicable only for assignment that
is not a Permitted Transfer.] Delivery of the foregoing documents by Transferor and Transferee
shall be subject to the provisions of Section 18.23 of the DDA.
7.16 Transferee does not have any contingent obligations or any other contracts the
performance or nonperformance of which could affect the ability of Transferee to carry out its
obligations hereunder. Transferee has not and shall not undertake such additional projects as
could reasonably be expected to jeopardize the sufficiency of such equity, capital and firm and
binding commitments for the purposes expressed in the preceding sentence.
7.17 [Except as set forth in Exhibit , there/ There] are no legal proceedings either
pending or, to the best of Transferee's knowledge, threatened, to which Transferee is or may be
made a party, or to which any of Transferee's property, or the Transfer Property, is or may
become subject, which could materially affect the ability of Transferee to carry out its
obligations hereunder.
Transferee's representations and warranties set forth in this Section 7 shall survive each Close of
Escrow until the termination of the DDA with respect to the Transfer Property and shall not be
merged with any Quitclaim Deed. The phrase "to Transferee's knowledge" and similar phrases
means those Persons Transferee represents as having knowledge of the transactions and
Transferee and accepted by the City, comprised of [ADD NAMES] in each case without any
duty of inquiry (collectively, the "Transferee Knowledge Parties"). Notwithstanding anything
to the contrary contained herein, none of the Transferee Knowledge Parties shall be personally
liable for any inaccuracy or breach by Transferee of the representations and warranties contained
in this Section 8 or elsewhere in this Assignment or the Property Documents. Transferee shall
promptly advise the City in writing if any of the Transferee Knowledge Parties becomes aware
(without any duty of inquiry) that any representation or warranty made by Transferee in or
pursuant to this Assignment is or becomes untrue in any material respect prior to each Close of
Escrow.
8. No Real Estate Commissions.
Transferor and Transferee each represents for the benefit of the City that it has engaged
no broker, agent or finder in connection with this Assignment or the transactions identified in
this Assignment or the Property Documents, other than disclosed to City in writing prior to the
Assignment Effective Date. Each of Transferor and Transferee hereby agrees to indemnify and
hold the City and its elected and appointed officials, employees and representatives harmless
from any losses and liabilities arising from or in any way related to any claim by any broker,
agent, or finder retained by Transferor and/or Transferee as applicable regarding this
Assignment, the Property Documents or development of the Project or the transactions identified
in this Assignment and the Property Document.
9. Miscellaneous.
9.1 Modification. No amendment, change, modification or supplement to this
Assignment shall be valid and binding on Transferor or Transferee unless it is in writing and
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 12
General 11-10-16 FINAL.docx
signed by both Transferor and Transferee. [{To be inserted only in connection with a Transfer
that is not a Permitted Transfer:} and with the written consent of the City thereto.] No
amendment, change, modification or supplement to this Assignment shall be deemed to be part
of the consent or deemed to be consented to by the City, unless the City executes a separate
written consent to such amendment, change, modification or supplement.
9.2 Applicable Law. This Assignment shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, irrespective of
California's choice -of -law principles.
9.3 BindingEffect. ffect. This Assignment and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of Transferor and Transferee
and their respective heirs, legal representatives, successors and assigns.
9.4 Counterparts. This Assignment may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Assignment shall not be effective until the execution and delivery by Transferor and Transferee
of at least one set of counterparts [{to be inserted only in connection with a Transfer that is not
a Permitted Transfer:} (together with an executed counterpart of the City's consent attached to
this Assignment)]. A counterpart of this Assignment that is executed and delivered electronically
(by facsimile machine or email) shall not be effective unless an ink -signed original executed
copy of the signature page of this Assignment is also promptly delivered to the other party, and
such ink -signed original executed page is actually received by the other party. Transferor and
Transferee hereby authorize each other to detach and combine original signature pages and
notarial acknowledgements and consolidate them into a single identical original. Any one of
such completely executed counterparts shall be sufficient proof of this Assignment as a duly and
validly executed agreement.
9.5 City as Third Party Beneficiary. Transferor and Transferee hereby acknowledge
and agree that until the Certificate of Compliance is recorded in the Official Records with respect
to the Transfer Property, the City shall be an intended third party beneficiary under this
Assignment and the City shall have the right to enforce the terms and provisions of this
Assignment applicable to the City. Other than the City, there shall be no third party beneficiaries
of this Assignment.
9.6 Notices. From and after the Amendment Effective Date, all notices that the City
delivers to the "Developer" under the Property Documents and/or the Entitlements with respect
to the Transfer Property shall also concurrently be delivered to Transferee pursuant to
Section 18.6 of the DDA, shall be delivered to Transferee only at the following addresses:
Transferee:
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 13
General 11-10-16 FINAL.docx
with a copy to:
[legal counsel]
[signature page follows]
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 14
General 11-10-16 FINAL.docx
Transferor and Transferee each has caused this Assignment to be duly executed by its duly
authorized officer as of the Assignment Effective Date.
Dated:
Dated:
"TRANSFEROR"
By: _
Name:
Title:
"TRANSFEREE"
a
By:
Name:
Title:
By:
Name:
Title:
{City consent on next page I
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 15
General 11-10-16 FINAL.docx
f THE FOLLOWING ACKNOWLEDGEMENT IS TO BE INSERTED ONLY IN
CONNECTION WITH TRANSFER THAT IS NOT A PERMITTED TRANSFER
ACKNOWLEDGMENT AND CONSENT BY CITY OF TUSTIN
By executing in the space set forth below, the City of Tustin hereby:
(a) Acknowledges receipt of the Assignment and Assumption Agreement
(the "Assignment") to which this Consent is attached;
(b) Consents to the making of the Assignment between Transferor and
Transferee, subject to the terms and conditions set forth in the Assignment and this
Acknowledgement and Consent by City of Tustin;
(c) Agrees that [insert name of Transferee], a J
(the assignee in the Assignment) shall be deemed by the City to be the "Developer" under the
Property Documents with respect to the Transfer Property, from and after the Assignment
Effective Date; and
(d) Acknowledges the additional addresses for Notices for Transferee set forth
in the Assignment and agrees that from and after the Assignment Effective Date all notices from
City to Developer under the Property Documents and the Entitlements with respect to the
Transfer Property shall be delivered to Transferee at such addresses.
(e) This Consent by the City constitutes the consent required pursuant to
Section 2.2.3(a) of the DDA with respect to Transfer to a Transferee and constitutes the City's
acknowledgment that the requirements of Section 2.2.3(a) have been satisfied with respect to the
Transfer described in this Assignment;
(f) [{Include the following language if terms for release of Transferor
under Section 2.2.3(a)(iv) are not met] Notwithstanding the Transfer and the assumption of the
Transfer Property and Developer obligations by Transferee as described in this Assignment,
Transferor acknowledges that it shall not be relieved or released from its obligations as
"Developer" under the Property Documents and the City shall be entitled to look to Transferor
to fully comply with the Property Documents as though there had not been a Transfer; and
unless such obligations are assumed by Transferee hereunder, Transferor is and shall remain
solely liable under the Property Documents for all matters and obligations arising prior to the
Assignment Effective Date, and Transferor and Transferee shall have joint and several liability
with respect to the obligations of Developer and Assigned Property assumed by Transferee
pursuant to this Assignment. Further, Transferor shall not be relieved or released from the
Ongoing Matters unless and until Transferor is expressly released in writing by the City; and
nothing in this paragraph (f) shall limit Transferor's liability during any applicable Additional
Liability Period.
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 16
General 11-10-16 FINAL.docx
[{Delete (not applicable) if terms of Section 2.2.3(a)fly) for release of Developer are not
met] Transferor is released from the obligations of Developer under the Property Documents
solely with respect to the Assigned Property and solely with respect to matters arising from and
after the Assignment Effective Date; provided that, Transferor is not relieved or released from
the Ongoing Matters unless and until Transferor is expressly released in writing by the City; and
nothing in this paragraph (f) shall limit Transferor's liability during any applicable Additional
Liability Period.]
This Consent by the City to the Assignment shall not constitute any of the following: (i) evidence
of compliance with or satisfaction of any obligation of Transferor under any of the Property
Documents, or any other agreement between Transferor and the City, except for the obligation of
Transferor to obtain the City's consent to any Transfer (ii) an agreement by the City to be bound
by or subject to any provision in any agreement between Transferor and Transferee or (iii) a
reaffirmation, renewal or remaking of any of the representations and warranties made by the City
in the Property Documents, except for the representation set forth in Section 18.11.2 of the DDA.
The consent by the City to the assignment by Transferor to Transferee and the review and
consent to agreements executed by and between Transferor and Transferee in no event should be
considered a consent by the City to amend or modify any provision of the Property Documents
or a waiver by the City of the provisions of the Property Documents, which remain binding on
City, Transferor and Transferee in accordance with their terms. In the event of any inconsistency
between Transferor and Transferee agreements on the one hand and any provision of the
Property Documents on the other hand, the provisions of the Property Documents shall prevail in
all cases as concerns the rights and obligations of the City.
{signatures on followingpage}
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 17
General 11-10-16 FINAL.docx
CITY:
CITY OF TUSTIN
Dated: 120 By:
ATTEST:
By:
Erica N. Rabe
City Clerk
APPROVED AS TO FORM:
By:
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP
Tustin Special Real Estate Counsel
By:
Amy E. Freilich
Jeffrey C. Parker
City Manager
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- 18
General 11-10-16 FINAL.docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
Notary Public, personally appeared
before me,
(insert name of notary)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- S-1
General 11-10-16 FINAL.docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
Notary Public, personally appeared
before me,
(insert name of notary)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- S-2
General 11-10-16 FINAL.docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
EXHIBIT A
Legal Description of the Development Parcels
[Insert Legal Description]
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- Exhibit "A"
General 11-10-16 FINAL.docx
EXHIBIT B
Legal Description of the Transfer Property
[Insert Legal Description of Transfer Property]
Tustin Cornerstone I DDA Art 16A Form ATTACHMENT 16A City of Tustin/Flight Venture LLC
of Assignment Assumption Agmt- Exhibit "B"
General 11-10-16 FINAL.docx
ATTACHMENT 16B
FORM OF PHASE TRANSFER ASSIGNMENT AND ASSUMPTION AGREEMENT
(FOR SECTIONS 2.2.3(b) TRANSFERS)
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT AND ASSUMPTION AGREEMENT
(Cornerstone I—Phase [I /2})
This ASSIGNMENT AND ASSUMPTION AGREEMENT (Cornerstone I—Phase [I
/2]) ("Assignment") is made as of , 20 (the "Assignment Effective Date") by
and between [FLIGHT VENTURE LLC, a Delaware limited liability company/{or specify other
if DDA or property to be Transferred has been assigned]] ("Transferor") and
, a ("Transferee"), [[to be inserted only in
connection with a Transfer that is not a Permitted Transfer:} with the consent of the CITY OF
TUSTIN, a municipal corporation of the State of California (the "City "),/ with reference to the
following matters:
A. The City and [Transferor/ Flight Venture LLC, a Delaware limited liability
company ("Flight Venture'), the predecessor in interest to Transferor/ entered into that certain
Tustin Legacy Disposition and Development Agreement Cornerstone I, dated as of
, 2016 (the "DDA"), relating to the conveyance from the City to "Developer"
(as that term is defined in the DDA) of that certain real property legally described on Exhibit "A"
attached hereto (the "Development Parcels"), comprised of the Phase 1 Parcel and the Phase 2
Parcel as described on Exhibit "A", and the subsequent development of the Development Parcels
by Developer, all as more particularly set forth in the DDA. Pursuant to the DDA, Developer
agreed to develop and construct on the Development Parcels certain Improvements comprising
the Proj ect [ {unless Transfer is to a Permitted Transferee, insert the following.] and pursuant
to the DDA, Developer has Completed the Minimum Horizontal Improvements, Completion of
which is a condition precedent under the DDA to the Transfer described by this Assignment/.
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All initially capitalized terms not otherwise defined in this Assignment shall have the meanings
ascribed to such terms in the DDA.
B. Pursuant to the DDA, the City has previously conveyed the Phase 1 Parcel to
Transferor [if other, specify here and establish relationship to Transferor/. Transferor owns all
right, title and interest of [Phase I /Phase 2] Developer with respect to [the Phase [I /2] Parcel
/ the Transfer Parcel/ and the rights and obligations of the Transferor as "Developer" under the
Property Documents (as defined below) with respect to the [Phase I /Phase 2} Project, the
[Phase I /Phase 2] Property and/or the Improvements existing or to be constructed thereon,
[{insert prior to the Phase 2 Property Close of Escrow if applicable:} including the Option,/
(the "Phase [I /2] Provisions") and desires to convey its right, title and interest thereto to
Transferee and Transferee desires to assume the foregoing as further set forth herein.
C. Concurrently with the execution and delivery of this Assignment, Transferor is
conveying to Transferee all of Transferor's right, title and interest in and to [the Phase [I /2]
Parcel/that certain real property legally described on Exhibit `B" attached hereto] (the
"Transfer Parcel") and all Improvements, if any, located thereon, all appurtenances pertaining
thereto and all permits, licenses, approvals and authorizations issued by any Governmental
Authority in connection therewith (collectively with the Transfer Parcel, the "Transfer
Property"), for purposes of construction and operation by Transferee of a portion of the Project
and other Transferee Improvements (defined below) on the Transfer Parcel. Pursuant to this
Assignment, Transferor is also assigning to Transferee, all of Transferor's right, title and interest
in and to the Project and the Property Documents as and to the extent relating to the Transfer
Property and the Phase [I /2] Provisions (as defined below) and Transferee is assuming the
foregoing and agreeing to comply with the terms of and perform all obligations of Developer
under the Property Documents with respect to Phase [I /2] and the Phase [I /2] Provisions,
including without limitation, construction of the Phase [I /2] Improvements and use and
maintenance of the Phase [I /2] Project, the Phase [I /2] Property and the Improvements
located thereon and all matters related thereto.
D. Pursuant to Section 2 of the DDA (including without limitation, Section 2.2.3(b)
of the DDA), a Transfer must include, among other things, the execution and delivery of an
Assignment and Assumption Agreement. [[Add for Transfer that are not Permitted Transfers
only:} The DDA requires that certain Transfers be approved by the City and provides the City
the right to approve certain Transferees as `Developer" with respect to the portions of the
Project so Transferred.]
E. Transferor and Transferee are entering into this Assignment in order to fulfill the
obligations of Transferor, as Developer, and Transferee under Section 2 of the DDA and to
confirm for the benefit of the City that Transferee will develop and use the Transfer Property in
accordance with the requirements of the DDA, including, without limitation, the Scope of
Development and the Schedule of Performance, and the other Property Documents.
F. The DDA imposes certain covenants, conditions, payment obligations and
restrictions on the Development Parcels and, prior to the filing of a Certificate of Completion,
the DDA restricts Developer's ability to transfer ownership and/or control of the Development
Parcels (including without limitation, the Transfer Parcel), the Project, the Improvements and/or
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Developer's obligations with respect to the Project (including, without limitation, Developer's
obligations with respect to the off-site infrastructure improvements), all as set forth in the DDA.
G. Simultaneously with this Transfer Event, Transferee will be acquiring the
Transfer Property from Transferor pursuant to and in accordance with the terms of the DDA.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Transferor and Transferee agree as follows:
1. Assignment
1.1 As of the Assignment Effective Date, Transferor hereby assigns, conveys,
transfers, bargains, grants, sells and sets over to Transferee, as and to the extent owned or held
by Transferor, the following (collectively, the "Assigned Interests"):
(a) All of Transferor's right, title and interest in and to the Project and the
documents listed on Exhibit "C" attached hereto (the "Property Documents") with
respect to the Transfer Property including all requirements of the Property Documents
that are imposed upon "Developer", with respect to the Project, the Property, the
Improvements now or to be constructed thereon, but only as and to the extent relating to
the Transfer Property;
(b) All obligations of Transferor under the Property Documents and the Phase
[I / 2] Provisions with respect to the Transfer Property including, without limitation,
(i) the obligation to construct and Complete [[insert only if conveyance is pursuant to
Permitted Transfer and is permitted by DDA to take place prior to completion.] the
Minimum Horizontal Improvements (to the extent not then constructed and Completed by
the Phase fl/ 2] Developer)]/ [[If the Transfer is of Phase 2 and the Minimum
Horizontal Improvements are not then Complete, add the following:}; provided that,
although the obligations under the Property Documents with respect to the construction
and Completion of the Minimum Horizontal Improvements on the Transfer Property shall
be retained by Transferor, Transferee shall be obligated to construct and Complete the
Minimum Horizontal Improvements to the extent Transferor fails to perform such
obligations in a timely manner in accordance with the Schedule of Performance in the
DDA, as further specified in the Property Documents/ [If the Transfer is of Phase I and
the Minimum Horizontal Improvements are not then Complete, add the following:} and
the Phase 2 Transferor Obligations including the obligation to construct and Complete
the Minimum Horizontal Improvements on the Transfer Property in accordance with the
Schedule of Performance in the DDA, as further specified in the Property Documents]
and the Minimum Phase [I /2] Improvements on the Transfer Property (collectively, the
"Transferee Improvements") in accordance with the Schedule of Performance and
(ii) the obligation to maintain the Improvements located on the Transfer Property in
accordance with the Property Documents, and (iii) any and all additional corresponding
rights, obligations, conditions, limitations and restrictions under the Property Documents
imposed upon or with respect to the Transfer Property (and the portions of the Project
and all Improvements thereon or to be located thereon) arising from and after the
Assignment Effective Date, including, without limitation, the rights, obligations,
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conditions, limitations, releases, indemnities and restrictions contained within the DDA
and the other Property Documents;
(c) All Entitlements and Development Permits and other development rights
relating to the Transfer Property;
(d) All plans, specifications, maps, drawings, and other renderings owned by
Transferor and relating to the Transfer Property, the Project and the Entitlements
pertaining thereto; {and}
(e) All warranties, claims, and any similar rights of Transferor relating to and
benefiting the Transfer Property or the rights and interests transferred pursuant to this
Assignment; {and}
(f) {Insert any additional specific rights or obligations being assigned or
assumed by the Transferee. The assignment should generally be limited to those matters
related to development construction, maintenance of the Project and the Transfer
Property. j
1.2 The Assigned Interests together with the Transfer Property are collectively
referred to in this Assignment as the "Assigned Property."
2. Assumption.
2.1 Transferee, on behalf of itself and its successors and assigns, from and after the
Assignment Effective Date, hereby expressly assumes and receives the Assigned Property and
each of the obligations set forth below to which it hereby expressly agrees it is subject and
Transferee agrees with Transferor (and such agreement is expressly also made for the benefit of
the City and may be directly enforced by the City) as follows, in each case, to the extent relating
to the period from and after the Assignment Effective Date: {NOTE: the following to be revised
as appropriate if obligations of Developer under the DDA have been completed}
(a) all of the Assigned Property and all of the obligations, conditions,
limitations and restrictions imposed upon the Assigned Property and/or the Transferor
with respect to the Assigned Property under the Property Documents;
(b) all rights and obligations of the Transferor as "Developer" under the DDA
and the other Property Documents with respect to the Phase [I /2] Provisions, the Phase
[I /2] Project, the Phase [I /2] Property and the Improvements thereon;
(c) Upon and subject to the terms and provisions of the Property Documents,
all the obligations to perform, construct, install and Complete any and all of the
Improvements required by the DDA to be constructed with respect to Transfer Property,
including, without limitation, the obligations to construct the Transferee Improvements in
accordance with the Entitlements, the Approved Plans, the Scope of Development and
within the time periods specified in the Schedule of Performance; [{If the Transfer is of
Phase 2 and the Minimum Horizontal Improvements are not then Complete, add the
following.1; provided that the obligations under the Property Documents with respect to
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the construction and Completion of the Minimum Horizontal Improvements on the
Transfer Property shall be retained by Transferor and shall be carried out by Transferee
only to the extent Transferor fails to perform such obligations in a timely manner in
accordance with the Schedule of Performance in the DDA, as further specified in the
Property Documents] [If the Transfer is of Phase I and the Minimum Horizontal
Improvements are not then Complete, add the following.] and the Phase 2 Transferor
Obligations including the obligation to construct and Complete the Minimum Horizontal
Improvements on the Transfer Property in accordance with the Schedule of Performance
in the DDA, as further specified in the Property Documents]; and
(d) all the obligations, conditions, limitations and restrictions to which
Transferor and/or the Assigned Property are subject by reason of the Entitlements related
to the Transfer Property;
(e) Upon and subject to the terms and provisions of the Property Documents,
Transferee shall pay and perform all obligations of "Developer" under the DDA and the
other Property Documents that relate to the Assigned Property, including, without
limitation, the following obligations: (i) the obligation to construct and Complete all
Improvements to be constructed on the Transfer Property in accordance with the Scope of
Development and within the time periods specified in the Schedule of Performance;
(ii) the obligation to pay all sums required to be paid by "Developer" as set forth in the
Property Documents in connection with the ownership and/or development of the
Assigned Property, to the extent such amounts have not been paid as of the Assignment
Effective Date; (iii) the obligation to develop the Transfer Property in full compliance
with all then -existing Entitlements and the Approved Plans; and (iv) as a condition
precedent to this Assignment, the obligation of the Controlling Person of the Transferee
to deliver to the City a Guaranty (or if such Controlling Person is not approved by the
City as the Guarantor, another Person approved by the City in its sole discretion as the
Guarantor in accordance with Section 4.6 of the DDA) [./and]
(f) {Insert any additional obligations to be assumed by Transferee.}
2.2 For avoidance of doubt, and without limiting the generality of the foregoing,
Transferee hereby agrees: (a) that Transferee has hereby assumed and shall be subject to and
obligated to perform in accordance with or otherwise comply with the requirements of the
Property Documents and (b) that it shall be subject to all rights and remedies of the City under
the Property Documents, including without limitation, the Right of Repurchase and the Right of
Reversion set forth in the DDA.
2.3 Transferee hereby acknowledges and agrees, for the benefit of Transferor and
City that it shall remain fully responsible to perform and satisfy all of the obligations and
liabilities assumed by Transferee pursuant to Section 2.1 and 2.2 above regardless of any of the
following:
(a) the value of the Assigned Property or the income to be derived from the
Assigned Property;
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(b) the existence or non-existence of any liens, easements, covenants,
conditions, restrictions, claims or encumbrances affecting the Assigned Property
(including without limitation any of the foregoing arising from or related to the
Entitlements or any of the Property Documents);
(c) the suitability of the Assigned Property for any and all future
development, uses and activities which Transferee may conduct or Transferor or any
prior Developer under the Property Documents may have conducted thereon, including,
without limitation, the development of the Project as described in the Property
Documents and this Assignment;
(d) the ability of the City or any third party to complete, or likelihood of the
completion of, any of the improvements and infrastructure described by the General Plan,
the Reuse Plan, the Specific Plan, the Tustin Legacy Backbone Infrastructure Program or
any other plan or policy of the City or any other Governmental Authority;
(e) the compliance with or enforcement by the City or any third party with
respect to the Reuse Plan, the General Plan, the Specific Plan, the Special Restrictions,
the CC&Rs, the Tustin Legacy Backbone Infrastructure Program or any other agreement
or governmental restriction or plan affecting Tustin Legacy by the City or any third party;
(f) the habitability, merchantability or fitness for a particular purpose of the
Assigned Property;
(g) the manner, quality, state of repair or lack of repair of the Assigned
Property;
(h) the nature, quality or condition of the Assigned Property including without
limitation, water, soil and geology;
(i) the compliance of or by the Assigned Property and/or its operation in
accordance with any of the Entitlements or any Governmental Requirements, including
without limitation, the National Environmental Policy Act, CEQA and the Americans
with Disabilities Act of 1990;
0) the manner or quality of the construction or materials, if any, incorporated
into any part of the Transfer Property or the Improvements;
(k) the presence or absence of Hazardous Materials, including without
limitation, asbestos or lead paint at, on, under, or adjacent to the Transfer Property or any
other portion of the Development Parcels or Tustin Legacy;
(1) the content, completeness or accuracy of the information, documentation,
studies, reports, surveys and other materials, delivered to Transferee by Transferor or
others in connection with Transferee's review of the Assigned Property and the
transactions contemplated in the Property Documents or this Assignment;
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(m) the conformity of the existing improvements on the Transfer Property, the
Development Parcels and/or at Tustin Legacy, if any, to any plans or specifications
therefor;
(n) compliance of the Assigned Property with past, current or future
Governmental Requirements relating to zoning, subdivision, planning, building, fire,
safety, health or environmental matters and/or covenants, conditions, restrictions or deed
restrictions;
(o) the deficiency of any undershoring or of any drainage to, on or from the
Transfer Property or any other portion of Tustin Legacy;
(p) the condition of any adjoining land owned by the City, including without
limitation the property covered by the Landscape Agreement and the property covered by
the Roadway, Landscape and Utility Easement Agreement and the adjoining City Park
and any improvements thereon;
(q) the fact that all or a portion of the Transfer Property may be located on or
near an earthquake fault line or falls within an earthquake fault zone established under the
Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 2621-
2630 or within a seismic hazard zone established under the Seismic Hazards Mapping
Act, California Public Resources Code Sections 2690-2699.6 and Sections 3720-3725;
(r) the existence or lack of vested land use, zoning or building entitlements
affecting the Assigned Property;
(s) the construction or lack of construction of Tustin Legacy or if constructed,
the construction of Tustin Legacy in accordance with design guidelines, plans and
specifications previously or to be prepared therefor;
(t) the conditions, covenants and restrictions imposed or to be imposed upon
the Assigned Property or any portion thereof under the Property Documents or the
Entitlements;
(u) the contents of the Memorandum of Agreement, the Federal Deeds, the
Base Closure Law and the FOST; and
(v) any other matters.
{Release/ Continuing Liability! under the DDA.
3.1 {Delete (not applicable) for Transfer to Permitted Transferee or for Transfer of
Phase I / Delete (not applicable) if Phase 2 Assignment takes place prior to Phase 2 Property
Close of Escrow} If this Phase 2 Assignment takes place concurrently with or following the
Phase 2 Property Close of Escrow, and the Phase 2 Guaranty by the approved Phase 2 Guarantor
and an approved Phase 2 Joint Venture Agreement has been delivered to the City, and there has
been compliance with the requirements of Section 2.2.3(b) and 4_6 of the DDA, then, except as
set forth below Transferor shall be released from the obligations of Developer under the DDA
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and the other Property Documents with respect to construction and Completion of the Phase 2
Improvements and with respect to the other obligations expressly assumed by Transferee under
this Phase 2 Assignment; provided that, notwithstanding the foregoing or the assumption of
obligations by Transferee, Transferor shall not be relieved of any of its other obligations under
the DDA and the other Property Documents and specifically, and without limitation shall not be
relieved or released from the Ongoing Matters f{if Transferor is or will be following the
Transfer, the Phase I Developer], or from the Phase 2 Transferor Obligations] which shall
remain the obligations of Transferor and each Successor Owner of the Phase 1 Property or any
portion thereof that is not an End User unless and until such Person is expressly released in
writing by the City.
Alternate 3.1 {Applicable for all circumstances in which Section 3.1 above does not
apply} Notwithstanding the Transfer of Phase 1 Transferor shall not be released from any
obligations of Developer under the DDA and the other Property Documents.
4. Indemnity. Transferee shall indemnify, protect, defend, assume all responsibility for and
hold harmless Transferor and its members, officers, agents, affiliates, employees, contractors,
consultants, and representatives (collectively referred to as the "Transferor Indemnified
Parties") with counsel reasonably acceptable to Transferor, from and against any and all Claims
arising from or relating to Transferee's failure to perform its obligations under, or otherwise
comply with, the Property Documents or this Assignment. [This section may be modified if the
purchase and sale documentation between Transferor and Transferee provides for different
language with respect to indemnification.]
5. No Waiver or Modification.
Nothing contained in this Assignment shall modify in any way any other provisions of
the Property Documents and/or the Entitlements. Transferee acknowledges that it is taking title
to and is assuming the Assigned Property subject to, among other things, the rights of the City
and Developer as described in the Property Documents.
6. Additional Documents.
Transferor and Transferee shall each execute and deliver to the other party, upon demand,
such further documents, instruments and conveyances, and shall take such further actions as are
reasonably necessary or desirable to effectuate the intent and purposes of this Assignment.
7. Representations and Warranties of Transferee.
Transferee represents and warrants to the City as follows:
7.1 Transferee has the necessary experience, financial experience and qualifications
necessary to perform as Transferee pursuant to this Assignment and the Property Documents to
construct and complete the Project, and, without limiting the foregoing, Transferee is
experienced in the development, management, and leasing of commercial projects of the size and
type described in this Assignment and the Property Documents and understands the process and
requirements associated with projects such as the Project described herein.
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7.2 Transferee's acquisition of the Property, development of the Project and its other
undertakings pursuant to this Assignment and the Property Documents are for the purpose of
timely development of the Development Parcels in accordance with the Schedule of Performance
attached to the DDA and not for speculation or land holding.
7.3 Transferee is a [ J [company], duly organized, and validly existing
and in good standing under the laws of the State of ,] is duly qualified to do
business and in good standing in the State of California and each other jurisdiction where the
operation of its business or its ownership of property or the performance of Transferee's
obligations under this Assignment and the Property Documents make such qualification
necessary.
7.4 Transferee has (or will have prior to the date by which a particular step is required
to be taken or performance of a particular obligation is required to be commenced pursuant to
this Assignment or any of the Property Documents) all requisite power and authority required to
enter into this Assignment and the instruments referenced in this Assignment and the Property
Documents, to assume and perform the obligations of "Developer" with respect to [specify:
Phase [1/ 2] or other] under the Property Documents, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations hereunder and thereunder.
7.5 Transferee has obtained (or will have obtained prior to the date by which a
particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Assignment or any Property Documents) all required consents in
connection with entering into this Assignment and the instruments and documents referenced in
this Assignment and the Property Documents, assuming and performing the obligations of
"Developer" under the Property Documents to which Transferee is or shall be a party and the
consummation of the transactions contemplated hereby and thereby.
7.6 The individuals executing this Assignment and the individuals that will execute
the instruments referenced in this Assignment and the Property Documents on behalf of
Transferee have, or will have upon execution thereof, the legal power, right and actual authority
to bind Transferee to the terms and conditions hereof and thereof.
7.7 This Assignment has been duly authorized, executed and delivered by Transferee
and all documents required in this Assignment or the Property Documents to be executed by
Transferee pursuant to this Assignment or the Property Documents shall be, at such time as they
are required to be executed by Transferee, duly authorized, executed and delivered by Transferee
and are or shall be, at such time as the same are required to be executed hereunder, valid, legally
binding obligations of and enforceable against Transferee in accordance with their terms, except
as enforceability may be limited by bankruptcy laws or other similar laws of general application
affecting creditors' rights.
7.8 Neither the execution or delivery of this Assignment, the documents referenced in
this Assignment or the Property Documents, nor the incurring of the obligations set forth in this
Assignment or the Property Documents and the certificates, declarations and other documents
referenced in this Assignment and the Property Documents, nor the consummation of the
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transactions contemplated in this Assignment or the Property Documents, nor compliance with
the terms of this Assignment and the documents referenced in this Assignment or the Property
Documents, will violate any provision of law or any order of any court or Governmental
Authority to which Transferee is subject or conflict with or result in the breach of any terms,
conditions, or provisions of, or constitute a default under any bond, note, or other evidence of
indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement,
lease or other agreements or instruments to which Transferee or any of its members are a party
and which affect the Property or the transactions contemplated by this Assignment or the
Property Documents.
7.9 No attachments, execution proceedings, assignments of benefit to creditors,
bankruptcy, reorganization or other proceedings are pending or, to the best of Transferee's
knowledge, threatened against Transferee or its members.
7.10 Transferee is relying solely upon its own inspections and investigations in
proceeding with this Assignment and the assumption of the Property Documents and the
transactions contemplated hereby and thereby, and is not relying on the accuracy or reliability of
any information provided to it by the City, on any oral or written representation (excepting only
those representations and warranties of the City as of the Effective Date (as such term is defined
in the DDA) expressly set forth in Sections 3.3 and 18.11.2 of the DDA) or on the non -disclosure
of any facts or conclusions of law made by the City, or any of its elected and appointed officials,
officials, employees, agents, attorneys or representatives made in connection with this
Assignment or the Property Documents. In making such investigation and assessment,
Transferee has been provided access to any persons, records or other sources of information
which it has deemed appropriate to review and it has thereafter completed such investigation and
assessment. Without limiting the generality of the foregoing provisions, Transferee
acknowledges that, except as set forth in Section 3.3.8 of the DDA, the City has not made and
will not make any representations or warranties concerning the condition of the Property, the
compliance or non-compliance of the Property or any portion thereof with Environmental Laws
or the existence or non-existence of Hazardous Materials in relation to the Property or any
portion thereof or otherwise.
7.11 To Transferee's knowledge, there are no adverse conditions or circumstances, no
pending or threatened litigation, governmental action, or other condition which could prevent or
materially impair Transferee's ability to develop the Transfer Property and the Project as
contemplated by the terms of this Assignment and the Property Documents.
7.12 Except as set forth in this Assignment and the Property Documents, Transferee
has not paid or given, and will not pay or give, any third Person any money or other
consideration for obtaining this Assignment, other than the normal cost of conducting business
and cost of professional services such as architects, engineers and attorneys.
7.13 All reports, documents, instruments, information and forms of evidence delivered
by Transferee to the City concerning or related to this Assignment and the Property Documents
and the transactions contemplated hereby and thereby are, to the best of Transferee's knowledge,
accurate and correct and sufficiently complete at the time of submission to give the City true and
accurate knowledge of the subject matter, and do not contain any misrepresentation or omission.
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7.14 Prior to the Assignment Effective Date, Transferee has delivered evidence of
equity capital and financial capacity to comply with the obligations of Transferee under this
Assignment and the Property Documents and all other items required to be satisfied under the
DDA in the form of the information specified in Section 2.2.3(b) of the DDA and including a
binding contractual commitment to fund from the Equity Investor if required by the DDA
("Financial Information"). The Financial Information remains true and correct as of the
Assignment Effective Date and has not been amended or modified. Based on the Financial
Information, Transferee has, as of the Assignment Effective Date, the equity capital and financial
capacity, to comply with the obligations of Transferee under this Assignment and the Property
Documents and as required by the DDA.
7.15 [{Following is applicable only for assignment that is not a Permitted Transfer.]
Prior to the Assignment Effective Date, and as a condition to the consent of the City to the
Assignment, Transferor and Transferee, as the proposed `Developer" with respect to the
Assigned Property, have executed and delivered that certain [Purchase and Sale
Agreement/Ground Lease , dated , 20] and [add all other
agreement executed or proposed to be executed by Transferor and Transferee in connection with
the Transfer, development, use and maintenance of the Transfer Property) (the "Conveyance
Document[s/'), a copy of [each of] which has been delivered by Transferor to the City. The
Conveyance Document[s]: [is/are] in full force and effect and [has/have] not been amended,
modified or terminated. Transferee shall provide notice to the City of all amendments,
modifications or proposed terminations by Transferor or Transferee of the Conveyance
Document[s or any one thereof) and shall not amend, modify or terminate [the/any] Conveyance
Document, without the prior consent of City in its sole discretion where required by this
Agreement or the DDA. Transferee acknowledges that, notwithstanding the execution by
Transferee and Transferor of the Conveyance Document[s], the City has the right, in its sole
discretion to approve and/or disapprove (1) Transferee as `Developer" under the Property
Documents; (2) all provisions of the Conveyance Documents to confirm that such provisions are
not inconsistent with the requirements of the DDA and the Property Documents; (3) any
encumbrances established by or provisions of the Conveyance Document[s] that would purport
to establish covenants running with the land, equitable servitudes or other matters that could
have the effect of binding successors in interest to Transferee, including the City, acquiring an
interest in the Transfer Property or the Transfer Interests and (4) any other matters as further set
forth in Section 2.2.3(b) and/or Section 4.6 of the DDA, as applicable. Delivery of the foregoing
documents by Transferor and Transferee shall be subject to the provisions of Section 18.23 of the
DDA.]
7.16 Transferee does not have any contingent obligations or any other contracts the
performance or nonperformance of which could affect the ability of Transferee to carry out its
obligations hereunder. Transferee has not and shall not undertake such additional projects as
could reasonably be expected to jeopardize the sufficiency of such equity, capital and firm and
binding commitments for the purposes expressed in the preceding sentence.
7.17 [Except as set forth in Exhibit , there/ There] are no legal proceedings either
pending or, to the best of Transferee's knowledge, threatened, to which Transferee is or may be
made a party, or to which any of Transferee's property, or the Transfer Property, is or may
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become subject, which could materially affect the ability of Transferee to carry out its
obligations hereunder.
7.18 As of the Assignment Effective Date, Transferor and Transferee [are/are not]
Related Parties as defined in the DDA.
Transferee's representations and warranties set forth in this Section 7 shall survive each Close of
Escrow until the termination of the DDA with respect to the Transfer Property and shall not be
merged with any Quitclaim Deed. The phrase "to Transferee's knowledge" and similar phrases
means those Persons Transferee represents as having knowledge of the transactions and
Transferee and accepted by the City, comprised of [ADD NAMES] in each case without any
duty of inquiry (collectively, the "Transferee Knowledge Parties"). Notwithstanding anything
to the contrary contained herein, none of the Transferee Knowledge Parties shall be personally
liable for any inaccuracy or breach by Transferee of the representations and warranties contained
in this Section 8 or elsewhere in this Assignment or the Property Documents. Transferee shall
promptly advise the City in writing if any of the Transferee Knowledge Parties becomes aware
(without any duty of inquiry) that any representation or warranty made by Transferee in or
pursuant to this Assignment is or becomes untrue in any material respect prior to each Close of
Escrow.
8. No Real Estate Commissions.
Transferor and Transferee each represents for the benefit of the City that it has engaged
no broker, agent or finder in connection with this Assignment or the transactions identified in
this Assignment or the Property Documents, other than disclosed to City in writing prior to the
Assignment Effective Date. Each of Transferor and Transferee hereby agrees to indemnify and
hold the City and its elected and appointed officials, employees and representatives harmless
from any losses and liabilities arising from or in any way related to any claim by any broker,
agent, or finder retained by Transferor and/or Transferee as applicable regarding this
Assignment, the Property Documents or development of the Project or the transactions identified
in this Assignment and the Property Document.
9. Miscellaneous.
9.1 Modification. No amendment, change, modification or supplement to this
Assignment shall be valid and binding on Transferor or Transferee unless it is in writing and
signed by both Transferor and Transferee. [{To be inserted only in connection with a Transfer
that is not a Permitted Transfer.] and with the written consent of the City thereto.] No
amendment, change, modification or supplement to this Assignment shall be deemed to be part
of the consent or deemed to be consented to by the City, unless the City executes a separate
written consent to such amendment, change, modification or supplement.
9.2 Applicable Law. This Assignment shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, irrespective of
California's choice -of -law principles.
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 12
(Agd).Docx
9.3 BindingEffect. ffect. This Assignment and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of Transferor and Transferee
and their respective heirs, legal representatives, successors and assigns.
9.4 Counterparts. This Assignment may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Assignment shall not be effective until the execution and delivery by Transferor and Transferee
of at least one set of counterparts [{to be inserted only in connection with a Transfer that is not
a Permitted Transfer:} (together with an executed counterpart of the City's consent attached to
this Assignment)]. A counterpart of this Assignment that is executed and delivered
electronically (by facsimile machine or email) shall not be effective unless an ink -signed original
executed copy of the signature page of this Assignment is also promptly delivered to the other
party, and such ink -signed original executed page is actually received by the other party.
Transferor and Transferee hereby authorize each other to detach and combine original signature
pages and notarial acknowledgements and consolidate them into a single identical original. Any
one of such completely executed counterparts shall be sufficient proof of this Assignment as a
duly and validly executed agreement.
9.5 City as Third Party Beneficiary. Transferor and Transferee hereby acknowledge
and agree that until the Certificate of Compliance is recorded in the Official Records with respect
to the Transfer Property, the City shall be an intended third party beneficiary under this
Assignment and the City shall have the right to enforce the terms and provisions of this
Assignment applicable to the City. Other than the City, there shall be no third party beneficiaries
of this Assignment.
9.6 Notices. From and after the Amendment Effective Date, all notices that the City
delivers to the "Developer" under the Property Documents and/or the Entitlements with respect
to the Transfer Property shall also concurrently be delivered to Transferee pursuant to
Section 18.6 of the DDA, shall be delivered to Transferee only at the following addresses:
Transferee:
with a copy to:
[legal counsel]
[signature page follows]
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 13
(Agd).Docx
Transferor and Transferee each has caused this Assignment to be duly executed by its
duly authorized officer as of the Assignment Effective Date.
Dated:
"TRANSFEROR"
By: _
Name:
Title:
"TRANSFEREE"
a
By: _
Name:
Dated: Title:
By: _
Name:
Title:
{City consent on next page I
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 14
(Agd).Docx
f THE FOLLOWING ACKNOWLEDGEMENT IS TO BE INSERTED ONL Y IN
CONNECTION WITH TRANSFER THAT IS NOT A PERMITTED TRANSFER
ACKNOWLEDGMENT AND CONSENT BY CITY OF TUSTIN
By executing in the space set forth below, the City of Tustin hereby
(a) Acknowledges receipt of the Assignment and Assumption Agreement
(the "Assignment") to which this Consent is attached;
(b) Consents to the making of the Assignment between Transferor and
Transferee, subject to the terms and conditions set forth in the Assignment and this
Acknowledgement and Consent by City of Tustin;
(c) Agrees that [insert name of Transferee], a J
(the assignee in the Assignment) shall be deemed by the City to be the "Developer" under the
Property Documents with respect to the Transfer Property, from and after the Assignment
Effective Date and the "Phase [I /2] Developer" under the DDA;
(d) [only if City agrees to insert at time based on facts known as of
Assignment Effective Date:} Agrees that the Transferor and Transferee [are/are not] as of the
Assignment Effective Date, Related Parties as such term is defined in the DDA; provided that a
determination with respect to the foregoing shall not bind the City in any manner at any future
date.
(e) Acknowledges the additional addresses for Notices for Transferee set forth
in the Assignment and agrees that from and after the Assignment Effective Date all notices from
City to Developer under the Property Documents and the Entitlements with respect to the
Transfer Property shall be delivered to Transferee at such addresses.
(f) This Consent by the City constitutes the consent required pursuant to
Section 2.2.3fb) of the DDA with respect to Transfer to a Transferee and constitutes the City's
acknowledgment that the requirements of Section 2.2.3(b) have been satisfied with respect to the
Transfer described in this Assignment;
(g) [[Only for Transfers that are not Permitted Transfers.] Upon
Transferee's delivery of the Guaranty required by the DDA and to the extent expressly assumed
by Transferee by this Assignment, Transferor shall be released from the obligations of Developer
under the DDA and the other Property Documents with respect to the construction and
Completion of the Vertical Improvements on the Transfer Parcel; provided that nothing in this
paragraph (g) shall limit Transferor's liability during any applicable Additional Liability Period
or [[if Phase 2 Transfer only.] with respect to the Phase 2 Transferor Obligations] and
notwithstanding the assumption of the Transfer Property and Developer obligations related
thereto by Transferee as described in this Assignment, Transferor acknowledges that it shall not
be relieved or released from its obligations as `Developer" under the Property Documents with
respect to the portions of the Property and other obligations retained by it and further, shall not
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 15
(Agd).Docx
be relieved or released from the Ongoing Matters and/or, in its capacity as a Phase 2
Transferor, from the Phase 2 Transferor Obligations.]
(h) This Consent by the City to the Assignment shall not constitute any of the
following: (i) evidence of compliance with or satisfaction of any obligation of Transferor under
any of the Property Documents, or any other agreement between Transferor and the City, except
for the obligation of Transferor to obtain the City's consent to any Transfer (ii) an agreement by
the City to be bound by or subject to any provision in any agreement between Transferor and
Transferee or (iii) a reaffirmation, renewal or remaking of any of the representations and
warranties made by the City in the Property Documents, except for the representation set forth in
Section 18.11.2 of the DDA. The consent by the City to the assignment by Transferor to
Transferee and the review and consent to agreements executed by and between Transferor and
Transferee in no event should be considered a consent by the City to amend or modify any
provision of the Property Documents or a waiver by the City of the provisions of the Property
Documents, which remain binding on City, Transferor and Transferee in accordance with their
terms. In the event of any inconsistency between Transferor and Transferee agreements on the
one hand and any provision of the Property Documents on the other hand, the provisions of the
Property Documents shall prevail in all cases as concerns the rights and obligations of the City.
{signatures on followingpage]
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 16
(Agd).Docx
CITY:
CITY OF TUSTIN
Dated: 120 By:
ATTEST:
By:
Erica N. Rabe
City Clerk
APPROVED AS TO FORM:
By:
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP
Tustin Special Real Estate Counsel
By:
Amy E. Freilich
Jeffrey C. Parker
City Manager
Tustin Cornerstone I DDA Art 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 17
(Agd).Docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
Notary Public, personally appeared
before me,
(insert name of notary)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 18
(Agd).Docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
Notary Public, personally appeared
before me,
(insert name of notary)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 19
(Agd).Docx
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
.M
Notary Public, personally appeared
before me,
(insert name of notary)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Att 16B - ATTACHMENT 16B City of Tustin/Flight Venture LLC
Assigment For Phase Transfer 11-9-2016 20
(Agd).Docx
EXHIBIT "A"
Legal Description of the Development Parcels
[Insert Legal Description]
Tustin Cornerstone I DDA Art 16B - Assigment ATTACHMENT 16B City of Tustin/Flight Venture
For Phase Transfer 11-9-2016 (Agd).Docx Exhibit "A"
EXHIBIT "B"
Legal Description of the Transfer Parcel
[Insert Legal Description of Transfer Property]
Tustin Cornerstone I DDA Art 16B - Assigment ATTACHMENT 16B City of Tustin/Flight Venture
For Phase Transfer 11-9-2016 (Agd).Docx Exhibit "B"
EXHIBIT "C"
List of Property Documents
The following documents, in each case including all exhibits and attachments thereto and
in each case including all amendments to any of the foregoing through the Assignment
Effective Date, are collectively referred to herein as the "Property Documents".
A. The DDA.
The Memorandum of TL
Cornerstone I, dated
Recorder, Orange County,
Development Parcels on _
tin Legacy Disposition and Development Agreement
and recorded in the Office of the County
California (the "Official Records") against title to the
as Instrument No.
C. Declaration of Special Restrictions for Cornerstone I (Phase 1) (the "Phase 1 Special
Restrictions"), dated and recorded in the Official Records against
title to the Phase 1 Parcel on as Instrument No.
D. [Add if then executed] Declaration of Special Restrictions for Cornerstone I (Phase
2) (the "Phase 2 Special Restrictions"), dated and recorded in the
Official Records against title to the [Transfer Parcel/Phase 2 Parcel] on
as Instrument No.
E. Quitclaim Deed for Cornerstone 1 (Phase 1) and Covenants, Conditions and
Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471 (the "Phase 1 Quitclaim Deed"), dated and recorded in the
Official Records against title to the Phase 1 Parcel on as Instrument
No.
F. [Add if then executed] Quitclaim Deed for Cornerstone I (Phase 2) and Covenants,
Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471 (the "Phase 2 Quitclaim Deed"), dated and
recorded in the Official Records against title to the [Transfer Parcel/Phase 2 Parcel]
on as Instrument No.
G. Development Agreement (the "DA"), dated , recorded in
the Official Records against title to the Development Parcels on
as Instrument No.
H. Landscape Installation and Maintenance Agreement, dated
recorded in the Official Records against title to the Development
as Instrument No.
and
Parcels on
I. Roadway, Landscape and Utility Easement Agreement, dated and
recorded in the Official Records against title the Development Parcels on
as Instrument No.
J. [Add CC&Rs]
K. [Add SLUR]
Tustin Cornerstone I DDA Art 16B - Assigment ATTACHMENT 16B City of Tustin/Flight Venture
For Phase Transfer 11-9-2016 (Agd).Docx Exhibit "C"
ATTACHMENT 17
FORM OF CITY DATE DOWN CERTIFICATE
REGARDING REPRESENTATIONS AND WARRANTIES
Reference is hereby made to that certain Tustin Legacy Disposition and Development
Agreement Cornerstone I dated as of , 2016 ("DDA"), by and between Flight Venture
LLC, a Delaware limited liability company ("Developer"), and the City of Tustin, a municipal
corporation of the State of California ("City"). Capitalized terms used herein that are not
defined herein shall have the meanings specified in the DDA.
This Date Down Certificate is being delivered by the City pursuant to {Section 7.2.1(a)(xi) /
7.3.10)(0) of the DDA. The undersigned does hereby certify to Developer, in the name and on
behalf of the City, that all of the representations and warranties made by the City in Section 3.3
and in Section 18.11.2 of the DDA are true and correct as of the date hereof, except as set forth
on Exhibit "A" attached hereto.
Without the written consent of the City: (i) no Person other than Developer may rely on this Date
Down Certificate for any purpose; and (ii) copies of this Date Down Certificate may not be
furnished to anyone for purposes of encouraging such reliance.
In no event shall the individual executing this Date Down Certificate on behalf of the City have
any personal liability hereunder.
{remainder of page is blank signature on next page}
Tustin Cornerstone I DDA Art 17 Form of City ATTACHMENT 17 City of Tustin/Flight Venture LLC
Date Down Cert 11-08-16.docx 1
Dated:
APPROVED AS TO FORM
Im
David Kendig, City Attorney
CITY:
CITY OF TUSTIN
0
Jeffrey Parker
City Manager
Tustin Cornerstone I DDA Art 17 Form of City ATTACHMENT 17 City of Tustin/Flight Venture LLC
Date Down Cert 11-08-16.docx 2
EXHIBIT "A"
{If none—enter None}
Tustin Cornerstone I DDA Art 17 Form of City EXHIBIT "A" City of Tustin/Flight Venture LLC
Date Down Cert 11-08-16.docx ,
ATTACHMENT 18
FORM OF DEVELOPER DATE DOWN CERTIFICATE
REGARDING REPRESENTATIONS AND WARRANTIES
Reference is hereby made to that certain Tustin Legacy Disposition and Development
Agreement Cornerstone 1 dated as of , 2016 ("DDA"), by and between
Flight Venture LLC, a Delaware limited liability company ("Developer"), and the City of
Tustin, a municipal corporation of the State of California (the "City"). Capitalized terms used
herein that are not defined herein shall have the meanings specified in the DDA.
Reference is hereby made to that certain Tustin Legacy Disposition and Development
Agreement Cornerstone I dated as of , 2016 ("DDA"), by and between Flight Venture
LLC, a Delaware limited liability company ("Developer"), and the City of Tustin, a municipal
corporation of the State of California (the "City"). Capitalized terms used herein that are not
defined herein shall have the meanings specified in the DDA.
This Date Down Certificate is being delivered by Developer pursuant to
{Section 7.2.2(b)(x) / 7.3.2(b)(v}) of the DDA concurrently with the {Phase I /Phase 2} Close
of Escrow. {Note: if Phase 2 Developer is different than Phase I Developer, this certificate
would need to be modified to refer to the form of certificate delivered by the Phase 2 Developer
to the City at the time of the Transfer—which would be in substantially the form of the
Original Certificate delivered by Developer to the City at the time of execution of the DDA.}
I, the undersigned, am the duly elected and qualified [state office held] of Developer, a limited
liability company duly organized and existing under the laws of the State of Delaware, and am
authorized by Developer to make the certifications contained in this Certificate. I further certify
to the City for and on behalf of Developer as follows:
1. Representations and Warranties. All of the representations and warranties made
by Developer in the DDA, including, but not limited to, those contained in Sections 2.1, 3. 1,
4.5.1 a), 4.5.2(f), 5.2 and 18.11.1 of the DDA, are true and correct as of the date hereof{, except
as otherwise specifically set forth on Schedule I attached hereto}. All information and
statements contained in the Developer's Certificate Regarding Representations and Warranties
dated , 2016 ("Original Certificate") remains true and correct as of the date of this
Date Down Certificate {, except as otherwise specifically set forth on Schedule I attached
hereto}.
2. Financial and Other Information. The Financing Plan and all financial and other
information submitted by the Developer to the City pursuant to Section 4.6 of the DDA prior to
or concurrent with the execution of the DDA remains true and correct as of the date of this Date
Down Certificate and all financial and other information submitted to the City on or since the
Effective Date of the DDA remain true and correct as of the date of this Date Down Certificate.
The Financing Plan, as the same may have been updated in accordance with the requirements of
Section 4.6.1 or 4.6.2 of the DDA, remains true and correct or, as modified to reflect Developer's
expectation as to available funding and costs, remains sufficient to pay through issuance of the
Tustin Cornerstone I DDA Art 18 Form of ATTACHMENT 18 City of Tustin/Flight Venture LLC
Developer Date Down Certificate (agd) 1
10-20-16 FINAL.docx
Certificate of Compliance for Phase {I/2}, all Development Costs of such Phase of the Project
and all other costs for the construction, marketing and lease of the Improvements as described in
the Scope of Development for such Phase, including, in the case of Phase 1 (and in the case of
Phase 2, to the extent not then completed in Phase 1), the Minimum Horizontal Improvements
and the Project budget for the Minimum Improvements remains a reasonable budget.
3. Certificate of Formation, Operating Agreement. As of the date of this Date Down
Certificate, each of the Certificate of Formation of Developer, the Operating Agreement of
Developer and all consents and approvals referred to in Section 6 of Original Certificate remain
in full force and effect and {except as otherwise specifically set forth on Schedule I attached
hereto} have not been modified, revoked or otherwise amended or terminated.
4. Good Standing. Developer remains in good standing in Delaware and California
as of the date of this Date Down Certificate. Attached to this Date Down Certificate as Exhibit A
are true and correct copies of the certificate of good standing for Developer from the Delaware
Secretary of State and the California Secretary of State and a certificate of tax good standing for
Developer from the California Franchise Tax Board, and each attached certificate of good
standing is dated not earlier than thirty (30) days prior to the date of this Date Down Certificate.
5. Authority of Si ng atM. [Insert name ofperson signing], is a [insert office held]
of Developer and is in such capacity, duly authorized by Developer to execute the DDA and any
and all instruments, documents and other agreements required in connection therewith in
accordance with the proceedings showing authority attached to the Original Certificate.
Without the written consent of Developer no Person other than the City may rely on this
Date Down Certificate for any purpose.
In no event shall the individual executing this Date Down Certificate on behalf of
Developer have any personal liability hereunder.
{remainder of page is blank signature on next page}
Tustin Cornerstone I DDA Art 18 Form of ATTACHMENT 18 City of Tustin/Flight Venture LLC
Developer Date Down Certificate (agd) 2
10-20-16 FINAL.docx
Dated:
"DEVELOPER"
FLIGHT VENTURE LLC,
a Delaware limited liability company
M.
Name:
Title:
Tustin Cornerstone I DDA Art 18 Form of ATTACHMENT 18 City of Tustin/Flight Venture LLC
Developer Date Down Certificate (agd) 3
10-20-16 FINAL.docx
EXHIBIT "A"
Tustin Cornerstone I DDA Art 18 Form of ATTACHMENT 18 City of Tustin/Flight Venture LLC
Developer Date Down Certificate (agd) EXHIBIT «A„
10-20-16 FINAL.docx
Schedule 1
{If none—enter None}
Tustin Cornerstone I DDA Art 18 Form of ATTACHMENT 18 City of Tustin/Flight Venture LLC
Developer Date Down Certificate (agd) SCHEDULE I
10-20-16 FINAL.docx
ATTACHMENT 19
LIST OF PROHIBITED USES
Manufacturing and physical assembly (except for limited prototype and similar
construction and assembly and/or "clean room" space ancillary to a principal use
that is not a prohibited use), and warehousing uses (except for warehousing that
uses no more than 5% of the space at the Property then leased or owned by the
relevant user);
2. Server farms as a principal use (provided that server rooms to accommodate a
principal use that is not a prohibited use are allowed);
Any coin operated laundry;
4. Any "dollar" stores such as Family Dollar, Dollar Tree or 99 Cents Only;
Any dry cleaning plant; provided, however, that this restriction shall not apply to
either (a) a drop off/pick up only type of facility or (b) an operation using a Liquid
CO2 System, a Wet -Dry System or a D5 System or other equal or better
environmentally sound process, so long as the operator thereof (i) uses best
management practices intended to avoid Release of Hazardous Materials;
(ii) identifies and addresses leaks; (iii) controls emissions of any of these
products; and (iv) performs all dry cleaning activities in compliance with all
applicable laws, rules, ordinances and regulations (federal, state or local);
6. Any dance hall, night club or billiard parlor, unless operated in conjunction with a
restaurant or other food establishment;
7. Any entertainment, pinball, video, or similar arcade, except as incidental to a
permitted retail use;
Any funeral home or mortuary;
9. Any flea market, except farmers markets and community or charitable events;
10. Any facility for the sale or display of pornographic material (e.g., video or book
store selling, renting, or exhibiting primarily material of a pornographic or "adult"
nature), except establishments that are not perceived to be, nor hold themselves
out as "adult" book stores (e.g., drug stores, grocery stores, newsstands or kiosks,
coffee shops or first class book retailers), but which may incidentally sell books,
magazines or other periodicals that may contain pornographic materials;
11. Any gambling facility or operation, including, but not limited to, off-track or
sports betting parlor, table games such as black -j ack or poker, slot machines,
video poker/black-jack/keno machines or similar devices, or bingo parlor (this
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 19 City of Tustin/Flight Venture LLC
FINAL.docx -I-
prohibition shall not be applicable to government sponsored gambling activities
e.g., state lottery—or charitable gambling activities, so long as such activities are
incidental to the business operation being conducted by the permitted occupant or
tenant);
12. Any gun shop, except as an incidental part of a sporting goods or outdoor retail
stores (e.g., Big 5 Sporting Goods, Dicks Sporting Goods, Sports Authority
Sporting Goods or Turner's Outdoorsman);
13. Firearm shooting range;
14. Any store selling paraphernalia used for the consumption of cannabis, tobacco,
legal highs, legal party powders and herbs;
15. Any store selling paraphernalia for illegal drugs;
16. Any massage parlor (except for bona fide therapeutic massage, chiropractic care,
sports therapy, a beauty salon/day spa and other bona fide massage services in
connection with a permitted health club use), adult entertainment restaurant, bar
or club (e.g., topless club or "strip joint");
17. Any retail store that primarily sells medical marijuana;
18. Any pawn shop;
19. Any medical office use (e.g., doctors, dentists, hospitals, urgent care clinics, or
rehabilitation facilities); and
20. Any residential uses.
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 19 City of Tustin/Flight Venture LLC
FINAL.docx -2-
ATTACHMENT 20
FORM OF DECLARATION OF SPECIAL RESTRICTIONS
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT
FROM RECORDING FEES PER
GOVERNMENT CODE 6103 AND 27383.
Recording requested by and
When recorded mail to:
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DECLARATION OF SPECIAL RESTRICTIONS
FOR CORNERSTONE I
{(PHASE I PARCEL)APHASE 2 PARCEL)]
This DECLARATION OF SPECIAL RESTRICTIONS FOR CORNERSTONE 1
[(PHASE I PARCEL)/(PHASE 2 PARCEL)] (this "Declaration'), is made as of
, 2016 ("Effective Date") by the CITY OF TUSTIN, a municipal
corporation of the State of California ("City"), and is acknowledged by FLIGHT VENTURE
LLC, a Delaware limited liability company (as further defined in Exhibit 4 attached hereto,
"Developer"). The City and Developer and their respective successor and assigns are sometimes
referred to in this Agreement individually as a "Party" and collectively as the "Parties."
A. Pursuant to the Defense Base Closure and Realignment Act of 1990 (Part A of
Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended, the Marine
Corps Air Station -Tustin ("MCAS Tustin') located substantially in the City of Tustin,
California was closed by the United States of America, acting by and through the Department of
the Navy (the "Navy"). In 1992, the City was designated as the Lead Agency or Local
Redevelopment Authority for preparation of a reuse plan for MCAS Tustin in order to facilitate
the closure of MCAS Tustin and its reuse in furtherance of the economic development of the
City and surrounding region.
B. In May 2002, the Navy approved an Economic Development Conveyance of
Property at MCAS Tustin and agreed to convey approximately 1,153 acres of MCAS Tustin to
the City. The 1,153 acres of MCAS Tustin located within the City of Tustin and either conveyed
by the Navy to the City or subject to a ground lease between the Navy and the City is referred to
in this Declaration as "Tustin Legacy".
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx 1
C. The City owns a fee interest in certain real property comprising approximately
[{if Phase I Special Restrictions.1 17.545 acres/ [if Phase 2 Special Restrictions.1 21.195
acres] of land located in the City of Tustin, County of Orange, California and comprising a
portion of Tustin Legacy as legally described on Exhibit 1 attached hereto and made a part
hereof (the "Land") comprising the [Parcel I/Parcel 2] as shown on Parcel Map No. 2015-168,
which has been recorded in the official records of Orange County in Book , Page on
("Parcel Map").
D. The City and Developer entered into that certain Tustin Legacy Disposition and
Development Agreement Cornerstone I, dated as of , 2016, pursuant to which
Developer has agreed to purchase the Parcel from the City upon and subject to the terms and
conditions set forth therein (as the same may hereafter be further amended, modified or
supplemented in accordance with its terms, the "DDA"). The DDA is evidenced by that certain
Memorandum of Tustin Legacy Disposition and Development Agreement Cornerstone I dated as
of the effective date of the DDA and Recorded against the Parcel and certain other land
comprising Parcel [I / 2] of the Parcel Map [immediately prior to the Recording of this
Declaration/on , 2016 as Instrument No. ___] (as the same may hereafter be
amended, modified or supplemented, "Memorandum of DDA").
E. In accordance with the terms of the DDA, the City intends to convey the Parcel
(as defined below) to Developer immediately following the Recording of this Declaration,
pursuant to that certain Quitclaim Deed For Tustin Legacy Cornerstone I — Phase I and
Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471 ("Quitclaim Deed") and [has previously conveyed / intends, in accordance
with the terms of the DDA, to convey] Phase [I / 2] of the Parcel Map to Developer, but
specifically excluding from the Land and the additional conveyed property each and every oil,
gas, mineral, water right and all other rights expressly reserved to the City as set forth in the
Quitclaim Deed (such reserved rights in their entirety as stated in the aforesaid quitclaim deeds,
the "Reserved Rights").
F. The Land, excluding therefrom the Reserved Rights is referred to herein as the
"Parcel" or as the "Phase [I / 21 Parcel' and Parcel [I/2] of the Parcel Map, excluding
therefrom the Reserved Rights is referred to herein as the "Phase [I / 21 Parcel'. The Phase 1
Parcel and the Phase 2 Parcel may be referred to herein collectively as the "Development
Parcels".
G. The City also owns a fee interest in that certain real property legally described on
Exhibit 2 attached hereto and made a part hereof ("City Benefited Property") located in the
City of Tustin, County of Orange, California and comprising a portion of Tustin Legacy. The
City Benefited Property is proximate to and directly affected by the use and maintenance of the
Development Parcels.
H. Developer has agreed, pursuant to the DDA, that upon its acquisition of the Parcel
it shall develop the Parcel as an office project with ancillary retail uses and related amenities and
one or more parking structures in accordance with the requirements of the DDA, this Declaration
and the Other Agreements.
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I. The City intends that Developer and all Successor Owners (as defined below)
shall use and maintain the Parcel in accordance with this Declaration and the Restrictions (as
defined below) and following the completion of the Project pursuant to the DDA, as an office
and ancillary retail project, as more particularly set forth herein. For purposes of this
Declaration, the term "Property Owner" shall mean the Developer and each Successor Owner
of the Parcel or any portion thereof.
J. To create and preserve the value, desirability and attractiveness of the Parcel, each
Property Owner will hereafter hold and convey title to the portion of the Parcel owned by it
subject to those certain protective covenants, conditions and restrictions set forth herein.
K. The City now desires to impose this Declaration on the Parcel for the following
purposes, among others: (i) to preserve the general plan for the use and maintenance of Tustin
Legacy, including of the Parcel, through development and maintenance of a Class A Project
upon the Parcel; (ii) to ensure proper use and maintenance of the Project; (iii) to protect each
owner and occupant of any portion of the Parcel and nearby owners and residents, including the
residents of the City of Tustin, from improper use of the Parcel; and (iv) in general, to provide
for a Class A Standard quality of maintenance of the Project, in each case upon and subject to the
terms of this Declaration.
L. This Declaration also sets forth those rights of the City and, upon acquisition of
each Development Parcel, certain obligations of Property Owner as specified in the DDA, each
of which shall remain in full force and effect for the period provided herein, notwithstanding the
termination of the DDA and/or the Recording by the City of a Certificate of Compliance against
all or any portion of the Parcel.
M. Capitalized terms not otherwise defined herein shall have the meanings set forth
for such terms on Exhibit 4 attached hereto and incorporated herein by this reference.
NOW, THEREFORE, the City hereby covenants and declares that the Parcel is now held
and shall hereafter be held, transferred, conveyed, sold, leased, subleased, encumbered,
mortgaged, used, occupied and improved subject to the covenants, conditions and restrictions
herein set forth in this Declaration, each and all of which is and are for, and shall inure to the
benefit of and pass with, the Parcel and every portion of or interest in the Project and shall apply
to Declarant and each Property Owner, to the extent set forth herein, for the purpose of uniformly
enhancing and protecting the value, attractiveness and desirability of the Parcel and Tustin
Legacy in furtherance of a general plan for the protection, maintenance, subdivision,
improvement, sale and lease of Tustin Legacy or any portion thereof. The covenants, conditions
and restrictions set forth in the Declaration shall run with the Parcel and shall be binding upon
Developer and each and every Successor Owner having any right, title or interest in the Parcel or
any part thereof, and shall inure to the benefit of the City and the City Benefited Property, and
any future owner of any portion of the City Benefited Property to the extent such future owner is
a Governmental Successor.
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The City hereby further declares as follows
1. Property Affected by this Declaration. The "Property" affected by this Declaration is
comprised o£• [{as to Phase I Special Restrictions:l the Phase I Parcel / [as to Phase 2 Special
Restrictions.] the Phase 2 Parcel], all improvements now existing or hereafter constructed
thereon and all appurtenances pertaining thereto]. To the extent that any Improvements located
on the Parcel are subject to a ground lease, during the term thereof the ground lessee under such
ground lease shall be jointly and severally liable with the fee owner of such property, for the use,
operation and maintenance of such Improvements in accordance with the terms and conditions of
the DDA and in compliance with this Declaration and the Restrictions set forth herein as if such
ground lessee were also the applicable Property Owner hereunder.
2. Covenants, Conditions and Restrictions. For the benefit of the City Benefited Property
and the City, and its Governmental Successors, and as an inducement for the City to consummate
the transactions contemplated by the DDA, but subject to Section 4.2 below, the violation of any
of the Restrictions (as hereinafter defined) set forth in this Section 2 shall at the City's option
constitute a Material Default hereunder and entitle the City to exercise any of the rights and
remedies set forth herein. The covenants, conditions, restrictions and agreements set forth in this
Declaration are collectively referred to herein as the "Restrictions".
2.1. Use Covenants and Restrictions. From and after the acquisition of fee title to
any portion of the Property by Developer or any Successor Owner, Developer and each
Successor Owner shall cause such portion of the Property so acquired to be developed and
utilized only as follows:
(a) [{For Phase 1:1 The Property shall be utilized solely for lawful
Office Uses, Food Hall Uses and ancillary Retail Uses/ {for Phase 2:1 The Property shall be
utilized solely for lawful Offices Uses and ancillary Retail Uses] and shall be developed in
accordance with the Approved Plans and the Entitlements and shall not be utilized for any
Prohibited Uses. Notwithstanding anything to the contrary contained in this Declaration or the
Other Agreements, the City or its Governmental Successor shall have the right to release all or
any portion of the Parcel, or any Property Owner of all or any portion of the Parcel, from
compliance with the use restrictions set forth in this Section 2.1(a) by recording a written
instrument executed by the City (or the applicable Government Successor) in the Official
Records. In no event shall any such release as to any portion of the Parcel or as to any Property
Owner constitute a waiver or release of the use restrictions set forth in this Section 2.1(a) as to
any other portion of the Parcel or any other Property Owner.
(b) Neither Developer nor any Successor Owner, nor any person
claiming by, through or under Developer or any Successor Owner, including any End User, shall
use the Parcel or any portion thereof for any Prohibited Use or convey, lease, sell or otherwise
transfer any Development Parcel or any portion thereof to any Person intending to utilize the
Development Parcel for a Prohibited Use.
(c) The Project shall be designed and constructed as a "Class A
Project" which shall mean the level of quality of the operation and maintenance activities shall
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be similar to those provided with respect to the buildings at the Campus at Playa Vista and
containing no Prohibited Uses.
(d) In terms of the quality of maintenance, the Project shall be
maintained consistent with Class A Standards.
(e) Developer and its Successor Owners and all End Users shall be
subject to this Declaration.
(f) The covenants in this Section 2.1 shall remain in full force and
effect with respect to each Development Parcel until, as to each Parcel, the twenty-fifth (25th)
anniversary of the Recording of the last Certificate of Compliance for such Parcel, unless
released at an earlier date by the City in writing, and upon the expiration of such twenty-five (25)
year period, the provisions of Section 2.1 shall automatically terminate as to such Parcel.
2.2. Maintenance Covenants and Restrictions.
2.2.1. From and after the acquisition of fee title to all or any portion of the Parcel
by Developer, Developer and its Successor Owners shall maintain such portion of the Parcel and
all Improvements thereon consistent with the following requirements:
(a) Prior to commencement of construction, each Property Owner
shall be responsible, at its sole cost and expense, (i) to secure and maintain the Parcel in a clean,
safe and secure condition, in compliance with all applicable laws, (ii) to abate weeds and other
hazards and nuisances on such portion of the Parcel as are not then under construction, (iii) to
erect and maintain barricades and fencing, and provide security, in each case with respect to the
Parcel and as reasonably necessary to protect the public and any Improvements already
constructed, and (iv) to maintain (in compliance with all Environmental Laws) erosion control on
the Parcel.
(b) From the date of commencement and during the continuance of
construction of any Improvements on the Parcel and until Completion thereof, Property Owner
shall maintain the Parcel and the Improvements thereon then under construction consistent with
normal and customary construction industry practice.
(c) From and after the issuance of a certificate of occupancy for any
Improvements on the Parcel, each Property Owner shall maintain all Improvements on the
portions of the Parcel not then under construction, including any shared driveways, drive aisles
and parking areas located on the Parcel in a clean, sanitary, orderly and attractive condition,
subject to reasonable wear and tear, and further subject to Section 2.2.1(d), change or damage by
casualty or condemnation. Property Owner shall be required to meet the standard for the quality
of maintenance of the Improvements on the Parcel required by this Section 2.2 regardless of
whether or not a specific item of maintenance is listed below, except that, in each case, and
notwithstanding anything in this Section 2.2 to the contrary, no Property Owner shall have any
maintenance obligation under this Declaration with respect to any items owned or controlled by
(or on property owned or maintained by) a utility franchisee, any lighting or landscape district, or
by the City. Representative items of maintenance shall include: (i) maintenance, repair and
replacement on a regular schedule, consistent with Class A Standards, of all Improvements;
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(ii) frequent and regular inspection for graffiti or damage or deterioration or failure, and
reasonably prompt (or, in the case of graffiti, within 48 hours) repainting or repair or
replacement of all surfaces, fencing, walls, equipment, etc., as necessary; (iii) emptying of trash
receptacles and removal of litter; (iv) regular sweeping of private streets, roadways and
sidewalks throughout the Parcel; (v) fertilizing, irrigating, trimming and replacing vegetation as
necessary; (vi) cleaning exterior windows on a regular basis; (vii) painting the Buildings on a
regular program and prior to the deterioration of the painted surfaces; (viii) construction,
maintenance, repair, and replacement as reasonably necessary of all paved surfaces (including
painting and striping), curbs, curb -cuts, gutters, walkways, planters, cart corrals, and medians,
curbs, gutters, directional signs, markers, lighting facilities, including the replacement of fixtures
and bulbs, storm drains and utility lines.
(d) If a casualty occurs with respect to a Parcel or Improvements
thereon following Recording of a Certificate of Compliance by the City for such Parcel,
Developer shall, in its sole discretion, either (i) promptly repair the Improvements and prior to
commencement of such repair maintain the portions of the Property subject to casualty in
accordance with Section 2.2.1(a), or (ii) if Property Owner determines in its sole discretion not to
repair some or all of the Improvements, maintain the portions of the Property subject to casualty
in accordance with Section 2.2.1(a). In each case, upon commencement of any construction with
respect to the affected portions of the Property and until completion of the repair work, Property
Owner shall comply with the requirements set forth in Section 2.2.1Lb) and upon completion of
the repair work, shall comply with the requirements set forth in Section 2.2.1(c).
Notwithstanding the foregoing, the portions of the Parcel unaffected by any such casualty shall
be maintained as otherwise required by this Declaration, including pursuant to Section 2.2 and
unless not economically feasible due to cost or physical proximity as demonstrated to the
reasonable satisfaction of the City, Property Owner shall provide landscaping or other barriers to
shield the portions of the Parcel remaining in use and adjacent public roadways from those
subject to casualty and from adjoining streets in order to maintain the Class A standards imposed
by this Declaration upon the unaffected portions of the Parcel and the Improvements thereon as
required pursuant to Section 2.2.1(c).
(e) If a Property Owner fails to maintain the Improvements or
landscaping located on its Parcel or any portion thereof in accordance with the requirements of
this Declaration and the same constitutes a Material Default by such Property Owner hereunder,
the City or its designee shall have the right, but not the obligation, subject to applicable notice
and cure provisions set forth in Section 4.2 below, to enter such Parcel upon reasonable notice to
Property Owner, correct such failure, and hold Property Owner responsible for the cost thereof
and such cost, until paid, shall constitute a lien on the applicable portion of such Parcel as and to
the extent described in Section 4.
2.3. Maintenance of Easement Areas. Each Property Owner shall cause to be
constructed and shall operate, manage, and maintain (or shall cause to be operated, managed and
maintained) any easement areas located on the Parcel for which it is responsible and the
Improvements thereon in a state of good repair, free of trash and debris and in a Class A
Standard. The duties of each such Property Owner shall include, without limitation, the
following, which shall be carried out in accordance with all Governmental Requirements:
(a) construction, maintenance, repair, and replacement of all paved
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surfaces, in a level, smooth, and evenly covered condition, and repair and/or replacement thereof
with the type of surfacing material originally installed, or such substitute as shall in all respects
be at least equal to such original material in quality, use, appearance, and durability;
(b) construction, maintenance, repair, and replacement as reasonably
necessary, of all curbs, curb -cuts, gutters, walkways, planters, cart corrals, and medians;
(c) painting and striping;
(d) construction, maintenance, repair, and replacement of all
directional signs, markers, lighting facilities, including the replacement of fixtures and bulbs;
(e) construction, maintenance, repair, and replacement of any and all
storm drains, storm water retention facilities, utility lines, water lines, sewers, and other utility
systems; it being understood that where repairs are necessary to prevent disruption of service to
any Property Owner, such repairs shall be undertaken immediately and without prior notice; and
(f) maintenance of all landscaped areas and replacement of shrubbery,
plantings, and flowers.
2.3.1. Cost of Maintenance. All costs incurred in fulfilling the obligations in
Section 2.2.1 and Section 2.2.2 with respect to the Parcel shall be paid by the applicable Property
Owner of the affected Building Pad and, with respect to areas owned in common by the Property
Owners owning all or any portion of the Parcel, shall be paid by all Property Owners, who shall
be jointly and severally liable for the costs thereof. Nothing in this Declaration shall prohibit
two or more Property Owners from entering into a separate agreement to share the costs for
performing the maintenance of Improvements on more than one of the Building Pads.
2.3.2. Term of Covenants. The covenants in this Section 2.2 shall remain in
full force and effect with respect to each Development Parcel until the date which is the earlier of
(a) the Recording of CC&Rs approved by the City against the entirety of the Parcel that address
the maintenance of the Parcel, in which event Section 2.2.2 of this Declaration shall be deemed
terminated effective automatically upon the Recording of such CC&Rs (provided that the terms
of Section 2.2 of this Declaration shall automatically again become effective if the CC&Rs shall
terminate and shall remain effective thereafter for the term of this Declaration), or (b) as to each
Parcel, the twenty-fifth (25th) anniversary of the Recording of the last Certificate of Compliance
for such Parcel, unless released at an earlier date by the City in writing, and upon the expiration
of such twenty-five (25) year period, the provisions of Section 2.2 shall automatically terminate
as to such Parcel.
2.4. Design of the Project. Developer acknowledges that the City may now or
hereinafter be negotiating with various other developers for the conveyance, lease or other
transfer of other portions of Tustin Legacy to such other developers, and through the Specific
Plan, intends to coordinate the design and development of the entirety of Tustin Legacy.
Accordingly, Developer and each Successor Owner shall comply with the Specific Plan and the
Entitlements (as and to the extent required by the DDA and the Development Agreement).
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2.5. Obligation to Refrain from Discrimination. There shall be no discrimination
against or segregation of any person, or group of persons, on account of sex, race, color, religion,
ancestry, national origin, disability, medical condition, marital status, or sexual orientation in the
sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property or in development of
the Project, nor shall any Property Owner establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the Property or in development of the
Proj ect.
2.6. No Obligations. Nothing in this Declaration shall obligate the City to
(a) exercise its approval or enforcement rights with respect to the covenants set forth in this
Section 2, or (b) to develop or cause the development of Tustin Legacy or any portion thereof to
proceed in accordance with the Specific Plan or any other plan, entitlement, program, policy or
agreement, for the benefit of the City or any third parties.
2.7. DDA Provisions. Pursuant to the DDA, the City has imposed certain covenants,
conditions and restrictions on the Parcel, including the releases contained in Section 4.5.2(f) of
the DDA (which shall be set forth in their entirety in the Quitclaim Deeds), and certain
environmental indemnity and environmental provisions, each of which is set forth verbatim
below in italics and each of which is hereby declared to be a covenant running with the land,
binding Developer and each Successor Owner in perpetuity except as otherwise set forth herein.
Within the italicized language which follows, certain terms shall have the following meanings
and the remaining terms shall have the meanings set forth in this Declaration including Exhibit 4
hereto: the term "Agreement" shall mean the DDA, the term "City" shall mean the "City" as
defined in this Declaration; the term "City Benefited Property" shall mean the "City Benefited
Property" as defined herein; the term "Close of Escrow" shall mean as to the Parcel the
Recording of the Quitclaim Deed for such Parcel; the term "Closing Date" shall mean as to the
Parcel, the date of Recording of the Quitclaim Deed for such Parcel; the term "Developer" shall
mean the "Developer" and each and every "Successor Owner" as defined in this Declaration; the
term "Improvements" shall mean the Improvements as defined in Exhibit 4 to this Declaration;
the term "Development Parcels" shall mean the Parcel; the term "Effective Date" shall mean
2016 {insert effective date of DDA}; the term "Property" shall mean the "Property" as
defined in this Declaration; the term "Project" shall mean the "Project" as defined in this
Declaration; and the term "Quitclaim Deed" shall mean the "Quitclaim Deed" as defined in this
Declaration. All other terms used and not defined in this Section or elsewhere in this Declaration
shall have the meanings set forth in Exhibit 4 hereto. During the term of the DDA, in the event
of a conflict between the terms of the DDA and the terms of this Section 2.6, the terms of the
DDA shall govern.
2.7.1. Indemnity. Section 10.1 of the DDA provides as follows:
"10.1 Developer's Indemnification for Non Environmental Matters.
From and after the Effective Date, as a material part of the
consideration for this Agreement, to the maximum extent permitted by law,
Developer, on behalf of itself and its successors and assigns hereunder and
each and every Person claiming by, through or under Developer or any
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Successor Owner, hereby agrees to indemnify, protect, defend, assume all
responsibility for and hold harmless the City and its appointed and elected
officials, agents, attorneys, affiliates, employees, contractors and
representatives (collectively referred to as the "City Indemnified Parties'),
with counsel reasonably acceptable to the City, from and against any and all
Non Environmental Claims to the extent caused by, resulting or arising from
the following during the period of Developer's ownership of the Property or
any portion thereof and any Additional Liability Period applicable thereto,
and with respect to those obligations of a Transferor described in clause (d)
of the definition of "Ongoing Matters" set forth on Attachment I [defined in
Exhibit 4 of this Declaration], except that with respect to clauses (b), (c), (e)
and (f) below, the obligation of Developer shall commence as to each Phase
upon the Close of Escrow with respect to such Phase:
(a) The marketing, sale or use of the Property
owned by Developer or Developer Affiliate in any way;
(b) All acts and omissions of Developer, or any
Developer Representative, Developer Affiliate, Pad Transferee or Space
Tenant in connection with the Project, the Property, or any portion of any of
the foregoing;
(c) Any plans or designs for Improvements
prepared by or on behalf of Developer, any Developer Affiliate, Pad
Transferee or Space Tenant 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 of any representation or warranty of Developer
or resulting from any Potential Default or Material Default, by Developer
under this Agreement;
(e) The non-performance or breach by Developer,
any Developer Representative, Developer Affiliate, Pad Transferee or Space
Tenant of any term or condition of this Agreement; and
(f9 Any development or construction of any
Improvements by Developer, any Developer Representative, Developer
Affiliate, Pad Transferee or Space Tenant whether regarding the quality,
adequacy or suitability of the plans, any labor, service, equipment or material
furnished to the Property, any Person furnishing the same, or otherwise.
Notwithstanding the foregoing, the foregoing shall not apply to and Developer
shall not be obligated to indemnify any of the City Indemnified Parties to the
extent of the gross negligence or willful misconduct of the City Indemnified
Parties or any breach of any of the City's representations, warranties,
covenants or obligations set forth in this Agreement or the Other Agreements.
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follows:
The indemnification provisions in this Section 10.1 shall not apply to
Environmental Claims. Developer's indemnification obligations to the City
regarding any Environmental Claims are exclusively addressed in Section
10.2. The foregoing indemnity shall be included in each Special Restrictions
and shall run with the land in accordance with Section 10.3 below. "
2.7.2. Environmental Indemnity. Section 10.2 of the DDA provides as
"10.2 Developer's Environmental Indemnification.
10.2.1 As a material part of the consideration for this
Agreement, and effective as to the Property or any portion thereof, but only
with respect to the Property or such portion thereof to which the Developer
has then acquired fee title, Developer on behalf of itself and Successor
Owners and each and every Person claiming by, through or under Developer
or any Successor Owner, hereby agrees that Developer and each Successor
Owner shall, to the maximum extent permitted by law, indemnify, protect,
defend (with counsel reasonably acceptable to the City), assume all
responsibility for and hold harmless the City Indemnified Parties from and
against any and all Claims resulting or arising from or in any way connected
with (i) the existence, Release, threatened Release, presence, storage,
treatment, transportation and/or disposal of any Hazardous Materials on, in,
under, from, or about any such acquired portion or portions of said lands,
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, and (ii) non-
performance or breach by Developer of its obligations under Sections 10.4,
10. S, 10.7, 11.1.4 or 11.2 (provided that as to Section 11.2, only to the extent
applicable to the environmental insurance required in Section 11.1.4 of this
Agreement) (collectively, 'Environmental Claims'); provided that neither
Developer nor any Successor Owner shall be responsible (and such indemnity
shall not apply) (a) to the extent caused by the gross negligence, fraud or
willful misconduct of the City Indemnified Parties, or (b) to the extent caused
by any breach of the City's representations, warranties, covenants or
obligations set forth in this Agreement or any Other Agreements relating
directly to the environmental matters giving rise to the Environmental Claim,
or (c) to any claim for a civil or criminal penalty based upon an alleged
violation of any Environmental Law by the City arising out of actions or
inactions between May 2002 and the Close of Escrow on the applicable
Parcel. This environmental indemnity shall be included in the Special
Restrictions provided that such indemnity (x) shall not be binding upon
Tenants who are End Users under Space Leases and (y) shall not be deemed
to limit in any manner the rights and/or remedies that Developer may have
against the Federal Government.
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10. 2.2 Notwithstanding anything contained herein and without
limiting or relieving Developer or any Successor Owner of its obligations
under this Agreement, the City agrees that with respect to any Environmental
Claims tendered by any one (1) or more of the City Indemnified Parties under
this Agreement for which Developer has the obligation to indemnify the City
pursuant to the terms of this Agreement, the City Indemnified Parties shall
seek recourse for such Environmental Claims under the Developer's
insurance coverage required by Article 11 of this Agreement as well as any
other applicable insurance coverage maintained by third parties for the
benefit of the City, in each case only to the extent such insurance could
reasonably be determined to be applicable to the type, extent, value and
location of the Environmental Claim being made. The City shall thereafter
use reasonable commercial efforts to prosecute its Environmental Claim for
coverage with such insurer(s). To the extent that insurance is determined by
the City not to be reasonably applicable the Environmental Claim or, if after
six (6) months from tender of the Claim to the insurer, despite such efforts,
insurance proceeds are not available to cover all or a portion of the Claim or
if such Environmental Claim is earlier denied by the insurance carrier, then
Developer shall defend and indemnify the City Indemnified Parties for the full
amount of the Environmental Claim not covered by the insurance but only to
the extent Developer has such obligations in this Agreement. If an insurers)
to which an Environmental Claim is tendered declines to defend, or fails to
timely defend the Environmental Claim within the six (6) month time period
described above, then Developer shall defend and indemnify against such
Environmental Claim to the extent it has such obligations in this Agreement.
However, if for any Environmental Claim for which the City has reasonably
concluded that insurance is applicable to such Claim and the City has not
received insurance proceeds after six (6) months as described above, then the
City shall continue to use reasonable commercial efforts to pursue such
insurance until the insurance carrier finally pays out on all or part of such
Claim and/or denies all or the remaining portion of such Claim. At any time
after six (6) months have passed since the original tender of a Claim to an
insurer by the City as described herein if the insurer has not paid out on all or
any part of the claim, the City shall advise the Developer and Developer in its
sole discretion may decide to pay for the legal fees and expenses associated
with filing and prosecuting litigation against such insurance carrier. If
Developer decides to pay such legal fees and expenses, the City shall proceed
with such litigation at Developer's expense as further set forth below.
Developer shall have the right to select counsel to represent the City in
connection with the prosecution of such Environmental Claim in litigation.
Any fees and expenses of such litigation will be borne by the Developer and
any monetary recovery from such litigation shall first be applied to reimburse
the Developer for any fees and expenses paid by Developer to defend and
indemnify the City for such Claim, and second, to the extent there remains
additional money recovered after such payments, then such additional
monetary recovery shall be applied to reimburse the City for any incurred fees
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and expenses that were part of the Environmental Claim but were not
reimbursed by the Developer. Finally, to the extent any additional money is
recovered after the payments described above, then such additional monetary
recovery shall be applied to reimburse the Developer for its litigation fees and
expenses incurred in prosecuting the Environmental Claim against the
insurance carrier. As used in this Section 10.2.2, "reasonable commercial
efforts" shall not include the initiation or prosecution of a lawsuit."
2.7.3. Claims Response. Section 10.4 of the DDA provides as follows:
"10.4 Claim Response.
In the event that following the Close of Escrow for any portion of the
Property or Parcel and for so long as Developer remains the fee title holder
of such portion of the Property or Parcel, any Environmental Agency or other
third party brings, makes, alleges, or asserts a Claim, arising from or related
to any actual, threatened, or suspected presence or Release of Hazardous
Materials on or about such portion of the Property or Parcel or any
Improvements thereon, including any Claim for Investigation or Remediation
on such portion of the Property or Parcel or such Improvements, or such
Environmental Agency or other third party orders, demands, or otherwise
requires that any Investigation or Remediation be conducted on such Property
or Parcel or with respect to Improvements thereon, Developer shall promptly
upon its receipt of notice thereof, notify the City in writing and thereafter shall
promptly and responsibly evaluate and respond to such Claim as provided in
Section 10.5 below. Further, upon receipt of such Claim, order, demand or
requirement, Developer shall take such reasonable measures, as necessary or
appropriate, to reasonably attempt to dissuade such Environmental Agency or
other third party from bringing, making, alleging, or asserting any Claim
against the City arising from or related to the presence or any actual,
threatened, or suspected Release of Hazardous Material on or about such
Property, Parcel or such Improvements, including any Claim for Investigation
or Remediation on such Property, Parcel or Improvements; provided,
however, that Developer shall have no obligation pursuant to this sentence
with respect to any Claim, order, demand or requirement arising from or
related to any actual, threatened or suspected Release of Hazardous Material
to the extent caused by the gross negligence, fraud or willful misconduct of the
City Indemnified Parties or any breach of any of the City's representations,
warranties, covenants or obligations set forth in this Agreement or any Other
Agreements relating to environmental matters. "
2.7.4. Release Notification and Remedial Actions. Section 10.5 of the DDA
provides as follows:
"10.5 Release Notification and Remedial Actions.
If, after the Close of Escrow with respect to a component of the
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Property or the Development Parcels and for so long as the Developer
remains the fee title holder of such component of the Property or the
Development Parcels, the presence or any Release of a Hazardous Material is
discovered on such Property or Parcel or any Improvements thereon in such
quantities or concentrations that require notifying an Environmental Agency
of such discovery, and regardless of the cause, Developer shall with respect to
such Property, Parcel and/or Improvements promptly provide written notice
(or in the event of emergency, telephonic notice, followed by written notice) of
any such Release to the City. To the extent that any Environmental Agency
(other than the City) is requiring that the City Remediate such Release and the
Developer acknowledges that it is obligated to assume responsibility or
indemnify the City with respect to such Release pursuant to Section 10.2 or
there is a good faith dispute between the City and Developer as to whether
Developer is obligated to assume responsibility or indemnify the City with
respect to such condition or Release pursuant to Section 10. 2, then Developer
shall (a) Investigate and/or Remediate the condition or Release in compliance
with and to the extent required by Environmental Laws and such
Environmental Agency; (b) take such other reasonable action as is necessary
to have the full use and benefit of the Property as contemplated by this
Agreement; and (c) provide the City with satisfactory evidence of the actions
taken as required in this Section. To the extent that any Environmental
Agency (other than the City) is requiring that the City Remediate such
condition or Release and the City acknowledges that Developer is not
obligated to assume responsibility or indemnify the City with respect to such
condition or Release pursuant to Section 10.2 or no Environmental Agency
(other than the City) is requiring that the City Remediate such condition or
Release, then (as between Developer and the City under this Agreement)
Developer may elect in its sole discretion whether to Remediate such
condition or Release and/or pursue any rights that Developer has against any
Person (including the Federal Government and the City) with respect to such
condition or Release. The foregoing shall be without prejudice to Developer's
or the City's rights against any responsible party or against the Federal
Government pursuant to Section 330, Fiscal Year 1993, National Defense
Authorization Act Public Law 102-484 or Section 120(h) of the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. § 9620(h), and without compromising the applicability of any
insurance coverage in regard to such Release. The City and Developer will
coordinate any remediation action with appropriate environmental insurance
carriers so as not to compromise coverage for the costs of such actions.
Nothing set forth herein requires Developer to perform any obligation of the
Federal Government and nothing set forth herein shall be deemed to limit or
impair (or take any action that might limit or impair) in any manner the rights
and/or remedies that Developer or City may have against the Federal
Government or any other rights and/or remedies of Developer. "
2.7.5. Conflict with Section 330 and Other Federal Government Obligations.
Section 10.6 of the DDA provides as follows:
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follows:
"10.6 Conflict with Section 330 and Other Federal Government
Obligations.
Notwithstanding anything to the contrary contained in this Article 10,
in the event that any actions required to be taken by Developer pursuant to
this Article 10 could potentially result in Developer losing rights, or are
contrary to any rights, which it otherwise would have pursuant to Section 330,
Fiscal Year 1993, National Defense Authorization Act Public Law 102-484 or
otherwise against the Federal Government, then the City and Developer shall
meet in order to determine the proper course of action to be taken by
Developer. The course of action to be agreed upon shall protect the City's
interest in the Project and Tustin Legacy, while retaining for Developer its
rights pursuant to Section 330 or otherwise against the Federal Government
to the maximum extent reasonable under the circumstances. Notwithstanding
the foregoing, nothing set forth in this Section 10.6 relieves Developer with
respect to Developer's environmental responsibilities and obligations and
environmental indemnification of Developer to the City in this Agreement. "
2.7.6. Insurance and Indemnification. Section 10.7 of the DDA provides as
"10.7 Insurance and Indemnification
Notwithstanding anything contained herein and without limiting or
relieving Developer or any Successor Owner of its obligations under this
Agreement, the City agrees that with respect to any Claims tendered by any
one (1) or more of the City Indemnified Parties under this Agreement for
which Developer has the obligation to indemnify the City pursuant to the
terms of this Agreement, the City Indemnified Parties shall seek recourse for
such Claims under the Developer's insurance coverage required by Article 11
of this Agreement as well as under any other applicable insurance coverage
maintained by or for the benefit of the City, in each case only to the extent
such insurance could reasonably be determined to be applicable to the type,
extent, value and location of the Claim being made. The City shall thereafter
use reasonable commercial efforts to prosecute its Claim for coverage with
such insurer(s). To the extent that insurance is determined by the City not to
be reasonably applicable the Claim or, if after six (6) months from tender of
the Claim to the insurer, despite such efforts, insurance proceeds are not
available to cover all or a portion of the Claim or if such Claim is earlier
denied by the insurance carrier, then Developer shall defend and indemnify
the City Indemnified Parties for the full amount of the Claim not covered by
the insurance but only to the extent Developer has such obligations in this
Agreement. If an insurers) to which a Claim is tendered declines to defend,
or fails to timely defend the Claim within the six (6) month time period
described above, then Developer shall defend and indemnify against such
Claim to the extent it has such obligations in this Agreement. However, if for
any Claim for which the City has reasonably concluded that insurance is
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applicable to such Claim and the City has not received insurance proceeds
after six (6) months as described above, then the City shall continue to use
reasonable commercial efforts to pursue such insurance until the insurance
carrier finally pays out on all or part of such Claim and/or denies all or the
remaining portion of such Claim. At any time after 6 months have passed
since the original tender of a Claim to an insurer by the City as described
herein if the insurer has not paid out on all or part of the claim, Developer in
its sole discretion may decide to pay for the legal fees and expenses
associated with filing and prosecuting litigation against such insurance
carrier. If Developer decides to pay such legal fees and expenses, the City
shall proceed with such litigation at Developer's expense as further set forth
below. Developer shall have the right to select counsel to represent the City
in connection with the prosecution of such Claim in litigation. Any fees and
expenses of such litigation will be borne by the Developer and any monetary
recovery from such litigation shall first be applied to reimburse the Developer
for any fees and expenses paid by Developer to defend and indemnify the City
for such Claim, and second, to the extent there remains additional money
recovered after such payments, then such additional monetary recovery shall
be applied to reimburse the City for any incurred fees and expenses that were
part of the Environmental Claim but were not reimbursed by the Developer.
Finally, to the extent any additional money is recovered after the payments
described above, then such additional monetary recovery shall be applied to
reimburse the Developer for its litigation fees and expenses incurred in
prosecuting the Claim against the insurance carrier. As used in this Section
10. 7, "reasonable commercial efforts" shall not include the initiation or
prosecution of a lawsuit. "
3. Enforcement of Covenants.
3.1. General Purpose and Constructive Notice. This Declaration and the
Restrictions shall run and pass with each and every portion of the Parcel and be binding upon
each Property Owner and each and every Person claiming by, through or under such Property
Owner, for the following terms: (a) with respect to the Restrictions set forth in Sections 2.1 and
2.2, for the time periods set forth in Section 2.1 and 2.21 respectively, (b) with respect to the
indemnity set forth in Section 2.6.1 (Section 10.1 of the DDA) for the time period set forth
therein, and (c) with respect to all other Restrictions set forth herein, in perpetuity. These
Restrictions shall benefit the City Benefited Property and the City shall retain the right to enforce
the restrictions and equitable servitudes against the Parcel and the same shall be enforceable
solely by the City notwithstanding any future transfer of the City Benefited Property and/or any
interest therein or portion thereof, provided that no private right of action shall exist or be
implied by the existence of this Declaration. Except as specifically set forth herein, the
Restrictions shall remain in full force and effect for the periods of time specified herein with
respect thereto, notwithstanding the City's exercise of any right or remedy herein. Subject to the
time limitations set forth herein, each Successor Owner that now or hereafter owns or acquires
any right, title or interest in or to any portion of the Parcel is and shall be conclusively deemed to
have consented to and agreed to every Restriction, provision, covenant, condition, right and
limitation contained herein, whether or not any reference to this Declaration is contained in the
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instrument by which such Successor Owner acquired such interest in the Parcel or any portion
thereof.
3.2. Transfers and Transfers of Control. Notwithstanding anything to the contrary
in this Declaration, except as set forth below, in the event that any Property Owner conveys all or
any portion of the Parcel to another Person, the Property Owner conveying all or such portion of
the Parcel shall be released from the obligations of this Declaration first occurring from and after
the effective date of such conveyance to another Person; provided, however, that (a) the
foregoing shall not be construed to permit any Transfer or Transfer of Control (each as defined in
the DDA) by the Property Owner of the Phase 2 Parcel or the Phase 1 Parcel or any portion
thereof prior to the Recording of a Certificate of Compliance for such Parcel except as expressly
permitted by the DDA, and (b) during the term of the DDA, notwithstanding any Transfers
and/or Transfers of Control, no Property Owner shall be released with respect to matters for
which it remains liable pursuant to the DDA, and unless specifically released by the City in
writing, each Property Owner shall remain fully liable for the obligations of such Property
Owner under this Declaration for such period as it is a Property Owner and, during the term of
the DDA, for such longer period as may be applicable to it during the any Additional Liability
Period (as defined in the DDA) under the DDA.
3.3. Inspection. Upon forty-eight (48) hours' prior telephonic, electronic mail or
written notice, or such longer period as may be explicitly set forth in this Declaration, and
subject to reasonable security provisions of the applicable Property Owner and any rights of such
Property Owner's tenants, and in addition to any rights that the City may have in its
Governmental Capacity, the City and its authorized representatives may from time to time enter
upon and inspect the Parcel or any portion thereof or any Improvements thereon for purposes of
ascertaining compliance with the Restrictions, but without obligation to do so.
3.4. Other Restrictions. This Declaration and the Restrictions contained herein are
not the exclusive source of restrictions on the use and maintenance of the Parcel. Nothing
contained herein shall prejudice or diminish in any way the City's rights under the DDA or any
Other Agreements or its authority in its Governmental Capacity, nor the rights and authority of
any other Governmental Authority having jurisdiction over the Project or any portion thereof,
and the exercise of any rights or remedies by the City hereunder shall be considered separate
from and independent of any breach or violation by Property Owner which is also a breach or
violation of any Governmental Requirements.
4. Potential and Material Defaults. In the event of any breach, violation or failure to
perform or satisfy any of the Restrictions which has not been cured within the applicable cure
period set forth below, the City may in its sole discretion enforce any one or more of the
remedies set forth in Section 4.3.
4.1. Potential Defaults. Except as otherwise provided in this Declaration, it shall be a
"Potential Default" if:
(a) Property Owner fails to pay timely any sum required to be paid to
the City pursuant to this Declaration; or
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(b) Property Owner fails to perform, or delays in the performance of,
in whole or in part, any obligation required to be performed under, or otherwise violates the
provisions of this Declaration, other than as set forth in Section 4.1(a).
4.2. Material Defaults.
(a) A Potential Default under Section 4.1(a) shall become a "Material
Default" if it is not cured within fifteen (15) calendar days after receipt or deemed receipt by the
defaulting Property Owner of the written notice of Potential Default from the City, which shall
not be extended by Force Majeure Delay.
(b) A Potential Default under Section 4.1(b) shall become a
"Material Default" if it is not cured, at such defaulting Property Owner's expense, (i) within
thirty (30) calendar days after the date of receipt or deemed receipt by the defaulting Property
Owner of written notice of such Potential Default from the City; (ii) if such cure cannot be
reasonably accomplished within such thirty (30) calendar day period, within ninety (90) calendar
days after the date of receipt or deemed receipt of written notice of such Potential Default from
the City, but only if the defaulting Property Owner has commenced such cure within such thirty
(30) calendar day period and diligently pursues such cure to completion, or (iii) within such
longer period of time as may be expressly agreed by the Parties in writing. The time periods set
forth in this Section 4.2(b) to cure a Potential Default shall be extended by Force Majeure Delay.
(c) Following written notice and failure to cure within the time periods
set forth in this Section 4.2, each Potential Default shall become a Material Default that shall be
deemed to have occurred upon the expiration of the applicable cure period.
4.3. Certain City Remedies. In the event of a Material Default, subject to the
Mortgagee cure rights set forth in Section 4.5 below, and without limiting the rights and
remedies of the City under the DDA, if then in effect, and any Other Agreement, the City may do
any or all of the following:
(a) The City may bring a suit for damages for any compensable breach
of or noncompliance with any of the Restrictions, or declaratory relief to determine the
enforceability of any of the Restrictions; provided, however, that (i) such damages shall be
limited to direct (actual) damages to the City for such Material Default, and (ii) the City hereby
expressly waives, releases and relinquishes any and all right to any expectation, anticipation,
indirect, consequential, exemplary and punitive damages; and/or
(b) The City may bring an action in equity or otherwise for specific
performance to enforce compliance with the Restrictions or an injunction to enjoin the
continuance of any such breach or violation thereof, whether or not the City exercises any other
remedy set forth herein, and Property Owner acknowledges that a particular or ongoing violation
of one or more of the Restrictions may cause the City to suffer material injury or damage not
compensable in money (including irreparable effects on the type and quality of development on
the City Benefited Property, Tustin Legacy or portions thereof, and/or the maintenance of the
Property, including without limitation, the Improvements in accordance with the standards(s) for
the quality of maintenance set forth in Section 2.2.1; and/or
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(c) Any Material Default of the Restrictions or any provision hereof is
hereby declared to be a nuisance, and the City shall be entitled to enter the Parcel and summarily
abate and remove, without further legal process to the maximum extent permitted by law, any
structure, thing or condition that may exist in violation of any of these Restrictions, or to
prosecute any remedy allowed by law or equity for the abatement of such nuisance against any
person or entity acting or failing to act in violation of the Restrictions, all at the sole cost and
expense of Property Owner. Such rights shall include without limitation, the right of the City or
its designee to enter the Parcel and to correct any Material Default by Property Owner in the
maintenance of the Improvements or landscaping on the Parcel in accordance with the
Restrictions.
4.4. Failure to Timely Pay Amounts Due. If there is a monetary Material Default
under this Declaration then, in addition to any other remedies conferred upon the City pursuant
to this Declaration, the defaulting Property Owner shall pay to the City, in addition to all
principal amounts due, interest from the date of such payment or part thereof was due until the
date paid at the default rate of eight percent (8%) per annum, compounded annually, but in no
event in excess of the maximum legal rate.
4.5. Rights of Mortgagees and Mortgagee Protection.
(a) No breach or violation of the Restrictions shall defeat or render
invalid the lien of any mortgage, deed of trust or similar instrument securing a loan made in good
faith and for value with respect to the construction or permanent financing of the Project or any
portion thereof on a Parcel following Recording of a Certificate of Compliance for such Parcel;
provided, however, that this Declaration and all provisions hereof shall be binding upon and
effective against Developer and each and every Successor Owner of such Parcel or portion
thereof whose title is acquired by foreclosure, trustee's sale, deed in lieu of foreclosure or
otherwise, but (i) such subsequent owner shall have a reasonable time after acquiring title in
which to cure any violations or correct and change any facts giving rise to the City's rights under
this Declaration occurring prior to such transfer of title or occupancy and which are reasonably
capable of being cured or changed provided that such Successor Owner diligently acts to effect
such cure or change (and in the event of such diligent and timely cure, such Successor Owner
shall have no further liability in connection with such prior violation or the continued existence
of such violation until such cure is completed), and (ii) Sections 4.1(a) and 4.1(b) shall not be
applicable as to such Successor Owner with regard to any non -curable default occurring prior to
the time such Successor Owner acquired title. Notwithstanding the foregoing, each Successor
Owner shall be required to use the Parcel in accordance with the restrictions set forth in
Section 2.
(b) If Developer or a Successor Owner grants a mortgage to a
mortgagee, such mortgagee may inform the City of the existence of such mortgage by delivering
written notice to the City confirming the existence of the mortgage on the Property in favor of
such mortgagee, together with the mailing address for such mortgagee (an "Identified
Mortgagee"). Prior to the Recording of the Certificate of Compliance for a Parcel, each
Permitted Mortgagee shall be an Identified Mortgagee for such Parcel.
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(c) If there is a Material Default by Developer or a Successor Owner,
the City shall not exercise any of its remedies under Section 4.3 until the expiration of the cure
period provided to Identified Mortgagees under this Section 4.5.
(d) At any time after a Potential Default by Developer or Successor
Owner, the City shall deliver written notice to each Identified Mortgagee, stating that a Potential
Default has occurred, and if such Potential Default has become a Material Default by the date of
the notice, that a Material Default has occurred (a "Notice to Mortgagee"). Each Identified
Mortgagee shall have a cure period of ninety (90) days in addition to the cure period provided to
Developer pursuant to Section 4.2 above (the "Mortgagee Cure Period"), which cure period
shall commence on the date that is the later of, (i) the date of the Notice to Mortgagee, and (ii)
the date of the Material Default, during which the Identified Mortgagees may cure the Material
Default.
(e) No mortgagee shall have the right to use the failure of the City to
provide a Notice to Mortgagee to any other mortgagee as a claim, defense or estoppel to
application of these provisions with respect to the first such mortgagee.
(f) Each mortgagee shall have the right, but not the obligation, during
the Mortgagee Cure Period to cure a Material Default, including the payment of any amounts due
to the City, to make any repairs or improvements, to do any other act or thing required of
Developer under this Declaration or which may be necessary and proper to be done in the
performance and observance of this Declaration to rectify a Potential Default or a Material
Default.
4.6. Lien Rights. The delinquent amount of any payments due hereunder, together
with any late charges or interest due on any such delinquent payment, reasonable attorneys' fees,
experts' fees and consultants' fees, and collection costs related to such delinquent payment shall,
to the greatest extent permitted by applicable law, be a lien and charge upon the Parcel and shall
be a continuing lien upon the Parcel in favor of the City.
4.7. Priority of Declaration. This Declaration including the lien rights described in
Section 4.6 shall be superior in priority to all Mortgages, including all Identified Mortgages, and
other liens. Notwithstanding the foregoing, no breach or violation of the Restrictions shall defeat
or render invalid the lien of any Mortgage or similar instrument securing a loan made in good
faith and for value with respect to the construction or permanent financing of the Project or any
portion thereof, provided, however, that this Declaration and all provisions hereof shall be
binding upon and effective against each Property Owner and each and every other occupant of
the Parcel or portion thereof whose title is acquired by foreclosure, trustee's sale, deed in lieu of
foreclosure or otherwise, but (such subsequent owner shall have a reasonable time after acquiring
title in which to cure any violations or correct and change any facts giving rise to the City's
rights under this Declaration occurring prior to such transfer of title or occupancy and which are
reasonably capable of being cured or changed provided that such Property Owner diligently acts
to effect such cure or change (and in the event of such diligent and timely cure, such Property
Owner shall have no further liability in connection with such prior violation or the continued
existence of such violation until such cure is completed). Notwithstanding the foregoing, each
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Property Owner shall be required to use the Parcel in accordance with the Restrictions set forth
in this Declaration.
4.8. No Damages Payable by City. The City would not have executed this
Declaration if the City could become liable for damages under or with respect to this
Declaration, the DDA or the Other Agreements. Consequently, and notwithstanding any other
provision of this Declaration, except as specifically set forth in Section 18.5.3 of the DDA for the
term thereof, the City shall not be liable in damages under this Declaration, the DDA or any
Other Agreement to Property Owner, or any Person claiming by, through or under such Property
Owner and by acceptance of this Declaration, Developer, on behalf of itself and each Successor
Owner, hereby expressly waives, releases, and relinquishes any and all rights to claim damages
of any kind or nature from the City except, during the term of the DDA, as set forth in
Section 18.5.3 of the DDA, including, without limitation, any and all right to any expectation,
anticipation, indirect, consequential, exemplary and punitive damages.
5. Miscellaneous.
5.1. Modification. From and after the transfer of fee title to the Parcel to Developer,
no amendment, change, modification or supplement to this Declaration shall be valid and
binding unless (a) it is represented in writing and signed by (i) the City, as the first party, and
(ii) Developer and/or any Successor Owners then owning any portion of the Parcel or any
interest in the Project, as the second parties; provided such instrument is signed by the first party
and all of the second parties then holding an interest in the Parcel and/or the Project, and (b) is
duly recorded in the Official Records. This Declaration shall be administered by the City
Manager of the City. Any matter to be approved by the City shall be deemed approved, and any
action to be taken by the City shall be deemed taken, upon the written approval by the City
Manager (or his or her designee). The City Manager or his or her designee shall have the
authority to issue interpretations with respect to this Declaration and to determine whether any
action requires the approval of the City Council.
5.2. Applicable Law. This Declaration shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, irrespective of
California's choice -of -law principles.
5.3. Attorneys' Fees and Costs. In the event any legal or equitable action or
proceeding shall be instituted between the City and Developer or any Successor Owner relating
to this Declaration, the Party prevailing in such action shall be entitled to recover from the losing
Party all of its costs, including court costs and reasonable attorneys' fees.
5.4. Conflict of Interest. No appointed or elected official or employee of the City
shall have any personal interest, direct or indirect, in this Declaration nor shall any official or
employee participate in any decision relating to the Declaration which affects his or her interests
or the interests of any corporation, partnership, or association in which he or she is directly or
indirectly interested. Developer warrants that it has not paid or given and will not pay or give
any third person any money or other consideration for obtaining this Declaration.
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5.5. Non -liability of City Officials and Employees. No elected or appointed official,
representative, employee, agent, consultant, legal counsel or employee of the City shall be
personally liable under this Declaration.
5.6. Construction and Interpretation of Declaration.
(a) The language in all parts of this Declaration shall in all cases be
construed simply, as a whole and in accordance with its fair meaning and not strictly for or
against any Person.
(b) Any provision of this Declaration that is deemed to be illegal,
invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to
the extent of the invalidity or unenforceability of such provision and shall be deemed stricken
from this Declaration. Any stricken provision shall not affect the legality, enforceability or
validity of the remainder of this Declaration. If any provision or part thereof of this Declaration
is stricken in accordance with the provisions of this Section, then the stricken provision shall be
replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in
tenor and intent to the stricken provision as is legally possible.
(c) The captions of the sections and subsections in this Declaration are
inserted solely for convenience and under no circumstances are they or any of them to be treated
or construed as part of this instrument.
(d) References in this instrument to "this Declaration" mean, refer to
and include this instrument, as well as any riders, schedules, exhibits, addenda and attachments
hereto (which are hereby incorporated in this Declaration by this reference). Any references to
any covenant, conditions, obligation and/or undertaking, "herein," "hereunder," or "pursuant
hereto' (or language of like import) shall mean, refer to and include the covenants, obligations
and undertakings existing pursuant to this Declaration and any riders, schedules, exhibits,
addenda, attachments or other documents affixed to this instrument.
(e) As used in this Declaration and as the context may require, the
singular includes the plural and vice versa and the masculine gender includes the feminine and
vice versa.
(f) As used in this Declaration the words "include" and "including"
mean respectively "include, without limitation" and "including, without limitation".
(g) Unless otherwise indicated, references in this Declaration to
sections, paragraphs, clauses, exhibits, attachments and schedules are to the same contained in or
attached to this Declaration.
5.7. Time of Essence. Time is of the essence with respect to all provisions of this
Declaration in which a definite time for performance is specified.
5.8. Counterparts. This Declaration may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
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Declaration shall not be effective until the execution by the City and Developer of at least one set
of counterparts. Any one of such completely executed counterparts shall be sufficient proof of
this Declaration.
5.9. Estoppel. City shall, from time to time upon not less than twenty (20) calendar
days' notice from Property Owner, but not more often than annually unless in connection with a
sale or refinancing of the Parcel and/or Improvements, execute and deliver to Property Owner a
certificate in recordable form stating that this Declaration is unmodified and in full force and
effect or, if modified, that this Declaration is in full force and effect, as modified, and stating the
modifications and stating whether or not, to the actual knowledge of the City Manager (and
without duty of inquiry), (a) a Potential Default or Material Default by Property Owner has
occurred and is continuing, and (b) if a Potential Default or Material Default by Property Owner
has occurred and is continuing, specifying the same. Any such certificate may be relied upon by
Property Owner or any prospective purchaser or lender of Property Owner. Property Owner
shall promptly pay to the City all of the City's actual out of pocket third party expenses,
including legal fees, and staff costs incurred with respect to the preparation, review, and delivery
of each City estoppel.
5.10. Force Maieure Procedures. If any party (the "First Party") believes that it is
entitled to an extension of time due to Force Majeure Delay, it shall notify the other party (the
"Second Party") in writing within ninety (90) calendar days from the date upon which the First
Party becomes aware of such Force Majeure Delay, generally describing the Force Majeure
Delay and its date of commencement. Upon written request from the Second Party, the First
Party shall promptly provide the following information with respect to such Force Majeure
Delay: a more detailed description of the Force Majeure Delay, when and how the First Party
obtained knowledge thereof, the steps the First Party anticipates taking to respond to such Force
Majeure Delay, and the estimated delay resulting from such Force Majeure Delay and response
and such other information as the Second Party may reasonable request. The extension for Force
Majeure Delay shall be granted or denied in the Second Party's reasonable discretion. If the
First Party fails to notify the Second Party in writing of its request for a given Force Majeure
Delay within the ninety (90) calendar days specified above, there shall be no extension for such
Force Majeure Delay.
5.11. Termination by City. This Declaration and the Restrictions contained herein are
for the sole benefit of the City and its Governmental Successors and the City and its
Governmental Successors shall have the absolute right to terminate all or any portion of this
Declaration and all or any portion of the Restrictions contained herein as to all or any portion of
the Parcel at any time without the prior written approval of any Owner or any other Person. Any
such termination shall be evidenced by Recording of a notice of termination executed by the City
or its then Governmental Successor and shall be effective as of the date of Recording of such
notice. Nothing in this Section shall modify the automatic termination of Section 2.2 of this
Declaration as provided in Section 2.2.4 of this Declaration.
5.12. Relationship to CC&Rs, SLUR. During the term of this Declaration, this
Declaration shall have priority with respect to the CC&Rs and to the SLUR recorded against the
Parcel, provided, however, that in the event that the Restrictions contained in Section 2.1 of this
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Agreement are less restrictive than the use and/or maintenance restrictions contained in the
CC&Rs and/or any SLUR, the more restrictive provisions shall govern.
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IN WITNESS WHEREOF, the City has executed this Declaration as of the date first set
forth above.
CITY OF TUSTIN:
Dated: By
ATTEST:
Erica N. Rabe, City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
APPROVED AS TO FORM
By:
David Kendig City Attorney
Armbruster Goldsmith & Delvac LLP
Tustin Special Real Estate Counsel
By:
Amy E. Freilich
Jeffrey C. Parker, City Manager
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BY EXECUTING THIS DECLARATION OF SPECIAL RESTRICTIONS FOR
CORNERSTONE I (PHASE [1/21 PARCEL), DEVELOPER ACKNOWLEDGES AND
AGREES THAT, UPON OBTAINING TITLE TO THE PROPERTY, DEVELOPER
SHALL ASSUME AND BE BOUND BY ALL OF THE OBLIGATIONS AND
LIABILITIES, COVENANTS, CONDITIONS, AND RESTRICTIONS HEREIN:
Date:
DEVELOPER:
a Delaware limited liability company
go
By: _
Name:
Title:
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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EXHIBIT 1
LEGAL DESCRIPTION OF LAND
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PHASE 1 PARCEL:
PARCEL 1 OF PARCEL MAP NO. 2015-168, IN THE CITY OF TUSTIN, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 388, PAGES 26
THROUGH 27, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
PHASE 2 PARCEL:
PARCEL 2 OF PARCEL MAP NO. 2015-168, IN THE CITY OF TUSTIN, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 388, PAGES 26
THROUGH 27, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
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Exhibit 1
EXHIBIT 2
LEGAL DESCRIPTION OF CITY BENEFITED PROPERTY
(attached)
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LEGAL DESCRIPTION
LOT C OF TRACT MAP NO. 17404, PER MAP
FILED IN BOOK 907, PAGES 6 THROUGH 42,°o
MISCELLANEOUS MAPS IN THE OFFICE OF THE
COUNTY RECORDER OF ORANGE COUNTY
TUSTI N LEGACY
CITY BENEFITED PROPERTY
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Exhibit 2
1
EXHIBIT 3
PROHIBITED USES
"Prohibited Uses" shall mean and include the following:
1. Manufacturing and physical assembly (except for limited prototype and similar
construction and assembly and/or "clean room" space ancillary to a principal use that is
not a prohibited use), and warehousing uses (except for warehousing that uses no more
than 5% of the space at the Property then leased or owned by the relevant user);
2. Server farms as a principal use (provided that server rooms to accommodate a principal
use that is not a prohibited use are allowed);
3. Any coin operated laundry;
4. Any "dollar" stores such as Family Dollar, Dollar Tree or 99 Cents Only;
5. Any dry cleaning plant; provided, however, that this restriction shall not apply to either
(a) a drop off/pick up only type of facility, or (b) an operation using a Liquid CO2
System, a Wet -Dry System or a D5 System or other equal or better environmentally
sound process, so long as the operator thereof: (i) uses best management practices
intended to avoid Release of Hazardous Materials; (ii) identifies and addresses leaks;
(iii) controls emissions of any of these products; and (iv) performs all dry cleaning
activities in compliance with all applicable laws, rules, ordinances and regulations
(federal, state or local);
6. Any dance hall, night club or billiard parlor, unless operated in conjunction with a
restaurant or other food establishment;
7. Any entertainment, pinball, video, or similar arcade, except as incidental to a permitted
retail use;
8. Any funeral home or mortuary;
9. Any flea market, except farmers markets and community or charitable events;
10. Any facility for the sale or display of pornographic material (e.g., video or book store
selling, renting, or exhibiting primarily material of a pornographic or "adult" nature),
except establishments that are not perceived to be, nor hold themselves out as "adult"
book stores (e.g., drug stores, grocery stores, newsstands or kiosks, coffee shops or first
class book retailers), but which may incidentally sell books, magazines or other
periodicals that may contain pornographic materials;
11. Any gambling facility or operation, including, but not limited to, off-track or sports
betting parlor, table games such as black jack or poker, slot machines, video poker/black-
jack/keno machines or similar devices, or bingo parlor (this prohibition shall not be
applicable to government sponsored gambling activitiese.g., state lottery—or
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charitable gambling activities, so long as such activities are incidental to the business
operation being conducted by the permitted occupant or tenant);
12. Any gun shop, except as an incidental part of a sporting goods or outdoor retail stores
(e.g., Big 5 Sporting Goods, Dicks Sporting Goods, Sports Authority Sporting Goods or
Turner's Outdoorsman);
13. Firearm shooting range;
14. Any store selling paraphernalia used for the consumption of cannabis, tobacco, legal
highs, legal party powders and herbs;
15. Any store selling paraphernalia for illegal drugs;
16. Any massage parlor (except for bona fide therapeutic massage, chiropractic care, sports
therapy, a beauty salon/day spa and other bona fide massage services in connection with
a permitted health club use), adult entertainment restaurant, bar or club (e.g., topless club
or "strip j oint");
17. Any retail store that primarily sells medical marijuana;
18. Any pawn shop;
19. Any medical office use (e.g., doctors, dentists, hospitals, urgent care clinics, or
rehabilitation facilities); and
20. Any residential uses.
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EXHIBIT 4
DEFINED TERMS
For avoidance of doubt, in the event that any capitalized term is used and not otherwise defined
in this Declaration, such term shall have the meaning set forth in the DDA.
"Additional Liability Period" shall mean, with respect to any Developer, the period of
ownership of the Property and/or the Project or any portion thereof by any Developer Affiliate or
any successor to such Developer Affiliate pursuant to one or more Transfers for which City
consent under the DDA was not required and for which the prior written consent of the City was
not obtained pursuant to the DDA.
Approved Plans" shall mean the plans and specifications approved by the City in its
Governmental Capacity and, during the term of the DDA, in its Proprietary Capacity, as required
by the DDA, which govern development of Improvements on the Property
"Affiliate of Alcion" shall mean any Person (a) for which at least two (2) of the
following individuals are together the Controlling Person: (i) Mark Potter, (ii) Eugene
DelFavero, or (iii) Martin Zieff, (b) that is within the Alcion family of funds, and (c) which has
sufficient equity capital pledged to the Project to fund (i) if prior to any Close of Escrow, (1) all
Option Payments that may be due from time to time, and (2) the Purchase Price for the Property
remaining to be acquired, and (ii) the amount identified as the required equity contribution of
Developer under the Phase 1 Financing Plan or Phase 2 Financing Plan, as applicable, approved
by the City for all Development Costs associated with that Phase, provided that in no event shall
the amount described in clause (c) above be required to exceed One Hundred and Fifty Million
Dollars ($150,000,000.00) for each Phase of the Project.
"Building" shall mean each building and structure on the Parcel.
"Building Pad" shall mean any legally subdivided lot comprising a portion of the Parcel
(other than parcels for roadways to be owned by a property owners' association) and proposed to
be owned by a Person other than the City.
"Buildings" shall mean the Buildings on the Parcel, collectively.
"Business Day(s)" shall mean any day on which City Hall is open for business and shall
specifically exclude Saturday, Sunday or a legal holiday.
"CC&Rs" shall mean
"CEQA" shall mean the California Environmental Quality Act and implementing
regulations and guidelines, contained in Cal. Public Resources Code Section 21000 et sec ., and
Cal. Code of Regulations, title 14, Section 15000 et SeMc ., respectively.
"Certificate of Compliance" shall mean one or more certificate(s) of compliance for the
Parcel, or portion thereof, issued and recorded by the City against the Parcel or the applicable
portion of the Parcel in accordance with the DDA (and evidencing the termination of the DDA as
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to such Parcel or portion thereof in accordance with its terms) upon the satisfaction of the
conditions precedent to the City's Recording of such certificate set forth in the DDA.
"City" shall mean the City of Tustin and each Governmental Successor owning all or any
portion of the City Benefited Property.
"City Benefited Property" shall mean the real property owned by the City and described
on Exhibit 2 attached hereto.
"City Code" shall mean the Tustin City Code for the City of Tustin, California, as the
same may be amended from time to time.
"City Council" shall mean the City Council of the City of Tustin which serves as the
City's legislative body.
"City Indemnified Parties" shall mean the City and its appointed and elected officials,
agents, attorneys, affiliates, employees, contractors, consultants and representatives.
"Claim" or "Claims" shall mean 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), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
"Class A Project" shall have the meaning set forth in Section 2.1(c).
"Class A Standards" shall mean in terms of the quality of maintenance, standards
consistent with a Class A Project.
"Close of Escrow" shall have the meaning set forth in Section 2.6.
"Complete" and "Completion" shall mean, with respect to the Project or, if the Project is
constructed in Phases, with respect to a given Phase, or if a Building Pad is eligible for its own
Certificate of Compliance, such Building Pad, the point in time when all of the following shall
have occurred with respect to the Project, such Phase, or such Building Pad: (a) the
Improvements with respect thereto have been substantially completed in accordance with the
DDA; (b) the issuance of a certificate of occupancy for core and shell, exterior staircase and
balcony systems and common restrooms by the City or, to the extent a certificate of occupancy is
not required by or available from the City for a particular Improvement, the equivalent
inspection, signoff or other permit activity with respect to such Improvement, (c) the Recording
of a Notice of Completion (California Civil Code Section 8182) by Developer, its Successor
Owner or such Party's contractor; (d) a certification by the architect for the Project that such
Improvements (with the exception of minor "punch list" items) have been completed in a good
and workmanlike manner and substantially in accordance with the Approved Plans and
specifications; and (e) all contractors, subcontractors, laborers, suppliers, architects, and
engineers who performed work on the relevant Improvements either (i) shall have been paid in
full and shall have executed final unconditional lien waivers or (ii) any mechanic's and/or
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materialmen's liens that have been recorded or stop notices that have been delivered have been
paid, settled or otherwise extinguished, discharged, released, waived, bonded around or insured
against or (iii) the statutory period for filing liens with respect to such Improvements shall have
expired without any liens being filed.
"DDA" shall have the meaning set forth in Recital D.
"Declaration" shall have the meaning set forth in the preamble to this Agreement.
"Developer" shall mean and include the Person acknowledging this Declaration as
"Developer" and each Successor Owner of all or a portion of the Parcel, in each case for so long
as such Person owns fee title to the Parcel or any portion thereof.
"Developer Affiliate" shall mean a Person for which any Affiliate of Alcion is the
Controlling Person.
"Developer Representatives" shall mean Developer and its officers, directors,
employees, agents, representatives, Space Tenants, prospective tenants, prospective purchasers,
contractors, and other Persons accessing the Development Parcels or property owned by the City
by, through or with the permission or under the direction or auspices of Developer.
"Development Agreement" shall mean the Development Agreement entered into by
Developer and the City dated and Recorded on , 2016 as Instrument No.
in connection with its development of the Project and the Parcel.
"Development Parcels" shall mean the Phase 1 Parcel and the Phase 2 Parcel
collectively.
"Development Permits" shall mean all ministerial permits, certificates and approvals
which may be required by the City or any other Governmental Authority for the development
and construction of the improvements for the Project including any engineering permits, grading
permits, foundation permits, construction permits, encroachment permits, building permits or
other permits as may be necessary pursuant to Chapter 4 of the Specific Plan and/or the City
Code.
"DTSC" shall mean the California Department of Toxic Substances Control.
"Effective Date" shall have the meaning set forth in the preamble to this Agreement.
"End User" shall mean a Person operating a business in any Improvement including any
Building or Leasable Space, whether such Person is (a) a Pad Transferee that holds a fee interest
in a Building Pad, a Ground Lease interest as a Tenant in a Building Pad, or (b) a Space Tenant
that holds a leasehold interest in a Leasable Space or is leasing office space in a Building.
"Entitlements" shall mean the City General Plan, the Specific Plan and the discretionary
land use approvals and entitlements legally required by the City or any other Governmental
Authority as a condition of subdivision and development of the Property and construction of
Improvements, but shall specifically exclude Development Permits.
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"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub -entities, including
any Regional Water Quality Control Board, the State Water Resources Control Board, the
DTSC, the South Coast Air Quality Management District, and the California Air Resources
Board; the City; any Fire Department or Health Department with jurisdiction over the Property;
and/or any other federal, state, regional or local governmental agency or entity that has or asserts
jurisdiction over Hazardous Substance Releases or the presence, use, storage, transfer,
manufacture, licensing, reporting, permitting, analysis, disposal or treatment of Hazardous
Materials in, on, under, about, or affecting the Project, the Parcel or any Improvements thereon.
"Environmental Claims" shall have the meaning set forth in Section 2.6.2.
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regulations, requirements, orders, directives, guidelines, or permit conditions, in existence
as of the Effective Date or as later enacted, promulgated, issued, modified or adopted, regulating
or relating to Hazardous Materials, and all applicable judicial, administrative and regulatory
decrees, judgments and orders and common law, including those relating to industrial hygiene,
public safety, human health, or protection of the environment, or the reporting, licensing,
permitting, use, presence, transfer, treatment, analysis, generation, manufacture, storage,
discharge, Release, disposal, transportation, Investigation or Remediation of Hazardous
Materials. Environmental Laws shall include the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.)
("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S.C.
Section 6901 et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended,
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
"Federal Deeds" shall mean (a) that certain Quitclaim Deed D and Environmental
Restriction Pursuant to Civil Code Section 1471 dated May 13, 2002, that was recorded on May
14, 2002 as Instrument Number 20020404594, and (b) that certain Quitclaim Deed for Parcels
III -D-5, III -D-6, III -D-7, III -D-8 and III -G-4 dated January 12, 2006, that was Recorded on
February 8, 2006 as Instrument Number 2006000089845.
"Federal Government" shall mean the United States of America (including the Navy),
by and through the Secretary of the Navy, or designee.
"Food Hall Uses" means a combination of one or more of the following uses or similar
uses to be operated in the Food Hall Building: multiple food and beverage -oriented retail uses,
restaurants, artisanal and specialty purveyors, small food shops, an indoor farmer's market or
grocery store, food stations for eating, test kitchens, culinary -related educational space, a wine
shop or beer garden, and a common seating area, but specifically excluding Prohibited Uses.
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"Force Majeure Delay" shall (a) prior to Recording of a Certificate of Compliance for
the Phase 2 Parcel and/or the Phase 1 Parcel, as to such Parcel, have the meaning set forth in the
DDA, and (b) following Recording of a Certificate of Compliance for each Parcel, as to such
Parcel, mean the occurrence of any of the following events when such event is beyond the
control of the claiming Person and such Person's contractors and consultants and is not due to an
act or omission of such Person or any consultant, contractor or other Person for whom such
Person may be contractually or legally responsible, which directly, materially and adversely
affects the ability of the claiming Person to meet its non -monetary obligations under this
Declaration and which events (or the effect of which events) could not reasonably have been
avoided by due diligence and use of commercially reasonable efforts by the claiming Person,
provided, however, that failure of any Property Owner to perform any obligation to be performed
by such Property Owner hereunder as the result of adverse changes in the financial condition of
such Property Owner or any other Person or failure to perform any obligation to be performed by
Property Owner or other Person hereunder as the result of adverse changes in market conditions
shall not constitute Force Majeure Delay: any act of God, materially adverse weather conditions,
strikes, lockouts, labor troubles, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war, casualty causing material physical destruction or damage on the Property
or other reasons of a like nature beyond the reasonable control of the claiming Person delayed in
performing works or doing acts required under this Declaration.
"Foreclosure" shall mean (a) a judicial or non judicial foreclosure under a Permitted
Mortgage that encumbers Developer's interest in the Property, (b) a UCC foreclosure (or other
applicable foreclosure procedure) under a Permitted Mortgage that encumbers the direct and/or
indirect ownership interest in Developer, and/or (c) any transfer or conveyance of the Property or
the direct and/or indirect ownership interest in Developer in lieu of a foreclosure described in
clauses (a) and (b) ) resulting in a termination of the lien of the affected Permitted Mortgage and
all junior encumbrances.
"FOST" shall mean the Department of Navy findings and determinations that the
Development Parcels were suitable for transfer to the City, pursuant to the documents entitled
"Final Finding of Suitability to Transfer For Southern Parcels 4-8, 10-12, 14, and 42, and Parcels
25, 26, 30-33, 37, and Portions of 40 and 41 Marine Corps Air Station Tustin, California" dated
September 28, 2001 and "Finding of Suitability to Transfer Carve -Out 3, Portions of Carve -Out
5, and Carve -Out 7 Former Marine Corps Air Station Tustin, California" dated April 2005.
"GBA" shall mean the gross square footage of a Building calculated in accordance with
City Code requirements, and shall be consistent with the gross square footage amounts set forth
in the Entitlements.
"Governmental Authority" shall mean any and all federal, state, county, municipal and
local governmental and quasi -governmental bodies and authorities (including the United States
of America, the State of California and any political subdivision, public corporation, district,
college and or school district, joint powers authority or other political or public entity) or
departments thereof having or exercising jurisdiction over either or both of the Parties, the
Project, the Property or other property upon which Developer is obligated to construct
Improvements and/or such portions of the foregoing as the context indicates.
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"Governmental Capacity" shall mean the authority of the City when acting in its
capacity to, among other things, regulate and entitle the Property pursuant to Governmental
Requirements, including enacting laws, inspecting structures, reviewing and issuing permits, and
all of the other legislative and administrative or enforcement functions of each pursuant to
federal, state or local law.
"Governmental Requirements" shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines and other requirements issued by any Governmental Authority
having jurisdiction over, governing, applying to or otherwise affecting either or both of the
Parties, the Project, the Improvements, the Property and/or other property upon which Developer
is obligated to construct Improvements or any component thereof and including without
limitation: (i) the City Code, the Specific Plan, the Entitlements, the Development Permits and
the Approved Plans.
"Governmental Successor" shall mean any Successor Owner of the City Benefited
Property that is a governmental entity.
"Ground Lease" shall mean a lease of real property comprising all or a portion of a
Parcel to an End User for construction and/or occupancy of one or more Buildings thereon.
"Hazardous Materials" shall mean and include the following
(a) "Hazardous Substance", "Hazardous Material', "Hazardous Waste",
or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a
"Restricted Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the
California Health and Safety Code;
(c) "Hazardous Material', "Hazardous Substance", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281, 25316, 25501,
25501.1, 117690 or 39655 of the California Health and Safety Code;
(d) "Oil' or a "Hazardous Substance" listed or identified pursuant to
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any
other hydro carbonic substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous
Waste", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California
Code of Regulations;
(f) Listed by the State of California as a chemical known by the State to cause
cancer or reproductive toxicity pursuant to Section 25249.8(a) of the California Health and
Safety Code;
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(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public agency to be remediated,
including remediation which such law or public agency requires in order for the property to be
put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual,
whether or not the presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsections 136 et sec ;
(j) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsections 2601 et sec ..;
(k) Any radioactive material including any "source material", "special nuclear
material", "by-product material", "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel" or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, California Health and Safety Code Section 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor
Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
"Identified Mortgagee" shall have the meaning set forth in Section 4.5(a).
"Improvements" shall mean all Buildings, structures, private streets, roads, drives,
parking lots and parking structures, bike paths, alleyways, sidewalks, utilities, common areas,
landscaping, hardscaping, fountains and similar improvements constructed on the Parcel from
time to time.
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property or any other property upon which Developer is required to
construct Improvements, including the air, soil, surface water, and groundwater, and the
surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
"Land" shall have the meaning set forth in Recital C.
"Leasable Space" shall mean any Building or demised portion of a Building that is
Leased or is intended to be Leased, but shall exclude Building Pads.
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx Exhibit 4
"Lease" shall mean, as a noun, an agreement between Developer and a Tenant to lease,
sublease or license a Building Pad or any portion thereof or any Building or portion thereof
thereon, including any Ground Lease or Space Lease, and, as a verb, shall mean the leasing by
Developer of any Building Pad or Building or portion thereof, including any space within a
Building, to a Tenant.
"Material Default" shall have the meaning set forth in Section 4.2(a).
"MCAS Tustin" shall have the meaning set forth in Recital A.
"Memorandum of Agreement" shall mean that certain Memorandum of Agreement by
and between The United States of America (through the Secretary of the Army or designee) and
the City dated May 13, 2002.
"Memorandum of DDA" shall have the meaning set forth in Recital D.
"Mortgage" shall mean any indenture of mortgage or deed of trust, hypothecation,
pledge, assignment for security purposes, bond, grant of taxable or tax exempt funds from a
governmental agency or other security interest affecting the Parcel or any portion thereof or any
documents constituting or relating to a sale-leaseback transaction, together with all loan
documents related thereto, but excluding any community facilities districts, assessment districts,
landscape and lighting districts or other assessments created or imposed by any Governmental
Authority.
"Mortgagee" shall mean any mortgagee, beneficiary (or any agent for one or more
lenders acting in such capacity) under any indenture of mortgage, deed of trust, trustee of bonds,
governmental agency which is a grantor of funds, and, with respect to the Parcel or any portion
thereof which is the subject of a sale-leaseback transaction, the Person acquiring fee title.
"Mortgagee Cure Period" shall have the meaning set forth in Section 4.5(d).
"Navy" shall have the meaning set forth in Recital A.
"Non -Environmental Claims" shall mean all Claims brought by third -parties that are
not Environmental Claims.
"Notice to Mortgagee" shall have the meaning set forth in Section 4.5(d).
"Office Uses" shall mean a structure or portion of a structure (in a mixed-use project)
used primarily for conducting professional and general office uses (as defined in the City Code,
including the types of office uses permitted in the Professional District (PR) zone), as well as
production spaces, and work spaces of establishments that are in the business of the
development, publishing, production, editing, or distribution of creative property, including but
not limited to advertising, architectural services, broadcasting, communications, computer
software design, media content, entertainment, engineering, fashion design, film distribution,
graphic design, interior design, internet content, landscape design, photography, and similar uses,
but specifically excluding all Prohibited Uses. Office Uses may include up to 7,000 GBA of
meetings rooms and conference facilities provided on a stand-alone basis (i.e., independent of
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx Exhibit 4
any other specific End User) in the Phase 1 Project. Notwithstanding the foregoing, meetings
rooms, conference facilities, screening theaters, creative facilities (i.e., video production spaces,
recording studios, or performance venues) ancillary to a specific End User shall also be
considered an office use. Office Uses may also include a maximum of one stand-alone building
on the Property devoted to educational or school uses.
"Official Records" shall have the meaning set forth in Recital C.
"Ongoing Matters" shall mean the matters for which a Transferor shall remain
responsible following any Transfer as further set forth in the DDA. Following the issuance of a
Certificate of Compliance for the Parcel, the Ongoing Matters shall be limited to those matters or
circumstances (including any payment obligations) which relate to or arose during the period that
such Transferor was a Developer under the DDA and for the Additional Liability Period
applicable hereunder and for the items that expressly survive the termination of the DDA under
this Declaration, the Memorandum of DDA and/or the Other Agreements as to which such
Property Owner has not been theretofore released by the City.
"Other Agreements" shall mean the Quitclaim Deeds, the Special Restrictions, the
Memorandum of DDA, the Easement, the Landscape Installation and Maintenance Agreement,
the CC&Rs, the SLUR and the Development Agreement, each of which shall be or shall have
been Recorded.
"Pad Transferee" shall mean a Person to whom Developer has Transferred a Building
Pad pursuant to a Pad Transfer (i.e., pursuant to a sale or Ground Lease of the fee interest
therein).
"Parcel" shall mean [the Phase I Parcel/ the Phase 2 Parcel], which consists of the real
property described in Recital F and legally described on Exhibit 1 hereto.
"Permitted Mortgage" shall mean, (a) prior to Recording of a Certificate of
Compliance for the Phase 2 Parcel, any indenture of mortgage or deed of trust, bonds, grant of
taxable or tax-exempt funds from a governmental agency or other conveyance of a security
interest in the Phase 2 Parcel, or any portion thereof to a Permitted Mortgagee or the conveyance
of the Phase 2 Parcel or any portion thereof to the Permitted Mortgagee or its Successor Owner
or purchaser in connection with a Foreclosure which satisfies all of the criteria set forth in
Section 2 and Section 17 of the DDA and (b) following Recording of a Certificate of Compliance
for any Parcel, a Mortgage Recorded against such Parcel.
"Permitted Mortgagee" shall mean (a) prior to Recording of a Certificate of Compliance
for the Parcel, a Mortgagee, and any successor or assign of such Mortgagee, in each case
meeting the criteria set forth in Section 17.1.2 of the DDA and accordingly entitled to the
Permitted Mortgagee protections provided by this Agreement and (b) following Recording of a
Certificate of Compliance for any Parcel, a Person holding a Mortgage Recorded against such
Parcel. For purposes of any acts under a Permitted Mortgage with respect to and/or following a
Foreclosure thereunder, "Permitted Mortgagee" means such Permitted Mortgagee or any wholly-
owned subsidiary thereof designated by the Permitted Mortgagee to take title to the foreclosed
property. The participation, securitization or assignment of a loan (or any portion thereof) by a
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx Exhibit 4
Permitted Mortgagee (acting in an individual capacity or as agent for other lenders) shall not
give rise to any requirement that each lender participating in such participation, securitization or
assignment itself be a Permitted Mortgagee (acting in an individual capacity or as agent for other
lenders), so long as (a) at the inception of the loan, the originating lender (or, if the loan is held
by more than one lender, the "lead lender" or agent lender (or similar title) is a Permitted
Mortgagee, and (b) at the time of any subsequent assignment of the loan, the lead lender or agent
lender (or similar title) is a Permitted Mortgagee.
"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
"Phases" and "Phasing" or similar terms, shall mean, as a noun, a subset of the Project
that relates to all or any portion of the Parcel and which is to be developed, at one time as a
distinct component of the Project, and that may be acquired or constructed prior to or following
other components of the Project in accordance with the DDA and, as a verb, the division of the
Project into such Phases.
"Potential Default" shall have the meaning set forth in Section 4.1.
"Prohibited Uses" are defined and listed on Exhibit 3.
"Project" shall mean the construction and installation on the Parcel of the Improvements.
"Property" is defined in Section 1.
"Property Owner" shall have the meaning set forth in Recital I. In addition, with
respect to the obligations imposed under Sections 2.2 and 2.3 of this Declaration, if a
Development Parcel is subject to a ground lease, the term "Property Owner" shall also include
the ground lessee under such ground lease.
"Quitclaim Deed" and "Quitclaim Deeds" shall have the meaning set forth in Recital E.
"Record", "Recording" and "Recorded" shall mean to record the specified instrument,
or the current or past recording of the specified instrument, in the official records of Orange
County, California.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Remediate" or "Remediation' shall mean any response or remedial action as defined
under Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx Exhibit 4
"Restrictions" has the meaning set forth in Section 2.
"Retail Uses" means all retail uses permitted by the Specific Plan that do not constitute
Prohibited Uses under this Agreement.
"Space Lease" shall mean each Lease of a portion of an improved Building located on
the Parcel, but in each case excluding leases of real property or ground leases.
"Specific Plan" shall mean the MCAS Tustin Specific Plan/Reuse Plan adopted by the
City as the same has been or shall be amended from time to time.
"Successor Owner" shall mean each and every Person owning or acquiring fee title to all
or any portion of the Parcel. In addition, with respect to the obligations imposed under
Sections 2.2 and 2.3 of this Declaration, and specifically excluding any insurance and indemnity
obligations under this Declaration, if a Parcel is subject to a ground lease, the Successor Owner
shall both the Person that is the ground lessee and the Person that is the fee owner of the Parcel,
which Persons shall be jointly and severally liable for the obligations of Property Owner with
respect to the affected Parcel.
"Tenant" shall mean any Person who Leases any land and/or space on the Parcel.
"Transfer" shall mean (a) the transfer, sale, assignment, gift, hypothecation, mortgage,
pledge or encumbrance, or other similar conveyance by Developer of the DDA and/or the Other
Agreements, the Project, the Property and/or the Improvements thereon, or any portion thereof or
interest therein, whether voluntary, involuntary, by operation of law or otherwise, or any
agreement to do so; and (b) the granting by Developer of any Mortgage, lien or other
encumbrance and/or the execution of any installment land sale contract or similar instrument
affecting all or a portion of the Project, the Property, the Improvements thereon, or any portion
thereof or interest therein and shall also include Transfer of Control of Developer or any
conversion of Developer to an entity form other than that of Developer at the time of execution
of this Agreement.
Transferor" shall mean any owner of a Parcel or any portion thereof that Transfers all or
any portion of its interest in and to the DDA, the Project, the Parcel and/or the Improvements
thereon, including by Transfer to a Successor Owner, Developer Affiliate or Mortgagee, any Pad
Transferee or Tenant under a Ground Lease.
"Tustin Legacy" shall have the meaning set forth in Recital B.
"Tustin Legacy Backbone Infrastructure Program" shall mean the backbone
infrastructure program developed by the City with respect to Tustin Legacy, which includes a
program for contribution by landowners in Tustin Legacy for backbone infrastructure, including
Tustin Legacy roadway improvements; traffic and circulation mitigation to support the Tustin
Legacy project; domestic and reclaimed water; sewer; telemetry; storm drains and flood control
channels; utilities backbone (electricity, gas, telephone, cable, telecommunications, etc.) (as such
program is in effect as of the Effective Date).
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Ventures LLC
Special Restrictions 11-8-16 (agd).docx Exhibit 4
EXHIBIT 5
SITE PLAN
(attached)
Tustin Cornerstone I DDA Art 20 Form of ATTACHMENT 20 City of Tustin/Flight Venture LLC
Special Restrictions 11-8-16 (agd).docx
Exhibit 5
ATTACHMENT 21
FORM OF ROADWAY AND UTILITY EASEMENT AGREEMENT
[INTENTIONALLY LEFT BLANK -TO BE APPROVED BY THE PARTIES AND
ATTACHED AS ATTACHMENT 21 TO THIS AGREEMENT PRIOR AND AS A
CONDITION TO THE PHASE 1 PROPERTY CLOSE OF ESCROW]
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 21 City of Tustin/Flight Venture LLC
FINAL.docx _ I _
ATTACHMENT 22
FORM OF PAD TRANSFEREE
NON -DISTURBANCE AND ATTORNMENT AGREEMENT
[INTENTIONALLY LEFT BLANK -TO BE APPROVED BY THE PARTIES AND
ATTACHED AS ATTACHMENT 22 TO THIS AGREEMENT PRIOR AND AS A
CONDITION TO THE PHASE I PROPERTY CLOSE OF ESCROW]
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 22 City of Tustin/Flight Venture LLC
FINAL.docx __ I __
ATTACHMENT 23
CITY NON -DISTURBANCE AND ATTORNMENT AGREEMENT
FOR SPACE TENANT
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT
FROM RECORDING FEES PER
GOVERNMENT CODE 6103 AND 27383.
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Space Above This Line Reserved for Recorder's Use
RECOGNITION, NON -DISTURBANCE AND ATTORNMENT AGREEMENT
(Space Tenant)
THIS RECOGNITION, NON -DISTURBANCE AND ATTORNMENT AGREEMENT
(Space Tenant) (this "Agreement") is entered into this day of ,
(the "Effective Date") by and among a
("Space Tenant"), [FLIGHT PHASE I OWNER LLC, a Delaware
limited liability company, the Developer under the DDA (defined below) / or
, the Phase 2 Developer under the DDA (defined below)] ("Developer"),
and THE CITY OF TUSTIN, CALIFORNIA, a municipal corporation duly organized and
existing under and by virtue of the laws of the State of California (the "City"). Each of Space
Tenant, Developer, and the City are referred to as a "Party" and all of them are sometimes
referred to as the "Parties."
WITNESSETH:
A. The City and Developer have entered into that certain Tustin Legacy Disposition
and Development Agreement Cornerstone I, dated as of , 20 (including all
attachments thereto), which, as the same may be amended, updated or modified from time to
time is referred to herein as the "DDA", with respect to the real property described therein as the
"Development Parcels." The Development Parcels include certain land described in the DDA
as the ["Phase I Parcel"/"Phase 2 Parcel'] as legally described on Exhibit A attached hereto
and incorporated herein by this reference, which pursuant to the DDA, were previously conveyed
by the City to Developer.
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx I
B. A Memorandum of Tustin Legacy Disposition and Development Agreement
Cornerstone I (the "Memorandum") executed by the City and Developer has been recorded
against the Development Parcels as Instrument No. in the official records of
Orange County, California (the "Official Records"). Initially capitalized terms set forth in this
Agreement and not defined herein shall have the meanings set forth therefor in the DDA.
C. The City and Developer have also previously executed the following documents,
each of which has been recorded against the [Phase I Parcel/Phase 2 Parcel] in the Official
Records on , 20 (collectively with the DDA and the Memorandum, the
"Property Documents"):
i) Declaration of Special Restrictions, dated as of
recorded on 20 as Instrument No.
Restrictions");
, 20 and
(the "Special
ii) Quitclaim Deed and Environmental Restriction Pursuant to Civil Code Section
1471 dated as of 20 and recorded on , 20 as
Instrument No. ;
iii) Landscape Installation and Maintenance Agreement
20 and recorded as Instrument No.
"Landscape Agreement");
dated
iv) Roadway. Landscape and Utility Easement Agreement dated
_ 20 and recorded as Instrument No.
"Easement Agreement");
v) Declaration of Covenants, Conditions and Restrictions
20 and recorded as Instrument No.
"CC&Rs"); and
as of
(the
as of
(the
dated as of
(the
vi) Special Land Use Restrictions as of 20 and recorded as
Instrument No. (the "SLUR").
D. Developer intends to lease to Space Tenant a portion of the [Phase I
Parcel/Phase 2 Parcel] commonly known as Suite and consisting of approximately
rentable square feet, as more particularly [described/depicted] on Exhibit B attached hereto and
incorporated herein by this reference (the "Premises") pursuant to that certain [insert name of
Lease and other identifying information], dated as of 20 (as may be amended
from time to time, the "Space Lease"). The legal parcel upon which the Premises are located is
referred to herein as the "Building Pad". Under the terms and provisions of the DDA, Space
Tenant (i) is an End User and (ii) does not intend to engage in a Prohibited Use upon the
Building Pad or within the Premises. Pursuant to the DDA, Developer agreed to complete or
cause to be completed construction of certain improvements on the [Phase I Parcel/Phase 2
Parcel], including on the Building Pad, within the time periods and subject to the additional
terms and conditions set forth in the DDA. [{If applicable add the following:} Developer and
Space Tenant have also entered into or intend to enter into the following documents related to or
affecting the Premises or the construction, maintenance and/or use thereof (together with the
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx 2
Space Lease, collectively, the "Space Lease Documents.' J
E. Under the terms of the DDA, the rights of the Space Tenant and its successors and
assigns leasing all or any portion of the Premises ("Space Tenant Successors") are "subject to"
the use limitations contained in the DDA, the Special Restrictions, and the CC&Rs.
F. The Parties desire to enter into this Agreement in order to (i) establish certain
rights and remedies of City and Space Tenant with respect to each other, and (ii) acknowledge
the City's Right of Repurchase and Right of Reversion with respect to the Parcel and the
Premises under the DDA, all on the terms and conditions specified in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of their mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. Non -Disturbance and Attornment. This Agreement shall become effective on the date of
delivery of the Premises by Developer to Space Tenant (the "Lease Commencement Date"). If
the City succeeds to the Developer's interest as landlord under the Space Lease following the
Lease Commencement Date then, as further set forth in and subject to the terms of this
Agreement, including without limitation, the provisions of Sections 4.2 and 4.3 below, the City
shall not terminate or disturb Space Tenant's occupancy or possession of the Building Pad and
the Premises, and Space Tenant shall attorn to City and recognize City as landlord under the
Space Lease.
2. The City's Rights.
2.1. Right of Repurchase. Space Tenant hereby acknowledges that if Developer shall
be in Material Default under any of the Property Documents, the City shall have available to it
all remedies set forth in the Property Documents, as the case may be.
2.2. City Right of Repurchase and Right of Reversion. Space Tenant acknowledges
that from time to time, at any time after the date that Developer becomes in Material Default
under the DDA and after the expiration of any applicable notice and cure periods in favor of a
Mortgagee, if any, with respect to such Material Default under the DDA, the City has the right,
but not the obligation, to exercise the Right of Repurchase under Section 16.3 of the DDA, and
Space Tenant further acknowledges that, in the event of the occurrence of any Reversion Action
Trigger as defined in Section 16.4.1 of the DDA, City has the right, but not the obligation, to
exercise the Right of Reversion under Section 16.4 of the DDA. Nothing in this Agreement shall
impair or modify: (a) the City's rights and remedies under the Property Documents, including
without limitation, the City's rights with respect to the Right of Repurchase or Right of
Reversion.
2.3. Additional Rights of City. Space Tenant acknowledges that the DDA contains
provisions that may, among other things, result in the City exercising the Right of Reversion or
Right of Repurchase as to other portions of the Development Parcels and/or as to interests of
other Persons in the Building Pad, or exercising its other remedies set forth in the Property
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx 3
Documents, and such exercise shall not obligate City to assume any obligations under the
Property Documents with respect to the Building Pad, including without limitation any
obligations to construct any or all Improvements upon the Development Parcels, and may result
in, among other things, all or any portion of the Development Parcels being developed by a
Person other than Developer or the Developer of the Phase 2 Project and being developed for
currently unforeseen uses.
2.4. Exercise of Remedies Voluntary. Nothing in this Agreement shall obligate the
City to exercise the Right of Repurchase or Right of Reversion or to exercise any other remedy
against any Developer or the Development Parcels, Space Tenant or the Space Lease and the
exercise of such remedies by the City shall be a right and not an obligation of the City.
2.5. On-Going Obligations of Developer. Notwithstanding anything to the contrary
contained in this Agreement, the Property Documents or in the Space Lease: (a) Developer, its
successors and assigns, Space Tenant, its successors and assigns, and the Building Pad and the
Premises are and shall remain subject to this Agreement and the Property Documents; and
(b) Developer hereby acknowledges and agrees that it retains all the obligations under the
Property Documents relating to the Building Pad, including, but not limited to, construction of
the Improvements and performance of Developer's maintenance and indemnity obligations.
2.6. Delivery of Notices. Until such time as a Certificate of Compliance is recorded
with respect to the Premises that are subject to the Space Lease, Developer and Space Tenant
shall provide to the City a copy of any notice or statement under the Space Lease pertaining to
default by Developer or Space Tenant, as applicable.
3. Obligations of Space Tenant. Notwithstanding anything to the contrary contained in this
Agreement , the Space Lease [{add if applicable:} or the other Space Lease Documents], Space
Tenant hereby represents, warrants, acknowledges and agrees for the benefit of the City that:
3.1. Space Tenant and each Space Tenant Successor shall, upon the execution of this
Agreement and thereafter upon the request of City or any City Successor (defined below),
provide the City or City Successor with an estoppel certificate, in form and substance attached
hereto as Exhibit "C" or otherwise reasonably acceptable to the City Successor and stating the
dates, if any, to which any rent and other sums payable under the Space Lease have been paid;
3.2. All claims, demands or causes of action which Space Tenant or any Space Tenant
Successor may have or may have had against Developer, Phase 1 Developer and/or Phase 2
Developer as of the date City succeeds to the position of [Developer/Phase I Developer/Phase 2
Developer] under the Space Lease [{add if applicable:} or the other Space Lease Documents],
or under any provisions of, or with respect to the Space Lease [{add if applicable:} or the other
Space Lease Documents], or on account of any matter, condition or circumstance arising out of
the relationship of Developer, Phase 1 Developer and/or Phase 2 Developer and Space Tenant
and/or Successor Space Tenant under the Space Lease [{add if applicable:} or the other Space
Lease Documents], Space Tenant's occupancy of the Premises or Developer's, Phase 1
Developer's or Phase 2 Developer's prior ownership thereof, shall be enforceable solely against
the prior Developer, Phase 1 Developer and/or prior Phase 2 Developer (i.e., the predecessor(s)
in interest to City or City Successor) as applicable to the extent provided in the Space Lease
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
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[{add if applicable:} or the other Space Lease Documents], and neither the City nor any other
City Successor shall be subject to any such claim, demand or cause of action.
4. City as Successor to Phase 1 Developer or Phase 2 Developer. If the City succeeds to the
interest of Developer under the Space Lease, whether through or in lieu of the exercise by the
City of any of its rights and/or remedies pursuant to this Agreement, the Space Lease or the
Property Documents or otherwise (the "Remedies"), then in such event (and only in such event):
4.1. The City, in its capacity as the successor to Developer's interest under the Space
Lease, and any other successor in interest to such interest under the Space Lease, and their
respective successors and assigns, and any person claiming the same by, through or under any of
the foregoing (any of the foregoing, the "City Successor") shall be subject to and shall comply
with the terms and provisions of this Section 4.
4.2. Provided that (i) Space Tenant is not in default of its payment or performance
obligations under this Agreement or under the Space Lease beyond any applicable notice, grace
or cure period set forth herein or therein, and (ii) Space Tenant is not in Material Default in the
performance or observance of any term, covenant or condition of the Property Documents, to the
extent applicable to Space Tenant, City Successor shall not terminate or disturb Space Tenant's
occupancy or possession of the Building Pad or the Premises, and the rights of Space Tenant
under the Space Lease shall remain in full force and effect, except as otherwise expressly
permitted in accordance with the terms of this Agreement or the terms of the Space Lease.
4.3. Space Tenant shall attorn to the City Successor and recognize the City Successor
as "landlord" under the Space Lease. Space Tenant shall perform, and be bound under, all of the
terms, covenants and conditions of the Space Lease, including, but not limited to, the obligation
to pay all amounts owed under the Space Lease, including without limitation, rent and any
percentage rent, until the expiration or earlier termination of the Space Lease, including any
renewal options which are exercised in accordance with the terms of the Space Lease. Space
Tenant shall execute and deliver to the City Successor such further assurance and other
documents, including a new lease upon the same terms and conditions as the Space Lease,
confirming the foregoing, as the City Successor may reasonably request. Notwithstanding the
foregoing, nothing contained in this Agreement shall be interpreted to release Developer, the
Building Pad and/or Space Tenant from the obligations imposed under the Property Documents.
4.4. Any interest of the City Successor under the Space Lease acquired by the City
shall not merge with any other interests of City in the Building Pad, including without limitation
any right, title or interest of the City under the Property Documents, the Right of Repurchase and
the Right of Reversion and/or other rights or remedies available to the City under any of the
Property Documents.
4.5. The following shall apply to each City Successor:
4.5.1. The City Successor shall not be liable for or bound by any act
or omission of Developer or any predecessor in interest to such City Successor.
4.5.2. The City Successor shall not be liable for payment of any sums
due from Developer to Space Tenant including, without limitation, (x) any payment or credit in
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the nature of a tenant improvement allowance or comparable item, any security deposit (unless
the City Successor shall have actually received and failed to refund such deposit in accordance
with the terms of the Space Lease), (y) payments, including, without limitation, payments of rent
or additional rent made by Space Tenant for more than one (1) month in advance of the due date
thereunder to Developer or any predecessor in interest to such a City Successor, or (z) payments
of any kind owing from Developer to Space Tenant under the Space Lease or otherwise,
including, without limitation, any refunds, payment, reimbursement or damages owed from
Developer to Space Tenant. Without limiting the foregoing, with respect to all such items, Space
Tenant agrees to look solely to Developer and not to any City Successor.
4.5.3. Space Tenant hereby waives and relinquishes with respect to
each City Successor all offsets, counterclaims and defenses which Space Tenant may have
against Developer or any predecessor in interest thereof (including, without limitation, any
offset, abatement or right of deduction provided for under the terms of the Space Lease),
provided that nothing herein shall be deemed to relieve a City Successor from performing its
obligations as landlord under the Space Lease with respect to obligations that arise from and
after the date such City Successor succeeds to the position of landlord under the Space Lease
unless specifically set forth in this Agreement.
4.5.4. The City Successor shall not be required to rebuild, repair or
restore any damage to the Building Pad or the Premises, or any portion thereof, caused by the
occurrence of an uninsured casualty or following a condemnation of all or any portion of the
Building Pad for which there are insufficient condemnation proceeds to pay the cost of such
rebuilding, repair or restoration.
4.5.5. The City Successor shall not be liable with respect to any
obligation to complete any site work or build out or maintain any improvements for the Building
Pad or the Premises, including, without limitation, any portion of the Minimum Horizontal
Improvements, any other Horizontal Improvements, the Vertical Improvements, any tenant
improvements, or any other improvements to be built upon the Building Pad or the Development
Parcels, and/or any obligation to pay any tenant improvement allowance to Space Tenant in
connection with the Space Lease.
4.5.6. Without limiting the applicability of any other provision of this
Agreement, in no event shall City Successor be liable for any payments required to be made by
the landlord under the Space Lease for any period prior to the date the City Successor obtains
title to the Building Pad.
4.5.7. Each City Successor shall be relieved of any obligation of the
landlord under the Space Lease accruing after its transfer, sale, assignment or conveyance to
another person or entity of the title to the Building Pad and the landlord's interest under the
Space Lease.
4.6. Hazardous Materials.
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4.6.1. Space Tenant hereby waives and releases the City and each
City Successor from any Claims it may have arising out of or related to Hazardous Materials
located in, on, under, or around the Building Pad and/or the Premises.
4.6.2. Nothing in this Agreement shall be construed, (a) to limit or
restrict in any way any obligation of the City or City Successor to Developer under the DDA,
(b) to limit, restrict, or expand Developer's environmental indemnities contained in Section 10.2
of the DDA, which remain in full force and effect, unmodified or (c) in the event that City or
City Successor succeeds to the interest of Developer as landlord under the Space Lease, to limit
or restrict any obligation of the City or City Successor as landlord under the Space Lease
Documents.
4.6.3. Except as otherwise set forth in the DDA, the City Successor
shall not be liable or responsible for any enforcement, cleanup, removal, remedial or other
governmental or regulatory actions, or for any agreements or orders threatened, instituted or
completed pursuant to any federal, state or local laws, ordinances, regulations or policies relating
to any Hazardous Materials, or for any indemnities under the Space Lease concerning the
presence, release or discharge of any Hazardous Materials on, under or about the Building Pad
and/or the Premises, or for any permits and waste discharge requirements issued to and/or
required of Space Tenant or Developer by any governmental body or by the City, or any claims
made or threatened by any person or governmental body or by the City against Space Tenant or
Developer or the Building Pad or the Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from the presence, release or discharge of any Hazardous
Materials on, under or about the Building Pad and/or the Premises.
5. Additional Space Tenant Agreements. Space Tenant and Developer, as applicable, each
makes the covenants and agreements to the City set forth in this Section 5.
5.1. Except for the payment of the first month's rent, Space Tenant shall not pay, and
Developer shall not accept, any payment of rent or additional rent more than thirty (30) calendar
days in advance of the applicable due date under the Space Lease.
5.2. Space Tenant shall send a copy of any notice or statement under the Space Lease
pertaining to Developer's default thereunder to City at the same time such default notice or
statement is sent to Developer. If Developer shall have failed to cure such default within the
time period provided for in the Space Lease, Space Tenant shall not exercise any remedies
available by virtue of such default unless (x) Space Tenant shall have notified City in writing of
Developer's failure to cure such default and (y) Space Tenant shall have afforded the City an
additional sixty (60) calendar days from the receipt of such notice to cure such default or if such
default cannot be cured within sixty (60) calendar days, then such additional time as may be
reasonably necessary if, within such sixty (60) -day period, the City commences and thereafter
diligently pursues the cure of such default (including, without limitation, commencement of
possessory proceedings, if necessary to effect such cure). If the City commences to cure a
Developer default, the Space Lease shall remain in full force and effect during the period that
such cure is being diligently pursued. Nothing in this Agreement shall require the City to cure
any Developer default under the Space Lease, and the exercise of such cure rights by the City
shall be a right and not an obligation of the City.
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6. Certain Agreements by Developer and Space Tenant. Developer, as Developer under the
DDA and as landlord under the Space Lease, and Space Tenant, as tenant under the Space Lease,
each represent, warrant, covenant, acknowledge and agree for themselves and their heirs,
successors and assigns and for the benefit of the City, that:
(a) Except as expressly set forth herein, this Agreement: (i) does not
constitute a waiver by City of any of its rights under the Property Documents and (ii) does not in
any way release Developer and/or Space Tenant, as applicable, from their respective obligations
to comply with the terms, provisions, conditions, covenants, agreements and clauses of the DDA
or the other Property Documents, including, without limitation, the release set forth in
Section 4.5.2(f) of the DDA, the indemnity set forth in Section 5.5 of the DDA, the insurance
required in Section 11 of the DDA and the indemnity, environmental indemnity and related
requirements set forth in Sections 10.1 through 10.7 of the DDA;
(b) City has no obligation nor shall the City incur any liability
with respect to any warranties of any nature whatsoever, whether pursuant to the Property
Documents or the Space Lease or otherwise, including, but not limited to, any warranties
respecting suitability for development, use, compliance with zoning, Developer's title,
Developer's authority, habitability, fitness for purpose or possession of the Building Pad or the
Premises; and
(c) Space Tenant (i) is an End User and (ii) has not engaged and will
not engage in a Prohibited Use upon the Building Pad or within the Premises.
7. Notices. All notices, demands, consents, requests and other communications required or
permitted to be given under this Agreement shall be in writing and shall be deemed conclusively
to have been duly given (a) when hand delivered to the other Party; (b) three (3) Business Days
after such notice has been sent by U.S. Postal Service via certified mail, return receipt requested,
postage prepaid, and addressed to the other Party as set forth below; (c) the next Business Day
after such notice has been deposited with an overnight delivery service reasonably approved by
the Parties (Federal Express, Overnite Express, United Parcel Service and U.S. Postal Service are
deemed approved by the Parties), postage prepaid, addressed to the Party to whom notice is
being sent as set forth below with next -business -day delivery guaranteed, provided that the
sending Party receives a confirmation of delivery from the delivery service provider; or (d) when
transmitted if sent by facsimile transmission or email to the fax number or email address set forth
below; provided that notices given by facsimile or email shall not be effective unless either (i) a
duplicate copy of such notice is promptly sent by any method permitted under this Section other
than by facsimile or email (provided that the recipient Party need not receive such duplicate copy
prior to any deadline set forth herein); or (ii) the receiving Party delivers a written confirmation
of receipt for such notice either by facsimile, email or any other method permitted under this
Section. Any notice given by facsimile or email shall be deemed received on the next Business
Day if such notice is received after 5:00 p.m. (recipient's time) or on a non -Business Day.
Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
City: Jeffrey C. Parker, City Manager
City of Tustin
300 Centennial Way
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Tustin, CA 92780
Fax: 714-838-1602
Email: jparker@tustinca.org
With a copy to: David Kendig
Woodruff Spradlin & Smart, APC
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com
Developer:
With a copy to:
Space Tenant:
With a copy to:
Any Party may by written notice to the other Party in the manner specified in this
Agreement change the address to which notices to such Party shall be delivered.
8. Preparation Costs. Developer shall pay to the City the City's out-of-pocket fees and
expenses, including legal fees, incurred with respect to the preparation and delivery of this
Agreement.
9. Miscellaneous.
9.1. Agreement Supersedes. This Agreement supersedes any inconsistent provision of
the Space Lease.
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
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9.2. Modification. No amendment, change, modification or supplement to this
Agreement shall be valid and binding on the Parties unless in writing, signed by all of the
Parties, acknowledged by a notary public and duly recorded in the Official Records.
9.3. Applicable Law. This Agreement shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, irrespective of
California's choice -of -law principles. The parties hereto agree that the resolution of any dispute
between or among them, or any of them, shall be resolved in accordance with the procedures and
in the venue and subject to the service of process and other provisions set forth in Section 18.1 of
the DDA.
9.4. Legal Fees and Costs. If any Party to this Agreement institutes any action, suit,
counterclaim or other proceeding for any relief against another Party, declaratory or otherwise
(collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with
respect to any inaccuracies or material omissions in connection with any of the covenants,
representations, warranties or obligations on the part of the other Party to this Agreement, then
the Prevailing Party in such Action shall be entitled to have and recover of and from the other
Party all costs and expenses of the Action, including (a) the Prevailing Party's reasonable
attorneys' fees (which, if the Prevailing Party is the City, shall be payable at the actual
contractual hourly rate for City's litigation counsel at the time the fees were incurred, and which
with respect to both the City and the Developer shall in no event more than $200 per hour) and
(b) costs actually incurred in bringing and prosecuting such Action and/or enforcing any
judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall
be deemed to have accrued on the commencement of such Action and shall be paid whether or
not such Action is prosecuted to a Decision. Any Decision entered in any final judgment shall
contain a specific provision providing for the recovery of all costs and expenses of suit, including
reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing,
perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include
in addition to Costs incurred in prosecution or defense of the underlying action, reasonable
attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post
judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy,
debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of
any order or judgment. "Prevailing Party" within the meaning of this Section 9.4 includes a
Party who agrees to dismiss an Action in consideration for the other Party's payment of the
amounts allegedly due or performance of the covenants allegedly breached, or obtains
substantially the relief sought by such Party.
9.5. No Partnership. Nothing contained in this Agreement shall be deemed or
construed to create a partnership, joint venture or any other relationship between the parties or
cause the City to be responsible in any way for the debts or obligations of Developer or Space
Tenant.
9.6. Construction and Interpretation of Agreement. This Agreement shall be
construed and interpreted pursuant to the provisions of Section 18.15 of the DDA.
9.7. Limitations on Damages Payable by the City. The provisions of Sections 18.5.1,
18.5.2 and 18.5.3(a) of the DDA are incorporated herein by this reference and as used therein,
Tustin Cornerstone I DDA Att 23 Space AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
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the term "Developer" shall mean and include Phase 1 Developer, Phase 2 Developer, Space
Tenant, and Space Tenant Successor.
9.8. No Waiver. No waiver of any provision or consent to any action under this
Agreement shall constitute a waiver of any other provision or consent to any other action,
whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a Party to provide a waiver in the future except to the extent specifically set forth in
writing. All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities for the City and Developer and all amendments hereto must be in writing
and signed by the appropriate authorities of the City and Developer.
9.9. Successors and Assigns. This Agreement and the covenants, conditions,
restrictions, obligations, rights and benefits contained herein are hereby agreed by Developer,
Space Tenant and the City to be covenants running with the land and enforceable as equitable
servitudes for the benefit of the City and against the [Phase I Parcel/Phase 2 Parcel] and the
Building Pad, and are hereby declared to be and shall be binding upon the Building Pad,
Developer, Space Tenant and the successors and assigns of Developer and/or Space Tenant
owning or leasing all or any portion of the Building Pad and the Premises, as applicable.
Notwithstanding the foregoing, no Transfer, including by Transfer of Control, shall be valid or
have any force or effect unless the City shall have provided its prior written consent thereto as
may be required by the DDA.
9.10. Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Agreement shall not be effective until the execution and delivery by the Parties of at least one set
of counterparts. The Parties agree to recognize execution of this Agreement by facsimile or
other electronically transmitted signatures; provided that such execution by facsimile or
electronic transmission shall not be effective unless a manually executed copy of the signature
page is promptly sent by U.S. Postal Service, postage prepaid or overnight delivery service or is
hand delivered to the Parties. The Parties hereby authorize each other to detach and combine
original signature pages and consolidate them into a single identical original. Any one of such
completely executed counterparts shall be sufficient proof of this Agreement.
{signatures commence on followingpage}
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the date first above set forth.
Dated:
ATTEST:
LE
Erica Rabe, City Clerk
APPROVED AS TO FORM
By:
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP
Special Tustin Counsel
By:
Amy E. Freilich
Dated:
"CITY"
City of Tustin
IM
Jeffrey C. Parker
City Manager
DEVELOPER:
FLIGHT PHASE I OWNER, LLC,
a Delaware limited liability company
IM
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5-1-
Dated:
"SPACE TENANT"
a[ ]
By: _
Name:
Title:
{Notary acknowledgements on following pages
Tustin Cornerstone I DDA Att 23 Space Tenant ATTACHMENT 23 City of Tustin/Flight Venture LLC
NDA 11-9-16 (agd)FINAL.docx
5-2-
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
X01
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
X01
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Cornerstone I DDA Att 23 Space Tenant ATTACHMENT 23 City of Tustin/Flight Venture LLC
NDA 11-9-16 (agd)FINAL.docx
5-3-
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
State of California
County of
X01
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Cornerstone I DDA Att 23 Space Tenant AT'T'ACHMENT 23 City of Tustin/Flight Venture LLC
NDA 11-9-16 (agd)FINAL.docx
5-4-
EXHIBIT A
TO
NON -DISTURBANCE AND ATTORNMENT AGREEMENT
Legal Description of [Phase I Parcel/Phase 2 Parcel]
[to be inserted]
Tustin Cornerstone I DDA Art 23 Space Tenant ATTACHMENT 23 City of Tustin/Flight Venture LLC
NDA 11-9-16 (agd)FINAL.docx EXHIBIT A
EXHIBIT B
TO
NON -DISTURBANCE AND ATTORNMENT AGREEMENT
[Depiction/Description] of Premises
[to be inserted]
Tustin Cornerstone I DDA Art 23 Space ATTACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx EXHIBIT B
EXHIBIT C
FORM OF SPACE TENANT ESTOPPEL CERTIFICATE
{Place on Letterhead of Space Tenant}
[Date]
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
Re: Tustin Cornerstone I
Ladies and Gentlemen:
The undersigned is writing this letter with respect to the Non -Disturbance and
Attornment Agreement (the "NDA") entered into with respect to the Premises (as defined below)
on the day of by and among
, a [{if such tenant is the
current Space Tenant add.1 ("Space Tenant") / [if current Space Tenant is a successor to the
original Space Tenant add.1, the predecessor -in -interest to , a ("Space
Tenant' J. ")] I the [Developer/Phase I Developer/Phase 2
Developer] under the DDA (defined below) ("Developer"), and THE CITY OF TUSTIN,
CALIFORNIA, a municipal corporation duly organized and existing under and by virtue of the
laws of the State of California (the "City"). [If there have been subsequent assignments of the
Developer/Phase I Developer/Phase 2 Developer or City interests affecting the NDA, list the
current such parties and define each as "Developer Successor" or "City Successor.'} Each of
Space Tenant, Developer, and the City are referred to herein as a "Party" and all of them are
sometimes referred to as the "Parties." All initially capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the NDA.
G. The City and Developer have entered into that certain Tustin Legacy Disposition
and Development Agreement Cornerstone I, dated as of , 2016 (including all
attachments thereto), which, as the same may be amended, updated or modified from time to
time is referred to herein as the "DDA", with respect to the real property described therein as the
"Development Parcels." The Development Parcels include certain land described in the DDA
as the ["Phase I Parcel "/"Phase 2 Parcel'] as legally described on Exhibit A attached hereto
and incorporated herein by this reference, which pursuant to the DDA, were previously conveyed
by the City to Developer.
Tustin Cornerstone I DDA Art 23 Space ATTACHMENT 23 City of Tustin/Flight Venture LLC
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I
K Developer has leased to Space Tenant a portion of the [Phase I Parcel/Phase 2
Parcel] commonly known as Suite and consisting of approximately rentable square
feet, as more particularly [described/depicted] on Exhibit B attached hereto and incorporated
herein by this reference (the "Premises") pursuant to that certain [insert name of Lease and
other identifying information], dated as of 20 (as may be amended from time
to time, the "Space Lease"). [[If applicable add the following:} Developer and Space Tenant
have also entered into the following documents related to or affecting the Premises or the
construction, maintenance and/or use thereof (together with the Space Lease, collectively, the
"Space Lease Documents'): [insert document names.]
I. A Memorandum of Tustin Legacy Disposition and Development Agreement
Cornerstone I (the "Memorandum") executed by the City and Developer has been recorded
against the Development Parcels as Instrument No. in the official records of
Orange County, California (the "Official Records").
J. The City and Developer have also previously executed the following documents,
each of which has been recorded against the [Phase I Parcel/Phase 2 Parcel] in the Official
Records (collectively with the DDA and the Memorandum, the "Property Documents") and
affect the Premises:
i) Declaration of Special Restrictions, dated as of
recorded on , 20 as Instrument No.
"Declaration of Special Restrictions");
20
and
(the
ii) Quitclaim Deed for Cornerstone I (Phase [I/2]) and Covenants, Conditions and
Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471 dated as of 20 and recorded on , 20 as
Instrument No. (the "Quitclaim Deed");
iii) Landscape
Installation and Maintenance Agreement dated as of
20 and recorded on , 20 as Instrument No.
(the "Landscape Agreement");
iv) Roadway, Landscape and Utility Easement Agreement dated as of
20 and recorded on , 20 as Instrument No.
(the "Easement Agreement"); and
v) Special Land Use Restrictions dated as of
on , 20 as Instrument No.
, 20 and recorded
(the "SLUR").
[The Space Lease//{If applicable replace with the following:} The Space Lease Documents] and
the Property Documents are referred to collectively herein as the "Documents".
By its execution of this letter, Space Tenant hereby confirms to the City and City Successor that:
1. A complete, true and correct copy of the [Space Leasel [add if applicable:}
Documents] is attached hereto and except as set forth on Attachment 1 to this letter
(a) [the Space Lease is /[[If applicable replace with the following:} Space Lease
Tustin Cornerstone I DDA Art 23 Space ATTACHMENT 23 City of Tustin/Flight Venture LLC
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2
Documents are] in full force and effect; (b) the [Space Lease has not/[{If applicable
replace with the following:} the Space Lease Documents have not] been modified,
supplemented or amended, whether orally or in writing, and (c) the [Space Lease has
not/[{If applicable replace with the following:} the Space Lease Documents have not]
not been assigned or otherwise transferred by the Space Tenant to any other person or
entity.
2. Except for the [Space Leasel [add if applicable:} Documents], there are no other
documents executed by and between Developer [[insert if applicable.] or any
successor in interest to Developer, including without limitation, Developer Successor]
and Space Tenant [[insert if applicable.] or any predecessor in interest to Space
Tenant] affecting the Premises.
Except as set forth on Attachment 2 to this letter:
(a) there are no uncured defaults by Space Tenant or claims thereof that have been
asserted by Developer or any successor to Developer, including without
limitation, Successor Developer, or any other Person with respect to the
obligations of Space Tenant under the Documents or any one thereof, and to
the best knowledge of Space Tenant, there is no other default, claim thereof or
condition which, with the giving of notice and/or the passage of time or both,
could become a default by Space Tenant with respect to its obligations under
the Documents or any one thereof, or under the performance of any term,
covenant or condition contained in the Documents or any one thereof,
(b) there are no uncured defaults by City [[insert if applicable.] or any successor
in interest to City, including without limitation, City Successor] under the
Property Documents or any one thereof, or claims thereof that have been
asserted by Space Tenant and, to the best of Space Tenant's knowledge, there
are no other defaults, claims thereof, or any condition which, with the giving of
notice and/or the passage of time or both, could become a default by City
[[insert if applicable.] or any successor in interest to City, including without
limitation, City Successor]with respect to their respective obligations under the
Property Documents or under the performance of any term, covenant or
condition contained in the Property Documents;
(c) there are no uncured defaults by Developer [[insert if applicable.] or any
successor in interest to Developer, including without limitation, Developer
Successor] or claims thereof that have been asserted by Space Tenant and, to
the best of Space Tenant's knowledge, there are no other defaults, claims
thereof, or any condition which, with the giving of notice and/or the passage of
time or both, could become a default by Developer [[insert if applicable.] or
any successor in interest to Developer, including without limitation, Developer
Successor]with respect to their respective obligations under Documents or any
one thereof or under the performance of any term, covenant or condition
contained in [the Space Lease / [If applicable replace with the following:} any
of the Space Lease Documents] or the Property Documents;
(d) to the best of Space Tenant's knowledge, there are no uncured defaults, claims
Tustin Cornerstone I DDA Art 23 Space ATTACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx EXHIBIT C
3
thereof, or any condition under the Documents, or any of them, which would
entitle the Space Tenant to exercise any of its rights or remedies under or to
terminate the Documents or any one thereof,
(e) Space Tenant has not asserted any right to terminate [the Space Lease//{If
applicable replace with the following:} any of the Space Lease Documents] or
the Property Documents or any one thereof and, to the best of Space Tenant's
knowledge, there are no facts which now, or after the giving of notice or the
passage of time, or both, would constitute a default (including, without
limitation, a Potential Default or Material Default under the DDA) under the
Documents or any one thereof or which would entitle the Space Tenant to then
exercise any of its rights or remedies under any of the Documents or to
terminate the Documents or any one thereof, and
(f) Space Tenant has not asserted and, to the best of Space Tenant's knowledge,
Space Tenant has no claim of breach, counterclaim, charge, defense, lien or
offset against any amounts payable under (a) [the Space Lease /{If applicable
replace with the following:} any of the Space Lease Documents] or the
Property Documents, presently existing against Developer or any successor to
Developer, the Project (as defined in the DDA) or the Property (as defined in
the DDA) under any of the Documents or (b) the Documents presently existing
against City or any City Successor, the Project (as defined in the DDA) or the
Property (as defined in the DDA) or under any of the Documents.
(g) Under the terms and provisions of the DDA and the Declaration of Special
Restrictions, Space Tenant (i) is an End User and (ii) does not intend to engage
in a Prohibited Use within the Premises.
As used in this letter, the phrase "to the best of the Space Tenant's knowledge", and words of
like import, mean that the facts in question are actually known (as opposed to imputed, inquiry or
constructive knowledge) to the representative of the Space Tenant signing below, based upon
such individual's own knowledge and reasonable inquiry. Further with respect to any statements
that relate to Documents other than [the Space Lease [{If applicable replace with the
following: {any of the Space Lease Documents}] in making statements above, with respect to the
term "to the best of Space Tenant's knowledge" and words of like import, Space Tenant is under
no duty of inquiry.
The undersigned acknowledges on behalf of Space Tenant that the City, the City Successor, and
the Developer may rely upon this letter. This letter may not be relied upon by any other party or
for any other purpose without the express written consent of the Space Tenant. This letter shall
be binding upon the Space Tenant and its successors and assigns.
Very truly yours,
[Insert signature of authorized representative of
Space Tenant]
Tustin Cornerstone I DDA Art 23 Space ATTACHMENT 23 City of Tustin/Flight Venture LLC
TenantNDA 11-9-16 (agd)FINAL.docx EXHIBIT C
M
ATTACHMENT 24
FORM OF SUBORDINATION AGREEMENT
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The City of Tustin
300 Centennial Way
Tustin, CA 92708
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
TUSTIN CORNERSTONE I SUBORDINATION AGREEMENT
{(PHASE I /PHASE 2)}
THIS TUSTIN CORNERSTONE I SUBORDINATION AGREEMENT
[(PHASE I /PHASE 2)] (this "Agreement") is entered into as of the day of ,
201 (the "Effective Date"), by and between , a (the
"Lender"), and CITY OF TUSTIN, CALIFORNIA, a municipal corporation duly organized
and existing under the laws of the State of California (the "City").
RECITALS
A. The City and Flight Venture LLC, a Delaware limited liability company ("Flight
Venture"), entered into that certain Tustin Legacy Disposition and Development Agreement
Cornerstone I dated as of , 201, as the same may be amended from time to time
(the "DDA"), with respect to certain real property referred to therein as the "Development
Parcels". A Memorandum of DDA was recorded against the Development Parcels in the Official
Records of Orange County, California ("Official Records") on 20 as
Instrument No. (the "Memorandum"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the DDA.
B. City and Flight Venture entered into that certain Development Agreement dated
as of 2016 and recorded in the Official Records on 2016 as Instrument
No. (the "DA").
C. Flight Venture has assigned its rights and obligations under the DDA with respect
to the Parcel (as defined below) to {insert name of
Transferee} ("Borrower") by an Assignment and Assumption Agreement dated
and recorded in the Official Records on , 20 as Instrument
go
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D. Pursuant to the DDA, the City has conveyed to Borrower a portion of the
Development Parcels referred to in the DDA as the ["Phase I Parcel"/ "Phase 2 Parcel'],
comprised of the real property legally described on Exhibit A attached hereto (the "Parcel"),
together with certain Improvements thereon and appurtenances thereto as further described in the
DDA [("Phase I Property"/ "Phase 2 Property")]. In accordance with the DDA, the Parcel is
or will be improved with Office Uses and ancillary retail uses, including development of, at a
minimum, the Minimum [Phase I/Phase 2] Improvements (the "Improvements"). The Parcel,
the Improvements and related personal and other property described in the Security Instrument
(defined herein) and defined therein constitute the "Mortgaged Property".
E. The City and {Borrower/Flight Venture} have also previously executed the
following documents, each of which has been recorded against the [Phase I Parcel/Phase 2
Parcel] in the Official Records on , 20 (collectively with the DDA, the DA, and
the Memorandum, as the same may be amended from time to time, the "Property Documents"):
(1) Declaration of Special Restrictions, dated as of , 20
and recorded in the Official Records as Instrument No.
Restrictions");
(the "Special
(2) Quitclaim Deed for Tustin Legacy Cornerstone I — Phase [I/2] and
Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471, dated as of , 20 and recorded in the Official Records as
Instrument No. (the "Quitclaim Deed");
(3)
(4)
(5)
Landscape Installation and Maintenance Agreement dated as of
20 and recorded in the Official Records as Instrument No.
(the "Landscape Agreement");
Roadway, Landscape and Utility Easement Agreement dated as of
20 and recorded in the Official Records as Instrument No.
(the "Easement Agreement");
Declaration of Covenants, Conditions and Restrictions dated as of
20 and recorded in the Official Records as Instrument No.
(the "CC&Rs"); and
(6) Special Land Use Restrictions as of , 20 and recorded
in the Official Records as Instrument No. (the "SLUR").
The Special Restrictions were recorded prior to the Quitclaim Deed and
Borrower's fee title to the Parcel is subject to the encumbrance of the Special Restrictions.
F. [{For Phase I only.] In connection with the conveyance of the Parcel to
Borrower, Borrower and City have also entered into a License for Site Development dated
, with respect to construction of the Minimum Horizontal Improvements on the
Phase 2 Parcel (`License')].
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G. In connection with the conveyance of the Parcel to Borrower,
("Guarantor"), a {state relationship to Borrower} has executed and
delivered a {Phase I/Phase 2} Guaranty to the City dated ("Guaranty").
H. Lender has agreed to make a loan to Borrower in the maximum principal amount
of $ (the "Loan") for the construction, development, equipping and/or
operation of the Project on the Parcel, which Loan is initially evidenced by that certain [Note]
dated as of , 201_ made by Borrower payable to the order of Lender (the "Note") and
that certain [Construction Loan Agreement] dated as of the date hereof between Borrower and
Lender (the "Loan Agreement").
I. The Loan is secured by, among other things, that certain [insert full document
title for Deed of Trust] dated as of the date hereof executed by Borrower for the benefit of
Lender ("Security Instrument"; together with the Note, the Loan Agreement, and all other
documents executed in connection with the Loan, collectively the "Loan Documents"), which
Security Instrument encumbers the Mortgaged Property and was recorded in the Official Records
concurrent herewith.
J. [[If applicable:} [PARENTS OF BORROWER} have executed an "Assignment
of Equity Interests, Pledge and Security Agreement" in favor of Lender dated as of
201 (the "Assignment").]
K. [[If the loan is a junior loan.} Lender acknowledges that the Property is already
encumbered by a [Insert exact title of Deed of Trust] in favor of (the "Senior
Lender'), dated and recorded in the Official Records as Instrument
("Senior Deed of Trust'). The loan secured by the Senior Deed of Trust is
sometimes referred to as the Senior Loan.]
L. As a condition to the making of the Loan, Lender requires and Borrower requests
that the City and Lender execute and deliver this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
The following terms, when used in this Agreement (including, as appropriate, when used in the
above recitals), shall have the following meanings.
(a) "Bankruptcy Proceeding" means any bankruptcy, reorganization,
insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment for the
benefit of creditors, or custodianship action or proceeding under any federal or state law with
respect to the Borrower, any guarantor of any of the Indebtedness, any of their respective
properties, or any of their respective partners, members, officers, directors, or shareholders.
(b) "Borrower" means all Persons identified as "Borrower" in the Recitals of
this Agreement, together with their successors and assigns, and any other Person who acquires
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title to the Mortgaged Property after the date of this Agreement; provided that, except as set forth
in Section 4(c) of this Agreement, the term `Borrower" shall not include the Lender in the event
that the Lender may acquire title to the Mortgaged Property.
(c) "Casualty" means the occurrence of damage to or loss of all or any
portion of the Mortgaged Property by fire or other casualty.
(d) "City" means the Person named as such in the first paragraph of this
Agreement.
(e) "City Lien" shall have the meaning set forth in Section 16.2 of the DDA
as set forth verbatim in the Memorandum.
(f) "Enforcement Action" means any of the following actions taken by or at
the direction of the City: the exercise of the City's Right of Reversion under Section 16.4 of the
DDA, the exercise of the City's Right of Repurchase under Section 16.3 of the DDA, the
obtaining of or seeking of the appointment of a receiver, the seeking of default interest or
charges, the taking of possession or control of any of the Mortgaged Property, the
commencement of any suit or other legal, administrative, or arbitration proceeding based upon
the Property Documents, or the exercise of any other remedy against the Borrower, excepting,
however, any rights or actions taken by the City in the exercise of its police powers.
(g) "Enforcement Action Notice" means a written notice from the City to the
Lender, given following one or more Property Document Breaches setting forth in reasonable
detail the nature of the breach by Borrower
(h) "Foreclosure Event" shall mean the foreclosure of the Security
Instrument (or any sale thereunder), whether by judicial proceedings, by virtue of any power of
sale under the Security Instrument, by acceptance of a deed -in -lieu of foreclosure (or similar
consensual conveyance of the Mortgaged Property to Lender or any of its affiliates or nominees
or designees), or by any other conveyance of all or any portion of the Mortgaged Property and/or
Improvements by other appropriate proceedings in the nature of a foreclosure, resulting in the
sale, lease or other conveyance of all or any portion of the Mortgaged Property and/or
Improvements to Lender or any of its affiliates or nominees or designees.
(i) "Indebtedness" means the "Indebtedness" as defined in the Security
Instrument. {confirm this term is used in Security Instrument or define utilizing term utilized
therein}
(j) "Lender" means the entity named as such in the first paragraph of this
Agreement which is initially the holder of the Note, and any other Person which subsequently
becomes the holder of the Note, as the case may be.
(k) "Loan Default" means any act, failure to act, event, condition, or
occurrence which constitutes, or which with the giving of notice or the passage of time, or both,
would constitute, an "Event of Default" {or insert comparable term from Security Instrument}
as defined in the Security Instrument.
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(1) "Loss Proceeds" means all monies received or to be received under any
insurance policy, from any condemning authority, or from any other source, as a result or any
Condemnation or Casualty.
(m) "Person" means an individual, partnership, limited partnership, trust,
estate, association, corporation, limited liability company, joint venture, firm, joint stock
company, unincorporated association, Governmental Authority, governmental agency or other
entity, domestic or foreign.
(n) "Property Documents" has the meaning set forth in Recital E to this
Agreement.
(o) "Property Document Breach" means any act, failure to act, event,
condition, or occurrence that allows (but for any contrary provision of this Agreement), or which
with the giving of notice or the passage of time, or both, would allow (but for any contrary
provision of this Agreement), the City to take an Enforcement Action.
(p) "Property Document Default" means the City has delivered to Lender an
Enforcement Action Notice and Borrower and Lender have failed to cure the Property Document
Breach within the cure period granted to Lender as a Permitted Mortgagee under the applicable
Property Document for the applicable type of Property Document Breach.
(q) The term "Rents" shall have the meaning given to the term in the Security
Instrument.
2. PERMITTED MORTGAGEE.
(a) The City hereby (i) consents to Borrower entering into the Loan,
(ii) approves Lender as the "Permitted Mortgagee" (as such term is defined in the DDA) under
the Loan with respect to the Mortgaged Property and (iii) approves the Security Instrument, after
it is properly recorded as an encumbrance against title to the Mortgaged Property, as a
"Permitted Mortgage" (as such term is defined in the DDA).
(b) Lender enters into this Agreement with the understanding that Lender's
rights as a Permitted Mortgagee under the DDA are subject to the terms and conditions set forth
in the DDA, including without limitation the following: (i) the City's right to the City Lien as
referred to in Section 16.2 of the DDA; (ii) the City's Right of Repurchase referred to in Section
16.3 of the DDA (which Section 16.3 is restated verbatim in the Memorandum); (iii) the City's
Right of Reversion referred to in Section 16.4 of the DDA (which Section 16.4 is restated
verbatim in the Memorandum), and (iv) the terms and conditions in Section 17 of the DDA.
(c) Lender acknowledges and agrees to be bound by and comply with Section
16.3.5 of the DDA and that, in accordance with Section 16.3.5 of the DDA, in the event of the
exercise by the City of the Right of Repurchase and payment of the Repurchase Price, the
portion of the Mortgaged Property reacquired by the City will be free and clear of Lender's
Security Interest and Lender agrees, in the event of such exercise of the Right of Repurchase by
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the City, to execute acknowledge and deliver all documents reasonably necessary or appropriate
to release Lender's Security Interest, at no additional cost or charge to City.
(d) Lender further acknowledges and agrees that, in accordance with Section
16.4.6 of the DDA, in the event of the exercise by the City of the Right of Reversion and
payment in accordance with Section 16.4.3(c) of the DDA, the portion of the Mortgaged
Property reacquired by the City will be free and clear of Lender's Security Interest and Lender
agrees, in the event of such exercise of the Right of Reversion by the City, to execute
acknowledge and deliver all documents reasonably necessary or appropriate to release Lender's
Security Interest, at no additional cost or charge to City.
(e) Notwithstanding any other provision of this Agreement, the City shall not
pursuant to the Property Documents, by any Enforcement Action or by entering into this
Agreement assume any obligations of the Borrower under the Loan Documents or be obligated
to comply with any of the terms of any of the Loan Documents. The City shall have the right, but
not the obligation, to cure any defaults under the Loan Documents pursuant to and in accordance
with Article 4 below.
(f) The Loan Documents require that the Equity Completion Date (as defined
in the DDA) shall have occurred before Lender disburses any funds to Borrower and Lender
agrees for the benefit of the City to be bound by and comply with that requirement.
(g) Lender further acknowledges and agrees to be bound by and comply with
Section 16.4.3(c) through (e) of the DDA which provide as follows:
"(c) Effect on Permitted Mortgaees. Concurrent with the Reversion
Event, the City shall fully satisfy each and every Permitted Mortgage
affecting the Reacquired Property, by paying to the Permitted
Mortgagees, in the aggregate, the lesser o (a) the aggregate Permitted
Mortgage Unpaid Balances of all Permitted Mortgages and (b) Two
Million Dollars ($2, 000, 000) per Phase, which amount has been
determined to be a reasonable estimation of the advances, costs and
expenses incurred or to be incurred by the Permitted Mortgagees, in the
aggregate, for each Phase prior to the Equity Completion Date for such
Phase, or by causing such amounts to be paid by any third party,
including any guarantor. "
(d) Interpleader. The City shall have the right to satisfy its obligation
pursuant to Section 16.4.3(c) by either interpleading, or causing any third
party on City's behalf, including Guarantor, to interplead in a court of
law the sums due and thereafter City and the Reacquired Property shall be
deemed released from and the City shall be released from and have no
further liability with respect to any Permitted Mortgagee of the
Reacquired Property or Permitted Mortgage encumbering the Reacquired
Property.
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(e) E ect. If the City pays or interpleads the amount specified in
Section 16.4.30 concurrently with the Reversion Event and the deposit
of such amount with the court or payment of such amount to Permitted
Mortgagee, (1) the Reversion Event shall foreclose, defeat and render
invalid each and every Permitted Mortgage encumbering the Reacquired
Property and upon the occurrence of a Reversion Event all Permitted
Mortgages Recorded against or encumbering all or any portion of the
Reacquired Property shall be deemed to be automatically released and of
no further force and effect with respect to the Reacquired Property and (2)
promptly thereafter, each Permitted Mortgagee shall take all steps
individually and collectively required to Record evidence of such release
and termination with respect to each Permitted Mortgage encumbering all
or any portion of the Reacquired Property. "
Lender hereby acknowledges and agrees that the foregoing provisions (Section 16.4.3(c)
through (e)) shall apply regardless of the amount or timing of disbursements made by Lender
under the Loan or the total amount of Indebtedness then outstanding.
(h) WITH RESPECT TO THE AMOUNTS PAYABLE TO LENDER AS
SET FORTH IN SECTIONS 2(c) AND 2(g) ABOVE, LENDER ACKNOWLEDGES AND
AGREES THAT SUCH AMOUNT BEARS A REASONABLE RELATIONSHIP TO THE
DAMAGES WHICH THE PARTIES ESTIMATE MAY BE SUFFERED BY THE CITY,
WHICH DAMAGES WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO
QUANTIFY, THAT SUCH AMOUNT CONSTITUTES A REASONABLE ESTIMATE OF
THE CITY'S DAMAGES IN SUCH EVENT, AND THAT THE REMEDY PROVIDED
FOR IN THE DDA AND THIS AGREEMENT IS NOT A PENALTY OR FORFEITURE
AND IS A REASONABLE LIMITATION ON POTENTIAL LIABILITY. LENDER
AGREES THAT THE FOREGOING STATEMENTS ARE TRUE EVEN THOUGH,
UNDER SECTION 16.4.3 OF THE DDA, THE LENDER MAY HAVE TO SHARE SUCH
AMOUNTS WITH ONE OR MORE OTHER LENDERS. LENDER FURTHER AGREES
THAT THE PAYMENT BY THE CITY OF THE AMOUNTS SPECIFIED IN SECTIONS
2(c) AND/OR 2(g) ABOVE, AS APPLICABLE, OR INTERPLEADER OF ANY SUMS TO
A COURT OF LAW AS SET FORTH IN THE DDA, WILL CONSTITUTE FULL
SATISFACTION OF ALL AMOUNTS DUE AND THAT UPON PAYMENT OF SUCH
SUMS, LENDER SHALL COOPERATE WITH CITY AND TAKE ALL ACTIONS TO
RELEASE THE SECURITY INSTRUMENT AND THE LIEN OF THE PERMITTED
MORTGAGE FROM THE PROPERTY REAQUIRED BY THE CITY PURSUANT TO
SECTION 16.3 AND/OR 16.4 OF THE DDA.
Initials of City Initials of Lender
3. SUBORDINATION.
(a) Lender hereby agrees, acknowledges and confirms that the Security
Instrument is subordinate to the terms, covenants, conditions, operations, and effects of each of
the Property Documents.
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(b) Lender expressly acknowledges and specifically confirms that the Security
Instrument is subordinate to the DDA, including, but not limited to, all of the following specific
provisions of the DDA:
(i) The rights of the City under the DDA with respect to the City Lien
as set forth in Section 16.2 of the DDA, the Right of Repurchase in favor of the City as
set forth in Section 16.3 of the DDA, and the Right of Reversion in favor of the City, as
set forth in Section 16.4 of the DDA. Lender acknowledges that the City's Right of
Reversion is subject to termination under certain conditions as set forth in Section 16.4.8
of the DDA;
(ii) The rights of the City in Articles 2, 16 and 17 and Section 4.6 of
the DDA; and
(iii) Any other provisions of the DDA or any of the attachments to the
DDA required to interpret Articles 2, 16 or 17 or Section 4.6 of the DDA.
The Lender, alone, shall have the authority to act under the DDA and the Security
Instrument as the Permitted Mortgagee under the DDA and the City shall be entitled to rely on
the authority of the Lender acting alone for all such purposes. The foregoing shall be true even if
the Lender is acting as agent or lead lender pursuant to a participation agreement, agency
agreement, intra -creditor agreement or comparable arrangement. Lender further agrees that the
City's determination as to whether any other lender is a Permitted Mortgagee shall be binding
and conclusive.
(c) Lender acknowledges and agrees that, under the terms of Section
17.1.1(f) and (g) of the DDA it is possible that there may be one or more additional Permitted
Mortgagees with respect to the Phase, including one additional Permitted Mortgagees whose
loan encumbers the Mortgaged Property and Construction Loans for Building Pads. Lender
further acknowledges and agrees that the amount referred to in Section 2(g) above may go
partially or entirely to another lender. [{If the Lender is the junior lender:} Without limiting the
foregoing, Lender acknowledges and agrees that there is a Senior Loan secured by a Senior
Deed of Trust in favor of the Senior Lender on the Mortgaged Property.]
(d) The foregoing subordinations in Sections 3(a), 3(b) and 3(c) shall apply
and continue notwithstanding (i) the actual date and time of execution, delivery, recording, filing
or perfection of each of the Loan Documents and each of the Property Documents, and (ii) the
respective rights of the Lender and the City to obtain a security interest in any collateral,
including any collateral other than the Mortgaged Property.
(e) In the event that the DDA is terminated, this Subordination Agreement
shall be interpreted and implemented as though the particular provisions of the DDA referenced
herein (including without limitation, Articles 2, 16 and 17 of the DDA) are still in effect and the
provision of the terminated DDA used for purposes of incorporation into this Subordination
Agreement shall be the provision in effect immediately prior to the termination of the document
in which it is contained.
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(f) Notwithstanding the foregoing, so long as no event has occurred that
would allow the City to exercise its Right of Reversion or the City has not acquired the Parcel
pursuant to the Right of Repurchase, the Rents, issues and profits from the Property, and the
Loss Proceeds payable with respect thereto, are expressly subject to the rights and claims of the
Lender under the Loan Documents and may be used by Borrower or Lender to comply with the
terms of the Loan Documents. Upon a Repurchase Event or acquisition by the City pursuant to a
Right of Repurchase, all Rents, issues and profits from the portion of the Property reacquired by
the City and Loss Proceeds payable with respect thereto shall be owned by the City and Lender
hereby relinquishes all rights and claims thereto, if any.
(g) The City represents and warrants to the Lender as follows: (i) that as of the
date of this Agreement, to the actual knowledge of the City Manager (without a duty of inquiry),
the Property Documents are in full force and effect; (ii) that the Property Documents have not
been modified or amended from the executed copies of the Property Documents delivered by the
City to the Lender concurrently with the date of this Agreement; (iii) that the City has not
delivered to Borrower any written notice of a default or breach by Borrower under any Property
Document; and (iv) that to the actual knowledge of the City Manager (without a duty of inquiry),
the City has not received written notice from Borrower that any event has occurred, which with
the giving of notice or the passage of time, or both, would constitute a default under any Property
Document.
(h) Lender represents and warrants to the City as follows: (i) that as of the
date of this Agreement, the Loan Documents are in full force and effect; (ii) that the Loan
Documents have not been modified or amended from the executed copies of the Loan
Documents delivered by the City to the Lender concurrently with the date of this Agreement; and
(iii) that the Lender has no knowledge of any fact or circumstance, the continuation of which
would constitute a default or breach by Borrower under any Loan Document; and (iv) Lender is
not aware of any event having occurred, which with the giving of notice or the passage of time,
or both, would constitute a default under any Loan Document.
(i) The City shall deliver to the Lender a copy of each notice delivered by the
City to Borrower pursuant to the Property Documents within five (5) business days after the
City's delivery of such notice to Borrower. The Lender shall deliver to the City in the manner
required in Section 5(b) of this Agreement a copy of each notice of a Loan Default delivered to
the Borrower by the Lender. Neither giving nor failing to give a notice to the Lender or City
pursuant to this Section shall affect the validity of any notice given by the Lender or City to the
Borrower, as between the Borrower and such of the Lender or the City as provided the notice to
the Borrower.
0) Within ten (10) Business Days after request by the City, but not more
often than once per year except in the event of a default by Developer under the Loan
Documents and/or the Property Documents, the Lender shall furnish the City with a statement,
duly acknowledged and certified confirming that there exists no default under the Loan
Documents (or describing any default that does exist), and certifying to such other information
with respect to the Loan Documents as the City may reasonably request, specifically including,
but not limited to the amount of the Indebtedness. Lender agrees that upon the occurrence and
during the continuance of any Default under the DDA and/or default under the Loan Documents,
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Lender shall provide City, from time to time as requested by City and within ten (10) Business
Days of receipt of a request from City, with a statement of the amount of the Indebtedness owed
and the then -current balance due, and shall keep the City reasonably informed of any actions that
Lender intends to take to address such defaults, including without limitation, any claims against
loan guarantors and/or Developer.
(k) Lender acknowledges that Section 17.3 of the DDA provides as follows
with respect to any modifications to Loan Documents (and the term "loan documents" as used
below shall mean the "Loan Documents" as defined in this Agreement):
"17.3 Chan, -e in Loan Documents. Following approval by the City of
loan documents in connection with its approval of a Permitted Mortgage,
but prior to closing of the Construction Loan evidenced by such loan
documents, Developer shall not modify or agree to modify those loan
documents without the prior written approval of the City, in its sole
discretion. In addition, as to each Mortgage, Developer shall, within five
(S) Business Days following execution of same, provide written notice to
the City, in accordance with Section 18.6, of each and every instrument
which effects or purports to effect an amendment, modification, waiver,
postponement, extension, replacement, renewal or termination of any of
the loan documents associated with such Mortgage or other terms and
conditions of the loan, which notice shall include a full and complete copy
of each such instrument. Notwithstanding its receipt of such notice, the
City shall not be bound by any amendment, modification, waiver,
postponement, extension, replacement, renewal or termination of any of
the loan documents associated with any Mortgage unless it shall have
given its prior written consent thereto; provided that nothing herein shall
obligate Developer to seek City's consent nor City to grant such consent. "
Lender hereby agrees to comply with the foregoing requirements.
4. DEFAULT UNDER PROPERTY DOCUMENTS
In the event of a Default under any Property Document:
(a) Lender: (i) shall have the right to cure any Property Document Default
in the manner and to the extent provided for in Section 17 of the DDA and the City's ability to
commence any Enforcement Action shall be limited as and to the extent provided for in Section
17.6 and 17.7 of the DDA, (ii) shall not have any obligation to cure any Property Document
Default and (iii) shall not be subrogated to the rights of the City under the Property Documents
by reason of the Lender having cured any Property Document Default. However, the City
acknowledges that all amounts advanced or expended by the Lender in accordance with the Loan
Documents or to cure a Property Document Default shall be added to and become a part of the
Indebtedness under the Security Instrument and shall be secured by the lien of, the Security
Instrument, subject however to the City's rights in Section 2(c), 2(f) and 2(g) of this Agreement and
Sections 16.3 and 16.4.3(c) of the DDA.
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(b) The Lender shall deliver to the City a copy of any notice sent by the
Lender to the Borrower of a Loan Default, including any alleged default sent by Lender under
any agreement in the nature of an inter -creditor or participation agreement, within five (5)
business days of sending such notice to the Borrower. Failure of the Lender to send notice to the
City shall not prevent the exercise of the Lender's rights and remedies under the Loan
Documents. The City shall have the right, but not the obligation, to cure any monetary Loan
Default within thirty (30) days following the date of such notice; provided, however, that the
Lender shall be entitled during such 30 -day period to continue to pursue its remedies under the
Loan Documents. The City may have up to ninety (90) days from the date of the notice to cure a
non -monetary Loan Default. Except as provided in Section 4(f) below, in the event that such a
non -monetary Loan Default creates an unacceptable level of risk relative to the Mortgaged
Property, or the Lender's secured position relative to the Mortgaged Property, as determined by
the Lender in its reasonable discretion, then the Lender may exercise during such 90 -day period
all available rights and remedies to protect and preserve the Mortgaged Property and the Rents,
revenues and other proceeds from the Mortgaged Property. The City shall not be subrogated to
the rights of the Lender under the Loan Documents by reason of the City having cured any Loan
Default. However, the Lender acknowledges that all amounts paid by the City to the Lender to
cure a Loan Default shall be deemed to have been advanced by the City pursuant to, and shall be
secured by the City Lien and shall be prior to the lien of the Security Instrument.
(c) Lender shall not be obligated to perform any of the Borrower's obligations
under the DDA to construct or complete any Improvements or to guarantee such construction or
completion thereof. Notwithstanding the foregoing, if any Person acquires title to any part of the
Mortgaged Property or the Improvements as a result of a Foreclosure Event or from Lender after
a Foreclosure Event, then such Person or entity shall be subject to all of the Property Documents.
If the Lender elects to construct any Improvements on the Mortgaged Property, the Lender must
first acquire title to the Mortgaged Property and assume all of the obligations of Borrower under
all of the Property Documents, and terminate this Agreement, and the Improvements may only
be those Improvements that Borrower would be permitted to construct under the DDA. In all
events, Lender shall only be liable to the City under the DDA after the date of a Foreclosure
Event to the extent of Lender's interest (whether fee or leasehold) in the portion of Mortgaged
Property and the Improvements thereon owned by Lender; provided that such limitation shall not
apply to any Person who acquires title to any part of the Mortgaged Property or the
Improvements as a result of a Foreclosure Event or from Lender after a Foreclosure Event.
(d) Subject to the terms of this Agreement, including, but not limited to
Section 4(e) below, the Lender may pursue all rights and remedies against Borrower available to
it under the Loan Documents, at law, or in equity, regardless of any Enforcement Action Notice
or Enforcement Action by the City. No action or failure to act on the part of the Lender in the
event of a Property Document Default or commencement of an Enforcement Action shall
constitute a waiver on the part of the Lender vis-a-vis Borrower of any provision of the Loan
Documents or this Agreement.
(e) Notwithstanding anything to the contrary in the Loan Documents, this
Agreement or in the DDA, if the City consummates an Enforcement Action and the Security
Instrument is not released as a result of the Enforcement Action, then Lender shall not exercise
Tustin Cornerstone I DDA Art 24 ATTACHMENT 24 City of Tustin/Flight Venture LLC
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any of its rights or remedies under the Loan Documents that would result in any Foreclosure
Event prior to the date that is ninety (90) days after the date the City acquires fee title to the any
portion of the Mortgaged Property pursuant to the Enforcement Action.
(f) Notwithstanding any other provision of this Agreement, any actions taken
by Lender under the Assignment which result in Lender acquiring the interests in Borrower now
held by [insert Controlling Party and Party with Operating Rights and Responsibilities and other
entities whose rights to lender could acquire] shall not constitute a Foreclosure Event. In the
event that Lender acquires such interests in Borrower, such acquisition shall be deemed a
Permitted Transfer of Control of Developer under the DDA, but shall not alter in any manner the
rights or obligations of Developer under the Property Documents, and Borrower shall remain
fully obligated as "Developer" under the Property Documents (and shall not enjoy the
protections of a Permitted Mortgagee under the Property Documents) notwithstanding the
acquisition of an interest or controlling interest by Lender in Borrower.
5. MISCELLANEOUS PROVISIONS.
(a) In the event of any conflict or inconsistency between the terms of the
Property Documents and the terms of this Agreement, the terms of this Agreement shall control.
In the event of any direct conflict or inconsistency between the terms of the DDA and this
Agreement, the terms of this Agreement shall prevail, provided however all terms and conditions
of the DDA not specifically and explicitly modified herein shall continue to apply and to be of
full force and effect without modification.
(b) This Agreement shall be binding upon and shall inure to the benefit of the
respective legal successors and permitted assigns of the parties hereto. No other party shall be
entitled to any benefits hereunder, whether as a third -party beneficiary or otherwise.
(c) Each notice, request, demand, consent, approval or other communication
(collectively, "notices," and singly, a "notice") which is required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been duly and
sufficiently given if (i) personally delivered with proof of delivery thereof (any notice so
delivered shall be deemed to have been received at the time so delivered), or (ii) sent by a
national overnight courier service (such as FedEx) designating earliest available delivery (any
notice so delivered shall be deemed to have been received on the next business day following
receipt by the courier), or (c) sent by United States registered or certified mail, return receipt
requested, postage prepaid, at a post office regularly maintained by the United States Postal
Service (any notice so sent shall be deemed to have been received on the date of delivery as
confirmed by the return receipt), addressed to the respective parties as follows:
Notices intended for the Lender shall be addressed to:
Tf to T .ender•
With a copy to:
Tustin Cornerstone I DDA Art 24
Subordination Agt 11-08-2016 (agd)(2).docx
ATTACHMENT 24
12
City of Tustin/Flight Venture LLC
With a copy to:
With a copy to:
Notices intended for the City shall be addressed to:
If to the City: Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Facsimile: (714) 838-1602
With a copy to: City of Tustin City Attorney
Woodruff Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attn: David E. Kendig
Facsimile: (714) 835-7787
Email: dkendig@wss-law.com
Any party, by notice given pursuant to this Section, may change the person or persons and/or
address or addresses, or designate an additional person or persons or an additional address or
addresses, for its notices, but notice of a change of address shall only be effective upon receipt.
Neither party shall refuse or reject delivery of any notice given in accordance with this Section.
(d) Nothing herein or in any of the Loan Documents or Property Documents
shall be deemed to constitute the Lender as a joint venturer or partner of the City.
(e) This Agreement shall be governed by the laws of the State of California,
irrespective of California's choice -of -law principles.
(f) The parties agree to submit to personal jurisdiction in the State of
California in any action or proceeding arising out of this Agreement. The parties hereby agree
and consent that without limiting other methods of obtaining jurisdiction, personal jurisdiction
over the parties in any such action or proceeding may be obtained within or without the
jurisdiction of any court located in California and that any process or notice of motion or other
application to any such court in connection with any such action or proceeding may be served
upon the parties by registered or certified mail to or by personal service at the last known address
of the parties, whether such address be within or without the jurisdiction of any such court. Any
legal suit, action or other proceeding by one Party to this Agreement against the other arising out
of or relating to this Agreement shall be instituted only in the courts of the State of California,
County of Orange or the United States District Court for the Central District of California, and
each Party hereby waives any objections which it may now or hereafter have based on venue
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and/or forum non-conveniens of any such suit, action or proceeding and submits to the
jurisdiction of such courts.
(g) To the extent permitted by law, each of Lender and the City waives its
respective rights to a trial by jury of any claim or cause of action based on, arising from, or
related to or arising out of this Agreement, in any action, proceeding, or other litigation of any
type brought by either party against the other, whether with respect to any cause of action in law
or equity. Lender and the City agree that any such claim or cause of action shall be tried by a
court trial without a jury. Without limiting the foregoing, the parties further agree that their
respective right to a trial by jury is waived by operation of this section as to any action, claim,
counter -claim, or other proceeding that seeks, in whole or in part, to challenge the validity or
enforceability of this Agreement. This waiver shall apply to any future amendments, renewals,
supplements, or modifications to this Agreement.
(h) If any Party to this Agreement institutes any action, suit, counterclaim or
other proceeding for any relief against another Party, declaratory or otherwise (collectively an
"Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any
inaccuracies or material omissions in connection with any of the covenants, representations,
warranties or obligations on the part of the other Party to this Agreement, then the Prevailing
Party in such Action shall be entitled to have and recover of and from the other Party all costs
and expenses of the Action, including (a) the Prevailing Party's reasonable attorneys' fees which
shall be payable at the actual contractual hourly rate for City's litigation counsel at the time the
fees were incurred, but in no event more than $200.00 per hour and (b) costs actually incurred in
bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award
(collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the
commencement of such Action and shall be paid whether or not such Action is prosecuted to a
Decision. Any Decision entered in any final judgment shall contain a specific provision
providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees
and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing
such judgment. For the purposes of this paragraph, Costs shall include in addition to Costs
incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs,
expenses and expert fees and costs incurred in the following: (a) post judgment motions and
collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party
examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
"Prevailing Party" within the meaning of this Section includes a Party who agrees to dismiss an
Action in consideration for the other Party's payment of the amounts allegedly due or
performance of the covenants allegedly breached, or obtains substantially the relief sought by
such Party.
(i) If any one or more of the provisions contained in this Agreement, or any
application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein, and any other application
thereof, shall not in any way be affected or impaired thereby.
0) The term of this Agreement shall commence on the date hereof and shall
continue until the earlier to occur of the following events: (i) the payment of all of the
Indebtedness; provided that this Agreement shall be reinstated in the event any payment on
Tustin Cornerstone I DDA Art 24 ATTACHMENT 24 City of Tustin/Flight Venture LLC
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14
account of the Indebtedness is avoided, set aside, rescinded or repaid by the Lender in which
case this Agreement shall then terminate when the Lender receives payment of all of the
Indebtedness and such payment is not set aside, rescinded or repaid by the Lender; or
(ii) issuance by the City of a Certificate of Compliance in accordance with Section 9 of the DDA
with respect to the portions of the Parcel secured by the Security Instrument.
(k) No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy hereunder.
(1) Each party hereto acknowledges that in the event any party fails to comply
with its obligations hereunder, the other parties shall have all rights available at law and in
equity, including the right to obtain specific performance of the obligations of such defaulting
party and injunctive relief.
(m) Nothing in this Agreement is intended, nor shall it be construed, to in any
way limit the exercise by the City of its governmental powers (including but not limited to
police, regulatory and taxing powers) with respect to the Borrower or the Mortgaged Property to
the same extent as if it were not a party to this Agreement or the transactions contemplated
hereby.
(n) This Agreement may be amended, changed, modified, altered or
terminated only by a written instrument or written instruments signed by the parties of this
Agreement.
(o) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.
[Signature and Acknowledgement Pages to Follow]
Tustin Cornerstone I DDA Art 24
Subordination Agt 11-08-2016 (agd)(2).docx
ATTACHMENT 24
15
City of Tustin/Flight Venture LLC
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
Dated:
ATTEST:
Erica N. Rabe, City Clerk
APPROVED AS TO FORM:
IM
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP
Tustin Special Real Estate Counsel
IM
Amy E. Freilich
Tustin Cornerstone I DDA Art 24 Subordination Agt
11-08-2016 (agd)(2).docx
LENDER:
By:
Name:
Title:
CITY:
CITY OF TUSTIN:
By:
Jeffrey C. Parker, City Manager
ATTACHMENT 24
S-1
City of TustinTlight Venture LLC
CONSENT OF BORROWER
The Borrower hereby acknowledges receipt of a copy of this Subordination Agreement,
dated as of , 201, by and between and The City of Tustin and
consents to the agreement of the parties set forth herein.
{INSERT BORROWER ENTITY}
IM
Date:
Name:
Title:
Tustin Cornerstone I DDA Art 24 Subordination Agt ATTACHMENT 24 City of TustinTlight Venture LLC
11-08-2016 (agd)(2).docx
S-2
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Tustin Cornerstone I DDA Att 24
Subordination Agt 11-08-2016 (agd)(2).docx
ATTACHMENT 24
S-3
(Seal)
City of Tustin/Flight Venture LLC
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Art 24 Subordination ATTACHMENT 24 City of Tustin/Flight Venture LLC
Agt 11-08-2016 (agd)(2).docx S-4
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On
before me,
(insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
Tustin Cornerstone I DDA Art 24 Subordination ATTACHMENT 24 City of Tustin/Flight Venture LLC
Agt 11-08-2016 (agd)(2).docx S-5
EXHIBIT A
LEGAL DESCRIPTION OF PARCEL
(legal description to include specific exclusions for
oil, water, and other rights reserved by the City
under the applicable Quitclaim Deed)
Tustin Cornerstone I DDA Art 24 ATTACHMENT 24 City of Tustin/Flight Venture LLC
Subordination Agt 11-08-2016 (agd)(2).docx EXHIBIT A
ATTACHMENT 25A
FORM OF
LICENSE AGREEMENT FOR SITE DEVELOPMENT
THIS LICENSE AGREEMENT FOR SITE DEVELOPMENT (this "Agreement") is
made and entered into as of , 20 (the "Effective Date"), by and
between FLIGHT VENTURE LLC, a Delaware limited liability company ("Developer"), and
the CITY OF TUSTIN (the "City"; the Developer and the City are referred to herein individually
as a "Party" and collectively as the "Parties"), with reference to the facts set forth below:
RECITALS
A. The City and Developer have entered into that certain Tustin Legacy Disposition
and Development Agreement Cornerstone I dated as of , 2016 (the "DDA"), for
the purchase by Developer of certain real property located in the City of Tustin, County of
Orange, State of California described therein as the "Development Parcels", upon which
Developer intends to construct certain Improvements as further described in the DDA. Capitalized
terms not otherwise defined herein shall have the meanings given to such terms in the DDA.
B. The Development Parcels are comprised of the Phase 1 Parcel (as described and
defined in the DDA) and the Phase 2 Parcel as more particularly described on Exhibit "A"
attached hereto and depicted on Exhibit "B" attached hereto (the "Phase 2 Parcel").
C. Concurrently with the execution of this Agreement, the City has conveyed its
interest in and to the Phase 1 Property to Developer. As part of its obligations under the DDA
and the Other Agreements, Developer is required in connection with its construction of the Phase
1 Improvements to construct certain Minimum Horizontal Improvements upon the Phase 2
Parcel.
D. The City remains the owner of the Phase 2 Parcel. In connection with the
acquisition and development by Developer of the Phase 1 Property, the City has agreed to grant a
construction license to Developer in accordance with the provisions of Section 8.2.4 of the DDA
to permit Developer to enter upon the Phase 2 Parcel prior to the Phase 2 Property Close of
Escrow to construct the portion of the Minimum Horizontal Improvements required to be
constructed thereon.
E. City and Developer have concurrently entered into two additional license
agreements as follows pursuant to the terms of the DDA:
(i) License Agreement (Staging and Construction Parking), pursuant to which
[{If a Phase Transfer has occurred:} the Phase IJ Developer has been granted a license
to access specified portions of the Phase 2 Parcel for staging and construction related to
construction of the Phase 1 Improvements ("Staging License"); and
(ii) License Agreement for Phase 2 Due Diligence providing a license for the
conduct by f{if a Phase Transfer has occurred.} the Phase 2] Developer of due
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
License Agt (Site Development) 11-07-16 1
(agd) FINAL. docx
diligence in connection with its Option to purchase the Phase 2 Property ("Due Diligence
License").
NOW THEREFORE, in consideration of the promises and mutual covenants, agreements
and conditions hereof, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as set forth below.
AGREEMENT
1. Recitals. The recitals set forth above are true and correct and are incorporated
herein by this reference.
2. Term. The term of this Agreement and the License shall commence as of the
Effective Date and, unless extended by the Parties in writing or terminated earlier in accordance
with this Agreement, shall remain in effect only until the earlier to occur of the following (the
"Termination Date"): (a) the Phase 2 Property Close of Escrow under the DDA; (b) the
Completion of the Minimum Horizontal Improvements; or (c) once Developer has commenced
construction of the Minimum Horizontal Improvements, the sixtieth (60th) calendar day after
Developer abandons or substantially suspends work on the Minimum Horizontal Improvements
upon the Phase 2 Parcel, unless such failure to prosecute the work to completion is due to a
Force Majeure Delay. Upon the Termination Date, Developer shall return the Phase 2 Parcel to
the City in the condition described in Section 8 and, in the event the Phase 2 Property Close of
Escrow under the DDA has not occurred, shall relinquish all right, title and interest in and to the
Phase 2 Parcel and any Minimum Horizontal Improvements performed and Developer and the
City agree that, unless otherwise set forth in Section 4.3.3 of the DDA, all Minimum Horizontal
Improvements constructed on the Phase 2 Parcel, and all materials acquired by Developer in
connection with same, shall be transferred to the City without compensation to Developer and
the City shall accept possession of any such Minimum Horizontal Improvements.
3. Construction License. The City hereby grants to Developer and to the Developer
Representatives a non-exclusive, revocable license (the "License") over the Phase 2 Parcel for
purposes of carrying out the construction of the Minimum Horizontal Improvements. Developer
is granted control of the Phase 2 Parcel for this purpose. Notwithstanding the foregoing, the
License and this Agreement shall be revocable by the City prior to the Termination Date only in
accordance with Section 19 of this Agreement.
4. Commencement of Work. Developer may not enter the Phase 2 Parcel pursuant
to this Agreement or commence the Minimum Horizontal Improvements until each of the
following has occurred: (a) the Phase 1 Property Close of Escrow shall have occurred; (b) the
City's issuance of rough grading permits with respect to the grading and incidental work
proposed by Developer and approved by the City on the Phase 2 Parcel ("Grading Permit");
(c) to the extent required under the DDA and the conditions of approval for the Project adopted
by the City Council with respect the Applicable Approvals, the provision by Developer of the
Construction Bond; (d) the execution of any subdivision improvement agreement required by the
City in its Governmental Capacity as a condition to commencement of the Minimum Horizontal
Improvements, if any; (e) the provision of the insurance required by this Agreement, and (f) the
satisfaction of all other conditions to commencement of construction of the Minimum Horizontal
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
License Agt (Site Development) 11-07-16 2
(agd) FINAL. docx
Improvements described in the Entitlements, the DDA and the Schedule of Performance. This
Agreement and the License shall each become null and void unless construction of the Minimum
Horizontal Improvements begins on or prior to the date set forth therefor in the Schedule of
Performance attached to the DDA, as such date may be extended for Force Majeure Delay, or as
such date may be extended by written agreement executed by the City Manager or his/her
appointee.
5. Repair. Except as authorized by this Agreement and/or the Grading Permit, in the
event that Developer's use of the Phase 2 Parcel or performance of the Minimum Horizontal
Improvements damages or destroys any improvements located on City -owned property
(including the Phase 2 Parcel or adjacent City -owned property) or on public streets or rights of
way, Developer shall repair such damage to as near a condition as existed prior to the access to
Phase 2 pursuant to this Agreement and/or the performance of such Minimum Horizontal
Improvements as is reasonably practicable at Developer's sole cost and expense.
6. Insurance. Prior, and as an ongoing condition, to exercise of the License
Developer shall or shall cause its Developer Representatives accessing the Phase 2 Parcel to
provide and maintain insurance meeting the requirements of Article 11 of the DDA which
insurance coverage shall extend to and include work performed and acts or omissions to act on or
related to the Phase 2 Parcel and the exercise of the License thereon.
7. "As -Is, Where -Is" License. Developer acknowledges that (a) the City makes no
representations or warranties as to the condition or suitability of the Phase 2 Parcel, the soil
located thereon, any hazards or Hazardous Materials, contaminants or pollutants that may be
present on or below grade at the Phase 2 Parcel, or otherwise; (b) Developer's use of the Phase 2
Parcel and the soil thereon and its license of the Phase 2 Parcel is "as is, where is" as described
in Section 4.5.2 of the DDA, in its present condition and without liability to City, without any
representation, promise, agreement or warranty on the part of the City regarding such condition
and state of repair needed for the exercise of the License except as expressly provided in
Section 3.3.8 of the DDA. Developer acknowledges that it has inspected the Phase 2 Parcel and
its determination to engage in this undertaking is based solely on its own investigation and is not
based on reliance of any statements, suggestions or information provided by the City, its agents,
officers, employees or contractors. Developer further acknowledges that the City shall not be
liable for any latent or patent defects in the Phase 2 Parcel, whether disclosed or not.
8. Condition of Phase 2 Parcel at Termination of License: Construction Bonds.
8.1 Condition of Phase 2 Parcel. At the Termination Date or upon any earlier
termination of the License and this Agreement (other than termination due to the occurrence of
the Phase 2 Property Close of Escrow under the DDA), Developer shall (a) remove its property
from the Phase 2 Parcel (other than property incorporated into the Minimum Horizontal
Improvements and property allowed to remain on the Phase 2 Parcel pursuant to the License
Agreement (Staging and Construction Parking) and/or the License Agreement (Phase 2 Due
Diligence) if then in effect, including, without limitation, all Hazardous Materials it brought to or
is required to remove from the Phase 2 Parcel in accordance with Sections 10 and 12 of this
Agreement; (b) report, contain, remove and Remediate, to the extent required by, and in
accordance with, Sections 10 and 12 of this Agreement, any land, air or water pollution
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
License Agt (Site Development) 11-07-16 3
(agd) FINAL. docx
(c) deliver the Phase 2 Parcel to the City in lien free condition; (d) cause the Phase 2 Parcel,
including without limitation, all Minimum Horizontal Improvements, to be delivered in a
condition consistent with the Grading Permit (but in the final condition specified in the Grading
Permit only to the extent the Minimum Horizontal Improvements has been completed as of the
date of termination) and all Governmental Requirements, and (e) except to the extent the
limitations provided in Section 13.1.2 below are applicable, deliver the Phase 2 Parcel in a
condition meeting all requirements of the City of Tustin Water Quality Ordinance, and all
federal, state, and Regional Water Quality Control Board and Regional Air Quality rules, permits
and regulations and applicable Mitigation Monitoring and Reporting Requirements relating to
such standards, including, without limitation, keeping the adjoining public roadways clear of any
dirt or mud.
8.2 Construction Bond. Upon termination of this Agreement for any reason
other than the occurrence of the Phase 2 Property Close of Escrow under the DDA, if Developer
shall have failed in any manner to comply with the requirements of Section 8.1 of this
Agreement, the City shall have the right, in its sole discretion, after giving Developer written
notice of such failure and an opportunity to cure the same in accordance with the terms and
conditions of Section 31 below, to cause the surety under the Minimum Horizontal
Improvements Construction Bond to satisfy the requirements of Section 8.1 (including without
limitation, to restore the condition of the Phase 2 Parcel to the condition specified by Section 8.1
of this Agreement and to pay in full all contractors and subcontractors performing the Minimum
Horizontal Improvements or any other work performed pursuant to this Agreement) or to seek
reimbursement under such bond for work performed or amounts paid by the City in satisfaction
of the foregoing. Upon payment in full of all amounts due and release of all liens (or bonding of
outstanding liens in the amounts required by the DDA) and performance by Developer or the
surety under the Minimum Horizontal Improvements Construction Bond of the work required by
this Section 8, the City shall release the Minimum Horizontal Improvements Construction Bond.
8.3 Survival. The provisions of this Section 8 shall survive termination of this
Agreement.
9. Release. Developer, on behalf of itself, its members, principals, officers,
beneficiaries, trustees, shareholders, partners, heirs, personal representatives, successors and
assigns (collectively, the "Releasing Parties"), as the case may be, hereby waives the right to
recover from and fully and irrevocably releases City and its officers, elected officials, employees,
consultants, agents, representatives and contractors (collectively, the "Released Parties"), from
and against any and all Claims that each of the Releasing Parties may now have or hereafter
acquire arising from or related to the activities of Developer on the Phase 2 Parcel pursuant to
this Agreement and any damage or destruction of any improvements located on the , excepting
from the foregoing release: (a) any breach by the City of any of the representations or warranties
of the City set forth in Sections 3.3 or 18.11.2 of the DDA, (b) any breach by the City of any of
the covenants or obligations set forth in this Agreement, the DDA or any Other Agreement,
(c) any Claim that is the result of the gross negligence or willful misconduct of the City, (d) any
actions of the City or any of the Released Parties affecting a portion of the Property which occur
following the Close of Escrow with respect to such portion of the Property, or (e) any Claim
arising with respect to the Development Permits, Applicable Approvals and Phase 2 Applicable
Approvals, if any, approved by the City in its Governmental Capacity. This release includes
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Claims of which the Releasing Parties are presently unaware or which the Releasing Parties do
not presently suspect to exist which, if known by the Releasing Parties, would materially affect
the Releasing Parties' decision to release the Released Parties. The Releasing Parties specifically
waive the protection 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 OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED THIS
SETTLEMENT WITH THE DEBTOR."
In this connection and to the extent permitted by law, the Releasing Parties realize and
acknowledge that factual matters now unknown to them may have given or may hereafter give
rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and
the Releasing Parties further agree that the waivers and releases herein have been negotiated and
agreed upon in light of that realization and that the Releasing Parties nevertheless hereby intend
to release, discharge and acquit the Released Parties from any such unknown Claims and
controversies to the extent set forth above. To the extent permitted by law, the foregoing
provisions of this Section 9 shall survive the termination of this Agreement.
CITY HAS AGREED TO ENTER INTO THIS AGREEMENT AND HAS GIVEN THE
RELEASING PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION
IN EXCHANGE FOR THE RELEASING PARTIES AGREEING TO THE PROVISIONS OF
THIS SECTION. BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS SECTION, (B) IT
HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS
MEANING AND SIGNIFICANCE, AND (C) IT HAS ACCEPTED AND AGREED TO THE
TERMS SET FORTH IN THIS SECTION.
CITY DEVELOPER
10. Indemnity. Developer hereby agrees to protect, indemnify, defend and hold
harmless the City Indemnified Parties from and against any and all Claims accruing during the
term of this Agreement to the extent arising from or related to Developer's or Developer
Representatives' activities on the Phase 2 Parcel pursuant to this Agreement during the term of
this Agreement including, but not limited to (a) the acts or omissions to act of Developer or the
Developer Representatives arising from the presence, activities or work on or use of the Phase 2
Parcel by Developer or the Developer Representatives, including without limitation with respect
to any Minimum Horizontal Improvements performed by Developer or any Developer
Representatives on the Phase 2 Parcel pursuant to this Agreement, any inspections, surveys,
tests, Investigations and studies carried out by Developer or the Developer Representatives on
the Phase 2 Parcel during the term of this Agreement or from the exercise of the License by
Developer or the Developer Representatives; (b) entry onto the Phase 2 Parcel by Developer or
the Developer Representatives in connection with this Agreement, (c) bodily injury to or death of
any person (including without limitation any employee or contractor of the City Indemnified
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Parties) or damage to or loss of use of property resulting from such acts or omissions of
Developer or any of the Developer Representatives and (d) the cost of Remediation of Hazardous
Materials as may be required by and compliance with any Construction Conditions (defined in
Section 13.1.3 below) established by any Environmental Agency or Environmental Law and
accepted by the City and Developer pursuant to Section 13.1.3; provided that Developer shall not
be responsible for and shall have no obligation to defend or indemnify the City Indemnified
Parties to the extent a Claim relates to or arises from: (i) the active negligence, gross negligence
or willful misconduct of a City Indemnified Party; (ii) the mere discovery of existing conditions,
contamination or Hazardous Materials at, on, under or emanating from the Phase 2 Parcel; (iii) to
the extent caused by any breach of the City's representations, warranties, covenants or
obligations set forth in the DDA or in any Other Agreement relating directly to any
environmental matters giving rise to any Environmental Claim; and/or (iv) any Claim for a civil
or criminal penalty based upon an alleged violation of any Environmental Law by the City
arising out of actions or inactions between May 2002 and the Phase 2 Property Close of Escrow.
If the City is served or otherwise presented with a Claim or potential Claim for which it believes
it is entitled to defense and/or indemnity under this Section, City will notify Developer of such
Claim or potential Claim within ten (10) Business Days of receipt of such claim. Selection of
counsel and defense of a Claim shall be conducted in accordance with the provisions of
Section 10.1 of the DDA. The provisions of this Section shall survive termination of this
Agreement.
11. Costs; No Liens. Developer shall bear all costs relating to the Minimum
Horizontal Improvements. Developer and the Developer Representatives shall not place, allow
to be placed on, or incur any liens against the Phase 2 Parcel or any portion thereof in connection
with the Minimum Horizontal Improvements or in any way attributable to the acts of Developer
and/or the Developer Representatives on the Phase 2 Parcel. Developer agrees to indemnify,
defend, and hold the City and its elected and appointed officials, employees, agents, attorneys,
affiliates, representatives, contractors, successors and assigns free and harmless from and against
any and all Claims arising with respect to payment of liens assessed or levied against the Phase 2
Parcel and/or the Improvements in connection with access to the License Areas or the Minimum
Horizontal Improvements performed, materials furnished, or any other activities under control of
Developer or the Developer Representatives which, pursuant to the laws of California, may
become a lien on the Phase 2 Parcel. Should any lien be filed against the Phase 2 Parcel in
connection with the work by Developer or the Developer Representatives under this Agreement,
Developer shall promptly bond around the lien as part of disputing the lien with the party
asserting the lien. The provisions of this Section shall survive termination of the License and
this Agreement. The City may post notices of non -responsibility on the Phase 2 Parcel prior to
Developer's commencement of any work under this Agreement.
12. Environmental Conditions Arising During Occupancy.
12.1 If any release of Hazardous Materials on the Phase 2 Parcel or any
adjoining property owned by the City occurs during the term of Developer's entry or activities
upon, the Phase 2 Parcel, Developer shall promptly upon becoming aware of same, provide
written notice (or in the event of emergency, telephonic notice, followed by written notice) of
any such Developer Release to the City and shall indemnify the City as and to the extent set forth
in this Agreement.
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12.2 The responsibility and liability of Developer under the Staging License
and this Agreement with respect to Release and Remediation of Hazardous Materials and
Environmental Claims is more extensive than the responsibility of Developer under the Due
Diligence License. Accordingly, Developer shall notify City and, to the extent that it is not the
Developer, shall notify Developer prior to its access to the Phase 2 Parcel and shall carefully
document its inspection and testing, and provide records of same to the City. In the event of any
disagreement as to whether work performed on the Phase 2 Parcel and the Improvements thereon
is performed pursuant to this Agreement (i.e., in further of due diligence) or pursuant to either of
the Staging License or the Due Diligence License it shall be presumed that such work is
performed pursuant to this License and that the terms and conditions of the Site Development
License and/or this Agreement shall govern. Further, Developer acknowledges and agrees that
the work performed by Developer under this Agreement, which is performed for the benefit of
the City, is of paramount importance to the City and accordingly, Developer (whether it is the
same or a Related Party to Developer or otherwise) shall at all times prioritize the construction of
the Minimum Horizontal Improvements over the exercise of its rights under the Due Diligence
License and the Staging License.
13. Environmental Remediation.
13.1 Remediation.
13.1.1 Loss or Damage to Improvements. In the event of damage to or
loss of any improvements or personal property situated on the Phase 2 Parcel, Developer shall
take all appropriate steps to erect fences to preclude unauthorized access to the Phase 2 Parcel
and otherwise mitigate hazardous and unsafe conditions within the Phase 2 Parcel caused by the
damage and destruction.
13.1.2 Pre -Existing Environmental Conditions. If as a result of
performing any of the work permitted by this Agreement, Developer discovers the presence of
Hazardous Materials on the Phase 2 Parcel that was present prior to any entry or activity upon
the Phase 2 Parcel by Developer and/or any Developer Representative that was not caused by
Developer and/or Developer Representatives or such pre-existing Hazardous Material so
discovered is exacerbated by Developer or any Developer Representative, then promptly upon
becoming aware of the same, Developer shall (a) provide written notice to the City of such pre-
existing or exacerbated Hazardous Material, and (b) tender a claim for the Remediation of such
pre-existing or exacerbated Hazardous Material under Developer's PLL insurance policy
maintained pursuant to and in accordance with Section 6 of this Agreement and Section 11. 1.4 of
the DDA and diligently pursue such claim. Except as provided for in this Section 13.1.2, and if
Developer has maintained the PLL policy with at least the limits of insurance required in, and at
all times required by, Section 6 of this Agreement and Section 11. 1.4 of the DDA and such
policy is in effect and has not been cancelled when such claim is tendered, then neither
Developer nor any Developer Representatives shall have any further obligations or liabilities in
connection with or related to such pre-existing or exacerbated Hazardous Materials.
13.1.3 Environmental Conditions Arising During Occupancy. If any
release of Hazardous Materials on the Phase 2 Parcel occurs during the term of Developer's
entry or activities upon, the Phase 2 Parcel (a "Developer Release") during the term of this
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Agreement, then Developer shall (a) promptly upon becoming aware of same, provide written
notice (or in the event of emergency, telephonic notice, followed by written notice) of any such
Developer Release to the City; and (b) tender a claim for the Remediation of such Developer
Release under Developer's PLL insurance policy maintained pursuant to and in accordance with
Section 6 of this Agreement and Section 11. 1.4 of the DDA and diligently pursue such claim;
and (c) indemnify the City for the costs of such Remediation in accordance with Section 10
above; and (d) Remediate the Developer Release in compliance with and to the extent required
by Environmental Laws and any Environmental Agency or Agencies to the level required by
Governmental Agencies for commercial development as described by the Applicable Approvals,
or if such removal is prohibited by any Environmental Laws, take whatever action is required by
applicable Environmental Law and such applicable Environmental Agency or Agencies; and
(e) to the extent a No Further Action Letter is required by the applicable Governmental Agency
as evidence of completion, provide the City with satisfactory evidence of the actions taken as
required in this Section 13. Developer's obligation to Remediate with respect to any affected
area under this Section 13.1.3 shall be considered fully satisfied upon receipt of a No Further
Action Letter with respect to such affected area. For purposes of this Agreement, the term "No
Further Action Letter" shall mean a "No Further Action Letter," "Closure Letter" or other
equivalent document to be issued by the appropriate Governmental Agency, which letter is to
generally confirm that "no further action" is to be required to address the existence of Hazardous
Materials within the affected area and there are no constraints or restrictions on future use. The
City shall have a right to have an observer present during all such testing and remediation work.
City may provide comments to any remedial action plan prepared by Developer for any
remediation (a "RAP"), and Developer shall not unreasonably decline to incorporate such
comments in such RAP; provided, however, that City shall not have approval or consent rights
with respect to such RAP unless the applicable Governmental Agency requires the consent of the
City for the approval of any RAP or issuance of a No Further Action Letter, in which event the
City shall have a right to consent but agrees not to unreasonably withhold, delay or condition
such consent. Notwithstanding the immediately preceding sentence, in the event that the
applicable Governmental Agency requires the consent of the City for the approval of any RAP or
issuance of a No Further Action Letter, the City shall have the right to withhold such consent
only to the extent necessary to assure that there shall be no land use control, constraint, limitation
or restriction on the construction and sale of commercial office uses, including without limitation
Office Uses on the Phase 2 Parcel ("Constraints"); provided, however, that the City shall not
unreasonably withhold its consent to Construction Conditions (defined below) that meet the
requirements of clauses (a) and (b) below. Examples of Constraints that the City may reject in
its sole discretion are Constraints that affect the ability of any Person to construct Office Uses on
the Phase 2 Parcel, to dig 12 feet or less below the surface of the land and the like. On the other
hand, the Parties recognize that certain remedial or removal action to address Hazardous
Materials at the Phase 2 Parcel may not be feasible economically or from an engineering
perspective without imposition of certain conditions. Such conditions that will not provide
Constraints on the use of the Phase 2 Parcel are referred to herein as "Construction
Conditions". As an example, if methane exists below the surface of the Phase 2 Parcel, in lieu
of removal of the methane, use of a methane boot may be required. If Developer proposes a
Construction Condition and the City does not agree to Developer's assertion and withholds
consent on that basis, then Developer will obtain and submit to the City estimates from at least
two contractors as to the cost to Remediate the Phase 2 Parcel to a level without Construction
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Conditions and the cost to Remediate to such level with Construction Conditions. If (a) the cost
to Remediate the pre-existing Hazardous Materials without imposition of Construction
Conditions is more than 15% greater than the cost to Remediate with the imposition of
Construction Conditions and (b) following Remediation to the standard required with imposition
of the Construction Condition there is no Constraint on the ability to construct and sell the Phase
2 Parcel for Office Uses consistent with the Applicable Approvals, then failure of the City to
agree to such Construction Condition will be deemed unreasonable absent another basis for
denial asserted by the City.
13.1.4 Environmental Reports. Upon written request from the City for
the same, Developer shall at no cost to the City provide the City with copies of (a) all test results
and data obtained in connection with testing related to Hazardous Materials, and (b) any final
environmental and/or consulting reports prepared in connection with any investigation and/or
Remediation of the pre-existing or exacerbated Hazardous Material or a Developer Release.
13.2 Assignment of Rights. City hereby assigns to Developer, to the extent
such rights are assignable, on a non-exclusive basis and as the Parties' interests may appear, any
rights that City has against any Person with respect to any Remediation, indemnification or
liability with respect to Hazardous Materials located on or about the Phase 2 Parcel that
Developer is responsible for under this Agreement, excluding any rights with respect to City's
existing pollution legal liability insurance policies.
13.3 Cooperation; Further Assurances. City shall reasonably cooperate with
Developer in pursuing and/or processing any claim against any insurer (excluding claims under
City's existing pollution legal liability insurance policies) or any other Person with respect to
Developer's obligations under this Agreement, including, without limitation, by making a claim
against any insurer in City's name for the benefit of Developer with respect to any costs, liability
or damages incurred by Developer under this Agreement, all at Developer's cost and expense.
Developer shall have full authority to pursue such claims in its own name and without consent or
approval from City, and shall have the right to make all decisions in connection with the pursuit
of any such claim. In the event that for any reason the assignment of rights set forth in
Section 13.2 above is ineffective or incomplete, City agrees: (a) upon written request of
Developer, to pursue claims against any Person for whom the assignment of rights is ineffective
or incomplete on behalf of the Developer in City's own name for the benefit of Developer (a
"Third Party Claim") subject to the provisions of this Section, (b) to initiate a Third Party
Claim requested by Developer, which may include an action, arbitration, reference or other
alternative dispute resolution mechanism and (c) if the City has no claim, to cooperate with
Developer in pursuing any such matter initiated by Developer. If City fails to initiate a Third
Party Claim where the City has such a claim, as required hereunder, Developer shall be excused
from its obligations to remediate under Section 13.1 above. City shall not unreasonably
withhold, condition or delay its compliance with Developer's requests in connection with the
prosecution and resolution of such Third Party Claim including, without limitation, with respect
to venue, strategy, law and motion and settlement. The City shall use its commercially
reasonable diligence in prosecuting such claim to conclusion. City's prosecution of any Third
Party Claim or other compliance with the provisions of this Section 13 shall be at Developer's
sole cost and expense, and if applicable, with the assistance of counsel selected by Developer
who shall represent the City as well as Developer as the real party in interest, except in the event
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of a conflict of or disparate interest. Such cost and expense of City shall include reimbursement
for time of City personnel and counsel incurred in connection with such pursuit, to be charged at
the then existing rates charged by City with respect to such personnel. Each of the Parties shall
execute and deliver any and all additional papers, documents or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
of its obligations under this Section 13 in order to carry out the intent and purpose of this
Agreement. City shall promptly pay over to Developer any award, payment, judgment or
settlement received by it in respect of any Third Party Claim. In the event the Phase 2 Property
Close of Escrow occurs under the DDA, this Section 13.3 shall survive the termination of this
Agreement.
13.4 Survival. In the event this Agreement terminates due to the Phase 2
Property Close of Escrow under the DDA, the terms of the DDA shall govern the Remediation of
the Phase 2 Parcel by Developer and the provisions of this Section 13 shall not survive other than
Sections 13.2 and 13.3 which shall survive only with respect to any pre-existing Hazardous
Materials discovered on the Phase 2 Parcel by Developer during the term of this Agreement or a
Developer Release. In the event this Agreement terminates in accordance with subsections (b) or
(c) under Section 2 of this Agreement, the Parties' rights and obligations under Sections 13.1.1,
13.1.2 and 13.1.3 shall survive the termination of this Agreement and the Parties' obligations
under Sections 13.2 and 13.3 shall survive only with respect to any pre-existing Hazardous
Materials discovered on the Phase 2 Parcel or exacerbated by Developer during the term of this
Agreement or any Developer Release. To the extent that completion of any Remediation is
required pursuant to the foregoing, Developer will complete such Remediation obligations in full
and shall not be relieved of its obligations as a result of the termination of this Agreement or for
any other reason.
14. No Supervision or Control. The City (whether acting in its Governmental
Capacity or its Proprietary Capacity) does not have any right, and hereby expressly disclaims any
right, of supervision or control over the architects, designers, engineers or persons responsible
for drafting or formulating of any plans, drawings and related documents of Developer.
15. No Waiver. Nothing contained in this Agreement shall be deemed to waive the
right of the City to act in its Governmental Capacity with respect to the consideration and
approval of the Entitlements and all other permits, licenses and approvals requested by
Developer from time to time in connection with the Project
16. Bailee Disclaimer and Waiver of Claims. Developer acknowledges and agrees
that City has granted its permission for use of the Phase 2 Parcel only for the purposes and in
accordance with the provisions of this Agreement. By entering into this Agreement, City is not
agreeing in any manner to accept obligations or responsibility for the safekeeping of the vehicles
or other property of Developer or of Developer's agents, contractors, officers, employees or
invitees. This Agreement is not a contract for bailment or deposit of goods for safekeeping and
City in no manner whatsoever purports to be a bailee. As a material part of the consideration to
be rendered to City for this Agreement, Developer hereby waives any and all claims or causes of
action against City, its officers, agents, or employees which it may now or hereafter have for
damages to, loss of, or theft of Developer's vehicles or other property anywhere in, about, or on
Tustin Legacy, including, but not limited to, the Phase 2 Parcel, from any cause whatsoever,
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unless such damage, loss, or theft results from the sole negligence, gross negligence or willful
misconduct of City, its officers, agents, or employees.
17. Compliance with Laws and Terms of DDA. Developer will at all times during the
term of this Agreement promptly observe and comply, at its sole cost and expense, and shall
cause its use of the Phase 2 Parcel, including without limitation, all Minimum Horizontal
Improvements, to be performed in accordance with the requirements of the DDA, the Grading
Permit and all Governmental Requirements, including without limitation all applicable federal
and state labor laws and regulations, and all permits required to perform the Minimum
Horizontal Improvements. Without limiting the generality of the foregoing, the provisions of
Sections 8.8 through 8.12, inclusive, of the DDA and the releases and indemnities set forth in
Sections 411M, 8.8.5, 8_9, 8.11, 8.12, and 10.1 of the DDA shall apply as though fully set forth
herein.
18. Data Sharing. Developer agrees to provide the City with copies of all soil test
results. Notwithstanding the provisions of Section 17, and except for the routine reporting of
data incident to a permit application, should Developer discover conditions on the Phase 2 Parcel
during the conduct of the Minimum Horizontal Improvements, that Developer believes may
require reporting to any Governmental Authority (local, regional, state, or federal), Developer
shall, as promptly as reasonably practical, advise the City of such discovery and thereafter
provide City with the field and/or laboratory data pertaining to such discovery.
19. Rights of City to Revoke License for Default. This Agreement and the License
granted hereby may be revoked by the City by provision of written notice to Developer, (a)
during the continuation of any default by Developer under this Agreement beyond the notice and
cure period set forth in Section 32, or (b) at any time if the City determines, in its sole discretion,
that the conduct or activities of Developer create health or safety concerns requiring stoppage of
the work. If Developer disputes the City's revocation of the License pursuant clause (b) above,
Developer shall have the right to provide the City with written notice within three (3) calendar
day(s) following delivery of such revocation notice setting forth Developer's basis for the
dispute. Developer and City shall meet and confer within five (5) Business Days from the
delivery of Developer's notice, in order to identify specific actions and remedies to be taken by
Developer to cure the default asserted by the City and provided that Developer agrees in writing
to take such actions and to promptly prosecute them to completion in a manner satisfactory to the
City in its reasonable discretion, the City shall not unreasonably withhold the reinstatement of
the License and this Agreement.
20. Additional Rules and Regulations Applicable to Use of Phase 2 Parcel. In
connection with its use of the Phase 2 Parcel, Developer shall comply with the rules and
regulations of the City attached as Exhibit "C" to this Agreement.
21. Dispute Resolution. In the event of a dispute between the Parties with respect to
this Agreement, the Parties agree that they shall resolve such dispute in accordance with the
provisions of Section 18.1 of the DDA, and the cost of any such proceeding shall be borne in
accordance with the provisions of Section 18.2 of the DDA and the provisions of Section 18.9 of
the DDA shall apply with respect to such dispute.
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22. Governing Law. This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California.
23. Relationship of Parties, Not an Easement or Interest in Land. Nothing contained
in this Agreement shall be deemed or construed, either by the Parties hereto or by any third
party, to create the relationship of principal and agent or to create any partnership, joint venture
or other relationship between the Parties. Nothing in this Agreement shall create or constitute an
easement in the Phase 2 Parcel and this Agreement shall be considered nothing other than a
license as set forth herein.
24. Notices. All notices required by this Agreement shall be provided in writing and
shall be deemed received when (a) personally served, (b) two (2) days after being sent by
registered or certified mail, return receipt requested, postage or charges prepaid, or by recognized
overnight carrier, or one (1) day after receipt by facsimile machine or electronic mail, with
transmission and receipt acknowledged in writing by facsimile, email or any other method
permitted under this Section, and addressed to the Party for whom intended at such Party's
address herein specified, or at such other address as such Party may have substituted therefore by
proper notice to the other.
If to Developer:
David Binswanger
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Fax: (213) 538-0901
Email: dbinswanger@lpc.com
With a copy to: Parke Miller
Lincoln Property Company Commercial, Inc.
114 Pacifica, Suite 370
Irvine, CA 92618
Fax: (949) 333-2131
Email: pmiller@lpc.com
With a copy to: Gregory S. Courtwright
Lincoln Property Company Commercial, Inc.
2000 McKinney Avenue, Suite 1000
Dallas, TX 75201
Fax: (214) 740-3460
Email: gcourtwright@lpc.com
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With a copy to: Mark Potter
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
E-mail: mpotter@alcionventures.com
With a copy to: Amy Forbes and Douglas Champion
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Suite 4900
Los Angeles, CA 90071
Fax: (213) 229-6151 / (213) 229-6128
E-mail: aforbes@gibsondunn.com / dchampion@gibsondunn.com
With a copy to: Andrew C. Sucoff
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Fax: (617) 523-1231
Email: asucoff@goodwinlaw.com
If to the City:
City of Tustin
Attn: Jeffrey C. Parker, City Manager
300 Centennial Way
Tustin, CA 92780
Fax: (714) 838-1602
Email: jparker@tustinca.org
With a copy to:
Woodruff Spradlin & Smart, APC
Attn: David Kendig, Esq., City Attorney
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com
and:
Armbruster Goldsmith & Delvac LLP
Attn: Amy E. Freilich, Esq., Special Counsel
12100 Wilshire Blvd., Suite 1600
Los Angeles, CA 90025
Fax: (310) 209-8801
Email: amy@agd-landuse.com
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25. No Assi ng ment. This Agreement shall not be assigned by Developer except with
the prior written consent of the City in its sole discretion.
26. Exhibits Incorporated. Each exhibit attached and referred to in this Agreement is
hereby incorporated by reference as though set forth in full where referred to herein.
27. Severability. If any provision of this Agreement or application thereof to any
person or circumstance shall to any extent be invalid or unenforceable, the remainder of this
Agreement (including the application of such provision to persons or circumstances other than
those to which it is held invalid or unenforceable) shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
28. Entire Agreement. This Agreement and the DDA contain the entire agreement of
the Parties with respect to the subject matter and 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.
29. Counterparts. This Agreement and any amendments hereto may be executed in
counterparts, each of which is deemed an original and all of which, when taken together, shall
constitute one and the same instrument.
30. Further Assurances. Each of the Parties hereto shall execute and deliver at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
of its obligations hereunder in order to carry out the intents and purposes of this Agreement.
31. Authority. Each Party warrants that it has the power and authority to enter into
this Agreement and to perform its obligations hereunder. Each individual who signs this
Agreement on behalf of an entity warrants that he/she has been duly authorized to do so and to
bind such entity.
32. Default Procedure. The non -defaulting party (the "Non -Defaulting Party") at its
discretion may elect to declare a default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of any other party (the "Defaulting Party") to
perform any material duty or obligation of said Defaulting Party in accordance with the terms of
this Agreement. However, the Non -Defaulting Party must provide written notice to the
Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required
by the Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed to
be in "default" of its obligations set forth in this Agreement if the Defaulting Party has failed to
take action and cure the default within ten (10) Business Days after the date of such notice or,
with respect to a default which by its nature cannot be cured within such ten (10) -Business Day
period, then the Defaulting Party shall be deemed to be "default" of its obligations hereunder if
the Defaulting Party has failed to commence to cure within such ten (10) -Business Day period
and thereafter diligently pursue such cure to completion.
33. Limitation on Damages. Developer acknowledges that the City would not have
entered into this Agreement if the City could become liable for damages under or with respect to
this Agreement. Consequently, and notwithstanding any other provision of this Agreement,
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except for the payment of attorneys' fees in accordance with Section 21 of this Agreement and
court costs, the City shall not be liable in damages under this Agreement to Developer and
Developer, on behalf of itself and each Developer Representative hereby waives any and all
rights to claim damages of any other kind or nature from the City including without limitation,
Claims for lost profits, consequential, incidental, indirect, special, collateral, exemplary or
punitive damages. Except as otherwise set forth in the DDA, in no event shall Developer be
liable to the City for any lost profits, consequential, incidental, indirect, special, collateral,
exemplary or punitive damages in connection with this Agreement or the Minimum Horizontal
Improvements.
{signatures commence on followingpage}
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year
first written above.
DEVELOPER:
{INSERT PHASE 10 WNER SIGNATURE BLOCK}
CITY OF TUSTIN:
Jeffrey C. Parker,
City Manager
ATTEST:
By:
Erica Rabe
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
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EXHIBIT A
LEGAL DESCRIPTION OF PHASE 2 PARCEL
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
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(agd) FINAL. docx Exhibit "A"
EXHIBIT B
DEPICTION OF PHASE 2 PARCEL
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
License Agt (Site Development) 11-07-16
(agd) FINAL. docx Exhibit "B"
EXHIBIT C
RULES AND REGULATIONS
1. Developer shall comply with all requirements of the Occupational Safety and
Health Administration.
2. Trash disposal shall comply with CR&R Incorporated and City of Tustin
standards.
3. Developer shall be required to have and maintain a valid City of Tustin Business
License.
4. All requirements of the City's Noise Ordinance (Chapter 6 of the City Code) shall
be met at all times.
5. Except as otherwise permitted by any other License Agreement then in effect
between Developer and City, Developer may not access any other areas on the adjacent Tustin
Legacy properties and may not enter any of the buildings on the Tustin Legacy site for any
purpose.
6. Developer shall ensure controlled access to the Phase 2 Parcel is maintained.
Developer shall ensure the access gates remain closed all times while not in use. Developer
understands and agrees that this access may be disturbed in the future. The City makes no
guarantees that there will be continuing access that can be provided at the current location.
7. Except for ingress and egress and during daytime construction periods in which
vehicle gates are actively manned/monitored, Developer must keep the vehicle gates and
adjacent roadway free and clear at all times. Developer shall install temporary enhanced fencing
around the Phase 2 Parcel which screens the property at its sole cost and expense subject to
inspection and approval of the installation by the City. If requested by the City, Developer shall
remove said installation upon termination of this Agreement; otherwise, Developer shall leave
the fencing in good condition, reasonable wear and tear accepted, at the termination of this
Agreement. The vehicle gates shall be installed to open into the Phase 2 Parcel so as not to open
outward and obstruct the circulation access route to and from the Phase 2 Parcel.
8. Security and access to Tustin Legacy is currently performed by the City of Tustin
Police Department. The City of Tustin is not responsible for providing security services for
Developer, Developer's equipment or property, or the Phase 2 Parcel during the license period.
Access to the Phase 2 Parcel shall be permitted only during daylight hours only from 7:00 a.m.
until 6:00 p.m., Monday through Friday, 9:00 a.m. until 5:00 p.m. on Saturdays. Developer is
responsible for securing the Phase 2 Parcel; including without limitation keeping all gates closed
and locked during hours when use of the Phase 2 Parcel is not permitted.
9. Hours of operation shall be according to Tustin City Code Section 4616 which
limits construction activities to between 7:00 a.m. and 6:00 p.m. Monday through Friday, and
between 9:00 a.m. and 5:00 p.m. on Saturdays, and at no time on Sundays unless otherwise
approved by the City. Construction activities are prohibited on New Year's Day, President's
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
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(agd) FINAL. docx Exhibit "C"
1
Day, Memorial Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, and
Christmas Day.
10. This development shall comply with all provisions of the City of Tustin Water
Quality Ordinance and all Federal, State, and Regional Water Quality Control Board rules and
regulations, including keeping the Phase 2 Parcel, and public roadways, including but not limited
to Armstrong Avenue and Barranca Parkway, clear of any dirt or mud tracked out of the Phase 2
Parcel.
11. In addition to access required under other provisions of this Agreement, the City,
and the Department of Navy and their representatives shall be allowed access to the Phase 2
Parcel at all times throughout the term of this Agreement, for any purpose without prior written
notice to Developer. Developer shall ensure that the City has a current roster of on-call
personnel and their phone numbers. Developer shall have no claim against the City for exercise
of their rights of access hereunder.
12. Developer shall not make or permit to be made any use of the Phase 2 Parcel or
any part thereof (i) which would violate any of the covenants, agreements, terms, provisions, and
conditions of this Agreement; 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
Phase 2 Parcel or any part thereof to be used in any manner or permit anything to be brought
onto or kept thereon which, in the reasonable judgment of City, shall in any way impair or tend
to impair the character, reputation or appearance of the Phase 2 Parcel or which will impair or
interfere with or tend to impair or interfere with any of the services performed by City.
13. Developer shall not display, inscribe, print, maintain or affix on any place in or
about the Phase 2 Parcel any sign, notice, legend, direction, figure or advertisement, except as
may be approved by City in writing.
14. Developer shall comply with all laws, enactments, rules, ordinances and
regulations of all governmental authorities relating or applicable to Developer's occupancy of the
Phase 2 Parcel governing use of the Phase 2 Parcel. Developer shall obtain all permits and
licenses required by the City of Tustin and shall pay all required fees.
15. Developer's work on the Phase 2 Parcel will be coordinated and performed with
the work contemplated in and in accordance with the Due Diligence License Agreement.
16. Developer shall allow no dangerous or hazardous condition to be created or
caused on the Phase 2 Parcel.
17. No smoking or alcohol consumption is permitted anywhere on or within the Phase
2 Parcel.
Tustin Cornerstone I DDA Art 25A Form ATTACHMENT 25A City of Tustin/Flight Venture LLC
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(agd) FINAL. docx Exhibit "C"
2
ATTACHMENT 25B
FORM OF
LICENSE FOR PHASE 2 DUE DILIGENCE
THIS LICENSE FOR PHASE 2 DUE DILIGENCE (this "Agreement") is made and
entered into as of 20 (the "Effective Date"), by and between
FLIGHT VENTURE LLC, a Delaware limited liability company ("Optionee"), and the CITY
OF TUSTIN (the "City"); City and Optionee individually, each a "Party" and collectively, the
"Parties"), with reference to the facts set forth below:
RECITALS
A. [{If Developer and Optionee are the same Person:} Optionee {If Developer and
Optionee are different Persons:} [ a J, [as successor in
interest toJ Flight Venture LLC, a Delaware limited liability company ("Developer") and the
City have entered into that certain Tustin Legacy Disposition and Development Agreement
Cornerstone I dated as of , 2016, as amended from time to time (the "DDA"),
for the purchase by Developer of certain real property located in the City of Tustin, County of
Orange, State of California described therein as the "Development Parcels", upon which
Developer intends to construct certain Improvements as further described in the DDA. Capitalized
terms not otherwise defined herein shall have the meanings given to such terms in the DDA.
B. The Development Parcels are comprised of the Phase 1 Parcel (as described and
defined in the DDA) and the Phase 2 Parcel as more particularly described on Exhibit "A"
attached hereto and depicted on Exhibit "B" attached hereto (the "Phase 2 Parcel").
C. Concurrently with the execution of this Agreement, the City has conveyed its
interest in and to the Phase 1 Property to [Developer/Optioneel. The City remains the owner of
the Phase 2 Property, which includes the Phase 2 Parcel.
D. Under the terms of the DDA, Developer [{if Option is unassigned.}, as the
"Optionee " thereunder, has an Option to acquire the Phase 2 Property, including the Phase 2
Parcel. / fif the Option is assigned:} has assigned the Option to Optionee.]
E. Developer and City have entered into this Agreement in order to provide a limited
license to Option to enter upon the Phase 2 Parcel prior to the Phase 2 Property Close of Escrow
to conduct due diligence with respect to the Phase 2 Property.
F. City and Optionee have concurrently entered into two additional license
agreements as follows pursuant to the terms of the DDA:
(i) License Agreement for Site Development, pursuant to which [{if the
Optionee is not the Developer:} the Phase IJ Developer has been granted a license to
access the Phase 2 Parcel in connection with construction of the Minimum Horizontal
Improvements ("Site Development License"); and
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(ii) License Agreement (Staging and Construction Parking) providing a
license for use by f{if the Optionee is not the Developer:} the Phase IJ Developer of
specified portions of the Phase 2 Parcel for staging construction materials and activities
and for parking related to construction of the Phase 1 Improvements ("Staging
License").
NOW THEREFORE, in consideration of the promises and mutual covenants, agreements
and conditions hereof, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as set forth below.
AGREEMENT
1. Recitals. The recitals set forth above are true and correct and are incorporated
herein by this reference.
2. Limited License. The City hereby grants to Optionee, for use by Optionee and its
officers, directors, employees, agents, representatives, Space Tenants, ground lease Tenants and
prospective tenants, prospective purchasers, contractors, and other Persons accessing the
Development Parcels or property owned by the City by, through or with the permission or under
the direction or auspices of Optionee (collectively, with Optionee, the "Optionee
Representatives"), a limited, non-exclusive and revocable license ("License") to enter upon the
Phase 2 Parcel for purposes of (a) conducting Optionee's due diligence inspection and/or
(b) obtaining data and making surveys and tests as Optionee may reasonably determine
necessary to evaluate whether it shall exercise the Option, provided that, prior to Developer's
entry upon the Phase 2 Parcel pursuant to such License, Developer shall: (i) deliver to the City
written evidence that Developer has procured the insurance required under Section 4 below; and
(ii) give the City twenty-four (24) hours advance telephonic, electronic mail or written notice of
any intended access which involves work on or may result in any impairment of the use of the
Phase 2 Parcel or the Improvements thereon or any portion thereof or any adjacent property by
any then -current owners, occupants, or contractors. Developer shall (A) access the Phase 2
Parcel and the Improvements thereon in a safe manner; (B) conduct no environmental testing,
sampling, invasive testing, or boring without the written consent of the City (not to be
unreasonably withheld, conditioned or delayed by action of the City); (C) not authorize any
dangerous or hazardous condition to be created or caused on the Phase 2 Parcel or the
Improvements thereon; (D) comply with all Governmental Requirements and obtain all permits
required in connection with such access; (E) keep the Phase 2 Parcel and the Improvements
thereon free and clear of any and all liens of any kind caused by Optionee or the Optionee
Parties, including without limitation, mechanics' liens or materialmen's liens related to
Optionee's access to or inspection of the Phase 2 Parcel or the Improvements thereon, and (F)
conduct all access, inspection and testing subject to the rights of the Developer constructing the
Minimum Horizontal Improvements, or tenants or contractors doing work on the Property, if any
(which work, inspections and testing, if conducted at times other than during normal business
hours, shall be conducted only after obtaining the City's prior consent, which shall not be
unreasonably withheld, conditioned or delayed) and in accordance with reasonable rules and
regulations established by the City. The License shall not be used for construction or staging
purposes. The use by Optionee of the License shall be subject to the terms set forth below,
including Section 9.
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3. Term. The term of this Agreement and the License shall commence as of the
Effective Date and, unless extended by the Parties in writing or terminated earlier in accordance
with this Agreement, the License shall be automatically revoked and this Agreement terminated
upon the earlier of (a) the termination or any earlier expiration of the Option, (b) termination of
the DDA, (c) the Phase 2 Property Outside Closing Date or (d) the Phase 2 Property Close of
Escrow; provided that the License may be revoked by the City and/or this Agreement terminated
in accordance with Section 19 of this Agreement, or from and after the occurrence of any
Material Default by Optionee under the DDA, or any Material Default by the Developer with
respect to Phase 1 under the DDA, the Site Development License, the Staging License or any of
the then -applicable Other Agreements past any applicable notice, grace, or cure periods to the
extent that the Developer of Phase 1 and the Optionee are Related Parties ("Termination
Date").
4. Insurance. Optionee shall procure and maintain, at its cost, and submit to City at
least 7 calendar days prior to commencement of investigative activities permitted by this
Agreement, evidence of automobile liability, general liability and property damage insurance
against all claims for injuries against persons or damages to property relating to or arising out of
Optionee's investigative activities. All policies of liability and property damage insurance shall
be primary, and to provide that any other insurance, deductible, or self-insurance maintained by
the City, or the Successor Agency to the Tustin Community Redevelopment Agency, or their
respective elected or appointed officials, officers, agents, representatives, employees or
volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed
to contain such provisions. Optionee shall also carry workers' compensation insurance in
accordance with California worker's compensation laws. Optionee hereby waives, and agrees to
obtain endorsements from its workers' compensation insurer waiving, all subrogation rights
under its workers' compensation insurance policy against the City, and the Successor Agency to
the Tustin Community Redevelopment Agency, and their respective elected and appointed
officials, officers, agents, representatives, employees and volunteers, and require each of its
subcontractors, if any, and each subcontractor's insurer, to do likewise under their workers'
compensation insurance policies. All required insurance shall be kept in effect during the term of
this Agreement and shall not be cancelable without thirty (30) days written notice to City of any
proposed cancellation. Optionee's certificate evidencing the foregoing and designating City, and
the Successor Agency to the Tustin Community Redevelopment Agency, and their respective
elected and appointed officials, officers, agents, representatives, employees and volunteers as
additional named insureds shall be delivered to and approved by City prior to commencement of
activities under this License. The procuring of such insurance and the delivery of policies or
certificates evidencing the same shall not be construed as a limitation of Optionee's obligation to
indemnify City, and the Successor Agency to the Tustin Community Redevelopment Agency,
and their respective elected and appointed officials, officers, agents, representatives, employees
and volunteers. The amount of insurance required hereunder shall include comprehensive
general liability, personal injury and automobile liability with limits of at least two million
dollars ($2,000,000.00) per occurrence and for each contractor or subcontractor that is
professionally licensed, professional liability coverage with limits of at least two million dollars
($2,000,000.00). All insurance coverage shall be provided by admitted insurers with an A.M.
Best's Key Rating of at least A -VII. If a contractor or subcontractor provides claims made
professional liability insurance, the contractor or subcontractor shall also agree in writing either
(1) to purchase tail insurance in the amount required by this Agreement to cover claims made
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within three years of the completion of that professional service provider's services in connection
with the investigative activities, or (2) to maintain professional liability insurance coverage with
the same carrier in the amount required by this Agreement for at least three years after
completion of that professional service provider's services in connection with the investigative
activities. The Optionee shall also be required to provide evidence to City of the purchase of the
required tail insurance or continuation of the professional liability policy.
In addition, Optionee shall be responsible for causing any contractor or subcontractor providing
work or services in connection with the investigative activities to procure and maintain the same
types and amounts of insurance, and in compliance with the terms set forth in this Section,
including but not limited to adding the City, and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, officers, agents,
representatives, employees and volunteers as additional named insureds to their respective
policies. Optionee shall not allow any contractor or subcontractor to commence any work or
services relating to the investigative activities unless and until it has provided evidence
satisfactory to City that the contractor or subcontractor has secured all insurance required under
this Section. Optionee agrees to monitor and review all such coverage and assumes all
responsibility for ensuring that each contractor's and subcontractor's insurance coverage is
provided and maintained in conformity with the requirements of this Section.
5. Indemnity. Optionee, on behalf of itself and each Successor Owner, hereby
agrees to protect, indemnify, defend and hold harmless the City Indemnified Parties from and
against any and all Claims arising during the term of the License, to the extent arising from or
related to: (a) the acts and omissions of Optionee and/or the Optionee Representatives arising
from or related to the presence, activities or work on or use of the Phase 2 Parcel or from the
exercise of the License by Optionee or the Optionee Representatives, including with respect to
the conduct of any inspections, surveys, tests, Investigations and studies carried out by Optionee
or the Optionee Representatives on the Phase 2 Parcel or on adjacent properties as part of the
work plan or investigation, (b) entry onto the Phase 2 Parcel by Optionee or the Optionee
Representatives in connection with this Agreement, (c) bodily injury to or death of any person
(including any employee or contractor of the City Indemnified Parties) or damage to or loss of
use of property resulting from such acts or omissions of Optionee or any Optionee's
Representative in connection with this Agreement, and (d) a Release of Hazardous Materials
existing on the Phase 2 Parcel prior to Close of Escrow caused by the acts of Optionee or any
Optionee Representatives; provided that the foregoing indemnity shall not apply to (1) the extent
caused by the gross negligence or willful misconduct of the City or any City Indemnified Party;
or (2) the discovery by Optionee or any Optionee Representatives of any pre-existing
environmental conditions on the Phase 2 Parcel not caused by or contributed to by Optionee or
the Optionee Representatives. Optionee shall keep the Phase 2 Parcel free and clear of all
Construction Liens related to Optionee's inspection and/or Investigation of the Phase 2 Parcel
and Improvements thereon. The indemnification by Optionee set forth in this Agreement shall
survive (A) the Phase 2 Property Close of Escrow and shall not be merged into the Phase 2
Property Quitclaim Deed, and (B) any termination of this Agreement prior to the occurrence of
the Phase 2 Property Close of Escrow. Nothing in this Section 5 shall in any way limit or relieve
Optionee from its obligations, covenants and indemnities under this Agreement, the DDA or the
Other Agreements following the Phase 2 Property Close of Escrow.
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6. Return of Property. Upon the Termination Date, Optionee shall return the Phase
2 Parcel and the Improvements thereon to the City in the condition described in Section 10 and,
in the event the Phase 2 Property Close of Escrow has not occurred, shall relinquish all right, title
and interest in and to the Phase 2 Parcel and the Improvements thereon.
7. Repair. Except as authorized by this License, in the event that Optionee's use of
the License damages or destroys any improvements located on City -owned property (including
the Phase 2 Parcel or property other than on the Phase 2 Parcel) or on public streets or rights of
way, Optionee shall repair such damage to as near a condition as existed prior to the
commencement of the License as is reasonably practicable at Optionee's sole cost and expense.
8. "As -Is, Where -Is" License. Optionee acknowledges that, except as otherwise set
forth in the DDA, (a) the City makes no representations or warranties as to the condition or
suitability of the Phase 2 Parcel, the Improvements thereon, the soil located thereon, any hazards
or Hazardous Materials, contaminants or pollutants that may be present on or below grade at the
Phase 2 Parcel, or otherwise; (b) Optionee's use of the Phase 2 Parcel and the soil thereon and its
license of the Phase 2 Parcel is "as is, where is" as described in Section 4.5.2 of the DDA, in its
present condition and without liability to City, without any representation, promise, agreement or
warranty on the part of the City regarding such condition and state of repair needed for the
exercise of the License. Optionee acknowledges that it has inspected the Phase 2 Parcel and the
Improvements thereon and its determination to engage in this undertaking is based solely on its
own investigation and is not based on reliance of any statements, suggestions or information
provided by the City, its agents, officers, employees or contractors. Optionee further
acknowledges that the City shall not be liable for any latent or patent defects in the Phase 2
Parcel or the Improvements thereon, whether disclosed or not.
9. Coordination of Work. Optionee shall not unreasonably interfere with the rights
of [the Phase IJ Developer or the use by [Phase IJ Developer of the Phase 2 Parcel or the
Improvements thereon pursuant to the Site Development License or the Staging License. At any
time when the Minimum Horizontal Improvements are under construction, the City reserves the
right to make the determination regarding whether to permit Optionee's concurrent access to the
Phase 2 Parcel in City's reasonable judgment in order to assure that there shall be no cost
impacts to the Minimum Horizontal Improvements and taking account operational safety during
the construction and operation of the Minimum Horizontal Improvements. Optionee shall
coordinate its access to the Phase 2 Parcel pursuant to this Agreement with the work of
Developer under the Site Development License and the Staging License. Unless Optionee and
Developer are the same Person, or access is provided by Developer, in no event shall Optionee
have the right to access the staging areas that are licensed to Developer pursuant to the Staging
License.
10. Condition of Phase 2 Parcel at Termination of License: Construction Bonds.
a. Condition of Phase 2 Parcel. At the Termination Date or upon any earlier
termination of the License and/or this Agreement (other than termination due to the occurrence
of the Close of Escrow), Optionee shall (a) remove its property from the Phase 2 Parcel (other
than, if Optionee and Developer are the same Person, property allowed to remain on the Phase 2
Parcel pursuant to the Site Development License or the Staging License, if then in effect),
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including, without limitation, all Hazardous Materials it brought to or is required to remove from
the Phase 2 Parcel in accordance with of this Agreement; (b) report, contain, remove and
Remediate, to the extent required by, and in accordance with, this Agreement any land, air or
water pollution; and (c) deliver the Phase 2 Parcel and the Improvements thereon to the City in
lien free condition and, except as may have been improved with the Minimum Horizontal
Improvements, in which event it shall be delivered in a condition consistent with the grading and
other Development Permits issued to Developer, in the condition of the Phase 2 Parcel and the
Improvements thereon at the commencement of the term of this Agreement and in compliance
with all Governmental Requirements.
b. Remedies. Prior to or following termination of this Agreement for any
reason other than Close of Escrow under the DDA, if Optionee shall have failed in any manner to
comply with the requirements of Section 10(a) of this Agreement, the City shall have the right, in
its sole discretion, after giving Optionee written notice of such failure and an opportunity to cure
the same, to seek reimbursement from Optionee for work performed or amounts paid by the City
in satisfaction of the foregoing.
C. Survival. The provisions of this Section 10 shall survive termination of
this Agreement.
11. Release. Optionee, on behalf of itself, its members, principals, officers,
beneficiaries, trustees, shareholders, partners, heirs, personal representatives, successors and
assigns (collectively, the "Releasing Parties"), as the case may be, hereby waives the right to
recover from and fully and irrevocably releases City, and the Successor Agency to the Tustin
Community Redevelopment Agency, and their respective elected and appointed officials,
officers, employees, consultants, agents, representatives, contractors and volunteers
(collectively, the "Released Parties"), from and against any and all Claims that each of the
Releasing Parties may now have or hereafter acquire arising from or related to the activities of
Optionee on the Phase 2 Parcel pursuant to this Agreement and any damage or destruction of any
improvements located on the Phase 2 Parcel, excepting from the foregoing release: (a) any
breach by the City of any of the representations or warranties of the City set forth in Sections 3.3
or 18.11.2 of the DDA, (b) any breach by the City of any of the covenants or obligations set forth
in this Agreement, the DDA or any Other Agreement, (c) any Claim that is the result of the gross
negligence or willful misconduct of the City, (d) any actions of the City or any of the Released
Parties affecting a portion of the Property which occur following the Close of Escrow with
respect to such portion of the Property, or (e) any Claim arising with respect to the Development
Permits, Applicable Approvals, and Phase 2 Applicable Approvals, if any, approved by the City
in its Governmental Capacity. This release includes Claims of which the Releasing Parties are
presently unaware or which the Releasing Parties do not presently suspect to exist which, if
known by the Releasing Parties, would materially affect the Releasing Parties' decision to release
the Released Parties. The Releasing Parties specifically waive the protection 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 OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
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HER MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE
DEBTOR."
In this connection and to the extent permitted by law, the Releasing Parties realize and
acknowledge that factual matters now unknown to them may have given or may hereafter give
rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and
the Releasing Parties further agree that the waivers and releases herein have been negotiated and
agreed upon in light of that realization and that the Releasing Parties nevertheless hereby intend
to release, discharge and acquit the Released Parties from any such unknown Claims and
controversies to the extent set forth above. To the extent permitted by law, the foregoing
provisions of this Section 11 shall survive the termination of this Agreement.
CITY HAS AGREED TO ENTER INTO THIS AGREEMENT AND HAS GIVEN THE
RELEASING PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION
IN EXCHANGE FOR THE RELEASING PARTIES AGREEING TO THE PROVISIONS OF
THIS SECTION. BY INITIALING BELOW, OPTIONEE ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS SECTION, (B) IT
HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS
MEANING AND SIGNIFICANCE, AND (C) IT HAS ACCEPTED AND AGREED TO THE
TERMS SET FORTH IN THIS SECTION.
CITY OPTIONEE
12. Costs; No Liens. Optionee shall bear all costs relating to its use of the License.
Optionee and the Optionee Representatives shall not place, allow to be placed on, or incur any
liens against the Phase 2 Parcel or any portion thereof in connection with the work permitted
hereunder or in any way attributable to the acts of Optionee and/or the Optionee Representatives
on the Phase 2 Parcel. Optionee agrees to indemnify, defend, and hold the City and its elected
and appointed officials, employees, agents, attorneys, affiliates, representatives, contractors,
successors and assigns free and harmless from and against any and all Claims arising with
respect to payment of liens assessed or levied against the Phase 2 Parcel and/or the
Improvements in connection with the access to the Phase 2 Parcel, or the work performed,
materials furnished, or any other activities under control of Optionee or the Optionee
Representatives which, pursuant to the laws of California, may become a lien on the Phase 2
Parcel. Should any lien be filed against the Phase 2 Parcel in connection with the work by
Optionee or the Optionee Representatives under this Agreement, Optionee shall promptly bond
around the lien as part of disputing the lien with the third party asserting the lien. The provisions
of this Section shall survive termination of the License and this Agreement. The City may post
notices of non -responsibility on the Phase 2 Parcel prior to Optionee's commencement of any
work under this Agreement.
13. Environmental Conditions Arising During Occupancy.
a. If any release of Hazardous Materials on the Phase 2 Parcel occurs during
the term of Optionee's entry or activities upon, the Phase 2 Parcel, Optionee shall promptly upon
becoming aware of same, provide written notice (or in the event of emergency, telephonic notice,
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followed by written notice) of any such Optionee Release to the City and shall indemnify the
City as and to the extent set forth in this Agreement.
b. The responsibility and liability of Developer under the Site Development
License and the Staging License with respect to Release and Remediation of Hazardous
Materials and Environmental Claims is more extensive than the responsibility of Optionee under
this Agreement. Accordingly, Optionee shall notify City and, to the extent that it is not the
Developer, shall notify Developer prior to its access to the Phase 2 Parcel and shall carefully
document its inspection and testing, and provide records of same to the City. In the event of any
disagreement as to whether work performed on the Phase 2 Parcel and the Improvements thereon
is performed pursuant to this License Agreement (i.e., in further of due diligence) or pursuant to
one of the other two License Agreements (i.e., for staging or construction of Improvements) it
shall be presumed that such work is performed for staging and construction purposes and that the
terms and conditions of the License Agreement for Site Development and/or the Staging License
Agreement shall govern. Further, Optionee acknowledges and agrees that the work performed
by Developer under the License Agreement for Site Development, which is performed for the
benefit of the City, is of paramount importance to the City and accordingly, Optionee (whether it
is the same or a Related Party to Developer or otherwise) shall at all times prioritize the
construction of the Minimum Horizontal Improvements over the exercise of its rights under this
Agreement and the License.
C. Survival. In the event this Agreement terminates as a result of the Phase 2
Property Close of Escrow under the DDA, the terms of the DDA shall govern the Remediation of
the Phase 2 Parcel by Optionee and the provisions of this Section 13 shall not survive other than
Section 13(a) which shall survive only with respect to a Release on the Phase 2 Parcel occurring
during the term of Optionee's entry or activities. In the event this Agreement terminates in
accordance with subsections (b), (c) or (d) under Section 3 of this Agreement, the Parties' rights
and obligations under Sections 4, 5, 11, 12 and 13(a) shall survive the termination of this
Agreement. To the extent that completion of any Remediation is required pursuant to the
foregoing, Optionee will complete such Remediation obligations in full and shall not be relieved
of its obligations as a result of the termination of this Agreement or for any other reason.
14. No Supervision or Control. The City (whether acting in its Governmental
Capacity or its Proprietary Capacity) does not have any right, and hereby expressly disclaims any
right, of supervision or control over the architects, designers, engineers or persons responsible
for drafting or formulating of any plans, drawings and related documents of Optionee.
15. No Waiver. Nothing contained in this Agreement shall be deemed to waive the
right of the City to act in its Governmental Capacity with respect to the consideration and
approval of the Entitlements and all other permits, licenses and approvals requested by Optionee
from time to time in connection with the Project.
16. Bailee Disclaimer and Waiver of Claims. Optionee acknowledges and agrees that
City has granted its permission for use of the Phase 2 Parcel only for the purposes and in
accordance with the provisions of this Agreement. By entering into this Agreement, City is not
agreeing in any manner to accept obligations or responsibility for the safekeeping of the vehicles
or other property of Optionee or of Optionee's agents, contractors, officers, employees or
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invitees. This Agreement is not a contract for bailment or deposit of goods for safekeeping and
City in no manner whatsoever purports to be a bailee. As a material part of the consideration to
be rendered to City for this Agreement, Optionee hereby waives any and all claims or causes of
action against City, its officers, agents, or employees which it may now or hereafter have for
damages to, loss of, or theft of Optionee's vehicles or other property anywhere in, about, or on
Tustin Legacy, including, but not limited to, the Phase 2 Parcel, from any cause whatsoever,
unless such damage, loss, or theft results from the sole negligence, gross negligence or willful
misconduct of City, its officers, agents, or employees.
17. Compliance with Laws and Terms of DDA. Optionee will at all times during the
term of this Agreement promptly observe and comply, at its sole cost and expense, and shall
maintain the Phase 2 Parcel and cause its use of the Phase 2 Parcel to be performed in
accordance with the requirements of the DDA and all Governmental Requirements, including
without limitation all applicable federal and state labor laws and regulations, and all permits
required to perform the work described by this Agreement.
18. Data Sharing. Optionee agrees to provide the City with copies of all soil test
results. Notwithstanding the provisions of Section 17, and except for the routine reporting of
data incident to a permit application, should Optionee discover conditions on the Phase 2 Parcel
during the conduct of the Minimum Horizontal Improvements, that Optionee believes may
require reporting to any Governmental Authority (local, regional, state, or federal), Optionee
shall, as promptly as reasonably practical, advise the City of such discovery and thereafter
provide City with the field and/or laboratory data pertaining to such discovery.
19. Rights of City to Revoke License and/or Terminate Agreement for Default. This
Agreement may be terminated and/or the License granted hereby may be revoked by the City by
provision of written notice to Optionee, (a) during the continuation of any default by Optionee
under this Agreement beyond the notice and cure period set forth in Section 32, or (b) at any
time if the City determines, in its sole discretion, that the conduct or activities of Optionee create
health or safety concerns requiring stoppage of the work. If Optionee disputes the City's
revocation of the License or termination of this Agreement pursuant clause (b) above, Optionee
shall have the right to provide the City with written notice within three (3) calendar day(s)
following delivery of such revocation/termination notice setting forth Optionee's basis for the
dispute. Optionee and City shall meet and confer within five (5) Business Days from the
delivery of Optionee's notice, in order to identify specific actions and remedies to be taken by
Optionee to cure the default asserted by the City and provided that Optionee agrees in writing to
take such actions and to promptly prosecute them to completion in a manner satisfactory to the
City in its reasonable discretion, the City shall not unreasonably withhold the reinstatement of
the License and this Agreement.
20. Intentionallv Deleted.
21. Dispute Resolution. In the event of a dispute between the Parties with respect to
this Agreement, the Parties agree that they shall resolve such dispute in accordance with the
provisions of Section 18.1 of the DDA, and the cost of any such proceeding shall be borne in
accordance with the provisions of Section 18.2 of the DDA and the provisions of Section 18.9 of
the DDA shall apply with respect to such dispute.
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22. Governing Law. This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California.
23. Relationship of Parties, Not an Easement or Interest in Land. Nothing contained
in this Agreement shall be deemed or construed, either by the Parties hereto or by any third
party, to create the relationship of principal and agent or to create any partnership, joint venture
or other relationship between the Parties. Nothing in this Agreement shall create or constitute an
easement in the Phase 2 Parcel and this Agreement shall be considered nothing other than a
license as set forth herein.
24. Notices. All notices required by this Agreement shall be provided in writing and
shall be deemed received when (a) personally served, (b) two (2) days after being sent by
registered or certified mail, return receipt requested, postage or charges prepaid, or by recognized
overnight carrier, or one (1) day after receipt by facsimile machine or electronic mail, with
transmission and receipt acknowledged in writing by facsimile, email or any other method
permitted under this Section, and addressed to the Party for whom intended at such Party's
address herein specified, or at such other address as such Party may have substituted therefore by
proper notice to the other.
If to Optionee:
David Binswanger
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Fax: (213) 538-0901
Email: dbinswanger@lpc.com
With a copy to: Parke Miller
Lincoln Property Company Commercial, Inc.
114 Pacifica, Suite 370
Irvine, CA 92618
Fax: (949) 333-2131
Email: pmiller@lpc.com
With a copy to: Gregory S. Courtwright
Lincoln Property Company Commercial, Inc.
2000 McKinney Avenue, Suite 1000
Dallas, TX 75201
Fax: (214) 740-3460
Email: gcourtwright@lpc.com
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With a copy to: Mark Potter
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
E-mail: mpotter@alcionventures.com
With a copy to: Amy Forbes and Douglas Champion
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Suite 4900
Los Angeles, CA 90071
Fax: (213) 229-6151 / (213) 229-6128
E-mail: aforbes@gibsondunn.com / dchampion@gibsondunn.com
With a copy to: Andrew C. Sucoff
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Fax: (617) 523-1231
Email: asucoff@goodwinlaw.com
If to the City:
With a copy to:
and:
City of Tustin
Attn: Jeffrey C. Parker, City Manager
300 Centennial Way
Tustin, CA 92780
Fax: (714) 838-1602
Email: jparker@tustinca.org
Woodruff Spradlin & Smart, APC
Attn: David Kendig, Esq., City Attorney
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com
Armbruster Goldsmith & Delvac LLP
Attn: Amy E. Freilich, Esq., Special Counsel
12100 Wilshire Blvd., Suite 1600
Los Angeles, CA 90025
Fax: (310) 209-8801
Email: amy@agd-landuse.com
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25. No Assi ng ment. Subject to the terms and provisions of the DDA, this Agreement
shall not be assigned by Optionee except with the prior written consent of the City in its sole
discretion.
26. Exhibits Incorporated. Each exhibit attached and referred to in this Agreement is
hereby incorporated by reference as though set forth in full where referred to herein.
27. Severability. If any provision of this Agreement or application thereof to any
person or circumstance shall to any extent be invalid or unenforceable, the remainder of this
Agreement (including the application of such provision to persons or circumstances other than
those to which it is held invalid or unenforceable) shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
28. Entire Agreement, Resolution of Conflict. This Agreement, the DDA and the
Other Agreements, including the Staging License and the Site Development License contain the
entire agreement of the Parties with respect to the subject matter and 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. In the event of any
conflict between the terms of this Agreement and the DDA or the Other Agreements (excluding
the Site Development License and Staging License), the provisions of the DDA and the Other
Agreements (excluding the Site Development License and Staging License) shall govern.
Further, for so long as Optionee and the Phase 1 Developer are the same entity or Related
Parties, in the event of any conflict between the terms of this Agreement and the Site
Development License or the Staging License, the terms of the Site Development License
Agreement shall have first priority and shall govern, the terms of the Staging License shall have
second priority, and the terms of this Agreement shall have third priority.
29. Counterparts. This Agreement and any amendments hereto may be executed in
counterparts, each of which is deemed an original and all of which, when taken together, shall
constitute one and the same instrument.
30. Further Assurances. Each of the Parties hereto shall execute and deliver at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
of its obligations hereunder in order to carry out the intents and purposes of this Agreement.
31. Authority. Each Party warrants that it has the power and authority to enter into
this Agreement and to perform its obligations hereunder. Each individual who signs this
Agreement on behalf of an entity warrants that he/she has been duly authorized to do so and to
bind such entity.
32. Default Procedure. The non -defaulting party (the "Non -Defaulting Party") at its
discretion may elect to declare a default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of any other party (the "Defaulting Party") to
perform any material duty or obligation of said Defaulting Party in accordance with the terms of
this Agreement. However, the Non -Defaulting Party must provide written notice to the
Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required
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by the Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed to
be in "default" of its obligations set forth in this Agreement if the Defaulting Party has failed to
take action and cure the default within ten (10) Business Days after the date of such notice or,
with respect to a default which by its nature cannot be cured within such ten (10) -Business Day
period, then the Defaulting Party shall be deemed to be "default" of its obligations hereunder if
the Defaulting Party has failed to commence to cure within such ten (10) -Business Day period
and thereafter diligently pursue to completion.
33. Limitation on Damages. Optionee acknowledges that the City would not have
entered into this Agreement if the City could become liable for damages under or with respect to
this Agreement. Consequently, and notwithstanding any other provision of this Agreement,
except for the payment of attorneys' fees in accordance with Section 21 of this Agreement and
court costs, the City shall not be liable in damages under this Agreement to Optionee and
Optionee, on behalf of itself and each Optionee Representative hereby waives any and all rights
to claim damages of any other kind or nature from the City including without limitation, Claims
for lost profits, consequential, incidental, indirect, special, collateral, exemplary or punitive
damages. In no event shall Optionee be liable to the City for any lost profits, consequential,
incidental, indirect, special, collateral, exemplary or punitive damages in connection with this
Agreement.
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.
SIGNATURES FOLLOW.]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year
first written above.
OPTIONEE:
Lo
Name:
Title:
CITY OF TUSTIN:
Jeffrey C. Parker,
City Manager
ATTEST:
By:
Erica Rabe
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
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EXHIBIT "A"
LEGAL DESCRIPTION OF PHASE 2 PARCEL
[including oillgas/water carve out from legal description]
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EXHIBIT `B"
DEPICTION OF PHASE 2 PARCEL
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ATTACHMENT 25C
FORM OF
LICENSE AGREEMENT (STAGING AND CONSTRUCTION PARKING)
THIS LICENSE AGREEMENT (STAGING AND CONSTRUCTION PARKING) (this
"Agreement") is made and entered into as of , 20 (the "Effective
Date"), by and between FLIGHT VENTURE LLC, a Delaware limited liability company
("Developer"), and the CITY OF TUSTIN (the "City"; the Developer and the City are referred
to herein individually as a "Party" and collectively as the "Parties"), with reference to the facts
set forth below:
RECITALS
A. The City and Developer have entered into that certain Tustin Legacy Disposition
and Development Agreement Cornerstone I dated as of , 2016 (the "DDA"), for
the purchase by Developer of certain real property located in the City of Tustin, County of
Orange, State of California, described therein as the "Development Parcels", upon which
Developer intends to construct certain Improvements as further described in the DDA. Capitalized
terms not otherwise defined herein shall have the meanings given to such terms in the DDA.
B. The Development Parcels are comprised of the Phase 1 Parcel (as described and
defined in the DDA) and the Phase 2 Parcel as more particularly described on Exhibit "A"
attached hereto and depicted on Exhibit "B" attached hereto (the "Phase 2 Parcel").
C. Concurrently with the execution of this Agreement, the City has conveyed its
interest in and to the Phase 1 Property to Developer.
D. The City remains the owner of the Phase 2 Parcel. In connection with the
acquisition and development by Developer of the Phase 1 Property, the City has agreed to grant a
construction staging and a construction parking license to Developer in accordance with the
provisions of Section 8.2.4 of the DDA to permit Developer to enter upon and to use the portions
of the Phase 2 Parcel identified on Exhibit "C" as Staging Area for staging of construction
materials and activities for the Phase 1 Project (the "Staging Area") and the portions of the
Phase 2 Parcel identified on Exhibit "C" as Parking Area for parking of vehicles used in
connection with Developer's construction work for the Phase 1 Project, including the Minimum
Horizontal Improvements (the "Parking Area"; and collectively with the Staging Area, the
"License Areas").
E. City and Developer have concurrently entered into two additional license
agreements as follows pursuant to the terms of the DDA:
(i) License Agreement for Site Development, pursuant to which [{If a Phase
Transfer has occurred:} the Phase IJ Developer has been granted a license to access the
Phase 2 Parcel in connection with the construction of the Minimum Horizontal
Improvements (the "Site Development License"); and
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(ii) License Agreement for Phase 2 Due Diligence providing a license for the
conduct by f{if a Phase Transfer has occurred:} the Phase 2] Developer of due
diligence in connection with its Option to purchase the Phase 2 Property ("Due Diligence
License").
NOW THEREFORE, in consideration of the promises and mutual covenants, agreements
and conditions hereof, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as set forth below.
AGREEMENT
1. Recitals. The recitals set forth above are true and correct and are incorporated
herein by this reference.
2. Term. The term of this Agreement and the License shall commence as of the
Effective Date and, unless extended by the Parties in writing or terminated earlier in accordance
with this Agreement, shall remain in effect only until the earlier to occur of the following (the
"Termination Date"): (a) the Phase 2 Property Close of Escrow under the DDA; (b) the
Completion of the Minimum Phase 1 Improvements; or (c) once Developer has commenced
construction of the Minimum Phase 1 Improvements, the sixtieth (60th) calendar day after
Developer abandons or substantially suspends work on the Minimum Phase 1 Improvements,
unless such failure to prosecute the work to completion is due to a Force Majeure Delay. Upon
the Termination Date, Developer shall return the License Areas to the City in the condition
described in Section 8 and, in the event the Close of Escrow under the DDA has not occurred,
shall relinquish all right, title and interest in and to the License Areas.
3. Construction License. The City hereby grants to Developer and to the Developer
Representatives a non-exclusive, revocable license (the "License") over the Staging Area for
purposes of staging construction materials and activities and over the Parking Area for parking in
connection with Developer's construction work. Developer is granted control of the License
Areas for this purpose. Notwithstanding the foregoing, the License and this Agreement shall be
revocable by the City prior to the Termination Date only in accordance with Section 19 of this
Agreement.
4. Commencement of Work. Developer may not enter the License Areas pursuant to
this Agreement until each of the following has occurred: (a) the Phase 1 Property Close of
Escrow shall have occurred; (b) the City's issuance of rough grading permits with respect to the
grading and incidental work proposed by Developer and approved by the City for the Phase 1
Project ("Grading Permit"); (c) to the extent required under the DDA and the conditions of
approval for the Project adopted by the City Council with respect the Applicable Approvals, the
provision by Developer of the Construction Bond; (d) the execution of any subdivision
improvement agreement required by the City in its Governmental Capacity as a condition to
commencement of the Minimum Horizontal Improvements, if any; (e) the provision of the
insurance required by this Agreement, and (f) the satisfaction of all other conditions to
commencement of construction of the Minimum Horizontal Improvements described in the
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Entitlements, the DDA and the Schedule of Performance. This Agreement and the License shall
each become null and void unless construction of the Minimum Horizontal Improvements begins
on or prior to the date set forth therefor in the Schedule of Performance attached to the DDA, as
such date may be extended for Force Majeure Delay, or as such date may be extended by written
agreement executed by the City Manager or his/her appointee.
5. Repair. Except as authorized by this Agreement, in the event that Developer's use
of the License Areas under this Agreement damages or destroys any improvements located on
City -owned property (including the Phase 2 Parcel or on public streets or rights of way),
Developer shall repair such damage to as near a condition as existed prior to the access to and/or
use of the License Areas pursuant to this Agreement as is reasonably practicable at Developer's
sole cost and expense.
6. Insurance. Prior, and as an ongoing condition, to exercise of the License
Developer shall or shall cause its Developer Representatives accessing the License Areas to
provide and maintain insurance meeting the requirements of Article 11 of the DDA which
insurance coverage shall extend to and include work performed and acts or omissions to act on or
related to the License Area and the exercise of the License thereon.
7. "As -Is, Where -Is" License. Developer acknowledges that (a) the City makes no
representations or warranties as to the condition or suitability of the License Areas, the soil
located thereon, any hazards or Hazardous Materials, contaminants or pollutants that may be
present on or below grade at the License Areas, or otherwise; (b) Developer's use of the License
Areas and the soil thereon and its license of the License Areas is "as is, where is" as described in
Section 4.5.2 of the DDA, in its present condition and without liability to City, without any
representation, promise, agreement or warranty on the part of the City regarding such condition
and state of repair needed for the exercise of the License except as expressly provided in
Section 3.3.8 of the DDA. Developer acknowledges that it has inspected the License Areas and
its determination to engage in this undertaking is based solely on its own investigation and is not
based on reliance of any statements, suggestions or information provided by the City, its agents,
officers, employees or contractors. Developer further acknowledges that the City shall not be
liable for any latent or patent defects in the License Areas, whether disclosed or not.
8. Condition of License Areas at Termination of License, Construction Bonds.
8.1 Condition of License Areas. At the Termination Date or upon any earlier
termination of the License and this Agreement (other than termination due to the occurrence of
the Phase 2 Property Close of Escrow under the DDA), Developer shall (a) remove its property
from the License Areas (other than property allowed to remain on the License Area pursuant to
the Site Development License or the Due Diligence License, if then in effect), including, without
limitation, all Hazardous Materials it brought to or is required to remove from the License Areas
in accordance with Sections 10 and 12 of this Agreement; (b) report, contain, remove and
Remediate, to the extent required by, and in accordance with Sections 10 and 12 of this
Agreement any land, air or water pollution (c) deliver the License Areas to the City in lien free
condition; (d) cause the License Areas, to be delivered in a condition consistent with the Grading
Permit (but in the final condition specified in the Grading Permit only to the extent the Minimum
Horizontal Improvements have been completed as of the date of termination) and all
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Governmental Requirements, and (e) except to the extent the limitations provided in Section
13.1.2 below are applicable, deliver the License Areas in a condition meeting all requirements of
the City of Tustin Water Quality Ordinance, and all federal, state, and Regional Water Quality
Control Board and Regional Air Quality rules, permits and regulations and applicable Mitigation
Monitoring and Reporting Requirements relating to such standards, including, without limitation,
keeping the adjoining public roadways clear of any dirt or mud.
8.2 Construction Bond. Upon termination of this Agreement for any reason
other than the occurrence of the Phase 2 Property Close of Escrow under the DDA, if Developer
shall have failed in any manner to comply with the requirements of Section 8.1 of this
Agreement, the City shall have the right, in its sole discretion, after giving Developer written
notice of such failure and an opportunity to cure the same in accordance with the terms and
conditions of Section 31 below, to cause the surety under any Phase 1 Construction Bond to
satisfy the requirements of Section 8.1 (including without limitation, to restore the condition of
the License Areas to the condition specified by Section 8.1 of this Agreement and to pay in full
all contractors and subcontractors performing the Minimum Phase 1 Improvements or any other
work performed pursuant to this Agreement) or to seek reimbursement under such bond for work
performed or amounts paid by the City in satisfaction of the foregoing. Upon payment in full of
all amounts due and release of all liens (or bonding of outstanding liens in the amounts required
by the DDA) and performance by Developer or the surety under any portion of the Minimum
Phase 1 Improvements Construction Bond of the work required by this Section 8, the City shall
release the corresponding Construction Bond.
8.3 Survival. The provisions of this Section 8 shall survive termination of this
Agreement.
9. Release. Developer, on behalf of itself, its members, principals, officers,
beneficiaries, trustees, shareholders, partners, heirs, personal representatives, successors and
assigns (collectively, the "Releasing Parties"), as the case may be, hereby waives the right to
recover from and fully and irrevocably releases City and its officers, elected officials, employees,
consultants, agents, representatives and contractors (collectively, the "Released Parties"), from
and against any and all Claims that each of the Releasing Parties may now have or hereafter
acquire arising from or related to the activities of Developer on the License Areas pursuant to
this Agreement and any damage or destruction of any improvements located on the License
Areas, excepting from the foregoing release: (a) any breach by the City of any of the
representations or warranties of the City set forth in Sections 3.3 or 18.11.2 of the DDA, (b) any
breach by the City of any of the covenants or obligations set forth in this Agreement, the DDA or
any Other Agreement, (c) any Claim that is the result of the gross negligence or willful
misconduct of the City, (d) any actions of the City or any of the Released Parties affecting a
portion of the License Areas which occur following the commencement of the term under this
Agreement, or (e) any Claim arising with respect to the Development Permits, Applicable
Approvals and Phase 2 Applicable Approvals, if any, approved by the City in its Governmental
Capacity. This release includes Claims of which the Releasing Parties are presently unaware or
which the Releasing Parties do not presently suspect to exist which, if known by the Releasing
Parties, would materially affect the Releasing Parties' decision to release the Released Parties.
The Releasing Parties specifically waive the protection of California Civil Code Section 1542,
which provides as follows:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED THIS
SETTLEMENT WITH THE DEBTOR."
In this connection and to the extent permitted by law, the Releasing Parties realize and
acknowledge that factual matters now unknown to them may have given or may hereafter give
rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and
the Releasing Parties further agree that the waivers and releases herein have been negotiated and
agreed upon in light of that realization and that the Releasing Parties nevertheless hereby intend
to release, discharge and acquit the Released Parties from any such unknown Claims and
controversies to the extent set forth above. To the extent permitted by law, the foregoing
provisions of this Section 9 shall survive the termination of this Agreement.
CITY HAS AGREED TO ENTER INTO THIS AGREEMENT AND HAS GIVEN THE
RELEASING PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION
IN EXCHANGE FOR THE RELEASING PARTIES AGREEING TO THE PROVISIONS OF
THIS SECTION. BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS SECTION, (B) IT
HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS
MEANING AND SIGNIFICANCE, AND (C) IT HAS ACCEPTED AND AGREED TO THE
TERMS SET FORTH IN THIS SECTION.
CITY DEVELOPER
10. Indemnity. Developer hereby agrees to protect, indemnify, defend and hold
harmless the City Indemnified Parties from and against any and all Claims accruing during the
term of this Agreement to the extent arising from or related to Developer's or Developer
Representatives' activities on the License Area pursuant to this Agreement during the term of this
Agreement including, but not limited to (a) the acts or omissions to act of Developer or the
Developer Representatives arising from the presence, activities or work on or use of the License
Areas by Developer or the Developer Representatives, including without limitation with respect
to any Minimum Phase 1 Improvements performed by Developer or any Developer
Representatives on the License Areas pursuant to this Agreement, any inspections, surveys, tests,
Investigations and studies carried out by Developer or the Developer Representatives on the
License Areas during the term of this Agreement or from the exercise of the License by
Developer or the Developer Representatives; (b) entry onto the License Areas by Developer or
the Developer Representatives in connection with this Agreement, (c) bodily injury to or death of
any person (including without limitation any employee or contractor of the City Indemnified
Parties) or damage to or loss of use of property resulting from such acts or omissions of
Developer or any of the Developer Representatives and (d) the cost of Remediation of Hazardous
Materials as may be required by and compliance with any Construction Conditions (defined in
Section 13.1.3 below) established by any Environmental Agency or Environmental Law and
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accepted by the City and Developer pursuant to Section 13.1.3; provided that Developer shall not
be responsible for and shall have no obligation to defend or indemnify the City Indemnified
Parties to the extent a Claim relates to or arises from: (i) the active negligence, gross negligence
or willful misconduct of a City Indemnified Party; (ii) the mere discovery of existing conditions,
contamination or Hazardous Materials at, on, under or emanating from the License Areas; (iii) to
the extent caused by any breach of the City's representations, warranties, covenants or
obligations set forth in the DDA or in any Other Agreement relating directly to any
environmental matters giving rise to any Environmental Claim; and/or (iv) any Claim for a civil
or criminal penalty based upon an alleged violation of any Environmental Law by the City
arising out of actions or inactions between May 2002 and the Phase 2 Property Close of Escrow.
If the City is served or otherwise presented with a Claim or potential Claim for which it believes
it is entitled to defense and/or indemnity under this Section, City will notify Developer of such
Claim or potential Claim within ten (10) Business Days of receipt of such claim. Selection of
counsel and defense of a Claim shall be conducted in accordance with the provisions of
Section 10.1 of the DDA. The provisions of this Section shall survive termination of this
Agreement.
11. Costs; No Liens. Developer and the Developer Representatives shall not place,
allow to be placed on, or incur any liens against the License Areas or any portion thereof or in
any way attributable to the acts of Developer and/or the Developer Representatives on the
License Areas. Developer agrees to indemnify, defend, and hold the City and its elected and
appointed officials, employees, agents, attorneys, affiliates, representatives, contractors,
successors and assigns free and harmless from and against any and all Claims arising with
respect to payment of liens assessed or levied against the License Areas in connection with
access to the License Areas or work performed, materials furnished, or any other activities under
control of Developer or the Developer Representatives which, pursuant to the laws of California,
may become a lien on the License Areas or the Phase 2 Parcel. Should any lien be filed against
the License Areas or any other portion of the Phase 2 Parcel in connection with the work by
Developer or the Developer Representatives under this Agreement, Developer shall promptly
bond around the lien as part of disputing the lien with the party asserting the lien. The provisions
of this Section shall survive termination of the License and this Agreement. The City may post
notices of non -responsibility on the License Areas prior to Developer's commencement of any
work under this Agreement.
12. Environmental Conditions Arising During Occupancy.
12.1 If any release of Hazardous Materials on the Phase 2 Parcel occurs during
the term of Developer's entry or activities upon, the License Areas, Developer shall promptly
upon becoming aware of same, provide written notice (or in the event of emergency, telephonic
notice, followed by written notice) of any such Developer Release to the City and shall
indemnify the City as and to the extent set forth in this Agreement.
12.2 The responsibility and liability of Developer under the Site Development
License and this License with respect to Release and Remediation of Hazardous Materials and
Environmental Claims is more extensive than the responsibility of Developer under the Due
Diligence License. Accordingly, Developer shall notify City and, to the extent that it is not the
Phase 2 Developer, shall notify Developer prior to its access to the License Areas and shall
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carefully document its inspection and testing, and provide records of same to the City. In the
event of any disagreement as to whether work performed on the Phase 2 Parcel and the
Improvements thereon is performed pursuant to this Agreement or pursuant to either of the Site
Development License or the Due Diligence License it shall be presumed that such work is
performed for staging and construction purposes and that the terms and conditions of the Site
Development License and/or this Agreement shall govern. Further, Developer acknowledges
and agrees that the work performed by Developer under the Site Development License, which is
performed for the benefit of the City, is of paramount importance to the City and accordingly,
Developer (whether it is the same or a Related Party to Developer or otherwise) shall at all times
prioritize the construction of the Minimum Horizontal Improvements over the exercise of its
rights under this Agreement and the Due Diligence License.
13. Environmental Remediation.
13.1 Remediation.
13.1.1 Loss or Damage to Improvements. In the event of damage to or
loss of any improvements or personal property situated on the License Areas, Developer shall
take all appropriate steps to erect fences to preclude unauthorized access to the License Areas
and otherwise mitigate hazardous and unsafe conditions within the License Areas caused by the
damage and destruction.
13.1.2 Pre -Existing Environmental Conditions. If as a result of
performing any of the work permitted by this Agreement Developer discovers the presence of
Hazardous Materials on the License Areas that was present prior to any entry or activity upon the
License Areas by Developer and/or any Developer Representative that was not caused by
Developer or any Developer Representative or such pre-existing Hazardous Material is
exacerbated by Developer or any Developer Representative, then promptly upon becoming
aware of the same, Developer shall (a) provide written notice to the City of such pre-existing or
exacerbated Hazardous Material, and (b) tender a claim for the Remediation of such pre-existing
or exacerbated Hazardous Material under Developer's PLL insurance policy maintained pursuant
to and in accordance with Section 6 of this Agreement and Section 11. 1.4 of the DDA and
diligently pursue such claim. Except as provided for in this Section 13.1.2, and if Developer has
maintained the PLL policy with at least the limits of insurance required in, and at all times
required by, Section 6 of this Agreement and Section 11.1.4 of the DDA and such policy is in
effect and has not been cancelled when such claim is tendered, then neither Developer nor any
Developer Representatives shall have any further obligations or liabilities in connection with or
related to such pre-existing or exacerbated Hazardous Materials.
13.1.3 Environmental Conditions Arising During Occupancy. If any
release of Hazardous Materials on the License Areas occurs during the term of Developer's entry
or activities upon, the License Areas, (a "Developer Release") during the term of this
Agreement, then Developer shall (a) promptly upon becoming aware of same, provide written
notice (or in the event of emergency, telephonic notice, followed by written notice) of any such
Developer Release to the City; and (b) tender a claim for the Remediation of such Developer
Release under Developer's PLL insurance policy maintained pursuant to and in accordance with
Section 6 of this Agreement and Section 11. 1.4 of the DDA and diligently pursue such claim;
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and (c) indemnify the City for the costs of such Remediation in accordance with Section 10
above; and (d) Remediate the Developer Release in compliance with and to the extent required
by Environmental Laws and any Environmental Agency or Agencies to the level required by
Governmental Agencies for commercial development as described by the Applicable Approvals,
or if such removal is prohibited by any Environmental Laws, take whatever action is required by
applicable Environmental Law and such applicable Environmental Agency or Agencies; and
(e) to the extent a No Further Action Letter is required by the applicable Governmental Agency
as evidence of completion, provide the City with satisfactory evidence of the actions taken as
required in this Section 13. Developer's obligation to Remediate with respect to any affected
area under this Section 13.1.3 shall be considered fully satisfied upon receipt of a No Further
Action Letter with respect to such affected area. For purposes of this Agreement, the term "No
Further Action Letter" shall mean a "No Further Action Letter," "Closure Letter" or other
equivalent document to be issued by the appropriate Governmental Agency, which letter is to
generally confirm that "no further action" is to be required to address the existence of Hazardous
Materials within the affected area and there are no constraints or restrictions on future use. The
City shall have a right to have an observer present during all such testing and remediation work.
City may provide comments to any remedial action plan prepared by Developer for any
remediation (a "RAP"), and Developer shall not unreasonably decline to incorporate such
comments in such RAP; provided, however, that City shall not have approval or consent rights
with respect to such RAP unless the applicable Governmental Agency requires the consent of the
City for the approval of any RAP or issuance of a No Further Action Letter, in which event the
City shall have a right to consent but agrees not to unreasonably withhold, delay or condition
such consent. Notwithstanding the immediately preceding sentence, in the event that the
applicable Governmental Agency requires the consent of the City for the approval of any RAP or
issuance of a No Further Action Letter, the City shall have the right to withhold such consent
only to the extent necessary to assure that there shall be no land use control, constraint, limitation
or restriction on the construction and sale of commercial office uses, including without limitation
Office Uses on the License Areas ("Constraints"); provided, however, that the City shall not
unreasonably withhold its consent to Construction Conditions (defined below) that meet the
requirements of clauses (a) and (b) below. Examples of Constraints that the City may reject in
its sole discretion are Constraints that affect the ability of any Person to construct Office Uses on
the License Areas, to dig 12 feet or less below the surface of the land and the like. On the other
hand, the Parties recognize that certain remedial or removal action to address Hazardous
Materials at the License Areas may not be feasible economically or from an engineering
perspective without imposition of certain conditions. Such conditions that will not provide
Constraints on the use of the License Areas are referred to herein as "Construction
Conditions". As an example, if methane exists below the surface of the License Areas, in lieu of
removal of the methane, use of a methane boot may be required. If Developer proposes a
Construction Condition and the City does not agree to Developer's assertion and withholds
consent on that basis, then Developer will obtain and submit to the City estimates from at least
two contractors as to the cost to Remediate the License Areas to a level without Construction
Conditions and the cost to Remediate to such level with Construction Conditions. If (a) the cost
to Remediate the pre-existing Hazardous Materials without imposition of Construction
Conditions is more than 15% greater than the cost to Remediate with the imposition of
Construction Conditions and (b) following Remediation to the standard required with imposition
of the Construction Condition there is no Constraint on the ability to construct and sell the Phase
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2 Parcel for Office Uses consistent with the Applicable Approvals, then failure of the City to
agree to such Construction Condition will be deemed unreasonable absent another basis for
denial asserted by the City.
13.1.4 Environmental Reports. Upon written request from the City for
the same, Developer shall at no cost to the City provide the City with copies of (a) all test results
and data obtained in connection with testing related to Hazardous Materials, and (b) any final
environmental and/or consulting reports prepared in connection with any investigation and/or
Remediation of the pre-existing or exacerbated Hazardous Material or a Developer Release.
13.2 Assignment of Rights. City hereby assigns to Developer, to the extent
such rights are assignable, on a non-exclusive basis and as the Parties' interests may appear, any
rights that City has against any Person with respect to any Remediation, indemnification or
liability with respect to Hazardous Materials located on or about the License Areas that
Developer is responsible for under this Agreement, excluding any rights with respect to City's
existing pollution legal liability insurance policies.
13.3 Cooperation; Further Assurances. City shall reasonably cooperate with
Developer in pursuing and/or processing any claim against any insurer (excluding claims under
City's existing pollution legal liability insurance policies) or any other Person with respect to
Developer's obligations under this Agreement, including, without limitation, by making a claim
against any insurer in City's name for the benefit of Developer with respect to any costs, liability
or damages incurred by Developer under this Agreement, all at Developer's cost and expense.
Developer shall have full authority to pursue such claims in its own name and without consent or
approval from City, and shall have the right to make all decisions in connection with the pursuit
of any such claim. In the event that for any reason the assignment of rights set forth in
Section 13.2 above is ineffective or incomplete, City agrees: (a) upon written request of
Developer, to pursue claims against any Person for whom the assignment of rights is ineffective
or incomplete on behalf of the Developer in City's own name for the benefit of Developer
(a "Third Party Claim") subject to the provisions of this Section, (b) to initiate a Third Party
Claim requested by Developer, which may include an action, arbitration, reference or other
alternative dispute resolution mechanism and (c) if the City has no claim, to cooperate with
Developer in pursuing any such matter initiated by Developer. If City fails to initiate a Third
Party Claim where the City has such a claim, as required hereunder, Developer shall be excused
from its obligations to remediate under Section 13.1 above. City shall not unreasonably
withhold, condition or delay its compliance with Developer's requests in connection with the
prosecution and resolution of such Third Party Claim including, without limitation, with respect
to venue, strategy, law and motion and settlement. The City shall use its commercially
reasonable diligence in prosecuting such claim to conclusion. City's prosecution of any Third
Party Claim or other compliance with the provisions of this Section 13 shall be at Developer's
sole cost and expense, and if applicable, with the assistance of counsel selected by Developer
who shall represent the City as well as Developer as the real party in interest, except in the event
of a conflict of or disparate interest. Such cost and expense of City shall include reimbursement
for time of City personnel and counsel incurred in connection with such pursuit, to be charged at
the then existing rates charged by City with respect to such personnel. Each of the Parties shall
execute and deliver any and all additional papers, documents or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
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of its obligations under this Section 13 in order to carry out the intent and purpose of this
Agreement. City shall promptly pay over to Developer any award, payment, judgment or
settlement received by it in respect of any Third Party Claim. In the event the Phase 2 Property
Close of Escrow occurs under the DDA, this Section 13.3 shall survive the termination of this
Agreement.
13.4 Survival. In the event this Agreement terminates due to the Phase 2
Property Close of Escrow under the DDA, the terms of the DDA shall govern the Remediation of
the License Areas by Developer and the provisions of this Section 13 shall not survive other than
Sections 13.2 and 13.3 which shall survive only with respect to any pre-existing Hazardous
Materials discovered on the License Areas by Developer during the term of this Agreement or a
Developer Release. In the event this Agreement terminates in accordance with subsections (b) or
(c) under Section 2 of this Agreement, the Parties' rights and obligations under Sections 13.1.1,
13.1.2 and 13.1.3 shall survive the termination of this Agreement and the Parties' obligations
under Sections 13.2 and 13.3 shall survive only with respect to any pre-existing Hazardous
Materials discovered on the License Areas or exacerbated by Developer during the term of this
Agreement or any Developer Release. To the extent that completion of any Remediation is
required pursuant to the foregoing, Developer will complete such Remediation obligations in full
and shall not be relieved of its obligations as a result of the termination of this Agreement or for
any other reason.
14. No Supervision or Control. The City (whether acting in its Governmental
Capacity or its Proprietary Capacity) does not have any right, and hereby expressly disclaims any
right, of supervision or control over the architects, designers, engineers or persons responsible
for drafting or formulating of any plans, drawings and related documents of Developer.
15. No Waiver. Nothing contained in this Agreement shall be deemed to waive the
right of the City to act in its Governmental Capacity with respect to the consideration and
approval of the Entitlements and all other permits, licenses and approvals requested by
Developer from time to time in connection with the Project
16. Bailee Disclaimer and Waiver of Claims. Developer acknowledges and agrees
that City has granted its permission for use of the License Areas only for the purposes and in
accordance with the provisions of this Agreement. By entering into this Agreement, City is not
agreeing in any manner to accept obligations or responsibility for the safekeeping of the vehicles
or other property of Developer or of Developer's agents, contractors, officers, employees or
invitees. This Agreement is not a contract for bailment or deposit of goods for safekeeping and
City in no manner whatsoever purports to be a bailee. As a material part of the consideration to
be rendered to City for this Agreement, Developer hereby waives any and all claims or causes of
action against City, its officers, agents, or employees which it may now or hereafter have for
damages to, loss of, or theft of Developer's vehicles or other property anywhere in, about, or on
Tustin Legacy, including, but not limited to, the License Areas, from any cause whatsoever,
unless such damage, loss, or theft results from the sole negligence, gross negligence or willful
misconduct of City, its officers, agents, or employees.
17. Compliance with Laws and Terms of DDA. Developer will at all times during the
term of this Agreement promptly observe and comply, at its sole cost and expense, and shall
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cause its use of the License Areas, to be performed in accordance with the requirements of the
DDA, the Grading Permit and all Governmental Requirements, including without limitation all
applicable federal and state labor laws and regulations, and all permits required to stage and
construct the Phase 1 Improvements. Without limiting the generality of the foregoing, the
provisions of Sections 8.8 through 8.12, inclusive, of the DDA and the releases and indemnities
set forth in Sections 4.5.2(f), 8.8.5, 8_9, 8.11, 8.12, and 10.1 of the DDA shall apply as though
fully set forth herein.
18. Data Sharing. Developer agrees to provide the City with copies of all soil test
results. Notwithstanding the provisions of Section 17, and except for the routine reporting of
data incident to a permit application, should Developer discover conditions on the License Areas
during the conduct of the Minimum Phase 1 Improvements, that Developer believes may require
reporting to any Governmental Authority (local, regional, state, or federal), Developer shall, as
promptly as reasonably practical, advise the City of such discovery and thereafter provide City
with the field and/or laboratory data pertaining to such discovery.
19. Rights of City to Revoke License for Default. This Agreement and the License
granted hereby may be revoked by the City by provision of written notice to Developer, (a)
during the continuation of any default by Developer under this Agreement beyond the notice and
cure period set forth in Section 32, or (b) at any time if the City determines, in its sole discretion,
that the conduct or activities of Developer create health or safety concerns requiring stoppage of
the work. If Developer disputes the City's revocation of the License pursuant clause (b) above,
Developer shall have the right to provide the City with written notice within three (3) calendar
day(s) following delivery of such revocation notice setting forth Developer's basis for the
dispute. Developer and City shall meet and confer within five (5) Business Days from the
delivery of Developer's notice, in order to identify specific actions and remedies to be taken by
Developer to cure the default asserted by the City and provided that Developer agrees in writing
to take such actions and to promptly prosecute them to completion in a manner satisfactory to the
City in its reasonable discretion, the City shall not unreasonably withhold the reinstatement of
the License and this Agreement.
20. Additional Rules and Regulations Applicable to Use of License Areas. In
connection with its use of the License Areas, Developer shall comply with the rules and
regulations of the City attached as Exhibit "D" to this Agreement.
21. Dispute Resolution. In the event of a dispute between the Parties with respect to
this Agreement, the Parties agree that they shall resolve such dispute in accordance with the
provisions of Section 18.1 of the DDA, and the cost of any such proceeding shall be borne in
accordance with the provisions of Section 18.2 of the DDA and the provisions of Section 18.9 of
the DDA shall apply with respect to such dispute.
22. Governing Law. This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California.
23. Relationship of Parties, Not an Easement or Interest in Land. Nothing contained
in this Agreement shall be deemed or construed, either by the Parties hereto or by any third
party, to create the relationship of principal and agent or to create any partnership, joint venture
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or other relationship between the Parties. Nothing in this Agreement shall create or constitute an
easement in the License Areas and this Agreement shall be considered nothing other than a
license as set forth herein.
24. Notices. All notices required by this Agreement shall be provided in writing and
shall be deemed received when (a) personally served, (b) two (2) days after being sent by
registered or certified mail, return receipt requested, postage or charges prepaid, or by recognized
overnight carrier, or one (1) day after receipt by facsimile machine or electronic mail, with
transmission and receipt acknowledged in writing by facsimile, email or any other method
permitted under this Section, and addressed to the Party for whom intended at such Party's
address herein specified, or at such other address as such Party may have substituted therefore by
proper notice to the other.
If to Developer:
David Binswanger
Flight Venture LLC
c/o Lincoln Property Company Commercial, Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Fax: (213) 538-0901
Email: dbinswanger@lpc.com
With a copy to: Parke Miller
Lincoln Property Company Commercial, Inc.
114 Pacifica, Suite 370
Irvine, CA 92618
Fax: (949) 333-2131
Email: pmiller@lpc.com
With a copy to: Gregory S. Courtwright
Lincoln Property Company Commercial, Inc.
2000 McKinney Avenue, Suite 1000
Dallas, TX 75201
Fax: (214) 740-3460
Email: gcourtwright@lpc.com
With a copy to: Mark Potter
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
E-mail: mpotter@alcionventures.com
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With a copy to:
With a copy to:
If to the City:
Amy Forbes and Douglas Champion
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Suite 4900
Los Angeles, CA 90071
Fax: (213) 229-6151 / (213) 229-6128
E-mail: aforbes@gibsondunn.com / dchampion@gibsondunn.com
Andrew C. Sucoff
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Fax: (617) 523-1231
Email: asucoff@goodwinlaw.com
City of Tustin
Attn: Jeffrey C. Parker, City Manager
300 Centennial Way
Tustin, CA 92780
Fax: (714) 838-1602
Email: jparker@tustinca.org
With a copy to:
Woodruff Spradlin & Smart, APC
Attn: David Kendig, Esq., City Attorney
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com
and:
Armbruster Goldsmith & Delvac LLP
Attn: Amy E. Freilich, Esq., Special Counsel
12100 Wilshire Blvd., Suite 1600
Los Angeles, CA 90025
Fax: (310) 209-8801
Email: amy@agd-landuse.com
25. No Assi ng ment. This Agreement shall not be assigned by Developer except with
the prior written consent of the City in its sole discretion.
26. Exhibits Incorporated. Each exhibit attached and referred to in this Agreement is
hereby incorporated by reference as though set forth in full where referred to herein.
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27. Severability. If any provision of this Agreement or application thereof to any
person or circumstance shall to any extent be invalid or unenforceable, the remainder of this
Agreement (including the application of such provision to persons or circumstances other than
those to which it is held invalid or unenforceable) shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
28. Entire Agreement. This Agreement and the DDA contain the entire agreement of
the Parties with respect to the subject matter and 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.
29. Counterparts. This Agreement and any amendments hereto may be executed in
counterparts, each of which is deemed an original and all of which, when taken together, shall
constitute one and the same instrument.
30. Further Assurances. Each of the Parties hereto shall execute and deliver at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
of its obligations hereunder in order to carry out the intents and purposes of this Agreement.
31. Authority. Each Party warrants that it has the power and authority to enter into
this Agreement and to perform its obligations hereunder. Each individual who signs this
Agreement on behalf of an entity warrants that he/she has been duly authorized to do so and to
bind such entity.
32. Default Procedure. The non -defaulting party (the "Non -Defaulting Party") at its
discretion may elect to declare a default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of any other party (the "Defaulting Party") to
perform any material duty or obligation of said Defaulting Party in accordance with the terms of
this Agreement. However, the Non -Defaulting Party must provide written notice to the
Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required
by the Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed to
be in "default" of its obligations set forth in this Agreement if the Defaulting Party has failed to
take action and cure the default within ten (10) Business Days after the date of such notice or,
with respect to a default which by its nature cannot be cured within such ten (10) Business Day
period, then the Defaulting Party shall be deemed to be "default" of its obligations hereunder if
the Defaulting Party has failed to commence to cure within such ten (10) Business Day period
and thereafter diligently pursue such cure to completion.
33. Limitation on Damages. Developer acknowledges that the City would not have
entered into this Agreement if the City could become liable for damages under or with respect to
this Agreement. Consequently, and notwithstanding any other provision of this Agreement,
except for the payment of attorneys' fees in accordance with Section 21 of this Agreement and
court costs, the City shall not be liable in damages under this Agreement to Developer and
Developer, on behalf of itself and each Developer Representative hereby waives any and all
rights to claim damages of any other kind or nature from the City including without limitation,
Claims for lost profits, consequential, incidental, indirect, special, collateral, exemplary or
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punitive damages. Except as otherwise set forth in the DDA, in no event shall Developer be
liable to the City for any lost profits, consequential, incidental, indirect, special, collateral,
exemplary or punitive damages in connection with this Agreement.
{signatures commence on followingpage}
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year
first written above.
DEVELOPER:
{INSERT PHASE I OWNER SIGNATURE BLOCK}
CITY OF TUSTIN:
Jeffrey C. Parker,
City Manager
ATTEST:
By:
Erica Rabe
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) 16
11-7-16 (agd) FINAL.docx.docx
EXHIBIT A
LEGAL DESCRIPTION OF PHASE 2 PARCEL
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) Exhibit "A"
11-7-16 (agd) FINAL.docx.docx
EXHIBIT B
DEPICTION OF PHASE 2 PARCEL
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) Exhibit "B"
11-7-16 (agd) FINAL.docx.docx
EXHIBIT C
DEPICTION OF LICENSE AREAS
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) Exhibit "C"
11-7-16 (agd) FINAL.docx.docx
EXHIBIT D
RULES AND REGULATIONS
1. Developer shall comply with all requirements of the Occupational Safety and
Health Administration.
2. Trash disposal shall comply with CR&R Incorporated and City of Tustin
standards.
3. Developer shall be required to have and maintain a valid City of Tustin Business
License.
4. All requirements of the City's Noise Ordinance (Chapter 6 of the City Code) shall
be met at all times.
5. Except as otherwise set forth in any other License Agreement then in effect
between Developer and City, Developer may not access any other areas on the adjacent Tustin
Legacy properties and may not enter any of the buildings on the Tustin Legacy site for any
purpose.
6. Developer shall ensure controlled access to the License Areas is maintained.
Developer shall ensure the access gates remain closed all times while not in use. Developer
understands and agrees that this access may be disturbed in the future. The City makes no
guarantees that there will be continuing access that can be provided at the current location.
7. Except for ingress and egress and during daytime construction periods in which
vehicle gates are actively manned/monitored, Developer must keep the vehicle gates and
adjacent roadway free and clear at all times. Developer shall install temporary enhanced fencing
around the License Areas which screens the property at its sole cost and expense subject to
inspection and approval of the installation by the City. If requested by the City, Developer shall
remove said installation upon termination of this Agreement; otherwise, Developer shall leave
the fencing in good condition, reasonable wear and tear accepted, at the termination of this
Agreement. The vehicle gates shall be installed to open into the License Areas so as not to open
outward and obstruct the circulation access route to and from the License Areas.
8. Security and access to Tustin Legacy is currently performed by the City of Tustin
Police Department. The City of Tustin is not responsible for providing security services for
Developer, Developer's equipment or property, or the License Areas during the license period.
Access to the License Areas shall be permitted only during daylight hours only from 7:00 a.m.
until 6:00 p.m., Monday through Friday, 9:00 a.m. until 5:00 p.m. on Saturdays. Developer is
responsible for securing the License Areas; including without limitation keeping all gates closed
and locked during hours when use of the License Areas is not permitted.
9. Hours of operation shall be according to Tustin City Code Section 4616 which
limits construction activities to between 7:00 a.m. and 6:00 p.m. Monday through Friday, and
between 9:00 a.m. and 5:00 p.m. on Saturdays, and at no time on Sundays unless otherwise
approved by the City. Construction activities are prohibited on New Year's Day, President's
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) Exhibit "D"
11-7-16 (agd) FINAL.docx.docx
1
Day, Memorial Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, and
Christmas Day.
10. This development shall comply with all provisions of the City of Tustin Water
Quality Ordinance and all Federal, State, and Regional Water Quality Control Board rules and
regulations, including keeping the License Areas, and public roadways, including but not limited
to Armstrong Avenue and Barranca Parkway, clear of any dirt or mud tracked out of the License
Areas.
11. In addition to access required under other provisions of this Agreement, the City,
and the Department of Navy and their representatives shall be allowed access to the License
Areas at all times throughout the term of this Agreement, for any purpose without prior written
notice to Developer. Developer shall ensure that the City has a current roster of on-call
personnel and their phone numbers. Developer shall have no claim against the City for exercise
of their rights of access hereunder.
12. Developer shall not make or permit to be made any use of the License Areas or
any part thereof (i) which would violate any of the covenants, agreements, terms, provisions, and
conditions of this Agreement; 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
License Areas or any part thereof to be used in any manner or permit anything to be brought onto
or kept thereon which, in the reasonable judgment of City, shall in any way impair or tend to
impair the character, reputation or appearance of the License Areas or which will impair or
interfere with or tend to impair or interfere with any of the services performed by City.
13. Developer shall not display, inscribe, print, maintain or affix on any place in or
about the License Areas any sign, notice, legend, direction, figure or advertisement, except as
may be approved by City in writing.
14. Developer shall comply with all laws, enactments, rules, ordinances and
regulations of all governmental authorities relating or applicable to Developer's occupancy of the
License Areas governing use of the License Areas. Developer shall obtain all permits and
licenses required by the City of Tustin and shall pay all required fees.
15. Developer's work on the License Areas will be coordinated and performed with
the work contemplated in and in accordance with the Due Diligence License Agreement.
16. Developer shall allow no dangerous or hazardous condition to be created or
caused on the License Areas.
17. No smoking or alcohol consumption is permitted anywhere on or within the
License Areas.
Tustin Cornerstone I DDA Art 25C Form ATTACHMENT 25C City of Tustin/Flight Venture LLC
License Agt (Staging & Const Parking) Exhibit "D"
11-7-16 (agd) FINAL.docx.docx
2
ATTACHMENT 26
APPLICABLE APPROVALS
• Development Agreement (DA) 2016-001
• Concept Plan (CP) 2016-001
• Design Review (DR) 2016-001
• Subdivision (SUB) 2016-02/Vesting Tentative Tract Map (VTTM) 18003
• Conditional Use Permit 2016-01 (Alcoholic Beverages — Type 47)
• Conditional Use Permit 2016-02 (Joint Use Parking)
• Conditional Use Permit 2016-15 (Live Entertainment)
• Conditional Use Permit 2016-23 (Projection of Mechanical Equipment)
• Minor Adjustment 2016-01 (10% Reduction - Parking)
• Minor Adjustment 2016-02 (10% Increase - Building Height)
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 26 City of Tustin/Flight Venture LLC
FINAL.docx -- I --
ATTACHMENT 27
FORM OF LANDSCAPE INSTALLATION AND MAINTENANCE AGREEMENT
[INTENTIONALLY LEFT BLANK -TO BE APPROVED BY THE PARTIES AND
ATTACHED AS ATTACHMENT 27 TO THIS AGREEMENT PRIOR AND AS A
CONDITION TO THE PHASE 1 PROPERTY CLOSE OF ESCROW]
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 27 City of Tustin/Flight Venture LLC
FINAL.docx _ I _
ATTACHMENT 28
PHASE 2 PROPERTY PURCHASE PRICE AND
OPTION PAYMENTS AND OPTION CREDIT
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 27 City of Tustin/Flight Venture LLC
FINAL.docx _ I _
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ATTACHMENT 29
CITY PARK
Tustin Cornerstone I DDA 11-8-2016 (agd) ATTACHMENT 27 City of Tustin/Flight Venture LLC
FINAL.docx _ I _
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ATTACHMENT 30
FORM OF GUARANTY OPINION
,201
City of Tustin, California (the "City")
300 Centennial Way
Tustin, CA 92780
Re: Guaranty Agreement Phase I Parcel made by Guarantor (as defined herein) in
favor of City dated as of , 2016 (the "Guaranty")
Ladies and Gentlemen:
We represent Alcion Real Estate Partners Master Fund HI, L.P., a Delaware limited
partnership ("Master Fund Guarantor") and Alcion Real Estate Partners Strategic Parallel Fund
HI, L.P., a Delaware limited partnership ("Parallel Fund Guarantor" and together with Master
Fund Guarantor, the "Guarantor"), in connection with the Guaranty (as defined above).
In connection with this opinion we have examined and relied solely upon copies of each
of the following, and we have made no other investigation or documentary review whatsoever:
Agreement of Limited Partnership of Master Fund Guarantor, dated as of March
18, 2014.
2. Certified copy of Certificate of Limited Partnership of Master Fund Guarantor
dated January 23, 2014, issued by the Secretary of State of the State of Delaware
on , 201.
Certificate of Good Standing of Master Fund Guarantor issued by the Secretary of
State of the State of Delaware dated , 201.
4. Certificate of Good Standing Foreign Limited Partnership of Master Fund
Guarantor issued by the Secretary of State of the State of California dated
, 20
Operating Agreement of Alcion Capital Master Fund GP IH, LLC, a Delaware
limited liability company ("Master Fund GP"), dated as of March 18, 2014.
6. Certified copy of Certificate of Formation of Master Fund GP dated January 23,
2014, issued by the Secretary of State of the State of Delaware on , 201.
7. Certificate of Good Standing of Master Fund GP issued by the Secretary of State
of the State of Delaware dated , 201 .
Tustin Cornerstone I DDA Art 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 1
City of Tustin
, 20
Page 2
Consent of Board of Managers of Master Fund GP dated as of , 201.
9. Limited Partnership Agreement of Alcion Capital III, L.P. dated as of March 18,
2014.
10. Certified copy of Certificate of Limited Partnership of Alcion Capital III, L.P.
dated 2014, issued by the Secretary of State of the State of
Delaware on , 2014.
11. Operating Agreement of Alcion Capital GP III, LLC dated as of March 18, 2014.
12. Certified copy of Certificate of Formation of Alcion Capital GP III, LLC dated
, issued by the Secretary of State of the State of Delaware on
20
13. Limited Partnership Agreement of Parallel Fund Guarantor, dated as of March 18,
2014.
14. Certified copy of Certificate of Limited Partnership of Parallel Fund Guarantor
dated February 20, 2014, issued by the Secretary of State of the State of Delaware
on , 201.
15. Certificate of Good Standing of Parallel Fund Guarantor issued by the Secretary
of State of the State of Delaware dated , 201.
16. Certificate of Good Standing Foreign Limited Partnership of Master Fund
Guarantor issued by the Secretary of State of the State of California dated
, 20
17. Operating Agreement of Alcion Capital Strategic III, LLC, a Delaware limited
liability company ("Parallel Fund GP"), dated as of March 18, 2014.
18. Certified copy of Certificate of Formation of Parallel Fund GP dated February 20,
2014, issued by the Secretary of State of the State of Delaware on , 201.
19. Certificate of Good Standing of Parallel Fund GP issued by the Secretary of State
of the State of Delaware dated , 201 .
20. Consent of Board of Managers of Parallel Fund GP dated as of
201.
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 2
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City of Tustin
, 20
Page 3
21. Certificate of Master Fund GP dated as of 20 (the "Master Fund
Certificate").1
22. Certificate of Parallel Fund GP dated as of 20 (the "Parallel
Fund Certificate").
23. Consent of the Board of Managers of Alcion Capital GP III, LLC dated as of
, 20
24. The Guaranty.
All assumptions stated herein have been made without investigation.
We have assumed the genuineness of all signatures except for those signatures on the
Guaranty of the persons signing the Guaranty on behalf of the Guarantor and the signature of
Guarantor on the Guaranty. We also have assumed the authenticity and completeness of all
items submitted to us as originals, the conformity with originals of all items submitted to us as
copies and the accuracy and completeness of all records made available to us by Guarantor. We
have assumed that any certificate or other document on which we have relied that was given or
dated earlier than the date of this letter continued to remain accurate insofar as relevant to our
opinions from such earlier date through and including the date of this letter. In making our
examination of the Guaranty, we have assumed: that City was in legal existence and had the
power to accept the Guaranty, and that any person acting on behalf of the City was duly
authorized to act in that capacity; the conduct of the City in connection with the transaction has
complied with any requirement of good faith, fair dealing and conscionability; and the City and
any agent acting for the City in connection with the transaction have acted in good faith and
without notice of any defense against the enforcement of any rights created by, or adverse claim
to any property or security interest transferred or created as part of, the transaction. We have
assumed the legal capacity of natural persons. We have assumed that there are no agreements or
understandings among the parties, written or oral, and there is no usage of trade or course of
prior dealing among the parties that would, in either case, define, supplement, or qualify the
terms of the Guaranty. We have assumed that there has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence.
Based upon and subject to the foregoing and any further qualifications set forth below,
we are of the opinion that:
(a) Based solely on Item 3 above, Master Fund Guarantor is a limited
partnership validly existing and in good standing under the laws of the
The Master Fund Certificate will include a certification regarding non -dissolution.
2 The Parallel Fund Certificate will include a certification regarding non -dissolution.
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 3
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, 20
Page 4
State of Delaware. Master Fund Guarantor has full partnership power and
authority to enter into and perform its obligations under the Guaranty.
Based solely on Item 4 above, Master Fund Guarantor has duly registered
to transact intrastate business as a foreign limited partnership in and is in
good standing in the State of California.
(b) Based solely on Item 15 above, Parallel Fund Guarantor is a limited
partnership validly existing and in good standing under the laws of the
State of Delaware. Parallel Fund Guarantor has full partnership power and
authority to enter into and perform its obligations under the Guaranty.
Based solely on Item 16 above, Parallel Fund Guarantor has duly
registered to transact intrastate business as a foreign limited partnership in
and is in good standing in the State of California.
(c) The execution, delivery and performance of the Guaranty and the Master
Fund Certificate by Master Fund Guarantor have been duly authorized by
all requisite partnership action of Master Fund Guarantor, and the
Guaranty and the Master Fund Certificate have been duly executed and
delivered by Master Fund Guarantor.
(d) The execution, delivery and performance of the Guaranty and the Parallel
Fund Certificate by Parallel Fund Guarantor have been duly authorized by
all requisite partnership action of Parallel Guarantor, and the Guaranty and
the Parallel Fund Certificate have been duly executed and delivered by
Parallel Fund Guarantor.
(e) The Guaranty constitutes the valid and binding obligation of Guarantor
and is enforceable against Guarantor in accordance with its terms. The
opinion expressed in this paragraph (e) is subject to each of the following
further qualifications:
(i) Our opinion is subject to the effect of bankruptcy,
insolvency, fraudulent transfer, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the
rights of creditors generally.
(ii) The enforceability of the Guaranty is subject to limitations
imposed by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or
at law).
(iii) We advise you of California statutory provisions and case
law to the effect that a guarantor may be discharged, in whole
or in part, if the beneficiary of the guaranty alters the
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 4
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City of Tustin
, 20
Page 5
obligation of the principal, fails to inform the guarantor of
material information pertinent to the principal or any
collateral, elects remedies that may impair either the
subrogation or reimbursement rights of the guarantor against
the principal or the value of any collateral, fails to accord the
guarantor the provisions afforded a debtor under Division 9 of
the California UCC or otherwise takes any action that
materially prejudices the guarantor, unless in any such case,
the guarantor has effectively waived such rights or the
consequences of such action or has consented to such action.
See, e.g., California Civil Code Section 2799 through Section
2855; California Uniform Commercial Code § 9-602,
Sumitomo Bank of California v. Iwasaki, 70 Cal. 2d 81, 73
Cal. Rptr. 564 (1968); Union Bank v. Gradsky, 265 Cal. App.
2d 40, 71 Cal. Rptr. 64 (1968). While California Civil Code
Section 2856, and case law, provide that express waivers of a
guarantor's right to be discharged, such as those contained in
the Guaranty, are generally enforceable under California law,
we express no opinion regarding the effectiveness of the
waivers in the Guaranty.
(iv) Certain provisions of the Guaranty may not be enforceable;
nevertheless, subject to the limitations expressed elsewhere in
this opinion letter, upon the material breach by Guarantor of
its obligations thereunder, such unenforceability will not
preclude the City from recovering from Guarantor, in
accordance with applicable law, such damages as were
proximately caused by such breach.
(v) Without limiting any of the qualifications contained
elsewhere in this opinion letter, we express no opinion as to
the validity or enforceability of any provisions of the
Guaranty that: (A) select any jurisdiction's laws to govern the
Guaranty; (B) contain a covenant not to compete; (C) provide
for penalties, liquidated damages, acceleration of future
amounts due (other than principal) without appropriate
discount to present value, late charges, prepayment charges, or
increased interest rates upon default; (D) provide that time is
of the essence; (E) provide for the confession of judgment; (F)
contain a waiver of (1) broadly or vaguely stated rights, (2)
the benefits of statutory, regulatory or constitutional rights,
unless and to the extent the statute, regulation or constitution
explicitly allows waiver, (3) unknown future defenses, or (4)
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 5
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City of Tustin
, 20
Page 6
rights to damages; (G) attempt to change or waive rules of
evidence or fix the method or quantum of proof to be applied
in litigation or similar proceedings; (H) provide for the
appointment of a receiver; (I) select the forum for the
resolution of any disputes or consents to the jurisdiction of
any jurisdiction (both as to personal jurisdiction and subject
matter jurisdiction); (J) appoint one party as an attorney-in-
fact for an adverse party; (K) contain a waiver of the right to a
jury trial; (L) provide that all remedies are cumulative; (M)
state that provisions of a contract are severable; (N) purport to
waive defenses available to Guarantor; (0) require arbitration
of disputes; (P) expressly state that fewer than all parties are
entitled to recover attorneys' fees and expenses; (Q) prohibit
oral modifications; (R) indemnify any party for damages
arising out of, or that purport to release or exculpate a party
from, its own misconduct; (S) contain self-help remedies; (T)
provide indemnification for securities law violations; (U)
contain voting agreements; (V) grant rights of setoff to
participants or to affiliates of parties to the Guaranty; (W) are
unconscionable as a matter of law at the time of closing; (X)
require payments to be made free of any setoff, counterclaim
or defense; or (Y) purport to waive any applicable statute of
limitations.
(f) Master Fund Guarantor's execution and delivery of the Guaranty and
Master Fund Guarantor's performance and observance of and compliance
with the provisions of the Guaranty does not conflict with or result in a
violation of Master Fund Guarantor's limited partnership agreement.
(g) Parallel Fund Guarantor's execution and delivery of the Guaranty and
Parallel Fund Guarantor's performance and observance of and compliance
with the provisions of the Guaranty does not conflict with or result in a
violation of Parallel Fund Guarantor's limited partnership agreement.
Our examination of law relevant to the matters herein is limited to the laws of the State of
California and Federal law and the Revised Uniform Limited Partnership Act as in effect in the
State of Delaware. We have not made an independent review of the laws of any state other than
California and the aforesaid laws of the State of Delaware. Accordingly, we express no opinion
as to the matters governed by the laws of any other state or jurisdiction.
You also should be aware of the following provisions of California law, to which the
opinions expressed in this opinion letter are subject:
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 6
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City of Tustin
, 20
Page 7
A. Section 726 of the California Code of Civil Procedure (the "Civil
Procedure Code") provides that any action to recover on any debt or other
right secured by a mortgage or deed of trust on real property must comply
with the requirements of such Section, which requirements relate to and
specify the procedures for the sale of encumbered property, the application
of sale proceeds, the rendition in certain cases of a deficiency judgment
and other related matters. We advise you that in such action or
proceeding, whether judicial or extrajudicial, the debtor may invoke the
"affirmative defense" aspect of Section 726 and require that the creditor
exhaust all its security before a personal judgment may be obtained
against the debtor for a deficiency. We also advise you that failure to
comply with the provisions of Section 726 (including, without limitation,
an attempt to exercise a right of setoff with respect to any funds of
Borrower which may be deposited with you from time to time and with
respect to which you do not hold a valid security interest) may result in the
loss of your rights with respect to the real property collateral and, under
certain circumstances, the loss of your right to a deficiency judgment.
B. Section 580b of the Civil Procedure Code provides that no deficiency
judgment shall be rendered upon a purchase -money obligation in favor of
the vendor arising from the sale of real property where such purchase -
money obligation is secured by a lien on the real property purchased from
the vendor, or in favor of a lender where the proceeds of the loan are used
to purchase a one -to -four family dwelling occupied entirely or in part by
the borrower and where such loan is secured by a lien on such dwelling.
C. Section 580d of the Civil Procedure Code provides that no deficiency
judgment shall be rendered upon a note secured by a deed of trust or
mortgage on real property after a sale of the real property pursuant to a
power of sale contained in such deed of trust or mortgage.
D. With respect to the enforceability of the Guaranty, we further advise you
that, under certain circumstances, a guaranty executed by a partner,
member, shareholder or other affiliate of a borrower may not be enforced
as an obligation separate from the loan which is guaranteed if it is
determined that Borrower is merely the alter ego or nominee of the
guarantor and that the "true" borrower is the guarantor. In such a case, if
the guarantor is held to be liable as a principal, it is likely that the
guarantor will also be entitled to the rights and defenses otherwise
available to a principal, including the protection of any applicable anti-
deficiency laws.
Tustin Cornerstone I DDA Att 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 7
ACTIVE/86020998.8
City of Tustin
, 20
Page 8
This opinion letter is furnished by us as counsel for Guarantor solely in connection with
the Guaranty and may be relied upon only by you and by transferees of the Guaranty and solely
in connection with the Guaranty. Our opinion letter may not be used, quoted from, referred to or
relied upon in whole or in part by you or by any other person for any other purpose, nor may
copies be delivered to any other person, without our prior written consent in each instance. We
shall have no obligation to revise or reissue this opinion letter with respect to any change in law
or any event, fact, circumstance or transaction which occurs after the date hereof. In addition,
we express no opinion with respect to any issue arising out of or related to (i) the identity or
status of any transferee of the Guaranty or (ii) any subsequent transaction.
This opinion letter and the opinions it contains shall be interpreted in accordance with the
Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar
Association's Business Law Section as published in 53 Business Lawyer 831 (May 1998).
Very truly yours,
GOODWIN PROCTER LLP
THIS IS A FORM OF OPINION ONLY. FINAL ISSUANCE OF THIS OPINION
REMAINS SUBJECT TO THE REVIEW AND FINAL APPROVAL OF THIS FIRM'S
OPINION COMMITTEE, BASED UPON RECEIPT OF THE FINAL EXECUTION
VERSION OF THE GUARANTY THAT IS THE SUBJECT HEREOF.
Tustin Cornerstone I DDA Art 30 Form ATTACHMENT 30 City of Tustin/Flight Venture LLC
of Opinion FINAL.docx 8
ACTIVE/86020998.8