HomeMy WebLinkAbout05 SECOND AMENDMENT TO THE TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT WITH FLIGHTAgenda Item 5
Reviewed:
AGENDA REPORT City Manager
Finance Director
MEETING DATE: October 1, 2019
TO: MATTHEW S. WEST, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: SECOND AMENDMENT TO THE TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT CORNERSTONE I (DDA) WITH FLIGHT
PHASE I OWNER LLC (FORMED BY THE AFFILIATES OF LINCOLN
PROPERTY COMPANY COMMERCIAL, INC. AND ALCION CAPITAL
STRATEGIC III, LLC)
SUMMARY:
Request for authorization to approve the Second Amendment to the Disposition and
Development Agreement Cornerstone I (DDA) with Flight Phase I Owner LLC, successor
in interest to Flight Venture LLC (formed by the affiliates of Lincoln Property Company
Commercial, Inc. (LPCC) and Alcion Capital Strategic III, LLC (Alcion)) for the Flight office
development at Tustin Legacy. This amendment would allow for the formation of a new
entity to include LPCC and Alcion by transferring the option to develop Phase 2 from the
Phase 1 owner to this new entity. The formation of this entity will allow for pre -planning
activities to commence and equity to be invested into Phase 2 from new sources. All terms
and conditions in Phase 2, will be transferred to the new entity including previously
approved entitlements and development requirements. The purchase price schedule for
Phase 2 will remain unchanged.
RECOMMENDATION:
Authorize the City Manager to execute the Second Amendment to the DDA between
Flight Phase I Owner LLC and the City, and any related implementing documents, subject
to 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:
This recommended Second Amendment to the DDA has no financial or fiscal impacts.
The negotiated price for Phase 1 and Phase 2 is unchanged from the original DDA.
Agenda Report — Second Amendment to the DDA with Flight Phase I Owner LLC
October 1, 2019
Page 2
CORRELATION TO THE STRATEGIC PLAN:
This action correlates to the City's Strategic Plan for Economic and Neighborhood
Development (Goal A).
BACKGROUND:
On November 15, 2016 the City Council authorized the City Manager to execute the DDA.
The DDA was amended on June 20, 2017. The first amendment (Amended DDA)
included several changes to the DDA in response to the lenders request to clarify the
rights of the City, developer and lender in the event of default by the developer, or as a
borrower under the loan.
The property described by the DDA is divided into two phases for development purposes.
The Phase I property was conveyed to the developer in 2017; construction of Phase 1 is
nearing completion. The developer holds an option to acquire the Phase 2 property. The
proposed Second Amendment specifies the terms and conditions under which the
developer may carry out one.or more transfers to affiliate entities of Lincoln and Alcion of
the rights and responsibilities for development, construction, leasing and operations of
the Phase 2 property.
The two phases of the Flight office campus consist of up to 870,000 square feet of creative
office use with a food hall and conference center on approximately 39 acres at Tustin
Legacy.
The first phase is on 17.5 acres adjacent to the newly completed Tustin Legacy Park. At
the close of escrow, the original developer, Flight Venture LLC, assigned all of the original
developer's rights and interests to Flight Phase I Owner LLC. As required by the Amended
DDA, the responsibilities for development, construction, leasing and operation of Phase
1 are held by an affiliate of Lincoln and the equity investor continues to be controlled by
an affiliate of Alcion. In this phase the developer was required to build not less than
350,000 square feet of gross building area (GBA) not to exceed 390,440 GBA. Phase I is
nearing completion and consists of 371,938 GBA of creative office, a 1,200 -space parking
structure, a 12,000-sf food hall and a 6,000-sf conference center.
The second phase of the property is to be constructed on the remaining 21.2 acres, if the
developer exercises the option for Phase 2, the developer will be required to build not
less than 400,000 GBA, not to exceed 479,560 GBA. At buildout of both phases, the total
project will consist of not less than 750,000 GBA and not more than 870,000 GBA.
For Phase 2, the developer has the option to purchase the remaining 21.2 acres of
property. This is a 10 -year option which commenced with the disposition of Phase 1
(2017). The Phase 2 price is adjusted annually ranging from $31,390,643 in the first year
to $47,280,105 in the tenth year. To have the right to purchase Phase 2 during the 10 -
year period, the developer makes annual option payments which are applied toward the
Agenda Report — Second Amendment to the DDA with Flight Phase I Owner LLC
October 1, 2019
Page 3
purchase price. 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. There remains a non -compete covenant in the DDA which
recognizes the requirement of the developer to make a significant upfront speculative
investment for the development of a large-scale office campus.
DISCUSSION:
Under the proposed amendment, the Phase 2 transfer will take place in two stages. In
the first stage the transfer would be to an affiliate of LPCC and Alcion to undertake
predevelopment activities and identify funding sources including equity investors and
lenders. In the second stage, the newly formed entity comprised of the LPCC/Alcion
affiliate and the equity investor would exercise the option to purchase and develop the
property.
The Second Amendment to the DDA will expedite pre -development activities which are a
condition precedent to the Phase 2 Close of Escrow and will permit a mechanism for
financing and development. Approval of the Second Amendment does not waive the
developer's obligations to provide the City with the information necessary to inform the
City's right to determine whether a transfer meets the requirements of this agreement.
City acceptance of the requested transfers does not waive its rights pursuant to any of
the other conditions to exercise of the option or Phase 2 Close of Escrow established in
the Amended DDA.
,r
h A. Buchanan Christopher Koster
nomic Development Director Deputy Director of Development Services
Economic Development Department
Attachment: Second Amendment to the DDA between the City of Tustin and Flight
Phase I Owner LLC
SECOND AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT CORNERSTONE I
This SECOND AMENDMENT TO TUSTIN LEGACY DISPOSITION AND DEVELOPMENT
AGREEMENT CORNERSTONE I (this "Second Amendment") is entered into as of
, 2019 (the "Second Amendment Effective Date") by and between the
CITY OF TUSTIN, a municipal corporation of the State of California (as more fully defined in
the Amended DDA (defined below), the "City") and FLIGHT PHASE I OWNER LLC, a
Delaware limited liability company (as more fully defined in the Amended DDA, the
"Developer"), successor -in -interest to FLIGHT VENTURE LLC, a Delaware limited liability
company (the "Original Developer"). The City and Developer and their respective permitted
successors and assigns are sometimes referred to in this Second Amendment individually as a
"Party" and collectively as the "Parties."
RECITALS
A. The City and Original Developer entered into that certain Tustin Legacy
Disposition and Development Agreement Cornerstone I dated as of November 15, 2016 (the
"Original DDA"), as amended by that certain First Amendment to Tustin Legacy Disposition and
Development Agreement Cornerstone I dated as of June 20, 2017 (the "First Amendment", and
collectively with the Original DDA, the "Amended DDA"). The Amended DDA as amended by
this Second Amendment is referred to herein as the "Agreement." Initially capitalized terms not
defined herein shall have the respective meanings assigned to such terms in the Amended DDA.
$, The Property described by the Amended DDA is divided into two phases for
development purposes. Concurrently with the Phase 1 Property Close of Escrow, Original
Developer assigned to Developer all of Original Developer's right, title and interest to, among
other things, the Amended DDA and all of Original Developer's rights and interests as
"Developer" thereunder. The Phase 1 Property was conveyed to Developer in 2017, and
construction of the Phase 1 Project (and the Minimum Horizontal Improvements comprising a
portion of Phase 1) is nearing completion. As required by the Amended DDA, the Operating
Rights and Responsibilities for development, construction, leasing and operation of Phase 1 were
and continue to be held by an Affiliate of LPCC and the Phase 1 Equity Investor was and continues
to be Controlled by an Affiliate of Alcion.
C, Developer holds an Option to acquire the Phase 2 Property. In order to commence
preparation of architectural and engineering plans and specifications for Phase 2 and securing of
Applicable Approvals for Phase 2 (collectively, the "Phase 2 Pre -Development Activities"),
completion and approval of which by the City are a condition precedent to exercise by Developer
of the Option, Developer desires to carry out one or more Transfers pursuant to the Agreement as
described below to a Phase 2 Developer. Initially, Developer seeks to carry out such Transfer to
an entity for which an Affiliate of LPCC will hold the Operating Rights and Responsibilities and
for which an Alcion Entity will be the Controlling Person ("Initial Phase 2 Developer"). In
connection with such Transfer, Developer has requested that the provisions of Section 1.2.4(a) of
the Amended DDA apply to the Transfer, notwithstanding that the Transfer would take place prior
Tustin Cornerstone I - Second Amendment 1 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
to the exercise of the Option and the execution and delivery by the Phase 2 Guarantor of the
Phase 2 Guaranty. As such assignment does not comprise a Transfer that is permitted pursuant to
the terms of the Amended DDA, Developer has requested that the City approve an amendment to
the DDA authorizing the requested Transfer and that it subsequently approve such Transfer and
the early application of the terms of Section 1.2.4(a).
D, Following the Transfer described in Recital C above and in order to capitalize the
Initial Phase 2 Developer or a Transferee of the Initial Phase 2 Developer prior to exercise of the
Option for purposes of acquisition of the Phase 2 Property and development of the Phase 2 Project,
Developer has indicated its intent to identify a Phase 2 Equity Investor that is a Qualified
Additional Investor (as defined below). In order to facilitate that intent, Developer has requested
that the City consent in advance to either or both of the following prior to exercise of the Option
by the Initial Phase 2 Developer: (1) a Transfer of Control of the Initial Phase 2 Developer to a
Qualified Additional Investor or an entity Controlled by the Qualified Additional Investor, or (2) a
Transfer of the Phase 2 Interests to a Qualified Developer Related Entity. Accordingly, Developer
is seeking a modification to the Transfer provisions and various other provisions of the Amended
DDA in order to obtain the City's consent for Developer to finance, entitle, and develop the
Phase 2 Project with a Phase 2 Equity Investor that is a Qualified Additional Investor and that may
be the Controlling Person of the Phase 2 Developer.
E. The City recognizes that the above requests of Developer will expedite the Phase 2
Pre -Development Activities, which are a condition precedent to the Phase 2 Close of Escrow, and
will permit a mechanism for financing and development of the Phase 2 Project, and, with the
proviso that by acceptance of the requested Transfers, the City does not waive its rights pursuant
to Section 4.3.3(d) (inclusive of clauses i) through (viii) thereof) of the Agreement (as amended
hereby) or to any of the other conditions to exercise of the Option or Phase 2 Close of Escrow
established in the Amended DDA (as amended by this Second Amendment) for its benefit, has
agreed to enter into this Second Amendment.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals, which are hereby
incorporated into the operative provisions of this Second Amendment by this reference, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties further agree as follows:
1. Modification to Section 1.2.4(a) of the Amended DDA.
a. Section 1.2.4(a) of the Amended DDA is hereby amended by deleting subclause C)
thereof and replacing it with the following:
Tustin Cornerstone I - Second Amendment 2 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
"(C) (1) the Phase Transfer of Phase 1 or Phase 2 by means other than
pursuant to Section 2.2.2(a) or(f) in accordance with the terms of this
Agreement, including, with respect to a Phase Transfer pursuant to any
provision other than Section 2.2.3(d), provision by Transferee of an
Assignment and Guaranty meeting the requirements of this Agreement, or
(2) with respect to a Special Phase 2 Transfer pursuant to Section 2.2.3(d), by
provision by the Special Phase 2 Transferee of a Special Phase 2 Assignment.
meeting the requirements of this Agreement, if applicable, and otherwise
satisfying the requirements of Section 2.2.3(d), including the concurrent
relinquishment by the Phase 1 Developer of all of its right, title, and interest
in and to the Option other than, if then applicable, its interest as the Working
Developer (and if a Pre -Exercise Notice has been delivered prior thereto or is
then concurrently given, the satisfaction of the requirements in
Section 4.3.3(d) (inclusive of clauses (i) through (viii) thereof), or"
b. Section 1.2.4(a). Section 1.2.4(a) subclauses (aa) and (bb) of the Amended DDA are
hereby deleted in their entirety and replaced with the following:
"(aa) the obligation to Complete the Minimum Horizontal Improvements and
any obligations binding on the Phase 1 Developer or the owner of the Phase
1 Property with respect to the Phase 2 Property expressly set forth in the
License Agreement for Site Development entered into by City and Developer
dated June 29, 2017 and the License Agreement (Staging and Construction
Parking) entered into by City and Developer dated June 29, 2017 and unless
and until assigned and assumed in accordance with this Agreement, the
License Agreement for Phase 2 Due Diligence entered into by City and
Developer dated June 29, 2017, (bb) any obligations binding on the Phase 1
Developer or the owner of the Phase 1 Property with respect to the Phase 2
Property or the adjoining roadways or landscaping expressly set forth in the
Quitclaim Deed for Phase 1, the Special Restrictions for Phase 1, the Master
Declaration, the CC&Rs, the Roadway and Utility Easement Agreement
and/or the Landscape Installation and Maintenance Agreement, in each case
in accordance with the terms and conditions of such agreements;"
2. Modification to Section 1.4 of the Amended DDA. Section 1.4.2 of the Amended DDA
is hereby amended by (a) deleting the phrase "Section 2.2.3(b)" and replacing it with the
phrase "Sections 2.2.3(b) or (d)" and (b) deleting the phrase "Phase Transferee" and
replacing it with the phrase "Phase Transferee or Special Phase 2 Transferee."
3. Modification to Section 2.2.2(a)(ii) and 2.2.2(a)f001(A) of the Amended DDA. In order
to facilitate the Transfer by a Phase 2 Developer that is a Qualified Developer Related
Entity to a Developer Affiliate following exercise of the Option and prior to the Phase 2
Close of Escrow and to correct a typographic error in the labeling of a subclause of
Section 2.2.2(a) as clause (A), the text following Section 2.2.2(a)(i) and preceding
Tustin Cornerstone I - Second Amendment 3 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
Section 2.2.2(a)(iii) is hereby deleted in its entirety and replaced with the following:
"(ii) (x) as to a Transfer with respect to Phase 1 or Phase 2 meeting all of the requirements
of this Section 2.2.2(a), an Affiliate of Alcion is the Controlling Person of the Developer
Affiliate that is the Transferee and (y) following exercise of the Option and prior to the
Phase 2 Close of Escrow as to a Transfer with respect to Phase 2 only meeting all of the
requirements of this Section 2.2.2(a) where the Transferor is a Qualified Developer Related
Entity and the Transferee is Controlled by, or has as its Controlling Person at all times the
Controlling Person of the Transferor and (z) in each such case (1) 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 and (2) if previously executed, the applicable Joint
Venture Agreements(s) and Guaranty(ies) for the applicable Phase that is the subject of the
Transfer 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 previously executed, the Developer
of the applicable Phase shall deliver Joint Venture Agreements for each of Transferor and
Transferee meeting the requirements of Section 4.6.2;"
4. Modification to Introductory Paragraph of Section 2.2.3 of the Amended DDA. The
second sentence of the introductory paragraph of Section 2.2.3 (prior to clause a thereof)
of the Amended DDA is hereby deleted in its entirety and replaced with the following:
"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 2.2.3(d) shall apply solely with respect to a Transfer by Developer
prior to exercise of the Option of the entirety of its interest in Phase 2, the Phase 2 Project,
and the Phase 2 Provisions to a Phase 2 Developer that is a Qualified Developer Related
Entity and as further described in Section 2.2.3; 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."
5. Modification to Section 2.2.3(a) of the Amended DDA. Section 2.2.3(a) of the Amended
DDA is hereby amended by deleting the phrase "Section 2.2.3(b)" each time it occurs and
replacing it with the phrase "Sections 2.2.3(b) or (d)."
6. Modification to Introductory Paragraph of Section 2.2.3(b) of the Amended DDA.
The introductory paragraph of Section 2.2.3(b) (prior to clause i thereof) of the Amended
DDA is hereby deleted in its entirety and replaced with the following:
"(b) Transfer of a Phase. Except as may be expressly permitted by Section 2.2.3(d)
(which addresses Special Phase 2 Transfers which are not deemed to be Phase Transfers),
Tustin Cornerstone I - Second Amendment 4 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
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
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 pursuant to this Section 2.2.3(b), 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, 2.2.3(c), 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 carried out in accordance with the requirements of this Section 2.2.3(b)
(a "Phase Assignment"), shall be carried out, (x) in the case of a Transfer, 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 pursuant to
which the Phase Transferee shall assume all of the Phase Transferor's right, title and
interest in and to the Transferred Phase, or (y) in the case of a Transfer of Control, by
execution by the applicable parties of documents for which the forms shall be approved by
the City in its sole discretion, and in each case pursuant to which the Phase Transferee 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. Except as otherwise expressly permitted by Section 2.2.3(d), any
Phase Transfer shall be made only in accordance with the following requirements:"
Tustin Cornerstone I - Second Amendment 5 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
7. Modification to the Introductory Paragraph of Section 2.2.3(c) of Amended DDA.
The introductory paragraph of Section 2.2.3(c) (before paragraph (i)) of the Amended
DDA is hereby amended by deleting the phrase "Section 2.2.3(a) or (b)" and replacing it
with the phrase "Section 2.2.3 (a), (b), or (d)."
New Section 2.2.3(d). The following text is added to the Amended DDA as
Section 2.2.3(d):
"(d) Special Phase 2 Transfer for Phase 2 Pre -Development Activities Prior to
Exercise of Option. Notwithstanding that Developer has not then exercised the Option or
the requirements of Section 2.2.3(b), Developer shall have the right, upon satisfaction of
the conditions set forth in this Section 2.2.3(d) as determined by the City in its sole
discretion, to carry out a Transfer with respect to the entirety of its interest in and/or
ownership in Phase 2, the Phase 2 Project, and the Phase 2 Provisions to an Initial Phase 2
Developer and thereafter either (x) one subsequent Transfer to a Person that is a Qualified
Developer Related Entity meeting the requirements of the definition thereof and this
Section 2.2.3(d) (in each case as determined by the City in its sole discretion), or (y) one
Transfer of Control of the Initial Phase 2 Developer pursuant to which a Qualified
Additional Investor meeting the requirements of the definition thereof and this
Section 2.2.3(d) (in each case as determined by the City in its sole discretion) would be
permitted to be or become a Controlling Person of the Initial Phase 2 Developer (each such
Transfer or Transfer of Control including a Transfer to the Initial Phase 2 Developer, a
"Special Phase 2 Transfer"). The Special Phase 2 Transfer may be used only to Transfer
to a Transferee that is (1) comprised of an Alcion Entity and an Affiliate of LPCC and, if
so desired by the foregoing, a Qualified Additional Investor, for which an Affiliate of
LPCC holds the Operating Rights and Responsibilities, or (2) an entity whose sole member
meets the criteria set forth in the foregoing clause 1 or to permit a Transfer of Control of
the Initial Phase 2 Developer to a Qualified Additional Investor, and which occurs prior to
or concurrently with the exercise of the Option and would not be able to be utilized for any
Transfer to any Person that does not include as members an Alcion Entity and an Affiliate
of LPCC that holds the Operating Rights and Responsibilities. Any Special Phase 2
Transfer shall be carried out in accordance with the requirements of this Agreement,
including, with respect to the Transfer to the Initial Phase 2 Developer and any subsequent
Transfer pursuant to this Section 2.2.3(d), by execution by the Phase Transferor and the
Special Phase 2 Transferee of an agreement in substantially the form and substance of the
Assignment and Assumption Agreement attached hereto as Attachment 16C (the "Special
Phase 2 Assignment"), pursuant to which Phase Transferor shall assign and the Special
Phase 2 Transferee shall assume all of Phase Transferor's right, title and interest in and to
Phase 2, the Phase 2 Project, and the Phase 2 Provisions including the relinquishment by
the Phase 1 Developer of all of its right, title and interest in and to the Option other than, if
then applicable, its interest as the Working Developer. The City acknowledges that the
transactions described in this Section 2.2.3(d) may be effectuated by up to two Special
Phase 2 Transfers so long as each Special Phase 2 Transfer pursuant to this Section 2.2.3(d)
shall be made only in accordance with the following requirements, provided that with
Tustin Cornerstone I - Second Amendment 6 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
respect to satisfaction of each of the matters below for which City determination or
approval is required, such determinations and/or approvals are in each case delegated by
the City to the City Manager or the City Manager's designee:
(i) The City shall have determined in writing prior to the
Transfer or Transfer of Control pursuant to this Section 2.2.3(d) that: (A) in the case of a
Transfer, the Person proposed as the Special Phase 2 Transferee is an Initial Phase 2
Developer or satisfies the definition of a Qualified Developer Related Entity set forth in
this Agreement, and in the case of a Transfer of Control, the Person proposed as Controlling
Party of the Initial Phase 2 Developer or Qualified Developer Related Entity is an Alcion
Entity or a Qualified Additional Investor; and (B) the proposed Special Phase 2 Transferee
is (1) comprised, in one or more entities, of an Alcion Entity and an Affiliate of LPCC and,
if so desired by the foregoing, a Qualified Additional Investor, for which an Affiliate of
LPCC holds the Operating Rights and Responsibilities or (2) an entity whose sole member
meets the criteria set forth in the foregoing clause 1 (such Person, a "Special Phase 2
Transferee"). In order to provide the City with information necessary to inform its right
to determine whether a Special Phase 2 Transfer to a Special Phase 2 Transferee satisfies
the requirements of this Agreement, the Phase Transferor and the proposed Special Phase 2
Transferee shall provide to the City, not less than twenty (20) Business Days prior to the
date of the proposed Special Phase 2 Transfer, the biographies of the principals of the
proposed Special Phase 2 Transferee and the information described in
Section 2.2.3(a)(ii)(A), LB,), LEE,), LF,) and (G) (if applicable) and, for Transfers other than to
the Initial Phase 2 Developer, the information described in Section 2.2.3(a)(ii)(C) and
with respect to the Special Phase 2 Transferee, together with the information required by
Sections 2.2.3(d) and 4.6.6;
(ii) The City's approval rights with respect to the proposed Special
Phase 2 Transferee and the proposed Transfer to such Person shall consist of the rights to:
(A) Assure that the Phase Transferor and the proposed Special
Phase 2 Transferee have met all requirements of this Agreement with respect to such
Special Phase 2 Transfer and be advised whether or not Phase Transferor and the proposed
Special Phase 2 Transferee are Related Parties;
(B) Assure that from and after the Special Phase 2 Transfer,
LPCC (or an Affiliate of LPCC), or another Person approved by the City in accordance
with Section 2.2.7, shall have the Operating Rights and Responsibilities for Phase 2 and
the Phase 2 Project;
(C) Approve a pre -development budget ("Pre -Development
Budget") for the Phase 2 Pre -Development Activities and the initial updated Phase 2
Financing Plan provided pursuant to Section 2.2.3(d)(vi)(B) and receive a copy of a fully
executed contract with the Project Architect covering at least Phase 2 schematic design and
entitlement support services;
Tustin Cornerstone I - Second Amendment 7 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
(D) Approve the terms of the Special Phase 2 Transfer, including
the terms of the conveyance agreements and all documents executed in connection
therewith by the Phase Transferor and Special Phase 2 Transferee in order to ensure that
the same are consistent with the matters submitted to and approved by the City in
accordance with the requirements of this Section 2.2.3(d)(ii); and
(E) Approve the operating agreement delivered pursuant to
Section 2.2.3(d)(v) to ensure that the same is in compliance with the requirements of this
Section 2.2.3(d),
(F) Approve documents submitted by Transferor that evidence
that the Permitted Mortgagee of Phase 1 has released the lien of its Permitted Mortgage
from the Assigned Interests (as such term is defined in the Special Phase 2 Assignment)
and that the Assigned Interests are not in any way encumbered by or subject to the terms
of the loan documents governing such Permitted Mortgage for Phase 1.
(iii) With respect to a Transfer, the entirety of Developer's interest in
Phase 2, the Phase 2 Project, and the Phase 2 Provisions shall be concurrently Transferred
to the Special Phase 2 Transferee.
(iv) The Parties agree that, Phase Transferor shall assign and the Special
Phase 2 Transferee shall assume by Special Phase 2 Assignment acknowledged and
Recorded, from and after the date of such Transfer all rights and obligations of Developer
related to Phase 2, the Phase 2 Project, and the Phase 2 Provisions, subject to the following:
(A) For avoidance of doubt, unless otherwise agreed by the City
in its sole discretion, upon the execution and delivery of the Special Phase 2 Assignment,
the Special Phase 2 Transferee shall be deemed to have assumed and shall be obligated to
comply with and perform all obligations of the Phase 2 Developer under this Agreement
and, following the Phase 2 Property Close of Escrow, the Other Agreements with respect
to Phase 2 including, unless otherwise expressly set forth in the Special Phase 2
Assignment, 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
Phase 2; and
(B) Upon a Special Phase 2 Transfer satisfying the requirements
of Section 2.2.3(d), the provisions of Section 1.2.4(a) of this Agreement shall apply;
provided that notwithstanding the foregoing or the assumption of obligations by the Special
Phase 2 Transferee, except as set forth in Section 1.2.4(a) and subject to the limitations set
forth in clauses (aa) through (dd) of Section 1.2.4(a), the Phase Transferor shall not be
relieved of or released from any of its other obligations under this Agreement and the Other
Agreements including the Ongoing Matters, which shall remain the obligations of the
Phase Transferor for so long as the Phase Transferor owns the Phase 1 Property or any
portion thereof and shall be binding on each Successor Owner of the Phase 1 Property or
Tustin Cornerstone I - Second Amendment 8 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
any portion thereof that is not an End User unless and until each such Person is expressly
released in writing by the City. Notwithstanding any other provision of this Agreement,
the Phase 1 Guaranty shall remain in full force and effect in accordance with its terms with
respect to Phase 1 and each of the matters which Phase 1 Developer remains obligated to
perform pursuant to this Agreement and the Other Agreements (including the Ongoing
Matters) and which are guaranteed thereby.
(v) at least fifteen (15) Business Days prior to the date of the proposed
Special Phase 2 Transfer, in the case of a Transfer of Control, the Initial Phase 2 Developer
shall deliver to the City a copy of its proposed amended operating agreement, and in the
case of a Transfer other than through a Transfer of Control, the Special Phase 2 Transferee
shall deliver to the City a copy of the proposed operating agreement of the Special Phase 2
Transferee, which in either case (1) shall be approved by the City to ensure that the same
is in compliance with the requirements of this Section 2.2.3(d); (2) shall commit the
members to fund the Option Payments and pre -development costs related to the Phase 2
Pre -Development Activities, in each case, that are approved by the members from time to
time; (3) shall delegate the Operating Rights and Responsibilities to an Affiliate of LPCC;
and (4) shall be dated as of or prior to the date of the proposed Transfer.
(vi) At the time of the Special Phase 2 Transfer, the Transferee shall:
(A) provide to the City evidence of insurance as required by
Section 4.6.5, as applicable;
(B) provide to the City an initial updated Phase 2 Financing Plan
and a copy of a fully executed contract with the Project Architect covering at least Phase 2
schematic design and entitlement support services and, if a Pre -Exercise Notice has been delivered
prior thereto or is then concurrently given, satisfy the requirements in Section 4.3.3(d) (inclusive
of clauses (i) through (viii) thereof), but, except as otherwise set forth in this Section 2.2.3(d) or
Section 4.6.2(c) shall not be required to include information concerning the Person proposed as
the Phase 2 Guarantor (which Person is anticipated, but not required, to be an Affiliate of the
Qualified Additional Investor);
(C) (1) with respect to a Transfer other than a Transfer through
a Transfer of Control, have executed and Transferor shall also have executed and each shall have
delivered the Special Phase 2 Assignment, acknowledged and Recorded, in the form attached
hereto as Attachment 16C, or in such other form as shall be approved by the City in its sole
discretion, and (2) with respect to a Transfer through a Transfer of Control, have executed and
Transferor shall also have executed and each shall have delivered the applicable transfer
documents in such form as shall be approved by the City in its sole discretion;
(D) certify in writing for the benefit of the City as to the accuracy
and correctness, as of the effective date of the Special Phase 2 Assignment, of the representations
and warranties set forth in the Special Phase 2 Assignment;
Tustin Cornerstone I - Second Amendment 9 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
(E) provide to the City a copy of the fully executed operating
agreement of the Transferee that has been approved by the City pursuant to Section 2.2.3(d)(v);
(F) provide a certification in favor of the City from the chief
financial officer or other authorized officer of the Special Phase 2 Transferee that the Special
Phase 2 Transferee is a Qualified Developer Related Entity and, except in connection with a
Transfer to the Initial Phase 2 Developer, that the proposed Phase 2 Equity Investor meets the
requirements of a Qualified Additional Investor, and in each case certifies the accuracy and
correctness of the deliverables and information provided pursuant to this Section 2.2.3(d),
including financial statements and that the operating agreement delivered pursuant to this
Section 2.2.3(d) is in full force and effect; and
(G) with respect to Transfers occurring prior to delivery of notice
of Option exercise pursuant to Section 4.3.3(d)(2), deliver a certification in favor of the City from
the chief financial officer or other appropriate authorized officer of the Special Phase 2 Transferee
and the Controlling Person of the Special Phase 2 Transferee confirming that the operating
agreement delivered pursuant to this Section 2.2.3(d) is in full force and effect and has not been
modified, and will not be materially modified or amended or terminated without the prior consent
of the City, in its sole discretion; and certifying as to the authority of such officers to bind the
Special Phase 2 Transferee and Controlling Person of such Special Phase 2 Transferee, as
applicable, and to execute such operating agreement and certifying as to the accuracy and
correctness of and attaching the following for the applicable Special Phase 2 Transferee and
Controlling Person;
(aa) A certificate of formation and California foreign
entity registration (if applicable) for the Special Phase 2 Transferee;
(bb) Evidence of authority of the individual(s) executing
the operating agreement to execute the operating agreement, which may be
satisfied by the delivery of an incumbency certificate if the individual(s) executing
the operating agreement are not expressly authorized in the documentation
delivered pursuant to clause (cc), below;
(cc) Copies of all resolutions or other necessary actions,
if any, taken to authorize the execution of the operating agreement; and
(dd) A certificate or certificates of good standing,
including tax good standing, issued within thirty (30) calendar days of the date of
delivery of the operating agreement to the City, by the Secretary of State and the
applicable taxing authority of the state in which the Special Phase 2 Transferee is
formed and by the California Secretary of State (if registration is required by
applicable law).
(vii) At the time of the Special Phase 2 Transfer:
Tustin Cornerstone I - Second Amendment 10 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
(A) the Option shall be in full force and effect;
(B) the Phase 2 Property Close of Escrow shall not have
occurred;
(C) Developer shall not be in Potential Default or Material
Default under this Agreement, or in default under any of the Other Agreements then in
effect, or any of the loan documents entered into by the Phase 1 Developer at the Phase 1
Property Close of Escrow, as have been amended or modified as described in Section 16
of the Second Amendment;
(D) if the Certificate of Compliance for Phase 1 has not then
been issued, the Joint Venture Agreement and Guaranty for Phase 1 shall remain in full
force and effect without defaults and without any modifications thereto other than
modifications that have been consented to by the City in its sole discretion;
(E) the Minimum Horizontal Improvements shall have been
Completed; and
(F) unless the lien of the Permitted Mortgage has been released
in connection with a prior Special Phase 2 Assignment, Developer shall have submitted to
the City evidence pursuant to Recorded instrument executed by the Permitted Mortgagee
of Phase 1 and recorded prior to Recording of the Special Phase 2 Assignment that the
Permitted Mortgagee of Phase 1 has released the lien of its Permitted Mortgage from the
Assigned Interests (as such term is defined in the Special Phase 2 Assignment) and that the
Assigned Interests are not in any way encumbered by or subject to the terms of the loan
documents governing such Permitted Mortgage for Phase 1, which instruments shall have
been approved by the City in its sole discretion.
(viii) If the Special Phase 2 Transfer pursuant to this Section 2.2.3(d) is
proposed to occur concurrently with or following delivery by Developer of a Pre -Exercise
Notice pursuant to Section 4.3.3(d)(1), then as a condition to such Special Phase 2
Transfer, the Transferor and Special Phase 2 Transferee shall satisfy or cause the
satisfaction of the requirements set forth in Section 4.3.3(d) (inclusive of clauses i
through (viii) thereof) and in order to provide the City with the information it requires,
shall provide to the City, not less than forty-five (45) calendar days prior to the date of the
proposed Special Phase 2 Transfer, the biographies of the principals of any proposed
Phase 2 Guarantor and all other information required by Section 4.3.3(d) (inclusive of
clauses (i) through (viii) thereof) to be provided as a condition to exercise of the Option
(provided that to the extent that Transferor and Transferee confirm in writing to the City
that such biographies and other information remain the same as that provided in connection
with a Pre -Exercise Notice, the forty-five (45) calendar day period shall run concurrently
with the delivery of all such information in connection with the Pre -Exercise Notice as
further described in Section 4.3.3(d)(1)).
Tustin Cornerstone I - Second Amendment 11 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
a
Notwithstanding any other provision of this Agreement or the fact that the City is not
granted an approval right with respect to the identity or financial capacity of a Phase 2
Guarantor or the terms and conditions of the Phase 2 Joint Venture Agreement at the time
of a Special Phase 2 Transfer, the occurrence of the Special Phase 2 Transfer shall not
release the Special Phase 2 Transferee or the Phase 2 Developer from the obligation to
satisfy each and every requirement of Section 4.3.3(d) (inclusive of clauses (i) through
viii) thereof) as a condition precedent for the benefit of the City to each of the exercise of
the Option by the Phase 2 Developer and the Phase 2 Close of Escrow and the fact that the
City is not granted an approval right at the time of the Special Phase 2 Transfer shall not
be deemed a waiver by the City of its right to approve, in its sole discretion, each of the
matters described in Section 4.3.3(d) (inclusive of clauses (i) through (viii) thereof)."
Modification to Section 4.3.3 of the Amended DDA.
a. The introductory paragraph of Section 4.3.3 (before paragraph (a)) of the Amended
DDA is hereby amended by (1) deleting the third sentence thereof (to wit, "The Option
shall not be Transferrable prior to its exercise except to a Developer Affiliate in
accordance with Section 2.2.2(f).") and replacing it with: "The Option shall not be
Transferrable prior to its exercise except to a Developer Affiliate in accordance with
Section 2.2.2(f) or except in accordance with Section 2.2.3(d).'; and (2) deleting the
phrase "Section 2.2.2(f)" in the fourth sentence thereof and replacing it with the phrase
"Sections 2.2.2(f) or 2.2.30)".
b. The introductory paragraph of Section 4.3.3(d) (before paragraph (i)) of the Amended
DDA is hereby deleted in its entirety and replaced by the following:
"The Option shall be exercisable by Optionee only upon satisfaction of the conditions
precedent set forth in this Section 4.3.3(d) (inclusive of clauses (i) through (viii)) and
shall be exercised in accordance with the following procedures: (1) first, no less than
forty-five (45) calendar days prior to the date that Optionee desires to exercise the
Option, delivering a Pre -Exercise Notice to the City, together with all of the
information and materials required to satisfy the conditions precedent set forth in this
Section 4.3.3(d) (inclusive of clauses (i) through (viii)) to Optionee's exercise of the
Option (it being understood that the City shall respond as to its approval or disapproval
of such information and materials within the later of (1) the date which is forty-five
(45) calendar days from the date of delivery of the Pre -Exercise Notice or (2) the date
that is forty-five (45) calendar days from the date of delivery of all information and
materials required to be delivered by Section 4.3.3(d) (inclusive of clauses (i) through
viii)); then (2) second, if the conditions precedent set forth in this Section 4.3.3(d) to
Optionee's exercise of the Option have been satisfied, delivering written notice of
Optionee's exercise of the Option to the City (which notice must be delivered no later
than sixty (60) calendar 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 the
Tustin Cornerstone I - Second Amendment 12 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
10.
11
conditions precedent to exercise by Optionee of the Option and to the Phase 2 Property
Close of Escrow:"
c. Section 4.3.3(d)(i) of the Amended DDA is hereby amended by deleting the reference
to "Sections 4.6.2(c), (d) and (e)" and inserting in place thereof a reference to
"Sections 4.6.1, 4.6.2(c), (d) and (e), and 4.6.3(c)".
Modification to Sections 4.3.3, 4.3.4,15.3(vi), and Attachment 1 of the Amended DDA.
Sections 4.3.3, 4.3.4(b), 15.3 vi , and the definitions of "Phase 1 Obligations",
"Related Parties" and "Transferor" in Attachment 1 are each hereby amended by
deleting the phrase "Phase Transfer" and replacing it with the phrase "Phase Transfer
or Special Phase 2 Transfer" each time it appears in each such Section (including all
subclauses thereof) and definition; provided however, that it is acknowledged and
agreed by the Parties that no Special Phase 2 Transfer can take place following exercise
of the Option, and accordingly, that the provisions of Sections 4.3.3(1) and 4.3.4 b i
shall not be read in a manner that implies a right to carry out a Special Phase 2 Transfer
following exercise of the Option.
Modification to Sections 4.6 of the Amended DDA.
a. Section 4.6.1 of the Amended DDA is hereby amended by deleting the phrase
"Section 2.2.3(a) or b)" and replacing it with the phrase "Sections 2.2.3(a), (b) or d)."
b. Section 4.6.2(a) of the Amended DDA is hereby amended by deleting the phrase
"Section 2.2.3(a) or (b)" and replacing it with the phrase "Sections 2.2.3(a), (b) or (d)."
c. The introductory clause of Section 4.6.2(c) of the Amended DDA (prior to
subclause (i) thereof) is hereby deleted in its entirety and replaced by the following:
"(c) Phase 2. Notwithstanding any other provision of this Agreement, prior and
as a condition precedent for the benefit of the City to each of (A) the exercise by
Optionee of the Option and (B) the Phase 2 Property Close of Escrow, Developer shall
cause each of the following conditions to be satisfied; provided, that if (1) Developer
has, as required by Section 4.3.3(d) (inclusive of clauses (i) through (viii) thereof),
previously satisfied or caused to be satisfied each of the below -listed conditions and
obtained the City's approval of each where required, and (2) Developer, Optionee,
Phase 2 Equity Investor and Phase 2 Guarantor each provides written notice to the City
prior to the Phase 2 Close of Escrow that there is no change in the documents or
information previously so delivered to and approved by the City or specifying any
changes to such documents and information (and providing the revised documents and
information), then the City's approval rights with respect to this Section 4.6.2(c) in the
case of clause B only shall be limited to the City's approval of (x) the new documents
and information provided, (y) any additional documents and information required to be
delivered in order to continue to satisfy the requirements of this Section 4.6.2(c) or
Tustin Cornerstone I - Second Amendment 13 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
otherwise required as a condition precedent to the Phase 2 Close of Escrow (but except
as set forth in subclause (z) below, without requirement to resubmit for approval
unchanged documents or information that have been previously approved by the City);
and (z) any previously reviewed and approved documents and information if the
documents or information provided pursuant to subclauses (x) or (v) impacts the
efficacy of the previously approved documents or results in or evidences changes to the
documents and/or information previously approved by the City:"
d. Section 4.6.2(c)(i) of the Amended DDA is hereby deleted in its entirety and replaced
by the following:
"(i) Developer shall have caused the Phase 2 Joint Venture Agreement to be
executed and delivered, which Phase 2 Joint Venture Agreement, as delivered:
(A) shall have been approved by the City in its sole discretion,
(B) shall have been made and executed by (1) 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 a Transfer approved by the City
pursuant to Section 2.2.3(a) or (b) or Section 2.2.7), and (2) a Person that either is
Controlled by, or has as its Controlling Person at all times, one of the following:
(x) an Alcion Entity, (y) a Qualified Additional Investor, but if and only if such
Qualified Additional Investor meets the requirements set forth in the definition
thereof as determined by the City in its sole discretion pursuant to Section 2.2.3(d),
or (z) another equity investor approved by the City in its sole discretion in
accordance with Section 2.2.3(a) or (b) (any of the foregoing, a "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);"
e. Section 4.6.2(c)(iv) of the Amended DDA is hereby deleted in its entirety and replaced
with the following:
"(iv) (x) at the time of issuance of the Pre -Exercise Notice, provision of
information concerning the proposed Phase 2 Guarantor sufficient for the City to
determine that such Person satisfies the requirements of Section 4.6.3(b) or 4.6.3(c) (as
applicable), and (y) at the Phase 2 Property Close of Escrow, the Phase 2 Guarantor
shall have delivered the Phase 2 Guaranty in accordance with and meeting the
requirements of Sections 4.6.3 and 4.7."
f. The following text is added to the Amended DDA as anew Section 4.6.3(c):
Tustin Cornerstone I - Second Amendment 14 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
12
"In the event a Special Phase 2 Transfer has occurred, in addition to the provisions of
Section 4.6.3(b) (if applicable), the City shall have the right, at and as a condition
precedent for the benefit of the City to each of the exercise of the Option and the
Phase 2 Close of Escrow to review and approve, in its sole discretion, the proposed
Phase 2 Guarantor and proposed Phase 2 Guaranty and the then -current Net Worth and
Liquidity and the Net Worth and Liquidity anticipated at the time at which the Phase 2
Guaranty would be given to assure that the proposed Phase 2 Guarantor meets the
Minimum Liquidity Standards (and City's review of such information at the time of
exercise of the Option shall not be deemed to be City's approval of the Phase 2
Guarantor, which approval shall be provided, if at all, at and as a condition to the Close
of Escrow for Phase 2). Accordingly, concurrently with its delivery of a Pre -Exercise
Notice, Phase 2 Developer shall cause the proposed Phase 2 Guarantor to deliver
evidence of its financial capacity to provide the Phase 2 Guaranty and authority to
provide the Phase 2 Guaranty, and copies of all documents evidencing formation, good
standing and authority requested by the City. Subject to the rights of the City to
approve each as the Phase 2 Guarantor and the financial condition of each to serve as
the Phase 2 Guarantor as set forth above, the Phase 2 Guaranty may come from an
Alcion Entity and/or a Qualified Additional Investor. For avoidance of doubt, the
Phase 2 Transferee shall not be obligated to provide such information at the time of a
Special Phase 2 Transfer unless such Special Phase 2 Transfer coincides with or occurs
subsequent to the provision of a Pre -Exercise Notice by Developer pursuant to
Section 4.3.3(d)(1) and shall not be obligated to provide a Guaranty at the time of the
Special Phase 2 Transfer unless the Guaranty would otherwise then be required to be
provided pursuant to this Agreement (i.e., at the Phase 2 Close of Escrow)."
Modifications to Article 7 of Amended DDA.
a. A new clause viii) is added at the end of Section 7.3.1(a) of the Amended DDA as
follows:
"(viii) an amendment to the Memorandum of DDA, in form approved by the City
and Developer, each in its reasonable discretion, memorializing the execution and
delivery of the Second Amendment to this Agreement and including verbatim the
provisions of Section 17.3 of the Agreement as so revised ("Second Amendment
Memorandum"), acknowledged and in Recordable form."
b. A new clause (b)(xii) is added at the end of Section 7.3.2(b) of the Amended DDA
as follows:
"(xii) the Second Amendment Memorandum, acknowledged and in Recordable
form."
Tustin Cornerstone I - Second Amendment 15 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
c. The text of Section 7.5.5(b) of the Amended DDA commencing with subclause (B)
is hereby deleted in its entirety and replaced with the following:
"(B) at the Phase 2 Property Close of Escrow, the Second Amendment
Memorandum, 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."
13. Modifications to Section 17.3 of the Amended DDA. The second and third sentences of
Section 17.3 of the Amended DDA are hereby deleted in their entirety and replaced with
the following:
"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 a transfer, sale, assignment,
disposition, gift, hypothecation, mortgage, pledge, encumbrance or other similar
conveyance or any 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, in each case to the extent that
Developer has actual knowledge of same, which notice shall include a full and complete
copy of each such instrument to the extent that Developer has actually received a copy of
same. Except as set forth in this Section 17.3, or in any Subordination Agreement executed
by the City and any Permitted Mortgagee, nothing in this Agreement shall obligate
Developer to seek City's consent nor City to grant such consent to any transfer, sale,
assignment, disposition, gift, hypothecation, mortgage, pledge, encumbrance or other
similar conveyance or any amendment, modification, waiver, postponement, extension,
replacement, renewal or termination of any Permitted Mortgage or the Subordination
Agreement or loan documents associated with such Permitted Mortgage; provided,
however, that any transfer, sale, assignment, disposition, gift, hypothecation, mortgage,
pledge, encumbrance or other similar conveyance by a Permitted Mortgagee of any of the
loan documents with respect to the Phase 2 Property shall, notwithstanding any assignment
language contained in the form of the Subordination Agreement, which may appear to be
self -operative, include an express assignment to the assignee of the Permitted Mortgage or
any portion thereof or loan document in connection therewith, of all of the rights and
obligations of such Permitted Mortgagee under the Subordination Agreement with respect
to the loan documents and Permitted Mortgage, or portion thereof, so transferred, sold,
assigned, disposed of, gifted, hypothecated, mortgaged, pledged, encumbered or otherwise
conveyed, and any Construction Loan proceeds distributed by Developer to its equity
owners for purposes other than the payment of Development Costs which distribution has
been authorized by the express terms of an amendment of the applicable loan documents
Tustin Cornerstone I - Second Amendment 16 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
made without the prior written approval of the City shall be excluded from the calculation
of Permitted Mortgage Unpaid Balance. The Parties shall execute a Second Amendment
Memorandum at the time of the Phase 2 Close of Escrow incorporating these provisions
and any and all Mortgages with respect to Phase 2 shall be subject and subordinate to the
terms of this Agreement and the Second Amendment Memorandum in addition to the other
matters set forth in Section 12.7."
14. Modification to Sections 17.5 of the Amended DDA. Section 17.5 of the Amended DDA
is hereby amended by deleting the phrase "Section 2.2.3" each of the times (two times) it
occurs and replacing it with the phrase "Sections 2.2.3(a) or (b)."
15. Modifications to Attachment 1 to the Amended DDA. The following modifications are
made to Attachment 1 to the Amended DDA.
a. The term "Assignment" is hereby modified by adding the following at the end thereof:
"or an Assignment and Assumption Agreement in the form and substance of the
agreement attached as Attachment 16C which shall be required to be executed by
Phase Transferor and the Special Phase 2 Transferee and consented to by the City,
with respect to a Transfer of Phase Transferor's right, title and interest in and to
Phase 2, the Phase 2 Project, and the Phase. 2 Provisions pursuant to
Section 2.2.3(d)."
b. The initial clause (prior to clausea) of the term "Ongoing Matters" is hereby deleted
in its entirety and replaced with the following:
""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, and as to a Special Phase 2 Transfer, with
respect to Phase 2, the Phase 2 Project, Phase 2 Provisions):"
The term "Phase Transfer" is hereby deleted in its entirety and replaced with the
following:
""Phase Transfer" shall mean a "Phase Transfer" #as defined in Section 2.2.3(b)
and shall specifically exclude a "Special Phase 2 Transfer" as defined in
Section 2.2.3(d)."
d. The term "Phase Transferee" is hereby deleted in its entirety and replaced with the
following:
""Phase Transferee" shall mean a Transferee acquiring the entirety of Initial
Developer's or a subsequent Developer's interest in and to either (1)(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
Tustin Cornerstone I - Second Amendment 17 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
thereon and the Phase 2 Provisions, in each case pursuant to Section 2.2.2 or
2.2.3(b) (but excluding Transfers pursuant to Section 2.2.3(d)),and in each case
described in clauses (a) and (b) above, excluding only those portions of the
Property previously Transferred by a Developer to Pad Transferees or Space
Tenants."
e. The term "Phase Transferor" is hereby deleted in its entirety and replaced with the
following:
""Phase Transferor" shall mean a Developer Transferring all of its interests in and
to (1) 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, excluding only those
portions of the Property previously Transferred by a Developer to End Users or
Space Tenants in each case to an Approved Phase Transferee pursuant to
Section 2.2.2 or 2.2.3(b) (but excluding Transfers pursuant to Section 2.2.2(d)); or
(2) Phase 2, the Phase 2 Project, and the Phase 2 Provisions pursuant to
Section 2.2.3(d)."
New Terms Added to Attachment 1 to the Amended DDA. The following new
definitions are hereby added to Attachment 1 to the Amended DDA:
a. ""Alcion Entity" 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 and (B) that is within the Alcion family of funds or
investments."
b. ""Pre -Exercise Notice" shall mean a written notice delivered by the Optionee to the
City of such Optionee's intention to exercise the Option no sooner than forty-five (45)
calendar days after the date of such notice."
c. ""Qualified Developer Related Entity" shall mean any Person that: (a) is licensed to
do business in the State of California; (b) has (either directly or as one of its Controlling
Persons, key employees, principals, and/or management) a Person with at least ten (10)
years of experience in developing or owning commercial office buildings or campuses
containing at least five hundred thousand (500,000) aggregate square feet of net
rentable space; and (c) either is Controlled by, or has as its Controlling Person at all
times either of the following: (i) an Alcion Entity, or (ii) a Qualified Additional
Investor, but if and only if such Qualified Additional Investor meets the requirements
set forth in the definition thereof as determined by the City in its sole discretion
pursuant to Section 2.2.3(d)."
d. ""Qualified Additional Investor" shall mean (a) a Person (i) either directly or through
its Affiliates, regularly engaged in the business of owning, developing, operating,
and/or investing in commercial real estate similar in size and scope to the Phase 2
Tustin Cornerstone I - Second Amendment 18 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
17
18.
Project, (ii) which has total assets (inclusive of unfunded capital commitments),
individually or with its parent entities and Affiliates, in excess of Five Hundred Million
Dollars ($500,000,000.00), (iii) which together with its Affiliates, within the preceding
eighteen (18) months prior to the date of the Transfer, has not been the subject of any
of the events or actions described in Section 2.2.5 (excluding any insolvency that is not
accompanied by another event or action described in Section 2.2.5) affecting more than
ten percent (10%) of the aggregate assets, or assets under management, as applicable,
of such Person and its Affiliates, and (iv) which has not, nor has its Controlling Person
or any key employee thereof having authority over the Phase 2 Project: (A) been
indicted or convicted for any felony or crime involving moral turpitude, (B) been
debarred by any public entity in California, (C) been engaged in litigation with the City
within the preceding five (5) years (other than tax contests or litigation unrelated to
development) or (D) been engaged in litigation with 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; or (b) any other Person
that is approved as a Qualified Additional Investor by the City in its sole discretion."
e. ""Second Amendment" shall mean the Second Amendment to Tustin Legacy
Disposition and Development Agreement Cornerstone I entered into by Developer and
the City."
f. ""Second Amendment Effective Date" shall have the meaning set forth in the
preamble to the Second Amendment."
g. ""Second Amendment Memorandum" shall have the meaning set forth in
Section 7.3. 1 (a)(viii)."
h. ""Special Phase 2 Assignment" shall have the meaning set forth in Section 2.2.3(b)."
i. ""Special Phase 2 Transfer" shall have the meaning set forth in Section 2.2.3(d)."
j. ""Special Phase 2 Transferee" shall have the meaning set forth in Section 2.2.3(d)."
New Attachment to Amended DDA. The Amended DDA shall be amended by adding
Attachment 16C.
Developer Representations and Warranties. As of the Second Amendment Effective
Date, Developer represents and warrants to the City as follows:
a. The Financing Plan concerning Phase 1, as updated in accordance with the
requirements of Section 4.6.1 of the Amended DDA, is true and correct as of the
Second Amendment Effective Date, and reflects Developer's expectation as to
available funding and costs, and remains sufficient to pay through issuance of the
Certificate of Compliance for Phase 1, all Development Costs for Phase 1 and all other
costs for the construction, marketing and lease of the Improvements as described in the
Tustin Cornerstone I - Second Amendment 19 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
Scope of Development for Phase 1, and the Project budget for the Minimum Phase 1
Improvements, as updated and amended, remains a reasonable budget.
b. The "Loan" and the "Loan Documents" described in the Subordination Agreement
executed and delivered by Developer and the Permitted Mortgagees concurrently with
the Phase 1 Close of Escrow remain in full force and effect and have not been modified,
supplemented or amended, whether orally or in writing (other than that certain Letter
Agreement by and among Developer, Alcion Real Estate Partners Master Fund III,
L.P., Alcion Real Estate -Partners Strategic Parallel Fund III, L.P., LPC West LLC,
Delphi CRE Funding LLC, and iStar Inc. dated as of January 12, 2018), and have not
been assigned or otherwise transferred by Developer or, to Developer's Knowledge, by
any Permitted Mortgagee, to any other Person (other than that certain assignment by
iStar Inc. of its rights and obligations under Note B -2F, and to the extent the same inure
to the benefit of or are binding upon the holder of Note B -2F, under the Loan
Agreement and other Loan Documents, to Star Tustin Lender LLC, a Delaware limited
liability company, a wholly-owned subsidiary of iStar Inc. and a Qualified Transferee
(as all of the foregoing capitalized terms are defined in the Loan Agreement (as such
term is defined in that certain Tustin Cornerstone Subordination Agreement (Phase 1)
dated June 29, 2017 made by and among the City, Delphi CRE Funding LLC and
iStar Inc. and Recorded on June 29, 2017 as Instrument No. 2017000270826). To
Developer's Knowledge. there are no defaults by Developer or any Permitted
Mortgagee under such loan documents, nor any facts which now, or after the giving of
notice or the passage of time, or both, would constitute a default thereunder by either
Developer or such Permitted Mortgagees or would entitle any party thereto to exercise
any of its rights or remedies under such loan documents, or any of them. The proceeds
of the Loan have been and will continue to be used solely to finance the acquisition of
the Phase 1 Property and/or construction of the Phase 1 Improvements and for
associated costs and expenses that directly relate to the Project (including financing
costs) and for no other purpose.
c. To Developer's Knowledge, no circumstance has occurred which could be reasonably
expected to prevent or materially impair Developer's ability to Complete the Phase I
Improvements.
d. The Amended DDA and the Other Agreements which have been executed and
delivered prior to the Second Amendment Effective Date 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 Developer to any other Person.
e. To Developer's Knowledge, (i) there are no Defaults of the City under the Amended
DDA, and no defaults of the City under the Other Agreements which have been
executed and delivered prior to the Second Amendment Effective Date, nor any facts
which now, or after the giving of notice or the passage of time, or both, would constitute
a Default under the Amended DDA or a default under such Other Agreements or which
Tustin Cornerstone I - Second Amendment 20 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
19
20.
would entitle Developer to then exercise any of its rights or remedies under the
Amended DDA or such Other Agreements which have been executed and delivered
prior to the Second Amendment Effective Date, or any of them, and (ii) Developer has
no claim of breach, counterclaim, lien or other offset presently existing against the City.
Notice.
Section 18.6 of the Original DDA is hereby amended to provide for the following
addresses and other information for notice to the City Manager of the City:
City: Matthew S. West, City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Fax: (714) 832-0825
Email: mwest@tustinca.org
And hereby amended to provide for the following address and other information for
Parke Miller, who is to receive copies of notices to Developer:
With a copy to: Parke Miller
Lincoln Property Company Commercial, Inc.
150 Paularino, Suite D182
Costa Mesa, CA 92626
Fax: (949) 333-2131
Email: pmiller@lpc.com
And hereby amended to provide for an additional copy of notices to Developer to be sent
as follows:
With a copy to: Eugene DelFavero
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
Email: gdelfavero@alcionventures.com
Miscellaneous.
a. Agreement Ratified. Except as specifically amended or modified herein, each and
every term, covenant, and condition of the Amended DDA as amended is hereby ratified
and shall remain in full force and effect. Each and every reference to the "Agreement" in
the Amended DDA (including, without limitation, the attachments thereto) shall be deemed
to refer to the Amended DDA as amended by this Second Amendment.
Tustin Cornerstone I - Second Amendment 21 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
b. Governing Law. This instrument shall be interpreted and construed in accordance
with the laws of the State of California.
C. Binding Agreement. This Second Amendment shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted assigns.
d. Counterparts. This Second Amendment 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 document.
(Signatures commence on followingpage)
Tustin Cornerstone I - Second Amendment 22 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
IN WITNESS WHEREOF, City and Developer have signed this Second Amendment as of the
Second Amendment Effective Date.
Dated:
ATTEST:
In
Erica N. Yasuda, City Clerk
APPROVED AS TO FORM
David Ken. _ City Attow
Armbruster Goldsmith & Delvac LLP,
Special Real Estate Counsel to the City
Amy E. Freilich
"CITY"
Matthew S. West,
City Manager
{signatures continued on following page}
Tustin Cornerstone I - Second Amendment S-1 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
"DEVELOPER"
FLIGHT PHASE 1 OWNER LLC,
a Delaware limited liability company
By
Name:��,Q��-.�k� Ccs
Title:y`�`� iQC ��a1
TJ
Dated:
Tustin Cornerstone 1- Second Amendment S-2 City of Tustin/ Lincoln Cornerstone I -
to DDA 9-3-2019 (agd) Second Amendment to DDA
ATTACHMENT 16C
FORM OF SPECIAL PHASE 2 ASSIGNMENT
PURSUANT TO SECTION 2.2.3(d)
{see attached}
Tustin Cornerstone I - Second Amendment ATTACHMENT 16C City of Tustin/ Lincoln Cornerstone I -
to DDA 9-18-2019 FINAL Second Amendment to DDA
ATTACHMENT 16C
FORM OF SPECIAL PHASE 2 TRANSFER ASSIGNMENT AND ASSUMPTION
AGREEMENT
(FOR SECTION 2.2.3(d) 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 2)
This ASSIGNMENT AND ASSUMPTION AGREEMENT (Cornerstone I—Phase 2)
("Assignment") is made as of [e], 20[o] (the "Assignment Effective Date") by and between
[FLIGHT PHASE I OWNER LLC, a Delaware limited liability company, or specify other if DDA
has been assigned] ("Transferor") and [o], a [9] ("Transferee"), 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, the
predecessor -in -interest to Transferor, entered into that certain Tustin Legacy Disposition and
Development Agreement Cornerstone I dated as of November 15, 2016, as amended by that certain
First Amendment to Tustin Legacy Disposition and Development Agreement Cornerstone I dated
as of June 20, 2017 and that certain Second Amendment to Tustin Legacy Disposition and
Development Agreement Cornerstone I dated as of , 2019 (collectively, 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 Project, 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. All
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 1 LLC
9-18-2019 FINAL
initially capitalized terms not otherwise defined in this Assignment shall have the meanings
ascribed to such terms in the DDA.
B. City and Developer have also previously entered into (a) that certain License for
Phase 2 Due Diligence dated June 29, 2017 ("License Agreement"), (b) that certain Memorandum
of Tustin Legacy Disposition and Development Agreement Cornerstone I dated as of November
15, 2016 and recorded in the Official Records against title to the Development Parcels on June
29, 2017 as Instrument No. 2017000270814 ("Memorandum of DDA") and that certain
Development Agreement by and between the City and Developer with an effective date of
December 1, 2016 and recorded in the Official Records against title to the Development Parcels
on March 30, 2017 as Instrument No.2017000128365 ("DA", and collectively with the DDA, the
Memorandum of DDA and the License Agreement, the "Documents").
C. Pursuant to the DDA, the City has previously conveyed the Phase 1 Parcel to
Transferor. Transferor owns; and now desires to convey, its right, title, and interest in and to Phase
2, the Phase 2 Project, and the Phase 2 Provisions (including the Option) to Transferee, and
Transferee desires to assume the foregoing as further set forth herein.
D. 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 Phase 2, the Phase 2
Project and the Phase 2 Provisions (including the Option) as described herein and Transferee is
assuming the foregoing all as described herein. Pursuant to this Assignment, Transferor is also
assigning to Transferee all of Transferor's right, title, and interest in and to the Documents as and
to the extent relating to the Phase 2 Property and the Phase 2 Provisions as described herein, and
Transferee is assuming the foregoing, all as described herein.
E. Pursuant to Section 2 of the DDA (including without limitation, Section 2.2.3(d) of
the DDA), a Transfer must include, among other things, the execution and delivery of an
assignment and assumption agreement. The DDA requires that certain Transfers be approved by
the City and provides the City the right to approve certain Transferees as "Optionee" under the
DDA and as "Developer" under the DDA and DA with respect to the portions of the Project so
Transferred.
F. 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 if Transferee acquires the Phase 2 Property, Transferee will develop
and use the Phase 2 Property in accordance with the requirements of the DDA, including, without
limitation, the Scope of Development and the Schedule of Performance, and the Documents.
G. 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.
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 2 LLC
9-18-2019 FINAL
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 Phase 2, the Phase 2
Project and the Phase 2 Provisions as set forth in the Documents;
(b) All rights and obligations of Transferor under the Documents with respect
to Phase 2 and the Phase 2 Project, other than the Excluded Matters (as defined in Section
2_2 of this Assignment); and
(c) All plans, specifications, maps, drawings, and other renderings owned by
Transferor and relating to the Phase 2 Property, the Phase 2 Project and the Entitlements
pertaining thereto.
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 Interests 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:
(a) All of the Assigned Interests and all of the obligations, conditions,
limitations, and restrictions imposed upon the Assigned Interests and/or the Transferor
under the Documents with respect to Phase 2, the Phase 2 Project and the Phase 2
Provisions, other than the Excluded Matters;
(b) All rights and obligations of the Transferor as "Developer" under the DDA
and DA and as "Phase 2 Developer" under the DDA, in each case with respect to Phase 2,
the Phase 2 Project and the Phase 2 Provisions, and as "Optionee" under the DDA and the
License Agreement other than the Excluded Matters;
(c) Upon and subject to the terms and provisions of the Documents, Transferee
shall pay and perform all obligations of "Developer" under the DDA and the DA and as
"Phase 2 Developer" under the DDA, in each case with respect to Phase 2, the Phase 2
Project and the Phase 2 Provisions and as "Optionee" under the DDA and the License
Agreement, including, without limitation, the following obligations: (i) if Transferee
acquires the Phase 2 Property, the obligation to construct and Complete the Minimum
Phase 2 Improvements on the Phase 2 Property in accordance with the Scope of
Development and within the time periods specified in the Schedule of Performance and the
obligation to maintain the Improvements located on the Phase 2 Property in accordance
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer3 LLC
9-18-2019 FINAL
with the requirements of the Documents and the Other Agreements; (ii) the obligation to
pay all sums required to be paid by "Developer" as set forth in the DDA and/or DA and as
"Phase 2 Developer" under the DDA, in each case in connection with the ownership and/or
development of the Assigned Interests, and as "Optionee" under the DDA and the License
Agreement;, (iii) if Transferee acquires the Phase 2 Property, the obligation to develop the
Phase 2 Property in full compliance with the DDA, the DA and the Other Agreements and
all then -existing Entitlements and the Approved Plans; and (iv) as a condition precedent to
the Phase 2 Close of Escrow, the obligation to deliver to the City a Phase 2 Guaranty in
accordance with the requirements of the DDA, including without limitation, Section 4.6 of
the DDA.
For avoidance of doubt, and without limiting the generality of the foregoing, Transferee hereby
agrees that Transferee has hereby assumed, shall be subject to, and obligated to perform in
accordance with, or otherwise comply with, the requirements of the Documents with respect to the
Assigned Interests, including without limitation, upon the Phase 2 Close of Escrow, the Right of
Repurchase and Right of Reversion with respect to Phase 2 set forth in the DDA, but specifically
excluding the Excluded Matters.
2.2 "Excluded Matters" shall mean the following matters that are excluded from the
Assigned Interests: (a)the obligations imposed with respect to Phase 2 and/or the Phase 2 Property
and Improvements set forth in the Master Declaration, the CC&Rs, the Roadway and Utility
Easement Agreement, and/or the Landscape Installation and Maintenance Agreement prior to the
Phase 2 Close of Escrow, provided that nothing in this Assignment shall preclude the requirement
of Transferee to perform the obligations imposed under each such agreement upon the owner and
developer of Phase 2 and the Phase 2 Property and Improvements, or any portion thereof, from
and after the Phase 2 Close of Escrow, and (b) the matters set forth in clauses (a), (b), (c), and (d)
of Section 3 of this Assignment.
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 of this Assignment regardless of any of the
following:
(a) the value of the Assigned Interests, Phase 2, the Phase 2 Project, and/or the
Phase 2 Property or the income to be derived from the Assigned Interests, Phase 2, the
Phase 2 Project and/or the Phase 2 Property;
(b) the existence or non-existence of any liens, easements, covenants,
conditions, restrictions, claims, or encumbrances affecting the Assigned Interests, Phase 2,
the Phase 2 Project and/or the Phase 2 Property (including without limitation any of the
foregoing arising from. or related to the Entitlements or any of the Documents);
(c) the suitability of the Assigned Interests, Phase 2, the Phase 2 Project and/or
the Phase 2 Property for any and all future development, uses, and activities which
Transferee may conduct or Transferor or any prior Developer under the DDA or the
Documents may have conducted thereon, including, without limitation, the development
of the Project as described in the Documents and this Assignment;
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 4 LLC
9-18-2019 FINAL
(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 Interests, Phase 2, the Phase 2 Project, and/or the Phase 2 Property;
(g) the manner, quality, state of repair, or lack of repair of the Assigned
Interests, Phase 2, the Phase 2 Project, and/or the Phase 2 Property;
(h) the nature, quality, or condition of the Assigned Interests, Phase 2, the Phase
2 Project, and/or the Phase 2 Property, including, without limitation, water, soil and
geology;
(i) the compliance of or by the Assigned Interests, Phase 2, the Phase 2 Project,
and/or the Phase 2 Property and/or their respective 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;
(j) the manner or quality of the construction or materials, if any, incorporated
into any part of the Phase 2 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 Phase 2 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 Interests, Phase 2, the Phase
2 Project, and/or the Phase 2 Property and the transactions contemplated in the Documents
and/or this Assignment;
(m) the conformity of the existing improvements on the Phase 2 Property, the
Development Parcels, and/or at Tustin Legacy, if any, to any plans or specifications
therefor;
(n) compliance of the Assigned Interests, Phase 2, the Phase 2 Project, and/or
the Phase 2 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;
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer5 LLC
9-18-2019 FINAL
(o) the deficiency of any undershoring or of any drainage to, on, or from the
and/or the Phase 2 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 Installation and Maintenance Agreement
and the property covered by the Roadway and Utility Easement Agreement and the
adjoining City Park and any improvements thereon;
(q) the fact that all or a portion of the Phase 2 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 Interests, Phase 2, the Phase 2 Project, and/or the Phase 2 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 Interests, Phase 2, the Phase 2 Project, and/or the Phase 2 Property or any
portion thereof under the 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.
Continuinn Liability under the DDA.
Notwithstanding anything to the contrary set forth herein, Transferor shall not be released
from: (a) any obligations binding on the Phase 1 Developer or the owner of the Phase 1 Property
with respect to the Phase 2 Property expressly set forth in the License Agreement for Site
Development and/or the License Agreement (Staging and Construction Parking), (b) any
obligations binding on the Phase 1 Developer or the owner of the Phase 1 Property with respect to
the Phase 2 Property or the adjoining roadways or landscaping expressly set forth in the Quitclaim
Deed for Phase 1, the Special Restrictions for Phase 1, the Master Declaration, the CC&Rs, the
Roadway and Utility Easement Agreement, and/or the Landscape Installation and Maintenance
Agreement, in each case in accordance with the terms and conditions of such agreements, (c) the
provisions of Section 4.3.3 and Section 15.3 of the DDA relating to the forfeiture of all Cash
Option Payments to the City, the obligations of the Working Developer to deliver a bill of sale to
the City for the Reimbursable Phase 2 Improvements, and the potential forfeiture of payment of
the Option Credit Remainder to the Working Developer in accordance with Section 4.3.3(h) of the
J?DA, (d) obligations under the DDA arising prior to the Assignment Effective Date (including
Ongoing Matters arising prior to the Assignment Effective Date), and (e) any other matters (if any)
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 6 LLC
9-18-2019 FINAL
with respect to Phase 2, the Phase 2 Project, the Phase 2 Property and/or the Phase 2 Provisions
for which Transferor remains liable pursuant to Section 1.2.4(a) of the DDA.
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, this Assignment.
No Waiver or Modification.
Nothing contained in this Assignment shall modify in any way any other provisions of the
Documents and/or the Entitlements. Transferee acknowledges that it is taking title to and is
assuming the Assigned Interests subject to, among other things,.the rights of the City as described
in the 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 and qualifications to perform as Transferee
pursuant to this Assignment and the Documents to construct and complete the Phase 2 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
Documents and understands the process and requirements associated with projects such as the
Phase 2 Project described herein.
7.2 Transferee's acquisition of the Assigned Interests, planned development of the
Phase 2 Project, and its other undertakings pursuant to this Assignment and the Documents are for
the purpose of advancing the timely development of the Phase 2 Parcel (and following exercise of
the Option and acquisition of the Phase 2 Parcel by Transferee, for the purpose of developing the
Phase 2 Parcel) in accordance with the Schedule of Performance attached to the DDA and is not
for speculation or land holding.
7.3 Transferee is a [e], duly organized, validly existing, and in good standing under the
laws of the State of [*], and 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 Documents
make such qualification necessary.
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 7 LLC
9-18-2019 FINAL
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 Documents) all requisite power and authority required to enter into this
Assignment and the instruments referenced in this Assignment and the Documents, to assume and
perform the obligations of "Developer" under the DDA and the DA and as "Phase 2 Developer"
under the DDA, in each case with respect to the Phase 2 Provisions, the Phase 2 Project and the
Phase 2 Property and as "Optionee" under the DDA and the License Agreement, to consummate
the transaction contemplated by this Assignment and the Documents, to take any steps
contemplated by this Assignment and the Documents, and to perform its obligations under this
Assignment and the Documents.
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 Documents) all required consents in connection
with entering into this Assignment and the instruments and documents referenced in this
Assignment and the Documents, assuming and performing the obligations of "Developer" under
the DDA and the DA and as "Phase 2 Developer" under the DDA, in each case with respect to the
Phase 2 Provisions, the Phase 2 Project and the Phase 2 Property and as "Optionee" under the
DDA and the License Agreement, 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 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 and/or the 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 and 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 None of (a) the execution or delivery by Transferee of this Assignment or, when
required by the terms of the DDA, the Other Agreements with respect to Phase 2; (b) the incurring
of the obligations set forth in this Assignment or the Documents and the certificates, declarations,
and other documents referenced in this Assignment and the Documents which are, or are to be,
incurred by Transferee; (c) the consummation by Transferee of the transactions contemplated in
this Assignment or the Documents which are, or are to be, consummated by Transferee; and (d)
compliance by Transferee with the terms of this Assignment and the documents referenced in this
Assignment or the Documents with which Transferee is obligated to comply 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
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 8 LLC
9-18-2019 FINAL
instruments to which Transferee or any of its members are a party and which affect the Assigned
Interests or the transactions contemplated by this Assignment or the 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 Documents set forth herein 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 Documents. In making such investigation and assessment, Transferee has been provided
with, or pursuant to the License Agreement is entitled to be provided with, access to any persons,
records, or other sources of information which it deems appropriate to review and will have
completed such investigation and assessment prior to the Phase 2 Close of Escrow. 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 Assigned Interests, Phase 2, the Phase 2 Project, and/or
the Phase 2 Property, the compliance or non-compliance of the Phase 2 Property or any portion
thereof with Environmental Laws or the existence or non-existence of Hazardous Materials in
relation to the Phase 2 Property or any portion thereof or otherwise.
7.11 [{For Transfers to Initial Phase 2 Developer:} To Transferee's knowledge, there
are no adverse conditions, circumstances, pending or threatened litigation, governmental actions,
or other conditions which could prevent or materially impair Transferee's ability to commence or
carry out the Phase 2 Pre -Development Activities as contemplated by the terms of this Assignment
and the Documents.] [{For Transfers other than to Initial Phase 2 Developer.) To Transferee's
knowledge, there are no adverse conditions, circumstances, pending or threatened litigation,
governmental actions, or other conditions which could prevent or materially impair Transferee's
ability to develop the Phase 2 Parcel and the Phase 2 Project as contemplated by the terms of this
Assignment and the Documents.]
7.12 Except as set forth in this Assignment and the 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 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.
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 9 LLC
9-18-2019 FINAL
7.14 [{For Transfer to Initial Phase 2 Developer only.) Prior to the Assignment
Effective Date, Transferee has satisfied all applicable requirements of Section 2.2.3(d) of the DDA,
including without limitation, by providing to the City all information required by Section 2.2.3(d)
of the DDA to be submitted to the City as a condition to the Transfer described in this Assignment.
All delivered information remains true and correct as of the Assignment Effective Date and has
not been amended or modified. / {For Transfers other than to Initial Phase 2 Developer:} 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 Documents
and all other items required to be satisfied under the DDA in the form of the information specified
in Section 2.2.3(d) 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
and all delivered 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 Documents and as required by the DDA. ]
7.15 Prior to the Assignment Effective Date, and as a condition to the consent of the City
to the Assignment, Transferee has executed and delivered that certain [operating agreement of
Transferee by and between , dated , 20 ] and [add if applicable:
that certain [contribution/assignment/ agreement by and between , dated
, 20 ] (the "Transfer Document[s]"), a true and correct copy of [each of] which
has been delivered by Transferor to the City and approved by the City pursuant to the rights granted
to the City in the DDA. The Transfer 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 Transfer
Document[s or any one thereof] and shall not materially modify or amend or terminate [the/any]
Transfer Document, without the prior consent of City in its sole discretion where required by this
Assignment or the DDA. Transferee acknowledges that, notwithstanding the execution by
Transferee and Transferor of the Transfer Document[s], the City has the right, prior to the exercise
by Optionee of the Option and prior to the Phase 2 Close of Escrow, in its sole discretion to
approve, among other things, the Phase 2 Joint Venture Agreement. Nothing in this Assignment
or the Acknowledgment and Consent by the City of Tustin attached hereto releases Transferee or
the Phase 2 Developer from the obligation to satisfy each and every requirement of
Section 4.3.3(d) (inclusive of clauses (i) through (viii) thereof) of the DDA as a condition
precedent for the benefit of the City to each of the exercise of the Option by the Phase 2 Developer
and the Phase 2 Close of Escrow or shall be deemed a waiver by the City of its right to approve,
in its sole discretion, each of the matters described in Section 4.3.3(d) (inclusive of clauses i
through (viii) thereof) of the DDA) or any other matters as further set forth in Section 4.6 of the
DDA. Delivery of the foregoing documents by 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.
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer1 O LLC
9-18-2019 FINAL
7.17 [Except asset 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 Phase 2 Property, is or may become
subject, which could materially affect the ability of Transferee to carry out its obligations
hereunder.
7.1$ 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 the Phase 2
Close of Escrow until the termination of the DDA with respect to the Assigned Interests, Phase 2,
the Phase 2 Project, and the Phase 2 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 7 or elsewhere in this Assignment
or the 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 the Phase 2 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 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 Documents
or development of the Phase 2 Project or the transactions identified in this Assignment and the
Documents.
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 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, and
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 Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 11 LLC
9-18-2019 FINAL
9.3 Binding Effect. 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 (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 e-mail) 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 Phase 2 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 Documents and/or the Entitlements with respect to the Phase
2 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:
[0]
[legal counsel]
[signature page follows]
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer12 LLC
9-18-2019 FINAL
Each of Transferor and Transferee has caused this Assignment to be duly executed by its
duly authorized officer as of the Assignment Effective Date.
Dated:
Dated:
"TRANSFEROR"
[ 1,
a
By:
Name: _
Title:
"TRANSFEREE"
1 1,
a
By:
Name:
Title:
By:
Name:
Title:
{City consent on next page}
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 13 LLC
9-18-2019 FINAL
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 the City of Tustin;
(c) Agrees that [insert name of Transferee], a [*] (the assignee in the
Assignment) shall be deemed by the City to be the [ "Optionee "/"Phase 2 Developer'] under the
DDA;
(d) 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; and
(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 DDA and the License Agreement with respect to the Assigned
Interests, Phase 2 or the Phase 2 Project, shall be delivered to Transferee at such addresses.
(f) This Consent by the City constitutes the consent required pursuant to
Section 2.2.3(d) of the DDA with respect to a Transfer to a Transferee and constitutes the City's
acknowledgment that the requirements of Section 2.2.3(d) have been satisfied with respect to the
Transfer described in this Assignment.
(g) With respect to Phase 2, the Phase 2 Project and the Phase 2 Provisions,
Transferor is hereby released from the obligations of "Developer" under the DDA and the DA and
as "Phase 2 Developer" under the DDA, and as "Optionee" under the DDA and the License
Agreement, except in each case for the matters set forth in Section 3 of this Assignment (the
obligations for which are retained by Transferor).
(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 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 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 Documents or a waiver
by the City of the provisions of the Documents, which remain binding on the City, Transferor, and
Transferee in accordance with their respective terms. In the event of any inconsistency between
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 14 LLC
9-18-2019 FINAL
agreements between the Transferor and Transferee on the one hand and any provision of the
Documents on the other hand, the provisions of the Documents shall prevail in all cases as they
concern the rights and obligations of the City.
{Note: The City shall have no obligation to execute this consent or to consent to the Assignment
described herein unless and until Transferor shall have provided evidence to the City that the
Permitted Mortgagee of Phase l has released the lien of its Permitted Mortgage from the
Assigned Interests and that the Assigned Interests are not in any way encumbered by or subject
to the terms of the loan documents governing such Permitted Mortgage for Phase 1.}
{signatures on following page}
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 15 LLC
9-18-2019 FINAL
CITY:
CITY OF TUSTIN
Dated: , 20 By:
Matthew S. West
City Manager
ATTEST:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM:
By:
David Kendig, City Attorney
Armbruster Goldsmith & Delvac LLP,
Tustin Special Real Estate Counsel
By:
Amy E. Freilich
Tustin Cornerstone I - DDA Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner
Assignment for Special Phase 2 Transfer 16 LLC
9-18-2019 FINAL
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 16C - ATTACHMENT 16C
Assignment for Special Phase 2 Transfer 17
9-18-2019 FINAL
(Seal)
City of Tustin/Flight Phase I Owner 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
Tustin Comerstone I - DDA Att 16C - ATTACHMENT 16C
Assignment for Special Phase 2 Transfer 18
9-18-2019 FINAL
(Seal)
City of Tustin/Flight Phase I Owner 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 Att 16C - ATTACHMENT 16C City of Tustin/Flight Phase I Owner LLC
Assignment for Special Phase 2 Transfer 19
9-18-2019 FINAL
EXHIBIT "A"
Legal Description of the Development Parcels
[Insert Legal Description]
Tustin Cornerstone I - DDA Att 16C -
Assignment for Special Phase 2 Transfer
9-18-2019 FINAL
ATTACHMENT 16C
Exhibit "A"
City of Tustin/Flight Phase I Owner
LLC
EXHIBIT "B"
Leial Description of the Phase 2 Parcel
[Insert Legal Description of Phase 2 Parcel]
Tustin Cornerstone I - DDA Att 16C -
Assignment for Special Phase 2 Transfer
9-18-2019 FINAL
ATTACHMENT 16C
Exhibit "B"
City of Tustin/Flight Phase I Owner
LLC