HomeMy WebLinkAbout08 SECOND AMENDMENT TO THE DDA WITH BROOKFIELD HOMES (2C AND 8) DocuSign Envelope ID: B962D7F6-4468-4F9C-A8F6-FAE66D426929
Agenda Item 8
Reviewed: DS
1W AGENDA REPORT City Manager ��
Finance Director N/A
MEETING DATE: DECEMBER, 21, 2021
TO: MATTHEW S. WEST, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: SECOND AMENDMENT TO THE DISPOSITION AND DEVELOPMENT
AGREEMENT (DDA) WITH BROOKFIELD HOMES SOUTHERN
CALIFORNIA LLC, FOR DISPOSITION PACKAGE 2C AND 8 AT TUSTIN
LEGACY
SUMMARY:
Request for authorization to approve the Second Amendment to the Disposition and
Development Agreement (DDA) with Brookfield Homes Southern California LLC
(Brookfield) for portions of disposition parcels 2c and 8 for the development of a for-sale
residential community consisting of 400 homes on approximately 25.4 net acres at Tustin
Legacy.
The project, called "The Landing", consists of three home types: single-family detached
homes (Circ), townhomes (Luna), and flats (Terra). Brookfield is seeking City approval
to create single purpose entities for each of the three home types for the purposes of
construction, marketing and sales. This would involve transfer of the homesites by type
to the three single purpose entities (Builder Transferees)which are wholly owned affiliates
of Brookfield. All obligations under the DDA would remain unchanged and both Brookfield
and the Builder Transferees would be jointly and severally liable for the terms of the
agreement and Brookfield is not released from such obligations and required performance
under the DDA.
RECOMMENDATION:
Authorize the City Manager to execute the Second Amendment to the DDA between
Brookfield 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.
DocuSign Envelope ID: B962D7F6-4468-4F9C-A8F6-FAE66D426929
Agenda Report— DDA 2nd Amendment, Brookfield Southern California Homes LLC
December 21, 2021
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FISCAL IMPACT:
The recommended Second Amendment to the DDA would not have a fiscal impact on the
City. Close of escrow has occurred and Brookfield would remain liable for any potential
future financial obligations such as the Profit Participation Agreement.
Negotiation costs, such as legal, third party consultants and staff costs incurred by the
City associated with this Second Amendment are reimbursed by Brookfield under the
terms of the existing DDA.
CORRELATION TO THE STRATEGIC PLAN:
This action correlates to the City's Strategic Plan for Economic and Neighborhood
Development (Goal A).
BACKGROUND:
On December 3, 2019, the City Council reviewed the entitlement application for the
Brookfield project, considering the Planning Commission's recommendation of approval,
and approved the project.
On December 17, 2019, the City Council reviewed the DDA and authorized the City
Manager to execute the DDA with Brookfield Homes Southern California LLC. On June
2, 2021 , the City Council reviewed the First Amendment to the DDA and authorized the
City Manager to approve the amendment.
Brookfield acquired the property at close of escrow on September 15, 2021. Brookfield
continues to make progress on construction and anticipates model openings in the
second quarter of 2022.
SECOND AMENDMENT TO THE DDA:
Builder Transferee
As is the case with many residential real estate developers, it is the practice of
Brookfield to form single purpose entities to own the properties to be developed prior
to the commencement of vertical construction, marketing and sale of residences to
the home buying public. Consistent with this practice, Brookfield requests the City's
consent to the transfer of portions of the property to segregate ownership to the three
entities formed for this purpose by Brookfield for its three product types. Brookfield
anticipates initial home sales in the second quarter of 2022. This Second
Amendment to the DDA is required to modify relevant provisions of the DDA in order
to allow the proposed transfer to three Brookfield developer affiliates rather than a
single Brookfield developer affiliate subject to the City's consent.
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Agenda Report— DDA 2nd Amendment, Brookfield Southern California Homes LLC
December 21, 2021
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The three Builder Transferees are as follows:
1 . Brookfield Tustin Homes LLC (Circ — single family detached)
2. Brookfield Tustin Towns LLC (Luna — townhomes)
3. Brookfield Tustin Metro LLC (Terra — flats)
Brookfield will convey all homesites to the Builder Transferees at one time. The
assigned property/rights would not be allowed to be divided further as only three
Builder Transferees corresponding to the three home products qualify for transfer.
The City would also retain the exclusive right to determine compliance with the
required criteria outlined in the amended DDA in order to approve any Builder
Transferee.
Developer Obligations
Brookfield would remain as the developer and owner of the common area and
infrastructure thereon until such time of completion and transfer to the Home Owners
Association. The Builder Transferees would assume the obligation to construct the
vertical improvements, meaning the home buildings themselves, on their respective
homesites. Brookfield will remain the responsible developer and upon the transfer,
the Builder Transferees and Brookfield, would remain jointly and severally liable for
fulfilling obligations under the DDA.
DISCUSSION:
These proposed transfers are common in the homebuilding business and consistent with
Brookfield's standard business practices and are not intended to relieve Brookfield from
any responsibility or liability to the City under the DDA, other agreements or the Guaranty.
Further, because these entities are 100% owned by Brookfield there will be no change in
the persons responsible for carrying out the development of the Project as a result of the
transfers.
While the Builder Transferees are an affiliate of Brookfield and wholly owned by the same
parent company, Brookfield would remain the responsible developer and the City will be
entitled to look to Brookfield to fully comply with the obligations of the DDA as though
there had not been a transfer (and Brookfield shall remain fully liable under the
agreement).
The City would retain all of its rights under the existing DDA and have the ability to
approve or deny any Builder Transferee in its sole discretion. Staff recommends for
Council consideration approval of the Second Amendment to the DDA and the proposed
transfer to the Builder Transferees.
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Agenda Report— DDA 2nd Amendment, Brookfield Southern California Homes LLC
December 21, 2021
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DSigned by: DocuSigned by:
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Director of Economic Development Manager of Development Services
Attachment: Second Amendment to the DDA between City of Tustin and Brookfield
Homes Southern California LLC
DocuSign Envelope ID: B962D7F6-4468-4F9C-A8F6-FAE66D426929
SECOND AMENDMENT TO TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PORTIONS OF DISPOSITION PARCELS 2C AND 8
This SECOND AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT FOR PORTIONS OF DISPOSITION PARCELS 2C
AND 8 ("Second Amendment") is entered into as of December , 2021 ("Second Amendment
Effective Date") by and between the CITY OF TUSTIN (as more fully defined in the DDA
(defined below), "City") and BROOKFIELD HOMES SOUTHERN CALIFORNIA LLC, a
Delaware limited liability company(as more fully defined in the DDA,"Initial Developer"). The
City and Developer are sometimes referred to herein individually as a"Party" and collectively as
the "Parties".
RECITALS
A. The City and Initial Developer entered into that certain Tustin Legacy Disposition
and Development Agreement for Portions of Disposition Parcels 2C and 8 dated as of December
17, 2019 ("Original DDA") as amended by that certain First Amendment to Tustin Legacy
Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8 dated as of
June 2, 2020 ("First Amendment", and collectively with the Original DDA, "Prior DDA")
pursuant to which, among other things, the City agreed to sell and Initial Developer agreed to
purchase the Property(as defined in the DDA). Initially capitalized terms not defined herein shall
have the respective meanings assigned to such terms in the Prior DDA and wherever in this Second
Amendment reference to a Section of the Prior DDA is made, such reference shall be to the text
of that Section in the Original DDA as the text of that Section has been amended, if at all, by the
text of the First Amendment. The DDA as amended by this Second Amendment is referred to
herein as the "Agreement".
B. The Close of Escrow under the Prior DDA took place and the Property was
conveyed to Initial Developer on September 15, 2021.
C. The Project contemplates development of three product types: Cira(single family),
Luna (townhomes) and Terra (flats). In order to create single purpose entities for purposes of
vertical construction, marketing and sale of each of these product types residences to the home
buying public, Initial Developer has requested the City's consent to the transfer of portions of the
Real Property to the following three entities formed for this purpose by Brookfield for its three
product types, namely:
1. Brookfield Tustin Homes LLC, a Delaware LLC (Cira product type);
2. Brookfield Tustin Metro LLC, a Delaware LLC (Terra product type); and
3. Brookfield Tustin Towns LLC, a Delaware LLC (Luna product type).
The identity and location of the Lots to be conveyed to each of the Builder Transferees
(defined below)is depicted on Attachment 17D to the Agreement,which is attached to this Second
Amendment as Schedule 4.
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D. It is the intent of Initial Developer to Transfer the designated Lots to each Builder
Transferee pursuant to a single Builder Transferee Assignment Agreement, in order that the
Builder Transferee will construct, or cause construction of, the Vertical Improvements upon such
Lots.
E. Initial Developer and the City have entered into this Second Amendment to
memorialize the concepts described above by modifying relevant provisions of the Agreement as
further set forth below and to authorize the Transfers contemplated by Initial Developer. Initial
Developer acknowledges on behalf of itself and each Builder Transferee that, upon execution of
each Builder Transferee Assignment Agreement(defined below), each Builder Transferee shall be
deemed to have consented to be bound by the Prior DDA as amended by this Second Amendment.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals, which are hereby
incorporated in the operative provisions of this Second Amendment by this reference, and other
good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,the
Parties further agree as follows:
1. Modifications to Section 2.1, 2.2.1, 9.7 and 10.3. In Sections 2.1; 2.2.1(c) 9.7 and 10.3
of the DDA, all references to Section 2.2.3(b)are hereby deleted in their entirety and replaced with
a reference to Section 2.2.3(a).
2. Section 2.2.3.
2.1 Section 2.2.3. The first paragraph of Section 2.2.3 of the DDA (before clause (a)) is
hereby deleted in its entirety and replaced with the following:
"2.2.3 Provisions Anolicable to Transfers and Transfers of Control
Other than Permitted Transfers. Prior to Recording of a Certificate of
Compliance, with respect and as a condition precedent to every Transfer and/or
Transfer of Control that is not a Permitted Transfer pursuant to Section 2.2.2,
Developer shall comply with the requirements of this Section 2.2.3 and the
provisions of Section 4.6 applicable to such Transfer or Transfer of Control.
Prior to any Transfer or Transfer of Control governed by this Section 2.2.3,
Developer shall obtain the prior written consent of the City to such Transfer or
Transfer of Control, which consent shall be granted or denied in the City's sole
discretion. The City's right of consent shall include the right of the City to
approve the Transferee and the Controlling Person of Transferee with respect
to a Transfer, and the Controlling Person of Developer or Developer Affiliate,
in the case of a Transfer of Control and the right to approve the proposed Equity
Investor, if any, and the proposed Guarantor as further described in Section 4.6.
Notwithstanding any other provision of this Agreement, Developer shall not,
except for Permitted Transfers described in Section 2.2.2(b), (c) and (d) or as
provided by Section 2.2.3(bl,Transfer any portion of its interest in the Property,
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the Project, the Improvements or this Agreement or Developer's rights and
obligations under this Agreement less than the entirety thereof."
2.2 Section 2.2.3(a) of the DDA is hereby amended by deleting the following text "In
order to provide the City with information necessary to inform its right to consent to a Transfer or
Transfer of Control pursuant to this Section, Developer shall provide to the City at least twenty (20)
Business Days prior to the date of any proposed or Transfer of Control:" (comprising all of the text
in clause a prior to and including the colon) and replacing it with the following:
"(a) The provisions of Section 2.2.3(a) shall apply with respect to Transfers of
the entirety of Developer's interest in this Agreement, the Project, the
Improvements and the Property and to Transfers of Control by Developer.
Upon a Transfer approved by the City pursuant to this Section 2.2.3(a) of all of
Developer's interests in this Agreement,the Project,the Improvements and the
Property to a Transferee approved by the City in its sole discretion and with the
satisfaction of all of the conditions to such Transfer set forth in this
Section 2.2.3(al pursuant to an Assignment Agreement in which Transferee has
assumed in writing all of Developer's obligations under this Agreement and the
Other Agreements in accordance with pursuant to an Assignment Agreement
meeting the requirements of Section 4.6.6(b)(i), Developer shall be released
from any of its obligations under this Agreement and the Other Agreements
arising from and after the date of such Transfer; provided that,in no event shall
Developer be released with respect to (i) the Ongoing Matters and further, the
Transfer of any Home to a Homeowner shall not release Developer from any of
its obligations under this Agreement and(ii) any Transfer approved by the City
pursuant to Section 2.2.3(b). If Transferor and Transferee satisfy the
requirements of this Section 2.2.3(a) with respect to a Transfer as determined
by the City in its sole discretion, the City shall execute a consent to assignment
and release in the form of the consent attached to the Assignment attached as
Attachment 17A of this Agreement. In order to provide the City with
information necessary to inform its right to consent to a Transfer or Transfer of
Control pursuant to this Section, Developer shall provide to the City at least
twenty (20) Business Days prior to the date of any proposed Transfer of
Control:"
2.3 Section 2.L3(b) of the DDA is hereby deleted in its entirety and replaced with the
following:
"(b) The following shall apply with respect to Transfers of a portion of
Developer's interests in the Property,the Project or this Agreement to a Builder
Transferee. If Transferor and Transferee satisfy the requirements of Section
2.2.3(b) with respect to a Transfer as determined by the City in its sole
discretion, the City shall execute a consent to assignment in the form of the
consent attached to the Builder Transferee Assignment Agreement attached as
Attachment 17C of this Agreement. Except as provided in this Section, or in
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Sections 2.2.2(b), (c) or (d), 16.3 or 16.4, Developer shall not Transfer any
partial interest in the Property, the Project or this Agreement unless such
Transfer meets each of the following requirements or unless otherwise agreed
by the City in its sole discretion: (A) the Transferee shall be a Builder
Transferee and shall be a Developer Affiliate; (B)the portion of the Property to
be Transferred ("Transferred Property") shall be comprised of only the Lots
listed on Attachment 17D as to be Transferred to the Builder Transferee; (C)
Developer and Builder Transferee shall provide information indicating that the
Builder Transferee satisfies the requirements set forth in Section 2.2.3(a)(i) and
(v) at least 20 Business Days prior to the Transfer. Together with such other
relevant information as the City may request pursuant to Section 2.2.3(a (vi);
(D) Developer shall assign and Builder Transferee shall assume those rights and
obligations of Developer related to the development of Vertical Improvements
on Lots described on Attachment 17D to this Agreement, and those additional
corresponding rights and obligations under this Agreement and the Other
Agreements as set forth in the form and substance of the Builder Transferee
Assignment Agreement attached to this Agreement as Attachment 17C; (E)
Builder Transferee,by instrument substantially in the form and substance of the
instrument attached hereto as Attachment 17C, or otherwise in a form
acceptable to the City in its sole discretion, acknowledged and Recorded, shall
assume from and after the date of such Transfer the particular rights of
Developer under this Agreement and the Other Agreements with respect to
development of the Vertical Improvements on the Transferred Property
corresponding to the Transferred Property and shall be jointly and severally
responsible for all other obligations under the DDA and the Other Agreements
(other than the obligation to construct Vertical Improvements on portions of the
Property not owned by it), as further provided in such Attachment 17C, (F)
Builder Transferee shall have agreed in writing for the benefit of Developer and
the City that Builder Transferee's development of the Property acquired shall
be in full compliance with the then-existing Entitlements, the Approved Plans
and the plans and specifications prepared by Developer, without modification;
(G)Initial Developer shall be jointly and severally liable for and not be released
from the obligations of "Developer" under this Agreement and the Other
Agreements even if any such obligations are expressly assumed by the
Transferee under the assignment instrument and all such obligations shall
remain the obligations of Initial Developer; (H) Builder Transferee shall have
been approved by the City in its sole discretion, and (I) Initial Developer and
the Builder Transferee shall have caused Guarantor to issue the Amended and
Restated Guaranty (Unsecured Obligations) in the form of Attachment 14D to
this Agreement and the Amended and Restated Guaranty (Secured Obligations)
in the form of Attachment 14E to this Agreement and shall have complied with
all requirements set forth in Section 4.6 applicable to Transfers; (J) Initial
Developer shall have executed and delivered (1) an Amendment to Profit
Participation Agreement in the form and substance of the instrument attached
to this Agreement as Attachment 31 and(2)an amendment to the Memorandum
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of DDA in the form and substance of the instrument attached to this Agreement
as Attachment 32; and (K) there shall not be more than three Builder
Transferees with ownership in the Real Property at any time. For avoidance of
doubt, it is hereby agreed that Builder Transferee shall be subject to all of the
requirements of this Agreement, including, without limitation, the restrictions
on Mortgages set forth herein, with respect to the portions of the Property
acquired by it."
3. Modification to Section 2.3 of the DDA. The text of Section 2.3 of the DDA is hereby
deleted in its entirety and replaced with the following:
"Without limiting the generality of the foregoing, a failure (a) by Developer to
comply with the requirements of this Article 2 with respect to any Transfer or
Transfer of Control or (b)by any Transferee or Builder Transferee to execute
the form of assignment and assumption agreement required by Section 2.2.3, if
applicable, or to execute and deliver,or cause a Transferee,its Approved Equity
Investor, if applicable, or Guarantor to execute and deliver, each of the
certificates and other documents required by Section 2.2 and Section 4.6
required in connection with a Transfer shall in each case be a Material Default
under this Agreement, subject to the provisions of Section 14.2.3, but with no
extension on account of Force Majeure Delay and, in such event, the City shall
have all remedies available to it at law and in equity, including those specified
in this Agreement and specifically including the right to exercise the Right of
Purchase and/or the Right of Reversion, as applicable, in accordance with
Article 16 of this Agreement."
4. Modification to Section 4.6 of the DDA.
4.1 Section 4.6.2(b)(i) of the DDA is hereby amended by replacing the phrase "(or if a
Transferee, in the Assignment Agreement)" with the phrase "(or if a Transferee in the Assignment
Agreement or if a Builder Transferee, in the Builder Transferee Assignment Agreement, as
applicable)"
4.2 Section 4.6.6(bl of the DDA is hereby deleted in its entirety and replaced with the
following:
"(b) Prior to or concurrently with, and as a condition to the proposed Transfer
or Transfer of Control (1)pursuant to Section 2.2.2(a) or 2.2.3(a),the proposed
Transferor and Transferee shall execute and deliver to each other and the City
an Assignment and Assumption Agreement in substantially the form and
substance of the Assignment Agreement attached hereto as Attachment 17A, or
in other form and substance approved by the City in its sole discretion
("Assignment Agreement") and(2)pursuant to Section 2.2.3(bl, the proposed
Transferor and Transferee shall execute and deliver to each other and the City
an Assignment and Assumption Agreement in substantially the form and
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substance of the Builder Transferee Assignment Agreement attached hereto as
Attachment 17C, or in other form and substance approved by the City in its sole
discretion ("Builder Transferee Assignment Agreement"), in each case
acknowledged and Recorded pursuant to which Transferor shall assign and
Transferee shall expressly assume for itself and its Successor Owners(and prior
to Close of Escrow, its successors and assigns), and for the benefit of the City,
all the rights and obligations of Developer under this Agreement (and, if then
executed, the Other Agreements) arising from and after the Transfer Date and
the proposed Transferee shall agree to be subject to all the conditions and
restrictions to which Developer is subject by reason of this Agreement and the
Other Agreements and to provide the representations and warranties for the
benefit of the City contained in the Assignment Agreement;"
4.3 Section 4.6.6(b)(i) of the DDA is hereby deleted in its entirety and replaced with the
words "Intentionally Deleted".
5. Modification to Section 8.5.2 of the DDA. In Section 8.5.2 of the DDA the phrase
"Assignment Agreement"is hereby deleted and replaced with the phrase"Assignment Agreement
or Builder Transferee Assignment Agreement, as applicable" and the last sentence of the Section
is hereby deleted in its entirety and replaced with the following:
"The covenants of Developer pursuant to this Section and the representations in Section 3.1
or any such Assignment Agreement or Builder Transferee Assignment Agreement represent
material consideration to the City."
6. Modifications to Attachment 1 of the DDA.
6.1 New Terms. The following terms are added, in the appropriate alphabetical order,
to the existing list of definitions in Attachment I to the DDA:
""Additional Declaration" shall mean that certain Declaration of Restrictions
recorded in the Official Records against title to the Property on September 15,2021
as Instrument No. 2021000576023."
""Amended Memorandum of DDA" shall mean a memorandum of record of the
Second Amendment to DDA to be Recorded against the Property substantially in
the form and substance of the memorandum attached to the Agreement as
Attachment 32 to reflect the execution of the Second Amendment to DDA."
""Builder Transferee" shall mean one of the three Developer Affiliates listed on
Attachment 17D to the Agreement and approved by the City as a Transferee
pursuant to the terms of the Second Amendment to DDA and a Builder Transferee
Assignment Agreement to which the City has consented."
""Builder Transferees" shall mean the following Developer Affiliates,
collectively: Brookfield Tustin Homes LLC with respect to the Cira product type;
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Brookfield Tustin Metro LLC with respect to the Terra product type and Brookfield
Tustin Towns LLC with respect to the Luna product type."
""Builder Transferee Assignment Agreement" shall mean the assignment and
assumption agreement entered into by Initial Developer and each Builder
Transferee in the form and substance of the agreement attached to this Second
Amendment as Attachment 17C and attached to this Second Amendment as
Schedule 3."
`"`Guaranty"means a guaranty made by one or more Guarantors and to which the
City is a named beneficiary, which (a) prior to the execution of the Builder
Transferee Assignment Agreement shall be in substantially the form and substance
of the guaranty attached as Attachment 14A and(b) subsequent to the execution of
the Builder Transferee Assignment Agreements (or any of them) shall be in
substantially the form and substance of both (i) the Amended and Restated
Guaranty (Unsecured Obligations) in the form of Attachment 14D to this
Agreement and (ii) the Amended and Restated Guaranty (Secured Obligations) in
the form of Attachment 14E to this Agreement and in all cases shall meet any
additional requirements established in this Agreement, including Section 4.6.5."
""Second Amendment Effective Date" shall mean the date set forth in the
preamble to the Second Amendment to DDA."
""Second Amendment to DDA" and "Second Amendment" shall mean that
certain Second Amendment to the DDA executed by Developer and City."
6.2 Modified Terms. The definitions of the following terms are hereby deleted in their
entirety and replaced by the following:
""Additional Liability Period" shall mean (a) with respect to any Developer, for
the period of ownership of its Successor Owners unless Developer has been
released with respect to such obligations pursuant to Section 2.2.3(al, (b)with
respect to Responsible Developers, for the period of ownership of its Successor
Owners acquiring pursuant to Permitted Transfer under Sections 2.2.2(a)or(b), and
(c) with respect to Developer's Transferring to Builder Transferees, for the period
of ownership of its Successor Owners acquiring pursuant to Transfer under
Section 2.2.3(b); provided that in no event shall termination of the Additional
Liability Period remove, reduce or modify the liability of Developer or its
Developer Affiliates for Ongoing Matters.
"Other Agreements" shall mean (a)the following recorded documents: Quitclaim
Deed, the Special Restrictions, the Memorandum of DDA, the DA, the Landscape
and Water Treatment Installation and Maintenance Agreement, the CC&Rs, the
City Deed of Trust and the Additional Declaration; (b)the License Agreements, (c)
the Profit Participation Agreement, each as may be amended from time to time."
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""Responsible Developer"means the Initial Developer, or if Initial Developer has
been previously released pursuant to Section 2.2.3(a), the then Approved
Developer.
7. New Attachments to the DDA.
7.1 A new Attachment 14D in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 1. All references in the Agreement to
Attachment 14D or to the Amended and Restated Guaranty (Unsecured Obligations) shall be
deemed to be references to the Amended and Restated Guaranty (Unsecured Obligations) attached
as Schedule I to this Second Amendment.
7.2 A new Attachment 14E in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 2. All references in the Agreement to
Attachment 14E or to the Amended and Restated Guaranty (Secured Obligations) shall be deemed
to be references to the Amended and Restated Guaranty (Secured Obligations) attached as
Schedule 2 to this Second Amendment.
7.3 A new Attachment 17C in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 3. All references in the Agreement to
Attachment 17C or to the Builder Transferee Assignment Agreement shall be deemed to be
references to the Builder Transferee Assignment Agreement attached as Schedule 3 to this Second
Amendment.
7.4 A new Attachment 17D in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 4. All references in the Agreement to the
Attachment 17D or to the Lot Transfer Proposal shall be deemed to be references to the Lot Transfer
Proposal attached as Schedule 4 to this Second Amendment.
7.5 A new Attachment 31 in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 5. All references in the Agreement to
Attachment 31 or to the First Amendment to Profit Participation Agreement shall be deemed to be
references to the First Amendment to Profit Participation Agreement attached as Schedule 5 to this
Second Amendment.
7.6 A new Attachment 32 in hereby added to the DDA in the form of the document
attached to this Second Amendment at Schedule 6. All references in the Agreement to
Attachment 32 or to the Amended Memorandum of DDA shall be deemed to be references to
Amended Memorandum of DDA attached as Schedule 6 to this Second Amendment.
8. Miscellaneous
8.1 Agreement Ratified. Except as specifically amended or modified in this
Second Amendment, each and every term, covenant, and condition of the DDA as amended is
hereby ratified and shall remain in full force and effect. Each and every reference to the
"Agreement"in the DDA(including,without limitation,the Attachments thereto) shall be deemed
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to refer to the DDA as amended by this Second Amendment. In the event of conflict between the
terms and conditions of the DDA and the terms and conditions of this Second Amendment, the
terms and conditions of this Second Amendment shall prevail and control.
8.2 Time of Essence. Time is of the essence with respect to all provisions of
this Second Amendment in which a definite time for performance is specified; provided that the
foregoing shall not be construed to limit or deprive a Party of the benefits of any cure period or
Force Majeure Delay expressly provided for in this Second Amendment.
8.3 Governing Law. This Second Amendment is made with respect to real
property located in the State of California and shall be construed, interpreted and applied in
accordance with the laws of that State, without regard to conflict of laws provisions. The venue
for all suits shall be Los Angeles County, California.
8.4 Binding Agreement. This Second Amendment shall be binding upon and
inure to the benefit of the Parties hereto and their respective heirs, representatives, successors and
permitted assigns.
8.5 Counterparts. This Second Amendment 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 Second
Amendment shall not be effective until the execution and delivery by the Parties of at least one set
of counterparts. The Parties agree to recognize execution of this Second Amendment by facsimile
or other electronically transmitted signatures; provided that such execution by facsimile or
electronic transmission shall not be effective unless a manually executed copy of the signature
page is promptly sent by U.S. Postal Service, postage prepaid or overnight delivery service or is
hand delivered to the Parties. The Parties hereby authorize each other (and Escrow Holder) to
detach and combine original signature pages and consolidate them into a single identical original.
Any one of such completely executed counterparts shall be sufficient proof of this Second
Amendment.
8.6 .Entire Agreement. The Agreement as amended by this Second
Amendment constitutes the entire agreement between Developer and the City hereto pertaining to
the subject matter hereof, and the final, complete and exclusive expression of the terms and
conditions thereof. Prior agreements, representations, negotiations, and understandings of the
Parties, oral or written, express or implied, are hereby superseded and merged into the Agreement.
8.7 Schedules and Attachments. Unless otherwise indicated, references in
this Agreement to articles, sections, paragraphs, subsections, clauses, exhibits, attachments and
schedules are to the same contained in or attached to this Agreement and all attachments and
schedules referenced in this Second Amendment are incorporated into the Agreement by this
reference as though fully set forth in this Section.
8.8 No Waiver. No waiver of any provision or consent to any action under this
Second Amendment shall constitute a waiver of any other provision of the Agreement or consent
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to any other action, whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a Party to provide a waiver in the future except to the extent
specifically set forth in writing. All waivers of the provisions of the Agreement must be in writing
and signed by the appropriate authorities for the City and Developer and all amendments hereto
must be in writing and signed by the appropriate authorities of the City and Developer.
8.9 Authority. The City and Developer each hereby represents that the person
executing this Second Amendment on behalf of such party has full authority to do so and to bind
such party to perform pursuant to the terms and conditions of this Second Amendment.
8.10 Date and Delivery of Second Amendment. Notwithstanding anything to
the contrary contained in this Second Amendment or the DDA, the Parties intend that this Second
Amendment shall be deemed effective, executed and delivered for all purposes under this Second
Amendment and for the calculation of any statutory time periods based on the date an agreement
between the Parties is effective, executed and/or delivered, as of the Second Amendment Effective
Date.
{signatures on following page)
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IN WITNESS WHEREOF, City and Developer have executed this Second Amendment as of the
Second Amendment Effective Date.
CITY OF TUSTIN:
Dated: By: ,
Matthew S. West
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner& Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
{signatures continued on following page)
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INITIAL DEVELOPER:
BROOKFIELD HOMES SOUTHERN
CALIFORNIA LLC, a Delaware limited
liability company
By:
Name:
Title:
By:
Name:
Title:
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SCHEDULE 1 TO SECOND AMENDMENT TO DDA
ATTACHMENT 14D
AMENDED AND RESTATED GUARANTY (UNSECURED OBLIGATIONS)
[see attached]
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ATTACHMENT 14D
FORM OF AMENDED AND RESTATED GUARANTY
(Unsecured Obligations)
This AMENDED AND RESTATED GUARANTY (this "Guaranty") is made as of the
day of , 2021 ("Effective Date"), by BROOKFIELD RESIDENTIAL US LLC,
a limited liability company formed under the laws of the State of Delaware ("Guarantor"), in
favor of the CITY OF TUSTIN, a public body, corporate and politic ("City").
RECITALS
A. Brookfield Homes Southern California LLC, a Delaware limited liability company
("Developer")and City have entered into that certain Tustin Legacy Disposition and Development
Agreement for Portions of Disposition Parcels 2C and 8,dated as of December 17,2019,including
all Attachments thereto (the "Original DDA"), as amended by that certain First Amendment to
Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C
and 8 dated as of June 2, 2020 ("First Amendment") and by that certain Second Amendment to
Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C
and 8, dated as of , 2021 ("Second Amendment"; the Original DDA, as amended by the
First Amendment and the Second Amendment collectively, as the same may be further amended,
updated or modified from time to time, are referred to as "DDA") under which Developer has
acquired certain real property as more particularly described in the DDA ("Real Property") and
certain additional rights that together with the Real Property comprise the Property (as defined in
the DDA). The Property is also subject to certain additional documents referred to in the DDA as
the "Other Agreements." Initially capitalized terms used and not defined herein shall have the
meanings set forth in the DDA;the term"Other Agreements" as used in this Guaranty means the
"Other Agreements" as that term is defined in the DDA, but, for the purposes of this Guaranty,not
including the Profit Participation Agreement or the City Deed of Trust. Wherever in this Guaranty
reference to a Section of the DDA is made, such reference shall be to the text of that Section in the
Original DDA as the text of that Section has been amended, if at all, by the text of the First
Amendment or the Second Amendment(or both).
B. Pursuant to the DDA,Developer has agreed, among other things,to perform certain
design work, perform certain Grading Work, including on the City Streets Grading Area, and to
construct the Improvements on the Real Property.
C. In connection with Developer's acquisition of the Property, and as required by the
DDA, Guarantor executed in favor of City that certain Guaranty, dated September 15, 2021 (the
"Original Guaranty"). The Original Guaranty included, as part of the obligations guaranteed
thereunder,the obligations of the Developer under the Profit Participation Agreement and the City
Deed of Trust. As of the Effective Date, and after giving effect to this Guaranty, no party's
obligations under the Profit Participation Agreement or the City Deed of Trust will be guaranteed
under this Guaranty, but all such obligations will instead be separately guaranteed under the
Amended and Restated Guaranty (Secured Obligations) dated the Effective Date (the "Secured
Obligations Guaranty"), made by the Guarantor with respect to the obligations under the Profit
Participation Agreement and the City Deed of Trust.
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D. With the consent of City,Developer has entered into three [Transferee]Assignment
and Assumption Agreements, each dated the Effective Date (the "Assignments"), in favor of,
respectively Brookfield Tustin , LLC, Brookfield Tustin , LLC, and
Brookfield Tustin , LLC (collectively, "Transferees"), under the terms of which
Assignments, Transferees have acquired title to portions of the Property and have jointly and
severally assumed Developer's obligations under the DDA and the Other Agreements, the Profit
Participation Agreement and the City Deed of Trust.' Developer and Transferees are referred to
collectively as "Obligors.")
E. Guarantor directly or indirectly owns 100% of Obligors and thus has a direct and
substantial interest in Obligors and will derive benefit from owning the Property and the
development of the Project, including the sale of residential units on the Property. Guarantor will
also derive a direct and substantial benefit by guaranteeing Obligors' obligation to undertake the
actions with respect to the Property required of Obligors under the DDA, including providing this
Guaranty, inasmuch as the City would not have consented to the Assignments in the absence of
Guarantor undertaking such obligations.
AGREEMENT
For good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce City to consent to the Assignments, City has required that
the Guarantor amend and restate the Original Guaranty as provided in this Guaranty and the
Secured Obligations Guaranty. With respect to all of the Guaranteed Obligations (as that term is
defined below),the Original Guaranty is hereby amended and restated in its entirety in accordance
with the following terms of this Guaranty. In accordance with the Secured Obligations Guaranty,
the Original Guaranty is also being amended and restated as of the Effective Date with respect to
the obligations of the Obligors arising under Profit Participation Agreement and the City Deed of
Trust, it being the mutual intention of Guarantor and City that all of the obligations originally
guaranteed by the Original Guaranty will be guaranteed by the Guarantor either under the terms
of this Guaranty or the Secured Obligations Guaranty. The Guarantor hereby makes the
guaranties, obligations, covenants and agreements set forth below in this Guaranty.
Section 1.Guaranty.
1.1 Payment and Completion Obligations. The Guarantor absolutely and
unconditionally guarantees all obligations of Obligors under the DDA and Other Agreements,
including, but not limited to, the items set forth in Section 1.1.1 and 1.1.2 below.
1.1.1 Guarantor shall pay any and all costs, including all Development
Costs (as such term is defined in the DDA), required and cause any and all work to be performed
as may be required to carry out and Complete (as such term is defined in the DDA) each of the
following elements of the Project and performance of the following other obligations if any of the
' NOTE TO DRAFT: This draft assumes that all of the proposed assignments will be entered into on the same day,
and that day will be the Effective Date under this instrument. If that assumption is not correct,this document will be
modified accordingly.
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Obligors shall fail to timely perform its obligations under the DDA, all as required by and in
accordance with, the terms of the DDA (collectively, "Completion Obligations"):
(a) Design, construction, Completion and maintenance of the
required Improvements, including, for avoidance of doubt, Completion of the Horizontal
Improvements, Phase Improvements and the Vertical Improvements. as more particularly
described in the DDA in strict accordance with all Governmental Requirements, Entitlements and
the requirements of the DDA, including the Scope of Development attached thereto as
Attachment 8.
(b) Obligors' obligations with respect to the Ongoing Matters;
(c) The indemnities and other obligations of any Obligor
pursuant to Sections 4.5.3, 5.5, 8.12(e), 8.15, 8.16, 10.1, 10.2, 10.7 and 11.1 (including payment
of all deductible amounts) and 17.12.1 of the DDA, including, to the extent applicable, during the
Additional Liability Period; and
The guarantee of the Completion of the foregoing work and the
performance of the foregoing obligations shall be an absolute obligation of Guarantor in the event
that any Obligor fails to commence or Complete,in a lien-free condition(as required by the DDA),
construction of the foregoing work within the time period set forth in the Schedule of Performance
(subject to any extension permitted by the DDA for Force Majeure Delay).
1.1.2 The Guarantor also absolutely and unconditionally guarantees that
Guarantor shall pay any and all costs required and cause any and all work to be performed as may
be required to carry out the following obligations as required by and in accordance with the terms
of the DDA and the Other Agreements if any Obligor shall fail to timely perform its obligations
under the DDA and the Other Agreements (collectively, the "Payment Obligations" and
collectively with the Completion Obligations, the "Payment and Completion Obligations"),
including the following:
(a) Payment of all of the costs and expenses incurred by City
arising in connection with the work covered by this Section 1.1 upon the Development Areas or
any Improvements thereon and the exercise by City of any or all of its remedies under the DDA
and the Other Agreements to the extent payable by any Obligor pursuant to the terms of the DDA
and the Other Agreements, and the foregoing shall specifically include any costs and expenses
incurred by City arising from its exercise of the Right of Purchase or Right of Reversion with
respect to the Real Property as provided in Sections 16.3 and 16.4 of the DDA, respectively.
Without limiting the foregoing, such amounts shall specifically include any amount paid by City
to obtain the release of any and all Construction Liens and/or Mortgages, as well as any amounts
paid to obtain the release of any other liens that came into existence as a result of any Obligor's
actions or inactions and any outstanding taxes and assessments; but excluding the Repurchase
Price applicable to any Repurchased Property actually acquired by City pursuant to the Right of
Purchase; provided that City shall be entitled to retain the Repurchased Property or Reacquired
Property so acquired in its entirety, notwithstanding any contribution or payment made by any
Obligor, or by Guarantor pursuant to this Guaranty. Guarantor acknowledges and agrees that the
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foregoing includes the obligation of Guarantor to pay costs and expenses incurred by City arising
from its exercise of its rights under Sections 16.3 and 16.4 of the DDA; and
(b) Payment of all of the Development Costs incurred to cause
the timely design, construction and Completion of the work referred to in this Section 1.1, such
that the Real Property and Improvements shall be in a lien-free condition as required by the DDA.
1.2 Payment of Enforcement Costs. In addition to its obligations in
Section 1.1, the Guarantor agrees to pay all costs and expenses incurred by City, including
reasonable attorneys' fees and costs, court costs and all other litigation expenses (including
reasonable expert witness fees, costs of depositions and other discovery, travel expenses, exhibit
preparation, and courier, postage, communication and document copying expenses), in enforcing
this Guaranty(the"Enforcement Payment Obligation"). The provisions of this Section 1.2 shall
survive the termination of this Guaranty.
1.3 Performance of Work. The work required for Guarantor to satisfy its
Payment and Completion Obligations: (a) shall be performed in accordance with the Scope of
Development and within the time periods set forth in the Schedule of Performance all as and to
the extent set forth in the DDA and the Other Agreements; (b) shall be performed in accordance
with the other requirements for construction of the Project set forth in the DDA and the Other
Agreements; and(c) shall be diligently pursued by the Guarantor to Completion of the Project and
issuance of a Certificate of Compliance for the Project.
1.4 Guaranteed Obligations. "Guaranteed Obligations"means the Payment
Obligations, the Completion Obligations and the Enforcement Payment Obligation. For the
avoidance of doubt, the obligations described in the definitions of Payment Obligations,
Completion Obligations, and Enforcement Payment Obligation are included within the definition
of the term "Guaranteed Obligations"regardless of any duplication in the obligations described in
such definitions, and whether the character of such obligations could be described as for payment,
performance, or both.
Section 2.Performance of Payment and Completion Obligations upon Default by any
Obligor.
2.1 Default by Obligor. If any Obligor is in Material Default under the DDA
for any reason, including for failure to commence or prosecute the development of the Project in
accordance with the Schedule of Performance or the Scope of Development, then City may, but
shall not be obligated to, deliver written notice to the Guarantor (a "Guaranty Notice"), that is
designed to provide notice to Guarantor of such default. The Guarantor, promptly after receipt of
the Guaranty Notice, shall perform its Payment and Completion Obligations and the Enforcement
Payment Obligation, provided that the Guarantor does not need to commence any such
performance obligations until receipt of a Guaranty Notice. The Guarantor shall take whatever
actions may be necessary to perform the Guaranteed Obligations, including the following:
(a) Diligently and expeditiously proceed to ensure the
Completion of the Project at the Guarantor's sole cost and expense, at the times set forth in the
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DDA and in accordance with the Schedule of Performance and subject to the other terms and
conditions set forth in the DDA and the Other Agreements;
(b) To the extent unpaid, fully pay and discharge all
Development Costs incurred or required to be incurred in connection with the Completion of the
Proj ect; and
(c) Pay any amounts necessary to release and discharge any
mechanics', material providers' or other liens that may exist or come into existence in connection
with the Real Property, the Project and/or the Completion of the Improvements, or in the
alternative contest the same subject to the terms and conditions set forth in the DDA.
2.2 Difficulty or Expense of Completion of the Project Does Not Excuse
Guarantor or Guaranty. Guarantor's obligations under this Guaranty will remain in full force and
effect until the Guaranteed Obligations are fully and finally paid and performed, regardless of
whether the Guarantor or any other Person determines that Completion of the Project is difficult,
more expensive than originally intended, or involves "Unanticipated Expense or Delay" (defined
below). "Unanticipated Expense or Delay"includes any event or circumstance that would make
the Completion of the Project more costly or would delay the Completion of the Project, such
events and circumstances specifically including, but not limited to, the following matters: (a) a
casualty that affects the Real Property or any Improvements that may have been constructed;
(b) the discovery of unanticipated soils conditions or Hazardous Materials in, on,or under the Real
Property or the License Areas; (c) Governmental Requirements or court orders applicable to the
Project; (d) any lack of debt or equity financing for Development Costs; (e) any change in market
conditions and(f) other events or circumstances beyond the control of Developer or the Guarantor
relating to the Project.
2.3 No Discharge Until Completion. It is the intent of the Guarantor and City
that the obligations and liabilities of the Guarantor hereunder are absolute, irrevocable and
unconditional under any and all circumstances and that until the Guaranteed Obligations are fully
and finally performed, the obligations and liabilities of Guarantor hereunder shall not be
discharged or released, in whole or in part, by any act or occurrence that might, but for the
provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor.
The Guaranteed Obligations shall be deemed to be fully and finally performed for purposes of this
Guaranty and this Guaranty shall terminate only on the later of(a)the Expiration Date (defined in
Section 16) and (b) the date on which the Certificate of Compliance is recorded by City with
respect to the Project.
Section 3.Absolute, Irrevocable and Unconditional Guaranty.
3.1 Irrevocable Guaranty. This Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and performance. This Guaranty shall be effective as a waiver
of, and the Guarantor hereby expressly waives, any right to which the Guarantor may otherwise
have been entitled, whether now existing under statute, at law or in equity, or arising under any
statute enacted after the date hereof or arising under any doctrine of law or equity promulgated
after the date hereof to require City to take prior recourse or proceedings against any collateral,
security or Person. It shall not be necessary for City, in order to enforce such payment or
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performance by the Guarantor, first to institute suit or pursue or exhaust any rights or remedies
against any Obligor or any other Person liable on such indebtedness or for such performance, or
to enforce any rights against any security given to secure such indebtedness or performance, or to
join any Obligor or any other Person liable for the performance of the Guaranteed Obligations or
any part thereof in any action to enforce this Guaranty, or to resort to any other means of obtaining
performance of the Guaranteed Obligations.
3.2 Demand Against the Guarantor. City may bring suit or make a demand
against any Obligor or against Guarantor or any other parties who have signed this Guaranty or
any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or
more of them, separately or together,without impairing the rights of City against Guarantor.
3.3 Independent Guaranty. The obligations of the Guarantor under this
Guaranty are independent of, and in addition to,the obligations and liabilities of any Obligor under
the DDA and the Other Agreements. This Guaranty is independent of(and shall not be limited
by) any other guaranty now existing or hereafter given by Guarantor, or any other Person, under
or in connection with the Property, the Improvements, the DDA or the Other Agreements. The
liability of the Guarantor under this Guaranty is in addition to any and all other liability the
Guarantor may have in any other capacity with respect to any Obligor, including, if applicable,
any direct or indirect ownership or control of any debt and/or equity securities of any Obligor or
any Controlling Person of any Obligor.
Section 4.Certain Agreements and Waivers by the Guarantor.
4.1 Waivers. Guarantor agrees that(a)neither City's rights or remedies nor the
Guarantor's obligations under the terms of this Guaranty shall be released, diminished, impaired,
reduced or affected by any one or more of the following events, actions, facts, or circumstances,
(b) Guarantor waives any rights, claims or defenses arising from any such events, actions, facts,
or circumstances, and (c)the liability of Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) any limitation on the liability of, or recourse against, any
other Person,including City,in the DDA or any of the Other Agreements or arising under any law;
(b) any claim or defense that this Guaranty was made without
consideration or is not supported by adequate consideration or that the obligations of the Guarantor
hereunder exceed or are more burdensome than those of the Obligors under the DDA or the Other
Agreements;
(c) the taking or accepting of any other security or guaranty for,
or right of recourse with respect to, any or all of the Guaranteed Obligations;
(d) any homestead exemption or any other exemption under
applicable law;
(e) any release, surrender, abandonment, exchange, alteration,
sale or other disposition, subordination, deterioration, waste, failure to protect or preserve,
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impairment, or loss of, or any failure to create or perfect any lien or security interest with respect
to, or any other dealings with, any collateral or security at any time existing or purported,believed
or expected to exist in connection with any or all of the Guaranteed Obligations, or any impairment
of the Guarantor's recourse against any Person or collateral;
(f) whether express or by operation of law, any partial release
of the liability of Guarantor hereunder (except to the extent expressly so released by City with
respect to this Guaranty) or any complete or partial release of any Obligor or any other Person
liable, directly or indirectly, for the performance of any or all of the Guaranteed Obligations;
(g) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of any
Obligor or any other Person at any time liable for the performance of any or all of the Guaranteed
Obligations;
(h) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of
Guarantor or its successors or assigns;
(i) either with or without notice to or consent of Guarantor, any
renewal, extension, modification, supplement, subordination or rearrangement of the terms of any
or all of the Guaranteed Obligations and/or the DDA or any of the Other Agreements or any other
agreements that may have been executed by any Obligor, City or any third party affecting the
obligations of any Obligor or City under the DDA,or performance(including changes with respect
to the construction of the Improvements) of any other terms thereof, or any waiver, termination,
or release of, or consent to departure from, any of the DDA, the Other Agreements, any other
agreements that may have been executed by any Obligor, City or any third party affecting the
obligations of any Obligor or City under the DDA,the Other Agreements or any other guaranty of
any or all of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or
compromise that may be granted from time to time by City to any Obligor or to any other Person
at any time liable for the payment or performance of any or all of the Guaranteed Obligations;
0) any neglect, lack of diligence, delay, omission, failure, or
refusal of City to take or prosecute (or in taking or prosecuting) any action for the collection or
enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action
to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security
therefor, or to exercise (or in exercising) any other right or power with respect to any security
therefor, or to take or prosecute (or in taking or prosecuting), or any failure to sell or otherwise
dispose of in a commercially reasonable manner any collateral securing any or all of the
Guaranteed Obligations;
(k) any failure of City to notify Guarantor of any creation,
renewal, extension, rearrangement, modification, supplement, subordination, or assignment of the
DDA or any of the Other Agreements or any of the Guaranteed Obligations or any part thereof, or
of any release of or change in any security, or of the occurrence or existence of any Material
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Default, or of any other action taken or refrained from being taken by City against any Obligor or
any security or other recourse, or of any new agreement between City and any Obligor, it being
understood that except as expressly set forth in this Guaranty, City shall not be required to give
Guarantor any notice of any kind under any circumstances with respect to or in connection with
the Guaranteed Obligations, any and all rights to other notice Guarantor may have otherwise had
being hereby waived by the Guarantor, and except for notices(s) expressly required to be delivered
to Guarantor under this Guaranty, Guarantor shall be responsible for obtaining for itself
information regarding any Obligor and any collateral, including any changes in the business or
financial condition of the Obligors or any collateral, and Guarantor acknowledges and agrees that
City shall have no duty to notify Guarantor of any information which City may have concerning
any Obligor or any collateral;
(1) the existence of any claim, counterclaim, set-off or other
right that Guarantor may at any time have against any Obligor, or any other Person (except City),
whether or not arising in connection with this Guaranty,the DDA,or any of the Other Agreements;
(m) the unenforceability of all or any part of the Guaranteed
Obligations against any Obligor, whether because the Guaranteed Obligations exceed the amount
permitted by law or violate any usury or other law(subject to the provisions of Section 12 below),
or because the Persons creating the Guaranteed Obligations acted in excess of their authority, or
because of a lack of validity or enforceability of or defect or deficiency in the DDA or the Other
Agreements, or because any Obligor has any valid defense, claim or offset with respect thereto, or
because any Obligor's obligation ceases to exist by operation of law, or because of any other reason
or circumstance, it being agreed that Guarantor shall remain liable hereon regardless of whether
Developer or any other Person be found not liable on the Guaranteed Obligations, or any part
thereof, for any reason (and regardless of any joinder of any Obligor or any other Person in any
action to obtain payment or performance of any or all of the Guaranteed Obligations);
(n) any order, ruling or plan of reorganization emanating from
proceedings under Title 11 of the United States Code with respect to any Obligor or any other
Person, including any extension, reduction, composition, or other alteration of the Guaranteed
Obligations, whether or not consented to by City, or any action taken or omitted by City in any
such proceedings, including any election to have City's claim allowed as being secured, partially
secured or unsecured, any extension of credit by City in any such proceedings or the taking and
holding by City of any security for any such extension of credit;
(o) any other condition,event,omission, action that would in the
absence of the provisions of this Section 4 result in the release or discharge of Guarantor from the
performance or observance of any obligation, covenant or agreement contained in this Guaranty
or any other agreement;
(p) except as provided in this Guaranty,any notice to Guarantor
of the existence of or the extending to any Obligor of any grace or cure period for the performance
of any of the Guaranteed Obligations or any failure to provide notice thereof,
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(q) any defense of waiver, release, discharge in res judicata,
statute of frauds, fraud, or ultra vires acts that may be available to any Obligor in respect of the
DDA or any of the Other Agreements;
(r) to the fullest extent permitted by law: (A) any defense
arising as a result of City's election, in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code; and (B)without limiting the
generality of any other provision hereof, all rights and benefits that might otherwise be available
to Guarantor under any guarantor, suretyship or other defenses under any law of the State of
California or otherwise (including California Civil Code Sections 2787 through 2855, inclusive,
2899 and 3433); including any rights of subrogation, reimbursement, indemnification, or
contribution and any other rights and defenses that are or may become available to the Guarantor
by reason of such provisions of the California Civil Code;
(s) the benefit of any statute of limitations affecting the liability
of any Obligor under the DDA or any of the Other Agreements;
(t) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Obligor in respect of the Guaranteed Obligations or
Guarantor in respect of this Guaranty; and/or
(u) any early termination of any of the Guaranteed Obligations,
except as expressly agreed to in writing by City, it being agreed that, among other things, that
Guarantor shall be obligated to pay all costs and expenses incurred by City in its exercise of its
rights under Sections 16.3 and 16.4 of the DDA.
4.2 Additional Waivers.
4.2.1 Without limiting any of the waivers contained in Section 4.1,
Guarantor waives all rights and defenses that the Guarantor may have because some or all of
Developer's obligations may be, or may be deemed to be, secured by real property (although
Guarantor acknowledges that as of the Effective Date the Guaranteed Obligations are not secured
by any real property). This means, among other things:
(a) City may collect from Guarantor without first foreclosing on
any real or personal property collateral pledged by any Obligor.
(b) If City forecloses on any real property collateral pledged by
any Obligor: (i)the amount of the obligation owed to City may be reduced only by the net price
for which that collateral is sold at the foreclosure sale or proceedings, even if the collateral is worth
more than the sale price and (ii) City may collect from Guarantor even if City, by foreclosing on
the real property collateral,has destroyed any right the Guarantor may have to collect from the any
Obligor.
This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have
because the Guaranteed Obligations may be, or may be deemed to be, secured by real property.
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These rights and defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580a, 580d, or 726 of the California Code of Civil Procedure.
4.2.2 Without limiting any of the waivers contained in Section 4.1,
Guarantor hereby waives any rights it might otherwise have had to assert any defense based upon
rights of subrogation, reimbursement, indemnification, and contribution and any other rights and
defenses that are or may become available to the Guarantor or that Guarantor may have in respect
of his or her obligations as a guarantor by reason of Sections 2787 to 2855, inclusive, as well as
Sections 2899 and 3433 of the California Civil Code or by reason of any election of remedies by
the creditor.
4.2.3 Guarantor also hereby waives any rights or defenses the Guarantor
may otherwise have had in respect of Guarantor's obligations as a guarantor or other surety by
reason of any election of remedies by City, as well as any rights or defenses Guarantor may
otherwise have had because any Obligor's obligations may be or may be deemed to be secured by
real property or an estate for years. These waived rights or defenses include, but are not limited
to, any rights or defenses that are based upon, directly or indirectly, the application of Section
580a, 580b, 580d, or 726 of the Code of Civil Procedure to the principal's note or other obligation.
4.2.4 Also without limiting the generality of any other waiver or provision
contained in this Guaranty, Guarantor hereby waives any and all benefits and/or defenses under
California Civil Code Sections 2899 and 3433, Chapter 2 of Title 14 of the California Civil Code
and California Commercial Code Section 3605.
4.3 Preferences. In the event any payment by any Obligor or any other Person
to City is held to constitute a preference, fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other reason City is required to refund such
payment or pay the amount thereof to any other Person, such payment by an Obligor or any other
Person to City shall not constitute a release of Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release,
surrender or discharge by City of this Guaranty or of the Guarantor or the prior expiration of this
Guaranty), as the case may be, with respect to, and this Guaranty shall apply to, any and all
amounts so refunded by City or paid by City to another Person (which amounts shall constitute
part of the Guaranteed Obligations), and any interest paid by City and any attorneys' fees, costs
and expenses paid or incurred by City in connection with any such event.
4.4 Defenses. Guarantor waives all rights and defenses arising out of an
election of remedies by City, including exercise by City of its Right of Reversion upon occurrence
of a Reversion Event or a repurchase of the Property pursuant to City's Right of Purchase, even
though such election of remedies may have destroyed such Guarantor's rights of subrogation and
reimbursement against any Obligor by operation of California Code of Civil Procedure
Section 580d or otherwise.
4.5 Anti-Deficiency Waivers. Should the Guaranteed Obligations ever
become secured by real property, Guarantor waives (a) any defenses the Guarantor may have by
reason of an election of remedies by City, and (b) any rights or defenses the Guarantor may have
by reason of protection afforded to any Obligor with respect to the Guaranteed Obligations
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pursuant to the anti-deficiency or other laws of California limiting or discharging any Obligor's
obligations, including California Code of Civil Procedure Sections 580a, 580b, 580d or 726.
4.6 Waiver of Notice of Acceptance. Guarantor waives notice of acceptance
of this Guaranty.
4.7 No Limitation on Waivers. No provision or waiver in this Guaranty shall
be construed as limiting the generality of any other provision or waiver contained in this Guaranty.
All of the waivers contained herein are irrevocable and unconditional and are intentionally and
freely made by the Guarantor.
Section 5.Subordination.
If, for any reason whatsoever, any Obligor is now or hereafter becomes indebted, directly
or indirectly to Guarantor including by operation of California Civil Code Sections 2847 and 2848,
or any successor statutes or similar law (any such indebtedness being referred to as the
"Subordinated Debt"):
(a) The Subordinated Debt and all interest thereon and all liens,
security interests and rights now or hereafter existing with respect to property of any Obligor
securing the Subordinated Debt shall, at all times,be subordinate in all respects to the Guaranteed
Obligations and to all liens, security interests and rights now or hereafter existing to secure the
Guaranteed Obligations, until the Guaranteed Obligations have been paid or performed in full;
(b) In the event of receivership, bankruptcy, reorganization,
arrangement or other debtor relief or insolvency proceedings involving any Obligor as debtor, City
shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder
and shall have the right to receive directly from the receiver, trustee or other custodian, dividends
and payments that are payable upon any obligation of such Obligor to the Guarantor now existing
or hereafter arising, and to have all benefits of any security therefor, until the Guaranteed
Obligations have been fully and finally performed; and
(c) Guarantor shall promptly upon request of City from time to
time execute such documents and perform such acts as City may require to evidence and perfect
its interest and to permit or facilitate exercise of its rights under this Section 5, including execution
and delivery of proofs of claim, further assignments and security agreements, and delivery to City
of any promissory notes or other instruments evidencing indebtedness of one or more of the
Obligors to the Guarantor. All promissory notes, accounts receivable ledgers or other evidences,
now or hereafter held by Guarantor, of obligations of any Obligor to Guarantor shall contain a
specific written notice thereon that the indebtedness evidenced thereby is subordinated under and
is subject to the terms of this Guaranty; and
(d) If, notwithstanding the foregoing provisions in this
Section 5, Guarantor should receive any payment, claim or distribution that is prohibited as
provided above in this Section 5, Guarantor shall pay the same to City immediately,the Guarantor
hereby agreeing that it shall receive the payment, claim or distribution in trust for City and shall
have absolutely no dominion over the same except to pay it immediately to City.
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Section 6.Other Liability of the Guarantor or Obligors.
6.1 Other Liability. If Guarantor is or becomes liable, by endorsement or
otherwise, for any indebtedness owing by any Obligor to City other than under this Guaranty
(including,without limitation,the Secured Obligations Guaranty), such liability shall not be in any
manner impaired or affected hereby, and the rights of City hereunder shall be cumulative of any
and all other rights that City may have against the Guarantor. If any Obligor is or becomes
obligated to City for any liabilities or indebtedness other than or in excess of the Guaranteed
Obligations, any payment received or recovery realized upon such other liabilities or indebtedness
of Developer to City may be applied by City to such other liabilities or indebtedness.
6.2 Net Worth and Liquidity Covenants.
(a) Guarantor shall maintain sufficient Net Worth to fully
discharge its obligations under this Guaranty. As of the Effective Date, Guarantor has, and during
the term of this Guaranty shall maintain, a Net Worth of not less than Three Hundred Million
Dollars ($300,000,000.00) ("Minimum Assets Standards") as determined on the last day of each
fiscal quarter of Guarantor. As used in this Guaranty, the term "Net Worth" shall mean the net
worth of Guarantor or Equity Investor which shall be determined based on(x) the fair market value
of the assets of each of the Persons comprising Guarantor (including the aggregate amount of
uncalled capital commitments from Guarantor's direct and/or indirect limited partners, and
intangible assets including goodwill, intellectual property, licenses, organizational costs, deferred
amounts,covenants not to compete,unearned income,restricted funds, investments in subsidiaries
or other Affiliates, intercompany receivables and accumulated depreciation), less (y) all liabilities
of the Persons comprising Guarantor(as determined in accordance with GAAP).
(b) Guarantor shall be required to deliver to City: (i) within
ninety (90) calendar days following June 30 of each year, a complete copy of Guarantor's annual
audited financial statements prepared by an independent accountant (provided however, that
audited statements shall be provided within sixty (60) calendar days of City's request therefor
during the existence of a Material Default by any Obligor under the DDA), in each case together
with a certification that the same fairly presents in all material respects the information set forth
therein and does not intentionally omit any material facts necessary to make the information set
forth therein true in all material respects and not intentionally misleading in any material respect;
and(ii)within sixty (60)calendar days following the end of each partial or whole calendar quarter,
a certification from an authorized officer of Guarantor stating Guarantor's Net Worth. In the event
that Guarantor is the subject of any of the events or actions described in Section 2.2.5 of the DDA
or in the event that Guarantor fails to comply with the requirements set forth in this Section 6.2
(each, a "Guarantor Illiquidity Event"), Guarantor shall notify City in writing within five (5)
Business Days following Guarantor's knowledge that a Guarantor Illiquidity Event has occurred.
City shall have the right, but not the obligation, to provide written notice to Developer and
Guarantor of the occurrence of a Guarantor Illiquidity Event and the provision of such notice shall
constitute a declaration by City of a Developer Potential Default under the DDA and a declaration
of a default under this Guaranty.
(c) Within thirty (30) calendar days following the provision of
notice of the occurrence of a Guarantor Illiquidity Event by Guarantor or Developer to City or by
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City to Developer and Guarantor, Guarantor shall supplement its Net Worth to meet the Minimum
Asset Standards or shall provide additional security satisfactory to City. Failure of Guarantor to
provide substitution of security to City within such thirty(30)calendar day period shall be a default
under this Guaranty.
Section 7.City Assigns; Disclosure of Information.
This Guaranty is for the benefit of City and City's successors and assigns, and in the event
of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred
with such Guaranteed Obligations. Guarantor waives notice of any transfer or assignment of the
Guaranteed Obligations or any part thereof.
Section 8.BindingE , Successor and Assigns.
This Guaranty is binding not only on the Guarantor, but also on the Guarantor's successors
and assigns. Guarantor covenants and agrees that it will not attempt to assign or delegate any of
its obligations under this Guaranty without the prior written consent of City, which may be
withheld by City in its sole and absolute discretion. Any attempt to assign or delegate any of
Guarantor's obligations under this Guaranty without City's prior written approval in City's sole
discretion shall not operate as a release of the Guarantor of any of its obligations. Guarantor further
covenants and agrees that any sale or transfer or any attempted sale or transfer of assets or
undertaking any other transaction that would reasonably be expected to reduce the net worth of
Guarantor to less than Three Hundred Million Dollars will constitute a default under this Guaranty
and will also constitute a default by Developer under the DDA.
Section 9.Governing Law.
The validity,enforcement, and interpretation of this Guaranty, shall for all purposes
be governed by and construed in accordance with the laws of the State of California (without
regard to its conflicts of law principles) and applicable United States federal law, and is intended
to be performed in accordance with, and only to the extent permitted by, such laws. The Guarantor
and City agree that any disputes arising between them in connection with this Guaranty or in
connection with or under any instrument, agreement or document provided for or contemplated by
this Guaranty, including in connection with the execution of this Guaranty, the Guaranteed
Obligations or any other matter arising under, related to or in connection with this Guaranty
(including a determination of any and all issues in such dispute, whether of fact or of law) shall be
tried and litigated exclusively in the Superior Court of the County of Orange, State of California,
in any other appropriate court of that county, or in the United States District Court for the Central
District of California. This choice of venue is intended by the Guarantor and City to be mandatory
and not permissive in nature, thereby precluding the possibility of litigation between or among
Guarantor and City with respect to or arising out of this Guaranty in any jurisdiction other than
that specified in this Section 9. Each party hereby waives any right that it may have to assert forum
non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section 9, and stipulates that the State and federal courts located in the County
of Orange, State of California, shall have in personam jurisdiction and venue over each of them
for the purpose of litigating any dispute, controversy or proceeding arising out of this Guaranty.
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Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in
any action against it as contemplated by this Section 9 by means of registered or certified mail,
return receipt requested, postage prepaid,to its address for the giving of notices as set forth in this
Guaranty, or in the manner set forth below for notices. Any final judgment rendered against a
party in any action or proceeding shall be conclusive as to the subject of such final judgment and
may be enforced in other jurisdictions in any manner provided by law.
Section 10. Invalidity of Certain Provisions.
If any provision of this Guaranty or the application thereof to any Person or circumstance
shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the
remaining provisions of this Guaranty nor the application of such provision to any other Person or
circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such provision to other Persons or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.
Section 11. Costs and Expenses of Enforcement.
Guarantor agrees to pay to City within fifteen (15) calendar days after written demand all
costs and expenses incurred by City in seeking to enforce City's rights and remedies under this
Guaranty, including court costs, costs of alternative dispute resolution and reasonable attorneys'
fees, whether or not suit is filed or other proceedings are initiated hereon. All such costs and
expenses incurred by City shall constitute a portion of the Guaranteed Obligations hereunder, shall
be subject to the provisions hereof with respect to the Guaranteed Obligations and shall be payable
by the Guarantor In the event of any suit or proceeding to adjudicate or resolve any dispute in
connection with this Guaranty, the prevailing party shall be entitled to recover its reasonable
attorneys' fees which shall be payable regardless of which party is the Prevailing Party, at the
actual contractual hourly rate for City's litigation counsel at the time the fees were incurred, but,
in no event more than $200 per hour and costs, court costs and all other litigation expenses
(including reasonable expert witness fees, costs of depositions and other discovery, travel
expenses, exhibit preparation, and courier, postage, communication and document copying
expenses).
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Section 12. No Usury.
It is not the intention of City or the Guarantor to obligate the Guarantor to pay interest in
excess of that lawfully permitted to be paid by the Guarantor under applicable law. Should it be
determined that any portion of the Guaranteed Obligations or any other amount payable by the
Guarantor under this Guaranty constitutes interest in excess of the maximum amount of interest
that the Guarantor, in its capacity as guarantor, may lawfully be required to pay under applicable
law, the obligation of the Guarantor to pay such interest shall automatically be limited to the
payment thereof in the maximum amount so permitted under applicable law. The provisions of
this Section shall override and control all other provisions of this Guaranty and of any other
agreement between the Guarantor and City.
Section 13. Representations; Warranties; and Covenants of the Guarantor. Until the
Guaranteed Obligations are performed in full and each and every term, covenant and condition of
this Guaranty is fully performed, Guarantor hereby represents, warrants, and covenants that:
(a) the Guarantor has a financial interest in the Obligors and will derive a material and substantial
benefit, directly or indirectly, from the development of the Project and from the making of this
Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and
enforceable against the Guarantor subject to the effect of bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights generally and limitations
imposed by general principles of equity and applicable law; (c)the Guarantor is not, and the
execution, delivery and performance by the Guarantor of this Guaranty will not cause the
Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of
acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound
or affected; (d)the Guarantor is duly organized, validly existing, and in good standing under the
laws of the state of its organization and has full power and authority to enter into and perform this
Guaranty; (e) except as may have been previously disclosed to City in writing,there is no litigation
pending or, to the knowledge of the Guarantor, threatened by or before any tribunal against or
affecting the Guarantor that would have a material adverse impact on Guarantor's ability to
perform its obligations hereunder; (f) all financial statements and information heretofore furnished
to City by the Guarantor do, and all financial statements and information hereafter furnished to
City by the Guarantor will, fully and accurately present the condition (financial or otherwise) of
Guarantor as of their dates and the results of the Guarantor's operations for the periods therein
specified, and, since the date of the most recent financial statements of the Guarantor heretofore
furnished to City, no material adverse change has occurred in the financial condition of the
Guarantor, nor, except as heretofore disclosed in writing to City, has the Guarantor incurred any
material liability, direct or indirect, fixed or contingent that would materially adversely affect
Guarantor's ability to perform obligations hereunder; (g) after giving effect to this Guaranty, the
Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the
property of the Guarantor is an unreasonably small capital, and does not intend to incur or believe
that it will incur debts that will be beyond its ability to pay as such debts mature; (h) the Guarantor
has read and fully understands the provisions contained in the DDA and the Other Agreements.
The Guarantor's representations, warranties and covenants are a material inducement to City to
consent to the Assignments and shall survive the execution hereof and any bankruptcy,foreclosure,
transfer of security or other event affecting any Obligor, any other Person, or any security for all
or any part of the Guaranteed Obligations.
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Section 14. Notices.
All notices, requests, consents, demands and other communications required or which any
party desires to give hereunder or under the DDA shall be in writing and, unless otherwise
specifically provided in the DDA, shall be deemed sufficiently given or furnished if delivered by
personal delivery,by nationally recognized overnight courier service, or by certified United States
mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this
Guaranty or in the DDA (unless changed by similar notice in writing given by the particular party
whose address is to be changed) or by facsimile.
Notice to Guarantor shall be delivered to the following addresses:
Guarantor: Brookfield Residential US LLC
c/o Brookfield Residential
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Attn: Nicole Burdette, Senior Vice President
Facsimile: 714-200-1872
Email: Nicole.Burdette@brookfieldrp.com
And with a copy to: Brookfield Residential US LLC
c/o Brookfield Residential
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Attn: Rick Whitney, Senior Vice President
Facsimile No.: 714-200-1813
Email: Rick.Whitney@brookfieldrp.com
With a copy to: Timothy L. Randall, Esq.
Songstad Randall Coffee & Humphrey LLP
3200 Park Center Drive, Suite 950
Costa Mesa, California 92626
Facsimile No.: (949) 757-1613
Email: TRandall@SR-Firm.com
Any notice or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of facsimile,upon receipt; provided that
service of a notice required by any applicable statute shall be considered complete when the
requirements of that statute are met. Notwithstanding the foregoing,no notice of change of address
shall be effective except upon actual receipt. This Section shall not be construed in any way to
affect or impair any waiver of notice or demand provided in this Guaranty, the DDA or the Other
Agreements or to require giving of notice or demand to or upon any Person in any situation or for
any reason.
Section 15. Cumulative Rights.
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All of the rights and remedies of City under this Guaranty, the Secured Obligations
Guaranty, the DDA and the Other Agreements are cumulative of each other and of any and all
other rights at law or in equity, and the exercise by City of any one or more of such rights and
remedies shall not preclude the simultaneous or later exercise by City of any or all such other rights
and remedies. No single or partial exercise of any right or remedy shall exhaust it or preclude any
other or further exercise thereof, and every right and remedy may be exercised at any time and
from time to time. No failure by City to exercise, or delay in exercising, any right or remedy shall
operate as a waiver of such right or remedy or as a waiver of any Material Default. No notice to
or demand on Guarantor in any case shall of itself entitle Guarantor to any other or further notice
or demand in similar or other circumstances. No provision of this Guaranty or any right or remedy
of City with respect hereto, or any default or breach, can be waived, nor can this Guaranty or
Guarantor be released or discharged in any way or to any extent, except specifically in each case
by a writing intended for that purpose (and which refers specifically to this Guaranty) executed
and delivered by City to the Guarantor.
Section 16. Subrogation.
Guarantor shall not have any right of subrogation under the DDA or the Other Agreements
or any right to participate in any security for the Guaranteed Obligations or any right to
reimbursement, exoneration, contribution, indemnification or any similar rights, until the
Guaranteed Obligations have been fully and finally discharged in accordance with Section 2.3
above, and Guarantor hereby waives all of such rights. Guarantor not shall not exercise any rights
that it may acquire by way of subrogation under this Guaranty, by virtue of any payment made
hereunder or otherwise, until all the Guaranteed Obligations have been paid or performed in full.
The Guaranteed Obligations will not be deemed to be "paid or performed in full" (whether
expressed as such or in words to similar effect) until the expiration of two years and one day
(without the filing of any bankruptcy, dissolution,reorganization, or insolvency proceedings by or
against either the Guarantor or Developer during such period) after such payment and/or
performance ("Expiration Date"). If any amount is paid to Guarantor on account of such
subrogation rights before the Guaranteed Obligations have been paid or performed in full, the
amount will be held in trust for the benefit of City and will immediately be paid to City to be
credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in such
order as City, in its sole and absolute discretion, determines. Until the Guaranteed Obligations are
paid or performed in full, any indebtedness of any Obligor to Guarantor is hereby subordinated to
all obligations and liabilities of the Obligors to City arising out of or related to the DDA.
Section 17. Time of Essence.
Time shall be of the essence in this Guaranty with respect to all of Guarantor's obligations
hereunder.
Tustin Brookfield Form A&R Guaranty(unsecured Schedule 1 City of Tustin/Brookfield Homes Por.
obl.)Aft 14D 12-03-21(HM)FINAL Attachment 14D(New) Parcels 2C and 8
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Section 18. Bankruptcy of Obligor.
The obligations of Guarantor under this Guaranty will continue to be effective, or be
automatically reinstated: (a) if the performance or the payment, in whole or in part, of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned by City (as a
preference, fraudulent conveyance or otherwise) upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of City, the Guarantor, any Obligor or any other Person, or(b) upon
or as a result of the appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to any Obligor, Guarantor, or any other Person, or any substantial part of its
property, or otherwise, all as though such payments had not been made. If a Default has occurred
and continues or exists under or with respect to the DDA or if any default occurs under this
Guaranty or with respect to any of the Guaranteed Obligations at such time as City is prevented
by reason of the pendency against the Guarantor, any Obligor or any other Person of a case or
proceeding under a bankruptcy or insolvency law, Guarantor agrees that this Guaranty and the
Guaranteed Obligations will be deemed to have been declared in default or accelerated with the
same effect as if this Guaranty and the Guaranteed Obligations had been declared in default and
accelerated in accordance with their respective terms. Guarantor will immediately perform or pay
the Guaranteed Obligations as required under this Guaranty without further notice or demand.
Section 19. Entire Agreement; Counterparts; Construction.
This Guaranty embodies the entire agreement between City and the Guarantor with respect
to the guaranty by the Guarantor of the Guaranteed Obligations. This Guaranty supersedes all
prior agreements and understandings, if any, with respect to the guaranty by the Guarantor of the
Guaranteed Obligations. This Guaranty shall be effective upon execution by the Guarantor and
delivery to City. This Guaranty may not be modified, amended or superseded except in a writing
signed by City and the Guarantor referencing this Guaranty by its date and specifically identifying
the portions hereof that are to be modified, amended or superseded. This Guaranty has been
executed in a number of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement. As used herein, the words
"include" and"including" shall be interpreted as if followed by the words"without limitation."
{Signatures appear on the following page)
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obl.)Aft 14D 12-03-21(HM)FINAL Attachment 14D(New) Parcels 2C and 8
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IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of the date
first written above, and City has consented to the amendment and restatement of the Original
Guaranty in accordance with the foregoing terms.
BROOKFIELD RESIDENTIAL US LLC, a Delaware
limited liability company
By:
Name:
Title:
By:
Name:
Title:
ACCEPTED AND AGREED AS TO SECTIONS
6.2 AND 8 OF THIS GUARANTY ONLY:
BROOKFIELD HOMES SOUTHERN CALIFORNIA LLC,
a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
(signatures continued on following page)
Tustin Brookfield Form A&R Guaranty(unsecured Schedule 1 City of Tustin/Brookfield Homes Por.
obl.)Aft 14D 12-03-21(HM)FINAL Attachment 14D(New) Parcels 2C and 8
S-1
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AMENDMENT AND RESTATEMENT
CONSENTED TO:
CITY OF TUSTIN:
By:
Matthew S. West,
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Hepner& Myers LLP
Special Real Estate Counsel to the
City
By:
Amy E. Freilich
Tustin Brookfield Form A&R Guaranty(unsecured Schedule 1 City of Tustin/Brookfield Homes Por.
obl.)Aft 14D 12-03-21(HM)FINAL Attachment 14D(New) Parcels 2C and 8
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SCHEDULE 2 TO SECOND AMENDMENT TO DDA
ATTACHMENT 14E
AMENDED AND RESTATED GUARANTY (SECURED OBLIGATIONS)
[see attached]
Tustin Brookfield 2nd Am to DDA 12-04-21 Schedule 2 City of Tustin/Brookfield Homes
(TIM)FINAL Attachment 14E(New) Por.Parcels 2C and 8
Second Amendment to DDA
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ATTACHMENT 14E
FORM OF AMENDED AND RESTATED GUARANTY
(Secured Obligations)
This AMENDED AND RESTATED GUARANTY (this "Guaranty") is made as of the
day of , 2021 ("Effective Date"),by BROOKFIELD RESIDENTIAL US LLC,
a limited liability company formed under the laws of the State of Delaware ("Guarantor"), in
favor of the CITY OF TUSTIN, a public body, corporate and politic ("City").
RECITALS
A. Brookfield Homes Southern California LLC, a Delaware limited liability company
("Developer")and City have entered into that certain Tustin Legacy Disposition and Development
Agreement for Portions of Disposition Parcels 2C and 8,dated as of December 17,2019,including
all Attachments thereto (the "Original DDA"), as amended by that certain First Amendment to
Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C
and 8 dated as of June 2, 2020 ("First Amendment") and by that certain Second Amendment to
Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C
and 8, dated as of , 2021 ("Second Amendment"; the Original DDA, as amended by the
First Amendment and the Second Amendment collectively, as the same may be further amended,
updated or modified from time to time, are referred to as "DDA") under which Developer has
acquired certain real property as more particularly described in the DDA ("Real Property") and
certain additional rights that together with the Real Property comprise the Property (as defined in
the DDA). The Property is also subject to the Profit Participation Agreement referred to in the
DDA and portions of the Property are subject to the lien of the City Deed of Trust referred to in
the DDA. Initially capitalized terms used and not defined herein shall have the meanings set forth
in the DDA; the term "Other Agreements" as used in this Guaranty means the "Other
Agreements" as that term is defined in the DDA, but, for the purposes of this Guaranty, not
including the Profit Participation Agreement or the City Deed of Trust. Wherever in this Guaranty
reference to a Section of the DDA is made, such reference shall be to the text of that Section in the
Original DDA as the text of that Section has been amended, if at all, by the text of the First
Amendment or the Second Amendment(or both).
B. Pursuant to the Profit Participation Agreement, Developer has agreed, among other
things,to pay to City certain amounts from the proceeds of the sale of portions of the Real Property.
The obligations of Developer under the Profit Participation Agreement are secured by the lien on
portions of the Real Property created by the City Deed of Trust.
C. In connection with Developer's acquisition of the Property, and as required by the
DDA, Guarantor executed in favor of City that certain Guaranty, dated September 15, 2021 (the
"Original Guaranty"). The Original Guaranty included, as part of the obligations guaranteed
thereunder,the obligations of the Developer under the Profit Participation Agreement and the City
Deed of Trust. As of the Effective Date, and after giving effect to this Guaranty, only the
obligations under the Profit Participation Agreement and the City Deed of Trust will be guaranteed
under this Guaranty, and all other obligations secured by the Original Guaranty will instead be
separately guaranteed under the Amended and Restated Guaranty (Unsecured Obligations) dated
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obl.) Att 14E 12-03-21(HM)FINAL Attachment 14E(New) Parcels 2C and 8
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the Effective Date(the"Unsecured Obligations Guaranty"),made by the Guarantor with respect
to such other obligations.
D. With the consent of City,Developer has entered into three [Transferee]Assignment
and Assumption Agreements, each dated the Effective Date (the "Assignments"), in favor of,
respectively Brookfield Tustin , LLC, Brookfield Tustin , LLC, and
Brookfield Tustin , LLC (collectively, "Transferees"), under the terms of which
Assignments, Transferees have acquired title to portions of the Property and have jointly and
severally assumed Developer's obligations under the DDA and the Other Agreements, the Profit
Participation Agreement and the City Deed of Trust.' Developer and Transferees are referred to
collectively as "Obligors.")
E. Guarantor directly or indirectly owns 100% of Obligors and thus has a direct and
substantial interest in Obligors and will derive benefit from owning the Property and the
development of the Project, including the sale of residential units on the Property. Guarantor will
also derive a direct and substantial benefit by guaranteeing Obligors' obligation to undertake the
actions with respect to the Property required of Obligors under the DDA, including providing this
Guaranty, inasmuch as the City would not have consented to the Assignments in the absence of
Guarantor undertaking such obligations.
AGREEMENT
For good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce City to consent to the Assignments, City has required that
the Guarantor amend and restate the Original Guaranty as provided in this Guaranty and the
Unsecured Obligations Guaranty. With respect to all of the Guaranteed Obligations (as that term
is defined below), the Original Guaranty is hereby amended and restated in its entirety in
accordance with the following terms of this Guaranty. In accordance with the Unsecured
Obligations Guaranty,the Original Guaranty is also being amended and restated as of the Effective
Date with respect to the obligations of the Obligors constituting "Guaranteed Obligations" as that
term is defined in the Unsecured Obligations Guaranty, it being the mutual intention of Guarantor
and City that all of the obligations originally guaranteed by the Original Guaranty will be
guaranteed by the Guarantor either under the terms of this Guaranty or the Unsecured Obligations
Guaranty. The Guarantor hereby makes the guaranties, obligations, covenants and agreements set
forth below in this Guaranty.
Section 1.Guaran1y.
1.1 Payment and Performance Obligations. The Guarantor absolutely and
unconditionally guarantees all payment and performance obligations of the Obligors arising under
Profit Participation Agreement and the City Deed of Trust (collectively, "Payment and
Performance Obligations").
1 NOTE TO DRAFT: This draft assumes that all of the proposed assignments will be entered into
on the same day, and that day will be the Effective Date under this instrument. If that assumption
is not correct, this document will be modified accordingly.
Tustin Brookfield Form A&R Guaranty(secured Schedule 2 City of Tustin/Brookfield Homes Por.
obl.) Att 14E 12-03-21(HM)FINAL Attachment 14E(New) Parcels 2C and 8
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1.2 Payment of Enforcement Costs. In addition to its obligations in
Section 1.1, the Guarantor agrees to pay all costs and expenses incurred by City, including
reasonable attorneys' fees and costs, court costs and all other litigation expenses (including
reasonable expert witness fees, costs of depositions and other discovery, travel expenses, exhibit
preparation, and courier, postage, communication and document copying expenses), in enforcing
this Guaranty(the"Enforcement Payment Obligation"). The provisions of this Section 1.2 shall
survive the termination of this Guaranty.
1.3 Guaranteed Obligations. "Guaranteed Obligations"means the Payment
and Performance Obligations and the Enforcement Payment Obligation. For the avoidance of
doubt, the obligations described in the definitions of Payment and Performance Obligations, and
Enforcement Payment Obligation are included within the definition of the term "Guaranteed
Obligations" regardless of any duplication in the obligations described in such definitions, and
whether the character of such obligations could be described as for payment,performance, or both.
Section 2.No Discharge. It is the intent of the Guarantor and City that the obligations and
liabilities of the Guarantor hereunder are absolute, irrevocable and unconditional under any and
all circumstances and that until the Guaranteed Obligations are fully and finally performed, the
obligations and liabilities of Guarantor hereunder shall not be discharged or released, in whole or
in part, by any act or occurrence that might, but for the provisions of this Guaranty, be deemed a
legal or equitable discharge or release of a guarantor. The Guaranteed Obligations shall be deemed
to be fully and finally performed for purposes of this Guaranty and this Guaranty shall terminate
only on the later of(a) the Expiration Date (defined in Section 16) and (b) the date on which the
Certificate of Completion is recorded by the City with respect to the Project.
Section 3.Absolute, Irrevocable and Unconditional Guaranty.
3.1 Irrevocable Guaranty. This Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and performance. This Guaranty shall be effective as a waiver
of, and the Guarantor hereby expressly waives, any right to which the Guarantor may otherwise
have been entitled, whether now existing under statute, at law or in equity, or arising under any
statute enacted after the date hereof or arising under any doctrine of law or equity promulgated
after the date hereof to require City to take prior recourse or proceedings against any collateral,
security or Person. It shall not be necessary for City, in order to enforce such payment or
performance by the Guarantor, first to institute suit or pursue or exhaust any rights or remedies
against any Obligor or any other Person liable on such indebtedness or for such performance, or
to enforce any rights against any security given to secure such indebtedness or performance, or to
join any Obligor or any other Person liable for the performance of the Guaranteed Obligations or
any part thereof in any action to enforce this Guaranty, or to resort to any other means of obtaining
performance of the Guaranteed Obligations.
3.2 Demand Against the Guarantor. City may bring suit or make a demand
against any Obligor or against Guarantor or any other parties who have signed this Guaranty or
any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or
more of them, separately or together, without impairing the rights of City against Guarantor.
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obl.) Att 14E 12-03-21(HM)FINAL Attachment 14E(New) Parcels 2C and 8
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3.3 Independent Guaranty. The obligations of the Guarantor under this
Guaranty are independent of, and in addition to,the obligations and liabilities of any Obligor under
the Profit Participation Agreement and the City Deed of Trust. This Guaranty is independent of
(and shall not be limited by) any other guaranty now existing or hereafter given by Guarantor, or
any other Person, under or in connection with the Profit Participation Agreement or the City Deed
of Trust. The liability of the Guarantor under this Guaranty is in addition to any and all other
liability the Guarantor may have in any other capacity with respect to any Obligor, including, if
applicable, any direct or indirect ownership or control of any debt and/or equity securities of any
Obligor or any Controlling Person of any Obligor.
Section 4.Certain Agreements and Waivers by the Guarantor.
4.1 Waivers. Guarantor agrees that(a)neither City's rights or remedies nor the
Guarantor's obligations under the terms of this Guaranty shall be released, diminished, impaired,
reduced or affected by any one or more of the following events, actions, facts, or circumstances,
(b) Guarantor waives any rights, claims or defenses arising from any such events, actions, facts,
or circumstances, and (c)the liability of Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) any limitation on the liability of, or recourse against, any
other Person, including City, in the Profit Participation Agreement or the City Deed of Trust or
arising under any law;
(b) any claim or defense that this Guaranty was made without
consideration or is not supported by adequate consideration or that the obligations of the Guarantor
hereunder exceed or are more burdensome than those of the Obligors under the Profit Participation
Agreement or the City Deed of Trust;
(c) the taking or accepting of any other security or guaranty for,
or right of recourse with respect to, any or all of the Guaranteed Obligations;
(d) any homestead exemption or any other exemption under
applicable law;
(e) any release, surrender, abandonment, exchange, alteration,
sale or other disposition, subordination, deterioration, waste, failure to protect or preserve,
impairment, or loss of, or any failure to create or perfect any lien or security interest with respect
to, or any other dealings with, any collateral or security at any time existing or purported,believed
or expected to exist in connection with any or all of the Guaranteed Obligations, or any impairment
of the Guarantor's recourse against any Person or collateral;
(f) whether express or by operation of law, any partial release
of the liability of Guarantor hereunder (except to the extent expressly so released by City with
respect to this Guaranty) or any complete or partial release of any Obligor or any other Person
liable, directly or indirectly, for the performance of any or all of the Guaranteed Obligations;
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(g) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of any
Obligor or any other Person at any time liable for the performance of any or all of the Guaranteed
Obligations;
(h) the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of
Guarantor or its successors or assigns;
(i) either with or without notice to or consent of Guarantor, any
renewal, extension, modification, supplement, subordination or rearrangement of the terms of any
or all of the Guaranteed Obligations and/or the Profit Participation Agreement or the City Deed of
Trust or any other agreements that may have been executed by any Obligor, City or any third party
affecting the obligations of any Obligor or City under the Profit Participation Agreement or the
City Deed of Trust, or performance of any other terms thereof, or any waiver, termination, or
release of, or consent to departure from, any of the Profit Participation Agreement or the City Deed
of Trust, any other agreements that may have been executed by any Obligor,City or any third party
affecting the obligations of any Obligor or City under the Profit Participation Agreement or the
City Deed of Trust or any other guaranty of any or all of the Guaranteed Obligations, or any
adjustment, indulgence,forbearance, or compromise that may be granted from time to time by City
to any Obligor or to any other Person at any time liable for the payment or performance of any or
all of the Guaranteed Obligations;
0) any neglect, lack of diligence, delay, omission, failure, or
refusal of City to take or prosecute (or in taking or prosecuting) any action for the collection or
enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action
to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security
therefor, or to exercise (or in exercising) any other right or power with respect to any security
therefor, or to take or prosecute (or in taking or prosecuting), or any failure to sell or otherwise
dispose of in a commercially reasonable manner any collateral securing any or all of the
Guaranteed Obligations;
(k) any failure of City to notify Guarantor of any creation,
renewal, extension,rearrangement,modification, supplement, subordination, or assignment of the
Profit Participation Agreement or the City Deed of Trust or any of the Guaranteed Obligations or
any part thereof, or of any release of or change in any security, or of the occurrence or existence
of any Material Default, or of any other action taken or refrained from being taken by City against
any Obligor or any security or other recourse, or of any new agreement between City and any
Obligor, it being understood that except as expressly set forth in this Guaranty, City shall not be
required to give Guarantor any notice of any kind under any circumstances with respect to or in
connection with the Guaranteed Obligations, any and all rights to other notice Guarantor may have
otherwise had being hereby waived by the Guarantor, and except for notices(s) expressly required
to be delivered to Guarantor under this Guaranty, Guarantor shall be responsible for obtaining for
itself information regarding any Obligor and any collateral, including any changes in the business
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or financial condition of the Obligors or any collateral, and Guarantor acknowledges and agrees
that City shall have no duty to notify Guarantor of any information which City may have
concerning any Obligor or any collateral;
(1) the existence of any claim, counterclaim, set-off or other
right that Guarantor may at any time have against any Obligor, or any other Person (except City),
whether or not arising in connection with this Guaranty, the Profit Participation Agreement, or the
City Deed of Trust;
(m) the unenforceability of all or any part of the Guaranteed
Obligations against any Obligor, whether because the Guaranteed Obligations exceed the amount
permitted by law or violate any usury or other law(subject to the provisions of Section 12 below),
or because the Persons creating the Guaranteed Obligations acted in excess of their authority, or
because of a lack of validity or enforceability of or defect or deficiency in the Profit Participation
Agreement or the City Deed of Trust, or because any Obligor has any valid defense,claim or offset
with respect thereto, or because any Obligor's obligation ceases to exist by operation of law, or
because of any other reason or circumstance, it being agreed that Guarantor shall remain liable
hereon regardless of whether Developer or any other Person be found not liable on the Guaranteed
Obligations, or any part thereof, for any reason (and regardless of any joinder of any Obligor or
any other Person in any action to obtain payment or performance of any or all of the Guaranteed
Obligations);
(n) any order, ruling or plan of reorganization emanating from
proceedings under Title 11 of the United States Code with respect to any Obligor or any other
Person, including any extension, reduction, composition, or other alteration of the Guaranteed
Obligations, whether or not consented to by City, or any action taken or omitted by City in any
such proceedings, including any election to have City's claim allowed as being secured, partially
secured or unsecured, any extension of credit by City in any such proceedings or the taking and
holding by City of any security for any such extension of credit;
(o) any other condition,event,omission, action that would in the
absence of the provisions of this Section 4 result in the release or discharge of Guarantor from the
performance or observance of any obligation, covenant or agreement contained in this Guaranty
or any other agreement;
(p) except as provided in this Guaranty, any notice to Guarantor
of the existence of or the extending to any Obligor of any grace or cure period for the performance
of any of the Guaranteed Obligations or any failure to provide notice thereof,
(q) any defense of waiver, release, discharge in res judicata,
statute of frauds, fraud, or ultra vires acts that may be available to any Obligor in respect of the
Profit Participation Agreement or the City Deed of Trust;
(r) to the fullest extent permitted by law: (A) any defense
arising as a result of City's election, in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code; and (B)without limiting the
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generality of any other provision hereof, all rights and benefits that might otherwise be available
to Guarantor under any guarantor, suretyship or other defenses under any law of the State of
California or otherwise (including California Civil Code Sections 2787 through 2855, inclusive,
2899 and 3433); including any rights of subrogation, reimbursement, indemnification, or
contribution and any other rights and defenses that are or may become available to the Guarantor
by reason of such provisions of the California Civil Code;
(s) the benefit of any statute of limitations affecting the liability
of any Obligor under the Profit Participation Agreement or the City Deed of Trust;
(t) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Obligor in respect of the Guaranteed Obligations or
Guarantor in respect of this Guaranty; and/or
(u) any early termination of any of the Guaranteed Obligations,
except as expressly agreed to in writing by City.
4.2 Additional Waivers.
4.2.1 Without limiting any of the waivers contained in Section 4.1,
Guarantor waives all rights and defenses that the Guarantor may have because some or all of
Developer's obligations may be, or may be deemed to be, secured by real property. This means,
among other things:
(a) City may collect from Guarantor without first foreclosing on
any real or personal property collateral pledged by any Obligor.
(b) If City forecloses on any real property collateral pledged by
any Obligor: (i)the amount of the obligation owed to City may be reduced only by the net price
for which that collateral is sold at the foreclosure sale or proceedings, even if the collateral is worth
more than the sale price and (ii) City may collect from Guarantor even if City, by foreclosing on
the real property collateral,has destroyed any right the Guarantor may have to collect from the any
Obligor.
This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have
because the Guaranteed Obligations may be, or may be deemed to be, secured by real property.
These rights and defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580a, 580d, or 726 of the California Code of Civil Procedure.
4.2.2 Without limiting any of the waivers contained in Section 4.1,
Guarantor hereby waives any rights it might otherwise have had to assert any defense based upon
rights of subrogation, reimbursement, indemnification, and contribution and any other rights and
defenses that are or may become available to the Guarantor or that Guarantor may have in respect
of his or her obligations as a guarantor by reason of Sections 2787 to 2855, inclusive, as well as
Sections 2899 and 3433 of the California Civil Code or by reason of any election of remedies by
the creditor.
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4.2.3 Guarantor also hereby waives any rights or defenses the Guarantor
may otherwise have had in respect of Guarantor's obligations as a guarantor or other surety by
reason of any election of remedies by City, as well as any rights or defenses Guarantor may
otherwise have had because any Obligor's obligations may be or may be deemed to be secured by
real property or an estate for years. These waived rights or defenses include, but are not limited
to, any rights or defenses that are based upon, directly or indirectly, the application of Section
580a, 580b, 580d, or 726 of the Code of Civil Procedure to the principal's note or other obligation.
4.2.4 Also without limiting the generality of any other waiver or provision
contained in this Guaranty, Guarantor hereby waives any and all benefits and/or defenses under
California Civil Code Sections 2899 and 3433, Chapter 2 of Title 14 of the California Civil Code
and California Commercial Code Section 3605.
4.3 Preferences. In the event any payment by any Obligor or any other Person
to City is held to constitute a preference, fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other reason City is required to refund such
payment or pay the amount thereof to any other Person, such payment by an Obligor or any other
Person to City shall not constitute a release of Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release,
surrender or discharge by City of this Guaranty or of the Guarantor or the prior expiration of this
Guaranty), as the case may be, with respect to, and this Guaranty shall apply to, any and all
amounts so refunded by City or paid by City to another Person (which amounts shall constitute
part of the Guaranteed Obligations), and any interest paid by City and any attorneys' fees, costs
and expenses paid or incurred by City in connection with any such event.
4.4 Defenses. Guarantor waives all rights and defenses arising out of an
election of remedies by City,including exercise by City of its Right of Reversion upon occurrence
of a Reversion Event or a repurchase of the Property pursuant to City's Right of Purchase, even
though such election of remedies may have destroyed such Guarantor's rights of subrogation and
reimbursement against any Obligor by operation of California Code of Civil Procedure
Section 580d or otherwise.
4.5 Anti-Deficiency Waivers. Guarantor waives (a) any defenses the
Guarantor may have by reason of an election of remedies by City, and (b) any rights or defenses
the Guarantor may have by reason of protection afforded to any Obligor with respect to the
Guaranteed Obligations pursuant to the anti-deficiency or other laws of California limiting or
discharging any Obligor's obligations, including California Code of Civil Procedure
Sections 580a, 580b, 580d or 726.
4.6 Waiver of Notice of Acceptance. Guarantor waives notice of acceptance
of this Guaranty.
4.7 No Limitation on Waivers. No provision or waiver in this Guaranty shall
be construed as limiting the generality of any other provision or waiver contained in this Guaranty.
All of the waivers contained herein are irrevocable and unconditional and are intentionally and
freely made by the Guarantor.
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Section 5.Subordination.
If, for any reason whatsoever, any Obligor is now or hereafter becomes indebted, directly
or indirectly to Guarantor including by operation of California Civil Code Sections 2847 and 2848,
or any successor statutes or similar law (any such indebtedness being referred to as the
"Subordinated Debt"):
(a) The Subordinated Debt and all interest thereon and all liens,
security interests and rights now or hereafter existing with respect to property of any Obligor
securing the Subordinated Debt shall, at all times,be subordinate in all respects to the Guaranteed
Obligations and to all liens, security interests and rights now or hereafter existing to secure the
Guaranteed Obligations, until the Guaranteed Obligations have been paid or performed in full;
(b) In the event of receivership, bankruptcy, reorganization,
arrangement or other debtor relief or insolvency proceedings involving any Obligor as debtor, City
shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder
and shall have the right to receive directly from the receiver, trustee or other custodian, dividends
and payments that are payable upon any obligation of such Obligor to the Guarantor now existing
or hereafter arising, and to have all benefits of any security therefor, until the Guaranteed
Obligations have been fully and finally performed; and
(c) Guarantor shall promptly upon request of City from time to
time execute such documents and perform such acts as City may require to evidence and perfect
its interest and to permit or facilitate exercise of its rights under this Section 5,including execution
and delivery of proofs of claim, further assignments and security agreements, and delivery to City
of any promissory notes or other instruments evidencing indebtedness of one or more of the
Obligors to the Guarantor. All promissory notes, accounts receivable ledgers or other evidences,
now or hereafter held by Guarantor, of obligations of any Obligor to Guarantor shall contain a
specific written notice thereon that the indebtedness evidenced thereby is subordinated under and
is subject to the terms of this Guaranty; and
(d) If, notwithstanding the foregoing provisions in this
Section 5, Guarantor should receive any payment, claim or distribution that is prohibited as
provided above in this Section 5, Guarantor shall pay the same to City immediately,the Guarantor
hereby agreeing that it shall receive the payment, claim or distribution in trust for City and shall
have absolutely no dominion over the same except to pay it immediately to City.
Section 6.Other Liability of the Guarantor or Obligors.
6.1 Other Liability. If Guarantor is or becomes liable, by endorsement or
otherwise, for any indebtedness owing by any Obligor to City other than under this Guaranty
(including, without limitation, the Unsecured Obligations Guaranty), such liability shall not be in
any manner impaired or affected hereby, and the rights of City hereunder shall be cumulative of
any and all other rights that City may have against the Guarantor. If any Obligor is or becomes
obligated to City for any liabilities or indebtedness other than or in excess of the Guaranteed
Obligations, any payment received or recovery realized upon such other liabilities or indebtedness
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of Developer to City may be applied by City to such other liabilities or indebtedness.
6.2 Net Worth and Liquidity Covenants.
(a) Guarantor shall maintain sufficient Net Worth to fully
discharge its obligations under this Guaranty. As of the Effective Date, Guarantor has, and during
the term of this Guaranty shall maintain, a Net Worth of not less than Three Hundred Million
Dollars ($300,000,000.00) ("Minimum Assets Standards") as determined on the last day of each
fiscal quarter of Guarantor. As used in this Guaranty, the term "Net Worth" shall mean the net
worth of Guarantor or Equity Investor which shall be determined based on(x) the fair market value
of the assets of each of the Persons comprising Guarantor (including the aggregate amount of
uncalled capital commitments from Guarantor's direct and/or indirect limited partners, and
intangible assets including goodwill, intellectual property, licenses, organizational costs, deferred
amounts,covenants not to compete,unearned income,restricted funds, investments in subsidiaries
or other Affiliates, intercompany receivables and accumulated depreciation), less (y) all liabilities
of the Persons comprising Guarantor(as determined in accordance with GAAP).
(b) Guarantor shall be required to deliver to City: (i) within
ninety (90) calendar days following June 30 of each year, a complete copy of Guarantor's annual
audited financial statements prepared by an independent accountant (provided however, that
audited statements shall be provided within sixty (60) calendar days of City's request therefor
during the existence of a Material Default by any Obligor under the DDA), in each case together
with a certification that the same fairly presents in all material respects the information set forth
therein and does not intentionally omit any material facts necessary to make the information set
forth therein true in all material respects and not intentionally misleading in any material respect;
and(ii)within sixty (60)calendar days following the end of each partial or whole calendar quarter,
a certification from an authorized officer of Guarantor stating Guarantor's Net Worth. In the event
that Guarantor is the subject of any of the events or actions described in Section 2.2.5 of the DDA
or in the event that Guarantor fails to comply with the requirements set forth in this Section 6.2
(each, a "Guarantor Illiquidity Event"), Guarantor shall notify City in writing within five (5)
Business Days following Guarantor's knowledge that a Guarantor Illiquidity Event has occurred.
City shall have the right, but not the obligation, to provide written notice to Developer and
Guarantor of the occurrence of a Guarantor Illiquidity Event and the provision of such notice shall
constitute a declaration by City of a Developer Potential Default under the DDA and a declaration
of a default under this Guaranty.
(c) Within thirty (30) calendar days following the provision of
notice of the occurrence of a Guarantor Illiquidity Event by Guarantor or Developer to City or by
City to Developer and Guarantor, Guarantor shall supplement its Net Worth to meet the Minimum
Asset Standards or shall provide additional security satisfactory to City. Failure of Guarantor to
provide substitution of security to City within such thirty(30)calendar day period shall be a default
under this Guaranty.
Section 7.City Assigns; Disclosure of Information.
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This Guaranty is for the benefit of City and City's successors and assigns, and in the event
of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred
with such Guaranteed Obligations. Guarantor waives notice of any transfer or assignment of the
Guaranteed Obligations or any part thereof.
Section 8.BindingE , Successor and Assigns.
This Guaranty is binding not only on the Guarantor,but also on the Guarantor's successors
and assigns. Guarantor covenants and agrees that it will not attempt to assign or delegate any of
its obligations under this Guaranty without the prior written consent of City, which may be
withheld by City in its sole and absolute discretion. Any attempt to assign or delegate any of
Guarantor's obligations under this Guaranty without City's prior written approval in City's sole
discretion shall not operate as a release of the Guarantor of any of its obligations. Guarantor further
covenants and agrees that any sale or transfer or any attempted sale or transfer of assets or
undertaking any other transaction that would reasonably be expected to reduce the net worth of
Guarantor to less than Three Hundred Million Dollars will constitute a default under this Guaranty
and will also constitute a default by Developer under the DDA.
Section 9.Governing Law.
The validity,enforcement, and interpretation of this Guaranty, shall for all purposes
be governed by and construed in accordance with the laws of the State of California (without
regard to its conflicts of law principles) and applicable United States federal law, and is intended
to be performed in accordance with, and only to the extent permitted by, such laws. The Guarantor
and City agree that any disputes arising between them in connection with this Guaranty or in
connection with or under any instrument, agreement or document provided for or contemplated by
this Guaranty, including in connection with the execution of this Guaranty, the Guaranteed
Obligations or any other matter arising under, related to or in connection with this Guaranty
(including a determination of any and all issues in such dispute,whether of fact or of law) shall be
tried and litigated exclusively in the Superior Court of the County of Orange, State of California,
in any other appropriate court of that county, or in the United States District Court for the Central
District of California. This choice of venue is intended by the Guarantor and City to be mandatory
and not permissive in nature, thereby precluding the possibility of litigation between or among
Guarantor and City with respect to or arising out of this Guaranty in any jurisdiction other than
that specified in this Section 9. Each party hereby waives any right that it may have to assert forum
non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section 9, and stipulates that the State and federal courts located in the County
of Orange, State of California, shall have in personam jurisdiction and venue over each of them
for the purpose of litigating any dispute, controversy or proceeding arising out of this Guaranty.
Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in
any action against it as contemplated by this Section 9 by means of registered or certified mail,
return receipt requested,postage prepaid, to its address for the giving of notices as set forth in this
Guaranty, or in the manner set forth below for notices. Any final judgment rendered against a
party in any action or proceeding shall be conclusive as to the subject of such final judgment and
may be enforced in other jurisdictions in any manner provided by law.
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Section 10. Invalidity of Certain Provisions.
If any provision of this Guaranty or the application thereof to any Person or circumstance
shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the
remaining provisions of this Guaranty nor the application of such provision to any other Person or
circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such provision to other Persons or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.
Section 11. Costs and Expenses of Enforcement.
Guarantor agrees to pay to City within fifteen (15) calendar days after written demand all
costs and expenses incurred by City in seeking to enforce City's rights and remedies under this
Guaranty, including court costs, costs of alternative dispute resolution and reasonable attorneys'
fees, whether or not suit is filed or other proceedings are initiated hereon. All such costs and
expenses incurred by City shall constitute a portion of the Guaranteed Obligations hereunder, shall
be subject to the provisions hereof with respect to the Guaranteed Obligations and shall be payable
by the Guarantor In the event of any suit or proceeding to adjudicate or resolve any dispute in
connection with this Guaranty, the prevailing party shall be entitled to recover its reasonable
attorneys' fees which shall be payable regardless of which party is the Prevailing Party, at the
actual contractual hourly rate for City's litigation counsel at the time the fees were incurred, but,
in no event more than $200 per hour and costs, court costs and all other litigation expenses
(including reasonable expert witness fees, costs of depositions and other discovery, travel
expenses, exhibit preparation, and courier, postage, communication and document copying
expenses).
Section 12. No Usury.
It is not the intention of City or the Guarantor to obligate the Guarantor to pay interest in
excess of that lawfully permitted to be paid by the Guarantor under applicable law. Should it be
determined that any portion of the Guaranteed Obligations or any other amount payable by the
Guarantor under this Guaranty constitutes interest in excess of the maximum amount of interest
that the Guarantor, in its capacity as guarantor, may lawfully be required to pay under applicable
law, the obligation of the Guarantor to pay such interest shall automatically be limited to the
payment thereof in the maximum amount so permitted under applicable law. The provisions of
this Section shall override and control all other provisions of this Guaranty and of any other
agreement between the Guarantor and City.
Section 13. Representations; Warranties, and Covenants of the Guarantor. Until the
Guaranteed Obligations are performed in full and each and every term, covenant and condition of
this Guaranty is fully performed, Guarantor hereby represents, warrants, and covenants that:
(a) the Guarantor has a financial interest in the Obligors and will derive a material and substantial
benefit, directly or indirectly, from the development of the Project and from the making of this
Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and
enforceable against the Guarantor subject to the effect of bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights generally and limitations
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imposed by general principles of equity and applicable law; (c)the Guarantor is not, and the
execution, delivery and performance by the Guarantor of this Guaranty will not cause the
Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of
acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound
or affected; (d)the Guarantor is duly organized, validly existing, and in good standing under the
laws of the state of its organization and has full power and authority to enter into and perform this
Guaranty; (e) except as may have been previously disclosed to City in writing,there is no litigation
pending or, to the knowledge of the Guarantor, threatened by or before any tribunal against or
affecting the Guarantor that would have a material adverse impact on Guarantor's ability to
perform its obligations hereunder; (f) all financial statements and information heretofore furnished
to City by the Guarantor do, and all financial statements and information hereafter furnished to
City by the Guarantor will, fully and accurately present the condition (financial or otherwise) of
Guarantor as of their dates and the results of the Guarantor's operations for the periods therein
specified, and, since the date of the most recent financial statements of the Guarantor heretofore
furnished to City, no material adverse change has occurred in the financial condition of the
Guarantor, nor, except as heretofore disclosed in writing to City, has the Guarantor incurred any
material liability, direct or indirect, fixed or contingent that would materially adversely affect
Guarantor's ability to perform obligations hereunder; (g) after giving effect to this Guaranty, the
Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the
property of the Guarantor is an unreasonably small capital, and does not intend to incur or believe
that it will incur debts that will be beyond its ability to pay as such debts mature; (h) the Guarantor
has read and fully understands the provisions contained in the Profit Participation Agreement and
the City Deed of Trust. The Guarantor's representations, warranties and covenants are a material
inducement to City to consent to the Assignments and shall survive the execution hereof and any
bankruptcy,foreclosure,transfer of security or other event affecting any Obligor, any other Person,
or any security for all or any part of the Guaranteed Obligations.
Section 14. Notices.
All notices, requests, consents, demands and other communications required or which any
party desires to give hereunder or under the DDA shall be in writing and, unless otherwise
specifically provided in the DDA, shall be deemed sufficiently given or furnished if delivered by
personal delivery,by nationally recognized overnight courier service, or by certified United States
mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this
Guaranty or in the DDA (unless changed by similar notice in writing given by the particular party
whose address is to be changed) or by facsimile.
Notice to Guarantor shall be delivered to the following addresses:
Guarantor: Brookfield Residential US LLC
c/o Brookfield Residential
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Attn: Nicole Burdette, Senior Vice President
Facsimile: 714-200-1872
Email: Nicole.Burdette@brookfieldrp.com
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And with a copy to: Brookfield Residential US LLC
c/o Brookfield Residential
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Attn: Rick Whitney, Senior Vice President
Facsimile No.: 714-200-1813
Email: Rick.Whitney@brookfieldrp.com
With a copy to: Timothy L. Randall, Esq.
Songstad Randall Coffee & Humphrey LLP
3200 Park Center Drive, Suite 950
Costa Mesa, California 92626
Facsimile No.: (949) 757-1613
Email: TRandall@SR-Firm.com
Any notice or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of facsimile,upon receipt; provided that
service of a notice required by any applicable statute shall be considered complete when the
requirements of that statute are met. Notwithstanding the foregoing,no notice of change of address
shall be effective except upon actual receipt. This Section shall not be construed in any way to
affect or impair any waiver of notice or demand provided in this Guaranty,the Profit Participation
Agreement or the City Deed of Trust or to require giving of notice or demand to or upon any
Person in any situation or for any reason.
Section 15. Cumulative Rights.
All of the rights and remedies of City under this Guaranty, the Unsecured Obligations
Guaranty, the Profit Participation Agreement and the City Deed of Trust are cumulative of each
other and of any and all other rights at law or in equity, and the exercise by City of any one or
more of such rights and remedies shall not preclude the simultaneous or later exercise by City of
any or all such other rights and remedies. No single or partial exercise of any right or remedy shall
exhaust it or preclude any other or further exercise thereof, and every right and remedy may be
exercised at any time and from time to time. No failure by City to exercise, or delay in exercising,
any right or remedy shall operate as a waiver of such right or remedy or as a waiver of any Material
Default. No notice to or demand on Guarantor in any case shall of itself entitle Guarantor to any
other or further notice or demand in similar or other circumstances. No provision of this Guaranty
or any right or remedy of City with respect hereto, or any default or breach, can be waived, nor
can this Guaranty or Guarantor be released or discharged in any way or to any extent, except
specifically in each case by a writing intended for that purpose (and which refers specifically to
this Guaranty) executed and delivered by City to the Guarantor.
Section 16. Subrogation.
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Guarantor shall not have any right of subrogation under the Profit Participation Agreement
or the City Deed of Trust or any right to participate in any security for the Guaranteed Obligations
or any right to reimbursement, exoneration, contribution, indemnification or any similar rights,
until the Guaranteed Obligations have been fully and finally discharged in accordance with
Section 2.3 above,and Guarantor hereby waives all of such rights. Guarantor not shall not exercise
any rights that it may acquire by way of subrogation under this Guaranty,by virtue of any payment
made hereunder or otherwise, until all the Guaranteed Obligations have been paid or performed in
full. The Guaranteed Obligations will not be deemed to be "paid or performed in full" (whether
expressed as such or in words to similar effect) until the expiration of two years and one day
(without the filing of any bankruptcy, dissolution,reorganization, or insolvency proceedings by or
against either the Guarantor or Developer during such period) after such payment and/or
performance ("Expiration Date"). If any amount is paid to Guarantor on account of such
subrogation rights before the Guaranteed Obligations have been paid or performed in full, the
amount will be held in trust for the benefit of City and will immediately be paid to City to be
credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in such
order as City, in its sole and absolute discretion, determines. Until the Guaranteed Obligations are
paid or performed in full, any indebtedness of any Obligor to Guarantor is hereby subordinated to
all obligations and liabilities of the Obligors to City arising out of or related to the Profit
Participation Agreement or the City Deed of Trust.
Section 17. Time of Essence.
Time shall be of the essence in this Guaranty with respect to all of Guarantor's obligations
hereunder.
Section 18. Bankruptcy of Obligor.
The obligations of Guarantor under this Guaranty will continue to be effective, or be
automatically reinstated: (a) if the performance or the payment, in whole or in part, of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned by City (as a
preference, fraudulent conveyance or otherwise) upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of City, the Guarantor, any Obligor or any other Person, or(b) upon
or as a result of the appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to any Obligor, Guarantor, or any other Person, or any substantial part of its
property, or otherwise, all as though such payments had not been made. If a Default has occurred
and continues or exists under or with respect to the DDA or if any default occurs under this
Guaranty or with respect to any of the Guaranteed Obligations at such time as City is prevented
by reason of the pendency against the Guarantor, any Obligor or any other Person of a case or
proceeding under a bankruptcy or insolvency law, Guarantor agrees that this Guaranty and the
Guaranteed Obligations will be deemed to have been declared in default or accelerated with the
same effect as if this Guaranty and the Guaranteed Obligations had been declared in default and
accelerated in accordance with their respective terms. Guarantor will immediately perform or pay
the Guaranteed Obligations as required under this Guaranty without further notice or demand.
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Section 19. Entire Agreement, Counterparts; Construction.
This Guaranty embodies the entire agreement between City and the Guarantor with respect
to the guaranty by the Guarantor of the Guaranteed Obligations. This Guaranty supersedes all
prior agreements and understandings, if any, with respect to the guaranty by the Guarantor of the
Guaranteed Obligations. This Guaranty shall be effective upon execution by the Guarantor and
delivery to City. This Guaranty may not be modified, amended or superseded except in a writing
signed by City and the Guarantor referencing this Guaranty by its date and specifically identifying
the portions hereof that are to be modified, amended or superseded. This Guaranty has been
executed in a number of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement. As used herein, the words
"include" and"including" shall be interpreted as if followed by the words"without limitation."
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of the date
first written above, and City has consented to the amendment and restatement of the Original
Guaranty in accordance with the foregoing terms.
BROOKFIELD RESIDENTIAL US LLC, a Delaware
limited liability company
By:
Name:
Title:
By:
Name:
Title:
ACCEPTED AND AGREED AS TO SECTIONS
6.2 AND 8 OF THIS GUARANTY ONLY:
BROOKFIELD HOMES SOUTHERN CALIFORNIA LLC,
a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
(signatures continued on following page)
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AMENDMENT AND RESTATEMENT
CONSENTED TO:
CITY OF TUSTIN:
By:
Matthew S. West,
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig,
City Attorney
Hepner& Myers LLP
Special Real Estate Counsel to the
City
By:
Amy E. Freilich
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SCHEDULE 3 TO SECOND AMENDMENT TO DDA
ATTACHMENT 17C
FORM OF BUILDER TRANFEREE ASSIGNMENT AGREEMENT
[see attached]
Tustin/Brookfield First Amendment to DDA Schedule 3 City of Tustin/Brookfield Homes
05-22-2020 FINAL Attachment 17C(New) or.Parcels 2C and 8
Second Amendment to DDA
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ATTACHMENT 17C
FORM OF BUILDER TRANSFEREE ASSIGNMENT
AND ASSUMPTION AGREEMENT
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
(Tustin Legacy Portions of Disposition Parcels 2C and 8)
Models'
This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assi n�") is made as of
2021 ("Assignment Effective Date")by and between BROOKFIELD
HOMES SOUTHERN CALIFORNIA LLC, a Delaware corporation ("Initial Developer") and
BROOKFIELD TUSTIN LLC, a Delaware limited liability company ("Transferee"),2
with the consent and for the express benefit of the CITY OF TUSTIN, a municipal corporation of
the State of California("C�"),with reference to the following matters:
A. The City and Initial Developer entered into that certain Tustin Legacy Disposition
and Development Agreement for Portions of Disposition Parcels 2C and 8, dated as of December
17, 2019 ("Original DDA"), as amended by that certain First Amendment to Tustin Legacy
Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8, dated as
of June 2, 2020 ("First Amendment") and by that certain Second Amendment to Tustin Legacy
Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8, dated as
202_ ("Second Amendment", collectively with the Original DDA and the First
Amendment, "DDA"). The DDA contemplates the conveyance from the City to Initial Developer
I Circa,Terra or Luna
2 For Cira Development,Brookfield Tustin Homes LLC Lots 5, 11-19,22-23,30,37-47,54, 57,65-71
For Terra Development,Brookfield Tustin Metro LLC,Lots 1,20-21, 55-56 and 72-73
For Luna.Development,Brookfield Tustin Towns LLC,Lots 2-4,6-10,24-29,31-36,48-53,58-63.
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of that certain real property legally described on Exhibit "A" attached hereto ("Real Property"),
which took place on September 15, 2021, and the subsequent development of the Real Property
by Initial Developer. All initially capitalized terms not otherwise defined in this Assignment shall
have the meanings ascribed to such terms in the DDA. Wherever in this Assignment reference to
a Section of the DDA is made, such reference shall be to the text of that Section in the Original
DDA as amended, if at all by the First Amendment and/or Second Amendment.
B. Initial Developer and the City have entered into the following agreements and
instruments, each dated September 15, 2021:
1. Memorandum of Disposition and Development Agreement for Portions of
Disposition Parcels 2C and 8 ("Memorandum of DDA"), recorded in the Office of the County
Recorder, Orange County, California ("Official Records"), against title to the Real Property on
September 15, 2021, as Instrument No. 2021000576019.
2. Declaration of Special Restrictions for Portions of Disposition Parcels 2C
and 8 ("Special Restrictions"), recorded in the Official Records against title to the Real Property
on September 15, 2021, as Instrument No. 2021000576020.
3. Quitclaim Deed for Portions of Disposition Parcels 2C and 8 and
Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant To Civil
Code Section 1471 ("Quitclaim Deed"), recorded in the Official Records against title to the Real
Property on September 15, 2021 as Instrument No. 2021000576021.
4. Landscape and Water Treatment Installation and Maintenance Agreement
("Landscape and Water Treatment Agreement"), recorded in the Official Records against title to
the Real Property on September 15, 2021, as Instrument No. 2021000576022.
5. Declaration of Restrictions ("Additional Declaration"), recorded in the
Official Records against title to the Real Property on September 15, 2021 as Instrument No.
2021000576023.
6. Profit Participation Agreement("Profit Participation Agreement").
7. Deed of Trust ("Deed of Trust"), recorded in the Official Records against
title to Lots 8 and 11 of Tract Map No. 19103 on September 15, 2021 as Instrument
No. 2021000576024, securing Initial Developer's obligations under the Profit Participation
Agreement.
8. Soil License Agreement dated October 7,2020("Soil License Agreement").
C. Prior to the Close of Escrow, Initial Developer and City entered into the Tustin
Legacy Development Agreement("DA"),recorded in the Official Records against title to the Real
Property on January 21, 2020 as Instrument No. 2020000025200.
D. The DDA, the Memorandum of DDA, the Special Restrictions, the DA, the
Quitclaim Deed, the Landscape and Water Quality Agreement, the Additional Declaration, the
Profit Participation Agreement,the Deed of Trust,the Soil License Agreement, and,when adopted
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and recorded against the Property, the CC&RS, are collectively referred to herein as "Property
Documents".
E. Pursuant to the DDA,Initial Developer agreed to develop and construct on the Real
Property certain Improvements comprising the Project, consisting of the Horizontal
Improvements, the Phase Improvements and the Vertical Improvements, in accordance with the
terms of the DDA including without limitation the Schedule of Performance and Scope of
Development attached thereto. In addition, pursuant to the Property Documents, Initial Developer
undertook certain additional obligations with respect to the Real Property and the Project.
F. The Project described by the DDA contemplates development of three product
types: Cira, Luna and Terra. In order to create single purpose entities for purposes of vertical
construction, marketing and sale of each of these product type residences to the home buying
public, Initial Developer has requested the City's consent to the transfer of portions of the Real
Property to three Developer Affiliates formed for this purpose by Brookfield. As this concept was
not initially contemplated by the DDA, the Parties entered into the Second Amendment to DDA,
which established a process for City to grant consent to each such Transfer. Pursuant to Section 2
of the DDA, a Transfer to a Builder Transferee must include, among other things, the execution
and delivery of an assignment and assumption agreement in the form approved by the City. Initial
Developer and Transferee are entering into this Assignment to fulfill the obligations of
"Developer" (as defined in the DDA) and "Transferee" (as defined in the DDA) under Section 2
of the DDA.
G. Concurrently with the execution and delivery of this Assignment, Initial Developer
is conveying by grant deed to Transferee Lots ("Transfer Parcel")' together
with (1) all appurtenances pertaining to the Transfer Parcel or such improvements, (2) all Phase
Improvements and Horizontal Improvements then constructed thereon (all of which shall be
conveyed to the Homeowners' Association in accordance with the requirements of the CC&Rs
upon completion thereof); (3)the Intangible Property comprised of permits, licenses, approvals
and authorizations issued by any Governmental Authority in connection with the Transfer Parcel
for development of the Vertical Improvements, and (4) the right to construct Homes
(but specifically excluding the matters described in Section 4.1.2 of the DDA) (collectively,
"Transfer Property"), and Transferee will develop the Transfer Parcel in accordance with the
requirements of the DDA, including, without limitation, the Scope of Development and the
Schedule of Performance, and the other Property Documents.
H. Initial Developer is also seeking the consent of the City to convey certain Lots
comprising portions of the Real Property to (and to enter into assignment and assumption
agreements with) two other Developer Affiliates and, under the terms of such assignments, each
such transferee shall acquire title to portions of the Real Property and the right to construct Vertical
Improvements and shall have assumed the obligation to construct Vertical Improvements on such
portions of the Real Property acquired by it and shall have, together with Transferee,jointly and
severally assumed Developer's obligations under the Property Documents, other than the
obligation to construct Vertical Improvements on the Transfer Parcel,which shall remain the sole
responsibility of Transferee and Initial Developer.
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L With respect to this Assignment,it is the intent of Initial Developer and Transferee,
for the benefit of City, that Initial Developer is not to be released from its obligations under the
Property Documents by virtue of this assignment, but that Initial Developer shall remain jointly
and severally liable for(a) all construction and maintenance obligations of"Developer"under the
Property Documents and (b) all obligations assigned to and assumed by Transferee pursuant to
this Assignment, including without limitation the obligation to construct the Vertical
Improvements. It is the further intent of Initial Developer and Transferee that each other Builder
Transferee and Initial Developer shall be granted a license by Transferee permitting construction
of the Horizontal Improvements and Phase Improvements upon the Transfer Parcel, and each
portion thereof, for purposes of ensuring efficient construction of the Horizontal Improvements
and Phase Improvements.
J. Concurrently with the execution and delivery of consent to this Assignment by the
City, Initial Developer and Transferee have caused Brookfield Residential US LLC ("Guarantor')
to execute and deliver to the City(a) an Amended and Restated Guaranty(Unsecured Obligations)
("Amended and Restated Guaranty") which amends and restates the Guaranty delivered by
Guarantor to the City dated September 15,2021 and(b) a Secured Obligations Guaranty, securing
the obligations under the terms of the Profit Participation Agreement and the City Deed of Trust
("Profit Participation Guaranty").
NOW THEREFORE,in consideration of the mutual covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Initial
Developer and Transferee agree as follows:
1. Assignment.
1.1 As of the Assignment Effective Date and subject to the terms of Section 4 of this
Assignment, Initial Developer hereby assigns, conveys, transfers, bargains, grants, sells and sets
over to Transferee, as and to the extent owned or held by Initial Developer, the following
(collectively, "Assigned Interests"):
(a) those rights and obligations of Initial Developer as "Developer" under the
Property Documents with respect to development and maintenance of Vertical
Improvements on the Transfer Parcel, and those additional corresponding rights and
obligations under the Property Documents with respect to the Transfer Parcel arising from
and after the Assignment Effective Date, including, without limitation, those rights,
benefits provided to and burdens, obligations, conditions, limitations and restrictions
imposed upon the Transfer Property or upon Initial Developer pursuant to the Property
Documents with respect to or relating to the Transfer Property, which include but are not
limited to the following provisions of the DDA:
(i) Article 2,including without limitation the restrictions on Mortgages
and the Transfer and Transfer of Control restrictions set forth therein;
(ii) the indemnities set forth in Section 10;
(iii) Sections 8.1 through 8.7, excluding therefrom Section 8.7.2;
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(iv) Sections 8.9.4 and 8.9.5;
(v) Section 8.11;
(vi) Sections 8.12 through 8.16;
(vii) Articles 9, 10, 11 and 12, excluding Sections 12.9 (Public Access
Easement) and 12.10 (Required Dedications);provided that Transferee may satisfy
its obligations under Article 11 to provide insurance if the existing insurance
company providing insurance for Initial Developer for each category of insurance
issues an endorsement adding the Transferee as a named insured under the policy
procured and maintained by Initial Developer and covering the Transferee's
activities as well as those of Initial Developer.
(viii) Articles 13, 14, 16 and 17;
(b) all plans, specifications, maps, drawings, and other renderings owned by
Initial Developer and relating to the Transfer Parcel (which assignment shall be on a non-
exclusive basis);
(c) all Entitlements, Development Permits and development rights relating to
the Transfer Parcel and the construction of the Vertical Improvements; and
(d) all of the terms,obligations,conditions,limitations and restrictions imposed
upon or related to the Real Property and/or"Developer"under or by reason of the Property
Documents, the Entitlements and Development Permits other than as set forth in
Section 1.1(c), including, without limitation, those for which Initial Developer is made
jointly and severally responsible pursuant to this Assignment whether or not performed by
Initial Developer including without limitation: (i) the obligation to construct the
Improvements to be constructed on the Real Property pursuant to Sections 8.9.2 and 8.9.3
of the DDA in accordance with the Scope of Development and within the time period
specified in the Schedule of Performance; and (ii) the obligation to pay all sums required
to be paid by"Developer"under the Property Documents in connection with the ownership
and/or development of the Real Property,to the extent such amounts have not been paid as
of the Assignment Effective Date; provided, however, that (x) such assignment shall be
non-exclusive and (y) Transferee shall have no obligation to construct Vertical
Improvements on any portion of the Real Property not then or previously conveyed to
Transferee; and provided further that City shall have the right to enforce such obligations
in the event of non-performance against Initial Developer and Transferee, regardless of
whether Transferee shall have the right to or does commence or perform such obligations.
1.2 The Assigned Interests together with the Transfer Property are collectively referred
to in this Assignment as "Assigned Property."
2. Assumption.
2.1 Transferee, on behalf of itself and its successors and assigns, from and after the
Assignment Effective Date, hereby assumes and receives the Assigned Property and Transferee
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hereby agrees (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) Transferee accepts the conveyance of and expressly assumes all of the
Assigned Property and agrees to perform those rights and obligations of Initial Developer
as "Developer" under the Property Documents with respect to development and
maintenance of Vertical Improvements on the Transfer Parcel, and those additional
corresponding rights and obligations under the Property Documents with respect to the
Transfer Parcel arising from and after the Assignment Effective Date, including, without
limitation, those rights, benefits provided to and burdens, obligations, conditions,
limitations and restrictions imposed upon the Transfer Property or upon Initial Developer
pursuant to the Property Documents with respect to or relating to the Transfer Property,
which include but are not limited to the provisions of the DDA set forth in Section 1.L(a)
of this Assignment.
(b) Transferee expressly assumes and shall be subject to all the obligations,
conditions, limitations and restrictions to which"Developer" and/or the Assigned Property
are subject by reason of the Entitlements and Development Permits related to the Transfer
Parcel.
(c) Upon and subject to the terms and provisions of the Property Documents,
Transferee expressly assumes and shall be subject to all the obligations to perform,
construct and/or install any and all Vertical Improvements to be constructed on the Transfer
Parcel in accordance with the Scope of Development and within the time period specified
in the Schedule of Performance and, to the extent not timely performed by Initial
Developer, to develop, construct and maintain the Horizontal Improvements and Phase
Improvements (collectively, "Transferee Improvements") and to perform all of those
obligations of Initial Developer as "Developer" under the Property Documents, including
without limitation, Sections 8.9.2 and 8.9.3 of the DDA.
(d) Upon and subject to the terms and provisions of the Property Documents,
Transferee shall pay and perform all obligations of"Developer" set forth in the Property
Documents, including, without limitation, the following obligations: (i) the obligation to
construct the Transferee Improvements to be constructed on the Transfer Parcel in
accordance with the Scope of Development and within the time period specified in the
Schedule of Performance; and (ii) the obligation to pay all sums required to be paid by
"Developer" under the Property Documents in connection with the ownership and/or
development of the Assigned Property, to the extent such amounts have not been paid as
of the Assignment Effective Date.
(e) Transferee hereby assumes and agrees to be jointly and several liable for all
of the terms, obligations, conditions, limitations and restrictions imposed upon or related
to the Real Property and/or "Developer" under or by reason of the Property Documents,
the Entitlements and Development Permits other than as set forth in Section 2.1(d),
including, without limitation, those for which Initial Developer is jointly and severally
liable pursuant to this Assignment whether or not performed by Initial Developer including
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without limitation: (i) the obligation to construct the Improvements to be constructed on
the Real Property pursuant to Sections 8.9.2 and 8.9.3 of the DDA in accordance with the
Scope of Development and within the time period specified in the Schedule of
Performance; and (ii) the obligation to pay all sums required to be paid by "Developer"
under the Property Documents in connection with the ownership and/or development of
the Real Property, to the extent such amounts have not been paid as of the Assignment
Effective Date; provided, however, that (x) such assignment shall be non-exclusive and
(y) Transferee shall have no obligation to construct Vertical Improvements on any portion
of the Real Property not then or previously conveyed to Transferee; and provided further
that City shall have the right to enforce such obligations against Initial Developer and
Transferee, regardless of whether Transferee shall have the right to or does commence or
perform such obligations.
(f) Without limiting the generality of the foregoing, Transferee specifically
agrees to pay all costs and expenses incurred by the City in connection with the Transfer,
including the costs of reviewing the documents relating to the Transfer, Transferee or
Transferor and preparing,negotiating and reviewing all documents that effectuate or relate
to the Transfer. Such costs and expenses shall include, without limitation, City Staff costs
as well as fees and costs incurred by the City for attorneys and other professionals and
agents.
(g) For avoidance of doubt,and without limiting the generality of the foregoing,
Transferee hereby agrees that it shall be subject to all rights and remedies of the City under
the Property Documents, including without limitation,the lien rights, Right of Repurchase
and the Right of Reversion set forth in the DDA and payment of Profit Participation as set
forth in the Profit Participation Agreement.
2.2 Transferee shall remain fully responsible to perform and satisfy all of the
obligations and liabilities assumed by Transferee pursuant to Section 2.1 and 2.2 above regardless
of any of the following:
(i) the value of the Assigned Property or the income to be derived from
the Assigned Property;
(ii) the existence or non-existence of any liens, easements, covenants,
conditions,restrictions, claims or encumbrances affecting the Assigned Property or
the Grading License Area(including without limitation any of the foregoing arising
from or related to the Entitlements or Development Permits or any of the Property
Documents;
(iii) the suitability of the Assigned Property or the Grading License
Area] for any and all future development, uses and activities which Transferee or
Initial Developer or any Homebuyer or Homeowners' Association may conduct
upon the Transfer Parcel and Improvements, including the development of the
Project as described in the Property Documents;
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(iv) the ability of the City or any third party to complete, or likelihood
of the completion of, any of the improvements and infrastructure described by the
General Plan, the Reuse Plan, the Specific Plan, the Tustin Legacy Backbone
Infrastructure Program or any other plan or policy of the City or any other
Governmental Authority;
(v) the compliance with or enforcement by the City or any third party
of, the Reuse Plan, the General Plan, the Specific Plan, the Special Restrictions
applicable to the Assigned Property or any other portion of the Real Property or the
Grading License Area or the special restrictions or other covenants and agreements
applicable to other property at Tustin Legacy, the CC&Rs, the Tustin Legacy
Backbone Infrastructure Program or any other agreement or governmental
restriction or plan affecting Tustin Legacy;
(vi) the habitability, merchantability or fitness for a particular purpose
of the Assigned Property or the Grading License Area;
(vii) the manner, quality, state of repair or lack of repair of the Assigned
Property or the Grading License Area;
(viii) the nature, quality or condition of the Assigned Property or the
Grading License Area including water, soil and geology;
(ix) the compliance of or by the Assigned Property or the Grading
License Area and/or their respective operation in accordance with any of the
Entitlements, Development Permits or any Governmental Requirement, including
without limitation, the National Environmental Policy Act, CEQA and the
Americans with Disabilities Act of 1990;
(x) the manner or quality of the construction or materials, if any,
incorporated into any part of the Transfer Property, the Grading License Area or
the Improvements;
(xi) the presence or absence of Hazardous Materials, including without
limitation, asbestos or lead paint at, on, under, or adjacent to the Transfer Parcel or
any other portion of the Real Property,the Grading License Area or Tustin Legacy;
(xii) the content, completeness or accuracy of the information,
documentation, studies, reports, surveys and other materials, delivered to
Transferee by Initial Developer or others in connection with Transferee's review of
the Assigned Property or the Grading License Area and the transactions
contemplated in the Property Documents;
(xiii) the conformity of the existing improvements on the Transfer Parcel
or the Grading License Area, if any, and/or at Tustin Legacy to any plans or
specifications;
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(xiv) compliance of the Assigned Property or the Grading License Area
with past, current or future Governmental Requirements (including, without
limitation, the Entitlements and/or Development Permits) relating to zoning,
subdivision,planning,building,fire,safety,health or Environmental Matters and/or
covenants, conditions, restrictions or deed restrictions;
(xv) the deficiency of any undershoring or of any drainage to, on or from
the Transfer Parcel, the Grading License Area or any other portion of Tustin
Legacy;
(xvi) the condition of any adjoining land owned by the City, including,
without limitation, any property and improvements covered by the Landscape and
Water Quality Improvement Agreement;
(xvii) the fact that all or a portion of the Transfer Parcel or the Grading
License Area 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;
(xviii) the existence or lack of vested Entitlements or Development Permits
for the Transfer Parcel or the Grading License Area;
(xix) the construction or lack of construction of Tustin Legacy or if
constructed, the construction of Tustin Legacy in accordance with design
guidelines, plans and specifications previously or to be prepared therefor;
(xx) the conditions, covenants and restrictions imposed upon the
Assigned Property or the Grading License Area or any portion thereof under the
Property Documents;
(xxi) the contents of the Memorandum of Agreement, the Federal Deed,
the Base Closure Law and the FOST; and
(xxii) any other matters.
2.3 No Representations or Warranties. Without limiting the applicability of all other
provisions of the DDA which shall remain in effect and applicable to Transferee and the Transfer
Property,Transferee recognizes that the City would not have sold the Real Property or entered into
the Property Documents except on an "AS, IS, WHERE IS, WITH ALL FAULTS" basis, and
Transferee acknowledges that the City has made no representations or warranties of any kind
whatsoever(excepting only those representations and warranties of the City expressly set forth in
Sections 3.3 and 17.12.2 of the DDA), either express or implied in connection with any matters
with respect to the Real Property or the Grading License Area or any portion thereof.
3. Representations and Warranties of Transferee.
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3.1 As an inducement to the City to consent to the Transfer and this Assignment and to
perform its obligations hereunder, Transferee represents and warrants to Initial Developer and the
City as follows:
(a) Transferee has the necessary expertise, experience, financial experience,
financial capacity, qualifications and legal status necessary to perform as Transferee pursuant to
this Assignment and to construct and Complete the Project as contemplated by this Assignment,
and, without limiting the foregoing, Transferee is experienced in the development, management,
and sale of residential condominium projects of the size and type described in this Assignment and
understands the process and requirements associated with projects such as the Project described
herein.
(b) Transferee's acquisition of the Assigned Property, development of the
Project and its other undertakings pursuant to this Assignment are for the purpose of timely
development of the Project upon the Real Property in accordance with the Schedule of
Performance attached to the DDA and not for speculation or land holding.
(c) Transferee is a limited liability company, formed and validly existing and
in good standing under the laws of the State of Delaware, is duly qualified to do business and in
good standing in the State and in each other jurisdiction where the operation of its business or its
ownership of property or the performance of Transferee's obligations under this Assignment make
such qualification necessary.
(d) Subject to all of the conditions in the DDA for the benefit of Transferee,
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,
the DDA,the DA and the other Property Documents) all requisite power and authority required to
enter into this Assignment and the instruments referenced in this Assignment, to consummate the
transaction contemplated hereby and thereby and to take any steps contemplated thereby or hereby,
and to perform its obligations under this Assignment, the Property Documents, the Entitlements
and Development Permits.
(e) 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, the Property Documents, the Entitlements and
Development Permits) all required consents in connection with entering into this Assignment and
the instruments and documents referenced in this Assignment to which Transferee is or shall be a
party and the consummation of the transactions contemplated hereby and thereby.
(f) The individuals executing this Assignment and the individuals that will
execute the instruments referenced in this Assignment 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.
(g) This Assignment has been duly authorized, executed and delivered by
Transferee and all documents required in this Assignment to be executed by Transferee pursuant
to this Assignment shall be, at such time as they are required to be executed by Transferee, duly
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authorized, executed and delivered by Transferee and are or shall be, at such time as the same are
required to be executed hereunder, valid, legally binding obligations of and enforceable against
Transferee in accordance with their terms, except as enforceability may be limited by bankruptcy
laws or other similar laws affecting creditors' rights.
(h) Neither the execution or delivery of this Assignment or the Property
Documents, nor the incurring of the obligations set forth in this Assignment or the Property
Documents or the certificates, declarations and other documents referenced therein, nor the
consummation of the transactions contemplated in this Assignment and the Property Documents,
nor compliance with the terms of this Assignment or the Property Documents will violate any
provision of law or any order of any court or Governmental Authority to which Transferee is
subject or conflict with or result in the breach of any terms, conditions, or provisions of, or
constitute a default under any bond, note, or other evidence of indebtedness or any contract,
indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreements or
instruments to which Transferee, or to the extent applicable to any non-publicly traded Transferee,
one of its owners, members or partners are a party and which affect the Assigned Property or the
transactions contemplated by this Assignment.
(i) 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 to the extent applicable to any non-publicly traded
Transferee, one of its owners, members or partners.
0) Except for those representations and warranties of the City expressly set
forth in Sections 3.3 and 17.12.2 of the DDA,Transferee is relying solely upon its own inspections
and investigations in proceeding with this Assignment and the transactions contemplated hereby
and in the Property Documents, and is not relying on the accuracy or reliability of any information
provided to it by the City, on any oral or written representation or on 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. In making such
investigation and assessment, Transferee has been provided access to any persons,records or other
sources of information which it has deemed appropriate to review and it has thereafter completed
such investigation and assessment. Without limiting the generality of the foregoing provisions or
any of the provisions of the Property Documents, Transferee acknowledges that the City has not
made and will not make any representations or warranties concerning the condition of the Assigned
Property or the Grading License Areas, the compliance or non-compliance of the Assigned
Property or the Grading License Areas any portion thereof with Environmental Laws or the
existence or non-existence of Hazardous Materials in relation to the Assigned Property or the
Grading License Area or any portion thereof or otherwise.
(k) {Except as described on Exhibit C to this Assignment),there are no adverse
conditions or circumstances, litigation or governmental action either pending or,to the knowledge
of any of the Transferee Knowledge Parties, threatened, to which Transferee or any Controlling
Person of Transferee is or may be a party or to which the Real Property and the Grading License
Area are or may become subject, which would reasonably be expected to prevent or materially
impair Transferee's ability to carry out its obligations hereunder or under the Property Documents
to develop the Transfer Parcel and the Project or carry out its other obligations under the Property
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Documents then in effect, as contemplated by the terms of this Assignment and the Property
Documents.
(1) Except as set forth in this Assignment and the Property Documents or as
required by the Entitlements and Development Permits, Transferee has not paid or given, and will
not pay or give, any third Person any money or other consideration for obtaining this Assignment,
or the transactions contemplated by the Property Documents other than the purchase price paid to
the Transferor and the normal cost of conducting business and cost of professional services such
as architects, engineers and attorneys.
(m) All reports, documents, instruments, information and forms of evidence
delivered by Transferee to the City concerning or related to this Assignment, the Property
Documents and the transactions contemplated hereby and thereby are,to 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 material misrepresentation or
omission.
(n) As of the Effective Date of this Assignment,Transferee will have the equity
capital and financial capacity required for Completion of the Development without requirement of
third-party financing.
(o) Transferee does not have any contingent obligations or any other contracts
the performance or nonperformance of which could adversely affect the ability of Transferee to
fund the Project or to carry out its obligations under this Assignment or the Property Documents.
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.
(p) Transferee's representations and warranties set forth in this Section 3.1
shall survive until the issuance of the Certificate of Compliance or earlier termination of the DDA,
and shall not be merged with the Quitclaim Deed or any other deed. As used in Section 3.1 and
3.2, "to Transferee's knowledge" and similar phrases means the actual present knowledge of the
"Transferee Knowledge Parties"as of the Effective Date,in each case without any duty of inquiry;
provided, however, that in the event any of the Transferee Knowledge Parties are unavailable at
the time these representations and warranties set forth in this Section 3.1 are restated at the close
of escrow for the Assigned Property covered by this Assignment, Transferee may specifically
identify different Transferee's Knowledge Parties, subject to the City's reasonable approval.
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 Section 3.1 or elsewhere in this Assignment.
3.2 Transferee Covenants Regarding_Representations and Warranties. 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
Section 3.1 is or becomes untrue in any material respect prior to the close of escrow of the
Assigned Property covered by this Assignment.
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3.3 Transferee Knowledge Parties. For purposes of the DDA, the "Developer
Knowledge Parties" of Transferee (also referred to in this Assignment as the "Transferee
Knowledge Parties") are and
{insert names of employees, officers, etc. of Transferee acceptable to the City in its sole
discretion}
4. Effect of Assignment on Certain Property Documents and Obligations. Initial Developer
and Transferee hereby agree as follows for the benefit of the City with respect to this Assignment
and its effect on the obligations of each of them under the Property Documents:
4.1 Initial Developer is not released from its obligations under the Property Documents
by virtue of this Assignment, but instead remains jointly and severally liable for (a) all
construction and maintenance obligations of "Developer" under the Property Documents and
(b) all obligations assigned to and assumed by Transferee pursuant to this Assignment, including
without limitation the obligation to construct the Vertical Improvements. Specifically,and without
limitation:
(i) although the Landscape and Water Treatment Agreement, Special
Restrictions, Quitclaim Deed,the DA and Additional Declaration each run with the
Real Property in accordance with their terms, Initial Developer shall perform the
obligations of"Developer" under each such Agreement other than with respect to
construction of the Vertical Improvements and shall be responsible for construction
of the Horizontal Improvements, the Phase Improvements and the Landscape
Improvements and Water Quality Improvements required to be constructed
pursuant to the DDA and the Landscape and Water Quality Agreement; and
(ii) although the Profit Participation Agreement is binding upon the
successors and assigns of Initial Developer, and therefore upon Transferee, Initial
Developer shall remain obligated to fulfill the obligations of"Developer"under the
Profit Participation Agreement.
4.2 Transferee shall construct the Vertical Improvements upon the Transfer Parcel and
to perform all obligations of"Developer"under the Property Documents related thereto or required
thereby in connection with such construction, provided that Initial Developer shall not be released
from and shall be jointly and severally liable with Transferee for such obligations.
4.3 Notwithstanding that Initial Developer retains joint and several liability for the
obligations under the Property Documents, Transferee shall in all cases be jointly and severally
liable under the terms of and obligated to perform the obligations of "Developer" under the
Property Documents regardless of whether or not Transferee has undertaken to or has the right to
perform any such obligations; and the City shall have the right to enforce such obligations against
Initial Developer and Transferee in the event of non-performance, regardless of whether
Transferee shall have the right to or does commence or perform such obligations; provided,
however, that Transferee shall have no obligation to construct Vertical Improvements on any
portion of the Real Property not then or previously conveyed to Transferee.
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4.4 Except as set forth in Section 4.3, the obligations of Initial Developer and
Transferee to the City under the Property Documents shall be the joint and several obligation of
each of them and may be freely enforced by the City against each of them,without regard to where
primary responsibility for such obligations is allocated between them pursuant to this Assignment
or otherwise.
5. Covenants of Initial Developer. By executing this Assignment, Initial Developer hereby
covenants and agrees that:
(a) notwithstanding the assignment by Initial Developer and the assumption by
Transferee in this Assignment, Initial Developer is not released from, and remains fully
liable for all obligations and liabilities under the Property Documents and the Entitlements
and Development Permits, including, without limitation, performance of all obligations of
"Developer" under the Landscape and Water Treatment Agreement and/or the Profit
Participation Agreement, and all other obligations of "Developer" under the Property
Documents, Entitlements and/or Development Permits that have accrued or will accrue
prior to or following the Assignment Effective Date,including without limitation,pursuant
to any indemnity given by Initial Developer under the Property Documents, the
Entitlements and/or Development Permits;
(b) in addition to all of the obligations of Transferee under the Property
Documents, Initial Developer remains jointly and severally liable with Transferee for all
the obligations under the Property Documents relating to the Transfer Property, including,
without limitation, for the following: (1)construction of the Improvements,
(2) performance of maintenance obligations of"Developer"under the Property Documents
and (3) all release and indemnity obligations of "Developer" under the Property
Documents, Entitlements and/or Development Permits with respect to the Transfer Parcel,
even if any such obligations are expressly assumed by the Transferee pursuant to this
Assignment.
6. No Waiver or Modification.Nothing contained in this Assignment shall modify in any way
any of the provisions of the Property Documents. Transferee acknowledges that it is taking title to
and is assuming the Assigned Property subject to, among other things, the rights of the City as
described in the Property Documents.
7. Additional Documents. Initial Developer 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 necessary or desirable to effectuate the intent and purposes of this
Assignment.
8. License in Favor of Initial Developer and each Builder Transferee for Construction of
Horizontal Improvements and Phase Improvements upon the Transfer Parcel. From and after the
Effective Date and until conveyance of the Horizontal Improvements and Phase Improvements
within each Transfer Parcel to the Homeowners' Association or upon such other date of
termination agreed upon by Transferee and Initial Developer and approved by the City,Transferee
hereby grants to Initial Developer, each other Builder Transferee and the successors and assigns
of each an irrevocable license coupled with an interest to access those portions of the Transfer
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Parcel required or reasonably necessary for the construction of the Horizontal Improvements and
Phase Improvements, subject to the obligation of each such entity to protect, indemnify, defend
and hold harmless Transferee and its successors and assigns owning all or any portion of the
Transfer Parcel so accessed, from and against any and all Claims arising out of or in connection
with the negligent acts or willful misconduct of itself or of its officers, directors, employees,
agents, representatives, consultants, contractors, and other persons accessing the Transfer Parcel,
including without limitation,bodily injury to or death of any person(including,without limitation,
any employee, representative or contractor of the City) or damage to or loss of use of property
resulting from such negligent acts or willful misconduct. Upon termination of construction of the
Phase Improvements and Horizontal Improvements in the Transfer Parcel or the City, Initial
Developer and Transferee shall cooperate to execute and record, in the Official Records, a
termination of the license set forth in this Section 8.
9. Miscellaneous.
9.1 Modification. No amendment, change, modification or supplement to this
Assignment shall be valid and binding on Initial Developer or Transferee unless it is represented
in writing and signed by both Initial Developer 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,
construed and enforced in accordance with the laws of the State of California, irrespective of
California's choice-of-law principles.
9.3 No Assi nom. Except as may be expressly permitted pursuant to Section 2.2.3(b)
of the DDA, neither this Assignment nor the Transfer Property nor any of the Assigned Property
shall be Transferred by Transferee without the prior written consent of the City in its sole
discretion.
9.4 Binding. This Assignment and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of Initial Developer and
Transferee and their respective heirs, legal representatives, successors and assigns.
9.5 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 Initial Developer 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 email) shall not be effective unless an ink-signed original executed copy
of the signature page of this Assignment is also promptly delivered to the other party, and such
ink-signed original executed page is actually received by the other party. Initial Developer 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
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completely executed counterparts shall be sufficient proof of this Assignment as a duly and validly
executed agreement.
9.6 City as Third Party Beneficiary. Initial Developer and Transferee hereby
acknowledge and agree that until the Certificate of Compliance is recorded in the Official Records,
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. Other than the City, there shall
be no third party beneficiaries of this Assignment.
9.7 Notices. From and after the Amendment Effective Date, all notices that the City
delivers to the "Developer" under the Property Documents with respect to the Assigned Property
shall also concurrently be delivered to Transferee pursuant to Section 17.6 of the DDA at the
following addresses:
Transferee:
Brookfield Tustin LLC
c/o Brookfield Homes Southern California LLC
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Attention: Nicole Burdette
Facsimile No.: (714) 200-1672
E-mail: Nicole.Burdette@brookfieldpropertiesdevelopment.com
with a copy to:
Timothy L. Randall, Esq.
Songstad Randall Coffee & Humphrey LLP
3200 Park Center Drive, Suite 950
Costa Mesa, California 92626
Facsimile No.: (949) 757-1613
E-mail: trandall@sr-firm.com
[signature page follows]
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Initial Developer and Transferee each has caused this Assignment to be duly executed by
its duly authorized officer as of the Assignment Effective Date.
"DEVELOPER"
BROOKFIELD HOMES SOUTHERN
CALIFORNIA LLC., a Delaware limited liability
company
By:
Name:
Title:
By:
Name:
Dated: , 2021 Title:
"TRANSFEREE"
BROOKFIELD TUSTIN LLC,
a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Dated: , 2021 Title:
{City acknowledgement and consent commences on following page)
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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 BROOKFIELD TUSTIN LLC, a Delaware
limited liability company ("Transferee" in the Assignment) as the Transferee as provided
in Section 2.2.3(b) of the DDA, with respect to the Assigned Property described in the
Assignment, subject to the terms and conditions set forth in the Assignment and the DDA
with respect to the Transfer.
(c) This Consent by the City constitutes the consent required pursuant to
Section 2.2.3(b) of the DDA and constitutes City's acknowledgment that the requirements
of Section 2.2.3(b)have been satisfied;
(d) Confirms that notwithstanding the assignment by Initial Developer and the
assumption by Transferee in this Assignment, Initial Developer is not released from, and
remains jointly and severally liable for all obligations and liabilities under the Property
Documents and the Entitlements and Development Permits, including, without limitation,
performance of all obligations of"Developer" under the Landscape and Water Treatment
Agreement and/or the Profit Participation Agreement, and all other obligations of
"Developer" under the Property Documents, Entitlements and Development Permits
whether Accruing prior to or following the Assignment Effective Date, including without
limitation, pursuant to any indemnity given by Initial Developer under the Property
Documents, Entitlements or Development Permits;
(e) Confirms that, in addition to all of the obligations of Transferee under the
Property Documents, Initial Developer remains jointly and severally liable with Assignee
for all the obligations under the Property Documents relating to the Transfer Property,
including, without limitation, for the following: (1) construction of the Improvements, (2)
performance of maintenance obligations of "Developer" under the Property Documents
and (3) all release and indemnity obligations of "Developer" under the Property
Documents, Entitlements and/or Development Permits with respect to the Transfer Parcel,
even if any such obligations are expressly assumed by the Transferee pursuant to this
Assignment.
(f) Acknowledges the additional addresses for Notices for Transferee set forth
in the Assignment and agrees that from and after the Assignment Effective Date all notices
from City to "Developer" under the Property Documents, Entitlements and Development
Permits with respect to the Transfer Parcel shall also be delivered to Transferee at such
addresses.
This Consent by the City to the Assignment shall not constitute evidence of compliance
with or satisfaction of any obligation of Initial Developer under any of the Property Documents,
Tustin Brookfield Form BT Assign&Assum Agt Schedule 3 City of Tustin/Brookfield Homes
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Consent
DocuSign Envelope ID: B962D7F6-4468-4F9C-A8F6-FAE66D426929
or any other agreement between Initial Developer and the City, except for the obligation of Initial
Developer to obtain the City's consent to any Transfer.
CITY:
CITY OF TUSTIN
Dated: , 2021 By:
Name:
Title:
ATTEST:
By:
APPROVED AS TO FORM:
By:
ACKNOWLEDGED AND AGREED:
DEVELOPER:
BROOKFIELD HOMES SOUTHERN CALIFORNIA LLC.,
a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
Tustin Brookfield Form BT Assign&Assum Agt Schedule 3 City of Tustin/Brookfield Homes
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Consent
DocuSign Envelope ID: B962D7F6-4468-4F9C-A8F6-FAE66D426929
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
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, ,
Date (Insert Name and Title of the Officer)
personally appeared
Name(s)of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature:
Signature of Notary Public
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Consent
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
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, ,
Date (Insert Name and Title of the Officer)
personally appeared
Name(s)of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature:
Signature of Notary Public
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
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, ,
Date (Insert Name and Title of the Officer)
personally appeared
Name(s)of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature:
Signature of Notary Public
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EXHIBIT "A"
Legal Description of the Real Property
LOTS 1 THROUGH 73, INCLUSIV E OF TRACT NO. 19103, IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 993,
PAGES 21 THROUGH 33, INCLUSIVE OF MISCELLANEOUS MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THE MATTERS SET FORTH IN SECTION 2 OF THE
QUITCLAIM DEED FOR PORTIONS OF DISPOSITION PARCELS 2C & 8 AND
COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING ENVIRONMENTAL
RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471 DATED OF EVEN DATE
HEREWITH AND RECORDED IMMEDIATELY PRIOR TO THE RECORDING OF THIS
DECLARATION IN THE OFFICE OF THE COUNTY CLERK RECORDER FOR ORANGE
COUNTY, CALIFORNIA.
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Exhibit A
1
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EXHIBIT `B"
Legal Description of the Transfer Parcel
LOTS AND OF TRACT NO. 19103, IN THE CITY OF TUSTIN, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 993, PAGES 21 THROUGH 33,
INCLUSIVE OF MISCELLANEOUS MAPS,IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.
EXCEPTING THEREFROM THE MATTERS SET FORTH IN SECTION 2 OF THE
QUITCLAIM DEED FOR PORTIONS OF DISPOSITION PARCELS 2C & 8 AND
COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING ENVIRONMENTAL
RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471 DATED OF EVEN DATE
HEREWITH AND RECORDED IMMEDIATELY PRIOR TO THE RECORDING OF THIS
DECLARATION IN THE OFFICE OF THE COUNTY CLERK RECORDER FOR ORANGE
COUNTY, CALIFORNIA.
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Exhibit B
1
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EXHIBIT "C"
Additional Disclosures
(if none, delete exhibit)
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Exhibit C
1
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SCHEDULE 4 TO SECOND AMENDMENT TO DDA
ATTACHMENT 17D
LOT TRANSFER PROPOSAL
[see map attached]
• Brookfield Tustin Homes LLC Lots 5, 11-19, 22-23, 30, 37-47, 54, 57, 65-71 (Cira product
type);
• Brookfield Tustin Metro LLC, Lots 1, 20-21, 55-56 and 72-73 (Terra product type); and
• Brookfield Tustin Towns LLC,Lots 2-4,6-10,24-29, 31-36,48-53,58-63 (Luna product type).
Tustin Brookfield 2nd Am to DDA 12-04-21 Schedule 4 City of Tustin/Brookfield Homes
(HM)FINAL Attachment 17D(New) Por.Parcels 2C and 8
1 Second Amendment to DDA