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HomeMy WebLinkAbout10 EXCLUSIVE NEGOTIATING AGREEMENT WITH LPC WEST LP FOR AN APPROXIMATELY 11 ACRE SITE WITHIN THE PACDocusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 MEETING DATE TO FROM Agenda Item 10 AGENDA REPORT Reviewed: City Manager a`L� Finance Director MAY 19, 2026 ALDO E. SCHINDLER, CITY MANAGER BRIAN MONCRIEF, DEPUTY CITY MANAGER — REAL PROPERTY SUBJECT: EXCLUSIVE NEGOTIATING AGREEMENT WITH LPC WEST LP FOR AN APPROXIMATELY 11 ACRE SITE WITHIN THE PACIFIC CENTER EAST SPECIFIC PLAN AREA SUMMARY: Request for authorization to enter into an Exclusive Negotiating Agreement with LPC West LP for the disposition and development of Planning Area 10 of the Pacific Center East Specific Plan. The staff supported recommendation is made by a Mayor appointed Ad Hoc Committee composed of Mayor Pro-Tem Schnell and Councilmember Gallagher. RECOMMENDATION: Authorize the City Manager to execute the Exclusive Negotiating Agreement between the City and LPC West LP in the form attached hereto, subject to any non -substantive modifications as may be recommended by the City's special real estate counsel or the City Attorney. FISCAL IMPACT: Concurrent with the execution of the Exclusive Negotiating Agreement, LPC West LP will submit a good faith deposit of $250,000 to be applied toward staff and third -party costs incurred by the City including the retention of legal counsel associated with the negotiation. These costs are separate from entitlement expenses that will be borne by LPC West LP. CORRELATION TO THE STRATEGIC PLAN: Entering into exclusive negotiations for the disposition and development of Planning Area 10 of the Pacific Center East Specific Plan contributes to the fulfillment of the City's Strategic Plan Goal A: Economic and Neighborhood Development. Specifically, this item implements Strategy 4, which is to develop a disposition and entitlement strategy for City - owned property in Pacific Center East. Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 City Council Agenda Report ENA with LPC West LP May 19, 2026 Page 2 BACKGROUND AND DISCUSSION: On March 4, 2025, the City Council authorized staff to release a competitive offering for Planning Area 10 (approximately 11 acres) of the Pacific Center East Specific Plan (Site) pursuant to City Council Resolution 25-10. On March 18, 2025, the City Council authorized the City Manager to negotiate and execute a Listing Agreement with Jones Lang LaSalle IP, Inc. (JLL) to market the Site, which was executed on April 9, 2025. An Offering Memorandum for the Site was released by JLL on June 4, 2025. On January 20, 2026, the City Council authorized staff and JLL to negotiate an Exclusive Negotiating Agreement (ENA) with Lincoln Property Company, now LPC West LP (Developer) for future City Council consideration. The Developer's proposal includes the development of a light industrial building, which will include manufacturing, warehousing, assembly, office and retail showroom use for a build to suit tenant. The ENA provides for an initial negotiating period of two hundred and seventy (270) calendar days from the Effective Date, which may be extended for one (1) additional period of ninety (90) calendar days at the discretion of the City Manager. If negotiations are successful, the project entitlements will be reviewed by the Planning Commission and the Disposition and Development Agreement and project entitlements will then be brought to the City Council for consideration, which is anticipated in Spring 2027. bhatn, AUVtntf Brian Moncrief Deputy City Manager — Real Property �atn, �Wtbtn�t,� Ryan Swiontek Deputy Director of Real Property Attachment: 1. ENA between the City of Tustin and LPC West LP Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 CITY OF TUSTIN EXCLUSIVE NEGOTIATION AGREEMENT (NEWPORT & VALENCIA SITE) THIS EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is dated as of May 13, 2026, for reference purposes only, and is entered into by and between the City of Tustin, a California municipal corporation ('City") and LPC West LP, a Delaware limited partnership ("Developer"), to provide a specified period of time to attempt to negotiate a DDA (as defined below). The City and the Developer are sometimes referred to in this Agreement individually as a "Party" and, collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the following recited facts (each, a "Recital"): RECITALS A. The City is the owner of that certain real property located at the northwesterly corner of the intersection of Valencia Avenue and Newport Avenue in the City of Tustin, California (APN 430-251-23 and 37) consisting of approximately 11.18 acres and more specifically described in Exhibit "A" and incorporated into this Agreement by reference ("Property"); and B. On August 20, 2024, the Tustin City Council adopted Resolution No. 24-48, declaring the Property surplus and a Notice of Availability was issued on August 30, 2024, for the required 60-day period. Although one developer initially responded to the Notice of Availability, no developers engaged in an additional 90-day Good Faith Negotiating Period and on February 12, 2025, the Department of Housing and Community Development (HCD) determined that all requirements under the Surplus Land Act (SLA) for the purposes of disposing of the Property have been met per the documentation provided to HCD by the City. The Parties acknowledge that prior to the disposition of the Property a covenant requiring that if 10 or more residential units are ever built on the Property not less than 15% of the total number of residential units developed on the Property shall be affordable; and C. The City has an interest in the Property being developed and has accepted development proposals from interested developers following a competitive Request for Proposals (RFP) offering process administered by commercial real estate brokerage firm Jones Lang LaSalle Incorporated (" JLL"); and D. The Developer has proposed the development of the Property to create a light industrial/advanced manufacturing/warehouse/assembly/office/retail experience showroom facility, as generally described in the project description attached to this Agreement as Exhibit `B" and incorporated into this Agreement by this reference ("Project"); and E. The intent of both the City and the Developer in entering into this Agreement is to establish a specific, limited period of time to exclusively negotiate a future agreement between them governing the potential sale of the Property and development of the Project on the Property, all subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented in a future disposition and development agreement ("DDA"). No DDA will be presented to the City Council for consideration until receipt of entitlements and California Environmental Quality Act (" CEQA") compliance has been achieved for all Phases of the Project by Developer. NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE PARTIES RELATING TO THE PROJECT AND THE COVENANTS AND PROMISES OF THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT, AND FOR GOOD AND VALUABLE 5 5905.00003 \4 4706069.17 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 CONSIDERATION, THE SUFFICIENCY AND RECEIPT OF WHICH ARE HEREBY ACKNOWLEDGED BY THE PARTIES, THE CITY AND THE DEVELOPER AGREE, AS FOLLOWS: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this Agreement, in their entirety, by this reference. Deposits. (a) Within seven (7) days of the Effective Date of this Agreement, the Developer shall pay to the City a deposit in the amount of $250,000.00 in immediately available funds the "City Costs Deposit") to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during the Negotiation Period (as defined in Section 3(a)), as part of the consideration for the City's agreement not to negotiate with other persons during the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated negotiations with the Developer during the Negotiation Period, pursuant to this Agreement. The City Costs Deposit may be expended solely to cover the City ENA Expenses (as defined below); in furtherance of the foregoing, the City shall charge all staff and third party costs (including reasonable consultant fees and attorney fees) associated with review and implementation of this Agreement and preparing the DDA (collectively, "City ENA Expenses") against the City Costs Deposit. The Developer shall be entitled, from time to time, to request and receive summaries from the City describing the identity of each provider of services and the amounts attributable to each that constitute City ENA Expenses. Notwithstanding the foregoing, Developer shall not be entitled to a description of any attorney -client privileged information, including a description of work performed by legal counsel to the City. If at any time during the Negotiating Period the City Costs Deposit balance falls to $25,000, Developer shall, within seven (7) calendar days after receiving written notice from the City, deposit an additional $50,000 which shall be credited to the City Costs Deposit. At the termination of this Agreement, if a DDA is mutually approved and executed, any remaining City Costs Deposit funds shall be returned to Developer or applied to any earnest money deposit that may become due pursuant to the DDA, at Developer's option. If this Agreement expires by its own terms without the Parties entering into a DDA, any remaining City Costs Deposit funds will be returned to Developer within thirty calendar (30) days. Developer acknowledges that the City Costs Deposit shall not be applied to fees and expenses required by the City for any permit, or other required entitlement or project processing applications made by the Developer, which shall be separately payable by the Developer. Term of Agreement. (a) The rights and duties of the City and the Developer established by this Agreement shall commence on the first date on which all of the following have occurred (the "Effective Date"):(I) execution of this Agreement by the authorized representative(s) of the Developer and delivery of such executed Agreement to the City prior to consideration by the City governing body, and (2) approval of this Agreement by the City governing body and execution by the City Manager. If the City Costs Deposit is not received by the City within seven (7) business days of the Effective Date, as set forth in Section 2(a) above, this Agreement. shall be null and void and have no further effect if the City delivers written notice to the Developer electing to terminate this Agreement prior to the Developer depositing the City Costs Deposit. However, if this Agreement is approved by the City Council and the City Costs Deposit is received as provided herein, this Agreement shall continue in effect for the period of 270 calendar days immediately following the Effective Date ("Negotiation Period"), subject to extension as set forth in Section 3(b) or earlier termination as and to the extent expressly set forth in this Agreement. (b) If Developer determines additional time is required to finalize the terms of a DDA, Developer may request in writing one additional 90-calendar day extension of this Agreement. The City Manager, shall in his or her sole discretion, determine whether to grant such extensions, and such 5 5905.00003\44706069.17 4933-5066-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 determination shall be binding on the City. The City hereby delegates to the City Manager the authority to agree to grant the foregoing extension in his or her sole discretion. Any additional extension shall require an action of the City's governing body. All references to "City's governing body" in this Agreement shall mean and refer to City Council. (c) This Agreement shall automatically expire and be of no further force or effect at the end of the Negotiation Period (including any extension of the Negotiation Period in accordance with Section 3(b)), unless, prior to that time, both the City and the Developer approve and execute a DDA acceptable to both the City and the Developer, in their respective sole and absolute discretion, in which case this Agreement will terminate on the effective date of such DDA. Alternatively, if the Parties determine the proposed Project is not feasible, the Parties may mutually agree in writing to terminate this Agreement prior to the expiration of the Negotiation Period. Upon the expiration or termination of this Agreement pursuant to this Section 3(c), the City shall return to Developer the remaining City Costs Deposit funds after all City ENA Expenses incurred by the City pertaining to the project as of such expiration or termination have been paid. (d) The Developer may unilaterally terminate this Agreement at any time during the Negotiation Period (including any extension of the Negotiation Period) by delivering written notice to the City in the event that during the course of the investigations and evaluation of the Property or the Project, Developer determines in good faith that the Project is not feasible or financeable or that the end user is not pursuing the Project. Upon delivery of such written notice of termination, the City shall return to Developer the remaining City Costs Deposit funds after all City ENA Expenses incurred by the City pertaining to the Project as of such expiration or termination have been paid. Any obligation of the City under this Agreement to return the remaining City Costs Deposit funds to the Developer shall survive the expiration or earlier termination of this Agreement. 4. Obligations of Developer. During the Negotiation Period, and pursuant to the attached Milestone Schedule (Exhibit C), as may be modified during the Negotiating Period by mutual agreement of the Parties, Developer shall proceed diligently and in good faith to develop and present to City staff and, subsequently, to the City governing body, if appropriate, for review and consideration, all of the following. For clarity, the City Manager may approve a modification to the Milestone Schedule that does not result in an extension of the Term of this Agreement but, if a modification to the Milestone Schedule will result in the Term being exceeded, that modification shall require City Council approval: (a) A complete conceptual development plan for the Project on the Property that describes and depicts: (1) the location and placement of the proposed building, (2) the architecture and elevations of the proposed building, (3) floor plan(s) and associated use(s) of the building with parking demand/provision, (4) preliminary material selection, and (5) landscape/hardscape concept plan; (b) Any zoning change, specific plan amendment or General Plan amendment that is necessary to accommodate the Project on the Property. This shall include the processing of entitlements necessary for development of the Project, including but not limited to, any required document under the California Environmental Quality Act; (c) A Letter of Intent with the build -to -suit tenant identified within the Developer's RFP proposal, within 60 calendar days of the Effective Date. If this cannot be achieved or the Letter of Intent is subsequently terminated, Developer shall inform the City and the Parties shall meet and confer regarding the viability of the Project. (d) A proposed time schedule inclusive of pre -development, takedown, and construction activities for the development of the Project on the Property; 55905.00003 \44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 (e) A proposed financing plan identifying (1) financing sources for all private and public improvements proposed for the Project, (2) financial pro forma identifying overall cost and revenue estimates, financial return metrics, static performance analysis as well as discounted cash flow analysis over the initial lease period or exit, and project feasibility which shall be updated on a quarterly basis or more frequently during the Negotiating Period as needed to reflect the evolution of the Project design; and (f) A preliminary net fiscal impact and economic benefit analysis demonstrating the costs and benefits to the City regarding all construction, maintenance and operations of all proposed public improvements, the costs of additional or increased levels of public services, and any new public revenues anticipated, job creation, direct and indirect economic benefits to be generated by the Project. Exclusive Negotiation of DDA. (a) At all times during the Negotiation Period, the City and the Developer shall proceed diligently and in good faith to negotiate a DDA between them. The City and the Developer shall generally cooperate with each other and supply such available documents and information as may be reasonably requested by the other to facilitate the conduct of the negotiations. Both the City and the Developer shall exercise commercially reasonable efforts to complete discussions relating to the terms and conditions of a DDA and such other matters, as may be mutually acceptable to both the City and the Developer, in their respective sole discretion. The exact terms and conditions of a DDA, if any, shall be determined during the course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a representation or agreement by either the City or the Developer that a mutually acceptable DDA will be produced from negotiations under this Agreement. Nothing in this Agreement shall impose any obligation on either Party to agree to a definitive DDA in the future. Nothing in this Agreement shall be interpreted or construed to be a guaranty, warranty or representation that any proposed DDA that may be negotiated by City staff and the Developer will be approved by the City governing body. The Developer acknowledges and agrees that the City's consideration of any DDA is subject to the sole and absolute discretion of the City governing body and all legally required public hearings, public meetings, notices, factual findings and other determinations required by law. 6. Due Diligence Investigations. As provided in the Milestone Schedule, Developer and its employees, representatives, agents, potential tenants and end users, contractors, subcontractors and consultants (collectively, the "Developer Party or Developer Parties") may conduct inspections, investigations, testing and studies of the Property ("Due Diligence Investigations") at its sole cost and expense. (a) The City licenses, permits and authorizes the Developer Parties to enter the Property for the sole purpose of conducting the Due Diligence Investigations, at Developer's sole cost and subject to all of the terms and conditions of this Agreement. Said license shall be revocable, in the City's discretion, for any breach of this Agreement by Developer. The Developer shall not conduct any intrusive or destructive testing of any portion of the Property, other than low volume soil samples without the written consent of the City. Prior to seeking City consent for any intrusive testing, Developer shall provide City with a work plan describing the intended activities. Following the conduct of any Due Diligence Investigations on the Property, the Developer shall restore the Property to substantially its condition prior to the conduct of such Due Diligence Investigations. Developer shall ensure that no liens are filed against the Property as a result of Developer's Due Diligence Investigation efforts. Due Diligence Investigations may, without limitation (except as otherwise expressly set forth in this Agreement), include: (i) Inspection of the physical condition of the Property; 55905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 (ii) Environmental investigations and studies, which may include, a Phase I Environmental Assessment and/or a Phase H Environmental Assessment; (iii) Geotechnical investigations which may include, geotechnical, seismic, and both surface and subsurface soil conditions; and (iv) Civil engineering studies which may include survey, topographical grading, drainage and utility studies. (b) Any Due Diligence Investigations of the Property by the Developer shall not unreasonably disrupt any then existing use or occupancy of the Property or the operations of the City. Developer acknowledges that there is an existing licensee on the site pursuant to the License Agreement (as defined below), and that Developer shall make every reasonable effort not to disrupt said licensee's use of the Property. Prior to any such entry by Developer on the Property, Developer shall notify the City at least two (2) business days prior to such Due Diligence Investigations of the Property. Prior to commencing any Due Diligence Investigations of the Property, a Developer Party shall also provide City with a certificate of insurance from a carrier licensed in the State of California with a Best's rating of "A:VM" or better, with an endorsement naming the City as an additional insured, evidencing the existence of Comprehensive General Liability coverage in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) combined single limit insuring against any and all liability or damage for injury to persons and damage to property that might arise out of or be related to any work done in regard to the Property by Developer. A Developer Party shall also provide evidence of Automobile Liability coverage for owned, hired, and non -owned vehicles with limits of not less than One Million Dollars ($1,000,000) combined single limit, with an endorsement naming the City as an additional insured. A Developer Party shall also provide Workers' Compensation insurance as required by California law or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such Workers' Compensation insurance shall cover all Persons employed by Developer in connection with the Project and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any Person employed by Developer incurring or suffering injury or death in connection with the Project or the operation thereof by Developer. Developer, on behalf of itself and all of its employees, contractors and subcontractors, hereby waives all claims of subrogation against City resulting from any Due Diligence Investigations during the Negotiating Period. A Developer Party shall also obtain an endorsement from its Workers Compensation insurer waiving all claims of subrogation against the City. If Developer or its consultants conduct any environmental investigation, sampling, drilling, or subsurface testing, Developer shall, prior to commencing any Due Diligence Investigations of the Property, also provide evidence of Contractor's Pollution Liability insurance covering Developer and each of its contractors and subcontractors performing such environmental investigation, sampling, drilling, or subsurface testing against pollution conditions arising from such activities, including unknown pre-existing pollution conditions, with limits of at least $5 million per claim. All such forms of insurance shall be primary and non-contributory with respect to any insurance maintained by the City, and Developer shall require any consultants, contractors and subcontractors entering the Property to maintain insurance consistent with the requirements of this subsection. (c) The Developer shall defend (with counsel reasonably acceptable to the City), protect, indemnify and hold harmless the City and its officers, elected officials, employees, and agents (" City Parties") from and against any and all third -party claims, demands, damages, liabilities, losses, costs, or expenses, including reasonable attorneys' fees (collectively, "Claims"), arising out of or related to Developer's Due Diligence Investigations or entry onto the Property by Developer or any Developer Parties, including but not limited to any injury to persons, damage to property, or release or disturbance of hazardous or regulated materials occurring in connection with such activities, in each instance occurring during the Negotiating Period; provided, however, such indemnification obligation shall not apply to the 5 5 905.00003144706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 extent any such Claims result from (i) the discovery of any pre-existing conditions on or affecting the Property that are not caused or exacerbated by the Developer Parties or (ii) the negligence or willful misconduct of the City or any City Parties,. This indemnification obligation shall survive termination or expiration of this Agreement. (d) Developer shall provide City, at no cost to City, copies of all reports prepared as a result of the Due Diligence Investigation. Such reports shall be provided without representation or warranty. 7. Restrictions Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. (a) The qualifications and identity of the Developer and its principals are of particular concern to the City. It is because of these qualifications and identity that the City has entered into this Agreement with the Developer. During the Negotiation Period, no voluntary or involuntary successor -in - interest of the Developer shall acquire any rights or powers under this Agreement, except as provided in Section 7(c). (b) The Developer shall promptly notify the City in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in Control (as defined in Section 7(d)) of the Developer, as well as any and all changes in the interest or the degree of Control of the Developer by any such person, of which information the Developer or any of its shareholders, partners, members, directors, managers or officers are notified or may otherwise have knowledge or information. Upon the occurrence of any significant or material change, whether voluntary or involuntary, in ownership, management or Control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the City, prior to the time of such change, the City may terminate this Agreement, without liability to the Developer or any other person, and refund any remaining City Costs Deposit funds provided by the Developer to the City pursuant to Section 2(a), above, by sending written notice of termination to the Developer, referencing this Section 7(b). (c) Notwithstanding anything in this Agreement to the contrary, the Developer may assign its rights under this Agreement to an Affiliate (as defined in Section 7(d)), such as a single purpose LLC, on the condition that such Affiliate expressly assumes all of the obligations of the Developer under this Agreement in a writing reasonably satisfactory to the City (such satisfaction to be evidenced by the signature of the City Manager on the writing), and further provided that Developer shall, at all times, control any such Affiliate and be responsible and obligated directly to the City for performance of the Developer's obligations under this Agreement. (d) For the purposes of this Agreement, the term "Affiliate' means any person, directly or indirectly, controlling or controlled by or under common control with the Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise. For the purposes of this agreement, "Control" means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether by ownership of equity interests, by contract, or otherwise. 8. Obligations to Review Draft Agreements and Attend Meetings. (a) During the Negotiation Period, each Party shall diligently review and comment on draft versions of a DDA provided by the other Party and, if the terms and conditions of such a DDA are agreed upon between City staff and the Developer, the Developer shall submit the DDA fully executed by the authorized representative(s) of the Developer to the City Manager for submission to the City governing body for review and approval or disapproval. Any future DDA shall consist of terms and conditions 55905.00003 W4706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 acceptable to both the Developer and the City governing body, in their respective sole and absolute discretion. (b) During the Negotiation Period, the Developer shall also keep City staff advised on the progress of the Developer in performing its obligations under this Agreement, on a regular basis or as requested by City staff, including, without limitation, having one or more of the Developer's employees or consultants who are knowledgeable regarding this Agreement, the design and planning of the Project and the progress of negotiation of a DDA, such that such person(s) can meaningfully respond to City and/or City staff questions regarding the progress of the design and planning of the Project or the negotiation of a DDA, attend both: (1) periodic meetings with City staff, as reasonably scheduled and requested by City staff during the Negotiation Period, which may be held telephonically, and (2) meetings of the City governing body, when reasonably requested to do so by City staff. City designates Brian Moncrief, Deputy City Manager — Real Property as its lead negotiator and primary contact. Developer designates Parke Miller as its lead negotiator and primary contact. Developer acknowledges that the Project Entitlements and any required CEQA document shall be presented to the City's Planning Commission and, if required, the City Council prior to consideration of the DDA by the City Council. The City retains its sole and unfettered discretion as to any matter presented to the City Council. 9. Developer to Pay All Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or negotiation of a DDA that may be undertaken by the Developer during the Negotiation Period, pursuant to or in reliance upon this Agreement or in the Developer's discretion, regarding any matter relating to a DDA, the Property or the Project, shall be the sole responsibility of and undertaken at the sole cost and expense of the Developer and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon the City. The Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City and/or the City of any and all applications and other documents and information to be submitted to the City and/or the City by the Developer pursuant to this Agreement or otherwise associated with the Project. The City shall not be obligated to pay or reimburse any expenses, fees, charges or costs incurred by the Developer in pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or negotiation of a DDA that may be undertaken by the Developer during the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or a DDA is entered into between the City and the Developer, in the future; provided, however, that the foregoing shall not limit the City's obligations (i) to return all or any portion of the City Costs Deposit to the extent otherwise set forth in this Agreement, (ii) pursuant to Section 14 below in the event of City's breach of this Agreement, or (iii) pursuant to Section 27 below. 10. City Not to Negotiate With Others. During the Negotiation Period, the City and City staff shall not negotiate with any other person regarding the sale, lease or redevelopment of the Property or any portion thereof. The term "negotiate," as used in this Agreement, means and refers to soliciting, engaging in any discussions with or entering into any agreement with a person other than the Developer, regardless of how initiated, with respect to the availability of the Property or that person's purchase, leasing or redevelopment of the Property, without the Developer's prior written consent which may be withheld in the Developer's sole and absolute discretion. The City acknowledges and agrees that, if not for this exclusivity, the Developer would not have entered into this Agreement or funded any amounts becoming due hereunder. Developer acknowledges that City may receive and retain unsolicited offers regarding redevelopment of the Property, but shall not solicit or entertain any offer or negotiate with the proponent of any such offer during the Negotiation Period; provided, however, that the City may notify such proponent 5 5 905.00 00 3 \447 06069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 that it is a party to this Agreement. Developer acknowledges that the City is a public agency and subject to the provisions of the California Public Records Act, Government Code Section 6254, et. seq. (the "Act"). The City shall use its best efforts to inform Developer of any request for information received pursuant to the Act. If Developer believes the information requested is confidential, Developer may pursue a court order preventing the release of the requested information and the City shall reasonably cooperate with Developer but such cooperation shall not require the City to incur any costs or expenses, assume any liability, or take any action inconsistent with applicable law, including the Public Records Act 1 l . Acknowledgments and Reservations. (a) The City and the Developer agree that, if this Agreement expires or is terminated for any reason prior to a future DDA being approved and executed by both the City and the Developer, for any reason, neither the City nor the Developer shall be under any obligation, nor have any liability to each other or any other person regarding the sale, lease or other disposition of the Property or the development of the Project or the Property. (b) The Developer acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from the Developer for the City to convey any estate or interest in the Property to the Developer or for the City to provide any financial or other assistance to the Developer for redevelopment of the Project or the Property. (c) The Developer acknowledges and agrees that the Developer has not acquired, nor will acquire, by virtue of the terms of this Agreement, any legal or equitable interest in real or personal property from the City. (d) Certain development standards and design controls for the Project may be established between the Developer and the City, but it is understood and agreed between the City and the Developer that the Project and the development of the Property must conform to all City and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project shall be subject to the approval of the City through the standard development application process for projects of this nature. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project or of the Project itself by the City. (e) The City reserves the right to reasonably obtain further available information and data to ascertain the ability and capacity of the Developer to acquire or lease, develop and operate the Property and/or the Project. The Developer acknowledges that it may be requested to make certain financial disclosures to the City, its staff, legal counsel or other consultants, as part of the financial due diligence investigations of the City relating to the potential disposition of the Property and development of the Project on the Property by the Developer and that any such disclosures may become public records. The City shall maintain the confidentiality of financial information of the Developer to the extent allowed by law, as determined by the City Attorney. (f) Developer acknowledges that there are certain encumbrances on the Property currently including: (i) Temporary Construction Easements in favor of California Department of Transportation; and (ii) License in favor of One 30 LLC (the "License Agreement"). 55905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 12. City Representations and Warranties. Where the representations and warranties of City contained in this Section 11(f)(ii) are stated to be to the actual knowledge of City, "actual knowledge" shall mean the actual knowledge of the City Manager as of the Effective Date. All representations and warranties contained in this Section are true and correct as of the Effective Date. City's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. City hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties: (i) City is a California municipal corporation, duly formed and operating under the laws of the State of California. City has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. (ii) The persons executing any instruments for or on behalf of City have been authorized to act on behalf of City and, to the actual knowledge of City, this Agreement is valid and enforceable against City in accordance with its terms and each instrument to be executed by City pursuant hereto or in connection therewith will, when executed, shall be valid and enforceable against City in accordance with its terms. (iii) City has taken all requisite action and obtained all requisite consents for agreements or matters to which City is a party in connection with entering into this Agreement and the instruments and documents referenced herein and, to the actual knowledge of City, in connection with the consummation of the transactions contemplated hereby. (iv) To the actual knowledge of City, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which City is a party or by which City may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to City. (v) If the City becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the City under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the City's knowledge and/or belief as of a certain date, the City will give immediate written notice of such changed fact or circumstance to the Developer. (vi) During the Negotiation Period, the City shall not grant any encumbrance on the Property or allow any lien to be filed against the Property. (vii) Within ten (10) days following the Effective Date, the City shall make available to the Developer copies of all plans, reports, studies, investigations and other materials pertaining to the Property that the City or any City Parties have in their possession or control; provided, however, that the City makes no representations, warranties or guarantees regarding their completeness or accuracy. (b) Developer Representations and Warranties. Where the representations and warranties of Developer contained in this Section are stated to be to the actual knowledge of Developer, "actual knowledge" shall mean the actual knowledge of Parke Miller as of the Effective Date. All representations and warranties contained in this Section are true and correct as of the Effective Date. Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever 5 5 905.0 0003 \44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by City has been made in material reliance by City on such covenants, representations and warranties: (i) Developer is a Delaware corporation. Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of Developer hereby represent and warrant that such persons have the power, right and authority to bind Developer. (ii) Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and, to the actual knowledge of Developer, the consummation of the transactions contemplated hereby, and no consent of any other party is required for Developer's authorization to enter into Agreement. (iii) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which Developer is a party or by which Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to Developer. (iv) To the actual knowledge of Developer, this Agreement is, and all agreements, instruments and documents to be executed by Developer pursuant to this Agreement shall be, duly executed by and shall be valid and legally binding upon Developer and enforceable in accordance with their respective terms. (v) If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer's knowledge and/or belief as of a certain date, the Developer will give immediate written notice of such changed fact or circumstance to the City. (vi) Developer has the necessary expertise, experience and financial capability to undertake development of the Project at the Development Parcel as contemplated by this Agreement. (vii) Developer acknowledges that if the Property is acquired it shall be used for the timely development of the Project consistent with a schedule of performance set forth in the future agreement between the Parties and not for speculation in land holding. (viii) Developer is experienced in development and understands the process and requirements required to design, construct, develop and otherwise implement development projects such as the Project described herein. (ix) Developer is capable of acquiring the Property and developing the Project with one or more capital partners and with financing pursuant to financing from a bank group or other institutional lender at the close of escrow pursuant to the DDA. At the close of escrow pursuant to the DDA (if applicable), Developer shall cause one or more guarantor(s) approved by the City in its sole discretion to provide the City with a performance and completion guaranty for the Project in form and substance acceptable to each of the Parties in its sole discretion or to furnish the City with another form of security meeting the requirements of the City in its sole discretion. Developer has represented that it intends to 5 5 905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 obtain a combination of equity financing and financing from an institutional lender in connection with its development of the Project and that it or its capital partner or their respective affiliates will support such financing with bank guaranties and indemnities as it may approve in its sole discretion. 13. Nondiscrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in undertaking its obligations under this Agreement. 14. City Breach - Limitation on Damages and Remedies. (a) THE DEVELOPER AND THE CITY ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE DEVELOPER UPON THE BREACH OF THIS AGREEMENT BY THE CITY. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE DEVELOPER WOULD SUFFER UPON THE BREACH OF THIS AGREEMENT BY THE CITY, THE DEVELOPER AND THE CITY AGREE THAT A REASONABLE ESTIMATE OF THE DEVELOPER'S DAMAGES IN SUCH EVENT IS THE AMOUNT EQUAL TO THE TOTAL CITY COSTS DEPOSIT FUNDED BY THE DEVELOPER (THE "CITY LIQUIDATED DAMAGES AMOUNT"). THEREFORE, UPON THE BREACH OF THIS AGREEMENT BY THE CITY, THE CITY SHALL PAY THE CITY LIQUIDATED DAMAGES AMOUNT TO THE DEVELOPER AND THIS AGREEMENT SHALL TERMINATE. RECEIPT OF THE CITY LIQUIDATED DAMAGES AMOUNT SHALL BE THE DEVELOPER'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF THIS AGREEMENT BY THE CITY. DEVELOPER SHALL NOT BE ENTITLED TO ANY ADDITIONAL FUNDS UPON TERMINATION OF THIS AGREEMENT OTHER THAN PURSUANT TO SECTION 27 BELOW APPLICABLE. Initials of Authorized I tials thorized Representative of City Rep entative of Developer (b) THE CITY AND THE DEVELOPER EACH ACKNOWLEDGE AND AGREE THAT THE CITY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE LIABLE TO THE DEVELOPER FOR ANY ADDITIONAL MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY OTHER THAN TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE CITY LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, THE CITY AND THE DEVELOPER AGREE THAT THE DEVELOPER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY UPON THE BREACH OF THIS AGREEMENT BY THE CITY IS TO TERMINATE THIS AGREEMENT AND RECEIVE THE CITY LIQUIDATED DAMAGES AMOUNT. (c) THE DEVELOPER ACKNOWLEDGES THAT IT IS AWARE OF THE MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE 5 5905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 DEBTOR OR RELEASED PARTY. (d) CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF THE DEVELOPER TO BE BOUND BY THE LIMITATION ON DAMAGES, RECOVERY AND REMEDIES SET FORTH IN THIS SECTION 14, AND THE DEVELOPER HEREBY RELEASES ANY AND ALL CLAIMS AGAINST THE CITY FOR ADDITIONAL MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY BREACH OF THIS AGREEMENT, EXCEPT RECEIPT OF THE CITY LIQUIDATED DAMAGES AMOUNT, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO THE DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE DEVELOPER SPECIFICALLY WAIVES THE BENEFITS OF CALIFORNIA CIVIL CODE SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT WITH REGARD TO THE LIMITATIONS ON DAMAGES AND REMEDIES AND WAIVERS OF ANY SUCH DAMAGES AND REMEDIES CONTAINED IN THIS SECTION 14. Initials of Authorized *entative orized Representative of City of Developer 15.Developer Breach — Limitation on Damages and Remedies. (a) THE DEVELOPER AND THE CITY ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE CITY UPON THE BREACH OF THIS AGREEMENT BY THE DEVELOPER. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE CITY WOULD SUFFER UPON THE BREACH OF THIS AGREEMENT BY THE DEVELOPER, THE DEVELOPER AND THE CITY AGREE THAT A REASONABLE ESTIMATE OF THE CITY'S DAMAGES IN SUCH EVENT IS ALL REMAINING FUNDS IN THE CITY COSTS DEPOSIT PLUS ACCRUED INTEREST, IF ANY(THE "DEVELOPER LIQUIDATED DAMAGES AMOUNT"). THEREFORE, UPON THE BREACH OF THIS AGREEMENT BY THE DEVELOPER, CITY SHALL BE ENTITLED TO RETAIN THE DEVELOPER LIQUIDATED DAMAGES AMOUNT AND THIS AGREEMENT SHALL TERMINATE. RETENTION OF THE DEVELOPER LIQUIDATED DAMAGES AMOUNT SHALL BE THE CITY'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF THIS AGREEMENT BY THE DEVELOPER. CITY SHALL NOT BE ENTITLED TO ANY ADDITIONAL FUNDS UPON TERMINATION OF THIS AGREEMENT OTHER THAN PURSUANT TO SECTION 27 BELOW, IF APPLICABLE. Initials of Authorized Representative of City 5 5905.00003\44706069.17 4933-5068-6121, v. 1 authorized Representative of Developer Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 (b) THE CITY AND THE DEVELOPER EACH ACKNOWLEDGE AND AGREE THAT THE DEVELOPER WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE LIABLE TO THE CITY FOR ANY ADDITIONAL MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY OTHER THAN TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE DEVELOPER LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, THE CITY AND THE DEVELOPER AGREE THAT THE CITY'S SOLE AND EXCLUSIVE RIGHT AND REMEDY UPON THE BREACH OF THIS AGREEMENT BY THE DEVELOPER IS TO TERMINATE THIS AGREEMENT AND RETAIN THE DEVELOPER LIQUIDATED DAMAGES AMOUNT. (c) THE CITY ACKNOWLEDGES THAT IT IS AWARE OF THE MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. (d) CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF THE CITY TO BE BOUND BY THE LMTATION ON DAMAGES, RECOVERY AND REMEDIES SET FORTH IN THIS SECTION 145, AND THE CITY HEREBY RELEASES ANY AND ALL CLAIMS AGAINST THE DEVELOPER FOR ADDITIONAL MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY BREACH OF THIS AGREEMENT, EXCEPT RECEIPT OF THE DEVELOPER LIQUIDATED DAMAGES AMOUNT, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO THE CITY AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE CITY SPECIFICALLY WAIVES THE BENEFITS OF CALIFORNIA CIVIL CODE SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT WITH REGARD TO THE LIMITATIONS ON DAMAGES AND REMEDIES AND WAIVERS OF ANY SUCH DAMAGES AND REMEDIES CONTAINED IN THIS SECTION 15. Initials of Authorized Ini thorized Representative of City Representative of Developer 16. Default; Breach. (a) Failure or delay by either Party to perform any material term or provision of this Agreement shall constitute a default under this Agreement, provided that if the Party who receives notice of a default from the other Party cures, corrects or remedies the alleged default within fifteen (15) calendar days after receipt of written notice by the other Party specifying such default, such Party shall not be in breach under this Agreement. The notice and cure period provided in the immediately preceding sentence shall not, under any circumstances, extend the Negotiation Period. If there are less than fifteen (15) calendar days remaining in the Negotiation Period, the cure period allowed pursuant to this Section 16(a) shall be automatically reduced to the number of calendar days remaining in the Negotiation Period. Nothing in this subparagraph (a) prohibits the parties from extending the Negotiation Period by mutual agreement in accordance with subparagraph 3(b) above. 55905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 (b) The Party claiming that a default has occurred shall give written notice of default to the Party claimed to be in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. However, the injured Party shall have no right to exercise any remedy for a default under this Agreement, without first delivering written notice of the default and allowing the applicable period to cure any such default as set forth in Section 16(a). (c) Any failure or delay by a Party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. (d) If a default of either Party remains uncured for more than fifteen (15) calendar days following receipt of written notice of such default, a "breach" of this Agreement by the defaulting Party shall be deemed to have occurred. In the event of a breach of this Agreement, the sole and exclusive remedy of the Party who is not in breach shall be to terminate this Agreement by serving written notice of termination on the Party in breach and, in the case of a breach by the City, the Developer shall also be entitled to receive the Liquidated Damages Amount. 17. Compliance with Law. The Developer acknowledges that any future DDA, if approved by the governing body of the City, will require the Developer (among other things) to carry out the development of the Project in conformity with all applicable laws, including all applicable building, planning and zoning laws, environmental laws, safety laws and federal and state labor and wage laws. 18. Press Releases. The Developer agrees to obtain the approval of the City Manager or his or her designee or successor in function of any press releases Developer may propose relating to the lease or development of the Property or negotiation of a DDA with the City, prior to publication. The rights and obligations in this provision shall not apply to leasing and marketing brochures and/or information distributed by email or placed online on a brokerage website or real estate website such as LoopNet.com. 19. Notice. All notices required under this Agreement shall be presented in person, by nationally recognized overnight delivery service, by email with acknowledgment from the receiving party, or by first class certified or registered United States Mail, with return receipt requested, to the address and/or fax number for the Party set forth in this Section 19. Notice shall be deemed confirmed by United States Mail effective the third (3rd) business day after deposit with the United States Postal Service. Notice by personal service or nationally recognized overnight delivery service shall be effective upon delivery. Either Party may change its address for receipt of notices by notifying the other Party in writing. Delivery of notices to courtesy copy recipients shall not be required for valid notice to a Party TO DEVELOPER: PARKE MILLER LINCOLN PROPERTY COMPANY COMMERCIAL, INC. 4041 MACARTHUR BLVD., SUITE 510 NEWPORT BEACH, CA 92660 Email: pmiller@lpc.com JUSTIN GLINCHER ELKINS KALT WEINTRAUB REUBEN GARTSIDE LLP 10345 W. OLYMPIC BLVD. LOS ANGELES, CA 90064 Email: jglincher@elkinskalt.com 55905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 TO CITY: ALDO SCHINDLER, CITY MANAGER 300 CENTENNIAL WAY TUSTIN, CA 92780 Email: citymanager@tustinca.org DAVID KENDIG, CITY ATTORNEY WOODRUFF AND SMART, APC 555 ANTON BLVD., SUITE 1200 COSTA MESA, CA 92626 Email: dkendig@woodruff.law ELIZABETH WAGNER HULL SPECIAL COUNSEL BEST BEST & KRIEGER, LLP 18101 VON KARMAN AVE, SUITE 1000 IRVINE, CA 92612 Email: Elizabeth.hull@bbklaw.com 20. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 20, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects, brokers and other consultants, when such fees are considered necessary by the Developer. 21. Acceptance of Agreement by Developer. The Developer shall acknowledge its acceptance of this Agreement by delivering to the City three (3) original counterpart executed copies of this Agreement signed by an authorized representative(s) of the Developer. 22. Counterpart Originals. This Agreement may be executed by the City and the Developer in multiple counterpart originals, all of which together shall constitute a single agreement. This Agreement may be signed by electronic means, which may include using either DocuSign or similar program or .pdf signature by email attachment, and such electronic or .pdf signature will constitute an original for all purposes. 23. No Third -Party Beneficiaries; No Personal Liability; Additional Limitations on Damages. Nothing in this Agreement is intended to benefit any person or entity other than the City or the Developer. No member, partner official, representative, director, staff member, attorney or employee of the City shall be personally liable to Developer or any successor in interest in the event of any default or breach by the City or for any amount which may become due to Developer or to its successor, or on any obligations under the terms of this Agreement. No member, partner, official, representative, director, staff member, attorney or employee of the Developer shall be personally liable to the City or any successor in interest in the event of any default or breach by the Developer or for any amount which may become due to the City or to its successor, or on any obligations under the terms of this Agreement. Each of the Parties, on behalf of itself and its successors and assigns, hereby expressly waives, releases and relinquishes any and all right to any expectation, anticipation, indirect, consequential, exemplary or punitive damages or damages provided, however, that the foregoing shall not limit or waive any right to enforce any express remedy set forth in this Agreement. 5 5905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 24. Governing Law and Venue. The City and the Developer acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Tustin, California. The City and the Developer agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without application of such laws' conflicts of laws principles. Venue for any related legal action shall be Orange County, California. 25. Waivers. No waiver of any breach of any term or condition contained in this Agreement shall be deemed a waiver of any preceding or succeeding breach of such term or condition, or of any other term or condition contained in this Agreement. No extension of the time for performance of any obligation or act, no waiver of any term or condition of this Agreement, nor any modification of this Agreement shall be enforceable against the City or the Developer, unless made in writing and executed by both the City and the Developer. 26. Construction. Headings at the beginning of each section and sub -section of this Agreement are solely for the convenience of reference of the City and the Developer and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one or the other of the City or the Developer, but rather as if both the City and the Developer prepared this Agreement. Unless otherwise indicated, all references to sections are to this Agreement. All exhibits referred to in this Agreement are attached to this Agreement and incorporated into this Agreement by this reference. If the date on which the City or the Developer is required to take any action pursuant to the terms of this Agreement is not a business day of the City, the action shall be taken on the next succeeding business day of the City. As used in this Agreement, "business day" shall mean and refer to days on which the City of Tustin City Hall is open for business. 27. Attorneys' Fees. If either Party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, then the prevailing Party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, in the case of either Party, salaries and expenses of the lawyers working for or employed by such Party (allocated on an hourly basis) to the extent they provide legal services to such Party in connection with the representation of that Party in any such matter and shall not exceed a rate of $450 per hour. 28. Real Estate Commissions. The City has retained JLL pursuant to a separate agreement and shall be responsible for payment of any commissions or other amounts, if any, due to JLL thereunder in connection with the transaction described in this Agreement. The City shall defend (with counsel reasonably acceptable to the Developer), protect, indemnify and hold harmless the Developer and the Developer Parties from and against any and all Claims arising from JLL or any other broker, agent or finder retained by the City regarding this Agreement or the sale of the Property. The Developer represents that it has not engaged any broker, agent or finder in connection with this Agreement and the Developer agrees to defend (with counsel reasonably acceptable to the City), protect, indemnify and hold harmless the City and the City Parties from and against any and all Claims arising from any claim by any broker, agent or finder retained by the Developer regarding this Agreement. The provisions of this Section 28 shall survive the termination of this Agreement. 29. Confidentiality. Except as otherwise required by law or court order, the City and Developer agree that each shall keep this Agreement and all information and/or reports provided by the other Party and identified as confidential at the time of disclosure, or that by its nature should reasonably be understood to be confidential, relating to the Property, the other Party or this Agreement until presentation to the City for approval, the DDA or any other documents negotiated by the City and 5 5905.00003\44706069.17 4933-5066-6121. v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 Developer, confidential and will not disclose any such information to any person or entity without obtaining the prior written consent of the other Party, except that (a) the City shall have the right (i) to make disclosures required by the Act, subject to Section 10 above and (ii) make disclosures to the City Parties as necessary in order to determine if the Project is feasible and financeable, provided such persons and entities are made aware the information is confidential; and (b) Developer shall have the right to make disclosures to Developer's existing and potential capital partners, lenders, and end users, and Developer's and their respective employees, partners, members, affiliates and independent contractors, including but not limited to consultants, financial planners, outside counsel, and experts as necessary in order to determine if the Project is feasible and financeable, provided such persons and entities are made aware the information is confidential. Notwithstanding the foregoing, the City's use and disclosure of its agreements and records are governed by the Act and nothing herein limits the City's right and obligation to comply with the Act or with laws mandating public notice or disclosure of public records, including without limitation, agendas, public hearings, staff reports and minutes produced in connection therewith, including, without limitation, the Ralph M. Brown Act. The City makes no representations nor warranties that writings and materials provided to or generated by the City during negotiations will be exempt from the Public Records Act; provided however that nothing in the foregoing shall relieve the City of its obligation to abide by Section 10 of this Agreement, when applicable. [Signatures on following page] 55905.00003\44706069.17 4933-5068-6121, v. 1 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 THE CITY OF TUSTIN EXCLUSIVE NEGOTIATION AGREEMENT (NEWPORT & VALENCIA SITE) IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the dates indicated next to each of the signatures of their authorized representatives, as appear below. Dated: MAY 13, ZD`4 Dated: APPROVED AS TO FORM: BEST BEST & KRIEGER, LLP LE Special Counsel 5 5905.00003\44706069.17 4933-5068-6121, v. 1 DEVELOPER: LPC WEST LP, a Delaware li ited partnership • By: Name: Its: Vice Dresi eit CITY: THE CITY OF TUSTIN La Name: Aldo Schindler Its: City Manager Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 EXHIBIT "A" TO EXCLUSIVE NEGOTIATION AGREEMENT Proper!y Legal Description Real property in the City of Tustin, County of Orange, State of California, described as follows: PARCEL 1 OF PARCEL MAP NO. 2010-127, IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 371, PAGES 25 THROUGH 29 OR PARCEL MAPS. EXCEPTING THEREFROM THAT PORTION OF PARCEL 1 OF PARCEL MAP NO. 2010-127, IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 371, PAGES 25 THROUGH 29 OR PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING NORTHWESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE NORTHWESTERLY TERMINUS OF THAT CERTAIN COURSE SHOWN AS HAVING A BEARING OF NORTH 490 20' 06" WEST AND A LENGTH OF 774.52 FEET IN THE SOUTHWESTERLY LINE OF SAID PARCEL 1; THENCE ALONG SAID CERTAIN COURSE, SOUTH 491 20' 11" EAST, 34.55 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CERTAIN COURSE, NORTH 451 31' 53" EAST, 420.60 FEET; THENCE NORTH 590 43' 50" EAST, 172.92 FEET TO THE NORTHERLY LINE OF SAID PARCEL 1. AS DESCRIBED IN THE GRANT DEED FROM THE CITY OF TUSTIN TO THE ORANGE COUNTY TRANSPORTATION AUTHORITY, A PUBLIC ENTITY IN GRANT DEED RECORDED OCTOBER 13, 2020, INSTRUMENT NO. 2020000566409, OFFICIAL RECORDS, COUNTY OF ORANGE, STATE OF CALIFORNIA. APN: 430-251-23 and 430-251-37 EXHIBIT A 55905.00003\44706069.17 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 EXHIBIT `B" TO EXCLUSIVE NEGOTIATION AGREEMENT Proiect Description The proposed project includes development of an approximately 230,000 gross square foot building for the purposes of light industrial, advanced manufacturing, warehouse, assembly, office, and retail experience showroom use, thoughtfully designed to meet the operational needs of modern occupiers while remaining adaptable for future generations of users. The building program includes up to approximately 42,000 square feet of two-story office space and a potential 6,500-square-foot retail experience showroom. The balance of the space will accommodate warehouse and assembly operations, with 36-foot clear heights and modern functionality built into every detail. Lincoln and its future occupier share a strong commitment to creating a high -quality, healthy workplace environment that supports employee wellness, productivity, and safety. The project includes: - Outdoor and on -site amenity spaces - Interior employee -focused features such as coffee bars, breakout zones, and collaborative workspaces - Ample on -site parking and clearly separated ingress/egress for cars and trucks - Sound attenuation measures designed to enhance comfort given the property's proximity to the freeway 55905.00003\44706069.17 Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 EXHIBIT "C" TO EXCLUSIVE NEGOTIATION AGREEMENT Milestone Schedule Within 30 Days of Effective Date () of ENA Development Team Submit key project personnel including lead negotiator and any third party consultants Organizational Structure Submit preliminary or planned information related to transaction entity (noting that entity may not yet be formed) and organization chart identifying structure, investment partners and control Term Sheet Price and Terms of Negotiation Within 60 Days of Effective Date of ENA Due Diligence- Phase 1 Provide written determination of property's physical suitability for development, taking into account relevant regulatory and environmental conditions. Conceptual Submit conceptual design consisting of site plans, floor plans, Development Plan building elevations, preliminary material selection, landscape/hardscape plan, and technical information inclusive of use, square footage, and parking. Financing Plan Submit initial pro forma and anticipated financing sources demonstrating project feasibility for the proposed development. Letter of Intent Provide Letter of Intent with build -to -suit tenant. Project Development Submit projected project schedule inclusive of negotiations, entitlements, closing, and construction for the proposed Schedule development. Within 120 Days of Effective Date ( ) of ENA Due Diligence- Phase 2 If Phase 2 is required, provide written determination of property's physical suitability for development, taking into account relevant regulatory and environmental conditions. Preliminary Net Fiscal Impact & Economic Benefits Analysis Entitlement Submittal 55905.00003\44706069.17 Submit a preliminary net fiscal impact and economic benefit analysis demonstrating the costs and benefits to the City generated by the project. Submittal to the City's Community Development Department of all necessary entitlement applications to accommodate the project. Docusign Envelope ID: B2942A1C-7706-82A5-815E-075EA3096335 Tenant Lease Agreement Submit confirmation of a form lease agreement (unexecuted and substantially negotiated) with build -to -suit tenant to be executed at Close of Escrow. Within 180 Days of Effective Date (_) of ENA Revised Proforma and Development Schedule Quarterly re -submittal of development proforma and schedule reflecting the current evolution of the project. All references to "days" are calendar days unless otherwise noted. 5 5905.00003\44706069.17