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HomeMy WebLinkAbout07. Approve Sale Agreement and Third Amendment to Ground Lease for 8.76 Acres of City Owned LanditeM . APPROVED BY CITY MANAGER T: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: OFFICE OF THE CITY MANAGER Y: ALDO E. SCHINDLER, DIRECTOR OF COMMUNITY DEVELOP ENT DATE: MAY 12, 22 SUBJECT: SALE AGREEMENT FOR - OF • , RELATE THIRD AMENDMENT TO GROUND LEASE i • • • • • • �•-• • �• • • • ME •-�'+ • • • • • -• r, • • r • • l 111-*441 The City of Downey owns 19.69 acres of • between the Promenade shopping center and Bellflower Boulevard. It entered into . long term ground - - of property with IndustrialRealty Group, LLC on December 4 2003,- amended - Ground Lease in March SALE AGREEMENT FOR 8.76 ACRES OF CITY -OWNED AND RELATED THIRD AMENDMENT TO GROUND LEASE MAY 12,2020 PAGE 2 half of the proceeds (if any) in excess of $15,263,424 from the sale or use of the property. The $10,600,000 would be paid upon the closing of the sale, which will occur prior to the end of 2020. The additional proceeds to the City will be paid when re -sales of the property exceed $15,263,424, but would be no later than 2025. The City, Holdings, and IRG have a long-term vision for both the Promenade and the vacant 19.76 acres that are the focus of the proposed sale and lease amendment documents. This "Phase 2" of the Promenade development is envisioned to complete the retail, office and hospitality development of that immediate area, thus, creating synergy for the entire site. In addition, by structuring the transaction as a sale of a portion of the property, the City will realize a significant cash infusion in calendar year 2020, which will be helpful in light of the impacts of the COVID-19 pandemic. Holdings has committed to place a minimum 150 room hotel, together with sufficient parking, on the property. The remainder of the property will be developed with uses consistent with the City -approved Specific Plan. Medical offices are the most likely predominant development, with some associated retail for that land. It also requires that Holdings deposits $200,000 shortly after opening escrow and an additional $200,000 approximately 45 days later. If the transaction does not close after the second deposit is made, the City keeps the $400,000. That size of non- refundable deposit creates a strong incentive for Holdings to close the transaction, which is scheduled to occur before the end of 2020. The sale creates a need to amend the Lease to remove the 8.76 acres from the scope of the leased property, and to make a corresponding reduction in the rent (which was originally calculated based on the square footage of the leased property). Likewise, Holdings commitment to build the 150 room hotel on the sale property allows for the release of the obligation to build a hotel under the Lease. Since the 8.76 acres to be sold to Holdings are currently subject to the Lease, the Lease will need to be amended. The property to be sold will be removed from the scope of the leased property, and the rent obligation will correspondingly be reduced. The Tenant has also proposed, and staff recommends, an extension of the Lease term to 99 years from the date of approval of the Lease amendment. The amendment will facilitate financing of long term quality businesses on the property. Tenant will continue to explore development opportunities for the remaining leased property. If it does not identify and facilitate a sale of the property, or commence construction on the property by April of 2025, the Lease will terminate early. If it succeeds in identifying a buyer for the remaining leased property, the City and Tenant will negotiate as to an appropriate division of the sales proceeds. The remaining notable modification to the Lease results in an extension of the expiration of its term from 2072 to 2120. This will allow the Tenant to better attract national retail tenants, premier office uses, and other quality tenants to the leased property. A 99 year lease also aides in the financing for the development of the site. To ensure that the City receives fair market rent in the additional years — from 2072 to 2120 — the Lease amendment calls for an up to 25% increase in the then -applicable rent in August of 2072. The Lease retains its significant incentives for Tenant to find and implement quality development opportunities. If it does not identify and facilitate development (or sale) of the property by April of 2025, the Lease will terminate early. If it succeeds in identifying a buyer for SALE AGREEMENT FOR 8.76 ACRES OF CITY -OWNED AND RELATED THIRD AMENDMENT TO '• LEASE MAY 12, 2020 RAGE 3 the • leased property, the City .:• Tenant will negotiate as to an .•prop division of the sales proceeds. ciao= - I • I • I I I RAM If' V 10 ffA FISCAL IMPACT Approval of the Sale Agreement and Escrow Instructions, and Third Amendment to the existing ground lease will not have an impact to the City's General Fund. ATTACHMENTS A - Site Aerial B - Resolution with Sale Agreement and Escrow Instructions C - Ordinance (with: Ground Lease by and between City of Downey and Holdings Downey, LLC and IRG Downey, LLC; First Amendment to Ground Lease; Second Amendment to Ground Lease; and Third Amendment to Ground Lease) Attachment" • • • SECTION• of of: Downey herebyapproves th- Sale authorizesAgreement, substantially in the form attached as Exhibit "A", and is on file with the City Cler (ii) if required, authorizes and directs the City Manager to make final changes or amendments to the Sale Agreement consistent with the City Council's direction, and (ii i directs the Mayor to execute the Sale Agreement and any other documents and agreements necessary to completei i • i by the Sale Agreement. 0 6 0 0 zur--AA it Is, SECTION 4. If any section, subsection, paragraph, sentence, clause or phrase of thi Resolution is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Resolution, The City Council declares that it would have adopted this Resolution, and each section, subsection sentence, clausejohrase or ortion thereof, irresr)ectivi 1191 WOW All W v 0-Te Maria Alicia Duarte, CIVIC City Clerk I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a regular meeting held on the day of May, 2020, by the following votes, to wit: ATES: Council Members: NOES: Council Member: ABSENT: Council Member: ABSTAIN: Council Member: Maria Alicia Duarte, CIVIC City Clerk This Sale Agreement and Escrow Instructions ("Agreement') is entered into on 2020 Date") by OF DOWNEY, a California municipal corporation ("Seller"), and HOLDINGS DOWNEY, LLC, a Delaware limited liability • IRGDOWNEY, LLC, . California limited liability companya • collectively with Holdings, "Buyer"). Buyer and Seller are hereinafter individually referred to as a "Party" L collectively as the P. A. Seller is the owner of 8.76 acres of ". property in the City •Downey Seller C. The Property is . portion of . f currently subjectto that certain• i Lease dated December 3, 2003 between Seller, as lessor and Buyer, as lessee, as amended ("Lease"). In addition to the Property, the Lease is applicable to an additional 10.93 acres of land that are referred to herein as the "North Parcel." The North Parcel is described and/or depicted in Exhibit B attached •. D. • approval of Agreement, the City has approved an amendment to the Lease that (i) removes the Property from the leased land under the Lease, (ii) ,.lit Iff • i * fi .` f L T • • ra • f • 'i• . • r i i "t E. After acquiring the Property, Buyer intends to re -sell all or a portion of the Property in one or more purchase and sale transactions ("Re -Sales"), and/or may choose to develop the [r •f .("OwnerParties have agreed to equally divide amounts i of i TWO HUNDRED SIXTY THREE THOUSANDHUNDRED TWENTY FOUR DOLLARS ($15,263,424) (the "Division Threshold'� realized from (i) the net lr;r�ll ii III IN necessary anci sulticiment Torone • • 97J77377 RI I • ri • i . f . • _ • •_ _f f Property • •., Plan. 680/0'R 110-0024 14Q66442,10 a0 �/08/20 ' 1 " T11 M. 9 M. 1.1 Purchase and Sale. Seller shall sell the Property to Buyer and Buyer shall j2urchase the Proj2el:ty from Seller subject to the terms and conditions set forth in this Agreement. 1.2 Purchase Price. The purchase price of the Property including the "Property Rights" (as defined in Section 2.8 below) is TEN MILLION SIX HUNDRED THOUSAND DOLLARS ($10,600,000) ("Purchase Price"). 1.3 Additional Consideration. In addition to the Purchase Price, Buyer shall provide additional consideration to Seller ("Additional Consideration") as specified in Section 8, below. 2.1 Escrow Instructions. Within seven (7) days following the execution this Agreement by the Parties, the Parties will open an escrow ("Escrow") with Chicago Tit Company ("Escrow Holder") for the purchase and sale of the Property. The "Opening ofEscro shall mean the date on which a fully executed copy of this Agreement and Buyer's "Initial Deposi (as defined in Section 2.2.1 below) have been delivered to Escrow Holder. Escrow Holder sha confirm the Opening of Escrow to the Parties in writing. This Agreement constitutes joint escro instructions to Escrow Holder. The Parties agree to execute such additional instructions consiste with the provisions of this Agreement which may be required by Escrow Holder. As between t Parties, Buyer and Seller agree that, if there is any conflict between the terms of this greeme riy &ario %_YNI.1 d-gr,.- Buyer and Seller shall each furnish Escrow Holder with their respective Federal Tax Identificati• Numbers and such other information as is reasonably required by Escrow Holder. 2.2 Payment of Purchase Price. The Purchase Price for the Property shall payable as follows: 2.2.1 Initial Deposit. Within seven (7) days following the execution• this Agreement by the Parties, Buyer shall deliver to Escrow Holder, by wire transfer or oth immediately available funds acceptable to Seller ("Acceptable Funds"), the sum of TW HUNDRED THOUSAND DOLLARS ($200,000) ("Initial Deposit"). If requested by Buyer, t Initial Deposit shall be placed by Escrow Holder in an interest -bearing account with intere accruing for the benefit of Buyer. 2.2.2 Additional Deposit. If Buyer provides Seller with the "Notice• Approval" (as defined in Section 4.2 below) on or before the "Property Approval Date" (as defin • 2 1•w hen within three 3 business d s follow h ig-Buver's delivery of the Noti W 6S01,028110-0024 141)66442- W 905/OWO -2- 2.2.3 Feasibility Consideration. Notwithstanding any other provision of this Agreement to the contrary, One Hundred Dollars ($100) of the Initial Deposit ("Retained Amount") shall, upon delivery to Escrow Holder, be non-refundable to Buyer for any reason other than a default under this Agreement by the Seller. The Retained Amount is consideration to Seller for holding the Property off the market until the "Property Approval Date" (as defined in Section 4.2 below) and granting Buyer the right to acquire the Property in accordance with this Agreement, if Buyer approves the Property on or before the Property Approval Date. The Retained Amount shall be released to Seller upon the opening of Escrow. Notwithstanding anything to the contrary not include the Retained Amount, except in the event of a default by Seller. 2.2.4 Memorandum. Concurrently with the delivery of an executed copy of this Agreement to Escrow Holder, (a) Buyer and Seller shall deliver to Escrow Holder a fully 6SWa28n0*024 -3- 2.3.1 Conditions Precedent to Buyer Obligation to Close. Buyer's obligation to close Escrow and purchase the Property is expressly conditioned on the satisfaction of the conditions listed in this Section 2.3.1. If any such condition is not satisfied, or waived (with the exception of (6) below which cannot be waived) by Buyer, at or prior to the Close of Escrow, for any reason other than a default by Buyer, Buyer may, in its sole discretion and without limiting any of Buyer's legal remedies or remedies under this Agreement, terminate this Agreement by written notice to Seller, in which case the Deposit shall be immediately refunded Buyer. (1) Title Policy. Escrow Holder has issued or committed to issue Buyer the "Title Policy" (as defined in Section 2.6 below) showing title vested in Buyer subject only to "Permitted Exceptions" (as defined in Section 2.5 below). (2) Representations and Warranties. Each of Seller's representations and warranties in this Agreement are materially true and accurate as of the Close of Escrow. (3) Seller Obligations. Seller is not in material default under this Agreement and each material obligation of Seller to be performed prior to the Close of Escrow, has been performed as required, including, without limitation the delivery of all documents required of Seller under this Agreement. (4) Lease Amendment. Seller and the lessors under the Lease shall have entered the Lease Amendment (which amendment shall not become effective until the Closing Date). (5) Moratoria. There shall be no action taken by the City, County or other public authority or agency with jurisdiction over the Property ("Governmental Authority") or any vote of the citizens of the City (including without limitation any moratoria) that would preclude or prevent Buyer from obtaining building permits, sewer permits, water permits, or certificates of occupancy for the Property that are consistent with the Property's existing land use entitlements or any future land use entitlements that may be done prior to the Close of Escrow ("Public Development Limitation"). (6) Legal Subdivision. The Property shall be a legal parcel under the California Subdivision Map Act that can be transferred by Seller to Buyer. 2.3.2 Conditions Precedent to Seller Obligation to Close. Seller's obligation to close Escrow and sell the Property is expressly conditioned upon the satisfaction of the conditions listed below. If any such condition is not satisfied, or waived by Seller, prior to the Close of Escrow, for any reason other than a default by Seller, Seller may terminate this Agreement by written notice to Buyer. (1) Representations and Warranties. Each of Buyer's representations and warranties set forth in this Agreement are materially true and accurate as of the Close of Escrow. 6SO/02S 110-0024 141)66442-10 -4- (2) Buyer's Obligations. Buyer is not in material default under this Agreement, and each material obligation of Buyer to be performed prior to the Close of Escrow hereunder has been performed as required. (3) Lease Amendment. Seller and the lessors under the Lease shall have entered the Lease Amendment (which amendment shall not become effective until the Closing Date). 2.4 Escrow Cancellation. QMWQM M. (1) Seller's Default. If Escrow fails to close due to Seller's default and this Agreement is terminated, Seller shall pay all Escrow cancellation charges. "Escrow cancellation charges" means all fees, charges and expenses charged or passed on to the Parties by Escrow Holder, including all title expenses. (2) Buyer's Default. If Escrow fails to close due to Buyer's default and this Agreement is terminated, Buyer shall pay all Escrow cancellation charges. (3) No Default. If Escrow fails to close and this Agreement is terminated for any reason other than a default by one of the Parties, the Parties shall share equally in any Escrow cancellation charges, and each Party shall be deemed to have released the other Party from all liability for the failure of Escrow to close. The foregoing shall not be deemed an election of remedies by Buyer or limit any remedies available to Buyer. 2.4.2 Deposit. If Escrow fails to close due to Buyer's default and this Agreement is terminated, the Deposit shall immediately be delivered and paid over to Seller; provided, however, that the foregoing shall not constitute an election of remedies by Seller. If Escrow fails to close due to Seller's default and this Agreement is terminated, the Deposit shall be returned to Buyer. If Escrow fails to close due to any reason other than a default by Buyer or default by Seller and Escrow is terminated before the Property Approval Date, the Initial Deposit shall be returned to Buyer. If Escrow fails to close due to any reason other than a default by Buyer or default by Seller and Escrow is terminated after the Property Approval Date, the Deposit shall immediately be delivered and paid over to Seller; provided, however, that the foregoing shall not constitute an election of remedies by Seller. 2.5 Permitted Exceptions to Title. As soon as reasonably possible after the Opening of Escrow, Escrow Holder shall cause Chicago Title Company, in its capacity as title insurer ("Title Company"), to deliver to Buyer and Seller a current preliminary title report ("Title Report") together with legible copies of all underlying documents referenced therein (together with the Title Report, the "Title Documents"). Buyer may, at Buyer's option and expense, have the a survey completed to delineate the Property and the North Parcel (the "Survey") in a form sufficient to permit the Title Company to delete the standard survey exception in connection with the issuance of the Title Policy (as defined in Section 2.6) The term "Permitted Exceptions" as used in this Agreement shall mean all of the following: (a) the Grant Deed, (b) non delinquent real 680/0'8 1111-0024 14966442,10 05/09/20 -5- 4: bi 0io Vie wrivim *r 2 Duyer, 111clulallig Um,qxur� shown on the Title Report but excluding any (i) "Disapproved Exceptions" as defined below that Seller, in its sole discretion, .• to remove prior to the Close of Escrow as provided -• and property taxes and assessments which will be removed (meaning removal from title and not the issuance of an endorsement in connection therewith by the Title Company) from title by Seller at its sole cost and expense prior to the Close of Escrow. If Buyer objects to any title exceptions or ("Objection Notice") of same to Seller on or before the Property Approval Date. If Buyer fails to deliver an Objection Notice but delivers a "Notice of Approval" (as defined in Section 4.2 below) subject to the Permitted Exceptions. If Buyer delivers an Objection Notice and Seller, by delivery of written notice to Buyer within five (5) business days following receipt of the Objection Notice, elects not to remove a Disapproved Exception (Seller's failure to respond to a Buyer Objection Notice shall be deemed such an election) Buyer's sole remedies shall be under Section 4.2 with respect to the delivery of a Notice of Approval or delivery or deemed delivery of a Notice of Termination and refund of all of the Deposit delivered into Escrow and all interest accrued thereon. 2.6 Title Insurance. Seller shall cause the Title Company to commit to issue _Lili Wl#,ffW,?.gvwWPGk kt��vnr'p ytli,��", )f W)m i Awkri mechanics lien endorsement (Seller shall provide any indemnity or other agreement required by the Title Company as a condition to the issuance of the mechanics lien endorsement) ("Title Policy") insuring fee title to the Property vested in Buyer subject only to the Permitted Exceptions, with coverage in an amount equal to the Purchase Price. If Buyer requires an extended coverage issued in connection with the standard coverage Title Policy which shall be at the cost of Seller) ("Buyer Title Costs"). Seller shall only be responsible for that portion of the cost of the Title Policy equal to the cost of a standard coverage title policy ("Seller Title Costs"). 2.7 Possession. Seller shall deliver possession of the Property to Buyer at the Close of Escrow subject only to the Permitted Exceptions and, except for the sublease dated January 10, 2018 between Buyer, as sublessor and Kaiser, as sublessee ("Kaiser Sublease"), free of any tenancies and/or third -party claims of use or ownership. 2.8 Property Rights. Effective as of the Close of Escrow, without the need for any additional documentation, unless required below, to the extent assignable, Seller assigns, transfers and conveys to Buyer all of Seller's right, title and interest in the following ("Property Rights"). 2.8.1 Personal Property. All right, title and interest of Seller, if any, in and to all tangible personal property owned by Seller now existing and placed or installed on or about the Property and used in connection with the ownership, operation, management, maintenance and/or repair of the Property. f)F.W01-81 10-0024 14066442, 10 a05108ilf, -6- 2.• in and to all beneficial easements, covenants, patents, licenses, trademarks, service marks and names used in connection with the operation of the Property, and all symbols, emblems with the operation of the Property, and all symbols, emblems and logos used in connection with the ownership is operation of Property, J • irrespective of i all ofright,{' interest in and to all goodwill associated therewith. • foregoing assignment is without-1 - - i I warranty except as provided in this Agreement or any exhibit to this Agreement and all Prope Rights consisting of materials prepared by Seller or third parties at the request of Seller shall el Cf i i f - i 1 i / i i. any fee, cost or charge. Seller shall execute all additional documentation necessary to eviden the foregoing assigninents as reasonably required by Buyer and/or any Governmental Authority applicable • party. i a 1 1I. I 1 1 2.9.1 Taxes. All current general and special taxes and assessments �n th /r r`i i i � i•` i i • / fire 2.9.2 General. All pro rationsprovided for day" basis and a three hundred sixty-five (365) day year. The provisions of this Section shall survive Close of Escrow. If either Party fails to pay its pro rata share of taxes or other expenses by the times herein provided, interest shall accrue on all unpaid amounts from when owing until paid at the maximum rate allowed by law. Any errors or omissions made in calculating adjustments and prorations shall be • f promptly up• discovery thereof. r Ttr"2tioTts. Vie Parties shall at the maximum rate allowed by 6W/028 I O -0024 141166442.I0 05/09i" n - P - 2.10 Closing Costs. Buyer shall pay the Buyer Title Costs, one-half (1/2) of Escrow Holder's fee and any other costs that in Escrow Holder's opinion are customarily borne by buyers of real property in the County. Seller shall pay for the cost of recording the documents described in Section 2.11, the documentary transfer tax, the Seller Title Costs, one-half (1/2) of Escrow Holder's fee, and any other costs of Seller specified in this Agreement or which in the opinion of Escrow Holder are customarily home by sellers of real property in the County. At least three (3) business days prior to the Closing Date Escrow Holder shall furnish Buyer and Seller with a preliminary Escrow closing statement which shall include each Party's respective share of costs. The preliminary closing statement shall be approved in writing by Buyer and Seller. As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver a copy of the final Escrow closing statement to Buyer and Seller. 2.11 Recordation and Delivery of Documents. No later than 12:00 p.m. on the business day immediately prior to the Closing Date, Buyer and Seller, as applicable, will deposit into Escrow the following documents (with the documents that are to be recorded in the following order and delivered as provided below): 2.11.1 Grant Deed. One (1) fully executed and acknowledged copy of the grant deed on Title Company's standard form conveying the Property to Buyer ("Grant Deed'). Conformed copies of the recorded Grant Deed shall be returned to Buyer and Seller as soon as possible. 2.11.2 Withholding Exemption Certificates. One (1) completed and executed copy of the following: Non -foreign Transferor Declaration; Preliminary Change in Ownership Report, Internal Revenue Service Form 1099-S, and California Franchise Tax Board Form 593 and any other applicable state tax withholding forms, as applicable, as applicable. As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver copies of all closing documents, including, without limitation, those listed above, the Title Policy, any additional escrow instructions and the final Escrow closing statement, to Seller's counsel and Buyer's counsel. 2.12 Seller's Proceeds. At the Close of Escrow, subject to Section 2.13 below, Escrow Holder is directed to wire funds representing Seller's cash proceeds through Escrow to Seller's account as directed in separate written instructions to be provided by Seller. 2.13 Cal-FIRPTA Withholding. Unless this transaction is exempt under California Revenue and Taxation Code Sections 18805 and 26131, Escrow Holder shall be the "withholding agent" and withhold from proceeds due Seller any amounts required under the above code sections to be withheld by Buyer and pay same to the California Franchise Tax Board or Internal Revenue Service in accordance with applicable law. 2.14 Additional Documents. Seller shall execute and deliver to Escrow any other documents reasonably required by Escrow Holder including, without limitation, Seller's affidavits or statements regarding mechanics liens and/or tenants or parties in possession. 2.15 Termination of Property Contracts. Seller shall terminate any service contracts or similar agreement relating to the Property to which Seller is a Party and which the 6,W/0'9 110-0024 14Q66442, 10 a05/0S/20 -8- Buyer does not elect in writing to assume which termination shall be effective as of the Close of Escrow. 3. Real Estate Brokerage Commission. Buyer and Seller each represent and warrant to each other that they have not employed, dealt with or incurred any obligation to any broker, agent or finder in connection with the Property, and that they have not incurred any obligation to of the Property to Buyer. Buyer and Seller agree to indemnify, defend and hold each other free and harmless from and against all costs and liabilities, including without limitation reasonable attorneys' fees and the costs and expenses of litigation, for causes of action or proceedings in any way related to or resulting from a breach of the foregoing representation and warranty or arising out o• • froceedin•s which ma-�j be instituted bN anjr broker, a0ent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party, respectively, in connection with this transaction. M UUMMIU�� 4.2 Buyer Approval/Disapproval. If Buyer determines, in its sole and absolute discretion, for any reason, that it does not wish to acquire the Property, then Buyer may, Outwon tiwv- 5:00 p.m. on the date which is the earlier of (i) the end of Kaiser's Review Period (as defined in the Kaiser PSA) and (ii) forty-five (45) days after the full execution of this Agreement ("Property Approval Date"), written notice terminating this Agreement ("Notice of Termination"), whereupon this Agreement shall automatically terminate and neither Party shall have any further obligation or responsibility hereunder or liability of any nature or amount whatsoever, other than Buyer's inderimity obligations under Section 4.3 below and the payment of Escrow cancellation charges, and the Initial Deposit delivered into Escrow and all interest accrued thereon shall be immediately refunded to Buyer. If Buyer approves the Property, Buyer shall deliver written notice of such approval ("Notice of Approval") to Seller and Escrow Holder prior to 5:00 p.m. on the Property Approval Date, in which case this Agreement shall remain in ftill force and effect subject to its terms and conditions. If Buyer does not so deliver a Notice of Termination or a Notice of Approval prior to 5:00 p.m. on the Property Approval Date, Seller shall send Buyer written notice of such failure and if by the date ("Termination Date") that is three (3) business days following receipt of such written notice (and the Property Approval Date shall be extended to the Termination Date) Buyer still has not delivered a Notice of Termination or Notice of Approval, Buyer shall be deemed to have delivered a Notice of Termination, in which case this Agreement shall automatically terminate, Escrow shall be cancelled and the Initial Deposit, less Escrow cancellation fees, shall be immediately refunded to Buyer. Additional Agreements. 5.1 Buyer's Investigation. Buyer shall be entitled to conduct such independent (,80!028110-0Q4 14966442,10 OSM/20 -9- thereon; (iii) applicable laws, statutes, rules, regulations, ordinances, limitations, restrictions requirements concerning the use, density, location or suitability of the Property or any existing proposed development or condition thereof, including but not limited to zoning, subdivision a other regulations (collectively, the "Regulations"); (iv) the necessity or availability of any speci plan or general amendments, rezoning, zone variances, conditional use permits, building permi mik,tironmental irn%sact re%orts. subdivision mai%sigublie rej%orts issued bk I the California Bureau Real Estate ("BRE") (it shall be Buyer's obligation, if applicable, to obtain all required publ reports as a condition to offering homes to purchasers) and all other governmental permit approvals or acts (collectively, the "Permits"); (v) the necessity and existence of all dedication fees, charges, costs or assessments which may be imposed by any Governmental Authority Aa availability or adequacy of access to the Property, or of water, sewage, gas, electrical or 3 utilities serving the Property and (viii) the presence or adequacy of infrastructure or improvements on, near or concerning the Property. 5.2 Warranties. 5.2.1 Seller's Warranties. In consideration of Buyer entering into th Agreement and as an inducement to Buyer to purchase the Property from Seller, Seller makes t following representations and warranties which shall be true and correct as of the Effective D and the Close of Escrow and each of which is material and being relied upon by Buyer. For purposes of this Agreement, including Seller's representations and warranties contained in t Section 5.2.1, the phrase "to the best of Seller's knowledge" shall mean the current actu knowledge of Seller, without duty of inquiry or investigation. If prior to the Close of Escro Buyer determines that any representation or warranty of Seller is untrue, inaccurate or incomple in any material respect (and without waiving any of Buyer's rights or remedies hereunder at la or in equity with respect to any material untruth, incompleteness or inaccuracy existing on t Effective Date-. that was known of or should have been known of bil Seller�,, Burler shalllive Sell written notice of same and Seller shall have seven (7) days from the date of receipt of Buyer 114 *1C C4# S-k;.�g I atc-slra-H '#, --exftecrvi-e"j-�#ei wtk4he-ranniinet #,f -.# e-r-i r ("Seller Cure Period') to correct any fact or circumstance that makes such, representation warranty materially untrue or inaccurate to Buyer's reasonable satisfaction. If Seller fails to in such correction within the Seller Cure Period, then Buyer by written notice to Seller within thr (3) days after the expiration of the Seller Cure Period (and the Closing Date shall be extended permit the running of such three (3) day period) shall be entitled (a) to terminate this Agreeme and obtain a full refund of the Deposit or (b) continue this Agreement in full force and effect wi no change in terms, but without waiving any legal, equitable or other remedies it may have again Seller. The foregoing is not a waiver or release of any of Buyer's rights or remedies for a material untruth, incompleteness or inaccuracy in a representation or warranty of Seller of whi Buyer obtains knowledge after the Close of Escrow. (1) Authorization. To the best of Seller's knowledge, Seller has full power and authority to enter into this Agreement and to perform all its obligations hereunder, and has taken all actions required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement by Seller. To the best of Seller's knowledge, each individual or entity who has executed this Agreement on behalf of Seller bS0/0281 10-0024 14966442 10 05110.11!20 -10- has the right, power, legal capacity and authority to execute, deliver and perform this Agreement on behalf of Seller. (2) Conflicting Agreements. To the best of Seller's knowledge, neither the execution or delivery of this Agreement, nor the consummation of the transaction contemplated herein, will conflict with, or result in a breach of, any contract, license or undertaking to which Seller is a party or by which Seller or any of the Property is bound, or constitute a default thereunder. In addition, to the best of Seller's knowledge, with respect to any agreements which affect the Property, neither Seller nor any other party or parties to such agreements are in default thereunder nor are there any facts that currently exist which with the passage of time would result in any such default. To the best of Seller's knowledge, the Property is not subject to any prescriptive easements, claims of adverse possession, encroachments or similar rights or claims (other than the Lease, which shall be amended to exclude the Property as of the Closing Date). In addition, to the best of Seller's knowledge, except (i) as otherwise disclosed in this Agreement and (ii) for the Kaiser Sublease, the Property is not subject to any leases, options or other similar rights or claims in favor of any third parties. The Property is not subject to a Williamson Act contract or any similar agricultural agreement. (3) Proceedings. To the best of Seller's knowledge, no legal or administrative proceeding is pending or threatened against Seller or the Property nor are there any other facts or circumstances which would adversely affect (i) Seller's right to convey title to the Property to Buyer as contemplated in this Agreement or (ii) Buyer's ability to own, develop and/or market the Property in the manner disclosed by Buyer to Seller. To the best of Seller's knowledge, there are no condemnation or eminent domain proceedings pending or threatened with respect to the Property. (4) Binding Agreement. This Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (5) Violations of Law. To the best of Seller's knowledge, on the Effective Date and Close of Escrow neither this Agreement nor the Property shall be in violation of any law, ordinance, rule regulation, or administrative or judicial order. (7) Assumed Obligations. To the best of Seller's knowledge, except for obligations or responsibilities of Seller that are expressly assumed by Buyer in this Agreement, there are no obligations or responsibilities of Seller with respect to the Property or otherwise of any kind that are assumed by Buyer. (9) Ownership of Property. Other than the lessor under the Lease and Kaiser under the Kaiser Sublease, Seller is the sole and only party that owns or holds any interest in the Property. (10) Property Documents. To the best of Seller's knowledge, the Property Documents and all other documents and information provided by Seller or its agents or consultants to Buyer are complete, true and accurate and do not omit any material fact and there 680,'02S 110-0024 14%6442 10 45iOW20 are no other documents, materials, studies, surveys or other information in the possession or control of Seller that would have a material and adverse effect on Buyer's ability to own, develop and/or market the Property. (11) Other Agreements. Except as set forth in the Property Rbm-n, ifr;-dg—?n,-i-iilii-�t-AgreementI and excei%t as re,,i-uired bp local state. or federal law or reaqmf&�ren Seller has not made any commitment or representation to or entered into any agreement of any kind with any government authority, or any adjoining or surrounding property owner, group or other third party, which be binding on Buyer, and Seller will not make any such representations or warranties or enter into any such agreements which would affect the Property or any portion thereof prior to the Close of Escrow, without Buyer's written consent. (14) Bankruptcy. No "Bankruptcy Event" (as defined below) has occurred with respect to Seller. There is not pending or threatened any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or recomposition of Seller or seeking appointment of a receiver, trustee, custodian or similar official for Seller for all or any substantial part of its assets. "Bankruptcy Event" means (a) the making by a person of a general assignment for the benefit of such person's creditors, (b) the admission in writing by a person of its inability to pay its or their debts as they mature, (c) an attachment, execution or other judicial seizure of any property interest which remains in effect, or (d) the failure to have taken or submission to any action indicating a general inability by a person to meet its financial obligations as they accrue. (15) Material Change. Seller shall promptly notify Buyer if Seller obtains information that would make any of the representations or warranties contained in this Section 5.2.1 materially inaccurate or misleading. 5.2.2 Buyer's Warranties. In consideration of Seller entering into this representations and warranties which shall be true and correct as of the Effective Date and the Close of Escrow and each of which is material and being relied upon by Seller. If prior to the Close of Escrow Seller determines that any representation or warranty of Buyer is untrue, inaccurate or incomplete in any material respect (and without waiving any of Seller's rights or remedies hereunder at law or in equity with respect to any material untruth, incompleteness or inaccuracy existing on the Effective Date, that was known of or should have been known of by Buyer), Seller may give Buyer written notice of same and Buyer shall have seven (7) days from the date of receipt of Seller's notice (and the Closing Date shall be extended to permit the running t-7 such, representation or warranty materially untrue or inaccurate to Seller's reasonable satisfaction. If Buyer fails to make such correction within the Buyer Cure Period, then Seller by written notice to Buyer within three (3) days after the expiration of the Buyer Cure Period (and the Closing Date shall be extended to permit the running of such three (3) day period) shall be entitled (a) to terminate this Agreement and retain the De%osit in which case BWAer shall reimburse Seller for all third party costs incurred by Seller in connection with the negotiation and preparation of this Agreement or (b) continue this Agreement in full force and effect with no change in terms, but without waiving any legal, equitable or other remedies it may have against Buyer. The foregoing is not a waiver or release of any of Seller's rights or remedies for any material untruth, bW0'81 W-0024 14G66442, 10 a0.5/09/20 -12- incompleteness or inaccuracy in a representation or warranty of Buyer of which Seller obtains knowledge after the Close of Escrow. (1) Authorization. Buyers are limited liability companies duly formed and validly existing under the laws of the State of Delaware and the State of California and are each qualified to transact business in the State of California. Buyers have full power and authority to enter into this Agreement and to perform all its obligations hereunder, and have taken all action required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement. Each individual who has executed this Agreement on behalf of Buyers has the right, power, legal capacity and authority to execute, deliver and perform this Agreement on behalf of Buyers. (2) Conflicting Agreements, Except for the Kaiser Sublease, neither the execution nor delivery of this Agreement, nor the consummation of the transaction contemplated herein, will conflict with, or result in a breach of, any contract, license or undertaking to which Buyer is a party or by which Buyer is bound, or constitute a default thereunder. (3) Proceedings. To the best of Buyer's knowledge, no legal or administrative proceeding is pending or threatened against Buyer nor are there any other facts or circumstances which would adversely affect Buyer's ability to own, develop and/or market the Property in the manner contemplated by this Agreement. (4) Bankruptcy. No Bankruptcy Event has occurred with respect to Buyer nor any member or manager of Buyer. There is not pending or threatened any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or recomposition of Buyer or any member or manager of Buyer or seeking appointment of a receiver, trustee, custodian or similar official for Buyer or any member or manager of Buyer for all or any substantial part of its or their assets. (5) Binding Agreement. This Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (6) Material Change. Buyer shall promptly notify Seller if Buyer obtains information that would make any of the representations or warranties contained in this Section 5.2.2 materially inaccurate or misleading. 5.2.3 Natural Hazard Zone Disclosure. No later than fifteen (15) business days prior to the Property Approval Date, the Seller will, at its sole cost and expense, provide Buyer with a Natural Hazard Zone Disclosure required by applicable law. 5.2.4 Exclusions. (a) Notwithstanding this • 5.2 or any other provision in this Agreement to the contrary, nothing in this Agreement shall relieve Seller of its liability for (a) any breach of Seller's representations and warranties contained in this Agreement and/or documents executed and delivered by Seller at or contemporaneously with the Close of Escrow, (A0/028110-0024 14Q66441 10 05/08i20 -13- Escrow.(b) any breach by Seller of its covenants in this Agreement, (c) Seller's fraud, (d) any matter for third persons or obligations to third parties with respect to matters which arose or accrued during Seller's ownership of the Property, or (f) Seller's acts or omissions from and after the Close of f) Notwithstanding this Secti• or other provision this Agreement to the contrary, nothing in this Agreement _ - - Buyer of r liabilities] third(a) any breach of Buyer's representations and warranties contained in this Agreement and/ documents executed and delivered by Buyer at or contemporaneously with the Close of Escro (b) any breach by Buyer of its covenants in this Agreement, (c) Buyer's fraud, (d) any matter f of Bu-ner's YM*M1V#Tz—indemnifiedb p Buyer under this A" persons obligations t• third parties with respectto matters which arise or accrue duri Buyer's ownership of •r` or acts or omissions • and after the CloseI Escrow. 5.4 Seller's Additional Covenants. Seller hereby covenants and agrees that: _ . • f • • i - - - _ . • i - • . r • request, • a e, LV . . i • • i;. change the zoning, use, permits • , entitlement of or • Property; -. • • shall not- or cooperate in the recording against the Property or any portion thereof, of any lien, encumbrance, agreement, easement, right of way or other matter without Buyer's written consent. Except 5.6 Disclaimers Bv Seller. expressly•Agreemeru including representations and . i • understood . • .• `i at any time made and are i now m. • and they specificallydisclaim, any warrantie withoutrepresentations or guaranties of any kind or character, express or implied, with respect to t Property, including, but not limited to, warranties, representations or guaranties as to (a) matte of title, (b) environmental matters relating to the Property or any portion thereof, includdin • presence of . '. i •us materials in, on, under . Property, (c) geological conditions, including, without limitation, subsidence, subsurfa . conditions, water table, underground water reservoirs, limitations regarding the withdrawal water, and geologic faults and the resulting damage of past and/or future faulting, (d) whether, a to the extent to which the Property or any portion thereof is affected by any water, wetlands, flo I • ` area, flood plain, floodway or r" •rf hazard, - drainage,i i f f including the existenceof .r past soilrepairs,• additions or i f is soil species or any environmentally sensitive or protected areas, (h) zoning or building entitlements which the Property or any portion thereof maybe subject,availability of • 6KV02S110-0024 14966442.1005/M/20 -1 - Property or any portion thereof including, without limitation, water, sewage, gas and electric, 0) usages of adjoining property, (k) access to the Property or any portion thereof, (1) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, physical condition, operation, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (in) the condition or use of the Property or compliance of the Property with any or all past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (n) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (o) any other matter affecting the stability and integrity of the Property, (p) the potential for further development of the Property, (q) the merchantability IWITS 111CJJ_J_111;j WILIVVILL I till I M or (t) the operation, repair or financial matters and any other matter or thing with respect to the Property. 5.7 Sale "As Is. Where Is". Buyer acknowledges and agrees that upo Closing, Seller shall sell and convey to Buyer and Buyer shall accept the Property "AS I WHERE IS, WITH ALL FAULTS," except to the extent expressly provided otherwise in th Agreement. Except as to the extent expressly provided otherwise in this Agreement, Buyer h not relied and will not rely on, and Seller has not made and is not liable for or bound by, a express or implied warranties, guarantees, statements, representations or information pertaining the Property or relating thereto made or furnished by Seller, or any property manager, real est A t n e S y u r p t h a I h 01 rung 0 1 esta r broker, agent or third party representing or purporting to represent Seller, to whomever made given, directly or indirectly, orally or in writing. Buyer represents that it is a knowledgeabi j experienced and sophisticated buyer of real estate and that, except as expressly set forth in th, Agreement, it is relying solely on its own expertise and that of Buyer's consultants in purchasi Ae WON, 'a IM - I M im r VELY as -ED71-yet j- c conditions thereof, and shall solely rely upon same when acquiring the Property. If Buyer fails terminate this Agreement prior to the expiration of the Feasibility Period, Buyer acknowledg that Seller has afforded Buyer a full opportunity to conduct such investigations of the Properr-ty Buyer deemed necessary to satisfy itself as to the condition of the Property and the existence non-existence or curative action to be taken with respect to any hazardous materials on• discharged from the Property, and will rely solely upon same. Upon Closing, Buyer shall express; including, but not limited to advers e vh,,,f s i cal or c o defects or adverse environmental, health or safety conditions, may not have been revealed Buyer's inspections and investigations. Buyer hereby represents and warrants to Seller th] Agreement; and (b) Buyer is purchasing the Property for business, commercial, investment other similar purpose. Buyer waives any and all rights or remedies •it may dg odpae oogaooon have or be entitled t erivin•frm•isrity in sizr frm any significant disparate barining psitin in relati Seller. I I WMAMN '" 141 JAM "IOWA 01 Z 121 Ill 'M X 91 0 K I] M m X M M DMI 139JAMMa I X ! . MM 680i02-8 110-0024 t41,6644ZJO 05/08/2-0 -15- # # I W"" III : UE MAYURCED11) 1JOLDS IN A FINAL JUDGMENT THAT A CLAIM IS CAUSED BY THE WILLFUT MISCONDUCT OR GROSS NEGLIGENCE OF SELLER. ) t SELLER'S INITIALS B4UYE . . . . . . R., INITIALS 5.8 Seller Released from Liahifily. Except for the representations set forth in Section 5.2.1 of this Agreement and the exclusions set forth in Section 5.2.4 of this Agreement, Buyer acknowledges that it will have the opportunity to inspect the Property during the Feasibility Period, and during such period, observe its physical characteristics, environmental condition and existing conditions and the opportunity to conduct such investigation and study as Buyer deems necessary, and except for the representations, warranties, covenants, and agreements set forth in this Agreement, Buyer hereby forever releases and discharges Seller from all responsibility and liability relating to the physical, environmental or legal compliance status of the Property, whether arising before or after the Effective Date, regarding the condition, valuation, salability or utility of the Property, or its suitability for any purpose whatsoever (including, but not limited to, with respect to the presence in the soil, air, structures and surface and subsurface waters, of hazardous toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws, regulations or guidelines, and any structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and hazardous materials on, under, adjacent to or otherwise affecting the Property) or its use and operation. Except for the representations, warranties, covenants, and agreements set forth in Section 5.2.1 of this Agreement and the exclusions set forth in Section 5.2.4 of this Agreement, Buyer further hereby waives (and by closing this transaction will be deemed to have waived) any and all objections, complaints and actions (including, but not limited to, federal, state and local statutory and common law based actions, and any private right of action under any federal, state or local laws, regulations or guidelines to which the Property is or may be subject. Buyer further hereby expressly assumes the risk and changes in applicable laws and regulations relating to past, present and future environmental conditions on the Property and the risk that adverse physical characteristics and conditions, including, without limitation, the presence of hazardous materials or other contaminants, may not have been revealed by its investigation. Vk SELLER'S INITIALS BUYER'S INITIALS 680/028110-0024 14%6442, 10 a05/08/20 -16- 6.2 Right to Cure. Buyer shall be deemed to be in default under this Agreement if Buyer fails, for any reason other than Seller's default under this Agreement, to meet, comply with, or perform any material covenant, agreement, or obligation required on its part, including the deposit or delivery of any funds, within the time limits and in the manner required Seller has given Buyer written notice describing the nature of the default, and Buyer has failed to cure such default within ten (10) business days after the receipt of such notice (unless the curing of such default cannot reasonably be accomplished within such ten (10) business day period in 680/0_8110-0024 1446644110a0>/OFi i1 -17- ten (10) business day period and diligently pursues same to completion). 0000r r� 7.1 In the event that Seller fails to perforin any of the material covenants or agreements contained herein which are to be performed by Seller, Buyer may, at its option and as its exclusive remedy, either (i) terminate this Agreement by giving written notice of termination to Seller whereupon Escrow Holder will return to Buyer the Deposit and both Buyer and Seller will be relieved of any further obligations or liabilities hereunder, except for those obligations which expressly survive any termination hereof, or (ii) seek specific performance of this Agreement. Except as specifically set forth in this Section 7.1, Buyer does hereby specifically waive any right to pursue any other remedy at law or equity for such default of Seller, including, without limitation, any right to seek, claim or obtain actual damages, punitive damages or consequential damages. 7.2 Right to Cure. Seller shall be deemed to be in default under this Agreement if Seller fails, for any reason other than Buyer's default under this Agreement, to meet, comply with, or perform any material covenant, agreement, or obligation required on its part; provided that no such default shall be deemed to have occurred unless and until Buyer has given Seller written notice describing the nature of the default, and Seller has failed to cure such default within ten (10) business days after the receipt of such notice (unless the curing of such default cannot reasonably be accomplished within such ten (10) business day period in which case the default shall be deemed cured if Seller commences to cure such default within such ten (10) business day period and diligently pursues same to completion). • 8.1 Presentation of Re -Sale Opportunities: Buyer shall present to Seller each signed letter of intent ("LOT') and/or proposed purchase and sale agreement ("PSA") that it receives and/or proposes for all or a portion of the Property. Until April 30, 2025 any sale where the sale price per acre equals or exceeds the "Presumed Value" (as defined in Section 8.2 below) shall be conclusively presumed to constitute a fair market value. For all proposed sales with a sale e earfuod. alue Seller mii, in its discretion, demand that irior to closini Pr a reasonable value. The gross proceeds of all portions of the Property sold by Buyer in accordance with this Section 8. 1, less escrow fees and customary closing costs, shall be referred to as the "Sale Proceeds." 8.2 Owner 1)ses: If Buyer seeks to develop all or any portion of the Property then, prior to commencing any physical development of such portion, Buyer shall notify Seller of Buyer's intent, and the deemed sale price per acre shall be ONE MILLION SEVEN HUNDRED TWELVE THOUSAND THREE HUNDRED FORTY-THREE AND 60/100 DOLLARS ($1,712,343.60) ("Presumed Value"). The value of all portions of the Property used by Buyer in accordance with this Section 8.2 shall be referred to as the "Use Proceeds." 680r028 110-0024 t496(44210 905/09/'O 18- roonnonolgigos I 194 111• 11 remedies for breach 0 the provisio ot this �Section 6 sliall De ciamages or o er mone ary re I provided, however, the amount of damages or other monetary relief (however characterized) awardable shall be capped at the fair market value of the portion of the Property subject to a dispute. 8.7 Survival of Oblig.-itions: The obligations set forth in this Section 8 shall survive the Close of Escrow and shall remain valid and enforceable until I year after the earlier of (i) the sale or use by the Buyer of all of the Property, or (ii) April 30, 2025. 9. Notices. Any notice to be given hereunder to either Party or to Escrow Holder shall be in writing and shall be given either by personal delivery, facsimile, federal express (or similar 6R(rO' M 0-0024 149(,6442, JOA51W/20 -19 overnight delivery service), overnight courier or by depositing such notice in the United States first class mail, certified, with return receipt requested, postage prepaid and addressed as follows: SELLER: The City of Downey I I I I I Brookshire Avenue Downey, CA 90241 Attn: City Manager Phone No.: (562) 904-7168 Fax No.: (562) 904-7284 With Copy to Rut an & Tucker, LLP 611 Anton Boulevard, 14t" Floor Costa Mesa, CA 92626 Attn: Jeffrey T. Melching Phone No.: (714) 641-5 100 Fax No.: (714) 546-9035 BUYER: c/o Industrial Realty Group, LLC I I I I I Santa Monica Boulevard, Suite 800 Los Angeles, California 90025 Attention: John A. Mase Phone No.: (310) 806-4434 Fax No.: (310) 473-8702 With a copy to: Fainsbert Mase Brown & Sussman, LLP I I I I I Santa Monica Boulevard, Suite 810 Los Angeles, California 90025 Attention: Jerry A. Brown, Es. Phone: (310) 473-6400 Fax No.: (310) 473-8702 Escrow Holder, [CHICAGO TITLE INFORMATION) Attn: IWO Either Party and Escrow Holder may, by written notice to the other and to Escrow Holder, designate a different address which shall be substituted for the one specified above. If any notice or other document shall be sent b-j, certified mail as set Vwj .9 - jwTnKhuiL , effectively served or delivered seventy-two (72) hours following the deposit of such notice in the United States mail in the manner set forth above. If any notice or other document shall be sent by facsimile, it shall be deemed to have been served or delivered upon electronic confirmation of transmission; provided that it is confirmed by a follow-up notice using approved methods 6S0/028110-0024 14966442, 10 05/08/20 -20- hereunder within seventy-two (72) hours and provided further that subject to the foregoing if such to have been received at 8:00 a.m. on the immediately following business day. 0Attorneys' ' If Party to Agreement• + any action proceeding for any relief against the other, declaratory or otherwise, in any way arising out of or Agreement and/or the ProL�erty, the losing Party shall %Xj to the !srevaUiU_%LajJp a reasonable sum for attorneys' fees and costs (including without limitation expert witness fees) incurred in bringing or defending such action or proceeding or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such action or proceeding and shall be paid whether or not such action or proceeding is prosecuted to final judgment. Any judgment or order entered in such action or proceeding shall contain a specific provision providing for the recovery of attorneys' fees and costs, separate from the judgment, incurred in enforcing such judgment. The prevailing Party shall be determined by the trier of fact based upon an assessment of which Party's major arguments or positions taken in the proceedings t f a 1 1 t . • . • • • . • . + - •• i • • disputed issues. For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) post -judgment motions; (2) contempt proceedings; (3) garnishment, levy and debtor and tbird-party examinations; (4) discovery; and (5) bankruptcy litigation. 11. Miscellaneous. 11.1 1 Modifications. No addition to or •i . M any term iprovision of this Agreement is effective unless in writing and signed by the Parties. 11.2 Construction of Agreement. The provisions of this Agreement shall not e construed in favor of or against either Party, but shall be construed as if both Parties prepared this Agreement. 11.3 Headings. The Section headings of this Agreement are only for convenience and shall not be deemed to limit the subject of such Sections or to be considered in 11.4 Governing Law. The laws of the State of California shall govern this 11.5 Time of the Essence. Time is of essence of each . • every provision • s + intent11.6 Further Assurances. Each of the Parties shall execute and deliver all additional papers, documents and other assurances, and shall do all acts and things reasonably necessary in connection with the performance of their obligations under this Agreement to carry out the of Agreement. 11.7 1 Waiver. No waiver 1, a Party of ', of any of _ covenants, or conditions of this Agreement by the other shall be construed or held to be a waiver of any succeeding or preceding breach of the same or any other term, covenant or condition 680%028110-0024 14966442.10 05/ /20 -21- contained herein. No waiver of any default by a Party shall be implied from any omission by the other Party to take any action on account of such default if such default persists or is repeated and no express waiver shall affect a default other than as specified in such waiver. The consent or approval by either Party to or of any act by the other requiring the first Party's consent or approval shall not be deemed to waive or render unnecessary the consenting Party's consent or approval to or of any subsequent similar acts by the other Party. 11.8 Seve rability. If any portion of this Agreement is held by any court of competent jurisdiction to be illegal, null, void or against public policy, the remaining portions of this Agreement shall not be affected thereby and shall remain in force and effect to the full extent permissible by law, but only to the extent that performance of such remaining provisions would not be inconsistent with the intent and purposes of this Agreement. 11.9 Gender and Number. As used in this Agreement (unless the context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural include one another. 11.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and all prior and contemporaneous agreements, representations, negotiations and understandings of the Parties, oral or written, (including, without limitation any letters of intent or understanding) are hereby superseded and merged herein. The preceding sentence shall not affect the validity of any instrument executed by the Parties in the form of the exhibits attached to this Agreement. 11.11 Survival. All covenants, agreements, representations, warranties and indemnities contained in this Agreement shall survive the execution and delivery of this Agreement and the Close of Escrow and the delivery and recordation of all documents or instruments in connection therewith. 11.12 Time References. Unless otherwise expressly provided in this Agreement, any reference in this Agreement to time for performance of obligations or to elapsed time shall mean Pacific Standard Time and time periods shall mean consecutive calendar days, months or years, as applicable. If the date ("Performance Date") on which any action is to be taken, any obligation is to be performed, or any notice is to be given under this Agreement falls on a Saturday, Sunday or federal holiday, such Performance Date shall be automatically extended to the next business day. As used in this Agreement, "business day" means any calendar day that is not a Saturday, Sunday or federal holiday. The time for performance on any Performance Date shall be no later than 5:00 p.m., unless otherwise provided in this Agreement. 11.13 Incorporation of Exhibits. Except as intentionally omitted, all exhibits attached hereto and referred to herein are incorporated into the Agreement as though fully set forth herein. 11.14 Condemnation. As used in this Section, "condemnation" or "condemned' shall mean the exercise of, or intended exercise of the power of eminent domain expressed in writing, or the filing of any action or proceeding for such purpose, by any person, entity, city, body, agency or authority having the right or power of eminent domain ("Condemning 690101-8 1 10-0024 14066442, 10 a0108,'20 -22- Authority") and shall include a voluntary sale by Seller to any such Condemning Authority, eith under the threat of condemnation or while condemnation proceedings are pending. If any porti of the Property and/or any improvements thereon shall be condemned prior to the Closing Dat Seller shall promptly notify Buyer of the same and, at Buyer's option, exercisable within fifte (15) days following Buyer's receipt of the aforesaid notice (or in the event that such notice .fWWMW-ei Date "hn the ClosinN Date shall be extended provide Buyer with the full fifteen (15) day period), Buyer shall elect, by written notice to Sell within said fifteen (15) day period, to either proceed with Closing (Upon the terms hereinafter s forth in this Agreement) or to terminate this Agreement, in which event Seller and Buyer sh thereupon be released from any and all liability hereunder and the Deposit shall be immediate 'M tj returned to Buyer by Escrow Agent. If Buyer fails to notify Seller of its election, such failure sh be deemed an election to terminate this Agreement and the Deposit shall be promptly refunded Buyer. If Buyer elects to proceed with the Closing, then, at the Closing, Buyer shall pay the Purchase Price for the Property as herein provided. Additionally, if Buyer elects to proceed wi the Closing, then Seller shall assign to Buyer all of Seller's right, title and interest in and to a condemnation award related to the portion of the Property condemned. I 11.16 Venue. In the event of any legal action to enforce or interpret this ,Vaz-so�al hereby agree to and do hereby submit to the jurisdiction of such court. 11.17 Counterparts. This Agreement may be executed in counterparts, each of • all of which together shall be construed as one instrument. 11. 18 Assignment. Except as provided below, Buyer may not assign its rights or obligations under this Agreement without the prior written consent of Seller, which consent may 'j_;WORMf of;biffAl il�ka W_w, i., however that before or after the O%enin,,N of Escrow Buyer, without Seller's consent shall be entitled to assign its rights and obligations under this Agreement to an entity (a) in connection with the sale of all or substantially all of the assets of Buyer or the merger of Buyer to or into such entity; (b) which is a partnership of which Buyer grwt 2& 11 2te e-ttibji i s A e general �aartner, a limited liability com i any of which Buyer or an affiliate entity is the managing member and wnicn Myer fl(-)IUS all VWJlrJNJ1Vk, HILMUNL d1lU MIA .9411CI CHULI in which Buyer has an ownership interest and is responsible for managing the day to day activities lender and where Buyer retains the ability to construct residences on the Property and an option to reacquire residential lots in the Property prior to sale to the public (an off balance sheet transaction). Buyer shall provide Seller with written notice of any such assignment. 11.19 No Third -Party Beneficiaries. Notwithstanding any provision contained in this Agreement to the contrary, this Agreement is intended as and shall be deemed to be an qpzw rf M r the sale of assets and none of the icrovisions hereof shall be deemed to create obligation or liability of any person that is not a Party, whether under a third -party beneficiary theory, laws relating to transferee liabilities or otherwise. Except as provided otherwise in this Agreement, Buyer shall not assume and shall not be obligated to discharge or be liable for any debts, liabilities or obligations of Seller including, but not limited to, any (a) liabilities or 680/028110-0024 14966442,10 aO5/08/20 -23- • • r • i i . - • •MWIMMMM, WN obligations of Seller, whether known or unknown by Seller or Buyer. Except as provided otherwise in this Agreement, Buyer shall have no duty whatsoever to take any action or receive or make any payment or creditarising from or . `r to any services provided or • `i in -ex -1 matters -xt�*riorto the Close of Escrow,. includin -, but not limited to-. an� relating to cost reports,f •audits,-. • or legal action arising 11.20 Exchange Cooperation. Buyer and Seller agree to cooperate with each other in accomplishing a tax -deferred exchange for either party under Section 1031 of the Internal Kievenue Code, which shall include the signing of reasonably necessary exchange documents; fir, • i.� i - ` . - ` r. .ii !i , .r i tr i as a consequence of such exchange, (ii) such exchange shall not delay the Closing Date, and (iii) neither Party shall be required to take title to any property as part of an exchange other than Buyer receiving title to the subject property herein. This Agreement is not subject to or contingent upon either Party's ability to effectuate a deferred exchange. In the event any exchange contemplated by either Party should fail to occur, for whatever reason, the sale of the subject I!,roperty shall nonetheless be consummated as provided herein. 11.21 Nonflability. The Parties agree that, in the event any Party is a corporation or a limited liability company, neither the directors, officers, employees, shareholders, members, managers�(and the members and managers of such members or manat- such corporation or limited liability company shall have any personal liability or obligation hereunder, and that each Party shall not seek to assert any claim or enforce any of its rights hereunder against such directors, officers, employees, shareholders, members, managers, (and the members and managers of such members or managers), or agents, whether disclosed or [iniisclosed. 68010_811Q-00'a 11P66442.10 0s!08,'O -2 - [SIGNATURE PAGE TO ,-QLE,OIG III IIIIIIIIII�I 1II � I jIIqII IIII loll, 11111 THE CITY OF DOWNEY, a HOLDINGS DOWNEY, LC, a California municipal corporation Delaware limited liability company By: Holdings SPE Manager, LLC, a By: Delaware limited liability company Mayor g-r By: "Seller."ase I lef Executive Officer APPROVED AS TO O. IRG DOWNEY, LLC, a California limited liabty company By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member By: S.L. Properties, Inc., a Delaware corporation It 411aflgwr I Y® John X-5 seA Its: Chief Executive Officer Em Special Counsel to City of Downey 680/028110-0024 14966442. 10 a05/08/20 -25- [SIGNATURE PAGE TO S.ALE,io, GfEEMENT AND ESCROWINSTRUCTIONS1 Buyer and Seller have executed this Agreement as of the Effective Date. THE CITY OF DOWNEY, a HOLDINGS DOWNEY, LLC, a California municipal corporation Delaware limited liability company By: Holdings SE Manager, LLC, a By: Delaware limited liability company Mayor Its: Manager By: "Seller" John A. Mase Its: Chief Executive Officer APPROVED AS TO FORM: IRG DOWNEY, LLC, a California limited liability company By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member Properties, Delaware corporation Its: Manager LN John A. Mase Its: Chief Executive Officer 680/028110-0024 14966442.10 a05/08/20 -25- EXHIBIT "A" 680/02S I W•0024 14Q66442-10 a05/0&20 EXHIBIT "A" 1'� /'q- Li BOOK-L9-PAGR.!L RECORDOF SURVEY WiEET I OF I swEEr flE CITY 01 XW'Zl, 'XVNlY OF Uf$ ANGRES, ETA-T n' (,A IFORNIA ATROMAMOMOF '01 Nofl'KMPT -A'-'P� 01 VwLloa.L 10 m—,� 5.� qx4ct 11 11, 14 1 RANDIV �11A uAwAl. traNrT A �.mfl 0' "1 %V"V Dbwas-f AM01W4, W'A .M-91,Alj 0�" t MplS�mo ofrCD� ft N 14tW mlict, I 11w cv"tM' 01Y W 010.11, A' L Llj � WAV 9 .'�`D 'W"' mTKRSTME LAND swwmG, INC STEFAN C LANTHER, PES 7259 DATE OF 90W1414KIM AE, 101 ATM= $ PER 871-:WARrAW T. CMYROAD Cl WrA MW QAFMC�ftw Id MUM POR. LOT 2 �V. MR z �'� W. 44S MAN Z—m 0 A nzo*kwS� m N. W. 1/4 . SEC. 10 A ", Si," Arm& PK p Imo —�w co'*� Av tow, C"n A7r10TW vropel-ty nw POR. S.W. 1/4, SEC, 10, T. 3 S- R. 12 W, RANCHO SANTA GERTRUDES 0.0, IM2 Lo lll� 7Aco acn` im a, no umKra WIPI"P M WSO"?' AS tlVRW 6 W Duo AtImlom .01" m IS. A11 vIlam.f .Na N-N.3v3 w O`7@aP.AL pruotx Alo "- 61 (Asr" 'tracra ot- x"lo A, " N'W1Zs.* Aw to noftt pm")d%n � swl� an; aw , WP) pw"MI" 61'Kri 1 I 111N�l Wm "0RA0"I II1A PXQAWW'vls a , . ". m," ACT 'MC%ir 1, 0004, ur ti "'are-, Z�-' —l"u"'cv- pw. 51 V tl 0 -ocrAyrs.%7 i'vm wE a, (JJ LS 72M W FLM 0—WCATES SE LEAD . TACK U 72M TAr FLU194 A-RWCA9 S . WASHER LS ?M TAa TIM Ma e-s aexard .1. — J-1 w 79544 Y.B. W615-F2 Cafe M+ R.SM-4165-55 data ovrd offlaad Mraab of Lea Covaty. C—N.. w 0'.� m — , roe8 APN 6256-OG4-909(pari-) In 680/028110-0024 14966442.10 a05/08/20 I Ra on I INFIRM (;F,O,,02S 110-0024 14966442.10 a05/09/20 EXHIBIT "" B Li BOOK2-90AMIL, RECORDOF SURVEY MqEET I OF I SNEET 'E rJrY '.4, DOYME1. COUNfy Or SM &W'.E11N, VAI- OF MWOM IA 1 .11If L.1 Y S 11E AIWMMW M ��T �ATJA SICIK� or5WIA, "'o 0 Na WTM %T, � 1A qw'o T—fA f&Amtn% TWAFEfq .11, A "fMm or W. slan'O"', "C7 'Aitm � SN1D T4-TTIOIA 5IC"CA '0, N qq C41 9' dsaAie a, AS MI CNAMD Ai MK� 1 PAV f-w k- .""4111pt,oftzs glrmo(o . 11-1 VIP., tT, 1nt *AT, Km.X0 V :<p CiV" oafa 61m, mo pm X0 CORNERSTONE LAND SURWYTNG, 04C. STEFAN C LAWNER, PLS 7259 W DATE OF SWKF NOTE�PA 2019 A' IS SmEer-1 T.—d 129A 06 -OF E!! WrA ME RAFMCM. `� /1w z POR. LOT 2 "N' —"-MAMS�IA4 N,W. 1/4, SEC. 10 _A Ci Z ZRf5 wp "s MeN movqo A@ Amaw. - "V ,VM bAT \0' WARMN North Parcelw. 1 1w P"ww ff � TWA 1 a fib pff6mam, Cs'prl"Z' All vfOT A, Cm MWO0 A,M&Y' M tm " DMATN POR. S.W. 1/4, SEC, 10. .1 alml Ly I.X"f amwo 01-M-ft IF T. 3 S, R" 12 W- mcq'w aml fb'xs�as "XsAll" RANCHO SANTA GERTRUDES Aw, fAWSIXT'd m m.a 11502 LO 'M IM "*WM"A1An1!fh1 INS MAP CaVRECRT A -"WI BADi By NE OR UNM Ny ME00m N cofff"Awx WTH THE AN OF TAT PRWESPWAL LAND SL0?WMS* ACT AT TK REQUEST OF VORKY WAS WIS T.At+.>'r gAiuwa 01 - T-f IV 7154- au. ISA do S=P �' r 0 rusrM.^ AR-- r* w 0 -�ATES su 1"mm Fn OW � W FLNSN 13-TES A7 LEAD & TAM LS 7M TAG, RM b,-WAIM SW & WASHM U 72W TAG RM h,~. — dbf. Per T—f N. 7PSM N.B. 137"-12 a' d — df. R4 15.163-68 *1N 'd Lela W d­q "w*d 27' ;2=017 Q--f Na. 201705"99. 0�i.l .1 t- mq.b. many, Cacfamia. aa' I a JT -A wk✓Y!0 w %WT'v vim T AWSAMM �4�MWWZW PAr —IM' 1-7M7 5 APN 62M-O04-.q(-'v-) 680/028110-0024 14966442. 10 a05/08/20 680/0=9110-0024 14466442.10 a45f08t20 ' 1 ��gwmva WTA go 11101 N 7-MIN IRI a 92 W a a NJ [ges Ly� 0S1-ace Abovefiv Recorders U'se) ME,MORANDtJM OF SALE AGREEMENT This Memorandum of Sale Agreement is made on 2020, by THE CITY OF DOWNEY, a California municipal corporation ("Seller"), and HOLDINGS DOWNEY, LLC, a Delaware limited liability ("Holdings") and IRG DOWNEY, LLC, a California limited liability company ("IRG" and, collectively with Holdings, A. Seller is the owner of certain real property in the City of Downey, County of Los Angeles ("County"), State of California, more particularly described in Exhibit "I" hereto ("Property"). B. Seller desires to sell the Property to Buyer, and Buyer desires to acquire the Property from Seller, for Buyer's further sale or development on the Property. THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller agrees as follows: 1. Agreement. Seller has agreed to sell the Property to Buyer in accordance with the terms of that certain unrecorded Sale Agreement and Escrow Instructions dated , 2020 ("Agreement') executed by Buyer and Seller the terms of which are incorporated herein by this reference. Unless otherwise expressly provided herein, all capitalized terms and phrases in this Memorandum shall have the same meanings given such terms in the Agreement. 2. Additional Consideration. Pursuant to the Agreement, Buyer has agreed to provide Seller, as additional consideration under the Agreement, with a portion of the Proceeds from the further sale or use of the Property by Buyer. 3. Interpretation. The purpose of this Memorandum is to give notice of the existence of the rights of Buyer or its assignee under the Agreement. If there is any inconsistency between the provisions of this Memorandum and the provisions of the Agreement, the provisions of the Agreement shall control. 6801028110-0024 14966442.10 a05!08/20 -2- THE CITY OF DOWNEY, a HOLDINGS DOWNEY, LLC, a California municipal corporation Delaware limited liability company By: Holdings SE Manager, LLC, a By: Delaware limited liability company Mayor Its: Manager By: "Seller" John A. Mase Its: Chief Executive Officer APPROVED AS TO FORM: IRG DOWNEY, LLC, a California limited liability company By: I 111, LLC, a Delaware limited liability company Its: Managing Member By: S.L. Properties, Delaware corporation Its: Manager By: John A. Mase Its: Chief Executive Officer Special Counsel to City of Downey 690/028110-00-24 14966442, 10 a05109/20 -3- A Notary Public or other officer completing this certificate verifies only the identity of th* individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, • validity • that document. • I I I I VAIJ am rull-2w On before me, (insert name and title of the officer) Notary Public, personally appeared I who proved to me on the basis of satisfactory evi(Jetice to be the person(s) Wilose lialile(s) is/MV subscribed to the within instrument and acknowledged to me that he/she/they executed the same and that be,( • 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. MMEM 01=1 M 680/028110-0024 14966442.10 0/08/20 -4- A Notary Public or other officer completing this certificate verifies only the identity of the 'ICCUracy, • validity of that document. State •i California IN (insert name and title of the officer) Notary Public, personally appeared I 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 M&10-�M4,MA4Xt� 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. sigIIHIL11-C - (Seal) 69(1/028110-0024 14966442. 10 05/08/20 -5- A Notary Public or other officer completing this certificate verifies only the identity of the �M-4iL&al who signed the document to which this certificate is attached and not the truthfulness - accuracy, or validity of that document. State of California I f Lit& lctgele On before me, _ (insert name and tithe of tine officer) Notary Public, personally appeared I who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are jjj 20 , icknowledied to me that he/she/thei executed the same 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. IN 4 MIR M-I M= ME 6801028 110-0024 14966442,10 a0 5/09/20 -6- [�►:f IfUmu ummmam-MOMM 6801025 110-0024 14066442, 10 a0',/09/—'0 W i,ll 1 ': EmEmmuffam i • � «06r,442, [O os OS/20 EXHIBIT "E" WHEN RECORDED MAIL TO: (S11,7C Abol.c.for Ricordcl 's Use) FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, HOLDINGS DOWNEY, LLC, a Delaware limited liability ("Holdings") and IRG DOWNEY, LLC, a California limited liability company (collectively "Grantor"), Does hereby REMISE, RELEASE AND QUITCLAIM to THE CITY OF DOWNEY, a California municipal corporation ("Grantee"), All of Grantor's right, title and interest in the real property in the County of Los Angeles, State of California, described on Exhibit "l." The purpose of this instrument is to terminate the Memorandum of Sale Agreement recorded on 1 2020 as Instrument No. in the Official Records of Los Angeles County, California. 680/028110-0024 14966442,10 a0i/08/20 I RAINUM, ion I vie 110411 as rot 011 13• �.� By: Holdings SPE Manager, LLC, a Delaware limited liability company Its: Manager M John A. Mase Its: Chief Executive Officer IRG DO"EY, LLC, a California limited liability company By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member W"y: S.L. Properties, Delaware corporation Its: Manager M- a I =I1 - 11OWN9 -go , - 680/028110-0024 14966442,10 05/08/20 -2 NEW= (insert narne and title of the offict�r) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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. or--=- M 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 k-'Ounty of Los Angell Ism 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 vMidity of that document. State of California I- 10 91IMM= (ingeil name and title of the o Micer) Notary Public, personally appeared 3 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 c�av and that b- ,�L his/her/their si nature(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. Mr.= MI, 690/028110-0024 14966442. , 0 05/08/20 -3- Attachment 'IC,, WIN Wi0e] 000§99= as 9 I NO SECTION 3. The City Council DOES HEREBY APPROVE the Third Amendment to the Ground Lease, substantially in the form attached as Attachment "B". SECTION 4. The City Manager and his/her authorized designees are hereby authorized to execute the TWird Amendment to tWe Grmi[d Lease. SECTION 5. If any section, subsection, paragraph, sentence, clause or phrase of thiii Ordinance is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council declares that it would have adopted this Ordinance, and each section, subsection, sentence, clause, phrase or portion thereof, irrespective of the fact that any one more sections, subsections, phrases, or portions be declared invalid or unconstitutional. I SECTIOR 6.. Except as expressly provided in this approval, nothing in the Third Amendment to the Ground Lease shall be deemed to waive or modify any other provisions of the Le?se. SECTION 7. The City Clerk shall certify the adoption of this Ordinance and cause the same to be published in the manner prescribed by law. Blanca Pacheco, Mayor My*" Maria Alicia Duarte, CIVIC City Clerk STATE OF CALIFOM11A COUNTY OF LOS ANGELES SS CITY OF DOWNEY I HEREBY CERTIFY that the foregoing Ordinance No. 20- was introduced at a Regular Meeting of the City Council of the City of Downey held on the _day of May, 2020, and adopted at a Regular Meeting of the City Council of the City of Downey held on the — d-1 of May, 2020, by the following vote to wit: I FURTHER CERTIFY that a summary of the foregoing Ordinance No. 20- was published in the Downey Patriot, a newspaper of general circulation in the City of Downey, oil —, 2020 (after introduction), and on —, 2020 (after adoption including the vote thereon). It was also posted in the Regular posting places in the City of Downey on the sarte dates. Maria Alicia Duarte, CMC City Clerk This Third Amendment to Agreements in Ground Lease (this "Third Amendment") is made as of this _ day of 1 2020, by and between THE CITY OF DO#al cuicoration of the State of Califodlordd HILDINWk DOWNEY, LLC, a Delaware limited liability company ("Holdings Downey"), and IRG DOWNEY, LLC, a California limited liability company ("IRG Downey") (collectively "Tenant"). A. Landlord and Industrial Realty Group, LLC, a Nevada limited liability company ("Original Tenant") entered into a Ground Lease, dated on or about December 4, 2003 (the "Original Ground Lease"), pursuant to which Landlord leased to Original Tenant certain real property described therein (the "Property") that was formerly a part of the NASA Industrial Plant in Downey, California. A true and correct copy of the Original Ground Lease is attached hereto as Exhibit "A" and incorporated herein by reference. B. Landlord and PCCP I Downey, LLC, a Delaware limited liability company ("PCCP Downey"), and IRG Downey (collectively, "Prior Tenant") entered into an Amendment to Agreements in Ground Lease, dated on or about March 15, 2012 ("First Amendment"). A true and correct copy of the First Amendment is attached hereto as Exhibit "B" and incorporated herein by reference. C. Landlord and Prior Tenant entered into a Second Amendment to Agreements in Ground Lease, dated on or about September 13, 2017 ("Second Amendment"). A true and correct copy of the Second Amendment is attached hereto as Exhibit "C". and incorporated herein by reference. D. Landlord and Prior Tenant also entered into the Tierra Luna Development Agreement, dated on or about March 15, 2012, as amended ("Development Agreement"). A true and correct copy of the Development Agreement is attached hereto as Exhibit "D" and incorporated herein by reference. E. PCCP Downey and Holdings Downey entered into an Assigranent and Assumption of Ground Lease, dated on or about April 10, 2019 ("Assignment"). A true and correct copy of the Assignment is attached hereto as Exhibit "E" and incorporated herein by reference. F. The Original Ground Lease, First Amendment, Second Amendment, Development Agreement, and Assignment contain various ongoing rights and obligations, G. All capitalized terms used herein but not herein defined shall have the meanings ascribed to such terms in the Original Ground Lease, First Amendment, Second Amendment and Development Agreement. H. Concurrent with this Third Amendment, Landlord, as seller and Tenant, as buyer, have entered into a Sale Agreement and Escrow Instructions ("Sale Agreement"), which Sale Agreement provides for the sale of an 8.76 acre portion of the Ground Lease Property ("South Parcel") from Landlord to Buyer (the "South Parcel Sale"). A true and correct copy of the Sale Agreement is attached hereto as ' Exhibit "F" and incorporated herein by reference. The South Parcel is described and depicted on Exhibit "W'. I. To facilitate the South Parcel Sale, Landlord and Tenant desire to terminate the Lease as to the South Parcel, while continuing the Lease as to the remaining 10.93 acres that comprise the Ground Lease Property ("North Parcel"). The North Parcel is described and depicted on Exhibit "U". J. In addition to modifying the definition of the Ground Lease Property, this Third Amendment (i) correspondingly modifies the rent under the Lease, (ii) extends the term of the Lease, (iii) modifies the provisions relating to future rent increases under the Lease, (iv) modifies deadlines for the sale or construction of the North Parcel, (v) acknowledges the possibility of future entitlement changes on the North Parcel, and (vi) discusses terms of potential sale of the North Parcel to Tenant ( "Lease Amend menf '). K. Landlord and Tenant now desire to enter into this Third Amendment to amend some of the rights and obligations specified in the Original Ground Lease, First Amendment, and Second Amendment, all subject and pursuant to the terms and conditions set forth in this Third Amendment below. The Original Ground Lease, as amended by the First Amendment, the Second Amendment, and this Third Amendment, is hereinafter referred to as the "Lease." NOW, THEREFORE, for good and valuable consideration, the receipt and slifficie-ligi,Jw1l j,JjgjedLandlord and Tenant herebi airee to amend, modifv as of the Third Amendment Effective Date (defined below) as follows: I . Effective Date. The effective date of this Third Amendment shall be A Closing Date, as that term is defined in the Sale Agreement (the "Third Amendment Effecti'49 Date"). The Third Amendment Effective Date will be reflected in an Amended Memorandum Lease to be recorded in the office of the County Recorder of Los Angeles County pursuant Section 16.13 of the Original Ground Lease. I 2. Acknowledaement and Approval of Ass4mment: Landlord hereby UM111= 3. Modification to Ground Lease Provertv: Notwithstanding Section the Original Ground Lease, from and after the Third Amendment Effective Date, the South arc shall no longer be a portion of the Ground Lease Property, and the entirety of the Ground Lea Property shall be comprised of the North Parcel. From and after the Third Amendment Effecti Date, the Ground Lease Property shall constitute the property described in Exhibit H hereto, Exhibit H to the Original Ground Lease shall have no further force, effect, or application und this Lease. I 6 4. Term: Notwithstanding Section 2.01 of the Original Ground Lease, unless earlier terminated in accordance with the provisions of this Lease, the term of this Lease shall expire at 11:59 p.m. on the day preceding the ninety-ninth (99th) anniversary of the Third Amendment Effective Date (the "Amended Expiration Date"). 5. Rent: All real property that is included in the South Parcel, whether subject to Base Rent (as that term is defined in the Original Ground Lease) or Converted Base Rent (as • t4hor_"xul Ground Lease, shall be, from and after the Third Amendment Effective Date, excluded from the rental calculation under the Lease causing a reduction in the Base Rent of 44.4896%. Notwithstanding anything to the contrary in the Lease, from and after August 22, 2072, the rent shall increase to the lesser of (i) twenty five percent (25%) above the rent in place on August 22, 2072, and (ii) the then -fair market rent as mutually and objectively agreed upon by the Landlord and Tenant acting in good faith. 6. Early'l-ermination: From and after the Third Amendment Effective Date, Section 2.03 of the Original Ground Lease (and all amendments thereto in the First Amendment and the Second Amendment) shall be replaced in full as follows: "2.03 I.-Iarlv Termillation: Notwithstanding Section 2.01 to the contrary, this Lease shall terminate on April 30, 2025 (the "Early Termination Date") as to all portions of the Ground Lease Property that have not been ane not been converted to a use that isirermitted bjgj the s�tecific plan applicable to the North Parcel (as it may be amended, and other than a studio production facility/back-lot), and/or are not then under construction for conversion to a use that is permitted by the specific plan applicable to the North Parcel (as it may be amended, and other than a studio production facility/back-lot)". 7. Conversion: Notwithstanding Section 3.02 of the Original Ground Lease, as modified by Section 5 of the Second Amendment, the removal of the South Parcel from the Ground Lease Property and potential development of such South Parcel shall not eliminate Tenant's rights to convert the North Parcel in a maximum of four phases anytime between the Commencement Date and the Early Termination D. 8. Planniiiv_ aiid Permittiiig: Landlord shall work in good faith to expeditiously process Tenant's"plans and permits for development of the North Parcel. 9. Land Use Modificatiotis: The North Parcel is currently entitled for office, -ur -ursues efforts to modify the land use entitlements, _j —;,ii ii 'ffice, retail and hotel uses. If Tenant L% Landlord willwork in good faith, at no cost to Landlord, with Tenant to support mixed -use development of the North Parcel, which may include a combination of office, medical office, retail, hotel, and residential uses. Notwithstanding the foregoing, nothing in this Third Amendment is intended as or shall be construed as a pre -commitment to approve any proposed modification to the entitlements for the North Parcel. Landlord, its City Council, its Planning Commission, and its officers acting in a discretionary capacity reserve the right to approve, deny, or condition any entitlement proposal for the North Parcel as they deem necessary and appropriate, so long as such discretion is exercised in accordance with applicable laws. 10, Marketin2 Ri2hts and Future Sales of All or Portions of the North Parcel,: Tenant may market the North Parcel (or any portion thereof) for sale to potential buyers, so long M as such sale transaction(s) ("Proposed North Parcel Sales") close on or prior to the Earl Termination Date. Tenant shall present to Landlord each signed letter of intent ("LOF') and/ proposed purchase and sale agreement ("PSA") that it receives and/or proposes for all or a portio of the North Parcel. Tenant shall not enter into any binding LOI or PSA unless closing on t proposed sale is contingent on the Landlord's prior reasonable approval of the Proposed No Parcel Sale. Landlord shall approve every proposed sale transaction presented to it by Tenant, IS1 long as (i) Landlord receives commercially reasonable information that the transaction will yie 9.2 Te e,,4 uivalent to or exceed fair market value, �, so long as the proposed lani use is acceptable to the Landlord and (iii) Landlord and Tenant have mutually agreed, in the respective sole and absolute discretion, to a division of the proceeds from each Proposed No I Parcel Sale. Landlord may, in its reasonable discretion, (i) demand that Tenant produce a appraisal or other property valuation for the each portion of the portion of the Ground Lew Property that is subject to a Proposed North Parcel Sale; (ii) commission — within a commercial] reasonable timeframe — an appraisal or other property valuation for such portion of the Grour Lease Property, or (iii) both "(i)" and "(ii)" (the "Value Validation"). Tenant may propose a sa of all or a portion of the North Parcel to itself, subject to the same processes, procedures, ar limitations set forth in this Section 7; provided, however, that Landlord retains the sole ar absolute discretion to approve or reject a proposed sale price as well as the portion of the n proceeds to be provided to Landlord. If a sale of a portion of the North Parcel is approved pursuw, to this Section 7, the parties shall process such amendments to the Lease as are necessary ar appropriate to remove such portion of the North Parcel from the Ground Lease Property and proportionately reduce the rent payable for such removed portion of the North Parcel. 11. flotel Develonnieiii: From and after the Third Amendment Effective Date, the "Hotel Development" provisions in Section 6 of the Second Amendment shall have no further force or effect. 12. Notice: Section 16.05 of the Original Ground Lease, as amended by Section 7 of the Second Amendment, is amended to replace Tenant and ats counsel with the Tenant: c/o Industrial Realty Group, Inc. 11111 Santa Monica Boulevard, Suite 800 Los Angeles, California 90025 Attn: John A. Mase Fax: (310) 473-8702 With a copy to: Fainsbert Mase Brown & Sussman, LLP 11111 Santa Monica Boulevard, Suite 810 Los Angeles, California 90025 Attention: Jerry A. Brown, Jr., Esq. FAX: (310) 473-8702 13. Coiiiiten)arts. This Third Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. 14. Further Assurances. Each of the Parties shall execute and deliver all additional papers, documents and other assurances, and shall do all acts and things reasonably riecessary in connection with the performance of their obligations under this Third Amendment to carry out the intent of this Third Amendment. 15. Govenwig Law. This Third Amendment is made under and shall be construed pursuant to the laws of the State of California. 5379�1 A M IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Third Amendment the date and year first above written. W CITY OF DOWNEY, z Municipal cop2oration of the Stxla-e' HINZ Ui'," HOLDINGS DOWNEY, LLC, I I . UM By: Holdings SPE Manager, LLC, a Delaware limited liability company Its: Manager BY: John A. se Its: Chief Executive Officer RAMM 1 Elio 11 PAIJI of mm'A I it. z�� By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member By: S.L. Properties, Inc., a Delaware corporation Its: Manager BY: Ar JohVnMase Its: Chiel'Fxecutive officer no IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Third Amendment the date and year first above written. Mai• a MW CITY OF DOWNEY, a Municipal corporation of the State of California L rim ors) ro &VIFIN 1 OR I I i in (WTO v M -8. 1=11 Its: Manager .0 John A. Mase ERG DOWNEY, LLC, 2 California limited liability company By: IRG 111, LLC, a Delaware limited liability compal Its: Managing Member By: S.L. Properties, a Delaware corporation Its: Manager ME John A. Mase ME ORIGINAL GROUND LFA IF Rfafffluv�� �1 0i. �t ;' !. MR] # 0XV-4tv "A bxd I S!VAM\UCHTER\Downc.y%Ground Leasc0owncyGroundLenev9.12-03-03.doc MMEMOMM T1 [IS OW(JND LEASI,-, (the "Lease") is madc and entered into �s ol'DccClnbcr4, 2003, by and between the CITY OF DOWNEY (hereinafter sometimes referred to as either "City" or Landlord") anti INDUSTRIAL REALTY GROUP, LLC (hereinafter referred to its "Tenant"). Landlord and Tenant hereby agree as follows: A. Landlord is the owner and/or lessee of the approximately 160-acre fort-ner National Aeronautics & Space Administration ("NASA") industrial plant site situated in the ('ily ofDowney, California and generally bounded by Lakewood Boulevard, Stewart and Gray Road, Hellflower Boulevard, Imperial Ilighway and Clark Avenue (the "NASA Site"). Landlord acquired its interest in the NASA Site from the United States of America, acting by and through NASA andhir the 0overnment Services Adunnistration (""GSA",). The NASA Site has been uscd over at 70-year period for aircrall manufacture, the invention. testing, and patenting, of the chemical milling process. research, production, and assembly of rockets and missiles, and the design, production, assembly, and testing of the equipment and materials for time Apollo Space Program and tile Space Shuttle Orbiter program. The NASA Site is composed of separate parcels of fluid ("Parcels 1, 2, 3, 4, 5 and 6" respectively) as shown (in the diagram attached hereto as Exhibit "A". B, In April 1999, Landlord acquired from 'lie l'ilitcd States of America, acting bV and through the Gencral Services Administration ("GSA") and NASA, approximately 66 acres of the NASA Site, comprised of Parcels 3, 4, 5 and 6 ("Parcels 3, 4, 5 and 6"), pursuant to that certain Quitclaim Decd dated April 19, 1999, recorded ill the official records of the County of Los Angeles as Documcot No. 99 0690588 (tile "1999 NASA Quitclaim Deed"), Parcels 3, 4, 5 aild 6 are also subject to varimis agreements between the Landlord and the United States (Collectively, the "Existing NASA Restrictions"): (% 'renant acknowlcdges� that Landlord is in negotiations with the United States of America, acting by and through GSA and NASA, to acquire the remaining approximately 94- acre portion of tile NASA site. comprised Off'MCIS I and 2 ("Parcels I and 2"), pursuant to the California Desert Protection Act, ("Act") of' 1994, 16 0.&C. § 410aaa, el set]. Tenant acknowledges that upon the lea -se ol*1he Ground [.case property, as further defined in lZecital 13-, it) 'Jenant from Landlord, Parcels I anti 2 shall be subject to certain reservations, covenants and restrictions relating; to the future use, renlediation and development of Parcels I and I sorne of which will run with time land as set forth in each of the documents listed below (which are collectively referred to as the "NASA 2003 Transaction Documents"): (ii) Transfer Agreement between Landlord and the United States (the "Transfer Agreement"); S;UAWUCH1TR\Damcy\Ground 1zBse\DnwneyGmundW, scOA2-03.01doc (iii) Environmental Liability Assumption Agreement between Landlord and International Risk Assumption Downey, LLC ("FRAD"), an environmental risk management company (the "Assumption Agreement"); (iv) Escrow Agent Agreement between Landlord, IRAD and an escrow agent to be determined (the "Escrow Agreement"); llrl�= I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1 1 339=t i i,: iM (vi) Covenant Deferral Request dated December 20, 2001 (the "CDW'); (vii) Memorandum of Agreement Among NASA, the GSA, the California State Historic Preservation Officer and the City of Downey Regarding Disposal of a Portion of the NASA Industrial Plant (the "MOA"); and (viii) Revocable License Agreement between NASA and the City of Downey dated November 26, 2001 attached hereto as Exhibit I'D" (the "License Agreement"). This License Agreement is intended to expire upon transfer of Parcels I and 2 toTcnaa The Existing NASA Restrictions„ the NASA 2003 Transaction Documents and the Superior NASA Documents (defined in Section 613.04 herein) are sometimes collectively referred to herein as the "NASA Documents," On September 15, 2003, the Governor of the State of California approved the Covenant Deferral Request, for the transfer of title to Parcels I and 2 of the NASA Site to Landlord in accordance with 42 U.S.C. Section 9620(h)(3)(C). In addition, tile NASA 200-1 Transaction Documents have now been finalized which will effectuate the remediation of Parcels I and 2 and other areas of the NASA Site and Landlord's purchase of Parcels I and 2 from the United States, through the GS)V D. NASA has described the environmental condition ol'Parcels I and 2 it) (lie NASA 2003 Transaction Documents and the environmental reports and analyses referenced therein. Landlord has made available toTcnant those certain environmental reports and other documents described in Exhibit "C" attached hereto (the "Existing Environmental Documents") which further describe the environmental condition of the NASA Site. Trichlorethy1clic ("TCE"), Perchloroethylene ("PCE"), and other volatile organic compounds have been detected in soils on, and in groundwater beneath, Parcels I and 2. Groundwater monitoring wells have been installed on Parcels I and 2 and sampled quarterly. Since June 2000, NASA (and its agents) have been conducting an investigation and remediation of such soil and groundwater conditions oil the NASA Site, including Parcels I and 2, under the supervision of the California Regional Water Quality Control Board - Los Angeles Regional (the "Regional Board"). The Regional Board has ordered additional investigation and testing of certain areas of concern on the NASA Site, and further soil and ground water investit ation and remcdiation activities will be required, F., Tenant wishes to ground lease from Landlord, anti Landlord wishes to ground lease to Tenant, a portion of the NASA Site, which portion is described in hereto (the "Ground Lease Property") comprising approximately 20 acres of Parcel 5 of the NASA Site° SMAMNLICHTMOowncylGmund LzmcZowncyGroundLewev9.12-03-03.doc F. Landlord and Tenant (as Seller and Buyer, respectively) have entered into that certain purchase and sale agreement ("Acquisition Parcel Purchase Agreement') dated on or about November 30, 2003 for the sale by Landlord to Tenant of that certain fee interest in a portion of Parcel I of the NASA Site, adjacent to the Ground Lease Property, consisting of approximately 58 acres more particularly described in Exhibit 'IF" attached hereto (the "Acquisition Parcel"). The Acquisition Parcel and the Ground tease Property are collectively rcftrrcd to as Ilic "Studio Property"). Concurrently licrewith, Tenant has acquired (or shall acquire) from Landlord the Acquisition Parcel pursuant to the Acquisition Parcel Purchase Agreement. G. Tenant's proposed future development of the Studio Property involves the demolition of some of the existing improvements located thereon and the construction of a movie studio/film location production facility (the "Production Facilities"), as well other non- studio/film commercial uses. Developer has, is or will be processing all discretionary governmental planning, land use, zoning, development and environmental perinils, plans, and approvals which are required for the development, use and operation of the Studio Properly (the "Entitlements"), The Entitlements include (but are not limited to) the following non -exhaustive list of discretionary government approvals for the development of Elie Ground Lease Property (the "City Entitlements"): (i) Amending the Downey Landing Specific Plan, dated February 2002, which includes rezoning and design guidelines) (the "Specific Plan"); and (ii) Any required demolition and building permits and related approvals for the possible reconriguration of buildings or improvements in order to provide additional area which may be included within the Studio Properly area (the "Construction Approvals"), Developer acknowledges that the Entitlements include (and the Ground Lease Property is subject to) required regulatory approvals and permits from government agencies other (Ilan the City of Downey. NOW THEREFORE, in consideration of the foregoing recitals and the representations, warranties, covenants and conditions contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties do hereby agree as follows: ARTICLE 1. 1,01, (irotindi,mqc))ronertv,,indf-',,i-stiiiLImprovements Landlord owns certain real property located in the City of Downey, County of Los Angeles, State of California, as legally described in Exhibit 4V attached hereto and incorporated herein by reference, and which is hereinafter called the "Ground Lease Property," The Ground Lease Properly is improved with numerous buildings and other structures, fixtures and improvements (collectively, the "Existing improvements'), SMAMUCHTEMDowne)AGround Lcasc\DowncyCaoundLca=v9.12-OM3.doc For and in consideration of the payment of rentals and the performance of all the covenants and conditions of this Lease, Landlord hereby leases and demises to Tenant, and Tenant hereby leases and hires from Landlord, the Ground Lease Property and the Existing Improvements, for the term and upon the covenants and conditions set forth herein. 1.03 Landlord and Tenant have also entered into the Acquisition Parcel Purchase Agreement which contains, among other things, certain Special Development Provisions relating to the development of a Portion of the Studio Property for use as Production Facilities, as sel lbrth in Article I I therein, This Lease is hereby made subject to the applicable provisions of the Acquisition Parcel Purchase Agreement. 1.04 Certain Definitions. I - I NOWU =5 (b) "Subtenant(s)" shall mean one or snore~ stititenants of the Ground Lease Property pursuant to a sublease entered into by and tictween Tenant, as landlord, and the subienartt_as tenant, and in accordance with the provisions with Articl(; 13 herein. F_ V-AKOJY*M Uniess terminated earlier in accordance with the provisions of this Lease, the term of this I -ease shall be for a period of fifty -rive (55) years (the "Term"). The Term shall expire lit 11:59 p.m. on the day preceding the fifty-fifth (55th) anniversary of the Commencement Date (as defined in Section 2.02) (the "Expiration Date'). 2,02. Commencement Ce`vmh"w ULO"" The Term shall cornmence upon the later of (i) the date Tenant acquires title to the Acquisition Parcel from Landlord pursuant to the Acquisition Parcel Purchase Agreement, and (ii) full execution of the Lease by the parties hereto (the "Commencement Date"); provided, however, that if the Commencement Date has not occurred on or before July 1, 2004 (unless Landlord and Tenant otherwise agree), this Lease shall be automatically cancelled and the Term shall not continence. The Commencement Date will be reflected in a Memorandum of Lease to be recorded in the office of the County Recorder of Los Angeles County pursuant to Section 16.13 of this Lease. Notwithstanding the foregoing, Tenant shall be entitled to terminate this Lease in the event that it does not acquire the Acquisition Parcel. S,.VAMUCKMRV)uwnqAGround Lc='J)o%vnqGround LAwev9.12-03-03 doc a M. 90208MESUMMMMM ' Notwithstanding Section 101 to the contrary, this Lease shall terminate on April 30, 2019, in the event that Tenant fails to convert any portion of the Ground Lease Property from its present use as a studio production facility/back-lot to any other use permitted by the Specific Plan, as may be amended (the "Early Termination Date""). ARTICLE 3. MWERM Beginning on the Cornnicnecnicia Date as provided in Section 2.02, above, and continuing rear the first five (5) years of the Terni,Tenant shall pay to Landlord minimum rent in the amount of $445,000 per year (tile "Base Rent"), The Base Rent shall be paid in monthly payments, ill advance, on tile first day of cacti mouth during the Term; provided that the first Base Rent payment shall be payable on the Commencement Date and shall be prorated by multiplying the Base Rent by a fraction, the numerator of which is the number of days from the Commencement Date to the end of then current month and thc denominator of which is tire actual number of days in such month. For purposes of this Lease, "Rent" or "rent" shall mean the to of all sums due to Landlord from Tenant hereunder, including but not limited to Base Rent, Converted Base Rent, Additional Rent (as defined in Article 4 herein) and all other fees and charges owed to Landlord hereunder. In the event that Tenant converts all or any portion of the use of the Ground Lease Property from that or n studio production facility/back-lot to any other use permitted by the Specific Plan, its may be amended, the annual Base Rent for that portion of the Ground Lease Property so converted (tire "Converted Property") shall be increased to an amount equal to the product of (i) 09, multiplied by, (fi) the land square footage of the Converted Property, multiplied by (iii) the Agreed Land Value, as defined below (the "Converted Base Rent"). Tile Converted Base Rent shall be effective on the date the certificate of occupancy is issued with respect to the Converted Property (each, a "Conversion Date"), For purposes of this Section 102, the "Agreed Land Value" shall be deemed to bv, Ten Dollars ($10.00) per square foot for any Converted Property with as Conversion Date occurring on or bcfhnDecember 31, 2008, Eleven Dollars ($11.00) per square foot for any Converted Property with a Conversion Date occurring on or before December 31, 2013; and Twelve Dollars ($12,00) per square foot for any Converted Property with a Conversion Date occurring after January 1, 2014, For example, (i) if Tenant amends the Specific Plan to permit the entire Ground Lease Property (915,427 square feet) to be used as an office park to be constructed in two phases, each phase of which utilizes one-half of the total square footage of the Ground Lease Property, and (ii) the Conversion Date for both phases of the project occurs prior to December 31, 2008, then the total annual Rent for the Ground Lease Property, as frilly converted, would be S823,884 (.09 x 915,427 square feet x $10,00). The Base Rent, however, shall be increased incrementally, effective mi the Conversion S:VAMUCHTER%DowncylGround Lc=W)owncyCimundLowev9,12-03-03.doo Date fil ac:4 1;g I�J 1� .. sc OW N A; -C-11"11 I Cr5fill Date of the first phase of the proje4 the annual Rent would equal $634,442 ($445,000 x Y2 + $823,884 x 1/2). Tenant may convert the Ground Lease Property in a maximum of four phases anytime between the Commencement Date and the Early Termination Date. Any portion of the Ground Lease Property not previously converted on or before April 30, 2019, shall be deemed to be converted its of that dale. Tenant shall promptly give Landlord written notice of upon its conversion of any portion of the Ground Lease Property to Converted Property, which notice shall set forth the nature of the conversion and the Conversion Date. Landlord shall reasonably F WWWWW Will 41w W ",Nix - A111MI 194JOLMO IfNJILM11•61111611 %all 641 le2juvI111411A Nnfly*MH it Beginning on the fifth (5h) anniversary of the Commencement Date, and continuing every five (5) years thereafter for the remainder of the 'Ferro, dre annual Base Rent shall increase by ten percent (10%); provided, however, that with respect to any Converted Property, the Converted Base Refit shall increase by ten �crccnt (10%) beginning on the fifth (Y) anniversary of each Conversion Date for such Converted Property and shall increase by ten percent ( I 011K) every five (5) years thereafter for the remainder of the Term. 3.04. Rent Abatement In the event that any portion of the Ground Lease Property is taken for any use, or reserved, by Landlord, IRAD, any federal agency or by any adjoining landowner in connection with the development or environmental remcdiation of the retail site adjacent to the Ground Lease Property (a "Taken Parcel"), Tenant shall receive ail abatement of Refit during the little that such party has possession or control over the Taken Parcel in all amount equal to the square footage of the Taken Parcel multiplied by the then effective rent per square foot being paid by Tenant for the entire Ground Lease Property, For example, if IRAD elects to locate a soil vapor extraction unit on a 20,000 square foot portion of file Ground Lease Property in connection with life ongoing remediation activities at the NASA Site, and the total square footage of the (!round Lease Property is 915,427 square feet (approximately 21 acres) then the rent abatement (based on an annual rent of $445,000) would be $9,722 per year ($.49 x 20,000). pro -rated for the time period that unrestricted use of the 20,000 square feet is unavailable to Tenant, In such event, Tenant shall notify Limdlord of the purpose and amount of the Rent reduction. 3.05. In -Lieu Studio License Fee Tenant and Landlord recognize the unique nature of the business proposed to be S:VAMUJCHn-R\Dcwney\Gmund Ltasc\[)owneyGmundLcascv9.12-03-03.doc • portion of the Ground Lease Property actually being used for film, television or commercial film or video production ("Filin Activities"). Payment of tile Studio roe shall not relieve the long- term tenants or short-term tenants not actually involved in Film Activities at the Ground Lease Property from their responsibility to pay as regular City BUSilICSS License tax, By executing this Agrecinem,Tenant declares it has voluntarily and willfully agreed to pay the Studio Fee, in licit of any and all City business taxes, using this alternative method of tax payment on behalf of those (ransictit entities conducting Filin Activities at the Ground Lease Property, This in -lieu rue does not apply to permanent occupants of any buildings, management of the Ground Lease Property, parking and building facilities operators and non -Studio Production Facility uses, It has no effect on the current license fees paid by Tenant directly to the Landlord. Payment of the Studio Fee shall be made quarterly oil tile first day of January. April, July and October of each year. A tell percent (10%) penalty shall be applied for payments not received or postmarked by the due date. Payments shall be made in the form of a corporate check, cashiers check or wire transfer, Payments shall be submitted to the Director of Finance for City, Landlord reserves the right to have fenant's books audited with regard to the income generated from studio/film location rental. -nic audits will be perforated at Landlord's expense, However, if the audit detects art underpayment to Landlord in excess of ton percent (10%), Tenant will be responsible for the reasonable cost of that year's atioiL The Studio Fcc due hereunder shall not be duplicative of the Studio Fee due from Developer to City pursuant to Section 11,5 of the Acquisition Parcel Purchase Agreement, i.e. the gross receipts frorn any Film Activities shall be subject to only one Studio Fee regardless of whether the rilin Activities take place on the Acquisition Parcel or (lie Ground Lease Ptcwperly� 3.06 Late Pavment Tenant hcreby acknowledges that late payment by Tenant to Undlord ofizent (as defined in Section 11 herein) pursuant to this [,case will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Accordingly, if any installmcm. of Rent or other paynictit under this Lease is not received by Landlord, within seven (7) days after notice from Landlord that such Rent is delinquent, Tenant shall pay a late charge equal to five percent (5%) of such overdue amounts, The paynient to and acceptance by Landlord of such late charge shall in no event constitute a waiver by Landlord of Tenant's default with respect to such overdue amounts, nor prevent Landlord lions exercising any of the other rights and remedies granted at law or equity or pursuant to this Lcasc. ARTICLE 4. TRIPLE NET LEASE, 'I'his Lease is a triple net lease in which,rctiant, in addition to the; payment ofBase Rent, shall be directly responsible for ilia payment of any and all Tixes, as defined in Section 5.01, Insurance, as defined in Section 11.01 herein, and all operating expenses vvith respect to the Ground Lease Property, and Landlord shall have no obligations of any nature with respect to tile Ground Lease Property, except as otherwise specifically provided in this Lease (collectively, "Additional Renf'). S:UAM\L1C1iTER0ownqAGr9und Lcmc\DowncyGroundlzwev9,12-03-03.doo ARTICLE 5. TAXES AND ASSESSMENTS For purposes of this Lease, "Taxes" shall mean all Personal Property Taxes, Real Property'raxes and Assessments, all as hereinafter defined. 5.02. Personal Propertv'fax�;s Subject to the provisions of Section 5,06, 'fenant shall pay before delinquency A taxes, assessments, license fees and other charges that are levied and assessed against Tenant's personal property installed or located in or on the Ground Lease Property which become payable during the term (collectively, "Personal Property Taxes"), On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. 5.03. R �d]Pro�cq3Jixcs Subject to the provisions of Section 5.06, Tenant shall pay all real property taxes, possessory interest taxes and general and special taxes levied and assessed against the Ground Lease Property mid all real property taxes levied against Tenant's improvements on or about the Ground Lease Property (collectively, "Real Property Taxes"). Tenant shall, semi-annually (or in such other installments as are permitted by law), pay the Real Propert),'raxc% not later than the taxing authority's delinquency mate, If at any time during the terns of this Lease any authority having the power to tax, including, without limitation, any federal, state, county, city government or any political subdivision thereof (collectively, "taxing authority"), shall alter the methods anWor standards of taxation and assessment against the legal or equitable interests of Landlord in the Ground Lease Property or the improvements located or constructed thereon, in whole or in part, so as to impose a monetary obligation on Landlord in lieu of or in addition to the taxes and assessments in existence as of the date of this Lease, such taxes or assessments based thereon, including, without limitation, (i) a tax, asscssment, excise, surcharge, fee, levy, penalty, bond or similar imposition, on Landlord's right to rental or other income from the Ground Lease Property or as against Landlord's leasing of the Ground Lease Property, (ii) any impositions in substitution or in lieu, partially or totally, of any impositions assessed upon real property prior to any such alteration, (iii) any impositions allocable to or measured by the area of the Ground Lease Property or the rental payable hereunder, including, without limitation, any impositions levied by any taxing authority with respect to the receipt of such rental or with respect to the possession, I ".ing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant or any subtcnant of the Ground Lease Property or any portion thereof, (iv) any impositions upon this lease transaction or any document to which Tenant is a party which creates or transfers any interest or estate in or to the Ground Lease Property (other than any transfer tax which may be due upon recordation of the Memorandum of this Lease described in Section 16.13), or (v) any unforeseen or extraordinary impositions which, although not Specifically described above, can fairly be characterized as a real property tax or a substitute for real property tax, shall be considered as Real Property Taxes for the purposes of this Lease. Notwithstanding the foregoing, Tenant shall not be obligated to pay franchise or other taxes (however denominated) SNAMUCHTEMDOwneyNGround Lz=OowncyGmand Leam9.12-03-03,doo levied on Landlord as a condition to its continued existence as an entity or any net income tax of Landlord, or a value added, gross income, gross receipts or other tax levied generally on income or receipts. 5.04. New Assessments if any general or special assessment is levied against the Ground Lease Property C'Msessment(s)"), Landlord may elect either to pay the Assessment in full or to allow the Assessment to go to bond. If Landlord allows an Assessment to go to bond, Tenant shall pay when due any and all Assessments, If Landlord pays the Assessment in fall, Tenant shall pay to Landlord each time a payinent of Real Property'Faxes is made a surn, equal to that which would have been payable (as both principal and interest) had Landlord allowed tile Assessment to go to bond. 5.05. Teiia.nt'sl'axf,iabilitvPtx)mted Tenant's liability to pay Rid Property Taxcs and Assessments shall be prorated on the basis of a 365-day year to account for any fractional portion of a fiscal tax year included in the Term at its inception and expiration or earlier termination in accordance with this Lease. Tenant, at its cost, shall have the right at any time"to seek a reduction in the assessed valuation of the (3round I -ease Property or to contest any 'taxes that are to be paid by 'Tenant. If Tenant seeks a reduction or contests any Taxes, the railure on Tenant.,, part to pay such Taxes shall not constitute a default as long as Tenant complies with the provisions of this Section. Landlord shall not be required to join in any proceeding or contest brought by Tenant unless law or applicable regulations so require in order for Tenant to contest the same. In the event that Landlord is legally required to participate in such tax contest, Landlord shall be only to nominal party. (The parties acknowledge that under current law and regulations, Landlord would not be a necessary party to a tax contest.) Tenant, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered, together with all costs, charges, interest and penalties incidental to the decision or judgment, If Tenant does not pay the Taxes when due and Tenant seeks a reduction or contests than as provided in this Section, before the commencement of the proceeding or contest, Tenant shall furnish to Landlord a security or other evidence reasonably satisfactory to Landlord that Landlord and the Ground Lease Property will be held harmless from any damage arising out of the proceeding or contest and assuring the payment of any judgment that may be rendered. Notwithstanding any provision of this Section 5.06, no Taxes may be delinquent at the expiration of the Term. SMAMUCHTEMDowneyNGround Lease\Downcy0roundLenev9.12-03-03.dm 10 am ARTICLE 6. USE, CHARACTER, OPERATION AND MAINTENANCE OF IMPROVEMENTS 6.01. General The Ground Lease Property shall be used for any use permitted by the current zoning or the Specific Plan, as may be amended from time -to -time (the "Permitted Uses"). 6.02. Liss Oblijatious There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, suhlease, transfer, use, occupancy, tenure or enjoyment of the Ground Lease Property or the improvements thereon, or any part thereof, and the 'Tenant itself, or any person claiming under or through it, shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection. location, number, rise or occupancy of tenants. lessees, subicnants, sublessees or vendees of the Ground Lease Property or the improvements. Tenant shall refrain from restricting the rental or lease of the Ground Lease Property or the improvements, or any portion, on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person, All such deeds, [cases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: In leases: "Me lessee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of' the: premises herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises leased." In contracts: "Mere shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, not, shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 6.03. Use Prohibitions Tenant agrees that in connection with the use and operation of the Ground Lease Property, Tenant will not: Sal! AMUCKMR\Downcy\Ground Lmc\DowncyGroundLeasev9,12-03-03,doc II (a) Cause or permit obnoxious odors to emanate or be dispelled from any improvements located thereon; (b) Permit undue accumulations of garbage, trash, rubbish or any other refuse; (c) Commit or suffer to be committed any to in, on or about the Ground Lease Property; (d) Use or allow the Ground Lease Property to be used for -,my unlawful purpose, or for any purpose which violates the terms of any recorded instrument affecting the Ground Lease Property; (c) Cause or permit any insurance coverage on the Ground Lease Property or the improvements thereon to becorne void or voidable to inake it impossible to obtain any required insurance at commercially feasible rates; (f) Violate any law, ordinance or regulation applicable to the Ground Lease Property and the improvements thereon; or (g) Permit the establishment of pornographic or adult sex businesses on the Ground Lease Property, such as strip clubs, adult bookstores or video shops. 6.04. General St.andardsof.Mainteriance Tenant shall be fully responsible for the operation and maintenance of all of Tenant's improvements on the Ground Lease Property, and any landscaping, open space and common areas on the Ground Lease Property, and shall operate and maintain or cause to be operated and maintained, such improvements, landscaping, open space and common areas in an integrated and cohesive manner and in good order, condition and repair. In connection thercurith, Tenant acknowledges that the Ground Lease Property is subject to the covenants, conditions and restrictions recorded against the NASA Site by Landlord as the declarant (the "CC&Rs"), which shall be binding upon Tenant, subtenants of Tenant and any successors in interest of either, governing the maintenance and repair of all improvements, landscaping, open space and common arm. The CC&,Rs include provisions entitling Landlord at its election, in the event of any breach and following reasonable notice to Tenant and to reasonable period of time in which to cure any breach, to enter upon the Ground Lease Property and perform any maintenance or repair of such areas and charge the Tenant for the cost of such maintenance or repairs. Without limiting the generality of the foregoing, Tenant shall observe the following standards: (a) Provide adequate security lighting and maintain all security and decorative light fixtures and associated wiring systems; (b) Maintain all surface and storm lateral drainage systems; and (c) Maintain all sanitary sewer lateral connections. SAJAM\LJCH'rER\Downey\Ground LtaseDowncyCiroundLAasev9.12-03-03.doc 12 6.05. Repairs Tenant shall from time to time make any and all necessary repairs to or replacement of any equipment, structures or other physical improvements upon the Ground Lease Property, in order to comply with any and all regulations, laws or ordinances of tile State of California, County of Los Angeles, City of Downey or other governmental body, which may be applicable, or as required in writing by the City Manager to Tenant incident to tile provisions of this Lease. If Tenant fails to make any such repairs or replacements as required, the City Manager may notify Tenant of said default in writing, and should Tenant fail to cure said default and make said repairs or replacements within a reasonable time, Landlord ilia), make such repairs or replacements and the cost thereof, including, but not limited to, the cost of labor, materials and equipment, shall be charged against Tenant and shall become a part of the rental for the period next following the period of default, or the same may be prorated over a period or time to be determined by the City Manager. Tenant shall at all times comply with, and shall pay all costs and expenses which may he incurred or required to be paid in order to comply with any and all laws, statutes, ordinances, rules and regulations ("laws") which apply to the operation and use of the Ground Lease Property, including those requiring alterations or additions to be made to, or sa(ety appliances and devices to be maintained or installed in, on or about the Ground Lease Property tinder any laws now or hereafter adopted, enacted or made anti applicable to the Ground Lease Property; provided, however. that Tenant shall not be responsible for compliance with, or the payment of any fees, charges or assessments relating to the existence of, or the rernediation activities related to, the hxisting Contamination, as defined in Section 613.01 herein. Without limiting the generality of the foregoing, Tenant shall conform to and abide by all applicable rules, regulations, resolutions, ordinances and statutes of the City of Downey, County of Los Angeles, State of California, the federal government, and all other governmental agencies where applicable, and where permits are required for such operations the same must be First had and obtained front the regulator), body having jurisdiction thereof before such operation is undertaken, Notwithstanding the foregoing, Tenant may contest, by appropriate legal proceedings conducted in good finth and with due diligence, the validity or application of ally such laws and where required by law, Landlord shall join in any ,;rich contest (as a nominal party only), provided Tenant shall indemnify and [told harmless Landlord against all cost or other expense in connec(ion therewith. MINNAM =1 1; FIVAM "A Bit ilia 0 EV V DI 114 Y43 6A.01. J-102ardotts Material s/Envi ronmental Lav,%s As used in this Lease, the term "Flazardous Materials" means ally material or substance which (i) is defined or listed as at `"hazardous waste,`" .. extremely hazardous wastc," "restrictive hazardous wastc," "hazardous material" or "hazardous substance" or considered a waste, S:VAMUCHTERWowncy\Gwund LcascTewncyGround l-tawA. 12-OMIdnc 13 condition ol'pollution or nuisance under Environmental Laws (defined below), (ii) is petroleum or as petroleum product or fraction thereof, (iii) contains asbestos or an asbestos containing material, or (iv) is a substance known by the State of California or the United States to cause cancer and/or reproductive toxicity. As used in this Lease the term "Environmental Laws" means any federal, state or local Law or Legal Requirement pertaining to (a) the existence, release, threatened release, use, storage. handling, generation, re mediation and/or transportation of Hazardous Materials. or (b) health, industrial hygiene or the environmental conditions in, on, under or about the Property, including without limitation: (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ('CERCLA"), 42 U.S.C. Sections 9601 et sc+; (ii) the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 690) et scol., (iii) Califbmia Health and Safety Code Sections 25100 et scq.-, (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 252493 et scq.: (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 et seq,; (vi) Califbi-nia Water Code Section 1300 et seq.; (vii) California Civil Code Section 3479 et seq., as such laws are amended and the regulations and administrative code,; applicable thereto. It is the intent of the parties hereto to construe the terms "Hazardous Materials" and "Environmental Laws" in their broadest sense. 6A.02 S Tenant shall not install, operate or maintain and shall not permit any Subtenant or Occupant of slur Ground Lease Property (or any of their employees, agents, contractors or invitees) to install, operate or maintain any below grade tank, sump, pit, pond, lagoon for the ' storage, handling or transportation of Hazardous Material'on or about the Ground Lease Property without the express prior written consent of Landlord (which consent shall be deemed to be a I lazardous Materiab; Consent (defined below) and is governed by Section 6A.03). 6A.03 Hazardous Materials ConsentIllazardnias Materials Activities (a) Subject to obtaining Landlord's prior written consent thereto pursuant to this Section 6A.03 (a "Hazardous Materials Consent"), Tenant or a Subtentint or Occupant may engage in I laz�;rrdous Materials Activities (defined below) in, on. about, to and from the Ground Lease Property only in accordance with all applicable Laws, Legal Requirements and Frivirowrental Laws, Neither Tenant, any Tenant Party (defined below), any Subteriant nor any other Occupant of the Ground Lease Property or of the Improvements, or any portion thereof, shall engage in any Flazardous Materials Activity (or knowingly permit any Hazardous Material Activity to occur in, on, under, about, to or from the Ground Lease Property, or the Improvements or any portion thereof during the Tenn without Tenant first obtaining a Hazardous Materials Consent from Landlord with respect thereto pursuant to this Section 6A.03. Any change in the amount, sequence, frequency, nature, timing or any other factor rcicvant to ally I Ja7ardous Material Activity previously consented to by Landlord, which materially increases the risk that the Ground Lease Property or the Improvements will become contaminated by Hazardous Materials, or the risk that any Ha7ardom hiliter4ils contamination caused by any 11olzardous Material Activity will be materially inare costly to re mediate or will be more injurious to human health, shall require a new written Hazardous Materials Consent from Landlord, nand Tenant shall not implement, nor permit to be implemented, any such change S:UAMWCHTT-:R\Downcy%Ground leasc\l)owncyGroundLeastv9.12-03-03,doc 14 without having first obtained a lla7ardous Materials Consent to such change pursuant to this Section 6A.03. Notwithstanding any provision of this lease to the contrary, Landlord may grant, refuse to grant, withhold and/or condition (as determined by Landlord in Landlord's commercially reasonable discretion) any Hazardous Materials Consent requested by Tenant hereunder (for the purposes of permitting Tenant or a Subtenant or Occupant to engage in a Hazardous Materials Activity, to implement a change in any Hazardous Material Activity requiring such HazArdous Materials Consent or to engage in any other conduct requiring it Hazardous Materials Consent hereunder), (b) For purposes of (his Lease, "HazMat Permits" means any governmental permit, consent, entitlement, or approval regulating or required with respect to: (i) any Hazardous Materials Activity or otherwise required under any Elivirotariental Laws with respect to the commencement. existence, performance, completion, closurc, documentation. disclosure, monitoring or reporting of any Hazardous Material Activity or (il) the commencement, closure, monitoring or reporting of any remediation of Ha7nrdous Materials subject to Landlord's approval, (c) For purposes of this Lease, Alazardaux Materials Activity" means any activity involving generation, use or storage of I la7ardous Materials, specifically excluding, however, (i) commercially reasonable amounts of cleaning chemicals, solvents and lubricants used in connection with the operations of 'the Ground Lease Property or by any Subtenant or Occupant operating in conformance with the Specific Plan Ilion in effect, (it) petroleum, liquid petroleum gas and similar fuels used to operate vehicles and equipment on or about the Ground Lease Property (provided that no underground storage of such fuels shall be permitted except in compliance with Section 6A.02 above), and (iii) any materials typically used by television or motion picture production companies in connection with their use of the Ground I -case property as as production facility, including the construction ofmolion picture and television sets. 6A.04 Stibmislions ReouircdlnConnectioii With Qonsent Requests, In connection with each request (a "HilzMat Consent Request") for a liw/ardous Material Consent tinder this Section 6A.04, Tenant shall submit to Landlord (i) description of the Hazardous Materials to be used, generated or stored on the Ground Lease Property, (ii) if required tinder applicable law and that available, I true and correct copy of each application (submitted by Tenant to the appropriate governmental authority) for a HazMat Permit required in connection with the HavArdous Materials Activity which is the subject of Tonarn's request and a copy of ail such flitzMat Pcn-nit or Permits so required (and if the foregoing is not available, as detailed listing of all flaz.Mat permits to be obtained in connection therewith by Tenant), and (iii) such additional information and/or written materials as shall be required by Landlord in good faith from time -to -time, Following any submission by Tenant or any Subteriant or Occupant of any materials or information described in this Section 6A.04, Landlord may require such additional or back-up information as Landlord shall reasonably determine, Landlord shall Ilse its good faith reasonable efforts to promptly respond to each I lazMat Consent Request, but no later than forty-five (45) days following submission by Tenant of all submissions and information required to be submitted by Tenant with respect to such request under this Section 6A.04. Any S:UAMUCHTER%DowncylGwtmd LeraeNDowncyGroundLeascv9.12-03-03.doc 15 material change in the nature or conditions of any HazMat Pen -nits shall require a new Hazardous Materials Consent. 6A.05 Illustrative Consent Conditions. In connection with any lliziodous Materials Consent granted by Landlord purstlam to Section 6A.04 (which Tenant agrees Landlord may withhold only in its reasonable discretion), Tenant agrees that Landlord may impose such conditions thereto as Landlord shall deem appropriate in its commercially reasonable discretion, including without limitation, any or all of the following: (a) The installation of such additional improvements in. on, under or about the Ground Lease Property, the Acquisition Parcel and/or adjacent land as Landlord shall desire to protect against or mitigate illy release of Hazardous Materials potentially occurring in, on. under or about the Ground Lease Property in connection with the Hazardous Materials Activity for which the Hazardouq Materials Consent is sought by Tenant or any Subtenant or Occupant; (b) Such new and/or additional insurance coverage with respect to the subject Hazardous Material Activity as Landlord shall remonably require; and/or (c) Such periodic monitoring and reporting with respect to the subject Hazardous Materials Activity as Landlord shall reasonably require. 6A.06 Landlord's Costs and Expenses In Connection With Requests for 1-hoggryd, Materials Consent-1 Tenant shall pay to Landlord, within ten (10) days of Landlord's written request therefor, all of Landlord's reasonable and good faith out of pocket costs and expenses (including, without limitation, the fees and expenses ol'such business and environmental consultants and attorneys its Landlord shall deem necessary) incurred by Landlord in consideCing any IlazMal Consent Request by Tenant or any Subtenant or Occupant submitted pursuant to this Section 6A.06, without regard to whether such consent is ultimately granted by Landlord. The reimburscinent described above shall be in addition to, and shall not hrnil. the cost of performance OfTellant's other obligations under this Article 6A, including, without limitation, the cost of performance by Tenant of ally conditions to any such hazardous Materials Consent, all of which shall he performed at Tenant's sole cost and expense, 6A.07 Povernmental Notices Tenant shall submit (and Tenant shall require each Subtenant and Occupant to submit) to Landlord, within ten (10) days of receipt by such party of each of the same (or if prepared by Tenant or any Subtenant or Occupant within text (10) (lays of preparation of the same),, a full and complete copy of each of the following: (a) Any written communication, demand, complaint, pleading, threat, notice or inquiry received or communicated by 'tenant or any Subtenant or Occupant received front or S:VAMWCHTERkDowney1Grntmd LemUlowncyGroundLcascv9.12-03-03.doc 16 i" delivered to any governmental agency, any adjacent landowner, or any other third party relating in any way to (i) any hazardous Material Activity, any Hazardous Material Consent or tiny flazMat permit, (ii) the actual or alleged presence and/or release of any I ]a,-xdous Materials or other adverse environmental condition in, on, under or about the Ground I -Case Property, (iii) any bodily injury or property damage suffered in connection with any hazardous material Activity occurring (or environmental condition located) in, on, about or under the Ground Lease Property. or (iv) any actual or alleged violation of any Enviroruriental Laws relating to, or occurring in, under, on or about the Ground Lcase Property; and (b) Any environmental or Hazardous Materials assessment, audit or report relating in any manncr to the Ground Lease Property. 6A.08 Notice of I fazardowk Material Release. If at any time Tenant shall become aware, or have reasonable cause to believe, that any Hazardous Material has been released or otherwise has come to be located in, on or beneath or about the Ground Lease Property, Tenant shall immediately upon discovering the release, presence or suspected presence of the Ilazardous Material, give written nolice oftbat condition to Landlord, Notwithstanding the foregoing, the notice requirement or this Section 6A.08 shall not apply to the Existing Contamination, as defined in Section 6B.01 herein, or to the use or storage an), Hazardous Materials for which as flazMa( Consent Request is not required pursuant to Section 6A.04 herein. 6A.09 Retention of Consultant As of each of the Expiration Date, or any sooner termination of this Lease, or any time during the Tenn Landlord reasonably determines in good faith that any material violation of Environmental Laws or any release of Hazardous Materials shall have occurred in, on, under or about the Ground Lease Property as a result of the actions of Tenant or any Subtenant or Occupant, Landlord may require Tenant to retain, at Tenant's sole cost and expense to qualified environmental consultant (the "Consultant") reasonably satisfactory to Landlord to conduct a reasonable inspection and investigation (an "Environmental Assessment") of a nature and scope reasonably approved in writing in advance by Landlord with respect to the existence of or any release of, any Hazardous Materials in. on, under or about the Improvements and/or the Ground Lease Property, or any violation of Environmental Laws then existing in, on, under or about the Ground Lease Property other than with respect to the Existing Contamination. Each Environmental Assessment shall be performed in a manner reasonably calculated to discover the presence of any Hazardous Materials contamination in, on, under or about the Ground Lease Property, other than the Existing Contamination, and shall be of a scope anti intensity reflective of the general standards of professional environmental consultants who then regularly provide environmental assessment services in connection with similar comalercial types of property as the Ground Lease Property. The Consultant shall concurrently deliver the written results of its investigation in writing directly to Landlord anti Tenant, If Landlord so requires, Tenant shall comply, at Terutrit's sole cost and expense, with all reasonable recommendations contained in the Environmental Assessment with respect to any precautions which should be taken with respect to environmental activities on or about the Groimd Lease Pro or for additional testing and S:VAWJCffERM3owxXround teU6DownqGroundLc&mO. 12-03,03.doc 17 studies to detect the presence of I lazardous Materials. Tenant covenants to reasonably cooperate with all of the ConsultaWs efforts contemplated under this Section 6A.09 and to allow the Consultant full entry and reasonable access to all portions of the Ground Lease Property reasonably required for Consultant's investigation. 2-3990-2� (a) Subject to the provisions of this Section 6A. 10, in the event that any Hazardous Materials shall be released into the environment in violation of any Eltivironmental Law in, on, under or about the Ground Lease Property during the Term of This Lease, Tenant sball promptly and diligently investigate the scope and nature of the release in question, shall prepare a Remediation Plan (defined below) with respect to such released Hazardous Materials, and thereafter shall remcdiate fully such Hazardous Materials contamination in accordance with the provisions of this Section 6A,10, provided, however, that [lie obligations of Tenant under this Section 6A.10 shall not apply to the extent that any such release into the environment of Hazardous Materials is caused by the willful misconduct or gross negligence of Landlord or is caused in connection with the remediation of the Existing Contamination. (b) Any remediation ofl-lavArdous IvIalerials in, on, under or about the Ground Lease Property which Tenant elects to remcdiatc, or pursuant to the provisions (if this Section 6A, 10, is required to reniccliatc, shall be pursued by'fenaut in the following manner: (i) Promptly following the discovery by Tenant of any release into the environment of any Hazardous Material in, on, under or about the Ground Lease Property, Tenant shall engage (or Landlord may require engagement of, pursuant to Section 6A.09) a consultant to perform an Environmental Assessment in accordance with the requirements of Section 6A.09. The written report prepared by the Consultant with respect to the Environmental Assessment shall describe, to the extent reasonably possible to do so, the exact nature, location, and scope of the released Haiardous Materials in, on, or about the Ground Lease Property; in any event Landlord shall have the right, without any liability whatsoever to Tenant or its Subtenants or Occupants, to cause an independent consultant selected by Landlord, it Landlord's cost and expense, to enter (after reasonable advance written notice is given to Tenant) the Ground Lease Property to verily all or any portion of the Environmental Assessment. (ii) Following the parties' scoping of the nature, degree, location and scope or the release of Ilazardous Materials in question, Tenant shall„ at its sole cost and expense, cause the Consultant to prepare a rcmediation plan (the "Rem ediation Plan") For remediation of the Ilazardous Materials in question (and any other remediation which may be required by governmental agencies having jurisdiction). Landlord shall have the right it all times to fully participate in (through its representatives andlor its independent consuitarn) preparation of (lie Remediation Plan and negotiation of the same with any- or all governmental agencies asserting jurisdiction with respect thereto, and the Remediation Plan (and any modification thereto proposed by 'Tenant to be implemented from time to time during the Term) shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Each Remediation Plan shall (A) in all respects comply with all Environmental Laws applicable to the release of Ha7ardous Materials in question, (B) be S.VAMXUCHTFRWowncy\Ground EAroundlcmmg. 12-03-03.doc 18 consistent with the standards, practices and objectives of remediation plans then being developed for similarly contarninated and situated institutionally owned first-class projects (of a comparable nature and with comparable relevant characteristics) in California and (C) give due consideration to all aspects of public health and safety and potentially negative impacts of the I la;,Ardous Materials contamination in question on the continuing value and viability of the surrounding properties and community. ]it connection therewith, Tenant shall cause the Consultant to pursue completion and fiall governmental approval of the Remediation Plan and all 113zMat Permits required in connection therewith with all due diligence at Tenant's sole cost and expense, (iii) Following approval by Landlord (and all governmental agencies having jurisdiction) of the Remediation Plan and issuance of all required HazMat permits with respect thereto. Tenant shall cause a qualified environmental contractor. reasonably approved in advance by Landlord, to continence and thereafter diligently pursue to completion the Remediation Plan, In connection therewith, upon completion of the Remcdiation Plan, Tenant shall (A) diligently pursue and obtain from each appropriate governmental agency asserting jurisdiction, written confirmnlion that no further remediation or remedial action shall be required, which shall be provided to Landlord promptly upon receipt thereof and (B) provide to Landlord a written report from Tenant's Consultant stating its professional opinion that no further rcmediation or work is required under the Remediation Plan, then applicable Environmental I aws and then prevailing institutional investor corranercial remediation standards and practices. All rernediation work contemplated hereunder to be conducted by Tenant shall be conducted (i) in a diligent and timely fashion by licensed contractors acting under the supervision of a consulting environmental engineer, and (it) with such insurance coverage pertaining to liabilities arising out the remediation work as is then reasonably required by Landlord with respect to such activities. 'I fie selection ol'the contractors and consulting environmental engineer, the contracts entered into with such parties, and any disclosures to or agreements with any public or private agencies or parties related to tire remediation work in question each shall be subject to Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed. In addition, Tenant shall submit to Landlord, promptly upon receipt or preparation, copies of any and all reports, studies, analyses, correspondence, governmental comments or approvals, proposed removal or other remediation contracts, and similar information prepared or received by Tenant in connection with any remediation work or Hazardous Materials related to the Ground Lease Property. (iv) All costs and expenses with respect to all work contemplated under this Section 6A.10 shall be paid by Tenant, including without limitation, the charges of the remediation -work contractors, the consulting environmental engineer, all consultants and taxes or penalties assessed in connection with the remediation work and Landlord's reasonable fees anti costs incurred in connection with investigation of the I lazardous Materials tcica:c in question (and preparation, review and negotiation of the Remediation Plan with respect thereto) and any monitoring or reviewing of such remediation work, 6A.11 Indg-111-11—ity, Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect, and hold harmless Landlord„ and each of its affiliates, and each of their respective SAJAMUCHTERTowney\Ground Lease0owncyGroundLcasev9.12-03-03-dat 19 01111 V WAI commissioners, council members, trustees, beneficiaries, officers, directors, employees, attorneys, agents, successors and assigns (cacti a "Landlord Party" or "Landlord Indemnified Party") front and against any and all Claims, Damages and Expenses (as defined in section 10.01(a) herein) relating to or arising out of, or resulting front, in whole or in part, directly or indirectly, (a) any discharge or release into the environment (or suspected discharge or release) in, on, under or about the Ground Lease Property (or any Improvements thereon) or ally Flamirdous Material which occurs during the Term of this Lease, (b) all Hazardous Ninterial Activities occurring in, on, under or about the Ground Lease Property dUTiIIg the Tenet of this Lease, (c) any violation by any Tenant Party (as defined in Section 10,01(c)) of any, Environmental Laws in or about (or applicable to) the Ground Lease Property (or any Improvements thereon) occurring during the 'Cerra of this Lease or (d) Tenant's failure to comply with any of its covenants under this Article 6A. The "Claims, Darnages and Expenses" subject to the foregoing indemnification shall include, without limitation, (i) personal injury claims, (H) the payment of liens, (iii) diminution in the value of the Ground Lease Property, (iv) damages for tile loss or restriction on use of the Ground Lease Property (v) sums paid in settlement of claims, (vi) reasonable attorneys' fees, consulting fees and expert fees, (vii) the costs of any investigation of site conditions, and (viii) the cost of any repair, clean-up, remedial, removal or restoration worts or detoxification if required by any governmental or quasi -governmental agency or body or deemed necessary in Landlord's reasonable judgment. Landlord shall have the right (but not the obligation) to join and reasonably participate in, at Landlord's expense, any legal proceedings or actions initiated in connection with Tenant's or any Tenant Party's 1-huAtidous Materials Activities in, on or about tile Ground Lease Property, Tenant's obligations pursuant to the foregoing indemnity shall survive the expiration or early terilunation of this Lease and shall bind Tenant's successors and assignecs and inure to the benefit of Landlord's successors and assignecs. Notwithstanding anything to the contrary in this Section 6A. 11. the indemnity provided for under this Section 6AJ I shall riot apply to (y) any llazzrdous Materials contamination to the extent the same is caused by the willful misconduct or the independent gross negligence of Landlord or any Landlord Party, or to (z) any Claims, Damages and Expenses arising out of, or related in any way whatsoever, to the Existing Contamination. 6A.12 StirrenderorCrt)titidU-asellronerty- Prior to the Expiration Date, or any sooner termination of this Lease, Tenant shall (i) remediate (and complete remediation of) in compliance with the requirements of Section 6A, 10, any Hamrdous Materials released into the environment in, on. under or about the Ground Lease Property or the improvements during the Tcrm of this Lease, (ii) obtain final closure of any FlazMat Permit applicable to the Ground Lease Property and issued during tile Term of this Lease (which closure shall be without any continuing conditions or obligations) and (iii) remove ally personal Ground Lease Property, equipment, fixture, tank and/or storage device or vessel placed or installed in, tin or about the Ground Lease Property during the Term of this Lease which is contaminated by or which has previously contained Hazardous Material%. Notwithstanding the foregoing, Tenant shall have no obligation to take any action with respect to the remediation of any of tile F',xisting Contamination, or the removal of any equipment, fixture, imik and/or storage device or vessel placed or installed in, on or about tile Ground Lease Property that was used in connection with the Existing Contamination. S:UAMUCHTER\Downcy%Gmund Lca \Downey0roundLxwcv9,12-03-03.doe 20 6A. 13 Taxes and Liens. ' Tenant shall not permit or suffer any lien to be recorded against the Ground Lease Property or any portion thereof as a consequence of any Hazardous Materials Activities of Tenant or any Tenant Party, including any so-called state, federal or local "Super Fund" lien relating to the clean-up of any llayArdous Materials in or about the Ground Lease Property; provided, however, that such obligations of Tenant shall not be applicable to the extent any of the same pertain to any Ilazardous Materials contamination existing in, on, under or about the Ground Lease Property as of the Lffective Date. The to "Taxes," as defined in Section I OI (a), shall also include any levy, asscssmeriL lien or charge by air), applicablc governmental authority against the Ground Lease Property, the Improvements or Landlord assessed or imposed on account of or in connection with any Hazardous Materials located in, oil or about the Ground Lease Property. 6A.14 Itight of Entry, Notwithstanding any other to or provision of this Lease, Tenant shall permit Landlord or the Landlord's agents or employees to enter the Ground Lease Property at any time, upon reasonable notice, to inspect, monitor and/or when Tenant has failed to do so in a timely and reasonable manner as expeditiously as is practical given the nature and extent of the contamination and after receipt of written notice, take emergency or long-term remedial action, with respect to I lazardous Materials present on, emanating from or affecting the Ground Lease Property, or to discharge Tenant's obligations hereunder with respect to such Ilazardo ' us Materials, Provided. however, that with respect to a situation where the Landlord is entering the Ground I case Properly to take long-term remedial action or to discharge Tenant's obligations hereunder with respect to Hazardous Materials, Landlord shall give Tenant at lease forty-five (45) days' prior written notice, except in the event of an emergency requiring immediate action, in which case Landlord shall provide such prior notice as may be reasonable under the circumstances. All costs and expenses incurred by the Landlord in connection with perfomiing Tenant's obligations hereunder shall he reimbursed by Tenant to the Landlord within thirty ('30) days after Tenant's receipt of written request therefore. ARTICE 6B JAI W, fU, -LX14, MIt REMKIZE= Prior to Landlord's acquisition of the NASA Site, of which the Ground Lease Property is a part thereof, the NASA Site was owncd toad operated by NASA. Tenant acknowledges that it has been informed that, as part or NASA's use and operation of the NASA Site as research and development space, releases of Hazardous Materials occurred in, on, under or about the NASA Site (the "Existing Contamination"). In connection therewith, Tenant hereby acknowledges receipt of the existing Environmental Documents described on Exhibit "C" attached hereto. S:VAMUCKM-R\Downey%Ground [case \Do%vneyGroundLcucO,12-03-03,doc 21 613M Tenant Investitzation. Tenant acknowledges, represents and warrants to file Landlord, it has inspected, analyzed, investigated, reviewed and evaluated all aspects and characteristics of the Ground Lease property, including, without limitation, the physical nature and environmental condition of' the Ground Lease Property (including revioving all of the Existing Environmental Documents), to (lie full satisraction offenant, and will lease the Ground Lease Property solely on the basis of such examinations, and net on the basis of any information provided or to be provided by the Landlord or on the basis of any express or implied, oral or written representations, wvarrantiex, isidennutics, or obligations of the Landlord. In connection therewith, Tenant expressly acknowledges that neither the Landlord nor any agent, attorney, employee, or representative of tire Landlord has made any representation as to tile physical nature or environmental condition of the Ground Lease Property and that Tenant, in executing, delivering and/or performing this Lease has not relied upon any representation made by or on behalf oftlic Lmdlord. 611k3 "As -Is'" Waiver Tenant hereby expressly acknowledges that is leasing the Ground Lease Properly in an "As Is/Where Is" condition without warranty of -any kirid, express or limited, including. without limitation, physical condition or the existence or absence of Hazardous Substances on the Ground Lease Property, the existence of any violations of any Environmental Laws, and, hereafter, if the Ground Lease Property is not in all respects entirely suitable for the use or uses to which the Ground Lease Properly or any part thereof will be put, then it is the sole responsibility and obligation of Tenant to take such action as may he necessary to place ihe Ground Lease Properly in as condition entirely suitable for such use or uses, IN CONNECTION WITH '1 1113: ABOVE., TENANT HEREBY ACKNOWLEDGES AND REPRESENTS TO LANDLORD TIIAT, TU.NANT HAS HAD AMPLE OPPORTUNITY TO INSPECT AND EVALUATE. THL GROUND LEASE PROPERTY AND TI I V' EXISTING ENVIRONMENTAL DOCUMENTS AND THE" FEASIBILITY OF T11F USES AND ACTIVITIF.'s TE'NANT IS ENTITLF ' 1) TO CONDUCT aG N THE ROUND LF',ASE PROPI,'IUI'Y; THAT TENANT IS EXPERIENCED IN REAL FSTATE DEVELOPMENT; `IT IAT TENANT MAY RELY ENTIRELY ON TENANT'S EXP13RIENCE', FXPERTISE AND ITS OWN INSPECTION OFTHE GROUND LEASE PROPERTY IN ITS cuRRENTSTATE IN PROCET.DING WITH THIS LEASE; THAT EXCEPT AS LXPRESSLY PROVIDED IN Fills LEASE, TEANNT WILL. ACCEPT TIIE: GROUND LEASE PROvEwl-Y IN ITS PRESENT CONDITION; AND THAT, TO TIME EXTENT THAT TENANT'S OWN EXPERTISE WITH RESPECT TO ANY OF THE FOREGOING IS INSUFFICIEN'r TO ENABLE TENANT TO REACII AN INFORMED CONCLUSION, TENANT HAS ENGAGED THE SERVICES OF PERSONS QUALIFIED 1-0 ADVISE TENANT WITH izr..spj-*C,r TO SUCH MA'`fERS, TENANT IS NOT RELYING ON ANY EXPRESS OR IMPHED, ORAL OR WIUT`I'J_-'N R.1`11KESENTATIONS OR WARRAN'J"IFS MADE "r Y LANDLOIU) OR ANY LANDLORD PARTY WITH RESPECT TO 11113 CONDITION OF TILE GROUND [,EASE PROPERTY IN ENTERING INTO THIS LEASE. "The foregoing shall not he decined in limit or %vaive any express covenants, warranties, representations or obligations of Landlord set forth in this Lease. SMAMUCH'Ir-KFUDowneykGround Leu@U)owncyCroundLcmev9.12-03-03 doc 22 613.04 The Superior NASA Site Documents ® tinqact of Privatisation Remedicutionand/til hLASA Remediation (a) Subordination. Tenant hereby agrees that (i) each and all of its rights under this Lease shall be fully subject and subordinate to (A) the rights (if TRAD (and tiny successor to or replacement for IRAD, for an), reason) under the Assumption Agreement, and ally and all amendments or modifications of all any successor agreements thereto, hereinafter adopted, created, effected or put into place, (B) the rights ot'NASA, GSA and/or the United States of America (collectively, the "US Parties") tinder the NASA Documents, including, specifically, the USA and an), and all amendments or modifications of the NASA Documents hereinafter adopted, created,effected or put into place and (C) the rights of Landlord and the ""Coordinating; Party," including, without limitations, the rights of the same when acting on behalf of one or more of the "Owners," ru; those tcmis are defined in the Assumption Agreement, under the I -SA andlor the CC&Rs, andlor the NASA Documents and all amendments or toodirications of (and any successor agreements to) the same hereafter adopted, mated, effected or put into place (collectively, as the same may exist from time to time, the "Superior NASA Documents"), (ii) Tenant shall not take or permit arty action or ornission in, on, under or about the Ground Lem Property which ,shall breach or violate any of the obligations of an "Owner" (including without limitation, any ground lessee) of all or any portion of the Ground Lease Property, under ally or the Superior NASA Documents, and (iii) Tenant shall strictly and timely perform each and all of the obligations applicable to the "Owner", including without limitation, the obligations of each subtenant of each portion of the Ground Lease Property, under each or the Superior NASA Documents. (b) Landlord's R to Parties tinder the Superior, NASA Stu Doctilincla. _Retp Tenant ackno"Iedgei that Landlord has entered into the various Superior NASA Site Documents in order to benefit the various owners and ground lessees of the NASA Site, including, without limitation, Tenant, salad to facilitate execution and implementation of the Superior NASA Documents. Tenant agrees that notwithstanding any provision of this Lcasc (or any other document) to tile contrary, and notwithstanding the Landlord's designation andlor performance as the "Coordinating Party" under one or more or tile Superior NASA Site Documents, (i) in no event and in no case shall IRAD, (or any successor or replacement thereof) or any of their respective agents, contractors, subcontractors, employees or representatives (collectively, the 111RAD Parties") be considered, churacterivcd, deemed or interpreted to be the agent, contractor, subcontractor or representative of Landlord or any agency, department or official thereof and in no event shall Landlord be legally responsible for any of acts, klinissions, negligence or misconduct of the IRAD Panic,% tinder any legal theory whatsoever, (if) in no event and in no case shalt any of the US Parties or any of their respective agents, contractors, subcontractors, employees or representatives (collectively, the "US Representative Parties") be considered, characterized, deemed or interpreted to be (lie agent, contractor, subcontractor or representative of Landlord (or any agency, department or official thereof) anti in no event shall Landlord be legally responsible or liable, in whole or in pan, for any of the acts or ornissions of any of the US Representative Parties under any legal theory whatsoever, (iii) in no event shall any of the MAD Parties or any OS Rcprcscntative Parties ever he considered a Landlord Patty (tinder any legal theory) for purposes ofthe application and interpretation of this Lease and (iv) Tenant shall indemnify, defend and ]told Landlord harmless, from any and all Claims, Damages and Expenses, SMAMVCHTER\DowwylGround lmcV)owncyCroundt.ensrv9.12-03-03.doe 23 its defined in Section 10.01 (a), asserted against or incurred by Landlord in connection with any claim or action by Tenant which is i it consi %tent in whole or in part with Tenant's agreements under clauses (i), (ii) and/or (iii) above, Tenant hereby waives, releases and discharges forever Landlord and all Landlord Parties from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and fivure. arising out of or in any way connected with the Tenant's use, maintenance, ownership or operation of the Ground Lease Property, any physical, title or other defects in, of, or related to the Ground Lease Property, ;my lia7Ardous Materials on the Ground Lease Property, or the existence of Hazardous Materials contamination in any state in, on, under, or adjacent to the Ground Lease Property, however they came to be placed there, without qualification. Tenant acUowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: As such relates to this Section 613.05, Tenant hereby waives and relinquishes all rights and benefits which it may have tinder Section 1542 of the California Civil Code, Tenant's Initials Notwithstanding the foregoing, the release set forth in the Section 613.05 shall not apply to any claim, liability, obligation, demand or cause of action to the extent the same results front (i) any default by Landlord in the performance of its obligations under this Lease, or, subject to the provisions of the CC&Rs, under the CC Rs or (ii) any I lazardous Materials released into the environment in violation of Environmental Laws as the result of any act of Landlord following the Commencement Date constituting gross negligence or will misconduct. (a) Re? ' ease Reopiremcig. Tenant hereby agrees that it shall require catch Subtenarn and Occupant of any portion of the land or improvements constituting the Ground Lease Property to execute and deliver to Landlord a release of clauris in the form attached as Exhibit "N', (an "Occupant Release") prior to permitting any such Subtenant or Occupant to lease, sublease or othenvise, obtain any tenancy, license, casement or other possession rights under any document as to, or otherwise occupy, any portion of the land or improvements constituting the (;round Lease Property, To the extent permitted under the NASA Documents, in S.-VAMUCW1ERU)awnqAr3round Lco=MowmyGroundLmcv9.12-03-03.doc 24 lieu of requiring an Occupant Release to be signed by each Subtentint or Occupant as set forth herein, Tenant, in its discretion, may elect to indemnify and hold Landlord harmless from any Losses or Liabilities resulting from any action brought or clairried by Or through any ."subtenant or Occupant against Landlord which would have been released or barred had such Subtenant or Occupant signed the Occupant Release. (b) Bindinp on Successors. The obligation to obtain the Occupant Release from each Subtenant or Occupant shall be binding upon each party that acquires any type of leaschold interest in all or any portion of the Ground Lease Property at any time following the Commencement Date, and such obligation shall be covenants running with the land as to the Ground Lease Property. 7.01. Construction of Irqvrovernerns and Maior lmorovements Subject to the terons and conditions contained in this Lease, Tenant, at its sole cost and expense, shall be entitled to (i) remodel, titter, repair, replace or make additions to any of the Fxnaing Improvements (defined in Section 1.01), and (ii) to construct, cause to be constructed, or allow to be constructed by any Subtenant or Occupant, such new improvements on or about the Ground Lease Property as Tenant deems necessary or appropriate in connection with TLnant's overall development of the Studio Property (the "Nevi, I in prove ments"), The Existing Improvements and the New Improvements are each sometimes individually referred to as 'an "Improvement" and collectively as the "Improvements," In the event that the total hard construction costs for any individual Improvement exceeds $1,000,000,00, such Improvement shall be deemed to be a "Major Improvement." 7.02. Construction Standards All construction, alteration or repair work permitted herein shall be accomplished expeditiously and diligently. Tenant shall take all reasonably necessary measures to minimize any damage, disruption or inconvenience caused by such work anti make adequate provision for the safety and convenience of all persons affected thereby, In addition, Tcnant shall pay (or cause to be paid) all costs and expenses associated therewith and shall indemnify and hold Landlord harniless from all damages, losses or claims attributable to the performance of such work. Dust, noise and other affects of such work shall be controlled using the best accepted methods customarily utilized in order to control such deleterious effects associated Nvith construction projects in a populated or developed area, Tenant shall also erect and properly maintain at all times all necessary safeguards for the protection of workers and the public. S:VAMVCH7ERU3awaey%Ground LcwcWawncyGroundLcascy9.12-03-03.doc 2$ 7.03. Utility Work Any work performed by or on behalf of Tenant or any Occupant or Subteriant, to connect to, repair, relocate, maintain or install any storm drain, sanitary sewer, water line, gas time, telephone conduit or any other public utility service shall be performed so as to minimize interference with the provision of such services to occupants and other persons. 7.04. Use of flans With respect to any Major Improvement, Elie contracts with any architect, other design professional or any general contractor shall provide, in form and substance reasonably satisfactory to Landlord, for their assignincrit to Landlord in the event that Lease is terminated due to Tenant's default hereunder. In such event, Landlord may, at its election, use ally plans and specifications to which Tenant is then entitled pursuant to any such contract upon the payment of any sums due to any party. Landlord's right to elect to use the plans and specifications as described above shall be subordinate to and shall not defeat the rights of any tender for improvements constructed on the Ground Lease Property and Landlord shall execute such agreements as a lender may reasonably request to confirm such subordination. 7.05. Comnliance with Construction Documents and Laws. Issuance of Permits All New Improvements and refurbishment of existing improvements shall be constructed in substantial compliance with all applicable local, state and federal laws and regulations. Tenant shall have the sole responsibility for obtaining all necessary permits and shall make application for such permits directly to the person or governmental agency having jurisdiction, 7.06. Landlord's Cooperation Landlord shall cooperate with and assist Tenantas reasonably required inTenant's efforts to obtain all governmental consents, approvals, permits or variances which may be required for the performance of any construction permitted tinder die terms of this Lease, including Landlord's joinder in any application for any such consent, approval, permit or variance where joinder therein ray the owner of the Ground Lease Property is required by law, provided that any such joinder shall be at no cost to Landlord, 7.07. Rights (if Access Provided they shall first present themselves to "Tenant's on-the-job supervisor and furnish reasonable evidence of their identity, representatives of Landlord shall have the right of r&uonable access to the Ground Lease Property and the Improvements; without charges or fees, and at norrnal construction hours during the period of construction, for the purposes of ascertaining compliance with the terms of this Lease, including, but not limited to, the inspection of the construction work being performed. Landlord shall from time to time provide Tenant with Cite names of those authorized to perform such inspections. Landlord's access shall be reasonably calculated to minimize interference with Tenants construction and/or operations. S:UAMUJCMR0owneAGround LeasekDovmcyCroundLowev9.12-03-03.doc 26 7.08. Notice ofConiqletion Upon completion of construction of any Major Improvement, Tenant shall file or cause to be filed in the Official Records of the County of Los Angeles a Notice of Completion (the Landlord, at no cost to Landlord, two (2) sets of cronoflex or mylar final as -built plans anif specifications of each Major Improvement. 7.09. Demolition of I Landlord hereby acknowledges that the Existing Improvements have very little value and are not part of 'I'cnant*s overall development plan for the Studio Property, including the Ground [..case Property, Accordingly, Tenant may demolish any or all of the E'xisting Improvements, is and when Tenant deems appropriate. During the Tenn, Tenant may also remodel, repair, make additions to, and demolish any of the New Improvements, as Tenant may deem necessary or appropriate. 7.10, Protection (if Landlord Nothing in this Lease shall tic construed as constituting the consent of Landlord, express or implied, to the performance of any labor or the famishing of any materials or any specific improvements, alterations of or repairs to the Ground Lease Property or any part thereof by any contractor, subcontractor, laborer or materialman, nor as giving Tenant or any other person any ' right, power or authority to act as agent of or to contract for, or permit the rcndering of, any services, or the furnishing of any materials, in such manner as Nvould give rise to the filing of mechanics' liens or other claims against the fee of the Ground Lease Property or any Improvements thereon. Landlord shall have the right at all reasonable times to post, and keep posted, on the Ground Lease Property any notices which Landlord may deem necessary for the protection of Landlord and of the Ground Lease Property and (tic improvements from mechanics' liens or other claims. Tenant shall give Landlord ten (10) days prior written notice of (tic commencement of any work to be done on the Ground Lease Property to enable Landlord to post such notices. In addition, Tenant shall make, or cause to be made, prompt payment of all monies due and legally owing to all persons doing any work or furnishing any materials or supplies to Tenant or any of its contractors or subcontractors in connection with the (!round Lease Property and the Improvements. Subject to Tenant's right to contest the same prior to payment, Tenant shall keep the Ground Lease Properly and the Improvements free and clear of all tnechani& liens and other liens on account of work done for Tenant or persons claiming under it. Tenant agrees to and shall indemnify and save Landlord harniless against liability, loss, damages, costs, attorneys' fees and all other expenses on account of claims of lien of laborers or in,atcrialnicri or others for work performed or materials or supplies .furnished to Tenant or persons claiming under it. S:\JAMUCffMXDowncyWffound Lzase\Do-neyGmandLeascv9,12-03-03-doc 27 In the event any lien is recorded, Tenant shall, upon demand, furnish the bond described in California Civil Code Section 3143, or successor statute, which results in the removal of such lien from the Ground Lease Properly, or other evidence satisfactory to Landlord that such lien will be paid, removed or discharged as a claim against the Ground Lease Property. UUMM- Should any claims of' lien be filed against the Ground Lease Property or the Improvements, or any action affecting the title to the Ground Lease Property or the Iniprovemcirts be commenced, the party receiving the notice of such lien or action shall forthwith give the other party written notice. ARTICLE 8. 0WeEVN%V,IPr J 8.01. Ownership of New -Teml All New Improvements constructed on the Ground Lease Property by Tenant shall, during the Tenn, be and remain the property of Tenant; provided, however, that'fcnani's rights and powers Nvith respect to the New Improvements are subject to the terms and limitations of this Lease anti Tenant's interest in such New Improvements shall terminate upon the expiration or sooner termination of this Lease, Once constructed, Tenant shall not remove, waste or destroy any New Improvements from or on the Ground 1-case Property, except ws specifically permitted by this Lease, 8.02. lZeniovalofilersoqatPrgpertyanti Ownqrsliir)tat 'remiinatioii At the expiration or sooner termination of the Tenn. Landlord may, at Landlord's sole election, require the removal from the Ground Lease property, at Tenarifs sole cost and expense, of all personal property (other than fixtures), or of certain personal property (other than fixtures), as specified in the notice provided for below. A demand to take effect at the nonnal expiration cal" the. Term shall be effected by notice given at least thirty (30) days before the expiration date. A demand to take cffcct on any other termination of the Term shall be effectuated by notice given concurrently with notice of such termination or within ten (10) days after such termination, Tenant shall be liable to Landlord liar costs incurred by Landlord in elfecting the removal of personal property which Tenant has failed to remove after demand pursuant to this Sectiom Tenant may remove any personal property front time -to -time within forty-five (45) days after the expiration of the Tenn. Tenant shall repair all damage (stractund or otherwise) caused by any such removal, provided that damage to Improvements which are obsolete economically or functionally or which are riot material need not be repaired so long as the Improvements are or are made structurally sound. Any personal property not removed by Tenant within forty-five (45) days following expiration of the Term shall be deemed to be abandoned by Tenant and shall, without &VAWUCHTERU)owncyWkound LcmuMawncyCroundlAasev9,12-03-03.doc 28 compensation to Tenant, then become Landlord's property, free and clear of all Claims to or against them by Tenant or any other person. Tenant shall pay when due and shall hold Landlord harmless from any liability for all charges for water, gas, sewage, electricity, telephone and other utility services supplied to the Ground Lease Property. ARTICLE 10. (a) "Claims, Damages and Expenses" shall mean any and all claims, demands, suits, liens, encumbrances, causes of action, liabilities, obligations, damages (including, without limitation, other direct damages), penalties, flues, judgments, forfeitures, losses., costs, or expenses (including reasonable attomey's, consultants, and expert fees), but specifically excluding any form of consequential damages. (b) "Landlord Indemnified Parties" shall mean Landlord and each of its affiliates, and each of their respective commissioners, council members, trustees, beneficiaries, officers, directors, employees, attorneys, agents, successorsand assigns, (c) "Tenant Party" or "'Fenant Parties" shall mean one or more of Tenant, any Subtenant, any Occupant or any of their respective partners, members, employees, officers, managers, directors, agents, contractors, guests or invitees. Except to the extent directly resulting from Landlord's gross negligence or %villfill misconduct, Landlord shall not be liable, and Tenant hereby waives on its behalf, and oil behalf of any Tenant Party, all Claims, Damages and Expenses it, or any Tenant Party may now or in the future have or bold against Landlord or any Landlord Party for any loss, damage or injury of any kind or character to any person or property (i) arising from any use of the Ground Lease Property, the Improvements or any part thereof, (ii) caused by any defect in any Improvements or in any equipment or other facilities located on or about the Ground Lease Property, (iii) caused by or arising from any act or omission or Tenant or any Tenant Party, (N) arising from any accident in, on, or about the Ground Lease Property or any of the Improvements, or (v) occasioned by the failure of Tenant to maintain the Ground Lease Property or any Improvements in a safe condition. SMAMUCFTMIV,Downcy\Graund LcaseWowncy0roundfzzscy9.12-03-03.doc 29 wMaI= 10,03. lndemnijy_by'rtnant Tenant shall indemnify, defend by counsel selected by Tenant, and reasonably acceptable to Landlord, and hold harinless each and all of the Landlord Inderrinified Parties from and against all Claims,, Damages and Expenses asserted against or incurred by any ofthe Landlord Indemnified Parties arising or resulting from, relating to, or in connection with (i) loss of life, personal injury andlor damage to goods or property of any Tenant party arising from of out or any occurrence, act, cause, event or ornission occurring in, on, under, upon, about or at the Ground Lease Property (or any improvements thereon, during the Terra or any holdover period, (ii) the occupancy or use by Tenant of the Ground Lease Property (or any Improvements thereon) or any part thereof, (iii) the negligence or willful misconduct ol—fcnant or any of its members, employees, officers, managers, directors, agents, contractors, guests or invitees, (iv) Tenant's default under, breach or failure to comply with any provision or obligations of Tenant under this Lease, or (v) any defect in the Ground Lease Property or the Improvements, except to the extent such Claims, Damages and Expenses are caused by the negligence or willful misconduct of Landlord (collectively, the "Indemnity Obligations"), Tenant agrees to cause any sublease for all or any portion (if the Ground Lease Property to include an indemnification provision from such subtenant in favor of Landlord and Landlord Parties, fit case any of (lie Landlord Indemnified Parties shall be made a party to any litigation commenced by or against Tenant with respect to any of the Indemnity Obligations, Tenant shall accept a tender of the defense and handling of such litigation by Landlord, and Tenant shall, notwithstanding any allegation of negligence or fault an the part of Landlord, defend the Landlord Indemnified Parties in the manner set forth herein. In the event Tenant fails to provide, at its cost, for the defense of such litigation, Tenant shall be liable to Landlord for all costs, expenses and reasonable attorneys fees thereafter incurred by Landlord in providing its own defense; provided, however, that to the extent any of the Landlord Indemnified Parties is ultimately held to be liable for all or part of any Claims, Damages and Expenses, then Landlord shall reimburse Tenant its proportionate share of the cost of any Claims, Damage and Fxpenses incurred byTenant and attributable toany of the Landlord Indemnified Parties. EYMN 4 a 11M 11.01. General Insurance IkeQuiremem All policies of insurance provided for herein (collectively, "Insurance) shall be written its primary policies (without "contribution" or "solely in excess of coverage carried by Landlord" provisions (with responsible and solvent insurance companies authorized to do business in California with a policyholder's rating of" A-'" or better and a financial rating of'"Vill" or better in Best's Insurance Reports. Prior to the Commence gent Date, Tenant shall supply Landlord (and at all times during the Term of the Lease keep on file with Landlord) a true and correct copy of 111 such policies or a certificate of' insurance accurately reflecting the coverage required hereunder, together with satisfactory evidence showing that all premiums thereon have been paid and, thercaller, as additional premiums become due, upon request, Tenant shall supply Landlord with satisfactory evidence that said premiums have been paid. Notwithstanding anything, to the S:UAMUCHTuRZowne)tGrmd Lcmoowney0roundizasev9.12-03-03,doc 30 i" contrary contained within this provision. Tenant's obligations to carry insurance as provided herein may be brought within the coverage of a so-called "blanket" policy or policies of insurance carried and maintained by Tenant, so long as such policy or policies segregates the amount of coverage applicable to the Ground Lease Property. Prior to the expiration of any insurance policies requited of Tenant by this Lease, Tenant shall furnish to Lwidlord renewals or binders in a commercially reasonable form satisfactory to Landlord. In the event that Tertant fails to procure, maintain anWor pay for, at the times and for the duration specified herein, any, insurance required hereunder, or fails to carry insurance required by any Law or Legal Requirement, Landlord may (but without obligation to do so) at any tinge or from time to time, allcr ten (10) days' written notice, procure such insurance and pay the premiums therefor, in which event Tenant shall repay to Landlord all sums so paid by Landlord, together with Interest thereon and any costs or expenses incurred by Landlord in connection therewith, within ten (10) days following Landlord's written demand to Tenant for such payment. 11.02. Tvnes and Limits of Coverage Tenant, at its sole cost and expense, shall, during the entire Term of this Lease, procure, pay for and keep in full force and effect: (a) commercial general liability insurance with respect to the Ground [,ease Property and the operations ol; or on behalf of Tenant in. on or about the (!round Lease Property, including, but, not limited to, owned and hired motor vehicle liability, cross -liability and scverability of interests, death and or personal injury, XC&IJ (during; periods when excavating, trenching, or underground digging is undertaken on the Ground I -ease Property), broad form contractual (insuring all of Tenant's indemnity obligations under this Lease and naming Landlord and any other party reasonably designated by Landlord is additional insured), owner's protective, broad -form property damage, liquor liability, garage keepurs legal liability, (ditring such periods as valet parking services ary provided on the Ground Lease Property, if any), and productfcomp)eled operations liability coverage for not less than Ten Million and No/100 Dollars ($10,000,000.00) (or such greater limits as may be required from time to mile by Landlord consistent with custornary and commercially reasonable insurance coverage on properties similarly constructed, occupied and maintained), combined limit per occurrence for bodily injury, death said property damage liability, (b) worker's compensation coverage as required by law, together with employers,' liability coverage with a limit ot'neat less than One Million and No/100 Dollars ($),000,000A)1- (c) "all-risk" or Special Causes of Loss insurance, in amounts reasonably satisfactory to landlord which policy shall name include, to the extent available at a commercially reasonable costs, coverage for loss occasioned by reason of (i) earthquake, (h) flood (if the Ground Lease Property shall be situated in an area designated by the United States Govemmeni, or any political subdivision thereof, as as "flood area" or by similar designation the result of which is to require such insurance coverage a% a condition to obtaining federally funded mortgage loans or obtaining a mortgage loan from a federally regulated institution), and (iii) sprinkler leakage, in an amount equal to the full replacement cost of the Improvements; S:VAMUCHTFRRVawncytGround LeucM)owney0roundLeasev9.12-03-03.doc 31 (d) insurance against fire, extended coverage, vandalism, malicious mischicfand such other additional perils as now are or hereafter may be included in the standard Special Form policy in general use in Los Angeles County, California, insuring the Improvements oil the Ground Lease Property, merchandise, trade fixtures, furnishings, equipments and other items of personal property of Tenant located on or in the Ground Lease Property, in an amount equal to not less than eighty percent (80%) of the actual replacement costs thereof, and shall include rental loss coverage for a minimum of twelve (12) months, (e) boiler and pressure vessel insurance in amounts reasonably satisfactory to Landlord; (f) at all times when any construction is in progress, builder's risk insurance, completed value form, covering all physical loss in an amount and in a form reasonably satisfactory to Landlord; and (g) such other or further insurance, in such amounts and in such form, as is customarily obtained by owners of properties similarly constructcd, occupied and maintained and which is available at commercially reasonable rates. 11.03. Soccific Insurance Police i ProviLS Mon s Fach policy evidencing insurance required to be carried by Tenant pursuant to Section 11.02 herein, shall contain the following provisions and/or clauses: (i) a cross -liability clause applicable to public liability coverage, (ii) a provision that such policy and the coverage evidenced thereby shall be primary and that any coverage carried by the Landlord shall be noncontributing with respcet to :any policies carried by Tenant, (iii) a provision including Landlord (and Undlord's officers and employees with respect to the commercial general liability insurance) as an additional insured to the extent of its interest; (iv) a scverability clause (applicable to public liability coverage); (v) a provision that the insurer will not cancel or change the coverage provided by such policy without first giving Landlord thirty (30) days' prior written notice; (vi) to the extent obtainable, a provision to the effect that any amounts payable by virtue of loss of rental incorne or business interruption, if any, shall be computed and stated separately in any settlement entered into by the insurer under the policy involved and (vii) an endorsement to the effect that the act or omission of Tenant or any Tenant Party, any occupancy or use of the Ground Lca.w Property for purposes more hazardous than permitted by such policy, ally foreclosure or other proceedings relating to the (Iround lease Property or any change in title to or ownership of the Ground Lease Property will not invalidate the policy as to Landlord. Tenant may have reasonable deductibles solely in conjunction with the commercial general anti automobile liability coverage set forth above; provided, however, Tenant shall be responsible for, pity, defend indemnify and hold Landlord barmless from, any and all damages, liability, claims, costs or expenses up to the amount of such deductible(s), plus any losses over and above the insurance coverage required hereunder. SMAMUCHTERMewcAGround LcasckD0wrcyGrovndLgam9. 12-03-03.doc 32 11,04. Loss Pavable The loss under all insurance policies insuring against property damage to the Improvements shall be payable to Tenant, or to any lender of Tenant. 11,05. Comp Lan�Le with Insurance Policies — — Tenant shall not violate, or permit to be violated, any of the conditions of any of the policies of insurance required under this Article 11. 11.06. Waiver of Subrqggism Landlord and Tenant each waive any rights either may have against the other oil account of any loss or damage occasioned to Landlord or Tenant, as ilia case may be, their respective property, the Ground Lease Property or the contents of the Ground Lease Property arising from any risk covered by casualty insurance carried (including, for purposes of this pmvisiou., any risk for which Landlord has elected to self -insure) or required to be carried pursuant to this Article 11, when, and to the extent, that such loss or damage is actually compensated pursuant to such insurance. Landlord and Tenant also agree that the insurance policies, ifany, obtained by each of them pursuant to this Lease shall contain endorsements waiving any right of subrogation of which the insurer may otherwise have against the non -insuring party. The foregoing release and the foregoing requirement for waivers of subrogation shall be operative only so long as the same shall neither Preclude the obtaining of such insurance nor diminish, reduce or impair the liability of any insurer. 11.07. Self Insurance Notwithstanding the foregoing requirements of this Article 11, Tenant shall be entitled to allow one ormorc Subicnarns, as defined in Section 1.04, to self -insure all or a portion of the insurance required under Section 11.2 provided each such Subtenant has and maintains a tangible net worth of it least 'twenty-mvc Million Dollars ($25.0000,000), such amount to be adjusted every five (5) years in accordance with changes in the CPI in the manner its set forth herein. For purpose of this Section 11,07, the tangible net worth requirement shall be adjusted based upon the increase in the Consumer Price Index for then current year', as shown in the Consumer Price Index ("CPI") for "All Items — US, City Average - Los Angeles" over ilia same C111 for 2003 the "Base Yeae'), computed as a percentage of the base figure. For example, assuming the CPI for the Base Year is 110 and the CPI for the current year is 121, the percentage to be applied would be 1211110 = I.10 = I 10 percent. In the event that the CPI is no longer available, the replacement index to be used shall be the one reported in the U.S. Department of Labor's most comprehensive official index then in use and most nearly answering the foregoing description of the index to be used. S,VAM1L1CHTERU:?owncy%Gffauad LcmdUQowncyGroundLeascv9.12-03-03.doc 33 M-1 U-00-M JU110 U DIO IM V tole (a) "Condemnation" means (i) the exercise of any governmental power in eminent domain, whether by legal proceedings or otherwise, by a condemnor, and (ii) a voluntary sale or transfer to any condemnor, Ober under threat of condemnation or while legal proceedings for condemnation are pending. (b) "Date of taking" means the date the condemnor has the right to possession of the property being condemned, (c) "Award- means all compensation, sums or anything of value awarded, paid or received on a total or partial condemnation, (d) "Condernnoe' means any public or quasi -public authority, or private corporation or individual, having (lie power of condemnation. 12.02. Parlies'lZiahts and Oblivations to Be Governed By Lease If during the Term of this Uasc, there is any taking of all or any part of the Ground I - ease Property, any improvements on the Ground Lease Property or any interest in this Lease by condemnation, the rights and obligations of The parties shall be determined pursuant to the provisions of this Article 12. 12.03. Total Taking If the Ground Lease Property is totally taken by condemnation, this Lease shall terminate on the date of the taking. 12,04. Effect ofPartial If any portion of the Ground Lease Property or the Improvements thereon is taken by condemnation, this Lease shall remain in effect 45 to the Portion remaining, except that Tenant may elect to terminate this Lease if the remaining portion of the Ground Lease Property is rendered unsuitable (as defined herein) for "tenant's continued use. The remaining portion of the Ground Lease Property shall be deemed unsuitable for Tenant's continued use if, following a reasonable amount of reconstruction, Tenant's business on the Ground Lease Property could not be operated at an economically feasible level as reasonably determined by Tenant. Tenant must exercise its right to terminate by giving Landlord written notice of its election within ninety (90) days after the nature and extent of the taking have been finally determined. Such notice shall also specify the date of termination, which shall not be prior to the date of taking. Failure, to properly exercise the election provided for in this section will, result in this Lease continuing in full force and effect, except that Rent shall be abated pursuant to Section 1105 below. SAJAMUCHTERN13owncy\Ground Leaso\DovmcyGroundLeucv9.12-03-03.doc 34 12.05. ElTect of Partial Takinjg on Rent If any portion of the Ground Lease Property is taken by condemnation and this Lease remains in full force and effect as to the portion of the Ground Lease Property not so taken, the Rent shall be reduced as of the date of taking in an amount determined by sutracting the Rent, as the case may be, attributable to that portion of the Ground Lease Property so taken at the time immediately prior to such taking and taking into account such things as any improvements located thereon. All other obligations of the Tenant under this Lease shall remain in full force and effect. 12.06. Waiver of CCP Section L20. 110 Each party waives the provisions of the Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court to ten-ninate this Lease in the event of a partial taking of the Ground Lease Property. Awards and other payments on account of a taking, less costs, fees and expenses incurred in the collection thereof ("Net Awards and Payments') shall be applied as follows: (a) Net Awards and Payments received on account of a taking other than a total taking or a taking for temporary use shall be held and applied to pay the cost of restoration of tile Ground Lease Property and any Improvements located thereon. The balance, if any, shall be divided between Landlord and Tenant in the ratio, as nearly as practicable, which (i) the then value of Landlord's interest in the Ground Lease Property (including its interest hereunder) be us to (ii) the then value of Tenonfs interest in the remainder of the Term (for such purposes the Term shall not be deemed to have terminated even if Tenant so elects under Section 12.04). In case of a taking other than a total taking or a taking for temporary use, Tenant shall furnish to Landlord evidence reasonably satisfactory to Landlord of the total cost or the restoration as provided for herein. (b) Net Awards and Payments received on account of a taking for temporary use shall be paid to Tenant. (c) Net Awards and Payments received on account of a total taking shall be allocated as follows: taking. Second: There shall be paid to any mortgagee of Tenant an amount equal to the sum of any unpaid principal amount of the indebtedness secured by the Ground VJAMUCHTERDowricylGround LcmcMovmeyGroLyndL49sev9.12-03-03.doc 35 ms Lease Property, if any, and any interest accrued thereon, all as of the date on which such payment is made. Third: There shall be paid to Tenant an amount equal to the value of the interest of Tenant in the remainder of the Term, including the value of the ownership interest in and use of the Improvements constructed on the Ground Lease Property, determined as of the date of such taking, after deducting the amount, if any, paid to any mortgagee of Tenant pursuant to clause second. Stich determination shall be made as if the Term shall not have terminated. Tenant shall be entitled to any compensation based upon the difference between the then fair market rent of the Ground Lease Property and the rent actually being paid pursuant to this Lease ("bonus value"). Fourth: Any remaining balance shall be paid to Landlord. 12.08. Voluntary Convevance A voluntary conveyance by Landlord to as public utility, agency or authority under threat of a taking under the power of eminent domain in lieu (if formal proceedings pursuant to the imposition ot'gover nmental requirements for dedication or otherwise shall be deemed a, taking within the meaning of this Article 12. 12.09. Power of Landlord Tenant acknowledges that the original named Landlord hereunder is comprised of a public municipal corporation and that as such. Landlord and its City Council, Boards, Commissions, Departments, employees, officers, agents and representatives exercise certain police powers, taxation powers, and other governmental powers duties and authorities over the Ground Lease Property and are required to follow applicable provision-, and requirements of the City Charter of the city of Downey, the Downey Municipal Code, ilia California Environmental Quality Act (Public Resources Code § 21000 at seq,, "CEQA"), and other ordinances, regulations, statutes and laws (collectively the "Entitlement Laws") regarding the review, consideration, processing and approval of all entitlements and other administrative or ministerial approvals, permits, plans or actions required for the development of the Ground Lease Property. The Ftitittement Laws require, among other actions, the filing of applications, payment of processing 11ces, and public notice and public hearings regarding the any entitlements and the (;round lease Property. Tenant acknowledges that Landlord reserve,, the right (without qualification or restriction under any statute, law ordinance, order, code or regulation) to approve, conditionally approve, modify, or deny any entitlements and all other administrative or ministerial approvals, penrlils, plans or actions required for the development of the Ground Lease Property. Nothing contained in this Lease shall in any manner (a) limit, restrict or affect (or constitute any form of promise to limit, restrict or affect in the future) in any manner the exercise: by Landlord of its police powers, taxation powers or any other governmental powers, duties and authorities under ilia Entitlement Laws or any other statutes, laws, ordinances, or regulations or (b) except as expressly provided to the contrary herein, create any ditty or obligation of Landlord (or any other governmental body) to cooperate with or assist Tenant in SMAMUICHTEROmmy%Ground Lcasc\DowncyGroundtx&qcv9.12-03-03.doc 36 the development of the Ground Lease Property; provided, however, that in its dealings with Tenant in processing any entitlements, Landlord shall treat Tenant on generally the same basis as it would deal with any similarly situated ground lessee or owner of real property located in the City of Downey, without regard to Landlord's interest in the Ground Lease. oil F.WM49161DIJIM-10 11 "'Itt Except as otherwise provided in Section 13.02, Article 15 and in the event of judicial foreclosure, trustee's sale or deed or assignment in lieu of foreclosure of a Leasehold Mortgage, Tenant and its successors and assigns shall not assign their interest in this Lease of ally portion hereof without the prior written consent of Landlord. Landlord's consent shall he granted upon the terms and conditions hereinafter provided, 'File consent by Landlord to an assignment hereunder shall not in any way be construed to relieve Tenant from c6hrifinng the express consent in writing of Landlord to any further assignment, Notwithstanding any other provision of this Leasc,Tenant shall be entitled to assign this Lease to any entity in which Tenant, or any affiliate of Tenant, has a controlling interest. 13.02. Landlord's Consent Tenant's right to make an assignment shall be subject to compliance with the following terms and conditions: (a) At the time of such assignment, this Lease shall be in fall force and effect and either no default then exists or no default will exist upon consummation of the assignment; (b) The assignee's financial condition -,hall be subject to Landlord's approval, which approval shall not lie unreasonably withheld or delayed, and shall be equal to or greater than the Tenant's condition at tile time of the execution of this Lease, and (c) The assignee shall have a reputation in the community for honesty and integrity, 13.03. Foreclosure of Leasehold Morteage Upon the foreclosure or trustee's sale or deed or assignment in lieu of foreclosure of any Leasehold Mortgage, the person or entity which was Tenant under this Lease prior to such sale or deed or assignment in lieu will not be liable for obligations arising under this Lease, save and except for Rent accruing prior to such sale or deed or assignment in lieu; provided that the purchaser at such sale or transferee by such deed shall be liable for the payment of` all Rent becoming due with respect to the period during which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder. 8:UAM%)CHTERVovYnWGround Lcose0owmyGroundLeascv9.12-03-03.dou 37 13.04. Subleases and other Possessory Interests Nothing in this Article 13 shall limit Tenant's right to sublease all or any portion of the Ground Lease Property for any of the uses permitted pursuant to The terins of this Lease or the Acquisition Parcel Purchase Agreement, or to grant any other type of possessory interest in and to any portion of the Ground Lease Property (collectively, a "Sublease"). No approval from Landlord shall be necessary with respect to any Sublease, ARTICLE 14. 12"-ITIM01 If 14.01. Defaults by Tenant Any of the following occurrences shall constitute a "default" under this Lease: (a) Tenant shall at any time be delinquent in the payment of any Rent or other monetary sum called for by this Lease for more than ten (10) days following written notice from Landlord to Tenant (a "Monetary Default"); (b) Except as set forth in Section 16.04 hereof, 'renant shall at any, time fail to keep and perfonn any of its covenants or agreements herein contained other than a Monetary Default (a "Non-monetM, Default'), and should such Non -monetary Default continue for thirty (30) days after written notice thereof frown Landlord to Tenant (or in the case of any, Non-monefiry Default which results in a condition of the Ground Lease Property which is hazardous to life, within fourteen (14) days afterwritten notice thereof) specifying the particulars of such default, Provided, however, that if such Non -monetary Default is of a nature that curing such default will take more than thirty (30) days (or in the case of a default hazardous to life, fourteen (14) days) and Tenant has commenced such cure within the foregoing time period, Tenant shall not be deemed in default so long as Tenant diligently pursues completion of such cure; (c) Tenant assigns (whether or not such assignment is deemed to be effective) this Lease (or any rights herein) in violation of Articles 13 and 15 herein, or sells, transfers or conveys, the whole or any part of the Ground Lease Property or any Improvement thereon in violation of this Lease; (d) The abandonment of the Ground Lease Property, or any substantial portion thereof, for a period of thirty (30) days at any one time after written notice from the City Manager calling attention to such abandonment, except when prevented by any of the causes described in Section 16.04, provided that Tenant shall return to and resume continuous possession and operation at the earliest date possible after occurrence of such event; or (e) A default by Tenant of any of the terms and conditions of the Acquisition Parcel Purchase Agreement which is not cured in a timely marmer as set forth therein. SAJAJAUCHTFR\DowncytGround Lea=\Downey0roundLzasev9.12-D3-03,dou 38 : I IWN= 14.02. Regulator, Restrictions Tenant shall not be considered in default as to any provision of this Lease when such default is the result of or pursuant to any process. order or decree of any court or regulatory body of competent jurisdiction, provided Tenant diligently pursues whatever action is required to obtain release from or reversal of such process, order or decree. Compliance with the process, order or decree shall not excuse a Monetary Default. Subject to the rights of any Leasehold Morigagees permitted under Article 15 of this Lease, upon the occurrence of any such default, in addition to any an(,( all other rights or reniedics of Landlord hereunder, or by law or in equity providcd, Landlord shall have the sole option to exercise the following rights and remedies: (a) Terminate this Lease by giving Tenant notice of termination (the "Termination Notice"), On the giving of the Termination Notice, (i,) all of Tenant's rights in the Ground Lease Property and in all Improvements shall terminate, and (ii) Tenant shall promptly surrender and vacate the Ground Lease Property and all Improvements subject to the provisions of Article 8 herein, respecting the right of certain subtenants to remain, Landlord may reenter and take possession of the Ground Lease Properly and all improvements and eject all parties in possession or eject some and not others, or eject none. Termination under this Section shall not relieve Tenant from the payment of any sum then due to Landlord or front any claim for damages previously accrued or then accruing against Tenant, (b) Without terminating this Lease, Landlord may at any time and from firne to time react the Ground Lease Property and improvements or any pail or parts ofthern for the account and in the name of Tenant or otherwise, Landlord may at Landlord's election ciect all persons tit eject some .and not others, or eject none, provided, however, that Landlord shall not have the right to eject any Subtenam who is not in definuit tinder its respective sublease. Landlord agrees to execute such non -disturbance agreements with Subtenants as Tenant may from time to time reasonably request. Any relciting may be for the remainder of the terra or for a longer tit shorter period, Landlord may execute any leases made under this provision either in Landlord's nante or in Tenant's name, and shall be entitled to all rents from the use, operation or occupancy of the Ground Lease Property or Improvements, or both. Tenant hereby appoints Landlord its attomey- in-fact for the purpose of such leasing. Tenant shall nevertheless pay to Landlord on the due dates specified in this Lease The equivalent of all sums required ot"fenant tinder this Lease, plus Landlord's expenses, less the avails of any rcletting or attorriment, including (by way of example), but riot limited to, remodeling expenses, commissions anti advertising, costs, No act by or on behalf of Landlord under this provision shall constitute a termination of this Lease unless Landlord gives Tenant notice of termination. IUCI Should Landlord elect to terminate this Lease under the provisions of Section 14.03(a), Landlord shall be entitled to recover from Tenant, as damages: SMAMUCHTERMowne)AGround LcmU3owncyGroundlzmv9.12-03-03.doc 39 (a) The worth at the time of the award of the unpaid rent that had been earned at the time of termination of this Lease; (b) The Nvorth at the tinie or (lie award of the amount by which the unpaid rent that Nvould have been earned after the date of termination of this Lease until time time or award exceeds the aniount of the loss of rent that Tenant proves could have been reasonably avoided, (c) The worth at the time of the award of the amount by which the unpaid rent for time balance of the Tcrm of this Leasc after the time (if award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and (d) Any other amount necessary to compensale Landlord for all detriment proximately caused by Tenant's default, including, without limitation, costs of recovering possession of the Ground Lease Property. expenses of reletting (including necessary repair, renovation and alteration of the property to meet (lie standard required by this Lease), reasonable attorneys' fees and any other reasonable costs. The "worth at the time of the award," as used in subsections (a), (b) and (c) of this Section, is to be computed by allowing interest at the maximum rate allowed by law. The "worth at the time of the award", as referred to in subsection (c) of this Section, is to be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (M), 14,05. fonvevance or Release of Improvements,, On the Fxpiration Date, title to all Improvements located on or about the Ground Lease Property shall automatically pass to Landlord's, free of any right, title, interest or estate of Tenant therein, or its successors or assigns, without the necessity of executing any further instrument and without the necessity of any allowance, compensation, consideration or payment by Landlord therefor. Tenant hereby grants, releases, transfers, sets over. assigns and conveys to f,andtord all of its rights, title arid interest in anti to all such Improvements, to be effective for all purposes upon any such termination of this Lease, Notwithstanding the foregoing, Tenant agrees to execute, acknowledge said deliver to Landlord promptly following the Expiration Date, a proper recordable instrument quitclaiming and releasing to Landlord any right, title and interest of Tenant in and to the Ground Lease Property arid all Improvements remaining thereon, and giving such further assurances of title as may be reasonably required by Landlord or its ,successor-,, assigns or title insurers, Nothing contained in this Section 14.05, however, shall adversely affect any right under this Lease that Tenant may have to quiet enjoyment arid possession or to rnodify the Improvements from time to time. Tenant shall, upon such Leilse termination or expiration, surrender and deliver the Ground Lease Property to the possession anti use of Landlord, without delay. S:VAMUCFMRWomcyWraund LcucTovmcy7QroundLtmv9.12-03-03.doo 40 im ARTICLE 15. During the term of this Lease,'fenant shall have the right, in accordance with the terms and conditions of this Article 1.5 and with respect to the Ground Lease Properly, to encumber by mortgage or assign Tenant's interest in this Lease. MX1M5MU-M= With respect to the Ground Lease Property, or any portion thereof, Tenant's interest it) this Lease nlay only be encumbered by one or more Leasehold Mortgages as defined in Section 15.03. Any assignment of Tenant's interest hereunder as security for such a mortgage, however, shall be sultject to each and all of the covenants, conditions and restrictions set forth in this Lease, and in the event of any conflict between the provisions of this Lease and the provisions of a Leas ehold Mortgage or any such assignment, the provisions of this Lease shall control, 15.03. LSqschqld Mortga yge Authorized; Fee Not Subordinated Subject to the applicable provisions of this Lease, Tenant may mortgage or otherwise encumber Tenant's leasehold estate to an Institutional Investor (as hereinafter defined) under one or more Leaschold Mortgage(s) and assign this [.ease as security for such Mortgage(s). The Leasehold Morigage(s) ,;hall affect only Tenant's leasehold estate and shall be subject to an of the terms and provisions of this Lease. Landlord's fee interest sh.,111 not be encumbered or subordinated. One copy of any and all Leasehold Mortgages finally executed and recorded shall be promptly filed with Landlord. 15.04. Notice to Landlord Provided that Tenant provides Landlord with (i) notice of any Leasehold Mortgage properly entered into hereunder, together with a true copy of such Leasehold Mortgage, tire note and all other material documents relating to such Leasehold Mortgage, and (ii) the name and address of the Leasehold Mortgagee, Landlord and Tenant agree that, following receipt of such notice by Landlord, the provisions of this Article 15 shall apply with respect to such Leasehold Mortgage. In the event of any transfer or assignment of a Leasehold Mortgage or in the event of a change of address of a Leasehold Mortgagee or of art assignee of such Leaschold Mortgage, notice of the new name and address %hall be provided to Landlord. Tenant shall thereafter also provide Landlord from time to time with a copy of each amendment or other modification or supplement to such instruments, All documents shall be accompanied by a certification by Tenant or the Leasehold Mortgagee that such documents are true and correct copies of the originals. SNAMUCHT131t0owneyAGround Lc=Mowney0roundLeam9.12-03-03.d®c 41 As used in this Article 15: (a) The lern) "Institutional Investor" shall refer to a savings bank, savings and loan association, commercial bank, trust company, credit union, insurance company, college, university, real estate investment trust, pension fund or other lender of substance which performs functions similar to any of the foregoing. (b) The term "Leasehold Mortgage" shall include a mortgage, a deed of trust or other security instrument by which TertariCs leasehold estate is mortgaged, conveyed, assigned or otherwise transferred to an Institutional Investor to secure a debt or other obligation. (c) The terns "Leasehold Mortgagee" or "Mortgagee" shall refer to a holder of a Leaschold Mortgage vvith respect to which the notice provided for by Section 15.04 has been given and received and as to which the provisions of this Article 15 aye applicable, 15.06. Consent of Leasehold Mortonace Reaulred No cancellation, surrender or modification of this Lease shall be effective as to any Leasehold Mortgagee unless consented to in writing by such Leaschold Mortgagee. 15.07. Default Notice Landlord, upon providing Tenant any notice of default under this Lease, shalt at the smile time provide a copy of such notice to each Leasehold Mortgagee, Notice by Landlord to Tenant shall be deemed to 'have been duty given even in the absence of notice to a Leaschold Mortgagee, provided, however, that [lie time periods with respect to such Leaschold Mortgagee shall not commence until notice is given to such Mortgagee. Front and after such notice has been given to the Leaschold Mortgagee, such Leaschold Mortgagee shall have the same period, after the giving of such notice upon it, for remedying any default (or acts or omissions which are the subject matter of such notice) or causing the same to be remedied, as is given Tenant, after the giving of such notice to Tenant, plus in each instance, the additional periods of time specified in Sections 15.09 and 15.09 to remedy, continence remedying or cause to be remedied the defauhs (or acts or omissions which are the subject matter of such notice) specified in any such notice. Landlord shall accept such performance by or at the instigation of such Leasehold Mortgagee as if Tenant had done the same. Tenant authorizes the Leaschold Mortgagee to take any such action at such I-caschold Mortgagee's option and does hereby authorize entry upon the Ground Lease Property by the Leasehold Mortgagee for such purpose. 15.08. Notice to Leasehold Mortgaiwe If arty default shall occur which entities Landlord to terminate this Lease, Landlord shall not (except as necessary to prevent waste or otherwise preserve the Ground Lease Property) exercise any right, power or remedy with respect to any default hereunder, and Shall have no S:UAA4XLJCHTERVowncy\Ground LeaelDowncyGroundLcucv9.12-03-03.doe 42 right to terminate this Lease unless, following the giving or the notice (if any) required by Section 14.01 of this Lease and the. expiration of the period of time (if any) given Tenant to cure such default (or the act or emission which gave rise to such default), Landlord shall notify the Leasehold Mortgagee of Landlord's intent to so terminate at least thirty (30) days in advance of the proposed effective date of such termination if such default is capable of being cured by the payment of money, and at least sixty (60) days in advance of tire proposed effective date of such termination if such default is not capable of being cured by the payment of money. The provisions, of Section 15,09 below shall apply if. during such thirty (30) day or sixty (60) day termination notice period, (tic Leasehold Mortgagee shall: (a) Notify Landlord of such Leasehold Mortgagee's desire to nullify such notice; (b) Pay or cause to be paid all Rent and other payinents that due and in arrears as specified in the termination notice to such Leasehold Mortgagee except for those amounts which were delinquent by more than sixty (60) days on the date of'such termination notice, and that rent which may become due during such thirty (30) day or sixty (60) day period following the notice of termination; and (c) Comply, or in good faith, with diligence and continuity, commence to comply, with all Non -monetary Defaults reasonably susceptible of being complied with by such Leasehold Mortgagee, provided, however, that in the event such Leasehold Mongigee shall cornmence foreclosure proceedings within such thirty (30) day or sixty (60) day period, Stich Leasehold Mortgagee shall not be required during such period to core or commence to core any default consisting of Tenant's failure to satisfy and discharge any lien, charge or encumbrance against the 'Tenant's interest in this Lease or the Ground Lease Property junior in priority to the lien of the mortgage held by such leasehold Mortgagee, and provided Further that if such Leasehold Mortgagee is restrained by a court of competent jurisdiction or by reason of any law, regulation, order or rule from proceeding to commence foreclosure proceedings, the time periods set forth above shall be lolled (notwithstanding which, Leasehold Mortgagee shall continue to pay all Rent due and becoming due during, the period of site]) toll) and if default is cured, Leaschold Mortgagee may discontinue such proceedings. Any notice to be given by Landlord to a Leasehold Mortgagee pursuant to any provision of this Article 15 shall be deemed properly addressed if sent to the Leaschold Mortgagee specified in the notice referred to in Section 15.04 at the address stated in such notice unless notice of a change of mortgage ownership has been given to Landlord pursuant to Section 15.04. 15.09. Mort"a cc to Foreclose If Landlord shall elect to terminate this Lease by reason of any default of Tenant and the Lerischold Mortgagee shall have proceeded in the manner provided for by Section 15.08, the specified date for termination of this Lease as fixed by Landlord in its Termination Notice shall be extended for a period of six (6) itionths, provided that such Lcaschold Mortgagcc shall. during such six (6) month period: S;VAMUCHMKU)owncylGround LzmOowwyGraundL=cO. 12-03-03.doc 43 (a) Pay, or cause to be paid, all Rent and any other monetary obligations of Tenant under this Lease with respect to such six (6) month period as ilia same become due, and contimle its good faith efforts to perform all of Tenant's other obligations under this Lease-, and (b) If not enjoined or stayed, take steps to acquire or sell Tenant's interest in this same to completion with due diligence. If at the end of such six (6) month period such Leasehold Mortgagee is diligently complying with this Section 15,09, this Lease shall not (lien terminate, and ilia time for completion by such Leasehold Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee proceeds to complete steps to acquire or sell Tenant's interest in this Lease by roreclosure of the Leaschold Mortgage or by other appropriate means with reasonable diligence and continuity. Nothing in this Section 15.09, however, shall be construed to extend this Lease beyond the original term hercof, nor to require a Leasehold Mortgagee to continue such foreclosure proceedings after the default has been cured. If the default shall be cured and ilia 1-caschold Mortgagee shall discontinue such foreclosure proceedings, this Lease shall continue in full force and effect as if Tenant had not defitalted under this Lcase, 15.10. Purchase and Sale If the Leasehold Mortgagee is complying with Section 15-09, upon the acquisition of Tenant's estate herein by such Leasehold Mortgagee or its designee or any other purchaser at a foreclosure sale or otherwise (and the discharge of any lien, charge or encumbrance against the Tenant's interest in this Lease or the Ground Lease Property which is junior in priority to the lien of the Leasehold Mortgagee held by such Leasehold Mortgagee and which the Tenant is obligated to satisfy and discharge by reason of the terms of this Lease), this Lease shall continue in (tall force and effect as if Tenant had not defaulted under this Lcase. The purchaser at any sale of this Lease and of the leasehold estate hereby created in any proceedings for the foreclosure of any Lcaschold Mortgage, including such Leasehold Mortgagee, or the transferee under any instrument of assigrunent or transfer in lieu of the foreclosure of the Leasehold Mortgage shall be deemed to have agreed to perform all of the terms, covenant,-, and conditions on the part of the Tenant to be performed hereunder from and after the date of such purchase and assignment. 15.11 Mo rt ces Right AtSell If the. leasehold estate hereunder shall be acquired pursuant to foreclosure, assignment in lieu of foreclosure or other proceedings, such transl�rcc, upon acquiring Tenant's Icaqchold estate, may sell and assign the leasehold estate on such terms and to such persons and organisations as are acceptable to such transferee. The purchaser at such sale or the transferee by such assignment and its successors as holders of the leasehold estate hereunder shall not be liable for the Rent or other obligations accruing after its or their subsequent sale or transfer of such leasehold estate and such purchaser or transferee and its successors shall be entitled to transfer such estate or interest without consent or approval of Landlord; provided that the purchaser or transferee or successor as holder of the leasehold estate hereunder shall be liable for S:VAMUCKrF-RU)o"vyNGr=d LcmeU)omryGroundLcmev9.12-03-03.dor 44 the payment of all Rent becoming due with respect to the period during which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder. ARTICLE 15A. REPRESENTATIONS, WARRANTIES 15A.0lRepresemations. Warranties and Covenants by Landlord Effective as of the Commencement Date, Landlord hereby represents, warrants and covenants to Tenant, and acknowledges that Tenant is relying upon such representations, warranties and covenants in leasing the Ground Lease Property, as follows: (a) Landlord Authority. Landlord is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the laws of die State of California and is fully authorized to execute this Lease and to fulfill its obligations as set forth herein. (b) Leases. Other than the agreements with NASA (listed on Exhibit "K"), Landlord is unaware of any leases or agreements affecting the Ground Lease Property or any parties in possession other than related to the studio operations. (c) Adverse Claims, As of The Commencement Data:, Landlord is unaware of any pending or threatened claims with respect to the Ground Lease Property that would have arty adverse impact on Tenant's ability to develop the Ground Lease Property for the Permitted Uses, other than with respect to the excess dirt located on the Ground Lease Property caused by operations at the studio in or about July through September 2003, which Developer has agreed to remove and dispose of pursuant to the terms of the Acquisition Parcel Purchase Agreement, (d) No Violation of Other ARreements, The execution of this Lease does not constitute a breach or violation of any other agreement to which Landlord is a party. (e) LiCi lgation. As of the Commencement Date, there is no litigation, dispute, action or claim against any person, whether pending or threatened, which may have a material adverse effect on the Ground Lease Property. (0 Environmental Insurance. Landlord shall cooperate with Tenant and use its best efforts to cause Tenant and any present or future tender of Tenant to be added as additional named i.nsurcds on any environmental insurance policies arranged by Landlord and IRAD with respect to the NASA Site. (g) Best Efforts.. Subject to applicable federal, state and local laws, statutes and regulation,-,, Landlord will exercise good faith and use its best efforts to (i) process on a timely basis the City Entitlements required for Tenant's intended development of the Ground Lmse Property, and (ii) assist Tenant in obtaining the other project approvals required by Tenant SA)AM%TCHTERU)ownc3A0wund LzascZowneyCr undLessev9.12-03-03.doc 45 from other govemmental agencies or third parties for Tenant's intended development of the Ground Lease Property. (h) Other than as set forth in Sections 11.2.2 and 11.2.3 of the Acquisition Parcel Purchase Agreement, Landlord acknowledges that Tenant is not required to install, pay for, or reimburse Landlord for, any other on -site or off -site hirrastracture improvements in connection with Tenant's use of the Ground Lease Property as an unimproved studio production facility/back-lot, excluding sets and temporary structures. (i) FfTectiveness of Renresentations. Warranties and Covenants. The representations, warranties and covenants of Landlord contained herein shall be accurate and true in all material respects oil the Commencement Date and shall, except as otherwise provided above, continue through the Lease Term. 15A.0211corcsentations, Warranties and Covenants by Tenant Effective as of the Commencement Date, Tenant hereby represents, warrants and covenants to Landlord, and acknowledges that Landlord is relying upon such representations, warranties and covenants in leasing the Ground Lease Property, as follows: (a) ]N !9 payments. Tenant his not paid or given, and will riot pay or give, any third person any money or other consideration for obtaining this Lease, other than the normal cost of conducting business and cost of professional services such as architects, engineers and attorneys. (b) Authority. Tenant is a limited liability company duly organized, qualified and validly existing and in good standing under the laws of the State, of Nevada, is duly qualified to do business and in good standing under the laws of each other jurisdiction where the operation of its business or its ownership of property make such qualification necessary, and has all required power and authority to own and operate its properties, to carry on its business as now and whenever conducted, and to enter into and perform its obligations under this Lease, (c) LALmLu1_0peration. Tenant will obtain all licenses, permits, consents and approvals required by all applicable governmental authorities toown, operate and develop the Ground Lease Property. (d) Litivation and Comoliance. To Tenant's knowledge, as of the Commencement Date there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Tenant which, if determined adversely to Tenant, would have a materially adverse affect on the financial condition of Tenant, nor is Tenant in violation of any laws or ordinances which would result in a material adverse affect on the financial condition of Tenant. (c) Pro*gqtCom liance. The construction and completion of any or all of the J improvements to be constructed on the Ground Lease Property will: (i) comply with all applicable governmental restrictions, including, without limitation, compliance with rill laws and S:UAMUCFM,RU)owncyWmund LeaseDownay0roundLemov9,12-03-03.dm 46 j�M�� the Ground Lease Property; and (iii) will not violate any enforceable use, easement, license, covenant, condition or restriction. (f) Effectiveness of Rep yes qations Warranties and Covenants. The representations, warranties and covenants of Tenant contained herein shall be accurate and true in all material respects on the Commencement Date and, except as otherwise provided above, shall continue through the Lease Tem. 15.A03 Title to the Ground Lease Pronertv Landlord hereby agrees to provide Tenant with an ALTA leasehold policy of title insurance (the "Leasehold Policy") in the face amount of $7,840,000 showing title to the Ground Lease Property vested of record in City subject only to the exceptions to title approved by Tenant. Landlord and Tenant shall equally share the cost of the Leaschold Policy, T-1101MM This Lease shall terminate and become null and void without further notice upon the expiration of the Term and any holding over by Tenant after such expiration shall not constitute a renewal hereof or give Tenant any rights hereunder or in or to the Ground Lease Property, except as otherwise herein provided, it being understood and agreed that this Ixasc cannot be renewed, extended or in any manner modified except, by a writing signed by both parties hereto. If Tenant shall hold over for any period after the expiration of the Tenn, Landlord may, at its option, exercisable by written notice to Tenant, treat Tenant as a tenant at sufferance commencing on the first day following the expiration of this Lease and subject to the terms and conditions herein contained, except that the niond-dy Rent, which shall be payable in advance, shall he one hundred fifty percent (150%) of an amount equal to the greater of (i) the then fair market monthly tell( for the Ground J,casc Property, as reasonably determined by Landlord„ or (ii) the monthly Rent payable by Tenant for the last full calendar month of the Tenn, increased to reflect any increases in the CPI from the Commencement Date through the Expiration Date. If Tenant fails to surrender the Ground Lease Property upon the expiration or sooner termination of this Lease, Tenant shall indemnify, defend and hold Landlord harmless from and against any and all Claims, Damages and lixpenses resulting front such holder, including, without limitation. any claims, made by any succeeding tenant founded on or resulting from such failure to surrender, and Landlord shall he entitled to the benefit of all provisions of Law respecting summary rcevery of possession to the same extent as if such statutory or other notice had been given, 16.02. &t—tovwft1jm In the event that any action is brought by either party hereto as against the other party hereto for the enforcement or declaration of any right or remedies in or under this Lease or for the breach of any covenant or condition of this Lease, then and in that event the prevailing party SAJAMVCHTER\DowncyBGround Lem\DowncyGroundLeasev9.12-03-03.doo 47 I court therein including, but not limited to, reasonable attorneys' fees. 16.03. Ouiet Possession, Landlord agrees that Tenant, so long as Tenant is not in default under this Lease and is paying the rent and performing the covenants and conditions of this Lease, shall quietly have, hold and enjoy the Ground Lease Property throughout the term hereof without interruption or disturbance from Landlord or any other persons claiming by, through or under Landlord; and Landlord warrants to Tenant that as of the Comraencement Date, there are no existing tenancies on the Ground Lease Property. 16.04. Force Maleure Except as to the payment of rent or other monetary stuns due hereunder, neither of the parties hereto shall be chargeable with, liable for, or responsible to, the other for anything or in any amount, and performance hereunder by either party shall not be deemed to be in default, for any delay caused by lire, earthquake, explosion, flood, hurricane, Cite elements, acts of God or the public enemy, action or interference of governmental authorities or agents, war, invasion, insurrection, rebellion, riots, strikes, lockouts, litigation, or any other cause whether similar or dissimilar to the foregoing which is beyond the control of such parties and any delay due to said causes or any of them shall not be deemed a breach of or default in the performance of this Lease. Any notice, request, demand, instruction or other document or communication required or permitted to be given hereunder shall he in writing addressed to the respective party as set forth below and may be personally served, sent by facsimile, or seat by a nationally recognized overnight courier or by U.S. Mail, first class, addressed as follows: Landlord: City Hall City of Downey I 1111 Brookshire Avenue Downey, California 90241 Attention: City Manager Fax: (562) 923-6388 With copy to: Oliver, Vose, Sandifer, Murphy & Leir 281 S. Figueroa Street Los Angeles, California 90012 Attention: Casey S. Vose, Esq. Fax: (213) 621-2211 SAIAWBLICHTER\J)owneY\GrouIid Lcwe\DowneYGmundLeBSCO-12-03-03.doc 48 Tenant: Industrial Realty Group, LLC 12214 Lakewood Blvd. Downey, California 90242 Attention: Stuart Lichter Fax: (562) 803-4796 With copy to: Fainsbert, Mase & Snyder, LLP 11835 West Olympic BlvdSuite I I Los Angeles, California 90064 sq Attention: John A. Mase, E. Fax: (310) 473-8702 1 Any party may change their notice address and/or facsimile number by giving written notice thereof in accordance with this Section. All notices hereunder shall be deemed givew (1) if served in person, when served; (2) if sent by facsimile, on the date of transmission if before 6:00 pam P.&T.; provided that as hard copy of such nofice is also sent by either a nationally recognized overnight courier or by U.S. Mail, first class,, (3) if by overnight courier, by a nationally recogni7ed courier which has a system of providing evidence of delivery, on the first business day after delivery to tile courier; or (4) if by U.& Mail, on (lie third day after deposit in the mail, postage prepaid, certified mail, return receipt requested, 16,06. Service of Process irrenant or any successor in interest of Tenant is not a resident ofthe State ofCalifornia, or is an firinted liability company or parinership without a member or partner resident of California, or is at foreign corporation not registered to do business in the State of California, Tenant shall file with tile Landlord the nanic and address of a natural person or entity qualified to do business ill the State of California as its duty authorized agent of Tenant for the service of process in any court action between Tenant and Landlord, arising out of or based upon this Lcasc, and the delivery to such agent of written notice or a copy of any process in such action shall constitute a valid service upon Tenant, If for any reason service of such written notice or of such process upon such agent is not possible, then Tenant may be personally served with such written notice or process in or outside of the State of California and such service shall constitute valid service upon'renant, it is further expressly agreed that Tenant is amenable to such process and submits to the jurisdiction of the cow of the State of California and waives any and all objections and protests thereto, This Lease shall be subject to the application of the internal laws of California and not Catiromia's Conflict of Laws with respect to issues which arise hereunder. r M Any waiver by Landlord or Tcriant of any breach of any one or more of the: covenants, conditions, terms and agreements of this Lcasc shall, not be construed to be .1 waiver or any subsequent or other breach of tire same or of any other covenant, condition, tcnn or agreement of this Lease, nor shall failure on the part of Landlord or Tenant to require exact, full and complete S-.VAM\L1CHTER\DowneYvGwund LewncyGround LeascO.12-03-03.doe 49 compliance with my of the covenants, conditions, terms and agreements of this Lease be construed as in any manner changing the terms hereof or estopping the other party from enforcing the Full provisions hereof, nor shall the terms or this Lease be changed or altered in any manner whatsoever other than by written agreement of Landlord and Tenant, No delay, failure or omission of Landlord to reenter the Ground Lease Property or to exercise any right, power, privilege or option, arising from any default, nor any subsequent acceptance of rent then or thereafter accrued shall impair any such right, power, privilege: or option to be construed as a waiver of or acquiescence in sucii default or as a relinquishment of any right. No notice to Tenant shall be required to restore or revive "time of the essence" after the waiver by Landlord of any default. No option, right, power, remedy or privilege of Landlord shall be construed as being exhausted by the exercise thereof in one or more instance. 'rise voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, but shall terminate all Or any existing subleases unless the sublessee has been formally permitted by the Landlord or the Landlord expressly elects to treat such surrender or cancellation as an assignment to Landlord of any or all such subleases. Subject to the restrictions set forth herein regarding assignment of the leasehold estate, each of the terms" covenants and conditions of this Lease shall extend to and be binding on and shall inure to the benefit of not only Landlord and Tenant, but to each of their respective heirs, administrators, executors, successors and assigns, Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, the heirs, administrators, executors, successors and assigns of such parties, the same as if in every case expressed. Imuffm Fach individual executing This Lease on behalf of Landlord or Tenant represents and warrants that lie or she is duly authorized to execute and deliver the Lease on behalf of such party, and that this Lease is binding upon such party in accordance with its terms, 16.11. Landlord's Right _to Enter Premises Landlord and its authorized representatives shall have the right to enter the Ground Lease Property at all reasonable times, after giving Tenant three (3) business days prior vnitten notice, for any of the following purposes: to determine whether Tenant is complying with its obligations under this Lease; to serve, post or keep posted any notices required or allowed under the provisions of this Lease; to post "for -ale" signs at any time during the term, so long as such signs make it clear at first impression it is Landlord's interest alone that is for sale, to post "for rent" or "for lease" signs during the last one (1) year of the term, or during any period while Tenant is in default; to show the Ground Lease Property to prospective brokers, agents, buyers, tenants or persons interested in an exchange, at any time during the tcnii; and to do any act or SMAMUCHTERMowney%Ground Le=OowrxyGround Lmev9.12-03-03.doc 50 N" TWUNT'N Rej VWrItTs" F Ur UUM 15id-41IT"I"JU street. Landlord shall use its best efforts to not to interfere with the operations of Tenant, or any Lease Proartv and, subiect to t e oregoing Landhmi, , P�R- 71F Ouler (MHO&E SKIRAY6 4�LL JA ]--2!LJL is Section. 16.12. Disclaimer of Partnership The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or as joint venturer with Tenant in the conduct of Tenant's business or otherwise. This Lease is not intended, and shall not be construed, to create the relationship of agent, servant, employee, partnership, joint venture or association as between Landlord and Tenant. 16.13. M-emoranduni Upon the request of either party, Landlord and Tenant shall execute a memorandum of this Lease or any arnendment or modification thereof for recordation in the official records of Los Angeles County, California. •M At the expiration or earlier termination of this Lcasc, Tenant shall execute, acknowledge and deliver to Landlord within thirty (30) days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the real property subject to this Lease., The titles to the sections of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease. S:VAM\L1CHTER%DowncylGro=d lmnkl)o-cyGm-dLmtv9-l2-03-03.doo 51 16.20. Covenants and Conditions Each term and each provision, including, without limitation, the obligation for tilt payment of Rent, to be performed by Tenant or Landlord, as the case may be, shall be construed to be both a covenant and a condition of this Lease, 16.21. Integration This Lease, together with the exhibits and documents incorporated by reference, constitutes the entire agreement between the parties concerning the Ground Lease Property and there arc no conditions, representations or agreements regarding the matters covered by this Lease which are not expressed herein. No person, firm or corporation has at any time had any authority front Landlord or Tenant to make any representations or promises on behalf of such party, and Tenant and Landlord each expressly agrees that if any such representations or promises have been made by the other party or others, Tenant or Landlord, as the case may bic% waives all right to rely thereon. No verbal agreement or implied covenant shall be held to vary these provisions. 16.22. 9"o VI Certificate, If upon any sale, assignment or hypothecation of the Ground Lease Property by Landlord an offset statement shall be required from Tenant, Tenant agrees to deliver, within ton (10) days after written request therefore by Landlord, a statement addressed to any such proposed mortgagee or purchaser, or to Landlord, in as form reasonably requested by Landlord's mortgagee or purchaser,, certifying that this Lease is unmodified and is in full forec and effect (if such be tile case), certifying the Commencement Date and the Expiration Date, certifying that there has been no assignment of this Lease anti that there are no defenses or offers licreto (or stating those claimed by Tenant) and containing such other information as may reasonably be requested by the party, to whom such certificate is addressed. In the event Tenant fails to deliver such offset statement to Landlord within the ten (10) day period provided above, it shall be deemed that this Lease is in full force and effect and that Tenant has no defenses or offsets against Landlord. 16.23 Landlords Itight to Sell Landlord shall have the right to sell its fee estate in the Ground Lease Property and assign its interest in this Lease without limitation; provided, however. that any such sale or assignmcm shall be subject to this Lease and Landlord shall first exercise its best efforts in good faith to obtain any consent required from NASA, if any, to allow Tenant the right to acquire the Ground Lease Property, Upon any such conveyance as permitted herein, Landlord shall automatically be relieved of any obligations under this "so other than those obligations which accrued prior to the date of such conveyance. 16,24. hncntionally_QeLctqd SMAMUCHTERWawncyiGround LcxwWowne),GroundLcnov9.12-03-03.doc 52 mmm Vo coTrse-rt or p,=val---,*alLhe •r.r sjUA,Wj,j(,Hn-RMownayTffaund lca%V)owncyGtuundLmucv9.12-OM3.doo 53 EM-JIBIT f= FIRST AMENDMENT, TO EXISTING GROUND LEASE. AMFNDMF,NT TO AGREEMENTS IN GROUND LEASE WFANUM A. Landlord and Industrial Realty Group, LLC, a Nevada limited liability company ("Original TenanC) (as landlord and tenant, respectively) entered into a Ground Lease, dated on or about December 4, 2003 (the "Existing Ground Lease"), pursuant to which &Zaat7i jq41&0-y was formerly a part of the NASA Industrial Plant in Downey, California. A true and correct copy of the Existing Ground Lease is attached hereto as Exhibit "A" and incorporated herein by referea,ce. B. The Existing Ground Lease contains various ongoing rights and obligations. C. Tenant has succeeded to Original Tenant's interest in the Property and the Existing Ground Lease. D. All capitalized terms used herein but not herein defined shall have the meanings ascribed to such terms in the Existing Ground Lease. E. Landlord and Tenant now desire to enter into this Lease Amendment to pursuant to the terms and conditions set forth in this Lease Amendment below. The Existing Ground Lease, as amended by this Lease Amendment, is hereinafter referred to as the "Lease". NOW, THEREFORE, for good and valuable consideration, the receipt a sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to ame modify and/or supplement the Existing Ground Lease as of the Amendment Effective Date follows: I - 1. Effective Date. The effective date of this Amendment shall be the date upon which Landlord and Tenant have each executed and delivered an executed counterpart of this Amendment to the other party (the "Amendment Effective Date"). 'Me Amendment Effective Date will be reflected in an Amended Memorandum of Lease to be recorded in the office of the County Recorder of Los Angeles County pursuant to Section 16.13 of the Existing Ground Lease. 62074W 1186170 - I ® 3/13=12 i" 2. Term. Rotwith stand in g Section 2.02 of the Existing Ground Lease, unless earlier terminated in accordance with the provisions of this Lease, the term of this Lease shall expire at 11:59 p.m. on the day preceding the fifty-fifth (55th) anniversary of the Amendment Effective Date (the "Inifial Expiration Date"). 3. Existine Ground Lease. Recital 1-1. Recital H to the Existing Ground Lease is amended to read in full as follows: 'M Tenant's proposedfuture development of the Property involves the demolition of some of the existing improvements located thereon and the construction of retail buildings, office buildii;gs, medical office bwldings, parking structures and any other uses permitted pursuant to the "Entitlements" (as hereinafter defined) (1he "Project'). Developer has, is or will be processing all discretionary governmental planning, land use, zoning, development and environmental permits, plans, and approvals which are requiredfor the development, use and operation of the Property (the "Entitlements'). The Entitlements include (but are not limited to) the following non-e-viunislive list of that do or may exist (the "City Entitlements'): (i) Amending the Downey Landing Specific Plan, dated January 24, 2012 which includes design guidelines (the "Specific Plan'); and (U) All required demolition and building permits and related approvals, if any, for the reconfiguration of buildings or improvements in order to provide additional area which may be included within the Property area (the "Construction Approvals'). Tenant acknowledges that the Entitlements may include (and the Ground Lease Property is subject to) required regulatory approvals and permits from government agencies other than the City of Downey. " 4. Clarif ication on Converted Base Rcirt ApOicability. If Tenant develops Luna Development Agreement by and between the City of Downey and Tenant, then the development of that parking area shall not constitute a "conversion7' of the use of the Ground Lease Property within the meaning of the first paragraph of Section 3.02 of the Ground Lease; provided, however, that immediately upon the use of all or any portion of that parking area to support converted uses on the Ground Lease Property, the parking area shall be deemed "Converted Property" and subject to corresponding rent adjustments under the Ground Lease. Nothing in this paragraph 4 shall be construed to limit or delay the deemed conversion of the Ground Lease Property required by the last paragraph of Section 3.02 of the Ground Lease. 5. (�quntcrRLrts. This Lease Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. 6. Governing Law. This Lease Amendment is made under and shall be construed pursuant to the laws of the State of California. 62074W186170 -2- 311312012 ii i IN WITNESS WHEREOF, the parties hereto have executed this Lease Amendment the late and year first above written. CITY OF DOWNEY, .............. WWOXMI . . a rw a wj;j V V! i I VIK�01 By: PCC�P LB TRG Downey, LLC, its le arla irtg Member Name: Title: Rasp-I—d WU111IA IRG DOWNEY, LLC, 3-MUZURNM By: S.L. Properties, Inc Name: Titjc: F4 62074A 1 1861N3 -3- 3/1312012 "'Y" all, 6207414116617v3 _ t} _ 311312012 SIRCAIV r. r TO rVLEASP �SffCPND AMP, IN GRPUNI) LEASE This Second Amendment to Agreements in Ground Lease (this "Second Arnerniment") is made as of this L3_ day Of":> " - -ob - - ,te-k -, 2017, by and between T[ IF CITY OF DOWNEY, a municipal corporation of the scl C of California ("Landlord") and PCCP IRG DOWNEY, LLC, a Delaware limited liability company, as to an undividcd 90% interest, and IRG DOWNElY, LLC, a California limited liability company. as to -in undivided 10% interest (collectively "Tenant"). A. Landlord and Industrial Realty Group, LLC, a Nevada limited liability company ("Original Tenant") entered into a Ground Lease. dated on or about December 4,2003 (the "Cxisting Ground Lease"). pursuant to which Landlord leased to Original Tenant certain real properly described therein (the "Property") that was formerly a part of the NASA Industrial Plant in Downey, California. A true and correct copy of the lixisting Ground Leaser is attached hereto as Exhibit "A" and incorporated herein by reference. B. Landlord and Tenant entered into an Amendment to Agreements in Ground Lease, dated on or about March 15, 2012 ("First Amendment"). A true and correct copy of the First Amendment is attached hereto as Exhibit "B" and incorporated herein by reference. C. Landlord and Tenant also entered into the Tierra Luna Development Agreement by and between CITY OF DOWNEY and PCCII IRG DOWNEY, LLC, a Delaware limited liability company, as to art undivided 90% interest, and IRO DOWNEY, LLC, a California limited liability company, as to an undivided 10% interest, dated on or about March 15, 2012 ("Development Agreement"). A true and correct copy of the Development Agreement is attached hereto as Exhibit "C" and incorporated herein by reference. D. The Existing Ground Lease, First Amendment and Developm Agreement contain various ongoing rights and obligations. i E, All capitalized terms used herein but not hercin defined shall have the meanings ascribed to such terms in the Existing Ground Lease, First Amendment and Development Agreement. F. Landlord and Tenant now desire to enter into this Second Amendment to amend some of the rights and obligation% specified in the I-xisting Ground Lease and First Amendment, all subject and pursuant to tire terms said conditions set forth in this Second Amendment below. Thc Existing Ground I -ease, as amended by the First Amendment and this Second Amendment, is hereinafter referred to as the "Lease." Attachment "B" NOW, THEREFORE, for good and valuable consideration, the receipt an?, Rufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to amend, amodify and/or supplement the Existing Ground Lease and First Amendment as of the Sec1n0l Amendment Effective Date (defirted below) as follows: 1. Fffective Date. The effective date of this Second Amendment shall be 19 eye ko cilunter i ti i C Fe Frecorded in 115e office M- AMMTD& RE 16.13 of the Existing Ground Lease. 2. Term: Notwithstanding Section 2,.01 of the Exisaing Ground Leamse, junl 3. Ontion to EAtend: Section 2.03 of the Existing Ground Lease states that the iQk,-- T@&2-V-&Vs-tn—ro-T"jLaxy_nortion of the Ground Lease Property to a use permitted by the Specific Plan by the Early Termination Date. IF Y j. j6o, to eylp- L �1 Termination Date. 4. An Mded rtflv ILennination: Notwithstanding Section 2.01 of the Existing Ground Lease (as amended above in Section 2 of this Second Amendment) to the contrary, if 41 T jej le'-ft. I IN PFUUML1511 then the Lease shall tenninate on the Amended Early Termination Date. S. Convo-sion: Section 3.02 of the Existing Ground Lease states that Tenant may convert the Ground Lease Property in a maximum of four phases anytime between the Property not previously converted on or before the Early Termination Date, shall be deemed to be converted on that date, Landlord and Tenant hereby agree that� if Tenant exercises the extension option provided above in Section 3 of this Second Amendment, then Tenant may convert the Ground Lease Property in a maximum of four phases anytime between the Commencement Date and the Amended Early Termination Date ssMl 02ISD 194442-OW218- 6 1-174-0 -2- EXHIBIT C .3- 6, Hotel DcvcloM_nqg: Tenant shall set aside approximately 3 acres of the Ground Lease Property for The Hotel Development defined in Section 1 A3 of the Development Agreement ("Hotel Development Site"). Landlord and Tenant agree that the set -aside acreage shall only be developer) with (lie Hotel Development, notwithstanding the fact that other uses may be pertained on the Ground Lease Property by the Specific Plan (as may be amended), Landlord and Tenant agree that the Hotel Development shall not proceed until Tenant and Landlord makes a determination, based on Tenant's review of any said all relevant market forces, that construction of the Hotel Development is a reasonably prudent business decision, The obligations of this Section 6 shall remain in effect following, and shall survive, the termination of this [-case, unless and until Landlord agrees in writing that another use may be developed on the Hotel Development Site. A Memorandum of Agreement memorializing the Hotel Development obligation shall be recorded within thirty (30) days following the execution of this Second Amendment. 7. Notice: Section 16.05 is amended to replace Tenant and its counsel with the Tenant: PCCP IRG Downey, LLC 555 California Street, Suite 3450 San Francisco, California 94104 Attn: Aaron Giovara Fax: (415) 732-7547 With copy to: Allen Matkins Leck Gamble Mallory & Natsis 600 West Broadway, 27th Floor San Diego, California 92101 Attn: Heather S. Riley Fax: (619) 233-1158 1 8. floongMtion- Nin-svillistanding Section 16.12 of the Existing Ground Lease, Landlord and Tenant agree to work cooperatively in a commercially reasonable way to ensure that the terms of the Lease are financeable by a third party construction lender. 9. CQj1_njg_rq_ait,,;. This Second Amendment may be executed in any number of counterparts, each of which, shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. 10. Govqminj_L�Aw. This Second Amendment is made under and shall be construed pursuant to the laws of the State of Califortria. 554 151 02/SD 194442-0OOOVU-24-1 7/h,,/ -3- EXHIBIT c -4- IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Seco Amendment the date and year first above written. i UITT-MM Approved as to Form: Abich r"IMa orney CITY OF DOWNEY, a MLnicipnl ct7 �afion of the State of California By; Z- • co 0 ile N V Its; K MIMM-00"M oil I of 9, 1 It's naging Member By: --Z4 Name: AUttlorized Signatory "TENANT" IRG DOWNEY, LLC, a California limited liability company By: IRG T11, LLC By: S.L. properties, Inc. By: Name: Its: 854151 194 DM2)8-11-17A-1 4 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMEWr CIVIL CODE § 1189 X�^ X, A,' Xx A notary public or other officer completing this ceffficate vartiles only the Identify of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. I State of California County of On—kmiat 11-, 2DII before me_41,114, Alliin 6uiwD) gotaj pub lie - Date Here Insert Name and Title of the Officer personally appeared fernityroto Val IlLaz- Name 0V of Signer(40 who proved to me on the basis of satisfactory evidence to be the person(&j whose name(k) Were - subscribed to the within instrument and acknowledged to me that helsbolthuy executed the same In histhei0twir OO authorized capacily(i"), and that by hisAmW4heir signatureon the instrument ilia person%), or the entity upon behalf of which the persoiAg acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Callfornla that the foregoing paragraph Is true and correct. ------------- ------ REBE A ANN GUERRERO WITNESS my hWd official seal. Corntrillsolon # 2112736 Notuy Public - California z Los Angeles County Signature__ wii mm. EvesM19.2019t Signature of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the,doeiglm fraudulent reattachment of this hor"m to an unintended do"o onrl-I "a u Description of Attached Document Title or Type of Document: ox�� Numbe-r , Peg Document Date: Nu b o Pages,� Signer(s) Other Than Named Above: Capacitypes) Claimed by Signer(s) Signer's Name: El Corporate Officer F1 Partner — n Limited IJ -al 0 Individual G,Attpo y in Fact U Trustee ��156ardlan or Conservator 0 Other 1-11 Signer Is resenllng: Signer's Name: _J Corporate Officer I Partner — El Limited LJ General Fl Individual El Attorney In Fact El Trustee 0 Guardian or Conservator LJ Other. Signer Is Representing: 02016 National Notary Association - www.Nationa]Notary.org - 1-800-US NOTARY (1-800-876-6827) ltem#5907 EXHIBIT c -6- IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Sell Amendment the date and year first above written. CITY OF DOWNEY, PCCP IRG DOWNEY, LLC, a Delaware limited liability company By: PCCP LB IRG Downey, LLC, its Managing Member Attest: By: Name: Its: Maria Alicia Duarte, GMC Interim City Clerk ANT" Approved as to Form: IRG DOWNEY, LLC, a California limited liability company By: IRG 111, LLC Yvette M. Abich Garcia City Attorney By: S.L.Properties, Inc. By: 14— Name: 11 V�nc 11s:0VAle. 334151.02/SD 1944424=0219-11-17AW/ -4- M" CALWORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 A not 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 ofA6__,Mde.51 Oki" On AuAof n, 17 before me, Gurrov to ,a Here Insert Name and Title of the Officer personally appeared r-eV r 4kqe__ of SignerN who proved to me on the basis of satisfactory evidence to be the person($4 whose namew is/me subscribed to the within instrument and acknowledged to Me that he/shoitliey executed the same In hi9A%Wt+mk authorized upacity(ma), and that by his 44e#Ah& signattireN on the Instrument the pensoft or the entity upon behalf of which the person( ilil acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing paragraph is true and correct. stitc MANOi G'UERREflo WITINESS my hand and official seal. CWW*Mm * 2112736 -11101111111 Poft - Cw"Ornia IN A"aWs CouftW - Signalure Al h comm. egods Jun 19, 2014 Signature of Notary Public Place Notary Seal Above OP77ONAL Though this section is optional, completing this information can deter alteration of the document fraudulent reattachment of this fierm to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacityries) Claimed by Signer(s) Signer's Name: 1 1 Corporate Officer — Tille(s): LI Partner — 1771 Limited , I G ar 0 Individual 0 Attorn��Uact n Trustee a,, or Conservator .i.ther zIc2ii Signer's Name, U Corporate Officer — Tdle(s); E1 Partner — EJ Limited FI General L " Individual I j Attorney In Fact * Trustee U Guardian or Conservator * Other: Signer Is Representing: X, cv 02016 National Notary Associallon - www.NationWNotary.org - 1-800-US NOTARY (1-a00-676-6827) hem #5907 wm� 1 i; I'i ` ► I� �1 FIAILW01 V #I I U-111 11144 zwolm 4 # & # , 11 0, WE wa-WIMME11 ROOM is THE TERM OF THE AGREEMENT WHEREAS, on November 30, 2003,. the City of Downey ("City") sold the property now Known as the Promenade at Downey shopping center to PCCP IRG Downey, LLC, and IRG Downey, LLC (collectively 'Developer); and, WHEREAS, on August 2, 2017 the Planning Commission recommended a first -2mendment to the Tierra Luna Development Agreement, which was approved by the City ivv"* reference; and, was; Bellflower Boulevard; and, WHEREAS, the Planning Commission held a duly noticed public hearing an February 6, njJg25MWl 1 ! i i I r a I I t 0 . * I # 6 1 J I -. - 4 . . I - 0 1111101011MIS , Lpm.Dm. 0 0 0 IN ronVE Willzir, MR, W WOW I Promenade at Do shopping center, an m d adjacent vacant 20 acres This 0 i I I i 1 0 . . i I cli amendment will also streamline the review process for new tenants, which is consistent with General Plan Policy 9.4.2, which states, "Streamline the development review process." The requested amendment to the Tierra Luna Development Agreement is consistent with the Downey Landing amended Specific Plan. The Tierra Luna Development Agreement is for the construction and operation of the Promenade at Downey shopping center, and adjacent vacant 20 acres. While the proposed change streamlines the review process for new businesses that want to operate in the shopping center, and adjacent vacant 20 acres, it does not alter the permitted uses. Additionally, no changes will occur to building locations, parking requirements, landscaping, or other development standard. A04, TAEREFORE, TAECMI�CGIACIL OF TA ORDAIN AS FOLLOWS: SECTION 1. Based upon the findings set forth in this ordinance, the City Council of the City of Downey hereby approves the five-year term extension to the Tierra Luna Development Agreement, which is outlined in Exhibit "C", which is attached hereto and made a part hereof. SECTION 2. If any section, subsection, paragraph, sentence, clause or phrase of this Ordinance is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council declares that it would have adopted this Ordinance, and each section, subsection, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, phrases, or portions be declared invalid or unconstitutional. SECTION a. The City Clerk shall certify the adoption of this Ordinance and cause the same to be published in the manner prescribed by law. ATTEST: �LICIA D�UARTE,C City Clerk am =11M Iwo 951, L#J 1WWD] a *"L61711 'M ir"M-616-1044-ra UTcx-ty tu*- of April, 2019, by the following voie, to wit: AYES: Council Members: Ashton, Frometa, Saab, Pacheco NOES: Council Member: None. ABSENT: Council Member: None. ABSTAIN: Council Member: Mayor Rodriguez 1 FT&MIJANUUM"t 0 A Rau FIR -444 i" 'L 'i This page Is p: 00 NOT DISCARD 20120588430 LgAbSHMET im 0 t fib' &m D.00 TAXES- OTMM: 0.00 P 0,00 r08 L E U E TjOS INSAINENT MW FOR RtCMD IT FIfW AMERWiVE TITLJ INSURANCE GO, A5 AN AVWIRMODATIM Oft IT HAS NW DEEN E"Kto AS 10 IT$ EX"TIO" OR As 10 ITS EF PECT UPON TRCL RECORDpp ING REQUESTED BY AND WIEEN RECORDED MAIL TO: CITY OF DOWNEY I I I I I Brookshire Downey, CA 90241 Attn: City Cleric pr...e AJ*vt ft Lim is for Reocriltes Use Only) This Development Agreernen( is recorded at the request and for the benefit of the City of Downey and is exempt from the payment of a recording fee pursuant to Government Code § 27383. TIERRALLUNA DEVELOPMENT AGREEMEM by and between 'Crff OF DOWNEY and PCCP I]RG DOWNEY, LLC, a Delaware limited liability company, as to in undivided 90% interest, and IRG DOWNEY, LLC, a California Nusked liability company, as to an undivided 10% interest 2049L7W="DW Dills I i" MK01% 03 m ........... . .... ...... ...... .... . . �­ . ..... L DEFINITIONS ........................... ...... . 1 TERM,- ................ ;_ .............. 1­1 .... ._­­ ; . ........... 1- ...... p­ ..... . ... ­­­.1­­­.. 11 2.1 Tenn .................................................. _ ...... .'.... .. T­"­­'­­­­.7 ............ 11 2.1.1 Term without Enhanced Project Election .............................................11 2.1.2 Term with Enhanced Project Election ............................................... . . It 2.1 Provisions Surviving Expiration of Term...........................................................11 3. DEVELOPMENT OF THE PROPERTY ...... ___ .......... 3.1 Applicable Regulations; Vested Right to Develop .............................................11 12 Tentative SuWivision Maps............................................................................... 12 3.3 Processing of Applications and Permits.............................................................12 3.4 Other Governmental Permits __ .... . ... _ ... ... ... ....... ____ ......... __ ...... 12 3.5 Subsequent General Plan Amendments and Zone 12 16 Timing of Development ...... ......... 13 3,7 Reservations of Authority ..... __ ......... ........ ...... 13 3.7.1 Consistent Futum City Regulations .............. .. . .... ......... ...... 13 3.72 Overriding State and Federal Laws and Regulations . . ......... 14 3.73 Public Health and Safi:ty_._,._ ........ 14 33A Uniform Construction Codes ................................................ 1 14 3.7.5 Police Power.__ ....... .......... [4 3.8 Large Format Retail Development Parking Easement 14 3.9 Signature ............. Is 3.10 City Infrastructure Improvements........ ............. ............. 15 3.11 Flexible Office Space on Developer Leased Property........................................ 15 4. FEES, CONDMONS, PUBLIC BENEFITS, AND AUDIT RIGHTS ....................... . 15 4.1 Temporary Fee Rebate ........ . ... M.M ...... . ..... 11 ...... ........ . .......... ...... ­.'. 15 4.3 JRE�EKVEDJ..._ ............ .... __ ........ ......... ....... ....... __ ...... ....... .... 16 4A Accounting and Review ....... . .. _ .... ........ . . ....... ___ ................. ... 16 4AAMaintenance of Books and Records .................................... ....... . . .... 16 4.4-2 Allocation of Costs and Expenses ............ ­1 ... . ... ­� ........ ....... ­� ....... 16 Non -Waiver By City ............ ........... .... - -------- - - ..... _; 16 4.4.4 tRS ERVED] ..... .......... . ........... .... * ..... *"* ......... ....... * ..... 17 4.4.S Survival ofAuditRights-..... ..... ___ ........... _._ ....... ......... ___. 17 5. GENERAL DEVELOPER COVENANTS....... ..... ...... .......... ___ ... . ..... 17 5.1 Commencement of Improvements and 17 5�2 Large Format and Remaining Commercial Dovelopmcnt 5�3 [RESERVED1 ... __ ...... .. . .... _ ........ .......... ............. _ 17 5.4 City Right to Inspect .... ........... ........... - .... ........... _ ...... _--_ 17 5.5 Developer 68OM291 W-am 26M 1.7 .021141U 11 5.6 Maintenance Covenant... .............. ................... ....... ­­­­­'­.­ ...... - ...... is 5.6.1 General Maintenance of Property ........................................................... is 5.62 Graffiti ............... ................. ..­ . . ............ .­ ........ T ...... ...... 5.6.3 Lion Fights ............ ........ ­­­ ....... _­­­." .......... 19 6, DEVELOPER COVENANTS RELATING TOT ENHANCED PROJECT ........... 19 6.1 Developer Election To Develop Enhanced Project ............................................19 6.2 Applicability of Base Project Covenants ............................................................19 6.3 Opewing Covenant ............. ........ 7 .......... . .. . I ............................. ...... 'Wi ..... 19 6.3.1 Conduct of Required OpemtIons— ........... :v ... ... ........ ........................ 19 6.3.2 Annual Grant Payment ........................................................................... 19 6.3.3 ...... ... . .... .................... .... _ 20 6.3.4 Use Restriction ..... .................................... ......................i...............2 0 6.3.5 Covenant to Maintain Property on Tax Rolls ...................::............:........20 6.3.6 No Conveyance to Tax Exempt Entity. ...................................... .... 20 63.7 Quality of Improvements ............ I .... I ..... I .......... .................. 20 6.4 Covenants Running with the Land .............. ....... ...... ......... ­ ...... ­­ ... 21 7. NON-DISCRIMIMATION .................. ....... ; ................... ........ .......... ­. ...... 21 7A Obligation to Refrain from Discrimination ........................................................21 7.2 Form of Non-discrimination and Nort-se gregation Clauses ...............................21 7.2.1 in deeds ........ ....... - ........ .................. ­..­ ................. v: . . ..................... 21 7.2.2 In leasez.... .......... ....... . ..................... . ..... 21 7.2.3 ................ ____ . ..... ......... w,_ ....................... 22 8. FIRE STATION DEDICATION AND DEVELOPMENT ........................................... 22 8.1 Election to Require Developmentof Fire Station Site..:........ i ............ ;.­­ ...... , 22 8.2 Design and Construction Costs. ...... ........ ___ ...... --- __22 U 8-3 Subdivision of Fire Station Site ........ a__ ...... - ........... ___ ........... ___ ............22 8.4 Developees Rental of Fire Station to City .............. 1.� ....... ....... . ...... . ........ _ 22 8.5 Conveyance of Fire Station and Fire Station Site to City ...................................22 L 9. DEFAULT, REMEDIES, AND TERMNATION ........ ..... ........ .......... ;.;23 9.1 Notice and Opportunity to Cure .................. ........................................ 23 5 9.2 Default Remedies . . ...... ..... . ....... ­01­.".; .. .......... ............. �,7 23 9.3 Developer's Exclusive Remedy ......... ....... ....... 6 ... ....... ................ .............. _.. 23 9.4 Force Maj cure . ............................ ...... . ............ .......... ........ 2 10. ANNUAL REVIEW ....... .................... .. .... ................. ....... ...... L 10.1 - Timing of Annual Review_. ................... ............. *.._;.,. ............... _ ....... 10.2 Standards for Annual Review .................... . . 24 10.3 Certificate of Compliance .................. .......... .................. .......... . . ...... 25 11. MORTGAGEE RIGHT'S ........ . ................ ; ...... .......... __ ......... . ... ...................... 25 11.1 Encumbrances on the Property ........... _ .............. .............................. 25 11.2 Mortgagee Protection ..... ............ . ...... . . . ........... E 411025110-M 5 ll� Not Obligated---- � 11.4 Notice ofDefWt to Mortgagee; Right of Mortgagee to Cure ........................... 25 12. ASSIGNMENT' - ......................................... ............................. ..................... ................ 26 12.1 Right tmAss6p........ -............. -...... -_------......... --.~.-.zu 112 Release Upon Transfex 26 12.3 Assignee Subject to Terms of � l3� ��e����������L�� ...... 13. INSURANCE AND IN8DE*0Nr[v_._.... _'__----_...-~..-...~.z7 13�l Insurance ...... -......... ...... .... ...... -.-.--...... ~.__..~....-.-._-.z7 13.1.1 Base ...... 13.1.2Ebhwmxed Project Inmumnce_.._..... .~_.--..~-........ -__.�z/ 13.1.3 Insurance Does Not Relieve Liability -........... .-.JJ 13.1A Default for Failure *oMaintain Fnoummcu-........ -_-_--27 13.2 Indemnities by Developer-- ....... _--_---- ...... --- ....... ..... _.~'-'zr ^3.2."General Indemnity .......... _~._.~~.... -........ ._........ .^~......... _2. B�� ���d m������� � Code Section |7@/-..... ....... ..... -............. ........ ..... ..... ~.~_1y |3.2.3Environmental Indemnity- ....... -............... _............ ........... -.-28 13.3 Tmdemnifi*mUamProcedures ...... ....... .......... ......... ---._-----...... o9 13.3.1 PxmpxNwmce... ....... --.-........... _------_--....... -...... mp 13.3.2 ..~~....... _.... %9 13.3.3 Settlement ...... ..... ... ........ ..-~~.-----...... --_..... --- -.... 'zp � 8.9ACity -_^.... ......... ........................... _............. _~~..29 13.3.5(nmurnme Proceeds ._~..'._.......... ............ ....... ................. .-..uV 14� THIRD PARTY LEGAL -----...... ....... .......... .a9 W 14.1 Developer CnvemanmmvDefemd this Agreement '... ...... _.^_........... 29 � 15. MISCELLANEOUS.,....----__,_---__--_----_._--_-.~90 15.1 Compliance with Applicable .-....--- ............ ................. --D0 uc2�� �wm�no�__..~..__.~-..�---.__.--.---___....-...--.....3n 0 150 Mutual30 � |SA Recordation of Agreement ............ ..-._----_.--........ %V /5.5 Constructive Notice and Anmapmnne._........ .......... ............ .-_...... .-.,~.30 0 � 1�6 Svum�mms�bwc��-.-........._......---._.-_---_.-~.__.3� �= � 15J City DIamugerImplementation -..--.-._~~...-..........~...... -..~... 3O -~ 15.9 Political Reform Act ............................. ................... ............. ...... ............. �3l a. 15.9 31 0 � /5.10 Entire Waivers and Amendments 31 15,11 Principles _---_--._..3l 1���� _-_,__-.._-_-__--_-_-_'__-_----'-.-___- 31 +_ l5.l3 Section Headings and Section and Article References .............. ,...... ................ 3% ! 15J4 `......... _____.,..... .^...... ......... ---- 32 15.15 Calculation of Time Periods ...... ........................................................................ o2 LLI Cr ���� V14/i2 �� 15.16 Time of Essi;nce ................I......._............ ...................... 32 15.17 Further Actions and Instruments .............................. ............... 32 15.19 Severability .......... _ ......... ...... ...... _ ...... 15.19 Legal Expenses . ...... ... __ ......... .......... ............. ...... . . 15.20 No Third Party Beneficiaries .... . .... ... I ... w ....... V . . ............. ....... 33 15,21 Relationship of Parties ..................................................................... ........... __. 33 15.22 Development as a Private Undertaking ........................ .......... 33 15.23 Inspection of Books and Records ........ ........... .............. ....33 15.24 Estoppel Certificate __ ........... - ........... ...... ____ 33 15-25 Applicable Law; Venue— .................................................................................. 34 15.26 Non -Liability of City Officers and Employees . ... __ ................ . ....... 34 15.27 Non -Liability of Developer's Officers and Employees ...................................... 34 15.29 Notices, .......................... ___ ... ....... __ ... __ ........... ­--_ ....... 15.29 Representation as to Ownership.. ......... . ....... ....... ___3s 15-30 Representation as to Ownership- .......... ...... ....... __ ...... . . 35 1531 Authority to lixecute-__ ........ ­­­ .... ­.. ..... ....... ___ ... 35 1532 Authority to Execute ..... ........... .............. - ...... ... ___ 35 15.33 Execution of Agrccotcnt; Counterparts .............................................................. 35 15.34 Exhibits,__ ..... . ............. ........ ........... ............... ...... ...... ........... 35 r J X Mn1JaM4112 -IV- I" a I - x 26"321.71IMoWDUS 023110-000MO-14121MV1. 5 LJ r J C L a sAn-A vi w I ang" yva I I ril ILI I RIM RM 0 M I I M I PIRNMINIMMOK111 I 6 hereinafter referred to as the "Enhanced Project." R Through this Agreement, the City has committed to provide certain additional I i-i Ai -I j ♦T: 1 1 6. M 1, 1%is Agreement is intended to be, and shall be construed as, a development agreement within the meaning of the Development Agreement Statute. This Agreement will eliminate uncertainty in planning for and secure the orderly development of the Pro", ensure a desirable, and functional community environment, provide effective and efficieAL development of public facilities infrastructure, and services appropriate for the development of the Property, assure attainment Of the maximum of utilization of resources within City, and provide other significant public benefits to City and its residents by otherwise achieving the goals and purposes of the l3cyclopinent Agmemcnt Statute. In exchange for these benefits to City, Developer desires to receive the assurance, that it may proceed with development of the property in accordance with the terms and conditions of this Agreement and the Existing .and Use Regulations (as defined below), all as more particularly set forth herein. L City has determined that the Base Project and, the Enhanced Project are consistent with the goals and policies,of the General Plan and imposes appropriate standards and quality of life and of the environment within City. Prior to its approval of this Agreement, City considered the environmental impacts of the Base Project and the Enhanced Project and completed its environmental review of the Based Project and the Enhanced Project. K. On December 21, 2011, the Downey City Planning Commission ("Planning Commission") held a public hearing on this Agreement, made certain findings end determinations with respect thereto, and recommended to the City Council of the City of Downey ("City Conned") that the Agreement be approved. WIN I J1 RIM-1 11114 Awl Y17jLM-I`Vk7-I �-Ti -177,171 p this AgreemenIL 26"1H.7/dAwqwm48 01611OID0026-14-12andito .2- 112i r i i.Ij 11111gq Based upon the foregoing Recitzls, which am incorporated herein by this reference, and ror good and vatuable consideration, die receipt and sufficiency of which is hereby acknowledged, City and Developer hereby agree as follows: The following terms when used in this Agreement shall have the meanings set forth 1.2 "Me term "Agreement" shall mean this Development Agreement by and among City and Developer. 1.3 The term "Annual Revige shall have the moaning ascribed in $ciction 10.1 of this Agreement. 1.4 The term "bankruptcy Law" shall hican Tide 11, United States Code, and any other or successor sute or federal statute relating to assipment for the benefiE of creditors, appointment of a rectiver or trustee. bankruptcy, composition, insolvency, moratorium, reorganization, or similar matters. 1.5 The term "Bankruptcy Proceeding" shall mean any proceeding, ther voluntary or involuntary, under any Bankruptcy Law. 1.7 The term "Bm Projectff "If mean Developer's dtvelopment of the Property within the pmmeters set forth in Recital E, and in a manner otherwise consistent with the Existing Land Use Regulations. 1.8 The term "CEQAO shall mean and refer to ft California Envirownental Quality Act Public Resources Cod� Sections 21000, et seq. 1.9 The term "Certiricate of Occupancy" shall mean A Certificate of Occupancy as "LlItf-LI A-YC-Mj4I 794.1 4 ra W4 I-F."" of Building Officials, as may be amended from time to time. 1.10 The teFrn "CertWication" shall mean a written cattification provided on or before February 15 of each year during the Term, signed by Developees managing tnernber Q) MOW" wag makes the election authorized by Section 6.1); provided, however, dut this portion, of tho 2M52L7&NU-pM MHO-W24-0-12MMAN M -an 2 M W-111561 I 3M F-M X: Section 6.1 of this Agreement, and (10 demonstrating Developer's good faith compliance all terms of this Agreement for purposes of conducting ft annual revioNy required by Section 10. U I is . ) 1 .1 - TrIMC13 1.12 The term "Cilty Council" shall mean the City Council of the City of Downey. 1.13 [RMERVED] 1.14 The term 'City kees and Charges" shall mean Development Fees and C Processing Fees, to the extent such fees are collected by and on behalf of Cityi I MEMH�� 1.16 The term "City Parties" sliall mean City, City Council, City offictrs, employees, attorneys and agents. I 1.17 The term "City Processing Fees" shall meart all fees charged by and on behallf of the City in connection with the processing, review, and consideration of applications for development, including any periodic updates thereto to reflect changes in the costs of processing, review, and consideration of applications.. 1.18 The term "Claim" shall mean any claim, loss, cosi; damage, expense, liability, lien, action, causo of action (whether in to contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees, Legal Costs, and expenses and investigation costs of whatever kind or nature), and anyjudgment. Without limiting the fiDregoing, "Claims" includo any matter that results or arises in any way from tiny of the f4trwittg: (1) the noncompliance by Developer or its contractor with any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal andtor state labor laws or regulations (including, without limitation, if C n applicable, the requirement to pay state and/or faeral prevailing wages and hir appre tices); (2) the implementation of Labor Code Section 1781 and/or Davis -Bacon, or any other similar law or 3 regulation; and/or (3) failure Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or Davis Bacon, as the same may be amended from 6 time to time'. or any other similar law or regulation. ki i.i 1.19 WSERVEDI 1.20 The term "Compifimee Yea? shall mean and reter to a period of one year. The i2 first Compliance Year commences on the Operation Period Commencement Date and ends on the anniversary of the Operation Period Commencement Date. "Me second through twentieth L Compliance Years follow thereafter. 2 111 The term "Mfaulting Patty" shall have the meaning set forth in Section 9.1, trMow. 1.22 The term "Davia-Bacon" shall mean , 40 U.S.C. Section 3141, et seq., and the �cgulafions promulgated thereunder set forth at 29 CFR Part 1, as the same may bc amended from time to time, or any other simiJar law or regulation. Section 11 of this Agreement 1,24 The term "Developer Leased Property' shall mean that certain real property I[I alit it MMIM, 1.26 The term "Developer Representative" shall have the nwaming set forth in Section 5.5. 1.27 Ybe to "Development Agreement Statute" shall inean Sections 65864 through 658695 of the Califbmia Government Code, as the same may be amended from time to time. 128 The term "Development Fees" shall rq= all fees collected by and on behalf of the City that are enacted by the City at any time pursuant to the Mitigation Fee A4 Government Code sections 66000 et seq. 1.29 The term "Effective Date" shall mean March 15, 2012. 1.30 'Me term 'Tnhanced Project" shall mean Developees devel6pment� of the iffiggi Whig G. aTd o*exiise ovTsiste7it-WAL during or from Dcvcloper`�s ownership or use of the Property. 11111111111111111i 1.32 The term "Environmental Matters" means (r)the pmence of Hazardous Substances on, in, under, from or affecting all or any portion or the Property; (U) the storage, holding, handling, release, threatened release, discharge, generation, leak abatement; removal or transportation of any Hazardous Substances on, in, under, from or affecting all or any portion of Property, (W) the violation of any law, rule, regulation, judgment, order, permit, license, agreement covenant, restriodon, requirement or the like by Developer, its agents or contractors, rotating to or goveming in any way Hazardous Substances on, in, under, from or affecting all or any portion of the Property; (iv) the failure of Developer, its agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the ' like in connection with Developer's activities on all or any portion of the Property; (v) the implementation W enforcement by Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any lime, become necessary to protect against the release, potential release or discharge of Hazardous Substances on, in, under, ftorn or affwIng all or any portion of the Property; (W) the failure of Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Substances existing, stored or generated on, in, under or from all or any portion of the Property; and (vii) any investigation, inquiry, order, hearing, action or other proceeding by or before any Govemmbntal Agency in connection with any Razardous Substances on, in, tinder, from or affecting all or any portion of the Property or the violation of any Environmental Law rotating to all or any portion of the Property. 1.33 The term "Existing Land Use Regulations" shall mean the General Plan, the Specific Plan, the N40A (which is pan of the Specific Plan) the Zoning Code,"� the Municipal Code, Maps, and all other ordinances, resolutions, rules, and regulations of City governing development and use of the Property in effect as of the Effective Date, including without limitation the permitted uses of the Property, the density and intensity of use, maximum height and size of proposed buildings, provisions for the reservation and dedication of land for public purposes, and, subject to the following sentence, construction standards and specifications. The term "Existing Land 'Use Regulations" does not include the Unifonn. Codes pertaining to IJ construction adopted for general application in City. The Specific Plan provides that in the event of a conflict between the provisions of the Specific Plan and the provisions of the Zoning Code, 4 the provisions of the Specific Plan control. 3 L L 134 The term "Equity Interest"' shall mean all or any part of any direct or indirect equity or ownership interests) (whether stock, partnership interest, beneficial interest in a trust, membership interest, or other interest of an ownership or equity nature) in any entity at any tier of ownership that directly or indirectly owns or holds any ownership or equity interest in a LO Person. W�WELQ=] J 136 The term 'Fire Station" shall mean a minimum of an eight thousand� (8,060) square foot portion of Building I that is required to be preserved in place by the MOA, The Fire Station shall be appointed with amenities and facilities that are the functional equivalent of those at a typical fire station headquarters existing at the time of the development of the Fire Station. R LI 5 C al C 2fiM21.7rMnqdON3 02A t 404OW4 4-12/nWi. R*061146019 W 1.37 ne Term "Fire Station Construction Costs" shall mean an amount not to exceed Four Million Four Hundred Thousand Dollars ($4,400,000), including but not limited to construction costs, soft costs, financing costs and a developer fee of ten percent (10%). 138 IU term Tim Station Lease shall mean a ]me by Developer to City of the --votic-f Wks 317101 ME: fri-INTROT, as rcasonauty Departmiant 139 The term "Fire Station Site' shall mean a site within that portion of the Property comprising approximately 38,000 square feet, together with associated parking, depicted on EXAi A. 2U L 1.40 The term "Floor Area" shaU mean the tote!arvit of all floors tamed Within the exterior wRHs of all buildings on the Property. 1.42 The term 'Grant Amount" means up to One Million Dollars per year 1,43 The term "llotel Development" shall mean 116,000 square feet of floor area (150 hotel rooms) of development for hotel uses under the Enhanced Project which shall be operated under one of the brand names set forth in Ehh:tbi_01" or such other brand name approved by City, in its sole and absolute discretion; provided, however, that the City Manager shall have the authority to grant up to a ten percent (100/.) variance in the amount of hotel square footage or the number of hotel rooms, and in the event such a variance is granted, the resulting development shall constitute "Hotel Development" un&r this Agreement. =:===4U -7- i "M "hazardous waste" in Section 25117 of the California Health and Safety Code or, as "hazardous substances" in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified ashazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include, without limitation, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances desigmited as a hazardous substance pursuant to 33 U.S.C. Section 1321 or listed pursuant to 33 U.S.C. Section 1317. 1.45 The term "Improvements" shall mean all commercial improvements, lands6ping, parking, and other related appurtenances to be constructed on, under, about or around the Property for the uses authorized by this Agreement 1.46 The term "Institutional Lender" shall mean any of the following: (a) A bank (State. Federal or foreign), trust company (in its individual or trust capacity), insurance company, credit union, savings bank (State or Federal), pension, welfitre or retirement fund or system, real estate investment trust (or an umbrella partnership or other entity of which a real estate investment trust is the majority owner), Federal or State agency regularly making or guaranteeing mortgage loans, investment bank or a subsidiary of a Fortune 500 company (such as AT&T Capital Corporation or General Electric Capital Corporation); (b) any Person that is a wholly owned subsidiary of or is a combination of any one or more of the Persoits described in "(a)" of this Section. ROAMW�r �ghlil�OtT.NT.Trig-ImKT.-�T-mr-T =1W wz�nvflwl =1`1111-7-11 MT W." 11 W-4 q f[4;J il-14 L11 tali I I- Irkil"49M (K-M KkOA-1-1 1.51 IM6 tdrrh "Legal Costs" shall mean, for any Person, all actual and re=nable V44 iWWQA-11tW 9WaWVW W Ago- Q WQ�A" I "A court costs and expenses, including in or as a result of any: (a) Banlauptcy Proceeding; i M-1 I M9 I t I tvJ I 1.52 The term "Maintenance Deficiency" shall mean an occurrence of an adverse condition art any area of the Property that is subject to public view in contravention of the general maintenance standard described in Section 5.6,1, below. 1.53 The term "Maximum Fee Sharing Amount" shall to dm million eight hundred thousand dollm ($3,800,000). 1.54 The term "MOA" means that Memorandum of Agreement by and among National Aeronautics and Space Administration, the General Services Administration, the California State Historic Preservation 0fricer and the City of Downey. 1.55 The term "Mortgage" shall mean a mortgage, deed of trust sale and leaseback arrangement, or any other form of conveyance in which the Property, or a portion thereof or interest therein, is pledged as security, and contracted for in good faith and for fair value, 1.56 no terra "Mortgagee" shall mean the holder of a beneficial interest under a Mortgage, or any successor or assignee of any such Mortgagee. 1.57 The to "Municipal Code" shall mean and ie&r to the City of Downey Municipal Code, as the Municipal Code exists as of the Effbetive Date, 1.59 The term "Non -Defaulting Party" shall have the meaning set forth in Section 9.1, below. 1.60 The term 'Wfice DevelopmenC shall mean 300,000 square feet of floor am of development for office uses. 1.61 The term "Operating Period" shall mean the period commencing upon the Operation Period Commencement Date and ending on the twentieth (2&) annivetsaryfliercot 1.62 Tbe term "Operation Period Commencement Date" shall mean and refer to the date on which the Required Operations -are established. A. 0 1.63 The term "Parties" shall mean Developer and City, and their respective C. successors and assigns. 10 5 L64 The term "Person" shall mean any am ocla i tion, corporation. government, Z individual, joint venture, joint-stock company, limited liability company, partnership, trust� unincorporated organization or other entity of any kind. 0 1.65 The tam "Political Reform Ace' shall mean Government Code section 19000 et seq, 1.66 The term "Prop"" shall mean the Developer Owned Property and the O� Developer Leased Property, asjointly depicted an &W_4it IT." -9. 0 i "I 1.67 The term "%maining Commercial Development" shall mean all retail, commercial, restaurant development on the Property other than (r) the Large Format Retail Development, and (h) the Theater Development. 1.68 The term "Required Operations" shall mean and refer to operations conduct - sales to the public of 100% of the Large Format Retail Development, As part of the Requi to California sales and use taxes. 1.69. The term "Sales Tax Revenues" shall moan s1Wl moan the total sales taxes under the laws of California during a Compliance Year from sales on the Property that have the City and the Property designated as the point of sale. 1.70 The term "Speciric Plan" shall mean and refer to the Amended Mwncy LandiiM Qpocific Plan, as it exists as of the Effective Date. 1.71 The term "Term" shall mean the period of time during which this Agreement shall be in eftot and bind the Panics and their respective successors and assigns, as set forth in Section 2.1 of this Agreement; provided, however, that certain of the obligations described in this Agreement shalt be in effect and bind the Parties and their respective successors and assigns for in perpetuity, as more particularly described in Sections 2.2. 1.72 The term 'Theater Development" shall mean 65,000 square feet of development for one or more'A..eater uses. 1.73 The term "Transfer" shall mean with respect, to any property; right or obligation any of the following, whether by operation of law or otherwise, whether voluntary or involuntary, and whether direct or indirect: Q) any assignm=4 conveyance, grant, hypothecation, mortgage, pledge, said, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any casement lien, or other encumbrance); (H) any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any direct or indirect Equity Interest(s) in the owner of such property, right or obligation by the holders of such Equity Interest(s); (W) any transaction described in "(U)" of this Section affecting any Equity Interest(s) or any other interest in such property, right or obligation or in any such owner (or in any other direct or indirect owner at any higher tier of ownership) through any manner or means whatsoever; or (N) any transaction that is in substance equivalent to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses "(t)" through "(iv)" of this Section shall be deemed a Transfer by Developer even though Developer is not technically the transferor. k "Transfer" shall not,, however, include any of the following (provided that the other Party to this Agreement W received notice of such occurrence) relating to any Equity Interest: (iA mere change in form of ownership with no material change in beneficial ownership and constitutes a tax-free transaction under Federal income tax law and the State real estate transfer tax; (11) A conveyance to member(s) of the immediate flarnilyCies) of the 209521,7AM.WDMJ 02110-MOM-14-WYMMo 40- 'ECO RDE R MEMO: This COPY is NOT an OFFICIAL RECORD. transferors) or trusts for their benerit-, or (W) a conveyance to any Person that, as of the Effective Date, holds an Equity Interest in the entity whose Equity Interest is being transferred. 1.74 The to "Zoning Code' shall mean and refer to the City of Downey Zoning Code, as said Zoning Code exists as of the Effective Data of this Agreement, and as it may further be amended by City from time. 2. TERM. 2.1 TeM. 2.1.1 Term without Enhanced ProfW Elctt(2a. Subject to Section 2.2, if Developer does not remake the election authorised by Section 6.1 within the time required by Section 61. the Term shall commence on the Effective Date and shall continue thereafter for a period of seven (7) years from and after the Effective Date, unless this meat .is terminated, modified, or extended by circumstances set forth in this Agreement or by mutual written consent of the Parties. 2.1,2 Tenn with Enhanced Proiect _Election. Subject to Section 2.2, if Developer makes the election authorind by Section 6.1 within the time required by Section 6.1, the Term "I commence on the Effective Date and shall continue thereafter for a period of twenty-five (25) years from and after the Effective Date, unless this Agreement is terminated, modified, or extended by circumstances sit forth in this Agreement or by mutual written consent of the Parties. 2.2 - Provisions Sury The provisions, rights, and obligations set forth in, Section 4A.5 shall remain effective and binding on City and Developer (and/or its successor(s) in interest) until the expiration of the time periods set forth in Section 4.4.5, The 0 provisions, rights, and obligations set forth in, Article 8 "1 remain effective and binding on City and Developer (and/or its successor(s) in interest) until the expiration of the time periods set forth in Article S. The provisions, rights, and obligations set forth in Section 12A shall remain -J < effective and binding on City and Developer (and/or its successor(s) in interest) until the U expiration at earlier termination of that certain Ground Uaw By and Between City of Downey and Industrial Realty Croup, ILLC, dated on or about December 4, 2003. The provisions, rights,, 0 and obligations set forth in, Section 13.2 shall remain effective and binding on the City and C Developer (and/or its successor(s) in interest) until the expiration of the statute of limitations On .01 any and every Claim, The provisions, rights, and obligations set forth in Article 5 shall remain 0 effective and binding on the City and Developer (and/or its successor(s) in interest) for a period 0 of twenty five (25) years from and after the Effective Date. 3, DEVELOPMENI-Q�R�QP, T�Y, 3.1 De Applioablc Regujatiow�- Vested Right to Other than as expressly se5 W velm C- forth herein. during the Tenn, the terms and conditions of developmertt applicable to tile Property, including but not limited to the permitted uses of the Pmpt�dy, the density and intensity of use, maximum height and size of proposed buildings, and provisions for the mservation and dedication of land for public purposes,, shall be those set forth in the Existing Land Use Regulations, In coftnection thercwith� subject to the terms and conditions of this Agrecmenl� Developer (and/or its successor(s) in interest) shall have the vested right to carry out and develop the Base Project and/or the Enhanced Project on the Property in accordance with the Existing Land Use Regulations. Developer shall also have a vested right to: (i) receive from City all future development approvals for the Base Project and/or the Enhanced Project that are consistent with, and implement the Existing Land Use Regulations and this Agreement; (it) not to have such approvals for the Base Project and/or the Enhanced Project be conditioned or delayed for reasons inconsistent with the Existing Land Use Regulations or this Agreement; and (ifil develop the Base Project and/or the Enhanced Project in a manner consistent with such approvals in accordance with the Existing Land Use Regulations and this Agreement. 11 4 1 A i to .. 4i 1 process vesting tentative maps in accordance with Chapter 4.5 (commencing with tua4f Code, and/or the Zoning Code. 3.3 Processine of AnnfiGations-and,Permits. Upon satisfactory completion by Developer of all required preliminary actions and payment of appropriate City Fees and Charges, if any, subject to the Maximum Fee Sharing Amount City shall proceed to process and check all L applications for Base Project and/or the Enhanced Project development and building approvals 1: within the times set forth in the Permit Streamlining Act (Chapter 4.5 (commencing with ji Section 65920) of Division I of Title 7 of the California Government Code), the Subdivision Ll Map Act (Division 2 (commencing with Section 66410) of Title 7 of the California Government i" J Code), and other applicable provisions of law, as the same may be amended from time to time. Ir 3 3.4 Pther Govern Provided that Developer pays the reasonable cost L of such cooperation� after City has approved the development of any portion of the Property, City shall reasonably cooperate with Developer in its cfforts to obtain such additional permits and approvals as may be required by any other governmental or quasi -governmental agencies having jurisdiction over such portion of the Property, which permits and approvals are consistent with City's approval and which are consistent with applicable regulatory requirements. City does 2 not warrant or represent that any other governmental or quasi -governmental permits or approvals will be grante& 3.5 S u b§ ,{rent at Plan Amendments and Zotm Chances. In consideration for Genqr a the benefits provided to Developer under this Agreement, including without limitation the vesting of the right to develop the Base Project on the Property in accordance with the Existing Land Use Regulations, Developer agrees that City shall have no obligation under this Agreement to grant any subsequent application for any amendments to the General Plan and/or changes to 3. the zone designations for the Property which may be initiated by Developer. Notwithstanding -12- 0 the foregoing, this Section 3.5 shall not limit Developer's statutory, constitutional, or common law right(s) Cif any) to seek future legislative approvals from City, 16 Tim n&atDovelopment. City acknowledges that Developer cannot at this time predict the timing or rate at which the Base Project and/or the Enhanced Project will be developed. The timing and rate of development depend an numerous factors such as market demand, interest rates, absorption, completion schedules, and other factors which am not within the control of Developer or City. In Pardee Construction Co. Y. City of Camarillo (1984) 37 CAM 465, the California Supreme Court held that a construction company was not exempt from a city's growth control ordinance notwithstanding that the construction cornparty and the city had, prior to the adoption of that ordinance, entered into a consent judgment (tantamount to a contract under California law) establishing the company's vested rights to develop its property in accordance with the existing zoning. The California Supreme Court reached this result on the basis that the consent judgment failed to address the timing of development. It is the intent of the Parties to avoid the result ofthe Pardee case by hereby acknowledging and providing in this Agreement that Developer shall have the vested right to develop the Base Project and/or dw Enhanced Project on the Property in such order and at such rate and at such tim4 as Oeveloper deems appropriate within the exercise of Developers sole subjective business judgment, notwithstanding the adoption of an initiative or any other measure after the Effective Date by City's electorate to the contrary. In addition to and not in limitation of the foregoing, but except as set forth in the following sentence, it is the intent of the Parties that no City moratorium or other similar limitation relating to the rate or timing of the development of the Base Project and/or the Enhanced Project on the Property or any portion thereof, whether adopted by initiative or otherwise, shall apply to the Om Project and/or the Enhanced Prqject on the Property to die extent such moratorium or other similar limitation is in conflict with the "press provisions of this Agreement Notwithstanding the foregoing, Developer acknowledges and agrees that nothing herein is intended or shall be construed as overriding any of the provisions relating tothe timing of and/or conditions to the provision of any benefit to Develop" under Section 4.), D Section 4.3, Section 6.1, Section 6.2 and Section 6.3, or any Section that otherwise requires that Developer perform an obligation on or before a specified calendar date and/or event, and/or -J within a specified period of time. 0 3.7 Reservations of Authority. Notwithstanding any provision set forth in this a: LL Agreement to the contrary, the laws, rules, regulations, and official policies set forth in this 0 C Section 3.7 shall apply to and govern development of the Base Project and/or the Enhanced M Project on the Property- 0 Z 3.7.1 fonsistem Future City Kcg&fions. City ordinances, resolutions, 2 regulations, and official policies adopted or approved after the Effective Date pursuant to >- procedures provided by law which do not conflict with the Existing Land Use Regulations shall 0 0-- apply to and govern development of Property. Any future City regulations which reduce the L) intensity of the development of the Property below that permitted by the Existing Land Use MO) Regulations, or limit the rate, timing or sequencing of development of the Property in a manner not otherwise provided for in the Existing Land Use Regulations, shall be deemed inconsistent with this Agreement and shall not be applicable to the development of the Property, W 2 cc uJ -13- 0 0- 33.2 !Pverridina State and Federal Laws,and Rejagladons. State and federal laws and regulations which override Developces vested rights set forth in this Agreement shall apply to the Property, together with any City ordinances, resolutions, regulations, and official polities which are necessary to enable City to comply with such overriding State and federal laws and regulations; provided, however, that (a) Developer does not waive its tight to challenge or contest the validity of any such State, federal, or local laws, regulations or official policies; and (fi) in the event that any such State or federal law or regulation (or City ordinance, resolution, regulation, or official policy undertaken pursuant thereto) prevents or precludes compliance with one or more provisions of this Agreement, the Panics agree to consider in good Nth amending or suspending such provisions of this Agreement as may, be necessary to comply with such State or federal laws, provided that no Party shall be -bound to approve any amendment to this Agreement unless' this Agreement is amended in accordance with the procedures applicable to the adoption of development agreements as set forth in the Development Agreement Statute and each Party retains full discretion with respect thereto. 3.7.3 Public Health and Safety. Any City ordinance, resolution, regulation, or official policy, which is necessary to protect persons on the Property or in the immediate community . , or both, from conditions dangerous to their health or safety, or both, notwithstanding that the application of such ordinance, resolution, regulation, or official policy or other similar limitation would result in the impairment of Deveiopces vested rights under this Agreement. 3.7.4 jJmform Construction 9j)—des. Provisions of the building standards set forth in the Uniform i-�Qnstr- =-tion Codes sh- all apply to the Property. As used herein, The term 'Uniform Construction Codes" collectively refers to the 2010 California Building Codes, the 2010 California Electric Code, the 2010 California Plumbing Code, the 2010 Califbmia Mechanical Code, the 2009 Uniform Solar Energy Code, the 2009 Uniform Swimming Pool, Spa and Hot Tub Code, the 2010 Grec'n Plumbing and Mechanical Cade, and the 2010 California Fire Code (including amendments thereto by the Downey Fire Department), as modified and amended by official action of City, and any modifications or amendments to any such Code adopted in the future by City. 3.7.5 Police Power, In all respects not provided for in this Agreement, City shall retain full rights to exercise its police power to regulate the development of the Property. Any uses or developments requiring a site plan, tentative tract map, conditional use pecmlt, variance, or other discretionary permit or approval in accordance with the Existing Land Use Regulations shalt require a permit or approval pursuant to this Agreement, and, notwithstanding any other provision set forth heroin, this Agreement is not intended to vest Developer's right to the issuance of such permit or approval nor to msirict Cilys exercise of discretion with respect thereto; provided,, however, that City acknowledges that it is obligated to process discretionary and ministerial approvals consistent with the Existing Land Use Regulations in accordance with the procedures set fixth in the Specific Plan. 3.8 _Lame Format Retail Dovqlooment Parkine Easement. During the Term, Developer may request in writing that City enter into negotiations for the provision, at no additional charge to Developer, of a parking easement and/or license agreement to accommodate up to twenty (20) parking spaces on no more than forty five one hundredths (0.45) acres of property adjacent to the Property and owned by City. The Panics shall negotiate in good faith to 2498521.71*f=%ItVW 023 1 IQ-MV3-14-12TM0m -14- -1 1111111 q pli 11 40 0 IM"I"EMM 6 WOMEN WM""WRIn 4" of removing improvements on the prior -designated parking area. jy� Ii•- . # TMMMM 3.11 EL%&J!Ac Ofrice Norwithstaiiding anything to the contrary in this Agreement, Developer shall be permitted to develop the 200,000 square feet of additional office floor area described in Recital E on the Developer [cased Property without further discretionary action by the City, so long as the retail floor area is decreased by 200,000 squaw feet and the total square footage of the proposed development does not exceed 1,516,000 square feet ATM 10- 46 evidence submitted by Developer and/or any need for additional infon-nation, Nveloper shall Charges, City shall remit to Developer fifty percent (500%) of said City Fees and Charges. The 10 4.2 der fees and CharExcept as specifically set forth in this Section 4, nothing set f6rth in this Agmcment is intended or shall be construed to limit or restrict City's authority to UM21.7AMMWWA ,1ATWL*JW,TiK$A impose, on new development within the City, new fees, charges, assessments, or taxes that apply to the development of the Property or that increase any existing foes, charges, assessments, or taxes that apply to the development of the Property, and nothing set forth herein is intended or shall be construed to limit or restrict whatever right Developer might otherwise have to challenge any fee, charge, assessment, or tax either not set forth in this Agreement or not in effect as of the Effective Date. In connection therewith, and subject to the partial rebate of City Fees and Charges provided in Section 4,1, Developer shall timely pay all applicable fees, charges, assessments, and special and general taxes validly imposed in accordance with the Constitution and laws of the State of California. Notwithstanding the foregoing, City represents that it has no current plans to increase any City Fees and Charges. OUNUWU r5 4A Acenuntinq and Ttviaw., 4A. I Maintenance of Books 44d_R_e_coEdg. Developer (and/or its successor(s) in interest) shall cause to be prepared and maintained complete, proper and accurate books, MUM= Section 6.1 to build the Enhanced Project. All such books, accounts and reco including true copies of all revenue and other income statements and tax returns, shall be maintained at Dcveiopees (ind/or its successor(s) in interest) address in Southern California,- or at another U IT I Q R-1 I SIT I R-1 qP a - Okl7g] It, t q L.; OIL 4.41 Allocation of Qosts and Exmnscs. In allomfing any item of cos% expense, IC6 Im-If ta accounting principles, consistently applied; shall be uzed. L 4.4 L 3 NgtL-W Aivcr B ' v Cite. The acceptance by the City of a paymcn� or the jprovision by City to Developer of a payment, required by this Agreement shall be without prejudice to the City's right to examine and to audit Developer's (and/or its successor(s). in interest) books, accounts and records to verify the accuracy of any information supplied by Developer (and/or its sucoessor(s) in interest), and to challenge the accuracy and validity of any such payment(s). Developer (and/or its successor(s) in interest) shall make available to the City and the City's designated representatives for Inspection during normal business hours at a business location of Developer (and/or its sumessor(s) in interest) located in Southern California, or at another location reasonably designated by Developer (and/or its successor(s) in interest) in Southern California, on twenty (20) business days' advance written notice, all of Developer's (and/or its successor(s) in interests) books, accounts and records relating to the development of the Property (and all matters which are the subject of this Agreement), which books, amounts 9 and records may be copied or extracted in whole or in part by the City or the City's designated E U representatives, but which will be maintained by City as proprietary and confidential business r_ U ZrAnOAMM40014 -16- Idol information to the extent permitted by the California Public Records Act (Government Code section 6250, et seq.), the Ralph M. Brown Act (GOverment Code section 54950, et seq.) and4or any other applicable state or federal laws respecting the disclosure of information held by a public agency. Mg. 4.4.5 Survival ofAudit , Notwithstanding any provision of this Agreement to the contrary, all of the Citys rights under this Agreement to audit and review any calculations or information submitted thereunder and collect any payments due the City shall survive any expiration of this Agreement as follows; (1) ifDoveloper elects under Section 6.1 to build the Enhanced Project, then any audit right of the temporary fee rebate amounts under Section 4.1 shall continue until two (2) years following the final payment of a rebate amount under Section 4.1; (it) if Developer elects under Section 6.1 to build the Enhanced Project, then any audit right of the Grant Amount under Section 63.2 shall continue until two (2) years after the expiration of the Operating Period; (M) the City's audit right of the Fire Station Construction Costs under Section 8 shall continue until three (3) years after the issuance of a Certificate of Occupancy for the Fire Station. 5. GENERAL 1.)S-_VELOPER CO ANTS Section 3.6, Developershall commcncc mid compl6te, or causse to be common and completed, at Developer's sole cost and expense the construction of the improvements. Developer shall be responsible for all costs of developing the Base Project and/or the Enhanced Project, which Includes all costs for construction, alteration, demolition, installation, and repair work, and all costs for pre -development, and pre -construction associated therewith, including inspection and land surveying work, for the Improvements. Once construction has commenced, Developer shall use commercially reasonable c5arts to pro"od to complete or cause to be completed the Base Project anNot the Enbanced Project in a goodand workmanlike manner. X -J 52 IAW_e Format and Rcmqip ng Commercial Develoomcni, RetUi ers. All Largt L Format Retail Development and Remaining Commercial Development shall be operated under one of the retail brand names set forth in B&hibit "H" or such other retail brand name approved by City, in its sole and absolute discretion. M 5.3 [RESEELVED], 5 5A g!y It igbiAo Inspect, Officecs, employees, agents and representatives of City shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction and operation of the Base Project and4or the Enhanced Project. Developer shall make a representative or Developer L) available to accompany City representatives onto the Property, at all times, during normal construction hours, upon reasonable advance notice fi= City. Developer understands and agrees that any such City inspections are for the sole purpose of protecting Citys rights under this Agreement, am made solely for Citys benefitt, that City's inspections may be superficial and .0 general in nature, and are for the purposes of informing City of the progress of the construction 0-181 104MM-14420MA. -17- of the Base Project and/or the Enhanced Project in a manner consistent with the terms and conditions of this Agreement, and that Developer shall not be entitled to rely on any such inspection(s) as constituting City's approval, satisfaction or acceptance .of any materials, workmanship, conformity of the Base Project and/or the Enhanced Project With this Agreement or otherwise. Developer agrees to make its own regular inspections of the work of construction of the Base Project and/or the Enhanced Project to determine that the quality of the improvements and all other requirements of the work of construction of the Base Project and/or the Enhanced Project are being performed in a manner satisfactory to Developer. 5.5 Develover Attendance at City-Mectiti&s. Developer shall ensure that one or more of its employees or consultants Who are knowledgeable regarding this Agreement and the construction and installation of the Improvements, such that such person(s) can meaningfully respond to City questions regarding the progress of the Improvements and attend meetings of the City Council and City staff, when reasonably requested to do so by City staff ("Developer Representative"). Developer shall identify the Developer Representative in Writing to City within 30 days of the Effective Date, and shall identify any changesin the identity of the Developer Kepresentadve in writing to City immediately upon such change. 5.6 Maintenance Coyggant. Developer for itself, its successors and assigns, covenants and agrees that: " M & notify Developer in writing of the Maintenance Deficiency. If Developer fails to Acute or Lmv-xy-wolv from any future payments and/or rebates to Developer under this Agreemea 5.6.2 gg-tr—RL Graffiti, as defined in Government Code Section 38772, that has been applied to the Improvements and that is visible from any public right-of-way adjacent or contiguous to the Property shall be removed by Developer by either painting over the evidence of such vandalism with a paint that has been color -matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within seventy two (72) hours following the time of written notice from City to Developer of the discovery of the graffiti, City shall have the right to enter the Property, as necessary, and remove the graffiti, without further notice to Developer. Any sum actually expended by City for the abatement of the graffiti, as authorized by this Section, shall 2698521'1faha Q2Ju10-G002r9-L4-12(MVUG become the debt of Developer. If the amount of the debt is not paid by Developer Within thirty (30) calendar days after written demand for payment from City to Developer, City shall have the right to'criforce collection by any available legal means including without limitation the withholding of the amount of the debt from any future annual Grant payment under this Agreement, I UMIUMMINIMI =011 IWO and 2924c, to see= the obligations of the Developer and it successors under this Section, Dericiency or removal of graffiti. This Agreement shall provide notice of such security interest in favor of the City. The City shall reasonably subordinate Its lien rights under this Section to security instruments or leases securing bortatide financing from Institutional Lenders to the Legal Costs) incurred in providing such subordination. 6. 29YLL9kBR COVENANTS RELKrING TO 11-M, E-NITANCED PROJECT 6.1 Pevelover Election To Develop Enhanced ProiZt. At any time during the first five (5) years following the Effective Date, Developer may in its sole and hbsolutc discretion elect to develop the Fribanced ProjecL Such an election shall be effective upon the provision of notice of such election in writing to the City. 6 6.2 _Agolicabilitv of Base Prolect Covenant�, If, pursuant to� Section 6.1, Developer X elects to develop the Enhanced Project, t he following covenants, in addition to those set forth in 0 Article 5 shall remain applicable and binding upon the parties. 6.3 —Operatine CovenanL The provision to City of an election to develop the Enhanced Project pursuant to Section 6.1, shalt constitute Developer's binding commitment to be bound by the Operating Covenant contained in this Section 6.3, which consisft of the following M term and conditions: LL 0 6.3.1 Conduct of Re uinADArAi9n 9 -A., During the Operating Period, Developer hereby covenants and agrees to diligently endeavor to continuously conduct or cause to be conducted the Required Operations on the Property. The failure of Developer to maintain the z Required Operations during any Compliance Year within Operating Period shall, inter olla, cycust the City from the obligation (a make any annual Grant payment pursuant to Section 6.3.2 for that Compliame Year. 6.3.2 Annual Grant Payment. Subject to Developer's continued compliance under this Agreemcnt� on or before June 3'0 following each calendar yew during Operating Period in which Developer maintains the Required Operations. City agrees to pay Developer the Grant Amount, provided, however, that City shall. not be required to pay the Grant Amount for rr La C) 0: -19- 0 lu""MI any calendar year during which Sales Tax Revenues do not equal a minimum of Two Million Five Hundred Thousand Dollars ($2,500,000). 6.3.3 Certification. Within forty-five (45) days following the eund of ea Gia� Ikw?—Y 4_2o4i Developer shall file a Certcation. 6.3A _Use Rqstrict4Ln. Throughout the Operating Period, the Property sh include buildings and facilities stifficient to support the Required Operations. i 6.3.5 Covenant to Maintain ProgM2rt an Tax Rok. Developer covenants to cause the Property to remain on the County of Los Angeles secured teal property tax rolls, continuously, throughout the Term, and to pay all property taxes regarding the Property and all improvements on or to the Property before delinquency, throughout the Tenn. Notwithstanding the foregoing, the City may, in its sole and absolute discretion, and upon written request of Developer, consent to a use of a portion of the Property that would cause said portion of the Property to be removed from the County of Los Angeles secured real property tax rolls. 6.3.6 No Conveyance to Tax Exemp1JEtart -. Developer coveriLts and agrees that throughout the Term, neither Developer, nor its successors or assigns, shall Transfer all or any portion of the Property to any Person or use all or any portion of the Property for any use, that is partially or wholly exempt from the payment of property taxes or that would cause the exemption of the payment of all or any portion of property taxes otherwise assessable regarding the Property, without the prior written consent of the City, which may be given or withheld in the City's sole and absolute discretion. Developer acknowledges and agrees that the covenants contained in this Section are material to the City and its decision to enter into this Agreement as the City receives significant financing from property tax revenues from development within the City and that any violation of such covenants will result in financial injury to the City by depriving the City of property tax revenues from all or a portionf the Property or the Base 0 U Project andlor the Enhanced Project Additionally, Developer acknowledges and agrees that the r restrictions on Transfers set forth in this Section are reasonable under the circumstances because J of the City's interest in property tax revenues from the Property. Notwithstanding the foregoing, Developer and City acknowledge that upon its transfer ih� accordance with Section 8 of this Agrcerncnt, ownership of the Fire Station Site may be hold by a tax exempt entity and/or the Fire Station Site may be used for purpose that is exempt from taxation, and such ownership and/or use shall not require any farther consents under this Section 6.3.6. 6,3.7 Quarsty of Inivrovenicnts. Developer shall, cause the Improvements for t`re_F.j'ra-Fgr..d Pr4jert I c, co 61 Ww amw W at 4-T ww C-09 annual basis from arid after the Effective Date based on the year -over -year change in the ralifft-P-Mi" SN-a Ij 1T 0 t X aU 26M21.7fiMwwDMS 02AII04002r3-WI2IJTUAw .20- im U-16101-0914-kffll I under one of the retail brand names set forth in Exhibit "R' or such other it brand name approved by City, in its sole and absolute discretion. 6.4 Covenants Running %vith tht 1oq4. Ilio provisions of this Ardcic6 shall be covenants runhing with the land of the Property during the Operating Period for the benefit of and shall be enforceable solely by the City in its sole discretion. till fol 1,011 MIN 11 4 7J Wlqpflon to Refralin-from Discrimination. Dcvcloper covenants and agrees for Property, nor shall Developer itself, or any person claiming under or through it,, establish or permit any such practice or practices of discrimination or segregation with reference to the scicction� I occqancx of', r art essecs he Property. no foregoing covenants shall run with the land and shall remain in efkct during (lie Extended Term, T2 Form of Non-diierimination, and Non-smrqApqqq_Qau 'D Ics. cvcloper covenants the Pri #rty-tat Devcloper. such successoirs and gch assigns shall refrain from restricting the 110=4 MMI I 7.2.1 Ln de SLs. "Me grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, erred, religion, sex, marital status, national origin, or ancestry in the safe, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall tiro grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub -tenants, or kub-lessees in the premises herein conveyed. The foregoing covenants shall run with the land." 7.2.2 in leases. ""a Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions, "That there shall be no discrimination against or segregation of any person or group of persons, on amount of race, color, creed, refi&n, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transforring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any pason claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of lonants, lessees, sub -lessees, or sub -tenants in the premises herein leasod." 26MMIJAMMIcUMS 0291114-124TMA. 7.2.3 In c-gatracts, "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, c=4 religion, sex, marital status. national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it,_ establish or permit any such practice or practices or discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub -lessees, or sub -tenants of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 8. FIRF, STATION DEDICAIM AND DEVELOPMENT. 8.1 Qction to.Requije _1kvelovmcnL2f Fire J Station Site. At any time during the _ twenty-five years period following the Effective Date, City may request in writing that Developer bcghi design and ultimately construct the Fire Station on the Fire Station Site. Upon issuing such request in writing, and upon furnishing approved specifications for the development of the Fire Station to Developer, Developer shall be required to diligently commence design and other predevelopment activities, and to diligently proceed to the completion of construction of the Fire Station on the Fire Station Site. City shall reasonably cooperate with Developer and developer shall reasonably cooperate with City in facilitating the construction of the Fire Station on the Fire Station Site. The Parties completion of construction of the Fire Station on the Fire Station Site shall occur within twenty four (24) months after the City issues its request that Developer begin design and ultimately construct the Fire Station on the Fire Station Site, but said timeline shall be extended based on force majeure events under Section 9.4, and based on unreasonab le delays in the issuance of permits or authorizations from governmental authorities. 81 Pesign,and Construction Costs. Developer shall bear all costs, fees, burdens, and charges associated with the design, pennitting, construction and delivery of the Fire Station in a manner flukt conforms to the specifications fitmished by City pursuant to Section 8.1. City shall waive all City Fees and Charges in connection with the development and construction of the Fire Station, and such waived amount shall not be included in the Maximum Fee Amount. 8.3 §ubdiv L son of Fire Station Site. Within two years following the issuance of a Certificate of Occupancy for the Fire Station, Developer and City shall cause'the Fire Station Site to be a separately saleable property through the. filing of a condominium map, or such other procedure for rendering the Fire Station Site saleable as the Parties may mutually agree upon. 9.4 Developer's Rental or Fire $tation to City. Upon issuance of a Certificate of Occupancy for the Fire Station, City and Developer shall enter into the Fire Station Lcasca This Agreement creates a present obligation to enter into the Fire Station Lease. AI! material terms and requirements to be includ ' ed in the Fire Station Lease have been included in this Agreement, and any additional matters included by mutual consent in the Fire Station Lease shall be fully consistent with the tam set forth in this Agreement 8.5 C&pvcyagge of Fite fl n_a14d Fire Station Site to Ci!y. Upon payment by City to Developer of the Fire Station Construction Costs, which shall be paid by City to Developer as rent over a period of twenty (20) years, the Fire Station Lease shall terminate. Upon the 2fiMa4.7fiMwM.1)?A 021H INMV344-121TWAM -22- termination of the Fire Station Lease, Developer shall convey fee title to the Piro, Station, the Fire Station Site and all improvements and fixtures thereon to City, and the Fire Station Lease shall be terminated with such termination. 9. DEPAULT,MM MIES. AND TMMTAJ1OM 91 1it ticc and l3npoitunity to Cup. Before this Agreement may he terminated or action may be taken toobtain judicial relief, the Party seeking relief ('74on-Defaniting Party") shall comply with the notice and cure provisions of this Section 9. 1 , A Nondefallting Party in its discretion may elect to declare a default under this Agreement in accordance with the procedures hereinafter set forth for any failure or breach of any other Party ("Defaulting Party") to per any material duty or obligation of said Defaulting Party in accordance with the terms of this Agreement. However, the Non -Defaulting Party must provide written notice to the Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required by the Nondefaulting Patty to cure such breach or failure. The Defaulting Pairty shall be deemed in "default" of its obligations set forth in this Agreement if the Defaulting Party has failed to take action and cured the default within fiffeen (15) days after the date of such notice (for monetary defaults), within thirty (30) days after the date of such notice (for non-monetar? defaults), or within such lesser time as may be specifically provided in this Agreement. If, however, a non - monetary default cannot be cured within such thirty (30) day period, as long as the Defaulting Party does each of the following, Ilion the Defaulting Party shall not be deemed in breach of this Agreement-, (z) notifies the Non -Defaulting Party in writing with a reasonable explanation as to the reasons the asserted default is not curable within the thirty (30) day period; (11) notifies the Non -Defaulting Party of the Defaulting Party's proposed course of action to cum the defatilt; (in) promptly commences to cure the default within the thirty (30) day period; (iv) makes periodic reports to the Non -Defaulting Patty as to the progress of the program of cure; and (v) diligently prosecutes such cure to completion. Notwithstannfing the foregoing, the Defaulting Party shall be deemed in default of its obligations set forth in this Agreement if said breach or failure involves the payment of money but the Defaulting Party has filled to completely cum said monetary default within fifteen (15) days (or such lesser time as may be specifically provided in this Agreement) after the date of such notice. 9.2 Deraolt Remedies. Subject to Section 9.3, in the event of a default, did Non - Defaulting Party, at its option, may institute legal action to cure, correct; or remedy such dcffiult� 0 enjoin any threatened or attempted violation, enforce the terms of this Agreement by specific C perfornunce, or pursue any other legal or equitable remedy. Furthermore, City, in addition to or as an alternative to exercising the remedies set forth in this Section 9,2, in the event of a material z default by Developer, mray give notice of its intent to terminate or modify this Agreement 0 pursuant to the Development Agreement Statute, in which event the matter shaR be scheduled for consideration and review by the City Council in the matincr set forth in the Developmen'! 0 Agreement Statute. U V 9.3 Develooer's Exclus The Parties acknowledge that City would no-, have entered into this Agreement if it were to be liable in damages under or with respect to this Agreement, or the Existing Land Use Regulations, or the application thereof, or any permit or approvaL sought by Developer in accordance with the Existing Land Use Regulations. Acctirdingty, Developer covenants on behalf of itself and its successors and assigns, not to sue 2 2G"521;7/1M.OVtO&M ' 0281 1G-0W.7J3w14-tvnNm. -23- City for damages or monetary relief for any breach of this Agreement or arising out of or connected with any dispute, controversy or issue regarding the application, interpretation or effect of this Agreement, the Existing Land Use Regulations, or any land use permit or approval sought in connection with the development or use of the Property or any portion thereof, the Parties agreeing that declaratory and injunctive relief; mandate, and specific performance shall be Developer's sole and exclusive judicial remedies. Notwithstanding the foregoing, the Parties acknowledge and agree that Developer may seek specific performance of City's monetary obligations under this Agreement, and that such an action for specific performance shall not be construed as an action for damages. 9.4 force The obligations by any Party hereunder shall not b deemed to be in default where delays or failures to perform are due to any cause wvithoxrt dwc lash and beyond the reasonable control of such Party, including to the extent applicable, the following. war, insurrection; strikes; walk -outs; the unavailability or shortage of labor, material,lor equipment, riots; flood&; earthquakes; the discovery and resolution of hazardous waste -or significant geologic, hydrologic, archaeological, paleontologic -at, or endangered species problems on the Property; fires; casualties; acts of God; governmental rcstdctiGns imposed or mandated by other goveritinctual entities, with regard to delays of Dcvctopees performance, delays caused by City's, failure to act or timely perform its obligations set forth herein; with regard to -delays of City's performance, delays caused by Developer's failure to art or timely perform its obligations set forth herein; inability to obtain necessary permits or approvals from other governmental entities; enactment of conflicting state or federal statutes or regulations; judicial decisions; or litigation not commenced by such Party. Notwithsianding the foregoing, any detay caused by the failure of City or any agency, division, or office of City to timely issue a license, permit. or approval required pursuant to this Agreement shall not constitute an event of force majeure extending the time for City's performance he der. If written notice of such delay or impossibility of perforniance is provided to the other Parties within areasonable time after the commencement of such delay or condition of impossibility, an extension of time for such cause will be granted In writing for the period of the enforced delay, or longer as may be mutually agreed upon by the Parties in writing, or the performance readered impossible may be excused in writing by the Party so notified. In no event shall adverse market or financial conditions constitute an event of force majeure extending the time for such Party's performance hereunder. Unless the parties agree in writing to the contrary, in no event shall the Term of this Agreement be extended by an event of force majeure. ia designee finds and determines that Developer has not complied with any of the terms or -24- Fill I 0 LIJ X UJ 0 cc 0 Article 9 horcitt, City may exercise its rights and remedies relating to any such event of default only after the period for curing a default as set forth in Article 9 has expired without cure of the default, The cosh incurred by City in connection with the Annual Review process shall be paid by Developer. 103 With respect to each year in which City approves Developer's compliance with this Agreement, City shall, upon written request by Developer, provide Developer With a written certificate of good faith compliance within thirty (30) days of CiWs receipt of Developer's request for same. MESWMEE�� 11.1 Encumbrances on the Property. The Parties hereto agree that this Agreement shall not prevent or limit Developer, in any manner, from encumbering the Property or any portion thereof or any improvements thereon with any Mortgage securing financing with respect to the construction, development, use, or operation of the Base Project and/off the Enhanced Project. III MortMgoc Prplectiop. This Agreement shall be superior and senior to the Hell of any Mortgage. Notwithstanding the foregoing,, nobreach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, and any acquisition or acceptance of title or any right or interest in or with respect to the Property or any portion thereof by a Mortgagee {whether pursuant to foreclosure, trustee's sale, dq=d in lieu of foreclosure, lease termination, or otherwise) shall be subject to all of the terms and conditions of this Agreement and any such Mortgagee who takes title to the Property or any portion thereof shall be entitled to the bertefits arising under this Agreernem 11.3 Morteapee Not ObliggLed, Notwithstanding the provisions ofthis Artktc 11, a lit A*r=GTiI7FIFTK*I be a condition dcirttoCity'sperforanarizo ere der. 11.4 Notice of Default to, Mort gace, Right Of MOrtilUee to Cure. each Mortgagee shall, upon written request to City, be entitled to receive written notice from City of the results of the Annual Review and of any default by Developer of its obligations ad forth in this Agreement. Each Mortgagee shall have a further right, but not an obligation, to core such default within fifteen (15) days after receipt of such notice (for monetary defaults), within thirty (30) days after receipt of such notice (for non -monetary defaults) or, if such default can only W remedied or cured by such Mortgagee upon obtaining possession of the Property, such Mortgagee shall have the right to seek to obtain possession with diligence and continuity through a receiver or otherwise, and to remedy or cure such default within thirty (30) days after obtaining possession, and, except in case of emergency or to protect the public * health or safety, City may not exercise any of its judicial remedies set forth in this Agreement until expiration of such thirty I69W20hM=wDMS 0241 1Q-WQ2ri-14-IVnU4- -25- rJ (30) day period, provided, however, that in the case of a default which cannot with diligence be remedied or cured within such thirty ('30) day period, the Mortgagee shall have such additional time as is reasonably necessary to remedy or cum such default provided Mortgagee promptly commences to cure the default within the thirty (30) day period and diligently prosecutes such cum to completion. 12, ASSIGNWNT. 12.1 ffigh-t_tq-A-§Lj&nq, Subject to City's prior written consent, which shall not be this Agreement in connection with a Trans&r of Developees interest in the Property. In the 4 N G 1 ro -7 ITT, 1 7 .1 assivace's demonstrated exArience in develoWns, and/or o Section 6.1). the assignec's commitment to develop and maintain the Base hvject (or the D• eloper is in default hercuunder prior saidtransfer. 12.3 AsNiance Subiect loTerms of Aercement. Following an assignment or transfer of any of the righm and interests of Developer set forth in this Agreement in accordance with Sections 12.1 and 12.2, the assignee's exercise, use, and enjoyment of the Property shall be subject to the to of this Agreement to the same Went as if the assignee or transferee were Developer. 12.4 Aploase UDon, Trans ngMI in fgE oE L _LM120 gro .M. Upon t e written consent to Section 13.01 of that certain Ground Lease By and Between City of Downey and Industrial Realty Group. LLC. dated on or about December 4, 2003 (which consent shall (tot be RWNW W-W&W4,94,61WW' -allimog at, - all tgulligmu V, -26- 1 11 gong MI-1 K relieved of its legal duty to perform the assigned obligations set forth in said Ground Lease, except to the extent Developer is in default thereunder prior to said trawfor. 13. LNSAJRANC1 NNUMNITY - MINE= A.MR company. 13.12 Enhanced Proig���- If Developer elects tinder Section 6.1 to - I ;Ikpjw aft tke P;J" e types ano M arno _71# between City and Industrial Realty Group, LLC, a Nevada limited liability company. 13.1.3 IPsuranea Does Not Relieve Liaty. Insurance Coverage in the L% 13.1.4 Default Por Failyre to,i by Developer to tI is in and maintain the insurance coverage required by this AgreemenL 13.2 jde�-MnWe �Vcl �- 1321 general Indemnity. Developer agrees to indemnify, protect, defend, and hold harmless the City Parties from and against any and all Claims which may arise, directly or indirectly, from the I acts, omissions, or operations of Developer or Developer's agents, contractors, subcontractors, agents, or employees pursuant to this Agreement, but excluding any loss resulting solely from the intentional or active negligence of the City Parties. Notwithstanding the forego' n& City shall have the right to select and retain counsel to defend any such action or actions and Developer shall pay the cost thereof; provided, however, that the Parties agree to attempt in good faith to coordinate and/or consolidate their defense of any Claim that is subject to the indemnification provisions of this Section 13.2. 131.2 2ELygil atIA-YOtice tO Developer of Labor Code Section 1*181. in connection with, but without. limiting,the foregoing, Developer hereby expressly acknowledges and agrees that the City is not by this Agreement affmiriatively 26M21MVwAvQKO 011110-M&H-1211rMAN "A representing, and has not.previously affirmatively represented. to the Developer or any contractor(s) of Developer for any conmction on or development on or adjacent to the 1-1r-WJT7WM- LEI. . . . . . X T­ IN .. jn_,w_aTAi_,r 'If, OWFkTrETtRi1 of T ?'Fvr Civhn- SxntioT 1781. as tube me m r MIFTI-IM111 Oil is Oq 1 1 lI 0 0 OEM 11*M MOR MMMUN, INM makes no representation, either legally and/or financially, as to the applicability or non- RM MrjT,1Zr41* I rm- R77r= AM acceptable to City, from and against "increased costs" as defined in California Labor Code �'-Samlaii "m law) of or on the Pro", that results or arises in any way from (1) noncompliance by 1323 Environmental IndemnitX. Developer agrees, In addon to any other indemnity obligations of.Developer to City under this Agreement or any other agreement A"jU. ':' "Igmg tII L&sses tkat Yurf,-at-uy-fiRe, 5_m impisi—I qrrrm, w�-t ar m7e ar alv?-t?jV,-PA jj�,j �MJIX ""kaiw i-f&r.,tjX tjatiTg to or MM71'A�TTM use of the Property, but excluding any loss resulting solely from the intentional or active negligence of the City Parties. Notwithstanding the foregoing, City shall have the right to select provided, however, that the Parties agree to attempt in good faith to coordinate and/or si,asililate teir teferA-z if, -my IfGssf'&�� we wzkjv-.t ti. At izicMT01catilz provisions of. this Section 13.2.3. The indemnity provisions set forth in this Agreement shall applicable Claim. -28- * .1 0 11 . 0 : a . "RITrMMT 111411 It . --I MMI Mvi UT, 15. MIaLE—LLANEOUS.. 151 Con Mfialc S WhAvolicablel.4.w. Developer shall carry out the construction of _.q_ the Base Project and/or the Enhanced Project in accordance with all applicable laws, regulations, and rules of Governmental Agencies, including without limitation all applicable federal and state labor standards. 15.2 Covenants. The provisions of thigAgreement shall constitute covenants which shall run with the -[and comprising the Property for the benefit thereof, and the burdens and benefits hereof shall bind and inure to the benefit of each of the Parties hereto and all successors in interest to the Parties hereto. I 15.3 Mutual Covcnams. The covenants contained in this Agreement are mubard covenants and consaitric conditions precedent or concurrent to the subsecluent or concurrent performance by the Party benefited by the covenant(s). 15.4. R ecorqattort of Aereement. This Agreement and any amendment, modification, termination or cancellation of this Agreement shall be recorded against the Property in the official records of the County Recorder by the Clerk of the City Council, within the period required by Section 65868.5 of the Government Code. Developer authorizes the recording of all such documents against the Property, and each and every parcel within the Property, whether preceding, during or after the Extended Term. i 15.5 !Constructive Notice and ActeeIgnee, Subject to Article 12, every person who now or hereafter owns or acquires any right, title, or interest in or to any portion of the Base Project and/or the Enhanced Project or the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instniment by which such person acquired an interest in the Base Project andfor the Enhanced Project or the Property. 15.6 5ucces , in Interest. Subject to Section 12.1, the burdens of this Agreement ulvb��Jmw' Ug7=1MY1 XJI 1- ItEW I OR I constitute covenants running with the land of the Property. Subject to Section 12.1, each ATM, r1.NT&'irf-Y4 141 15.7 City Manager Implemcntatign. City shal I implement this Agreement through its City Manager. The City Manager is hereby authorized by City to issue approvals, interpretations that any such action(s) dGes/do not materially or substantially change the Improvement or increase the monetary obligations of City by more than Seventy -Five Thousand Dolton AMUT �hj' ZOMI7AMM#HnDVA 1111111111111111 111 1 1111 I i I mil ii approvals by the Community Development Director, his designee or the Community Development Department, the procedures in the Specific Plan shall be followed. All other actions shall require the consideration and approval of the City Council, unless expressly provided otherwise by action of the City Council. Nothing in this Section 15.6 shall restrict the submission to the City Council of any matter within the City Manager's authority under this Section 15.6, in the City Manager's sole and absolute discretion, to obtain the City Council's express and specifiz authorization on such matter, The specific intent of this Section 15.6 is to authorize certain actions on behalf of City by the City Manager, but not to require that such actions be taken by the City Manager, without consideration by the City Council, 15.8 Politic -at Re[QIW_Aq� The Parties acknowledge that they are each aware of the Political Reform Act- Each Party represents and warrants to the other that it is its full intention to comply with all applicable provisions of the Political Reform Act. 15.9 Su rvival of AmumenL All of the provisions of this Agreement shalt be applicable to any dispute between the Parties arising from this Agrccrncnt, whether prior to or following expiration or termination of this Agreement, until any such dispute is finally and completely resolved between the Parties, olther by written settlement, entry of a trot] appealable judgment at expiration of all applicable statutory limitations periods and all, terms P nd conditions of this Agreement relating to dispute resolution and limitations on damages or remedies shall survive any expiration or termination of this Agreement. -xv --W insist and demand strict compliance by the other Parties with the terim of this 'Agreement thereafter, Any amendments or modifications to this Agmment must be in writing, signed by duly authorized representatives of each of 'the Parties hereto, and recorded in the Official Records of Los Argcics County, California. 15-11 No inference in favor of or against any Party shall be drawn from the fact that such Party has drafted any part of this Agreement. 'the Parties have both participated substantially in the negotiation, drafting, and revision of this Agreement, with advice from legal and other counsel and advisers of their own selection. A word, terns or phrase defined in the singular in this Agreement may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which shall govern all language in this Agreement. The words "include" and "including" in this Agreement shall be construed to be ,followed by the words- "without limitation." Each collective noun in this Agreement shall be interpreted as if followed by the words "(or any part of it)," except where the context clearly requires otherwise. Every reference to any document, including this Agreement, refers to such document, as modified from time to time (excepting any modification that violates this Agreement), and includes all exhibits, schedules, addenda and riders to such documeoL The word "or" in this Agreement includes the word "and," Every reference to a law, statute, MU21.16M.moOM 0111W025-14.11MUlho -31- regulation, order, form or similar governmental requirement refers to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to tune. 15.12 lrtco ration ofltitals.Tlkb Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference. 15.13 Section Headings and Seqiolt, and Arjkl-Rcfereaces, All section headings and subheadings in this Agreement are inserted for convenience only and shall not be considered in the construction or interpretation of this Agreement. All references to Section numbers shall be construed to include any and all subsections of the referenced Section number. All references to Articles shall be construed to include each and every section and subsection within the referenced Article, I ISM SjMularand Pluml. As used in this Agreement, the singular of anyiword includes the plural. 15.15 C#Iculati2p, of :Eimc Periods. Unless otherwise specified, all references to time periods in this Agreement measured in days shall be to consecutive calendar days, all references to time periods in this Agreement measured in months shall be to consecutive calendar months and all references to time periods in this Agreement measured in yews shall be to consecutive calendar years. Any reference to business days in this Agreement shall mean consecutive business days. 15. L6 JvLm-s-ogf-L--g-e-ug. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element i 15. 17 Further- Actioof the Parties shall cooperate wit and provide reasonable assistance to the other Parties to the extent necessary to implement this Agreement- Upon the request of a Party at any time, the other Parties shall promptly execute, U with acknowledgement or affidavit if reasonably required, and file or record such required r instruments and writings and take any actions as may be reasonably necessary to implement this J Agreement or to evidence or consummate the transactions contemplated by this Agreement. 15.18 5eve �b— . If any term, provisior4 covcnmi% or condition of this Agreement is L held by a court of competent jurisdiction to be invalid, void, or unenforceakile, the remaining S provisions of this Agreement shall continue in full force and effect� unless and to ;he extent the rights and obliptions of anyFarty has been materially altered or abridged by such holding. 15.19 Jm!-Uwmc—s, In any Action proceeding between City and Developer, the prevailing party in such Action shall recover all of its actual and reasonable is and expenses L (whether or not the same would be recoverable pursuant to Code of Civil Procedure Section 1033.5 or Civil Code Section 1717 in the absence of this Agreement), including expert i to witness fees, attorricyPs. fees, and costs of investigation and preparation prior the commencement of the Action. However, such recovery shall not exceed the dollar amount of the actual costs and expenses of the party from whom such recovery is sought for such same Action, and such prevailing party shall not recover any costs and expenses in excess of the non- U prevailing party's expenses. The right to recover such costs and expenses shall accrue upon F - r U 26M21.7&UzwDMS r -32- 11 0 .1 a -1 .1 a - commencement of the Action, regardless of whether the Action is prosecuted to a final judgment or decision, 15.20 No 'Mips Pear y ri itirieg. This Agreement and all of its terms, conditions, PAULA__ and provisions are entered into only for the benefit of the Parties executing this Agreement (and any successors in interest), and not for the benefit of any other individual or entity, In this regard, the owner of any portion of the Properly that does not timely enter into and perform this Agreement or a substantially similar agreement with City shall have no benefit from, and shall not be a beneficiary of, any of the provisions of this Agreement, 15.21 Relationship of parties. City and Developer hereby renounce the existence of any form ofjoint venture or partnership between them and agree that nothing contained herein or in any document executed in connection herewith shall be construed as making City and Developer joint venturers or partners. 15.22 Development as a va—te , , JIL The Parties acknowledgel and agree that the development of the Development is a private development. Neither Party is acting as the agent of the other in any respect pursuant to this Agreement and each Party is an independent contracting entity, with respect to the terms, covenants and conditions contained in this Agreement No partnership, joint venture or other association of any kind is formed by this Agreement. Other than the relationship between City and Developer with respect to the Developer Lessed Property, the only relationship between City and Developer is that of a government entity regulating the development of private property and the owner of such propedy. M23, lna ocction of Books and Records, Subject to the limitations set forth in Section 4A.5, City shall have the right at 91 reasonable times, at City's sole cost and expense, to inspect the books and records of Developer relating to this Agreement, the Property, the Base Project and/or the Enhanced Project, and any development approvals for the Base Project and/or the Fultanceill Project, to the extent relevant to Citys rights or obligations under this Agrocritcrit, but excluding any proprietary information or attorney -client privileged communications. Developer shall also have the right at all reasonable times, at Developer's sole cost and expense, to inspect 0 the books and records of City misting to this Agreement, the Property, the Base Project and/or the Enhanced Project and any development approvals for the Base Project and/or the Enhanced 0 Project, to the extent relevant to Developer's rights or obligations under this Agreement but c: excluding any proprietary information, closed -session information or attorney -client privileged in communications. 0 1524 I�sLopael Cenitica—le. Any Party hereunder may, at any time, deliver written notice to any other Party requesting such Party to certify in writing that, to the best knowledge of the certifying Party, Q) this Agreement is in full force and effect and a binding obligation of the Party, (fl) this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments; and (W) the requesting Party is not in default in the C- performance of its obligations set forth in this Agminent or, if in default, to describe therein the nature and amount of any such defaults. A Party receiving a request hereunder shall execute and return such certificate within sixty (60) days following the receipt thereof. Any third party including a Mortgagee shall be entitled to rely on the Certificate. oaaataaaratsMt -33® 1525 ADpjicable Law: Venue. This Agreement shall be construed and enforced in accordance with the internal laws of the State of California. Any action at law or in equity arising under this. Agreement or brought by any Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Los Angeles, State of California or the United States District Court f6r the Central District of California, Los Angeles Division, and the Panics hereto waive all provisions of law providing for the removal or change of venue to any other court. 15.26 No ty jq-Liabilitv of Ci Officers cu. No official, officer, employee, agent or representative of 6hy shall be personally liable to any of Developer or its shareholders, partners, officers, employees, agents, respective, successors and/or assigns for any loss arising out of or connected with this Agreement, the Existing Land Use Regulations, or the development of the Property. 15.27 N.On,Ljabilitv of Developer's -Officers -and Eipt&Lee . No official, officer, employ", agent or representative of Developer shall be personally liable to any of the City Parties for any loss arising out of or connected With this Agreement, the Existing Land Use Rogulations,or the development of the Property. 15.28 Mo1j"e . Any notice or communication required hereunder between City and Developer must be in writing and may be given either personally, by registered or certified mail, return receipt requested, or by facsimile transmission. If given by registered or certified mail, the sante shall W deemed to bave been given and rooeived on the date of actual receipt by the addressee designated hereiribelow as the Party to whom the notice is sent. If personally delivered, a notice shall be dccroed to have been given when delivered to the Party to whom it is addressed. Notices delivered by facsimile transmission shall be deemed to have been given on the first business day following the date of tinuismission to the facsimile number. A Party hereto may at any time, by giving ten (10) days' writteanotice to the other Partics hereto, designate any other address in substitution of the address to � which such notice or communication shall be given. Such noticeis or communications shall be given to the Parties at their addresses set forth below: Cityof Downey City Hall I I I I I Brookshire Downey, CA 90241 Attn: City Manager Telephone: (562) 904-7284 Telecopy. (562) 923-6389 With a CODY to: Ratan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn.- JefFirey T. Melchin& Esq. Telephone: (714)641-5100 Telocopy: (714) 546-9035 -34- 11 � jjjj��i���� P TM� �•W i , irto pqvelonct: Manarino Realty LLC 15615 Alton Parkway #450 Irvine, CA 92618 Attu: Robert A. Manarino Telephone: (949) 748-7800 Telecopy, (949) 748-7807 With 3 coaktw- Allen Matkins Lock Gamble Mallory & Nalsis LLP Three Embaricadero Center, 12a Floor San Francisco, CA 941114074 Attn: Sonia Ransom, Esq. Telephone: (415) 837-1515 Telecopy: (415) 837-1516 l5-29'Rqpms- Rogo n _.M to 0.w erft, . Developer represents and iwarrants that Developer is the owner in fee of the Developer Owned Property. 15.30 &VLq§wtatiqrt as ' to Ovaserihin. City represents and warrants that City is the own& in fee of the Developer Lmcd Property. 15.31« Developer warrants and represents that (i) it is duly irpi-izcd ant ex (11) it is 4uly xohorizel, tit, execuite snCdel ivc*A., isk, greement, (ffi'54y sic executing this Agtvernrmt, Developer is formalty bound to the provisions of this Agreement, 15.32 Authority (a Execute. City warrants and represents that (t) it is duty organized and existing, (U) it is duty aut�o�riz to execute and deliver this Agreement, (M) by so executing this Agreemcat City is formally bound to the provisions of this Agreement, (N) City's entering into and performance of its obligations set forth in this Agreement dm not violate any provision of any other agreement to which City is bound, and (v) there is no existing or threatened litigation or legal proceeding of which City is aware which could prevent City from entering into or performing its obligations set forth in this Agreement. 15.33 Exect_ition of &greement: Co-unterparts, Ibis Agreement may be executed by the of which taken together shall constitute one and the same agreement This Agreement shall wnstitute a valid and enforceable agreement between City and Developer. 15-34 ExhibilA. This Agreement contains nine (9) exhibits, attachedherew and made a pat hereof by this reference. Said exhibits are identified as follows., A Legal Description of Developer Owned Property B Depiction of Developer Owned Property C Legal Description of Developer Leased Property D Depiction of Developer Leased Property rGstt�.ar, nays -35- E Depiction o(Property F Fire Station Site Plan 0 [RESERVED] F4 Pre -Approved Retail Development Brand Names 1. Pre -Approved Hotel Development Brand Names &IMMM9= MMzI.wq&%"Ow Wjj@4MftrJ6M.j2MMW -36, L IN WrrNESS WHEREOF, City and Developer have executed this Agreement as of tht Lqte first written above. City Clerk APPROVED AS TO FORM: Abich Gmia .0 CITY OF DOWNEY, a Charter City By; May C. NC A --j [SIGNATURES CONTINUE ON FOLLOWING PAGE] m I �11.1110. -37- I ®666116ERNIEMO: This COPY Is NOT. an OFFICIAL RECORD.; PDEVU0PHR" PCCP IRG DOWNEY, Mci. a Delaware limited liability compay 27' Nanic WiMani P- Undsay Title., AUUIorfzca signatory * �fb BYJ S1.'Propertics, Inc," By; Name: 'fu4A.-V UcAf6ft- Title- PA�Cf -1 I WA 1:1 v 8 0 STATE OF CALIFORNIA )93 COUNTY OF LOS ANGELES) Notary Nblic On JN�oc�� before me, _C-,<AW,6 L personally appeared roved to me ) the basis of satisfactory evidence) to be the person(s) whose nume(s) Were subscribed to the within instrument and acknowledged to me that hetshe/they executed the same in hisJher/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the pe"(s) or the entity upon behalf of which the person(s) acted, executed the instrument " %'Y 01A L I-f - loy- -i 1 %0117 rMn -M lu e C-610 -kW to V State of Calflarnla that the texeOng is true and =ect STATE OF CALIFORNIA COUNTY OF LOS ANGELES) on before me, personally appmed personally known to me (or proved to me on the basis of satisfactory evidence) to be the Person(s) whose name(s) Ware subscribed to the within instrument and acknowledged to me that he/shetthey executed the same in hisiber/their a4thotized capacity(ics), 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. Witness my hand and official seal. UM ZMVINM"O" orl 110~44- 1 V11' AA# -39- ,I I r, CALIFORNIA ALURURPOSE ACKNOWLEDGMENT State of Calltomia County ot affi/On/P.Aaefore me personally appeared —4o M ftm f within instrument ancl acknowledged to me that ln�trument the persor*, or the antity upon behaff of which the person(s) acted, executed the InWumenL true and correcL WITNESS off Signaturevc� OP77ONAL ThaWh No Aribrmilon bebw b me mW~byAw #nWMm vababb to perm" 106*9 On dv dMownt and couAdprovent firsudWent mmml wdruaftdo7ftf of b%W brm to &W#Wd=4Mnt Descrip0on of Attached Document Title or Type of Docurnent - • AL -7 A ]It rtx"Vt 0 A" in Fact ri ThIstse 0 Guarftn or Conservator 01 Other— SfWw Is Representing: Number ofPages: — Signees Name: • lrx*Adual • Corporate Ofter 0 Partner — 0 Urnited 13 General • Attorney in Fad N11011*11M, • Trustee Too ot ftrz �W* • Guamilan or Consw4ator ED other. &gner Is Ftepresenting:__—J. OWNaftW MWVM=42wfl- M MSM AS, P.D. h.CA -10 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County at -JIXT:��C:nr-�"-' - I On 41\60-�.N before me, Public Cleo personally appeared at d sle�'A who proved to me on the baSIS Of satisfactory evidence to be the person(s) whose name(s) Warelsubscribed to the within Instrument and acknowledged to Me that helsheAhey executed the same In hMwAheir authorized mpadty(les), and that by hWherAheir signehirs(s) on the G"RI.Alit in meat the porsort(s), or the entity upon behalf of mt+rbn300q 4, ELL which the parson(s) acted, executed the Instrurnent. ..y L�VCnL 06012 I certify under PENALTY OF PERJURY under the laws C.'M EKpoesJ109. a 2013 of the State of Calftmia that the foregoing paragraph Is true and correct WITNESS my hand and official Signatiur OP770NAL TboughtW"ffmro" WOW is nor (Wfodby law, 11gW prM VS4WA M perafts r" on ffm docWrAW pa"M ftowont 11MMI rod ma"Rahment of ft k(M In aft1her d0cment. 0 Description of Attached Docurittent Title or Type of Docurneft Document Date: Numim of Pages: Signer(s) Other Then Named Above: Cgpacity(igs) Cla!Med by Signer(s) Signers Name., 0 SIgner's NarrW� z 0 individual 0 Individual e [3 corporate Offlost — TOW* o corporate officer —Tifle(a): 0 partner — 0 Limited 0 General ❑ Partner — 13 Urnited LI General 0 0 Attorney in Fact 0 Attorney In Fact Tbp of LNmb hwe 0 0 TWOS 01histes 24 0 Guardian or Conservator 13 Guardian or Conservator O [3 thw!-- 0 Other. Signer Is FtsproseffllM— M. Signer Is Representing: feW Cd Tdf*w 14001vol� =od4m. =Do SM An =CL1bK"4W =2% CA =MMI =J"*A$*=WW9 State of Calif arnia Countv of kak-- I V ,242-t�efore me, 05' �&personally appeared who proved to McDCowEdtLNMtowtrsSyftE MPMdAooBnCo* sE- CC1oL0AVNW429qOR1WN,2&0 13 es1lauvLscwideserafinanrfciy fe h utethinait rdctte%w2eSirdtPh,�nhteEalxNieuAMhcrfLhudlyTCteYd ltOfpheeF d IinPhsEtrhRhuUmJ)lli UUtll,n o o be wo bscbed md es RRffn th MtY rf5. u - awmusflsIithns'aesaidfh hnmmc aet d tathesyec�d ozead ta g j Aor pon ao oaoaionhateoegc eerot o o t I _ paragraph is troe WA correct. I WITNESS my JM wrati'l-I 'aqtli" Signature: TiW,0011"-F-IFOV F" NMWV U&I AbM OPTIONAL MVh Me k*mwAm bobw is mt mW#W by firm ft my ptcm vahable to p&= and =1 I pieved fraud0kni mmvaf and ragamman I of M fwn to ena0w documrd. Descron of Attached -Document TitleorTypea ocurnew Mrna"'� Document D. — ,�I&nbor of Pages: SIgner(s) Oft�rThan �Named Capacilty(les) Claimed by Signe4s Signer's Nwe- - . I i's Narre, • Corporate Officer — TIW(s): 0 N 0 • Individual 0 ifr:Jovmmwn M • Partner — 0 Umited 0 General 07 tu'rb hKe U Partner — 0 Urnited CI Gencrai Top d hIM here • Attorney in Fact 11 Attorney In Fact 0 Trustee 11 Trustee • Guardian or Conservator 0 Guardian or Conservator • Other 0 Other:, Signer Is Representing: Signer Is Represerfdrig, 0 M16 04.9.,W Nhn A-19ek. - U&wflbt— - 1,M&U8 RMARV (1-b"A-SM71 1". 85W7 Iff-MIG12VIAMON:1641-flo STATE OF CALIFORNIA )ss COUNTY OF LOS ANGELES) 10 10 9019 before m person y tc On �o In appeared 4L$16 refeeft4y��� proved to nic on the basis of satisfactory evidence) to be the personW whose name* isIV4 subscribed to the within instrumentand acknowledged to methat heJfihaAhe,L executed the same in hisAw011*k authorized capacity(Jes), and that by hisAwmftoir signatureW on the instrument the personW or the entity upon behalf of which the ptrsonw act,ed, executed the inslwraentI carW under PENALT*� OF PIFRJURY under the lam of the Staw Of Wfw" that ft foregogno Is uue arw owea Witness my hand and official seal. ro^�� *D10 RIA M. iWENT2 Notary 2bli, SEAL]Rh Witness my hand and official sed. EM Ong M 'ECORDER MEMO: This COPY is NOT an OFFICIAL RECORD_ u 3 u E. 40 'ECORDER MEMO. This COPY is NOT an OFFICIAL RECORD. (w EXHOr W LEGAL besclumcm ACMIS"M PAM& INOSE PORWHS OF Wr 2 AM LOT 3 Of FRACTAAM SWWN IOL TOWNSIV 3 SOUM RA1406 12 WEST. I" THE RAMCM SAWA GERTMM, TOGMElt WITH 4 PORTION OF THE SOUTHWEST *DARTER OF SAID FRACTIONAL SECTION 1% IN TM CITY OF DOWNEY. COUNlY OF LOS AMMM STATE OF CAUPO;VM AS RMORDW IN DOM 1, PAGE 6M OF NISCMANEWS Ft=90$, RWORDW IN THE OFFICC OF ME COUWY REWROM OF &AWOMAM, DMRMAS FOMOW& BEGINNINO AT A POW IN THE NORTHMY UNE Of SW LOT 2 IN THE NORIVNW QUAMA OF FRACTIOM SWTION % SW UNE ALSO BEW THE f0M9XY UK OF STEWART AND WAY ROAD 00 FEET WVP, OVANT 1HOEON SOUTH SWIr WEST 44ILS1 FM WOM THE NOR110" OW40 OF 940 LOT 2; THEME ON A LOW SEMMM Sw POW Of eEMWW wo THE SourmWeSt CORKM OF THE SOUTHEAST QUIWER OF THE NORTIliFAST QUARTO OF TNX SOUPMWOWTER Of FRACTIONAL SECTW* IA SOUtH 001SIfF WEST 1101124 FW TO THEMM POWT OF BE"WING; THENCE $OUTH W4VII- WEST 119423 FEET TO A POINT' IN A LINE 111AT M PARALLEL WITH AND DISTANT SOUFHEAVIVRLY 0,00 W AT NOW ANGLIM FROM THE CWTE14ME OF LAXEWOOD UOIA"AFA AS "WN ON COLD" SW&MRS 8 SOM MW 00. 114t OR ME IN THE OFFICE OF THE VED m ENGrok-k, 0—�9A"l + _Vler. t Io lkl TlltTli 2T 41 %r IflabW at E 4 THE POW OF A" TM SOUMEST COPMER OF THE SOKJTNEAV QUARTER OF THE NO"WST OUARM OF M SOUTHWEST QUIRIM OF IFRACTIONAL SeCTION it THEPKX NOM14 031W'Rr EAST, ALONG SNII LW A VISTAWXOF MCI$ FEET TOTHE-MMPOWOF nemooic, yJ MUMM AN AREA OF 2AMM OQUARE FELT MGM OR LESS ALL AB MOWN 04 MMrW ATTACHED HERETO NO MAIM APART HEREOF 0 r- m FAW 0 CL 0 L) F- 0Lu to -ECORDER MEMO: This COPY is NOT an OFFICIAL RECORD p A "W E !!?A EXHIBIT *13" WWW" FARW SnWT APO all, ow4ell* W (06 ro, pegLerion of )eveloper ONvn_td--P-r-op-t—rt2 I M, It I Rum"Um D 6WW-0.-Thipa"COPY is NOT an OFFIC"IA'L" R" 'CORD. —F-XMff "C" Lelski D"cejR(jqjoLDevgloSer Uged Pro kert I m is COPY is NOT an OFFICIAL REC RD- Kw xr rY +fit :r F " r t A S Arm A.} Ifil 4+ i IM :ECORDER MEMO: This COPY is NOT an OFFICIAL RECORD EXHIBIT *8' -WVJSMAL KAM CMM LEAW -f MOM Nm MUM ma 99 MIT' , L'It SECL W L is ;L :L STAE 5m Eau@= a AllolorAmlh mc. Ron, OWE WIMMMMM� =� IE m m 'ACOMS" PARCW l®rp's 7V A m J6 r. 'IF 7w L-54 tj up E T --- "I 4T R- L-$ frgg six"" AMOCIAM W- E L'A F mi pepiction of propsx-tl M, I Me z did 'OA-M 4MOI&LO LL am V lun- .1 IOU N z m -1 Lo U at 1 ..7 UJ �U, d wrW u u OL gr 0, a. C4 411) /t C" G�A 4 sky X 1 w th cc qio— r -:214 J. im 'ECORDER MEMO: This COPY is NOT an OFFICIAL RECORD. E"13ff Vol Depiction of Irlylstation Site . . . . . . . . ....... SIM FLAN UOCK PROGRAM fim Q%r of Dawnw I--,lw4p 11 x 17 45 w-Stom§± «§\# I \«±»» » �°w- © : a; � � w � � � 2 I .: CJ U if ml #1 1 I'll- !!L:'OKl1NG GOODS .. BIG CASELAS FACTORYDICKS SPORTING GOODS GW SMITH NIKE STORE ROGERDUNN SPORT CHALET SPORTMART ' f • ` •IL L 9, • J., fQ FRLT 1: r . l GAMESTOP T-MOBLE TOYS R US VERIZON SPEADIALTY DINING RAJA FRESH i BINS BEN , JERRYS COFFEE DEAN & TIEA LEAF COLDSTONE HOT DOG ON JAMIBAJUICE LAMAJCON SHISH KABOB ::• • BISTRO ON BORDER ' ■ PANDAEXPRESS PANERA ■ RED eRICK PIZZA • ih f • i f ': oo o ROLL IT SUSHI SHARRO ITALIAN EATERY SWEETSTARBUCKS SUBWAY '.OR i-[ ■ ` FROZEN• YOGURTLAND PINKBERRY PARLORFARRELLS ICE CREAM DININGCASUAL APPLEBEFS BENIHANA BLACK C' BOSTOWS GOURMETPIZZA i . CALIFORNIAv= KITCHEN CEFIORE ITALIAN YOGURT CHEESECAKEFACTORY CHICAGO PL72A CORNERCLAIM JUMIPER DAILY f C 'i Er CAFE EINSTEIN BROS BAGELS FIVE GUYS FAMOUS1 FRIES MEXICAN GRILL GRILLEHANAH ISLANDS RESTAURANTS HOLDINGS, INC. JOHNNYROCKETS HABIT BURGER LONE STAR STEAKHOUSESALOON MACARONIGRILL MAGGW,.4YS DRIVE-IN OLD SPAGHETTI FACTORY ON BORDER ORIGINAL ROADHOUSEGRILL OUTBACKSTEAKH04JSE F.F. CHANG'S CHINA BISTRO, PARADISE DINER PICK UP STIX, INC. . • ' • RESTAURANT GROUP `71 LOBSTER RED ROBIN • DINER •' i i FRIDAYS •il RANCH YARDHOUSE 0 .EC RDER MEMO: This COPY is NOT an OFFICIAL RECORD. 1 CLAIRE'S NIKE FACTORY STORE CLARKSMSTONIAN NORDSTROM CONVERSE NORDSTROM BACK DC SHOES ONEU DSW PAOLOGIARDINI ETNIES: EXS PERRY ELLIS FAMOUS FOOTWEAR QUICKSILVER NINE WEST STEIN MART OFF BROADWAY T.J. MAXX PUMA nU-rS REEBOK TOM MY HILFIGER ROCKPORT U.S. POLO ASSN. SHOE PAVILLION UNDER ARMOUR SKETCHERS VAN NEUSEN SPRITZ VANS VINCE CAMUTO SHOES WOVENS APPAREL VOLCOM AEROPOSTUE AMERICANAPPAREL ANN TAYLOR HOUSEWARES & HOME FURNISHING BANANA REPUBLIC 3 DAY BLINDS BOBIGIRLS AARON BROTHERS BCBG/ MAXAZAIA ANNA'S LINENS BENt4ETTON EKWBAY COMPANY BILLABONG CORNINGWARE CORELLE REVERE CABI COST PLUS CALVIN KLEIN HOME C70MS (TJX COMPANY) C14ARLOTTE RUSSE KITCHEN COLLECTION CHARMING SHOPS LE CREUSET COLUMBIA SPORTSWEAR LINENS N THINGS DKNY MATTRESS GALLERY DOCKERS PIER-1 IMPORTS DOT'S DRESSBARN ECKO, UNLTD. INEWSAPPAREL, ESPIRIT AEROPOSTLE FILENE'S BASEMENT ACAN APPAREL FOREIGN EXCHANGE BACHRACH FOSSIL BANANAREPUBLIC GAP, INC BENNETTON GUESS BILLABONG H&M CALVIN KLEIN HANES BRANDS COLUMBIA SPORTSWEAR HURLEY INTERNATIONAL DC SHOES IZOD DKNY JOURNEYS DOCKERS JUICY COUTURE ECKO UNLTD. JUSTICE FILENE'S BASEMENT KEN LE FOSSIL KIPURG GAP. INC LIEVIS GUESS LIDS H&M LUCKYBRANDJEANS HANES BRANDS DE OR HURLEY INTERNATIONAL MAXSTUDIO.COM ROD MICHAEL KORB JOURNEYS MICR JUICY COUTURE NAUTICA KENNETH COLE NIKE FACTORY STORE LEVIS NORDSTROM LIDS NORDSTROM RACK LUCKY BRAND JEANS NOT YOUR DAUGHTERS JEANS MICR AEL KORS ONEILL MICHAEVS PAPAYA FACTORY OUTLET NAUTICA PERRY ELLIS 48 r •11Iri: EmAppruvc4 Hotel Development Brand Names X • • N.',. r HOTELS 3 RESORTS •' • r :• r OF a+. +wirv! 1,53.72501W SHERATION HOTELSWESTIN POINTSFOUR BY • LE •rE REGIS THE Luxiiny coLLEcTioN .; ELEMENT f I: Ql,r�MILVER STEW MART SUO T.J. MAXX THE AVE TILLY'S BASIESS R US CARTER'S CHILDREWS PLACE KIDS BUDDIEZ KIDS SUIPERCENTER OSHKOSH STRIDE RITE SPECIALTIES 24 HOUR FITNESS ACEHARDWARE ARIZONA LEATHER BALLY'S BARBEQUES GALORe BARNES & NOBLE BEVERAGES N MORE BRISTOL FARMS CALIFORNItA NATIONAL BANK CHASE BANK COACH Ix DAVIDS BRIDAL 0 DAVE AND BUSTERS 0 DESIGNER FRAGRANCES & COSMETICS ,UJ ECKO UNLTD. FEDEX KINKOS GELSONS SUPER MARKET GOLD'S GYM GYM13OREE U. HAIR CUTTERS 0 HAIR SALON c HALLMARK m HANCOCK FABRICS 11-- HENRYS FARMERS MARKET 0 HILTON z JO-ANN FABRIC KRAGEN LIDS NAIL SALON 0 OFFWE DEPOT PACIAO DENTAL PARTY AMERICA SAMSONITE COMPANY STORE SMART & FINAL SPROCKETS KIDS SPROUTS MARKET UJ SUNGLASS HUFT 2 TARGET Ix UTLET TIME FACTORY WATCH OAy ui r M, �3:Ir�iil —�i is (Above Space Fcr Recorde7s Use Only) FIRST AME j?F, V13 LOPM kNZAQR_Fr-. I ML-NI �v and between Q!Y-JQh 1)OWNEY and ECCPIRG Doi, WN-gY,L�. . I)Ala"re limited liability comijaply, L,19 uqdivi ided 90% in te g0Zq_ qL DOWN ' ' _ _d IRG NY. LLC. a California limited liability corona ,As 1p an undivided I 011/o 6t1rrM This First Amendment to Tierra Luna Development Agreement ("First Amendment") is made and entered into effettive as of 2017, by and between the CITY OF DOWNEY, a California charter city, DOWNEY, LIX, a Delaware limited liability company, as to an undivided 90% interest, and IRG DOWNEY, LLC, a California limited liability company, as to an undivided 10% interest (collectively, "DEVELCII A"). City and Developer are collectively referred to herein as the "Parties ` A. Whereas, on March 15,2012, the Parties entered into the Tierra Luna Development Agreement ('Development Agreement"); B. Where -as, the Development Agreement allowed Developer to develop the Property with either the Base Project or the Enhanced Project; C.. Whereas, Developer was required by'Sebtiori 6'.1 to Tnike an election in writing the Enhanced Project on the Property; D. Whereas, Developer did not make such an election and therefore Developer now wishes to codify in writing its decision to develop the Base Project on the Property; and I E. Whereas, the Parties also wish to amend certain sections of the Development Agreement. 02F I I P-011PV�44- I ?4-10q Ll- 74MMU i M, NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated herein by acknowledged, the Parties hereby agree as follows: I. U-VELOPMl5,NTOFTl4E,PR0FEM I.I. Pqv q inent o Developer has elected to carry out and develop gL-U— J;j Jag JMIWJ g 1i liclWoce v%M the Existin Land Use Remlations. As a Agreement that apply to the Base Project. 1.2. Develoner Election to Devclon Frihanced ProiccL Developer has not and Will not W'V MI P r; Gr- I in its entirety� 1.34 TcrTn with F-nh_Vc(�d I�f •tcliq�efion. Section 2.1.2 of the Development Project. 2. GENERAL DEVELOPER COVEN—AIU—S 2.1. Large Format and Remajnin� Commercial Develounient Relailers, Section 5.2 of the Development Agreement shall be amended and replaced as follows: Large Fori'llat and lZentainin Coninigrcial_De%,eLeppieriLRet-,iiier All Large Format I Retail Development and Rernaining Commercial Development developed as part of the Base Project shall be operated under one of the retail brand names set forth in.Exhibit. "H" or such other retail brand name in the Developers sole discretion. 3. FW.-. STATION DEDICAIION AND VEVELOPMENT 3.1. Pvvelornneot or the TiN :Nation Site, Article 8 of the Development Agreement allows the City to request in writing that the Developer design and construct a Fire Station on the Property. The City no longer desires to have a Fire Station built on the Property. Article 9 of the Development Agreement, together with the definitions included in Sections 1.36, 1.37, 1.38 and 1.39, shall therefore be deleted in their entirety.. Exhibit F shall also be deleted from the Development Agreement. 4. MISCELLANEOUS 4.1. Notice . Section 15.28 of the Development Agreement shall be amended to replace the Developer and its counsel with the following: I Etr me—r: PCCP IRG Downey, LLC 555 California Strect, Suite U50 San Francisco, California 94104 Attn; Aaron Giovara Telephone: (415) 732-7645 Telecopy: (41.5) 732-7547 With a COallory* & Natsis LLP One America Plaza 600 West Broadway, 27th Floor San Diego, California 92101- Attn: Heather S. Riley Telephone: (619) 233-1155 Telecopy: (619) 233-1158 4.2 Defined Terms: Capitalized terms that are not specifically defined in this F" e greeml Amendment shall have the meaning assigned to those terms in the Development Agmement. 2: m r �. 4.3 COUMOMWI: This 'First Amendment may be executed in any number Uk" 44 counterparts, eacb of which shall be deemed an oriqs�jnd, but all of whicN� constitute one and the same instrument. (Signatures on Next Page] 029; i� 900713-14. I Ift-I)m .3- Attest: ll�;�Ijp�j �iplpll��!p�lll 111IIIII CITY OF DOWNEY, 'ST, , m q Its: Mayor PT16 02311 G-MZM-V-1 7/hw/Pm -I- I; I ON s - 011.i.) By: Name:, Its: I' is 1 7 1 1 CAUFORMA ALL-PURMS ACKNOWLEDOMgW CML CODE I 1189 A notary public or other cff�cas completing this certificate voriflas only the identity of the Individual who slgDed the document to which this carliftme is attachad, and not the truthfulness, 0ocMcy, or valldily of Mi document. State of California county of LOS A96a66 On before me, MX,14,AhK(jU9,'r&P, Date Hem Insart Name and Tide of the Offtw personally appeared vasrr- Narne($) of Signer(s) Idence to be the personW whose name((O F. satisfactory ev V or the entity upon behalf of which the PeMCM(00 actedexecuted the Instrument. I ceriffy under PENALTY OF PERJJ SigUR�Y�undar the, tat, ar of the State of California that the foregoing pwmagra Is twe and cwect. -------------------- al. REBECCA ANN GUERAERI wiTNESS my h and official seal. CorwhslaR 0 2112735 oIL NOWY Pubic - Califrnia 2� Los MpW County nature P O&O MYOMM.4ahe Jun 19, 201 Signature of Notary Public Piece Alotatty Seal Above CW7701ML WlbrMation can deterafteration, of the domment NW, F Title or Type of Document' DocumeM Date: Signer(s) Other Than Named Above: Capacilyges) Claimed by ftrwr(a) Signses Name, k\ A 0 Corporate Officer — TMe(S)' El Partner — 0 Umfted D General 0 individual 0 Attorney 11 ct 0 Trustee 0 Gu or Conservator 0 Other. Signer Is Repres ng: J� I I�'-. IM = i: gignees Name: 0 Corporate Officer — TItle(sy 0 Partner — 0 Limited 0 General 0 Individual 0 Attorney in Fact El Trustee 0 Guardian or Conserlvator 0 Other Signer Is Representing: A notary public or other officer completing this oarlificate verifies only the Identity of the Individual YAD siped the I. to whloh this certificate Is aftaohod, and not the truthfulness, aocuracy, or valklity of that documerit. State of Coilfornia county Of —himhwhoo - ) On -Ajazate*w-- before me, , Mitnt-ij AnnAb2, M, Hit Name and 'Far, of nicer personalty appeared AM �rl I �ffa Nam* of ft-ne4) • is true and correct. WITNESS my hand a. o official sew�— %rnalure Place Ablary Sea! Above 011001171011M - 71hough this section Is optioned, completing this Information can deter afteratfon of Me document or fraudulent reattachment of this form to an unintended document. Description of Altached Document Tills or Type of Document., Document Date:.— Number of Pages: Signer(s) Other Than Named Above: CapacRy(les) Claimed by Signmis) Signees Name: El Corporate Officer • Partner — 0 UmIted El General • Individual 0 Attorney in Fact • Trustee D Guardian or Conservator • Other. , Signer Is Reprewting. Signer's Name: 1 Corporate Officer — ritleo(s): • Partner — 0 Umited 0 General • Individual M Attorney In Fact • Trustee 0 Guardian or Conservator • Other Signer Is Representing: 1;Aw PRIG 1102FUNITIMUM 1111RIII I Maria Alicia Di---rtecmc Interim City Clerk Approved ia to Formt Yvette H. AbI64 Garcia City &ttokusy &4 t;iantint"Imumu I dti f;t. By; PCCP I.B IRG DoweU4 LLC, itsManagingLMeMber "IEW" IRG DOWNEY, LLC, a California limited liability company By-. IRG 111, LLC By: S.L. Prooertidsi Inc. By. - Name: Its: Rw�"� m 11 & On �q ore me, RenAV Irene Qar _j"t 15. 2017 bef _Aqna Marquez Notary Public personally appeared 'John A._MVp —, who proved to me on the basis of satisfactory the person or the entity upon behalf of which the person acted, executed the instrument. I ................ WITNESS a and official seal. Sign, tu W-WM r \� \� ©* � n 04/16/19 AT 11:40AM LEADSHEET I 97511347 m THIS FORM IS NOT TO BE DUPLICATED 0 S: 0.00 T s: o.00 o.00 P 0.00 am CITY OF DOWNEY CITY CLERK WHEN RECORDED MAIL TO: City of Downey Aft City Clark '201 3 84' 11111 Brookshire A�enue Downey, CA 90241 re. EnmW-Govem'MOM C . ode I 1 11, G - C 2738& 1 .. (a 1 (1 SPACE I A . BOVE THIS LI - N I E RESERVED kiik kECORDER'S USE ma1 : I CAW 10195114 RUM 1 14 1) 211 A Q F41 I City of Downey Attn: City Clerk SECOND AMENDMI�NLTQ TUER-RA LUI\IA DEVELOPMENT AQ3FBMENT bra an stnon.g CITY OP DO E—CQ—I—IRf—IITCH 3A �Ey L�I- - III. GDOWNEY. LL.C. and US VI DOWNEY, LLC- amn1 If-wney, Buyer are collectively referred to herein as the "Parties." A. Whereas, on March 15, 2012, the Parties entered into the Tierra Luna Development Agreement ("Development Agreemeia"); B. Whereas, the Development Agreement allowed Developer to develop the Property with either the Base Project or the Enhanced Project; C. Whereas, on September 13, 2017, the pardes entered into the First Amendinant to the Tierra if Development Agreement ("First Amendment"),; D. Whereas, Developer was required by Section 6.1 of the Development Agreement �t -i-,&ke 'w DmAk mont Aereemenmts terif �wxgvf *n - Developer wished to develop the Enhanced Project on the Property; E. Whereas, Developer did not make such an election and Developer codified writing its decision to develop the Base Project on the Property in the First Amendment; I • F. Whereas, the Developer Owned Property has been sold to Buyer, but Developer has retained the Developer Leased Property; and G. Whereas asp of the sale of the Developer Owned Propettyj Developer and Buyer have entered into an Operating Agreement, dated September 21, 2018 ("Operating Agreement"). Now, rREREFORE, based upon the foregoing Recitals, which are incorporated herein by reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. THRM 01' THE AGkEl--Mr-lVr 1,1 LN IgasioiLol-rerin. City, Developer and Buyer hereby agree to extend the Term of the Development Agreement pursuant to the authorization in Sc(7,tton 11. 1 of the Development Agreement. The extended term of the Development Agreement shall commence upon the Effective Date of this Second Amendment and shall continue thereafter for five (5) years. 2. MISCEL1,ANLO1J—S '2 ' I Notices. Section 15.28 of the Development Agreement, which was previously amended in the First Amendment, shall be further amended to add a notice address for Buyer. Such notices and communications as described in Section 15.28 shall be given to Buyer at the address set forth below: If to Buyer_: c/o Northwood Investors LLC 11355 W. Olympic Blvd., Suite 100 Los Angeles, California 90064 Attn: Daniel Palmieri Facsimile: (310) 943-1685 Pircher Nichols & Meeks LLP 1901 Avenue of the Stars, Suite 1200 Los Angeles, California 90067 Attn: Real Estate Notices (DBG/ADK/5080001.5) Facsimile: (310) 201-9922 2.2 P&ILed IeM: Capitalized terms that are not specifically defined in this Second Amendment shall have the meaning assigned to those terms in the Development Agreement or the First Amendment 2.3 Full Force and PMa All applicable terms and provisions of the Development Agreement, the First Amendment and the Operating Agreement remain in full force and effact, except those that are specifically modified in this Second Amendment. [SECOND AMENDMENT CONTJ1VUFD NNE PAGE] 2.4 Counftarts: This Second Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. IN WFFNESS WHEREOF, City, Developer and Buyer hereto have executed this Second Amendment the date and year first above written. f.,CIW1q CITY OF DOWNEY, a Municipal corporation of the State of California ATTEST' BV: Namo-- Its:— �IA, Al �ICIA �DUI �, CMC --MA City Clerk "DEVELOPER" APPROVED SASI Toy. PCCP I DOWNEY, LLC, a Delaware limited liability company ATT ABICH GARCIA By: PCCP LB IRG Downey, LLC, 'y k rney its Managing Member BY Name:— ltv— "DEVELOPER" IRG DOWNEY, LLC, 12908308.2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CnnL CODE § 1189 FF mta�oubflc or other oflcer completing this cortificate verifies only the Identity of the indIvidual who signed the catment to which this certificate Is allached, and not the Mithfulness, accuracy, or validity of that document, Siate of California County of On Y i 1 kl) v —'LO —% — before m 6, --t&QK Ls Q-_,& j—L>,L, Date Here fnwft Name and 77de of the Offirer personally appeared -.0 Name(s) of Signer(s) I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. "Or 11 0 Wary Publi� - Callfwnla WITNESS my hand and official sea]. Los Angeles County Commission N 2202960 MY Comm. Exores Jun22762021 Signature' Place Notary Seat Above ........ ...... A noftry public or other cifficar completing this certificate verifies only the identity ofthe individual who signed the document to which this certificMc is attached, and not the truthfulnes.q, accuracy, or validity of that document. State of California County of -LP5 PD4-e OnkAe%,T,o Q, zoiOi , before me, 4 tc r l ^ I - . , a Notary Public, personaHyappcared_jam hn a. vAe--,o--r who proved to me on the basis of satisfactory evidence to be the perso-wbose natneo i-,,/are subscribed to the within instrurneril and acknowledged to me that hc/sue/lVy executed the same in his/W/tIA authorived capacity(i and that by his/Wllk/eir signnlurc�q on the insirturtent the persoriv, or (lie entity upon beha rf1f, which the personacted, cxceuted the instriumcnt I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature • 2.4 C Lo—u—nten_iarts: This Sccond Amendment may be executed in any number of counterparts, each of which shall be deemed an original, bitt all of which, taken together, shall constitute one and the same instrument, Ml TjC4;1 i1q r1wo a I I Fly; ;I" 1101MI CITY OF DOWNEY, By: Name: Its: — "DEVELOPER" PCCP IRG DOWNEY, LLC, a Delaware limited liability company ty: ----------- Nam/ mQvU1bWtC---- Its: Aut�pqped Signatory "DEVELOPER" IRG DOWNEY, LLC, 2A�&� M'y: IRG III, LLC Properties, Inc. By: Name-- lts:_ 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 tTa-MbInvss, IscOrAcY, or vatidity oktmt docament- -.1 State of California County of On YVIcAy CM �2, 201cl, before ate, 'A OS . a Not Public, personally appeared jt&& who proved to me on the basis of satisfactory evidence to be the personal whose to the Nvithin instrument and acknowledged to me that he/sDoAhey executed the same in his/hgyA4r.-ir nuthorized capacity (ke), and, that by hiq!j!;jAheir signaturc(oi.),on the insiniment the person(s),or the entity upon behalf orwhich the person( ,.5) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature, C. K. HICIN05 Nalary i'E My lo 19774' COMMISSIon 0 219774 ! M�C xp'm� :M E _ �v'. 2021 y Ltflom ExpiresAin 113, 2021 I M4 i 11 11 18 FITKUN US VI DOWNEY, LLC, ------------- Itly: us vi Cpj LPj a Delaware limit6d partnershipi its Sole Mern1wr BVK US VI CA Gr, LLIZ a Delaware limited'liabilit a, company, its General Partner By: Name: K�ALe, A W 5 0, Title: 5C By:,, Name: zV Title: IM"uu-Mus A notary public or other officer completing this certificate verifies only the identity of the indhid ual who signed the dmument to which this certirscate is attached, and not the truthfulness, accuracy, or validity of that document. Ljqv State JA ofCaUfi"io PIA) County of tJ e-w yoy� On a A-V —C - )cjbre me, --_V— JOUAlt— alloaPublic, per sonily aPN'a w I who ProN,ed to me on the basis of ' re(t satisfactory evidence to be the person(s) whose to the within instrument and acknowledged to me that ltcBsl as ctttcd the same in his/hevMxtr-g! atilhorized capacity(ies), and that by hisil" ignature(s) on the instrument the person(s), or the entity upon behalf'of which the persoll(,�M)M' , oxecuted the instrument. I i 111211 111i WITNESS my band and official seal. MUMM ELAINE S ASHE NOTARY PU80C-STATE OF NEVV YORK No. 01AS4873607 OU511fiDd In Suffo!k County My CUffiff"'"" 9*000 M- 14-,*()22 dnotary public or other officer completing this certificate verifies only the identity of the individual who signed the ocument to whichthiscertificate is allached, and nazi the truthfulness, accunicytor:9-fidity ofthat-dmionctit, State of C—WOffiki- County of _e�" On J O-LF—, before rn 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 f6regoing paragraph is true and correct, Signature I.+t'i/.r. i 7 DIANE ANDREWS )VIVAAF nyred--YiAw 1,V,"— Ne.01ANG359017 Qualified In Richmond County My CommisMan EpipiresOO-22-2021 EXHIBIT ASSIGNMENT r ASSUMPTION OF Rr r �•X t it, AJ Aulpmmt and Anumption of Ground Uwe Ai 4I 3 X,t Af' 1 i" i a i III' ' Vo I DAYN I RQV 3W."Ju 110 Wj1UT.Fj P FaLA-Pa Wase Brown Gordon & Sussman -LLP I 1100 Santa Monica Blvd, Suite 870 Los Angeles, California 90025 Attn: Dean Sussman Assignment and Assumption of Ground Lease WOMAN ON; C4DMPWIY k- company CAssignee?): MIT= nis Assignment and Assumption of Ground Lease is being executed and delive Assignment and Assumption it 1 ~111 1 -1 "'IN HOW NUNN 101111.0whill as lessor and Industrial Realty Group, LLC, as Icssee, as disclosed by a Memorandum of Lease to Agreements in Ground Lease dated October 13, 2017, as disclosed by Second Amended i" 111-.r • .rr 11 6 1 1 -3 1- _66,861 i 'too' IIWW[mMWA 19 P. 1.8ow MIOW . WOMM04 i III described on the attached Exhibit A (as asSIgnea ana aMeDaeu from ram: to fInu, 110 Lease'�. TO HAVE AND TO HOLD, the same unto Assignee, its successors and assigns, from and -9-fter the date hereof, subject to the ternts, covenants, conditions and provisions contained in the GTou84l.case. This assignment is made without recourse (except as expressly set forth herein) or representation or warranty, express, implied or by operation of law, of any kind and nature whatsoever. Assignee hereby accepts the foregoing assignment and hereby assumes all duties 0 i4w mid:,71ker tl,,e ilate hereof. Issienee AM shall defend, indemnify and hold harmless Assignee from and against any and all -Clairn asserluA-against tr hicur:rai ky Av,"'Pce 2s a msvdt t-filkssi6m*r's�-ffi lue ti, • iutievvlz r —INA" fees, whether suit is instituted or not). This Assignment shall inure to the benefit of, and be binding upon, the respective legal representatives, successors, and assigns of the parties hereto. This Assignment shall be governed by, and construed under, the laws of the State of Georgia. This Assignment will be simultaneously executed in several counterparts, each of which when so executed and delivered shall constitute an original, fully enforceable counterpart for all purposes. IN WrYNESS WHEREOF, Assignor and Assignee have duly executed this instrurnen., of the day first above written. PCCP IRG DOWNEY, LLC a Delaware limited liability company By: Name: -Znij;ei Title: Ar�kcwud Bye Name' Tj67- 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 Countyof SCZvt'C'sSr--'-' On qj g/1—oll before me, a notary ptiblic, personally appeared who proved to me on the basis of satisfactory c�idefiice 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 hiAer/thvir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instniment. Y =711 T MIT 7, V 7, MMM MWIT, I T-M that the foregoing paragraph is true and correct. W" SS my and and official seal. (Affix Seal) -a' CHERMANMADUNN NOWY Public- California AIJMdACWftty COMmkOw F2778664 *AY Comm EXPI 4,2 �F2 IiZ3 ifim A notary public or other officer completing this cerIificate veres 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 doc ument.— State of California County of On A�r�q' , `2,f) lot before mc,&Mj t -V�yw QW, a notary pub] ic, personally eared ( IDVV,8, A --jW- I- I who proved to me on the basis of satisfactory evidence to be the person(s) whose name( ,4 * subscribed to the within instrument and acknowledged to me that he/syelth;ey executed the same in his/IjerIthOr authorized capacity(jiK), and that by his/Wrld-or signature(4 on the instnuncnt the person(s), or the entity upon behalf of which the persono acted, executed the instrument. I I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. t7E z-,NAYIMNECARDONA MAROW. Notary Public-CalHomla sea]. Los Angler County Seal. Commission 9 2182550 My Comm. Expires Feb 9, 2021 (Affix Seal) Ili • 1 • 11. i 1 ; 1 • • :; i1 •' 1 i I'I ' r 1 i I I r i'; 'r r • r • i 1 •: 1is' r1 •' `•1 r 1 1 . 1 •'r1 1 I r i • 1 I 1 I r• • • Ir f i • I • r 1' 1 • rr ' • • . 1. i s • i 1 1 • i r1 .,. 1 1, r '• r •, •II • • ,' i llr ,, • • r '; I i 11'I• • ��ir I r • • r- • t i' 1 I I 1 1 `• � • 1 • I a •. r I i " • i • I' I • ' 1 1 ' . i i r • • f 'rl • 1 APN: 62564004-909 (portion) EXHIBIT F SAIJLA �1111 a WW" 9 3 213 1 NIZ I This Sale Agreement and Escrow Instructions ("Agreement") is entered into on , 2020 ("Effective Date") by THE CITY OF DOWNEY, a California municipal corporation ("Seller"), and HOLDINGS DOWNEY,Delaware limited liability ("Holdings") and IRG DOWNEY, LLC, a California limited liability company ("IRG' and, collectively with Holdings, "Buyer"). Buyer and Seller are hereinafter individually referred to as a "Party" and collectively as the "Parties." A. Seller is the owner of 8.76 acres of real property in the City of Downey ("City"), County of Los Angeles ("County"), State of California, located Apollo Way and Bellflower Blvd., and described and/or depicted in Exhibit "A" attached hereto ("Property"). B. Seller desires to sell the Property to Buyer, and Buyer desires to purchase the Property from Seller in accordance with the provisions of this Agreement. C. The Property is a portion of the land currently subject to that certain Ground Lease dated December 3, 2003 between Seller, as lessor and Buyer, as lessee, as amended ("Lease"). In ?"i"i iti,fru. I tk -93-7 rxp, to herein as the "North Parcel." The North Parcel is described and/or depicted in Exhibit B attached hereto. D. Concurrent with the approval of this Agreement, the City has approved an amendment to the Lease that (i) removes the Property from the leased land under the Lease, (ii) x _r.slft -1s the term of the Lease,_(iv) modifies the provisions relating to future rent increases under the Lease, (v) modifies deadlines for the sale or construction of the North Parcel, (vi) acknowledges the possibility of future entitlement changes on the florth farcel, and (vu) discusses terms or polemiai sale of une 11orm farce ob"Umye7C -Tease Amendment"). A true and correct copy of the Lease Amendment is attached hereto as Exhibit C. E. After acquiring the Property, Buyer intends to re -sell all or a portion of the Property in one or more purchase and sale transactions ("Re -Sales"), and/or may choose to develop the Property itself ("Owner Uses"). The Parties have agreed to equally divide all amounts in excess of FIFTEEN MILLION TWO HUNDRED SIXTY THREE THOUSAND FOUR HUNDRED TWENTY FOUR DOLLARS ($15,263,424) (the "Division Threshold'� realized from (i) the net proceeds from the Re -Sales plus (ii) the appraised value of the land that is subject to Owner Uses. F. As fiirther consideration under this Agreement, Buyer has agreed to set aside land necessary and sufficient for a one hundred fifty (150) room hotel with sufficient parking ("Hotel Development") on the Property, notwithstanding the fact that other uses may be permitted on the Property by the Specific Plan. 680/0-18110-0024 14966442 10 05108!20 -1- Purchase and Sale; Purchase Price. 1.1 Purchase and Sale. Seller shall sell the Property to Buyer and Buyer sh purchase the Property from Seller subject to the terms and conditions set forth in this Agreemen] L2 Purchase Price. The purchase price of the Property including the "Prope Rights" (as defined in Section 2.8 below) is TEN MILLION SIX HUNDRED THOUSAN DOLLARS ($10,600,000) ("Purchase Price"). 1.3 Additional Consideration. In addition to the Purchase Price, . Buyer shl is rovide additional coitsiieratiiiji t* Seller V �i 0 2.1 Escrow Instructions. Within seven (7) days following the execution of this Agreement by the Parties, the Parties will open an escrow ("Escrow") with Chicago Title Company ("Escrow Holder") for the purchase and sale of the Property. The "Opening ofEscrow" shall mean the date on which a fully executed copy of this Agreement and Buyer's "Initial Deposit" (as defined in Section 2.2.1 below) have been delivered to Escrow Holder. Escrow Holder shall confirm the Opening of Escrow to the Parties in writing. This Agreement constitutes joint escrow instructions to Escrow Holder. The Par -ties agree to execute such additional instructions consistent with the provisions of this Agreement which may be required by Escrow Holder. As between the Parties, Buyer and Seller agree that, if there is any conflict between the terms of this Agreement and any Escrow instructions required by Escrow Holder the terms of this A t h 11 11111 iiiiiil lime 2.2 Payment of Purchase Price. The Purchase Price for the Property shall be payable as follows: 2.2.1 Initial Deposit. Within seven (7) days following the execution of this Agreement by the Parties, Buyer shall deliver to Escrow Holder, by wire transfer or other immediately available funds acceptable to Seller ("Acceptable Funds"), the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000) ("Initial Deposit"). If requested by Buyer, the Initial Deposit shall be placed by Escrow Holder in an interest -bearing account with interest ?ccruing for the benefit of Buyer. Additional Deposit. If Buyer provides Seller with the "Notice of Approval" (as defined in Section 4.2 below) on or before the "Property Approval Date" (as defined in Section 4.2 below), then within three (3) business days following Buyer's delivery of the Notice of Approval, Buyer shall deliver to Escrow Holder, by Acceptable Funds, an additional deposit in the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000) ("Additional Deposit'). If re uested b Buver, the Additional DeDOSit-A211 be 680/028110-0024 14966442,10 a05/08/20 -2- Feasibility Consideration. Notwithstanding any other provision of this Agreement to the contrary, One Hundred Dollars ($100) of the Initial Deposit ("Retained Amount") shall, upon delivery to Escrow Holder, be non-refundable to Buyer for any reason other than a default under this Agreement by the Seller. The Retained Amount is consideration to Seller for holding the Property off the market until the "Property Approval Date" (as defined in Section 4.2 below) and granting Buyer the right to acquire the Property in accordance with this Agreement, if Buyer approves the Property on or before the Property Approval D. The Retained Amount shall be released to Seller upon the opening of Escrow. Notwithstanding anything to the contrary in this Agreement, any provision of this Agreement entitling Buyer to a refund of the Deposit shall not include the Retained Amount, except in the event of a default by Seller. Memorandum. Concurrently with the delivery of an executed copy of this Agreement to Escrow Holder, (a) Buyer and Seller shall deliver to Escrow Holder a fully executed and acknowledged copy of a Memorandum of Sale Agreement substantially in the form attached hereto and incorporated herein as ' Exhibit "W' ("Memorandum") and (b) Buyer shall deliver to Escrow Holder a fully executed and acknowledged quitclaim deed in the form attached hereto as ENhibit "E" ("Quitclaim Deed'). On the business day following the date on which Buyer makes the Initial Deposit, Escrow Holder shall record against the Property the Memorandum. The Quitclaim Deed shall be held by Escrow Holder and if this Agreement terminates, Escrow Holder shall record the Quitclaim Deed immediately after receipt of written record by either Xiaj%,i so longas 1h �Ak,*�. n of such re-vuest to record concurrently with Escrow Holder's receipt thereof. 2.2.5 Payment at Closing. If Seller has deposited into Escrow all documents and amounts required of Seller to close Escrow, including without limitation, the "Grant Deed" (as defined in Section 2.11.1 below) and complied with all of Seller's other obligations under this Agreement, then on or before the "Closing Date" (as defined in Section 2.3 below) so as not to delay the "Close of Escrow" (as defined in Section 2.3 below), Buyer shall deposit into Escrow the following in Acceptable Funds: (a) the balance of the Purchase Price (Purchase Price less the Deposit and any other credits to Buyer under this Agreement) and (b) Buyer's share of Escrow closing costs pursuant to the preliminary Escrow closing statement furnished by Escrow Holder as provided below. 2.3 Close of Escrow. Subject to Sections 2.3.1 and 2.3.2, Escrow for the sale of the Property shall close on the date ("Closing Date") which is the earlier of (i) the date of closing of a purchase and sale agreement presently being negotiated ("Kaiser PSA") between Buyer, as seller, and Kaiser Foundation Health Plan, a California nonprofit public benefit corporation 1 ieg; b f ortion of the Pro e ;�Vi onehundredtwen (120) days following , r.61 J-YC179 the Additional Deposit by an additional one hundred thousand dollars ($100,000) to a total Additional Deposit of three hundred thousand dollars ($300,000) and a total Deposit of five hundred thousand dollars ($500,000). As used in this Agreement, "Close ofEscrow" shall mean the date on which the Grant Deed conveying title to the Property to Buyer is recorded. 680/028110-0024 14966442 10 a05/08/20 -3- Conditions Precedent to Buyer Obligation to Close. Buyer obligation to close Escrow and purchase the Property is expressly conditioned on the satisfacti of the conditions listed in this Section 2.3. 1. If any such condition is not satisfied, or waived (wi the exception of (6) below which cannot be waived) by Buyer, at or prior to the Close of Escro for a reason other than a default bl'. B 'er Bi erma jijjW1'" 1 (1) Title Policy. Escrow Holder has issued or committed to issue Buyer the "Title Policy" (as defined in Section 2.6 below) showing title vested in Buyer subject only to "Permitted Exceptions" (as defined in Section 2.5 below). (2) Representations and Warranties. Each of Seller's representations and warranties in this Agreement are materially true and accurate as of the Close of Escrow. (3) Seller Obligations, Seller is not in material default under this Agreement and each material obligation of Seller to be performed prior to the Close of Escrow, has been performed as required, including, without limitation the delivery of all documents required of Seller under this Agreement. (4) Lease Amendment. Seller and the lessors under the Lease shall have entered the Lease Amendment (which amendment shall not become effective until the Closing Date), (5) Moratoria. There shall be no action taken by the City, County or other public authority or agency with jurisdiction over the Property ("Governmental Authority") or any vote of the citizens of the City (including without limitation any moratoria) that would preclude or prevent Buyer from obtaining building permits, sewer permits, water permits, or certificates of occupancy for the Property that are consistent with the Property's existing land use entitlements or any future land use entitlements that may be done prior to the Close of Escrow ("Public Development Limitation"). (6) Legal Subdivision. The Property shall be a legal parcel under the California Subdivision Map Act that can be transferred by Seller to Buyer. 2.3.2 Conditions Precedent to Seller Obligation to Close. Seller's obligation to close Escrow and sell the Property is expressly conditioned upon the satisfaction of the conditions listed below. If any such condition is not satisfied, or waived by Seller, prior to the Close of Escrow, for any reason other than a default by Seller, Seller may terminate this Agreement by written notice to Buyer. (1) Representations and Warranties. Each of Buyer's representations and warranties set forth in this Agreement are materially true and accurate as of the Close of Escrow. 680/028110-0024 14966442,10 05/09/20 -4- (2) Buyer's Obligations. Buyer is not in material default under rV•WWWT hereunder has been performed as required. (3) Lease Amendment. Seller and the lessors under the Lease shall have entered the Lease Amendment (which amendment shall not become effective until the Closing Date). 2.4 Escrow Cancellation. NMMM,� (1) Seller's Default. If Escrow fails to close due to Seller's default and this Agreement is terminated, Seller shall pay all Escrow cancellation charges. "Escrow cancellation charges" means all fees, charges and expenses charged or passed on to the [1,arties by Escrow Holder, including all title expenses. (2) Buyer's Default. If Escrow fails to close due to Buyer's default and this Agreement is terminated, Buyer shall pay all Escrow cancellation charges. (3) No Default. If Escrow fails to close and this Agreement is terminated for any reason other than a default by one of the Parties, the Parties shall share equally in any Escrow cancellation charges, and each Party shall be deemed to have released the other Party from all liability for the failure of Escrow to close. The foregoing shall not be deemed an election of remedies by Buyer or limit any remedies available to Buyer. 2.4.2 Deposit. If Escrow fails to close due to Buyer's default and this Agreement is terminated, the Deposit shall immediately be delivered and paid over to Seller; provided, however, that the foregoing shall not constitute an election of remedies by Seller. If iM*-'jA5-*66w;r. i4f? "4k.A grAement is terminated the (Irib-2-m -Dey-osit shall be returned to Buyer. If Escrow fails to close due to any reason other than a default by Buyer or shall be returned to Buyer. If Escrow fails to close due to any reason other than a default by Buyer or default by Seller and Escrow is terminated after the Property Approval Date, the Deposit shall immediately be delivered and paid over to Seller; provided, however, that the foregoing shall not constitute an election of remedies by Seller. 2.5 Permitted Exceptions to Title. As soon as reasonably possible after the Opening of Escrow, Escrow Holder shall cause Chicago Title Company, in its capacity as title 1-narw to deliver to Bu_k,7jer and Seller a current Itreliminary title report ("Title Report") together with legible copies of all underlying documents referenced therein (together with the Title Report, the "Title Documents"). Buyer may, at Buyer's option and expense, have the a survey completed to delineate the Property and the North Parcel (the "Survey") in a form sufficient to permit the Title Company to delete the standard survey exception in connection with the issuance of the Title Policy (as defined in Section 2.6) The term "Permitted Exceptions" as used in this Agreement shall mean all of the following: (a) the Grant Deed, (b) non delinquent real 690/028110-0024 14066442.10 a05/09/M property taxes and assessments; (c) items and exceptions created by or with the written consent ot Buyer, including documents to be recorded pursuant to this Agreement and (d) the title exceptions shown on the Title Report but excluding • (i) "Disapproved Exceptions" as defined below that Seller, in its sole discretion, agrees to remove prior to the Close of Escrow as provided below and (ii) all • liens and monetary encumbrances on the Property, other than non -delinquent real property taxes and assessments which will be removed (meaning removal Erom title and not the issuance of an endorsement in connection therewith by the Title Company) from title by Seller at its sole cost and expense prior to the Close of Escrow. If Buyer objects to any title exceptions or any matters set forth on the Survey ("Disapproved Exceptions"), Buyer shall deliver written notice ("Objection Notice") of same to Seller on or before the Property Approval Date. If Buyer fails to deliver an Objection Notice but delivers a "Notice of Approval" (as defined in Section 4.2 below) 011011IFY Will I o wrinen notice Lo iNTIM NTT ki) P117=37-1157 . )7L11TC71W#TC-Crffi#-J=TJ�P!� elects • to • a Disapproved Exception (Seller's failure to respond to a Buyer Objection Notice shall be deemed such an election) Buyer's sole remedies shall be under Section 4.2 with respect to the delivery of a Notice of Approval or delivery or deemed delivery of a Notice of Ten-nination and refund of all of the Deposit delivered into Escrow and all interest accrued thereon. 2.6 Title Insurance. Seller shall cause the Title Company to commit to issue to Bu er at the Close of Escrow a standard covera e ALTA Owner's olicy of title insurance with and to all tangible personal property owne y e ernowexsingan pace orinsa about the Property and used in connection with the ownership, operation, management, maintenance and/or repair of the Property. 680/028110-0024 14966442, 10 a05!08/20 -6® 2.8.2 Other Related Matters. All right, title and interest of Seller, if any, in and to all beneficial easements, covenants, patents, licenses, trademarks, service marks ani names used in connection with the operation of the Property, and all symbols, emblems with the operation of the Property, and all symbols, emblems and logos used in connection with the ownership or operation of the Property, and irrespective of size, and all of Seller's right, title and interest in and to all goodwill associated therewith. 2.8.3 consistingwarranty except as provided in this Agreement or any exhibit to this Agreement and all Prope Rights of - prepared by or r parties at the requestof any fee, delivered to Buyer lien free and freely usable by Buyer at its discretion without the payment cost or charge. Seller shall execute all additional documentation necessary to eviden the foregoing assignments as reasonably required by Buyer and/or any Governmental Authority applicable third party. r a I ■ I'I Ii 2.9.1 Taxes. All current general and special taxes and assessments on the Property shall be prorated by Escrow Holder based upon the latest available information as shown in the tax statements provided to Escrow Holder by Seller, using customary escrow procedures. Seller shall provide Buyer with written evidence of the payment or satisfaction of such taxes. Should the Property be part of a larger tax parcel ("Assessment Parcel") which as of the Close of Escrow remains unsegregated on the County Tax Assessor's Roll for the ensuing fiscal year, Escrow Holder shall charge Buyer and credit Seller for taxes and assessments allocated to the Property (based on unimproved value) based on the percentage of the total acreage of the Assessment fairly r Parcelequitablydetermined and supplied to Escrow Holderby Buyer and' Buyer r transfers,Seller shall cooperate in good faith to cause the Property to be separately assessed and segregated in Buyer's name on the current tax roll. Any real property taxes or assessments levied under the Supplemental Tax Roll as a result of the sale of the Property to Buyer, shall be the responsibility of Buyer. Any real property taxes or assessments levied under the Supplemental Tax Roll as a result of r • - or other occurrences before the Close of • be ` responsibility of are otherwise the responsibilityof - •under the Lease). 2.9.2 General.r • rations provided • be on •. r. • -hundred a i. provisions • on survive Close of Escrow. If either Party fails to pay its pro rata share of taxes or other expens by the times herein provided, interest shall accrue on all unpaid amounts from when owing un paid at the maximum rate allowed by law. Any errors or omissions made in calculati tl adjustments and prorations shall be corrected promptly upon the discovery thereof If a estimations are made at the Close of Escrow regarding adjustments or prorations, the Parties sh make the appropriate correction promptly when accurate information becomes available. corrected adjustment or proration shall be paid in cash to the Party entitled thereto within ten days after written request therefor and if not so paid interest shall accrue and be payable on sa at the maximum rate • -i by law. 680/01-5110-0024 14966442.10 a05/06120 �7' 2.10 Closing Costs. Buyer shall pay the Buyer Title Costs, one-half (1/2) of Escrow Holder's fee and any other costs that in Escrow Holder's opinion are customarily borne by buyers of real property in the County. Seller shall pay for the cost of recording the docunlents described in Section 2.11, the documentary transfer tax, the Seller Title Costs, one-half (1 /2) of Escrow Folder's fee, and any other costs of` Seller specified in this Agrecinent or which in (lie opinion ol'Escrow holder are customarily borne by sellers of real property in the County. At least three (3) business days prior to the Closing Date Escrow Holder shall furnish Buyer and Seller with as preliminary Escrow closing statement which shall include each Party,.; respective share of costs. The preliminary closing statement shall be approved in writing by Buyer and Seller. As soon as reasonably possible following the Close of Escrow, Escrow I -folder shall deliver as copy of the final Escrow closing statement to Buyer and Seller. 2.11 Recordation and Delivery of Documents. No later than 12:00 p.m. on the business day inuriediately prior to the Closing Date, Buyer and Seller, as applicable, will deposit into Escrow the following documents (with the documents that are to be recorded in the following order and delivered as provided below): 2A1.I GrautDeed. One (1) fully executed and acknowledged copy of the grant deed on Title C onipany's standard bran conveying the Property to Buyer ("Giwnt Deed'), Conforined copies ofthe recorded Grant Deed shall be returned to Buyer and Seller as soon as possible. 2.11.2 Withholding Exemption Certificates. One (1) coinpleted and executed copy of the following: Non -foreign 1'ranst-eror Declaration; Preliminary Change in Ownership Report, Internal Revenue Service Forni 1099-S, and California Franchise Tax Board Form 593 and any other applicable state tax withholding tbrins, as applicable, as applicable. As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver copies of all closing documents, including, without limitation, those listed above, the Title Policy, any additional escrow instructions and the final Escrow closing statement, to Seller's counsel and Buyer's counsel. 2.12 Seller's Proceeds. At the Close of Escrow, subject to Section 2.13 below, Escrow Holder is directed to wire funds representing Seller's cash proceeds through Escrow to Seller's account as directed in separate written instructions to be provided by Seller. 2.13 Cal-FIRPTA Withholding. Unless this transaction is exempt under California Revenue and Taxation Code Sections 18805 arid 26131, Escrow Holder shall be the "withholding agent" and withhold from proceeds due Seller any amounts required under the above code sections to be withheld by Buyer and pay same to the California Franchise Tax Board or Internal Revenue Service in accordance with applicable law. 2.14 Additional Documents. Seller shall execute and deliver to Escrow any other documents reasonably required by Escrow Holder including, without limitation, Seller's affidavits or statements regarding mechanics liens and/or tenants or parties in possession. 2.15 Termination of Property Contracts. Seller shall terminate any service contracts or similar agreement relating to the Property to which Seller is a Party and which the 6801028110-0024 14966442. 10 a050V20 Buyer does not elect in writing to assume which termination shall be effective as of the Close of Escrow. 3. Real Estate Brokerage Commission. Buyer and Seller each represent and warrant to each other that they have not employed, dealt with or incurred any obligation to any broker, agent or fi-nder in connection with the Property, and that they have not incurred any obligation to pay any other real estate brokerage or other commission or fee in connection with the conveyance of the Property to Buyer. Buyer and Seller agree to indemnify, defend and hold each other free and harmless from and against all costs and liabilities, including without limitation reasonable attorneys' fees and the costs and expenses of litigation, for causes of action or proceedings in any way related to or resulting from a breach of the foregoing representation and warranty or arising out of any action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party, respectively, in connection with this transaction. 4. Investigation by Buyer. flunnlsr 1 4.2 Buyer Approval/Disapproval. If Buyer determines, in its sole and absolute discretion, for any reason, that it does not wish to acquire the Property, then Buyer may, terminate this Agreement and cancel Escrow by delivering to Escrow Holder and Seller prior to 5:00 p.m. on the date which is the earlier of (i) the end of Kaiser's Review Period (as defined in the Kaiser PSA Jalualls after the full execution of this Agreement ("Property Approval Date"), written notice terminating this Agreement ("Notice of Termination"), whereupon this Agreement shall automatically terminate and neither Party shall have any further obligation or responsibility hereunder or liability of any nature or amount whatsoever, other than Buyer's indenmity obligations under Section 4.3 below and the payment of Escrow cancellation charges, and the Initial Deposit delivered into Escrow and all interest accrued thereon shall be immediately refunded to Buyer. If Buyer approves the Property, Buyer shall deliver written notice of such approval ("Notice of Approvar) to Seller and Escrow Holder prior to 5:00 p.m. on the Property Approval Date, in which case this Agreement shall remain in full force and effect subject to its terms and conditions. If Buyer does not so deliver a Notice of Termination or a Notice of Approval prior to 5:00 p.m. on the Property Approval Date, Seller shall send Buyer written notice of such failure and if by the date ("Termination Date") that is three (3) business days following receipt of such written notice (and the Property Approval Date shall be extended to the Termination Date) Buyer still has not delivered a Notice of Termination or Notice of Approval, Buyer shall be deemed to have delivered a Notice of Termination, in which case this Agreement shall automatically terminate, Escrow shall be cancelled and the Initial Deposit, less Escrow cancellation fees, shall be immediately refunded to Buyer. 5.1 Buyer's Investigation. Buyer shall be entitled to conduct such independeni 1 I biis 1-IMMIM-110 NO - M114 MUMOMIQ Win 1 V 101 q 1041=013 Is-1-1k a 630/028 110-0024 14966442 10 a05/08/20 -9- thereon; (iii) applicable laws, statutes, rules, regulations, ordinances, limitations, restrictions or requirements concerning the use, density, location or suitability of the Property or any existing or proposed development or condition thereof, including but not limited to zoning, subdivision and other regulations (collectively, the "Regulations"); (iv) the necessity or availability of any specific plan or general amendments, rezoning, zone variances, conditional use permits, building permits, environmental imi%actre(worts subdivision ma�,iyswublic rqcorts issue M1*fi-jr--x-J4w1 Real Estate ("BR-U) (it shall be Buyer's obligation, if applicable, to obtain all required public reports as a condition to offering homes to purchasers) and all other governniental pennits, approvals •. acts (collectively, the "l-'erynits"); (v) the necessity and existence of all dedication,,;, fees, •. • or assessments which may lie iniposed by any Governniental Authority in connection with the proposed development of the Property; (vi) the value of the Property; (vii) the availability or adequacy of access to the Property, or of water, sewage, gas, electrical or other utilities serving the Property and (viii) the presence or adequacy of infrastructure or other improvements on, near or concerning the Property. 5.2 Warranties. 5.2.1 Seller's Warranties. In consideration of Buyer entering into this Agreement and as an inducement to Buyer to purchase the Property from Seller, Seller makes the following representations and warranties which shall be true and correct as of the Effective Date • the Close • Escrow and each of which is material and • relied •f by Buyer. For all purposes of this Agreement, including Seller's representations and warranties contained in this Section 5.2.1, the phrase "to the best of Seller's knowledge" shall mean the current actual knowledge of Seller, without duty of inquiry or investigation. If -prior to the Close of Escrow Buyer determines that any representation or warranty of Seller is untrue, inaccurate or incomplete in any material respect (and without waiving any of Buyer's rights or remedies hereunder at law or in equity with respect • any material untruth, incompleteness • inaccuracy existing on the Effective Date, that was known of or should have been known of by Seller). Buyer s4,911 give'Selle WIN, Lit) 1111CI 1111 L UIC I JAILI111; 01 :S ("Seller Cure Period;) to correct any fact or circumstance that makes such, representation or warranty materially untrue or inaccurate to Buyer's reasonable satisfaction, If Seller fails to make such correction within the Seller Cure Period, then Bu I-1MKWwAWbM (3) days atIer (lie expiration of the Seller Cure. Period (,and the Closing Date shall he eXtLe tided to permit the running of such three (3) day period) shall be entitled (a) to terniinate this Agreenlent • ♦t a full refund of the Deposit • (b) • this Agreenient in full force and eff�ct with no chan4. but without waiviD g any legjaw.Mlita bla-orr if Seller. The foregoing is not a waiver or release of any of Buyer's rights or remedies for any material untruth, incompleteness or inaccuracy in a representation or warranty of Seller of which Muyer obtains knowledge after the Close of Escrow. (1) Authorization. To the best of Seller's knowledge, Seller has full power and authority to enter into this Agreement and to perforin all its obligations hereunder, and has taken all actions required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement by Seller. To the best of Seller's knowledee. each ini-ivi(imwf T 680/078t 10-0024 14966442. 10 a05108r-O -10- has the right, power, legal capacity and authority to execute, deliver and perform this Agreement on behalf of Seller. (2) Conflicting Agreements. To the best of Seller's knowledge, neither the execution or delivery of this Agreement, nor the consummation of the transaction contemplated herein, will conflict with, or result in a breach of, any contract, license or undertaking to which Seller is a party or by which Seller or any of the Property is bound, or constitute a default thereunder. In addition, to the best of Seller's knowledge, with respect to any agreements which affect the Property, neither Seller nor any other party or parties to such agreements are in default thereunder nor are there any facts that currently exist which with the passage of time would result in any such default. To the best of Seller's knowledge, the Property is not subject to any prescriptive easements, claims of adverse possession, encroachments or similar rights or claims (other than the Lease, which shall be amended to exclude the Property as of the Closing Date). In addition, to the best of Seller's knowledge, except (i) as otherwise disclosed in this Agreement and (ii) for the Kaiser Sublease, the Property is not subject to any leases, options or other similar rights or claims in favor of any third parties. The Property is not subject to a Williamson Act contract or any similar agricultural agreement. (3) Proceedings. To the best of Seller's knowledge, no legal or administrative proceeding is pending or threatened against Seller or the Property nor are there any other facts or circumstances which would adversely affect (i) Seller's right to convey title to the Property to Buyer as contemplated in this Agreement or (ii)Buyer's ability to own, develop and/or market the Property in the manner disclosed by Buyer to Seller. To the best of Seller's knowledge, there are no condemnation or eminent domain proceedings pending or threatened with respect to the Property. (4) Binding Agreement. This Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except to the extent that such enforcement may be limited y applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (5) Violations of Law. To the best of Seller's knowledge, on the Effective Date and Close of Escrow neither this Agreement nor the Property shall be in violation of any law, ordinance, rule regulation, or administrative or judicial order. (7) Assumed igi s. To the best of Seller's knowledge, except for obligations or responsibilities of Seller that are expressly assumed by Buyer in this Agreement, there are no obligations or responsibilities of Seller with respect to the Property or otherwise of any kind that are assumed by Buyer. (9) Ownership of Property. Other than the lessor under the Lease and Kaiser under the Kaiser Sublease, Seller is the sole and only party that owns or holds any interest in the Property. (10) Property Documents. To the best of Seller's knowledge, the Property Documents and all other documents and information provided by Seller or its agents or consultants to Buyer are complete, true and accurate and do not omit any material fact and there 690/02S 110-00v4 -1 1- 14966442.10 a05(0&(20 are no other documents, materials, studies, surveys or other information in the possession or control of Seller that would have a material and adverse effect on Buyer's ability to own, develop and/or market the Property. (11) Other Agreements. Except as set forth in the Property excevt as req_uired bocal state or federal law or rea-ulation, Seller has not made any commitment or representation to or entered into any agreement of any kind with any government authority, or any adjoining or surrounding property owner, group or other third cal which be binding on B -wer and Seller will not make Ln TA such representations or warranties or enter into any such agreements which would affect the Property or any portion thereof prior to the Close of Escrow, without Buyer's written consent. (14) Bankruptcy. No "Bankmptcy Event" (as defined below) has occurred with respect to Seller. There is not pending or threatened any case, proceeding or other actioD seeking reorganization, arrangement, adjustment, liquidation, dissolution or recomposition of Seller or seeking appointment of a receiver, trustee, custodian or similar official for Seller for all or any substantial part of its assets. "Bankruptcy Event' means (a) the making by a person of a general assignment for the benefit of such person's creditors, (b) the admission in writing by a person of its inability to pay its or their debts as they mature, (c) an attachment, execution or other judicial seizure of any property interest which remains in effect, or (d) the its financial obligations as they accrue. (15) Material Change. Seller shall promptly notify Buyer if Seller obtains information that would make any of the representations or warranties contained in this Section 5.2.1 materially inaccurate or misleading. 5.2.2 Buyer's Warranties. In consideration of Seller entering into this Va-IlAr representations and warranties which shall be true and correct as of the Effective Date and the Close of Escrow and each of which is material and being relied upon by Seller. If prior to the Close of Escrow Seller determines that any representation or warranty of Buyer is untrue, inaccurate or incomplete in any material respect (and without waiving any of Seller's rights or remedies hereunder at law or in equity with respect to any material untruth, incompleteness or inaccuracy existing on the Effective Date, that was known of or should have been known of by Buyer), Seller may give Buyer written notice of same and Buyer shall have seven (7) days from ot- such seven(/) clay period) �-b uyer U ure 7'eriou )LocorrM U111 1ULAU such, representation or warranty materially untrue or inaccurate to Seller's reasonable satisfaction, If Buyer fails to make such correction within the Buyer Cure Period, then Seller by written notice a?7131707031aii reim6urse terminate this Agr 'n TAIhieft Cse third party costs incurred by Seller in connection with the negotiation and preparation of this Agreement or (b) continue this Agreement in full force and effect with no change in terms, but without waiving any legal, equitable or other remedies it may have against Buyer. The foregoing is not a waiver or release of any of Seller's rights or remedies for any material untruth, 680/028110-0024 14966442.10 a05/08i20 -12- incompleteness or inaccuracy in a representation or warranty of Buyer of which Seller obtains knowledge after the Close of Escrow. (1) Authorization. Buyers are limited liability companies dilly fori-ned and validly existing under the laws of the State of Dela%areancl the State of Californiaand are each qualified to transact business in the State of California. Buyers have full power and MIthonty to enter into this Agreement and to perforate all its obligations hereunder, and have taken all action required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement. Each individual who has executed this Agreement on behalf of Buyers has the right, power, legal capacity and authority to execute, deliver and perforin this Agreement on behalf of Buyers. (2) Conflicting Agreements. Except for the Kaiser Sublease, neither the execution nor delivery of this Agreement, nor the consummation of the transaction conternplated herein, will conflict with, or result in a breach of, any contract, license or undertaking to which Buyer is a party or by which Buyer is bound. or constitute a default thereunder. (3) Proceedings. To the best of Buyer's knowledge, no legal or administrative proceeding is pending or threatened against Buyer nor are there aany other facts or circumstances which would adversely affect Buyer's ability to own, develop and/or rnarket the Property in the manner contemplated by this Agreement. (4) Bankruptcy. No Bankruptcy Event has occurred with respect to Buyer nor any rnernber or manager of Buyer. There is not pending or threatened any case, proceeding or other action seeking reorganization, arrangetilent, adjustment, liquldaation, dissolution or recomposition of Buyer or any member or manager of Buyer or seeking appointment of a receiver, trustee, custodian or similar official for Buyer or any member or manager of Buyer for all or any substantial part of its or their assets. (5) Binding Agreement. This Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratoriumand other principles relating to or limiting the rights of contracting parties generally. (6) Material Change. Buyer shall promptly notify Seller if Buyer obtains information that would make any of tile representations or warranties contained in this Section 5.2.2 materially inaccurate or misleading. 5.2.3 Natural Hazard Zone Disclosure. No later than fifteen (15) business days prior to the Property Approval Date, the Seller will, at its sole cost and expense, provide Buyer with a Natural Hazard Zone Disclosure required by applicable law. 5.2.4 Exclusions. (a) Notwithstanding this Sectioji 5.2 or any other provision in this Agreement to the contrary, nothing in this Agreement shall relieve Seller of its liability for (a) any breach of Seller's representations and warranties contained in this Agreenietil and/or documents executed and delivered by Seller at or contemporaneously with the Close of Escrow, 680/0281 7 0-0024 14966442. 10 05/08LM -13- (b) any breach by Seller of its covenants in this Agreement, (c) Seller's fraud, (d) �Sny matters which Buyer is to be indemnified by Seller under this Agreement, (e) any of Seller iab 1ties third persons or obligations to third parties with respect to matters which arose or accrued duri Seller's ownership of the Property, or (f) Seller's acts or omissions from and after the Close Escr • , r) Notwithstanding this Section•: any other provision Agreementthis to the contrary,• •.in this Agreement shall relieveof its liability• (a) any breach of Buyer's representations and warranties contained in this Agreement and/or documents executed and delivered by Buyer at or contemporaneously with the Close of Escrow, (b) any breach by Buyer of its covenants in this Agreement, (c) Buyer's fraud, (d) any matter for which Seller is to be indemnified by Buyer under this Agreement, (e) any of Buyer's liabilities to third persons or obligations t• third parties with respect • matters which arise or accrue during Escrow.Buyer's ownership of the Property, or (f) Buyer's acts or omissions from and after the Close of 5.4 Seller's Additional Civenants. Seller hereby• - and agrees into any agreement to promote, advertise, market, transfer, lease or convey any of the Property modify or amend any lease as to the Property; (b) will not enter into any agreement, that will or purport• •` binding on the Buyer or the Property• "i • the Close of Escrow;'iWorsym-1-Tier's-re,,tuest Seller will not take rove or consent to an�i action or omission that wou change the zoning, use, permits or entitlement of or for the Property; and (d) shall not record cooperate in the recording against the Property or any portion thereof, of any lien, encumbranc- agreement, easement, right of way or other matter without Buyer's written consent. 5.6 Disclaiiners..Bv Seller. Except as expressly set forth in this Agreement including the representationsand warranties set forthf understood and agreed agents-, re-,tresentatives or emyloylees have not at any time made and are not now making, and they specifically disclaim, any warranties, representations or guaranties of any kind or or implied, with respect Property, including, but not limited to, warranties, representations or guaranties as to (a) matters of title, (b) environmental matters relating to the Property or any portion thereof, including, without limitation, the presence of hazardous materials in, on, under or in the vicinity of the Property, geological • • • •' • without limitation,• •subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of avirs-r,nmid g-7-M g�t* faults and the resulting damage of %ast and/or future faulting,%�A�, whether, and to the extent to which the Property or any portion thereof is affected by any water, wetlands, flood prone area, flood plain, floodway or special flood hazard, (e) drainage, (f) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or 680/028 t 10-0024 14966442.10 a05/03/20 -14- Property or any portion thereof including, without limitation, water, sewage, gas and electric, 0) usages of adjoining property, (k) access to the Property or any portion thereof, (1) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, physical condition, operation, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (n) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (o) any other matter affecting the stability and integrity of the Property, (p) the potential for further development of the Property, (q) the merchantability 7i-ff with laws including without limitation, the Americans with Disabilities Act, (s) tax consequences, or (t) the operation, repair or financial matters and any other matter or -thing with respect to the Property. 5.7 Sale "As Is, Wliere Is". Buyer acknowledges and agrees that up-m- Closing, Seller shall sell and convey to Buyer and Buyer shall accept the Property "AS I WHERE IS, WITH ALL FAULTS," except to the extent expressly provided otherwise in th Agreement. Except as to the extent expressly provided otherwise in this Agreement, Buyer h not relied and will not rely on, and Seller has not made and is not liable for or bound by, "-g1L �,*r i-itIlliedwz-va�ities, Uu2x,?jtees, st?,tements, reDresentations or inforination)2ertainin� V 6 UVAMMIN 0 uroKer, agent or L111rC1 party represenTing or ��Tr,,Ilorafig to MpTUNCHL 3CHU-1, LV WIMIXTef MaUO given, directly or indirectly, orally or in writing. Buyer represents that it is a knowledgeabli- experienced and sophisticated buyer of real estate and that, except as expressly set forth in th Agreement, it is relying solely on its own expertise and that of Buyer's consultants in purchasi the Property and shall make an independent verification of the accuracy of any and all documen Property as Buyer deems necessary, including, but not limited to, the physical and environment conditions thereof, and shall solely rely upon same when acquiring the Property. If Buyer fails terminate this Agreement prior to the expiration of the Feasibility Period, Buyer acknowledg Buyer deemed necessary to satisfy itself as to the condition of the Property and the existenc non-existence or curative action to be taken with respect to any hazardous materials on discharied from the Prowtv, and will reli soleli uDon same. UDon Closin ass )MIC L11C I IN& MaL duvrllse Marmis, 111L;1J1"JA",)LL flit L 11111ILCIL LV, altITCINC L III defects or adverse envirom-nental, health or safety conditions, may not have been revealed Buyer's inspections and investigations. Buyer hereby represents and warrants to Seller th (a) Buyer is represented by legal counsel in connection with the transaction contemplated by th Agreement; and (b) Buyer is purchasing the Property for business, commercial, investment other similar purpose. Buyer waives any and all rights or remedies it may have or be entitled t I V 121 UM In M.,101 68OX28110-0024 14Q66442 10 05/08/20 -15- ENFORCED TO THE FULLEST EXTENT PERMITTED BT LAIT'FOW.4A� OF SELLER, EVEN IF THE APPLICABLE CLAIM IS CAUSED BY THE ACTIVE OR PASSIVE ORDINARY NEGLIGENCE OR SOLE, JOINT, CONCURRENT OR COMPARATIVE ORDINARY NEGLIGENCE OF SELLER, AND REGARDLESS OF WHETHER OR NOT LIABILITY WITHOUT FAULT OR STRICT LIABILITY IS IMPOSED OR SOUGHT TO BE IMPOSED ON BUYER OR SELLER, BUT WILL NOT BE ENFORCED TO THE EXTENT THAT A COURT OF COMPETENT JURISDICTION HOLDS IN A FINAL JUDGMENT THAT A CLAIM IS CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SELLER. SELLER'S INITIALS BUYER'S I F]ALS 5.8 Seller Released frotu Liabilitv. Except for the representations set forth in Section 5.2.1 of this Agreement and the exclusions set forth in Section 5.2.4 of this Agreement, VW.7'ev Period, and during such period, observe its physical characteristics, environmental condition and existing conditions and the opportunity to conduct such investigation and study as Buyer deems necessary, and except for the representations, warranties, covenants, and agreements set forth in this Agreement, Buyer hereby forever releases and discharges Seller from all responsibility and TRsmg nefore or arfer Lne Effective _0 the Property, or its suitability for any purpose whatsoever (including, but not limited to, with respect to the presence in the soil, air, structures and surface and subsurface waters, of hazardous be deterinined to be toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws, regulations or guidelines, and any structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and hazardous materials on, under, adjacent to or otherwise affecting the Property) or its use and operation. Except for the representations, warranties, covenants, and agreements set forth in Section 5.2.1 of this Agreement and the exclusions set forth in Section 5.2.4 of this Agreement, Buyer further hereby waives (and by closing this transaction will be deemed to have waived) any and all objections, complaints and actions (including, but not limited to, federal, state and local statutory and common law based actions, and any private right of action under any federal, state or local laws, regulations or guidelines to which the Property is or may be subject. Buyer further hereby expressly assumes the risk and changes in applicable laws and regulations relating to past, present and future environmental conditions on the Property and the risk that adverse physical characteristics and conditions, including, without limitation, the presence of hazardous materials or other contaminants, may not have been revealed by its investigation. SELLER'S INITIALS BUYER'S INITIALS 680/028110-0024 14966442,10 a05/08/20 -16- HMMM9rr� r Right e Cure. Buyer be deemed to be in default under Agreement if Buyer • comply with, or perform any material covenant, agreement, or obligation required on its pa including - deposit or delivery of r the time limits and in the manner requir-r in this Agreement, - rovided that no such default shall be Seller has given Buyer written notice describing the nature of the default, and Buyer cure such default within tenbusiness days after the receipt of such notice (unless the curi of such default cannot reasonably be accomplished within such ten (10) business day period 680/028110-0024 14966442,10 a05108(20 -17- ten (10) business day period and diligently pursues same to completion). 7.1 In the event that Seller fails to perform any of the material covenants or ao-feements contained herein which are to be (cerfonned brA Seller - Bu "jr maq�m-Mrl its exclusive remedy, either (i) terminate this Agreement by giving written notice of tennination to Seller whereupon Escrow Holder will return to Buyer the Deposit and both Buyer and Seller will be relieved of any further obligations or liabilities hereunder, except for those obligations which expressly survive any termination hereof, or (ii) seek specific performance of this Agreement. Except as specifically set forth in this Section 7.1, Buyer does hereby specifically waive any right to pursue any other remedy at law or equity for such default of Seller, including, without limitation, any right to seek, claim or obtain actual damages, punitive damages or consequential damages. 7.2 Right to Cure. Seller shall be deemed to be in default under this Agreement if Seller fails, for any reason other than Buyer's default under this Agreement, to meet, comply with, or perform any material covenant, agreement, or obligation required on its part; provided that no such default shall be deemed to have occurred unless and until Buyer has given Seller written notice describing the nature of the default.- and Seller h,?,ffiWr.;dLirTMTMM tAMMURUjii ten (10) business days after the receipt of such notice (unless the curing of such default cannot reasonably be accomplished within such ten (10) business day period in which case the default shall be deemed cured if Seller commences to cure such default within such ten (10) business day period and diligently pursues same to completion). Additional Consideration. 8.1 ' Presentation of Re -Sale Opportunities: Buyer shall present to Seller each signed letter of intent ('101") and/or proposed purchase and sale agreement ("PSA") that it receives and/or proposes for all or a portion of the Property. Until April 30, 2025 any sale where the sale price per acre equals or exceeds the 'Tresumed Value" (as defined in Section 8.2 below) shall be conclusively presumed to constitute a fair market value. For all proposed sales with a sale rice er acre below the Presumed Value, Seller may, in its discretion. de-ittg-iji. tVA -*)ri r 1(j1_" , GIR61111 'IT I L11 WIN 3 CU LIMI 0. 1 , Yess escrowlees anct customary closing costs, stiall be rele—pri f o as tPSale Proceeds." 8.2 Owner Uses: If Buyer seeks to develop all or any portion of the Property then, prior to commencing any physical development of such portion, Buyer shall notify Seller of Buyer's intent, and the deemed sale price per acre shall be ONE MILLION SEVEN HUNDRED TWELVE THOUSAND THREE HUNDRED FORTY-THREE AND 60/100 DOLLARS ($1,712,343.60) ("Presumed Value"). The value of all portions of the Property used by Buyer in accordance with this Section 8.2 shall be referred to as the "Use Proceeds," 6801028110-0024 14966442. 10 a05108120 -18- 8.3 LJnsold ProfttEat: If Buyer neither sells nor develops all or a portion of the Property by April 30, 2025, the unsold portion of the Property shall be valued at the Presumed Value. The value of all unsold portions of the Property in accordance with this Section 8.3 shall be referred to as the "Remaining Proceeds." 8.4 Division of Proc.eeds Above the Division Tfireshold: The sum of the Sale Proceeds, the Use Proceeds, and the Remaining Proceeds shall be referred to herein as the "Proceeds." Sale Proceeds shall count toward total Proceeds upon close of the sale by Buyer of each portion of the Property sold to a third party. Use Proceeds shall count toward total Proceeds 'upon conimencement of physical development of cacti portion of the Property developed by the Buyer. R,emaining Proceeds shall count toward total Proceeds- as of April 30, 2025. Buyer shall retain all Proceeds up to the Division Threshold. Buyer and Seller shall equally split (50150) all Proceeds above the Division ThreshoUL. • 8.5 Hotel Developinent Covenant: Buyer shall set aside land necessary to develop the Hotel Development defined in Section 1.43 of the Tierra Luna Development Agreement by and between CITY OF DO'�NNEY and Buyer, dated on or about March 15, 2012 ,�"Hotel Devekri�m,-offJ01rA60W'i4jI with the Hotel Development, notwithstanding the fact that other uses may be permitted on the Ground Lease Property by the Specific Plan (as may be amended). Seller and Buyer agree that the Hotel Development shall not proceed until Seller and Buyer make a determination, based on Buyer's review of any and all relevant market forces, that construction of the Hotel Development is a reasonably prudent business decision. The obligations of this Section 8.5 shall remain in effect following, and shall survive, the termination of this Agreement, unless and until Seller agrees in writing that another use may be developed on the Hotel Development Site. A Memorandum of Agreement memorializing the Hotel Development obligation shall be recorded within thirty (30) days following the execution of this Agreement. 8.6 Remedies ' : Notwithstanding anything to the contrary in this Agreement, remedies for breach of the provisions of this Section 8 shall be damages or other monetary relief, provided, however, the amount of damages or other monetary relief (however characterized) awardable shall be capped at the fair market value of the portion of the Property subject to a dispute. 8.7 Survival of Obligations: The obligations set forth 'in this Section 8 shall survive the Close of Escrow and shall remain valid and enforceable until I year after the earlier of (i) the sale or use by the Buyer of all of the Property, or (ii) April 30, 2025. 9. Notices. Any notice to be given hereunder to either Party or to Escrow Holder shall be in writing and shall be given either by personal delivery, facsimile, federal express (or similar 680/028110-0024 14966442.10 a0ii08/20 -19- 1 P W-1 Howl" to I 1r*1W,0 Wq ME E10 I toe SELLER: The City of Downey I I I I I Brookshire Avenue Downey, CA 90241 Attn: City Manager Phone No.: (562) 904-7168 Fax No.: (562) 904-7284 With Copy to Rutan & Tucker, LLP 611 Anton Boulevard, 14"' Floor Costa Mesa, CA 92626 Attn: Jeffrey T. Melching Phone No.: (714) 641-5 100 Fax No.: (714) 546-9035 BUYER: c/o Industrial Realty Group, LLC I I I I I Santa Monica Boulevard, Suite 800 Los Angeles, California 90025 Attention: John A. Mase Phone No.: (310) 806-4434 Fax No.: (310) 473-8702 With a copy to: Fainsbert Mase Brown & Sussman, LLP 11111 Santa Monica Boulevard, Suite 810 Los Angeles, California 90025 Attention: Jerry A. Brown, Esq. Phone: (310) 473-6400 Fax No.: (310)473-8702 Escrow Holder: [CHICAGO TITLE INFORMATION] Attn: Phone No,: Fax No.: Either Party and Escrow Holder may, by written notice to the other and to • Holder, designate a different address which shall be substituted for the one specified above. If any notice or other document shall be sent by certified mail as set forth above, it shall be deemed to have been United • mail in the manner set forth above. If any notice or • •:i shall be sent by facsimile, it shall be deemed to have •-- served • delivered •• electronic • of • provided that it is confirmed by a follow-up notice using approved i• 680/028110-0074 14Q66442A0 05/08/20 -20- 0 fie Ioreg Ing = IT alit 1.*rVTT1!r17rC =0 IT F transmission occurs on a weekend or holiday or after 5:00 p.m. on a weekday, it shall be deemed to have been received at 8:00 a.m. on the immediately following business day. 10. Attorneys' Fees. If any Party to this Agreement shall bring any action or j2roceedini for ai relief aiainst the other, declaratow or otherwise W RaY WZv 112TISY g out -of -or III UOI UICULIVII 11116 Pigl UCHICIR UIIU/ 01 LIIV, f I Up V1 L.7, L11C. IU6111g r UI L_T Man pay To Tne prevalilIlg _r UI LY a reasonable sum for attorneys' fees and costs (including without limitation expert witness fees) incurred in bringing or defending such action or proceeding or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such action or proceeding and shall be paid whether or not such action or proceeding is prosecuted to final judgment. Any judgment or order entered in such action or proceeding shall contain a specific provision providing for the recovery of attorneys' fees and costs, separate from the judgment, incurred in enforcing such judgment. The prevailing Party shall be determined by the trier of fact based upon an assessment of which Party's major arguments or positions taken in the proceedings could fairlp be said to have �yrevailed over the other Pamfp's ma�or ar_Nument disputed issues. For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) post -judgment motions; (2) contempt proceedings; (3) garnishment, levy and debtor and third -party examinations; (4) discovery; and (5) bankruptcy gation. 1 �U_ �11 - I � 11.1 No Modifications. No addition to or modification of any term or provision of this Agreement is effective unless in writing and signed by the Parties. 11.2 Construction of Agreement. The provisions of this Agreement shall not be construed in favor of or against either Party, but shall be construed as if both Parties prepared this Agreement. 11.3 Headings. The Section headings of this Agreement are only for convenience and shall not be deemed to limit the subject of such Sections or to be considered in their construction. 11.4 Governing Law. The laws of the State of California shall govern this 11.5 Time of the Essence. Time is of the essence of each and every provision of this Agreement. 11.6 Further Assurances. Each of the Parties shall execute and deliver all additional papers, documents and other assurances, and shall do all acts and things reasonably necessary in connection with the performance of their obligations under this Agreement to carry out the intent of this Agreement. 11.7 No Waiver. No waiver by a Party of a breach of any of the terms, covenants, or conditions of this Agreement by the other shall be construed or held to be a waiver of any succeeding or preceding breach of the same or any other term, covenant or condition 680/028110-0024 14966442 10 a05/08/20 -21® contained herein. No waiver of any default by a Party shall be implied from any omission other Party to take any action on account of such default if such default persists or is repeated all o n•express waiver shall affect a default other than as specified in such waiver. The consent approval by either Party to or of any act by the other requiring the first Party's consent or approv. shall not be deemed to waive or render unnecessary the consenting Party's consent or approval a or of any subsequent similar acts by the other Party. 11.8 SeverabiJity. If any portion of this Agreement is held by any court of competent jurisdiction to be illegal, null, void or against public policy, the remaining portions of this A�- 1reement shall not be affected therebri and shall remain in force and effect to the full extent permissible by law, but only to the extent that performance of such remaining provisions would not be inconsistent with the intent and purposes of this Agreement. 11.9 Gender and Number. As used in this Agreement (unless the context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural i,xclui.e one another. 11.10 Entire Agreement. This Agreement constitutes the entire agreemen between the Parties pertaining to the subject matter hereof and all prior and contemporaneo I agreements, representations, negotiations and understandings of the Parties, oral or writte (including, without limitation any letters of intent or understanding) are hereby superseded a, I merged herein. The preceding sentence shall not affect the validity of any instrument executed the Parties in the form of the exhibits attached to this Agreement. 11.11 Survival. All covenants, agreements, representations, warranties arl indemnities contained in this Agreement shall survive the execution and delivery of A Agreement and the Close of Escrow and the delivery and recordation of all documents instruments in connection therewith. i 11. 12 Time References. Unless otherwise expressly provided in this Agreeme any reference in this Agreement to time for performance of obligations or to elapsed time sh mean Pacific Standard Time and time periods shall mean consecutive calendar days, months years, as applicable. If the date ("Performance Date") on which any action is to be taken, a notice is to be Sunday or federal holiday, such Performance Date shall be automa ically extended to the ne business day. As used in this Agreement, "business day" means any calendar day that is noti, Saturday, Sunday or federal holiday. The time for performance on any Performance Date shall no later than 5:00 p.m., unless otherwise provided in this Agreement. I 11.13 Incorporation of Exhibits. Except as intentionally omitted, all exhibits attached hereto and referred to herein are incorporated into the Agreement as though fully set forth herein. 11.14 Condemnation. As used in this Section, "condemnation" or "condemned' shall mean the exercise of, or intended exercise of the power of eminent domain expressed in writing, or the filing of any action or proceeding for such purpose, by any person, entity, city, body, agency or authority having the right or power of eminent domain ("Condemning 680/0-28 110-0024 14966442.10 a05108r-O -22- Authority") ana-sh—aff-M-Mulcle a voiuntary sa-MM7,Mier To 77370. �;_2 under the threat of condemnation or while condemnation proceedings are pending. If any portion of the Property and/or any improvements thereon shall be condemned prior to the Closing Date, Seller shall promptly notify Buyer of the same and, at Buyer's option, exercisable within fifteen (15) days following Buyer's receipt of the aforesaid notice (or in the event that such notice is delivered within fifteen (15) days of the Closing Date, then the Closing Date shall be extended to provide Buyer with the full fifteen (15) day period), Buyer shall elect, by written notice to Seller within said fifteen (15) day period, to either proceed with Closing (upon the terms hereinafter set forth in this Agreement) or to terminate this Agreement, in which event Seller and Buyer shall thereupon be released from any and all liability hereunder and the Deposit shall be immediately returned to Buyer by Escrow Agent. If Buyer fails to notify Seller of its election, such failure shall be deemed an election to terminate this Agreement and the Deposit shall be promptly refunded to Buyer. If Buyer elects to proceed with the Closing, then, at the Closing, Buyer shall pay the full Purchase Price for the Property as herein provided. Additionally, if Buyer elects to proceed with the Closing, then Seller shall assign to Buyer all of Seller's right, title and interest in and to any condemnation award related to the portion of the Property condermied. MMMMU• r� 11.16 Venue. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be the Superior Court of the County and the Parties hereby agree to and do hereby submit to the jurisdiction of such court. 11.17 Counterparts. This Agreement may be executed in counterparts, each of 11. 18 Assignment. Except as provided below, Buyer may not assign its rights or obligations under this Agreement without the prior written consent of Seller, which consent may be withheld in the sole discretion of Seller; provided, however that before or after the Opening of Escrow Buyer, without Seller's consent shall be entitled to assign its rights and obligations under this Agreement to an entity (a) in connection with the sale of all or substantially all of the assets or an airinaTe enTiTy is Tne gencrai paruief, a MID LeU YiaD111LJ COMP-Mly *1 WHIM n 4_J C1 41 di al la entity is the managing member and which Buyer holds an ownership interest and any other entity 1"M1 M, VAHVAI, or -To 1010111R.31 MET MiuTT 1XI C f) 10, reacquire residential lots in the Property prior to sale to the public (an off balance sheet transaction). Buyer shall provide Seller with written notice of any such assigni-nent. 11. 19 No Third -Party Beneficiaries. Notwithstanding any provision contained in this Agreement to the contrary, this Agreement is intended as and shall be deemed to be an agreement for the sale of assets and none of the provisions hereof shall be deemed to create any obligation or liability of any person that is not a Party, whether under a third -party beneficiary theory, laws relating to transferee liabilities or otherwise. Except as provided otherwise in this Agreement, Buyer shall not assume and shall not be obligated to discharge or be liable for any debts, liabilities or obligations of Seller including, but not limited to, any (a) liabilities or 6801028110-0024 -23- 14966442-10 ,05/08/20 events or transactions occurring prior to, on or after the Close of Escrow, (c) liabilities or obligations of Seller, whether known or unknown by Seller or Buyer. Except as provided otherwise in this Agreement, Buyer shall have no duty whatsoever to take any action or receive or make any payment or credit arising from or related to any services provided or costs incurred in 11.20 Exchange Cooperation. Buyer and Seller agree to cooperate with eal other in accom-,vlishing a tax -deferred exchange for either y."i under Section 1031 of the Interriffil Revenue Code, which shall include the signing of reasonably necessary exchange docume provided, however, that (i) neither party shall incur any additional liability or financial obligatio as a consequence of such exchange, (ii) such exchange shall not delay the Closing Date, (iii) neither Party shall be required to take title to any property as part of an exchange other th Buyer receiving title to the subject property herein. This Agreement is not subject to or continge upon either Party's ability to effectuate a deferred exchange. In the event any exchan contemplated by either Party should fail to occur, for whatever reason, the sale of the subje property shall nonetheless be consummated as provided herein. I 11.21 Nonliabitity. The Parties agree that, in the event any Party is a corporati or a limited liability compaii;,, neither the directors officers ', m9lo-.iees shareholders, membei managers, (and the members and managers of such members or managers), nor any agents of a 111 such corporation or limited liability company shall have any personal liability or obligati hereunder, and that each Party shall not seek to assert any claim or enforce any of its rig hereunder against such directors, officers, employees, shareholders, members, managers, (and t members and managers of such members or managers), or agents, whether disclosed a owmz nn-0n24 -24- 1111111111�1�11gi sa�W17.11"'11111 I'l 1 111!18101113;11��� THE CITY OF DOWNEY, a HOLDINGS DOWNEY, LLC, a California municipal corporation Delaware limited liability company By: Holdings SPE Manager, LLC, a By: Delaware limited liability company Mayor Its: at By: "Seller" John imns'e Its: Chief Executive Officer APPROVED AS TO FORM: IRG DOWNEY, LLC, a California limited liability compal By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member By: S.L. Properties, Inc., a Delaware corporation Its: nager, By: John anger e Its: Chi efExecutive Officer 680/028110-0024 14966442.10 a05/08/20 -25- [SIGNA TURE PA GE TO SALE A GREEMENT AND ESCR 0 W INSTR UCTION] TAE CITT OF DOWNEY, a I Raj K Vwr, I DO I j i I I I MR 6 M. OWNER! I 00=1 I By: Holdings SPE Manager, LLC, a By: Delaware limited liability company Mayor Its: Manager "Seller" LN John A. Mase Its: Chief Executive Office-i IRG DOWNEY, LLC, a I •T 11f By: IRG 111, LLC, a Delaware limited liability company Its: Managing Member By: S.L. Properties, Delaware corporation Its: Manager M John A. Mase Its: Chief Executive Officer "Buyer" 680/028110-0024 14966442, 10 a05/08/20 -25- BOCK2-9 PAGSIL RECORD OF SURVEY SHEET 9 ; — I--. —'� fo" sE_'t' , IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA ;�SM� IW tOl 7 - IW 'sccwm Q, " 1w 1w M-tja <Aw' -(01Q. CC nlc svjww""' r'bw1&$'4 ft0i0&;' Ole -L. :tOW %EWIM •0, 01 ",1; C,TY �'Y' DC.,L,, a% ML�w " P~&U SDZ 4X rM -ECORDS, ffeRftl II" 1Hr �R�t " "a �'T' AfC�"X" � "10 CON" 51 w SD D 200 00 CORNERSTONE LAND SIMVEMG, C. STEFAN C. LANTHER. FES 7259 ",Jr, 0� _�tjIaN -,"q 3A ORT M ff " fR i%M)K -- 147— "IT xw"p 87EWAff"I" AAD (MYROAD MTA ME *POR, LOT 2 w 1 ==STATFWN1, N.W. 1/4 ,SEC. 10 Rh% am Or OK AC I To my T—Mv r' ow. sum WA MM to DO POR S.W. 1/4, SEC- 10, T. 3 S., R. 12 W_ RANCHO SANTA GERTRUDES N.V. a,wa CS South Parcel gwy—an"En' 7NE MA"Tw ar "C sIjAwy is To RaSTARM PC PRCPMFY AS DESCRIM M OEM ftrIlIKED MARCH 14 2M AS t�YY1MLNT w 044t,Illol OF OFMU ff *0 '1', 0. OF JIMENEM 'K(DWO 07,MAP A' _wNT NO IVOMWL Aw tolivel , REPI"Khm OF SEGMH @M2 (bx5) Cr I MWIS AW PROFESSMS CME UAWW"VATT r Ras NtrMOW" I, Mo=,(M A 201t I .&M P, ' wMw . ',4 4 =3 a, Dw p"rYmw-L tANo obw kW W !'y"fr 01, 2alf &01�1'—NSA 4 OAft r-I AM?IN, - 1, 0 -,NiacAnns SET " wN LS 79M TAG nVSN O-MUCATES SET " A, TAM & IS l TAa ILM A-M—IE3 � A WASHM & LS Z850 Ma FAM e T—f N.. 71$ M.. 137 -F2 r 7 . —f RA fww-w 'vo v.— "f.M 00" I,AMw ""'Z & d. AIVO. . A pj"-PJ will 91w tr W— APM EXHIBIT H NORTH PARCEL -DESCRIPTION AND DEPICTION 5 1/600K-L-PMM�!L ,3 ,g-,i RECORD OF SURVEY IN THE CITY Of I111-1Y, COUNTY III 111S -rELES, STATE OF CALIFORNIA ATFUSIANWOF "A' =10. -.110N M 01 2 N flk XIA�,KTl Qvo" 01 fR�",t_ PCy,�4 - — w rm R-cm u " rE-1wJv 51 M. . � A � n, O'FACR 0, s-0 M,c mvs� MUM �0. M'ym VIT gf� C', �'na . w", � PAQ0 M V ."'now S RLCM-% plfK�Qfo . IME —"A V 11K MINIM ff�� �[, C4 C,v 200 No CORNSTSTME LAND WRKE M, OVC.SUAN C. LANTHER, PLS 7259 DAIE OF RW,Ey. Z019 m Dom GM Y ROAD SMWAffAID W AW N.W. 1/4, SEC. 10rd ✓ " 0 Cjf�!MTA Dme U&MOM. POR� LOT 2 X mil; It WAIMMI= North Parcel D(fp m m .5 poam., POR. 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