HomeMy WebLinkAbout12. Adopt Ord-Approving 3rd Amend to Ground Lease for City-Owned Land w-Holdings Downey LLC & IRG Downey LLCiteM NO.
APPROVED BY
CITY MANAGER
T: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
: ALDO. SCHINDLER, DIRECTORI DEVELOP
ATE: MAY 26, 2020
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A - Site Aerial
B — 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 tol
Ground • Lease; and Third Amendment to Ground
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SECTION 2. The City Council finds, determines, and declares, that the activities
contemplated in the Third Amendment to the Ground Lease are consistent with the Downey
General Plan, and the Specific Plan applicable to the property that is the subject to the Lease;
the Lease does not propose or authorize any change in allowable uses on the leased property.
SECTION 3. The City Council DOES HEREBY APPROVE the Third Amendment to the
Ground Lease, substantially in the form attached as Attachment "A".
SECTION 4. The City Manager and his/her authorized designees are hereby authorized
to execute the Third Amendment to the Ground Lease.
SECTION 5. 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 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 Lease.
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
uvikf---I�w
Maria Alicia Duarte, CMC
City Clerk
STATE OF CALIFORNIA
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 COUncit 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 field on the day
of May, 2020, by the following vote to wit:
00�
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
same dates.
Maria Alicia Duarte, CMC
City Clerk
I V; I I A W.10 10191130 1 OWN W
This Third Amendment to Agreements in Ground Lease (this "Thiraf
Amendment") is made as of this _ day of 2020, by and between THE CITY
3 of of California"'Landlord"f, and HOLDINGS
the State j
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 Exidbit "A" and incorporated herein by reference.
B. Landlord and PCCP IRG 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
true and correct copy of the Second Amendment is attached hereto as Exhibit '.I.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 !,"DeyeloLi�ment A�qeemenc�. 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 Assignment and
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copy of the Assigninent 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
Attachment "A"
Parcel") from Landlord to Buyer (the "South Parcel Sale"). A true and correct copy of the Sale
Agreement is attached hereto as E._xhibit -F" and incorporated herein by reference. The South
Parcel is described and depicted on ExIiihit-
1. To facilitate the South Parcel Sale, Landlord and Tenant desire to terminate
acres that
comprise the Ground Lease Property ("North Parcel"). The North Parcel is described and
depicted on Exhibit
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)
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ii�,tiii,i,iiiioiiiirr-el,lv�acknowled N s the possibil'
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North Parcel to Tenant ( "Lease Amendmenf
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, Firs)
Amendment, and Second Amendment, all subject and pursuant to the terms and conditions so.
forth in this Third Amendment below. The Original Ground Lease, as amended by the Firs)
A&iArneriL 6e Secoi#I4, Amendment. and this Third Amendment, is hereinafter referred to as tU-
= ory. Ll
NOW, THEREFORE, for good and valuable consideration, the receipt and
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and/or supplement the Original Ground Lease, the First Amendment, and the Second Amendment
as of the Third Amendment Effective Date (defined below) as follows:
I . Effective Date. The effective date of this Third Amendment shall be the
Closing Date, as that term is defined in the Sale Agreement (the "Third Amendment Effective
Date"). The Third 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 Original Ground Lease.
2. Acknowle&,emcnt and A.Poroval of A,�sigLijlient: Landlord hereby
acknowledges and approves the Assignment.
3. Modification to GrOUnd Lease Notwithstanding Section 1.01 of
the Original Ground Lease, from and after the Third Amendment Effective Date, the South Parcel
shall no longer be a portion of the Ground Lease Property, and the entirety of the Ground Lease
Property shall be comprised of the North Parcel. From and after the Third Amendment Effective
Date, the Ground Lease Property shall constitute the property described in Exhibit H hereto, and
Exhibit H to the Original Ground Lease shall have no further force, effect, or application under
Viis Lease.
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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 subjecli
to Base Rent (as that term is defined in the Original Ground Lease) or Converted Base Rent (as
that term is defined in the Original Ground Lease) or any other rental obligation under the Original
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 ren!
shall increase to the lesser of (i) twenty five percent (25%) above the rent in place on August 22,
2072, and (H) the then -fair market rent as mutually and objectively agreed upon by the Landlord
and Tenant acting in good faith.
6. EarIv'fermination: 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 11-1,'ariv Terniination:
Notwithstanding Section 2.01 to the contraq this Lease shall te
"Early Termination Date") as to all portions of the Ground Lease Property that have not been
Parcel (as it may be amended, and other than a studio production facilitylback-lot), and/or are not
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 Date,
8. Phannim-, and Perniilfint,,: Landlord shall work in good faith to
expeditiously process Tenant's plans and permits for development of the North Parcel.
9. Land Use Modifications, : The North Parcel is currently entitled for office,
medical office, retail and hotel uses. If Tenant pursues efforts to modify the land use entitlements,
Landlord willwork in good faith, at no cost to Landlord, with Tenant to support mixed -use
development ofthe North Parcel, which may include a combination ofoffice, rnedical office, retail,
hotel, and residential uses. Notwithstanding the foregoing, nothing in thisThird Atriendinern is
intended as or shall be construed as a pre-commitnient to approve any proposed modification to
the entitlements for the North Parcel. Landlord, its City Council, its Planning Commission, and
its officers actine in a discretionag caeaci� reserve the rig'f,t to aDmove, dri�. or mlydifita rtv
NUMMit pa uposai Ior Me 1101-M f al Vel as LTICY NOT necessaly ana appropriate, so iong as sucop,
discretion is exercised in accordance with applicable laws.
10. Markefinsz Rialits and Funtre Sales of All or Portions of the North Parcel:
Tenant may market the North Parcel (or any portion thereob for sale to potential buyers, so long
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as such sale transaction(s) ("Proposed North Parcel Sales") close on or prior to the Early
Termination Date. Tenant shall present to Landlord each signed letter of intent ("LOF') and/or
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of the North Parcel. Tenant shall not enter into any binding LOI or PSA unless closing on the
proposed sale is contingent on the Landlord's prior reasonable approval of the Proposed North
Parcel Sale, Landlord shall approve every proposed sale transaction presented to it by Tenant, so
long as (i) • receives commercially reasonable information that the transaction will yield
sales trtcceds thatzrc equivalext ts -r exceed fbir market value, (ii) so longas the propo,,ik�J land
use is acceptable to the Landlord and (iff) Landlord and Tenant have inutually agreed, in their
respective sole and absolute discretion, to a division of the proceeds from each Proposed North
Parcel Sale. Laudlord may, in its reasonable discretion, (i) demand that Tenant produce an
appraisal or other property valuation for the each portion of the portion of the Ground Lease
Property that is subject to a Proposed North Parcel Sale; (ii) commission — within a commercially
reasonable timeframe — an appraisal or other property valuation for such portion of the Ground
Lease Property, or (iii) both "(i)"and "(ii)" (tile "Value Validation"), Tenant may propose a sale
of all • a portion of the North Parcel to itself, subject to the same pTocesses, procedures, and
• set forth in this Section 7; provided, hoivever, that Landlord relains, the Sole and
absolute discretion to approve or reject a proposed sale price as well as the portion of the net
proceeds to I)e providedto Landlord. If a sale of a portion oftlic North Parcel is ..►f pursuant
to this Section 7, the parties shall process such amendments to the Lease as are necessary and
appropriate to remove such portion of the North Parcel froin the Ground Lease Property and to
proportionately reduce the rent payable for such removed portion of the North Parcel.
11. 1 lotel Deve lopment: • and after the Third Amendment Effective Date,
the "Hotel Development" provisions in Section 6 of the Second Amendment shall have no Rutber
force • 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
following:
Tenant: c/o Industrial Realty Group, Inc.
I I I I I 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
I I I I I Santa Monica Boulevard, Suite 810
Los Angeles, California 90025
Attention: Jerry A. Brown, Jr., Esq.
FAX: (310) 473-8702
13. Counteroarts. This Third Amendment may be executed in any number of
counte�arts i each of which shall be deemed an oriuinal. but all of which. i�gr.
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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
necessary in connection with the performance of their obligations under this Third Amendment to
carry out the intent of this Third Amendment.
15. Goveminiz Law. This Third Amendment is made under and shall be
construed pursuant to the laws of the State of California.
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EA WITNESS WHEREOF, Landlord and Tenant hereto have executed this Thiffl
Amendment the date and year first above written.
CITY OF DOWNEY,
a Municinal cowoTetim, *f ftg-Stq-tr�,if %y.,
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Its: Manager
John A. Mlse
Its: Chief Executive Officer
IRG DOWNEY, LLC,
By: IRG 111, LLC,
a Delaware limited liability compa
Its: Managing Member I
By: S.L. Properties, Inc.,
a Delaware corporation
Its: Manager
t By:__
.John . 1MZa ass
Its: C'hicf Executive Officer
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IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Thir4
Amendment the date and year first above written.
CITY OF DOWNEY,
a I'lawiciinal co-ooratio-c of the State of California
By:
Name:
Its:
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UNIM 111.
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Its: Manager
By:
Jo A. Mase
Its: Chief Executive Officer
IRG DOWNEY, LLC,
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By: IRG III, LLC,
a Delaware limited liability company
Its: Managing Member
Properties,
a Delaware corporati
Its: Manager I
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John A. Mase
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EXHIBIT A
ME
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I'll IS GROUND I XASI; (file "Lease") is mastic ind cincred 2003,
by and between the CTI`V OF DOWNEY (hereinafter soinclinw referred tons cither "City" or
Landlord") and Mous,rRIAL REALTV GRO11P, LIX (licreinaller rererred it) as
'Tenant"). Landlord and Tenant hereby agree as follows:
1=1
A. Lwidlord is the owner and/or lessee of the approximately 160-acre former
National Acronantics & Space Ad minktraflon ("'VASA") indiswial plant site situtdcd in 111c cily
ofDowney, California and generally bounded by Lakewood Boulevard, Stewart and Gray Komi,
13cliflower Boulevard. Imperial llighivity and Clark Avenue (lite "NASA Site"). Nuidlonl
aequircd its interest in the NASA Site from the I inn States of Anierica, aicting by anal through
NASA andlor the Government Semices Administration ("GSA"). The NAM Site has been used
over as 70-year period for aircraft manufacture, (lie invention, ics(ing, and patenting of tile
chemical milling process, resuarcli, production. and assembly of rockets an(] missiles, and the.
design, production, assembiv, and testing or ti, equipment and materials for the Apollo Space
Proprim and the Space Shuttle Orbiter prograin. The NASA Site is composed ofr, sepuralc
parcels (if hand ("Parcels 1, 2, 3, 4, 5 and Cr" respectively) as sbown on lite dingrarn atulclictl
hereto as Exhibit "A".
K In April 1999, lAindlord acquired from the United States of America, acting by
and through the General Services Administration ("GSA") and NASA, approximately 66 acre's,
of the NASA Sitc, comprised ot'llareels 3, 4, 5 and 6 ("Parcell; 3, 4, 5 and 6"), pursuant to tlia%t
certain Quitclaim Deed dated April 19, 1999, recorded in tits official records of the County of'
less Angeles as Document No. 99 WOW (the "1999 NASA Qoitclahn Deed*'). parcels 3, 4„ 5
and 6 � are also sobicct to various agreements between the Landlord and the united States
(Collectively, the "Existing NASA Restrictions"):
(% Tenant acknowledges that Landlord is in negotiations with the Lhiitcd ;States of
America . acting by and through GSA and NASA, to acquire lite remaining approximately 94-
acre portion or thu NASA site, comprised ot'llarcels i rind 2 ("Parcels I and 2"). pursuant to tlic
California Deserl Prolcclion Act, ("Act") of 1994. 10 U.S.C". § 410aaa et seq. Tcrinot
acknowledges that upon, the lease offlic Ground Lease Properly, as furtbur defined in Itecital 17
to Tenant front Landlord, Parcels I and 2 shall be subject to certain reservations, covenants gild
restrictions relating to tic future use, remediation and development of Parcels I and 2, solne of
Which will too Willi tile land as set forth ill each (if (lie document,,; fisic(l below (which are
collectively referred to as the "NASA 2003 Transaction Documents"):
(i) NASA Quitclaim Deed (the "2003 NASA Deed");
(H) Transfer Agreement between Landlord and the United States (the
"Transfer Agreement");
SMAMUCHTFRU)mvitykGrowd lxase%DnwncyGroundLcwcv9.12-03-4)3,doc
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(iii) Environmental Liability Assumption Agreement between Landlord and
International Risk Assumption Downey, LLC ("IRAW), an environmental risk marragenrunt
company (the "Assumption Agreement");
(iv) Uscrow Agent Agreement between Landlord, IRAD and an escrow agent
to be determined (the "Escrow Agreement");
(v) Environmental Services Agreement between NASA and Landlord (the
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(vi) Covenant Deferral Request dated December 20,2001 (the "CDR");
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(vii) Memom adorn of Agreement Aniong NASA, the GSA, the California State
Historic Preservation Officer ;aid the City or Downey Regarding Disposal of at 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 93" (the "License Agreentene'). This
License Agreement is intended to ex-pire upoo (runsfer of Parcels I and 2 to Tenant,
The Existing NASA Restrictions, the NASA 2003 Tran%tction Documents and the Superior
NASA Docurriefts (defines) in Section 6B.04 licrein) are sometimes collectively referred to
herein as the "NASA Documents." On September 15, 2003, the Governor of the State or
California approved the Covenant Deferral Request for the iransfor of title to parcels I anti 2 of
the NASA Site to Landlord in accordance with 42 U.S.C". Section 9620(h)(3)(C). In addition, the
NASA 2003 Transaction Documents have now trucit finalized which will effectuate the
reinc(lialion of Parech; I and 2 and other areas of the NASA Site nand Landlord's purchase of
Parcels I arid 2 from the United Sintes, through the GSA.
1), NASA has describc4l the crivitormicrita) condition of 11;uccls I and 2 in the NASA
2003 Transaction Documents and the enviretunental reports and unalyses refereneLd therein.
Landlord has trattic available toTcrintit those certain environmental reports and other documents
described in Exhibit "C" attached hereto (the "Existing Environmental Documents") which
further describe the environnicrital condition of the NASA Site, Trichlorethylene ("TCE"),
Perchlorocthy1cne (ITCV), and other volatile organic compounds have been detected in soils
on, and in groundwater beneath, Parcels I and 2. Groundwater numitoring wells have k-cn
installed on Parcels I and 2 and sarripled, quarterly. Since June 2000, NASA (and its agents)
have been conducting an investigation and rernedintion or such ,;oil and groundwater conditions
on the NASA Site, including Parcels I and 2, under the supervision or the California Regional
Water Quality Control Board - Los Angeles Regional (the "Regional Board"). The Regional
Board has ordered additional investigation and testing of cermin areas of concern on the NASA
Site, and further soil and groundwater investigation and rcmediation activities will be required.
J:. Teriant wishes to ground lease front Landlord, ;Intl Landlord wish" 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 tin: NASA Site.
S:UAM\LICWM-RZownq%Gmund Lz=%MwncyGmUndLuw9.12-03-03.d6c
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 (if the NASA Site, adjacent to the Ground I.case Property, consisting of
approximately 59 acres more particularly described in Exhibit "F" attached hereto (tile
"Acquisition Pareel"). Ibe Acquisition Parcel and flic Ground Lease Properly are cc)))ccti%Pcly
referred to is the "Studio Property"), Concurrently herewith, 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 Properly involves the
demolition of some of the existing improvements located thercon and the construction of a movie
studio/fUm location production facility (the "Production Facilities"), as well other non-
studio/film commercial uses. Developer has, is or will be processing all discretionary
govemmental Planning, land use, zoning, development and environtrictittil pertains, plans, and
approvals which are required rat the developinctit. use, and operation of the Studio Properly (the
"Frititlearvilts"), The I-Intitlernerus include (but are not limited to) the following ni.)n-exhaustive
list of discretionary government approvals for the development or the Ground I case 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 reconfiguration of buildings or improvements in order to provide additional area
which may be included within the Studio Property area (the "Construction Approvals"),
Developer acknowledges that the Entiticitlenis include (and the Ground Lease Property is subject
to) required regulatory approvals and penults from government agencies other than 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:
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1,01. (Liround Lcitse ProtNtly ayd r-_,:
Landlord owns certain real property located in the City of Downey, County of Los
Angeles, State of Califomin, as legally described in Exhibit I'll" attached hereto and
incorporated licrein by reference, anti which is hercinafter called the "Ground Lease Property,"
'111c Ground Lease Properly is improved with nuincrons buildings and other structures, rixturcs
and improvements (collectively, the "Existing Improvements"),
S:VAM0JCHTER\D9wncy%Ground Lcwc\DowncyGrouridLjcowv9.12-0".doc
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For and in consideration of the payment of rentals and the perfon-nance of all the
covenants and conditions of this Lease, Landlord hereby leases and dernises to Tenant, and
Temint hereby leases and hires from Landlord, the Ground Least Property and the Existing
Improvements, for the term and upon the covenants and conditions set forth herein,
1.03 equisition Pared—p—tir-chwe Agreement
Landlord and Tenant have also entered into the Acquisition Parcel Purchase Agreement
which contains, among other things, certain Special Developnicirt Provisions relating to the
development of a Portion of the Studio Property for use as Production Facilitics, as set forth in
Article I I therein. This Lease is hereby made subject to the applicable provisions of the
Acquisition Parcel Purchase Agreement.
1,04 tLe—rtnin Definitions
(a) "Occupant(s)" shall mean any person or legal entity having any type of
possessory interest in any portion of the Ground Lease Property other than a Subtenant.
(b) "Subtunaut(s)"sliall mean one or more subtenants of the Ground Lease Property
pursuant to a sublease ciltercki into by and between Tenum, as landlord, and the subleiraw,.as
teriant, and in accordance with the provisions with Article 13 herein.
UWAIM
UnIcq% terminated earlier inaccordance with the provisions of this Lease, the terns of this
Lease shall he for a period of fifty-five (55) years (the "Term"), The Tenn shall expire at 11 .59
pmi, on the clay preceding the filly-fifilt (551h) anniversary of the Commencement Date (m
defincd in Section 2.02) (the "Expiration Date').
& _ I (, - 2_, 0� COKJM(yLJLOfNI(
2,02. �'0mrncnccmcut
The Tcrun shall commence upon (lie later of (i) the (late Tenant acquires title to the
Acquisition Parcel from Landlord purso,"I to the Acquisition Parcel Purchase Agrccrilent, and
(ii) frill execution of the Lcwsc by the parties hereto (the "Commencement Date), provided,
however, that if the Commencement Ditc 'has not occurred an 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.
SAJAMUCKI'MDOWneyWround LcaAc\Downty0rotFndL4am9,12-03-03-doc
2.03 Eariv I ennination
' Notwitbmanding Section 10I to the contrary. this Lease shall terminate; tanApril 30,
2019, in the event that Tenant fails to cojje,crr any portion of' the; Ground ).case property frorn its
present use as a studio production ficilityiback-lot to any ollicr use permitted by lite Specific
Plan.as may be amended (the: "Earl), Termination Datc"),
ARTICLE 3.
R.FlUr- rcyluf YINNIVY-4M.
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Beginning on the Commencement Date as provided in Section 2.02, above, and
continuing for the first five (5) years of tire Term, Tenant shall pay, to Landlord mininitun rent it)
the arnount ofS445,000 Per year (the `Ra5c hint"), The Base Real shall be paid in monthly
paymcnis, in advance, on lite first day Of each 111011th during lite Tcrol; provided that the lust
Base Rent paylacill shall Ile payable one lite Commencement Dale and shall be Prorated by
multiplying the Base Rent by a fraction. the ricuncrator of%viticli is the number of days rron) the
Cournlencerricnt Date to the, clul of then current month ruld the dwivininator of which is tile
actual number of days in such month, For purposes of this Lease, "Itcut" or "rent" shall mean
tile total of all sums due to Landlord from Tenant hr:rcundcr, including but not limited to Mse
Rent, Converted Base Rent, Additional Rent (as defined in Article 4 herein) and all other fees
and charges owed to Landlord hereunder.
3.02 Converted Base Rent
In the event that Tenant converts all or any portion of the use of the Ground Lease
Property from that of n studio production flacility/back-lot to any other use permitted by the
Specific Plan, its may he amended, the annual Ham Runt for that portion of the 6round [.ease
Property so converted (tile "Converted Property") shall be increased to an artiount equal to tile
product of (i) 09. multiplied by, (ii) tile hl"d Square toolage of tile Cta1vcflcd property,
inAthiplied by (iii) the Agreed Land Value, as defined below (tile "Convvrted Base )tcjt("). The
Converted Base Rent shall be of on the date the certificate of occupancy is issued will,
respect to tile Corwerled Property (each, it "Conversion Date"), For purposes of this Section
3.01 the "Agreed Land Value" shall be deemcd to be: Tcn Dollars ($10,00) per square root for
any Converted property with a Conversion Date occurring oil or before December 31, 2008;
Eleven Dollars ($11,00) per square foot for any Converted property with rA Conversion J)atc
occurring oil or before December 31, 2013; and Tnoolvo Dollars (S 12.00) per stplare toot for air),
Convcticd Property with as Conversion Date occurring after January 1, 2014, For cKarnple, (i) if
Tenant amends the Specific ]Ilan to permit the entire Ground Lease Properly (915,427 square
feet) to be used as all office Park to be constructed in Two phases, each phase of* wilich otilizes
one-half of lite total square footage of the Ground Ixa.w Property, and (ii) tile 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 fidly converted, would be $823,884 (.09 x 915,427 square feet x
SM00). The Base Rent, however, shall be incrcivwd incrementally. effective oil the (.'rolvcrsion
S:UAMUCllTEK\Downcy\Grotmd Leue\DowncyGmundLxucv9.12-03-03.dm
EXHIBIT A
-7-
Date for each phase of the project, based on the relationship that tile Converted Property in each
phase bears to the total square footage of the Ground Leased Property, i.e. upon the Conversion
Date of the first phase of the project, the annual Rent would equal $634.442 ($445,000 x V, +
$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 as of that date. Tonant shall promptly give Landlord Witten 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
cooperate with Tenant in obtaining a subdivision parcel map, pursuant to the Subdivision Map
Act, in order to facilitate the redevelopment of the Ground Lease Property.
3.03 lnqIeil%q5 -Base l3gol
- — iq --- —
Beginning on the fifth (516) anniversary of the Commencement Date, and continuing
every five (5) years thereafter for the remainder of the Term, the amund Base Rent shall inerease
by tell percent (10%)-, Provided, however, that with rcslicci to any Converted Property, tile
I
Converted Baqc Rent shall increase by ten percent (10%) beginning on the fifth (5") anni ' vcrsary
of each Conversion Date for such Converted Property and shall increase by tern percent (10%)
every five (5) years thereafter for the remainder of the Tem.
In the event that any portion of the Ground Lease Property is taken for any use, or
rcituved, by Landlord, IRAD, any federal agency or by any adjoining landowner in connection
with the dcYclopment or crivirontnental retnediation of the retail site adjacent to the Ground
Lease Property (a "Taken Parcel"). Tenant shall receive an abatement of Rent during the time
that such party has possession or control over the Taken Parcel in an amount equal to the square
footage of die 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 the Ground Lease Property in connection with
(tic ongoing rcmediation activities at the NASA Site, and the total square footage of the Ground
Lease Property is 915,427 square feet (approximately 21 acres) Own the rent lbalement (based
on tin annual rent of $445,000) ivouid he $9,722 per year ($,49 x 20,000), pro -rated for the throc
period that unrestricted use of the 20,000 square feet is unavailable to Tenant, In such event,
Tenant shall notify Landlord of the purpose and amount of the Rent reduction.
3.05. fp-J
Tenant and Landlord recognize the unique nature of the business proposed to be
conducted on the Ground Lease Property and that the traditional business license tax would not
fairly measure the extent of the business conducted within the Landlord's boundaries and would
be inconvenient for Tenant's customers to pay, Accordingly, Tenant agrees to pay the Landlord
a one percent (1%) fee (the "Studio Fee") based on the gross rental receipts from rental of the
S:VAMUJCHTER%Downey\Gwimd LAmsc%])owncyGmundLewev9.12-03-03-doc
portion of the Ground [.,case Property actually being used for film, telcyibion or cornmercial film
or video production ("Film Activities"), Payment of file Studio lea: shall not relieve the long-
teml tenants or short -tetra tenants not actually involved in Film Activities at the Ground Lease
Property front their rc.sponsibility to pity as regular City Business License tax, By executing this
Agreenitmi, Tenant declares it has voluntarily and wilitolly agreed to pay the Studio Fee, in bell
of any and all City business taxes. Using this alternative method of lax payincin can behalf or
those transient cillitics condticting Film Activities at the Ground Lease Property, 'J'his, in-lict, fee
does not apply to permanent occupluiLs of any buildings, management of the Ground Lease
property, parking anti building facilities operators anti non -Studio 11roducijon facility nsc& it
his no effect on the current license fees paid byTenant directly to the Landlord. Payurent of lite
Studio Fee shall he made quarterly oil the first day of3anuary. April, July and October of each
year. A tell percent (10%) penalty shall be applied for payments not received or postinarked by
the due (late. payments shall be made in the forril of a corporate chuck„ cashiers check or wire
lraosfcr. Payments shall be submitted to the Director of Finance for City, Landlord reserves the
right n) have Tenant's books inrafired with regard to the income gcricirated from studioltilm
location rcinal. 77bc audits will be fict-fortned it Landlord's expense. I lowever, if the: audit
detects an undurpayincrit to Landlord in excess often percent (101/6),Tenuar will be responsible
for the reasonable cost of thnt year's audit. 'fhe Studio lace due hereunder shall not be
duplicative of the Studio Fee due front MMoper to City pursuant to Section 11.5 of the
Acquisition Parcel Purchase Agreement, i.e. the grass receipts from any Film Activities shalt Ix -
subject to only one Studio Fee regardless of whether the Film Activities take place oil the
Acquisition parcel or the Ground Lease llroperly,
M6 1-ate Pavmcin,
Tenunt herchy acknowledges that !sate payment by. "tenant to Landlord ofHent (as defined
in Suction 3A herein) pursuant to this [,case will cause Landlord to incur cx)slq not contemplated
by this [,case, the exact amount orwhich will bccxtretnelydiffictiltio,,isccrtain. Accordingly, if
any installment of Rent or other payment under this Lcasc is riot received by Landlord, avithirr
seven (7) days after notice from Landiard that such Rent is delinquent, Tenant shall pay,a late
charge equal to Five percent (5%) of such overdue amounts, The payment to and acceptance by
Landlord of such late charge shall in no event conslittile a waiver by Landlord rat Tenant's default
with respect to such overdue turrounts, nor prevent Landlord front exercising any of tile other
rights and rernedi" granted at law or cqoity or pursuant to this Lca:c.
ARTICLE 4.
TRIPLE NET LEASE.
"!iris Lelse is a triple net lease in which Tenant, in addition to the payment riflInse Itent, shall be
directly responsible for the payment runny and all Taxes, as defined in Section $.O I, Insurance,
as defined in Section 11.01 herein, and all operating expenses with respect to kite Ground Lease
property, and Landlord -hall have no obligations of any nature with respect to the (*)round Lease
Property, except as othcrwise specifically provided in this Lcitse (collectively, "Additional
Rent").
8AJAM1ClfFER\Do%=y\QmwW L=cUUowney0toundIrAsev9-l2-03-03.dor,
ARTICLE 5.
TAXES AND ASSESSMENTS
For purposes of this Lease, "I'axes" shall mean all Personal Property Taxes, Real
Property *faxes kind Assessments, all as hereinafter defined.
5.02. Personal ProQ "N *J'a
Subject to the provisions of Section 5.06,Tenant shall pay belbre delinquency all taxes,
assessments, license (cesand other charges that are levied and asx5sed flgairis(Tenatu.q personal
property installed or located in or on the Ground Leasc Property which become payable during
1)te term (collectively, "Personal Property Taxes""). On demand by Landlord, Tenant shall
furnish I andlord with satisfactory cvidcrice of these payments.
5.03. fteal PrinierwTaxes
Subject to the provisions of Section 5.06, Tenant shall pay all real property taxes,
possessory interest taxes kind gencral ;aid special taxes levied and assessed against the Ground
Lease Property and all real property taxes levied against Tenant's improvements on tit about the
Ground Lease Property (collectively, "Real Property Taxes"), Tenant shall, semi-annuatly (or
in such other installments as are permitted by law), pay the Iteal Property T axes flat later that) the
taxing autharity's delinquency date. Ir at any time during the term of this 1,msc any authority
having the po%,.Tr to tax, including, without limitation, any federal, state, county, city government
or any political subili vision thereof (collectively, "taxing authority"), Vila)) alter the methods
and/or 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
purl, so as to impose a monetary obligation on Landlord in licit 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, asscssruent, excise, surcharge, Ice, levy, penalty, band or,
similar imposition, on 1-andlord's right to rental or other income from the Ground Lease Property
(it its against Landlord's leasing of the Ground l.ease Property, (h) any impositions in substitution
or ill licit, 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
wiy taxing authority with respect to the receipt of such rental or with respect to the possession,
leasing, operation, management, mointenaticc, alteration, repair, use or occupancy by Tenant or
any subtenant 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 (%,) any
special, unforeseen or extraordinary impositions which, although not specifically described
abovc, " i fairly be charrieteri7xil as a real property tax or a substitute for real property tax, shall
be considered as Real Property 'faxes for the purposes of this Lease. Notwithstanding the
foregoing, Tenant shall not be obligated to pay franchise at other taxes (however denominated)
s;uAmUJCHTERXDDWncy%0round L-*m)own ryGumdLxasev9.12-03-03.dm
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.
If any gLileral Or special assessment is levied -,against tile Ground Leasc property
("Assessinent(s)"), Landlord may elect either to pay the Msessincin in Rill or to allow the
Assessment to go to bond. If Landlord ,)Ilo%v.s an Assessment to go to bomi, Tenant shall pay
when due any and all Assessment% If Undlord pays the Assessment lit full,'feriant shall pay to
Landlord each tints a payinent of Reed Properly'l'q\c% is made a surn equal to that which would
have been payable (as both principaland interest) had Landlord allowed the Assessment to go to
bond.
5.05. Tenant's Tax Liability Pr9jr_aLqd
Tenant's liability to pay Real property Taxes and Assessment% shall be prorated on the
basis of a 365-day year to amount for any fractional portion of fiscal tax year included in the
Terru at its inception and expiration or carhcr termination in accordance- with ibis Lease,
5.06. Tax Contest
Tenant, aI its cost, shall have the right at any time to seek a reduction in the assessed
valtultion of the Ground Lease property or to contest any Taxes that arc to tic paid byTesiant,'If
Tenant seeks a reduction or contests any Taxes, the ruilure on Tenant's part to pay such 'faxes
shall not constitute as default is long as Tenant complies wo the provisions oroussection.
Landlord shall not be required to join in any proceeding or contest brought by Teolint
unless law or applicable regulations so require in order ror Tenant to contest the same, lit awe
event that Landlord is legally mquivcd to participate in such tax contest, Landlord shall be only it
nominal party, (The parties acknowledge that under current law and regulations, Landlord
would not be is necessary party to it tax contest.) Tenant, on final detan-nination Of the
proceeding or contest, shall immediately pay or discharge any decision or judgment tendered,
together with all costs, charges, interest and penalties incidental to the decision ot-judgment, If
Tenant does not pay the Taxes when thic and Tenant seeks a reduction or contests them as
provided in this Scamin, before ilia conimencenient of the proceeding or contest, Tenant shall
furnish to Landlord a security or other evidence reasonably satisfactory to Landlord that
Landlord and the Ground ],ease Property will tic held harmless from any damage arising out or
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.
SMAMUCHTEloDownefflround lmme\DowntyGrourALzmv9.12-03-D3.doo
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. ILS—C
There shall be no discrimination against orscgregation of any person or group of persons
on account of race, color, creed, religion, sex, inarital status, ancestry or national origin in the
-11c, lease, sublease:, transfer, rise, occupancy, tenure or enjoyment of the Ground Lease Property
or the improvements thereon, or any part thercot.and the Tcruint itself, or any person claiming
under or through it, shall not establish or permit any such practice or practices of discrimination
or segmgafion with reference 10 the selection, location, number, use or occupancy
V of tenants,
lessees, sublemorts, sublessecs or vcndecs of the Ground Lease Property or the improvements.
Tenant shall refrain from restricting the rental or lease of the Ground Lease Property or
tire 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, leases 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
lissigns, and .111 Persons claiming under or through it, and this lease is made and accepted upon
'I hal there shall be no discrimination against or
and sab ect to file following conditions:
segregation ofany person or group ofpcisons on account of race, color,
r religion, sex, marital
status, ancestry or national origin in tile leasing, subleasing, transferring, use, occupancy, tenure
or enjoymcm ol'the premises herein leased, nor shall the lessee itself, or any person claiming
under or through it, establish or permit arty such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees. subtenants, sublessees or vendecs in the promises leased."
In contracts; "Mere shall be no discrimination against or segregation of any person or
group of Persons oil account of race, color, creed, religion, sex, marital status. ancestry or
national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or ciijoyment of the
premises, nor shall the transferee itself, or any person churning 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
veridees 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:
SAJAMUCHTMDowney\Ground Lmc\Downey0roundLeasL-v9.12-03-03.doo
I I
(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 waste in, on or about the Ground Lease
Property;
(d) Use or allow the Ground Lease Properly to be used forany unlawful purpose, or
for any purpose which violates the ternis of any recorded instrumentatTecting the Ground Lease
Property;
(a) Cause or permit any insurance coverage on the (nound Lease Property or the
improvements thereon to become void or voidabla to make it impossible to obtain any required
insurance at cornmercially leasibIc 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, Gencrid Standards ofMainteriance
,
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 Properly, and slaill 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 thercivith, Terrawa
acknowledgct; that the Ground Lease Properly is subjcct to the covenants, conditions and
resniclions 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,
goveming the; maintenance and repair of all improvements, landscaping, open space and
common areas, The CC&Rs include provisions entitling Landlord at its clection, its the event of
an breach and following reasonable notice to `tenant a enant and reasonable period of lime in which
any
to cure any breach, to enter upon the Ground Lease Property and perforrit any maintenance or
repair of such areas and charge the Tenant for thi, cost of such maintenance or repairs. Without
limiting the generality orthe forcgoing,'feriant 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
(a) Maintain all sanitary sewer lateral connections.
S-.NJAMkLICH'I`ER\Downey\Gmnnd Ltasc%DowncyC!roundtAnscv9.12-03-03.dw
12
am
Tenant shall from time to finie make any find all neecssary repairs it) or rcphiccincut of
any equipment, structures or other physical improvements upon the Ground Lease Property, in
order to comply with any and all regulations, fa%vs or ordinances (31' the State of California,
County ref Lars Angeles, City of Downey or other govemnicntal body, which may be applicable,
or as required in writing by the City Manager to Tenant incident to the provisions of this Lease.
If Teriant fails to make any such repairs; or replacenivirts as required. tire City Mauaiger may
notify Tenant of said default in writing, and should Tenant fail to cure mid deffirdi and make said
repairs or replacernentq within a reasonable time, Landlord inay make such repairs or
replacements and the cost thereof, including, but not limited to, the cost of labor, materials and
equipment, shill IV charged against Tenant and shall become it part of the rental for the period
next following the Period ot'default, or the same may be prorated over a fictiod or time to tic
determined by the City Manager.
6.06, Governinctual Rcrm—Jrq-q)ot,' ,
Tenant i'll"ll at all titnes comply with, and shall pay all costs rand expenses which may be
incurred or requited to be paid in order to comply tvith atoy and all laws, statutes, ordinances,
rules anti relpikitions which apply to die operation anti use of the Ground Lease
Property, including those requiring alterations of additions to be mude, to, or safety appliances
and devices to be maintained or installed in, on or about the Otround Lc use Property under any
laws now or hereafter adopted, craicted or inadc am] applicable to the Ground Lease property;
provided, however. that Tenant shall not be responsible for compliance with, or tire ptty,iinu, or
any fees, charges, or usscuments relating to the existence of, or the remediation activities related
to, the Existing Contamination, as defined in Section MIDI herein,
Without Inuiting life generality of the foricgoingTcon"t shall conform to and abido by all
applicable rules, regulations, resolutions, ordinances and statutes of the City of Downey, Courity
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 nuist be first had
and obtained rforn the regulatory body having jurisdiction thereof before such operation is
undertaken. Notwithstanding the foregoing, Tenant may contest, by appropriate legal
proceedings conducted in good Faith and Nkith due diligence. On: validity or npplication of any
such laws and where required by law, Landlord shall join in fury such contest (as a norniiial party
only), provided Tenant shall indemnify and )told handless Landlord against all cost or other
expense in connection therewith.
6A.01. LL-ggardous MweriaNtEny: ostniqnqd I myN
As used in this Lease, the term "Hazardous Materials" nicans any material or substance
which (i) is dermcd or listed as a -h=%rdous waste," "extremely hazardous %vastc." "restrictive
hazardous %vasle," "Itaxardous material" or "`hazardous substance" or considered a waste,
S:VAMUCKFERWowncy\Gwund L—q\Dow-yGround Lcu"9. 12-01-03.doe
13
condition of' pollution or nuisance under Eiivironmental Laws (defined below), (ii) is petroleum
or a pefroletan 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 raprodoctive 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, usc, storage, handling, generation, renactliation 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 el
sett,; (ii) the Rewurce Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections
6901 el seq.. (iii) California licalth and Salety Code Scetions 25100 et seq.; (iv) the Safe
Drinking Water and Toxic Enforcernent Act of 1986, California I-1calib and Surety Code Section
25249.5 ct sect.; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 et seq.;
(vi) California Water Code Section 1300 cl seq.; (vii) California Civil Code Section 1479 et seq.;
as such laws are amended and the regulations and administrative codes applicable (hereto. It I.,, -
the intent of the parties hereto to construe the terms "Hazardous Materials" and "Environmental
Laws" in their broadest sense.
6A.02 : tqra T&3At ks
_1-_
Tenant shall not install, operate or maintain and shall not permit any Subtenant or
Occupant of thu Ground Lease Property (or any of their ernployecs, agents, contractors or
invilces) to install, operate or maintain any below ,grade Link, sump, pit, porid, lagoon for the
storage, handling or transportution of I lazardous 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 lazardoui Materials C'Mrsent (ilciined b0mv) and is governed by Section 6A.03).
6A.03 I lazardous Materials Consui%ll lay=dous Materials Acfiyilics,
(a) Subject to obtaining Landlord's prior written consent thereto pursuant to this
Section 6A.03 (,a "Hazardous Materials Consent), Tenant or a Subtenant or Occupant may
engage in I lazardous Materials Activities (defined below) in, on, about, to and from the Ground
Lease Properly only in accordance with A applicable Laws, Legal Requirements and
Environmental Laws, Neither Tenant, any Tenant Party (defined below), any Subtenant, not any
other Occupant or tire (;round Lease Property or of the Improvements, or any portion thorcof,
shall engage in any Hazardous Materials Activity (or kavivingly licrinit any Hazardous Material
Activity to occur in, on, undcr, about, to or from the Ground Lease Property, or the
Improvements or any portion thereof during the Term without Tenant first obtaining a Hazardous
Materials Consent front Landlord with respect thereto pursuant to this Section 6A.03. Any
change in file amount, sequence, fircqucrivy, nature. timing or any other factor relevant it) ally
I la7ardous Material Activity previously consented to by landlord, which materially increases the
risk that the Ground Lease Property or the InAprovcments will become contaminated by
Hazardous Materials, or the risk that any Hazardous Materials conlarninution caused by in),
Ha=dous Material Activity will be materially more costly to remadiate or will be more
injurious to human health, shall require a new written Hazardous Materials Consent from
Landlord, and Tenant sludl not implement, nor permit to be implemented, any such change
SNAMUMM-WowncyNGround IA*so\Downey0roundUastv9.12-03-03.dm
14
i"
Without having first obtained a Hazardous Materials Consent to such Change pursurall to this
Section 6A.03, Nolwithsianding any Provision of this lease to the contrary, Landlord may grant,
reftisc to grant, withhold and/or condition (as delennined by Landlord in Landlord's
commercially reasonable discretion) any Hazardous Materials Consclit requested by Tenant
hereunder (for the purposes or penuitting Tcriant or it Stibronaint or Occupant to engage in a
Hazardous Nlaicrials Activity, to jinplement it claings: in any Havardous Material Activily
requiring such lliwirdrius Materials Cement or to crigagc in any olber conduct rccluiring at
I-Im,airdous Materials Consent hereunder),
(b) laser purposes or this Lease, -nownt Permits" nicaus my governmental permit,
Consent, entitlement, or approval regulating or required \vilh respect to: (i,) any I'llizardenj
Material, Activity or otherwise required under any Frivironincrital Laws with respect to tile
colloriclicernent. CXktcncc, performance, completion. closure, dtleutnenuition, disclosure,
"Itillitoring or reporting of any I hazardous Material Activity or (ii) the commencetnein, closurc,
monitoring or reporting of any reniedialion of Hazardous Materials subject to Landlord's
approval.
(c) For purposes of this Lease, "llsizardous Nlaterink Activity" tucans any activity
involving generation, use or storage of I lazattlous Mltcrials, specifically excluding, howcver, (i)
commercially reaw.nable amounts of' cleaning chemical-, solvents and lubricants used in
connection with the operations of the Ground Lease Property or by any Subtenant or Occupant
operating in corilbr-mance with the Specific Plan then fil effect, (H) petroleum, liquid petroleum
gas arrrd similar fuels used to operate vehicles and equipment oil or about the Ground Lease
Property (provided that no underground storage of such luels shall be permitted except in
compliance with Section 6&02 above), and (iii) any t-noteriak typically used by television or
notion picuirt: production companies in connection with their rise of the Ground Lease Properly
as is production facility, including the colistructioll or motion picture and television sum
6&04 Sobillis"o - si—fl—s—ReQuired In Connection With Conscot Rcuucs[s.
In connection with each request (a "HazMat Consent Request") far a Ilayirdous
Material Consent tinder this Section 6A.04, Tenant dual( submit to Landlord (i) description of the
I lazardous Materials to be used, gencrated or stored on the Ground Lease Property, (ii) if
required tinder applicable law and then available, it true and correct copy of each application
(submitted by Tenant to the approprinic governolental authority) for a HuzMat Permit required in
connection with tile flayrirdota; Materials Activity which is the subject OfTcruint's request and a
copy of all such HazMat Permit or Permits so required (and il'the foregoing is not available, it
detailed listing of all I hr/.Mat Permits to be obtained its connection therewith by Tenant), and (iii)
such additional information andfor written materials as shall be required by Landlord in good
Faith front li nic-lo -ti tile, Following any submission by Tenant or any Subicriant or Occupant of
ally materials or inrormation described in this Section 6A.04, Landlord may require such
additional or back-up information as Landlord shall reasonably determine. I -laidlord shall use its
good litifli reasonable efforts to promptly respond to cach I W.Mat Consent koqucsf, but no later
than forty-fivc (45) days, following submission by "Nwarst of all submissions nrid information
required to be submitted by Tenant with reilicitt to such request under this Section 6A.04, Any
S:UAMUClMRsDma),kGrutmd Leu@OowneyacoundLamv9.12-03-03.doc
1$
Alm
material change in the nature or conditions of any HazMat Permits shall require a new
Hazardous Materials Consent.
6A.05 LUpawl q tivc Consent Conditions,
In connection with any I I=trdoas Materials Consent granted by Landlord porstiant to
Section 6A.04 (which Tenant agrecs Landlord nray withhold only in its reasonable discretion),
Tenant agrees that Iandford may inipme such conditions thereto its Landlord shall clean
appropriate ill its commercially reasonable discretion, including without limitation, ally or all of
the following:
(1) The installatioli of such nodillonal improvements in, on, under or illvul the
Ground Lease Property, Ole Acquisition Parcel anWor adjacent land is Landlord shall desire to
protect against or ruiligate any relc:tsc of fluardous Materials potentially occurring in, can. oader
or about the Ground Lease Property ill connection with the Hazardous Materials Activity for
which the I lazardous Material- Consent is sought lay Tenant or ally Sublerialit or Occupant'.
(b) Such new andfor additional insurance coverage with respect to the subject
Hazardous Material Activity as Landlord shall reasorallAy require; anchor
(c) Such periodic monitoring and reporting with respect to the subject Hazardous
Materials Activity as Landlord shall reasonably require.
6A.06 Landlord's Costs an( In Connection tenth ' for II
�a ald�
Mint,; F—i 111 ---, Co- M, —cit, I,
, fe a a I I I sh at I pay to I aal rd I o rd . within ten (10) days tar La n d I o rd's written rc q ucst Ih erclor,
all of Laadlord's reasonable and good faith out or pocket costs and eNpenses (including, without
limitation, the Ices and expenses of such business and crivironmenial corun)ltants and attorneys as
Landlord shall decin necessary) incurred by Landlord iii considering any IlazMat Consent
Request by Tenant or any Subtenant or Occupant submitted pursuant to this Section 6A.06,
without regard to whather such consent is ultimately granted by Landlord. The reirnburscinent
describcd above shall be in addition to, and shall not limit, the cost of perrurniance ofTerrant's
other obligations under this Article 6A, including, without limitation, the cost of performance by
Tenant of [lily conditions to any such ]lazardous Materials Consent, all of which shall be
performed at Tenant's sole cost and expense.
6A.07 Governmental Notices
Tenant shall submit (and Tenant shall rcquire cacti Subtenant and Occuptint to submit) to
Landlord, within ten (10) days of mccipt by such party of each of the sanic (or it' prepared by
Tenant or any Sublenant or Occupant within ten (10) days of prcparation of ific sainc), a full and
complete copy of each of the following:
(a) Any written cominurricition, durnand, coiuphiint, pleading, threat, notice; or
inquiry received or communicated by Tenant or ally Subtenant or Occupant received from or
SNAMUCHTERZowneAGmund undLeascv9,12-03-03.doc
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EXHIBIT A
-17-
delivered to any governmental agency, any adjacent landowner, or any other third party relating
ill any way to (i) any Hazardous Material Avtivhy. any Hazardous Material Consent or any
I lazMat permit, (ii) the actual or alleged presence andlor release of any I hy/Airdous Materials or
other adverse covironniewal condition in, oil, under or about the Ground Lease Property, (iii)
any bodily injury or property damage suffered in connection with any IWArdous lualcrial
Activity occurring (or environmental condition located) in, oil, about or kinder the Ground Ixase
Property, or (iv) any actual or alleged violation of any Environmental Laws reluting to, or
occurring in, under, on or about the Ground I .casc Property: rand
(b) Any environmental or Hazardous Materials assessment, audit or report relating in
any manner to the Ground Leaw Property.
6A.08 Notice of I lazardous 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 Mille to be located in,
on or bereath of
about the Ground Lease Property, Tenant shall irmediately upon discovering the release,
presence or suspected presence of the; I hazardous Material, Live written notice of that condition
to Landlord. Notwithstanding the f0re9k)iaV, die, notice requirement of this Scclion 6A.08 shall
not apply to tile Existing Contamination, as detined in Section 6B.01 herein, or to tile use or
storage tiny Hazardous Materials for which as IlAzMat Consent Request is not required pursuant
to Section 6A.04 herein.
2-32MZMM3MMMZ=
As of each of the Expiration Date, or any sooner termination of this Lease, or any time
during the Term 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 'knarn's sale cost and expense as qualified
crivironniental 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 llazArdous Materials in, on, under or about the Improvements -andlor tile
Ground Lease Property, or any violation of Environmental Laws then existing if), on, under or
about the Ground Least Property other than with respect to the Existing Contominafion. Each
Environmental Assessment shall be performed in a manner reasonably calculated to discover the
presence of any Hamrdous Materials cowarninntion in, on, under or about the Ground Lease
Property, other than the Existing Contamination, and shall be of a scopeand intensity renecti-m
of the general standards of professional environmental consultants who then regularly provide
envirorkmental assessment services in connection with similar cominct-cial tylics of property as
the Ground Least Property, 'Me Consultant shall concurrently deliver the written results; of its
investigation in wrifing, directly to Landlord and Tenant, If Landlord so rernjircs, Tenant shall
comply, at Teriant's sale cost and expense. with all reasonable recommendations contained in the
Environmental Assessment with respect to any precautions which should be token with respect to
environmental activities on or about the Ground Lease Property or for additional testing and
8.-1JAMJCffERkDoWnqACraund L—\DownqjGro-dL--9.l2-0"3.doc
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studies to detect the presence of I lazardmis Niatcrials, Tenaut covenants to reasonably cooperate
Nvith all of the Consullant's efforts contemplated under this Section 6X09 anti to allow The
Consultant full entry and reasonable access to all portions of the Ground Lease Property
reasonably required for Consultant's investigation.
MMMM
, en
(a) Subject to the polviiinits of this Section 6A. I O„ in the vv I that any Hazardous
Materials shall be released into the crivirminicill in violation of any U.nvirmilocnial Law in, on,
under or about the (;round Lease Property during the Term of this Lease, Tcliant sli all promptly
and diligently investigate tire scope and nature of the ielvase in question, shall prepare a
Remcdiation Plan (dullned below) tvith respect to such relcased Ha7ardous MatcriMs, and
thercafter shall rernedialc fully such Ulazardous Materials contamination in accordance with the
provisions of this Section 6AAW, provided, ho%vcvcr, that the: obligations ofTenant under this
Section 6XIO shall not apply to (lie extent that any such release into (lie enviforalient of
I laz;)rdous Materials is caused by tire Nviliful inisconthict or gross negligence of Landlord or is
caused, in connection with the ternediation of the Existing Contamination.
(b) Any rentediation of I lazardous Malcria)s in, on, under or about the Ground Last
Property which Tenturt elects to winediatc, or pursuant to the Provisions (if this Section 6A, 10. is
required to retnediatc, shall be pursued lay Tenant in the following Trumner:
(i) Promptly following the discovery by Tenant of any, rcicase into file
environment of any Hazardous Material in, on, tinder or about the Ground Leasc Ptopcjjy,
Tenant shill engage (or [Andiord may require ensagernein or, pursuant to Section OA.09) a
consultain to perforn) ')It Environmental Assessinwit in accordance wilh the rctluirements of
Section WK The written report prepared by lite Consultant with respect to the Environmental
Assessment shall describe, to the extent reasonably possible to do so, lite exact nature, location,
mid scope of the released I lazardous Materials in, on, or about the Ground Lease property; in any
event Landlord shall have the right, without any liability whatsocver io'j'cnarn or its Sublvilanis
or Occuptints, to cause an indepcialctit consultant selected by Landlord, at Landlord's cost and
expense, to enter railer reasonable advarice written notice is given to Tcnano the Ground Lease
Property to verify all or any portion of the 1`111vironnicnial Assessment.
(i i) Following the Parties' scoping of the nature, degree. location mitt scope (if'
the release of I In7ardous Materials in queslion, Tenant shall, al its SOIC U0.41 anti expense, cause
the Consultant to prepare a rernediation plan (the "Reincilintion Plan") for rcmediation of the
Hazardous Materials ill cluestion (and any other reniediation which may be required by
governmental agencies having jurisdiction), Landlord shall have kite right at all times to hilly
participate in (through its representatives undtor its independent consultant) preparnflon of tine:
Remediaticai Plan and negotiation or lite mme with any or all governmental agencies asscrting
jurisdiction with respect thcrelo, and lite Rtinc(liation Man (and my modification thercik)
proposed byTcnaol to be implemented front lime to time doring, ]lie Term).Aill be subject to the
prior wriiien approval or I-Andlord, which approval shall not be unreasonably withheld,
conditioned or delayed, Eaull Rcinediation Plan shall (A) in all respects comply with till
Environmental Lavvs applicable to (lie release of Ilawdoug Materials in question, (B) lie
SAJAWLICHTFIttDowncyCround lAm\Downcy6ioundL4wcv9.12-03-03.dnc
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consistent with the standards, practices and objectives of remediation plans then being developed
for similarly rtsratarnainratfid and sitilined institutionally Owned first-class projects (of a comparable
nature and will) comparable relevant characteristics) ill California and (C) give titre consideration
to all w'spects of" public health and snfLty and potentially negative impacts or the I lazardous
Materials contamination in question on the continuing; value and viability of (lie surrounding
propmlics and comnionily, In connection therewith, Tenant shall caust: dic Consultant lo pursue
Completion and Jbil governmental approval of the Renictliation Plan and all liazMat Permits
required in connection therewith with at( clue diligence at Tenant's sole cost and expense,
(iii) Following approval by Landlord (and all governmental agencies having
juristutioto or the Rvinedintion Plan and issuance of all required KnxMai Pcrtnits with respect
thereto, Terr ant ,;hall cause as qualificd cavironmental C0111"ilclM reasonably approved bw advance
by I °andlortl, to commence and ilicrealler diligently purstic to completion the Remediation plan,
41 connection therewith. upon Completion of the Rernedialion Plan, Tenant %ball (A) diligently
pursue anti obtain from cacti appropriate governmental agency asserting jurisdiction, written
confirinalion thin no further rcitiediation or remedial action shall he rquirckt. whiell $1,311 be
provided to Undloril promptly upon receipt thercol'and (B) provide to Landlord a written report
1'rom Temaill's Consultant slating its professional opinion that no further remediation or work is
roquired tinder the Hernediation Plan, Own applicable Environmental ),,aNv.s anti Own prevailing
institutional investor corrancrcial rcroctliation standards and practices, All rctlactliation work
contemplated hercurder to be conducted by Tenant ;hall Ile conducted (i) in a diligent and timely
fashion by licensed contractors acting under the supervision of as consulting anviroomentril
engineer, and (ii) with such insurance coverage pertaining to lint-silities arising ota the
rentedialion work as is their reasonably rctluned by Landlord with respect to such activities. *file
selection of the contractors and consulting, environmental engineer, tile contracts entered into
with such partics, cold any disclosures to or agreement.% will) any public or private agencies or
parties related to the 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 roccipt or prcpamfion, copies of any and ali
reports, studies, analyses, correspondence, governmental comments or approvals, proposed
removal or other remedintion contracts, and similar Information prepared or received by Tenant
in connection with any retnediation work or Hawdous Materials related to the Ground Lease
Property.
(iv) All costs and expenses with respect to all work contemplated under this
Section 6A,10 shall tv paid by Tenant, including without limitation, the charges of the
remedinlion work contractors, the consulting Onvit"Mancillal engineer, all consultants and taxes or
penalties anscised in Connection with tire remediation work and I.Andlord's reasonable fees and
costs incurred in connection with investigation oftlic Hazardous Materials release its question
(and preparation, review and negotiation of (lie Remediation Phin with respect thereto) and any
monitoring or reviewing of such remcdiation work.
Tenant sliall indemnify, defend (by counsel reasonably acceptable to Ia lidlord), protect,
and hold harmless Landlord, and each of its affiliates, and each of their respective
S:UAM\UCHTER\Downcy\Ground Lcasc\DmmeyQmndLaLm9.12-03-03-doe
19
commissioners, council members, trustees, beneficiaries, officers, directors, employees,
attorneys, agents, successors and assigns (each a "Landlord Party" or "Landlord Indommifled
Party") front mid against any and all (;laims, Damage-% and 12,xperises (as delined in Section
10,01(i) herein) relating to or arising out of, or resulting from, in whole or in part, directly or
indirectly, (a) any discharge or release into the environment (or suspected discharpc or release)
in, (in, under or about the Ground Least, Property (or any Improvements thereon) of any
Hazardous Material which occurs during tile Term of this Lease, (b) all ll=xrdous Material
Activities occurring in, on, tinder or abLint Ilse Ground Lease Property during lite Term of this
Lease, (c) ,my violation by tiny Teninit Party (as defined in Section 10,01(c)) of tiny
Environmental Laws in or about (or applicable to) the Ground Lease property (or any
huprovcluctits thercon) occurring during thaTcrin of this Lease or (d)Tcnaru*s flailtire to comply
with any of its covenants under this Article 6A, The "Cluirris, Damages and Expenses" subject
to tile foregoing indemnification shall include, without limilation, (i) personal injury Uldil0s, 00
tile payrricni of liens, (iii) diminution in ilia value (if the Ground Least: Property, (N) damages for
ilia loss or restriction oil use of tire Ground lr.C.IIW Property (v) sums paid in Wilenictif of claims,
(vi) reasonable attorneys' fees, consulting fees tuld CNI)CM fees, (vii) tile Costs Of any
investigation of, site conditions, and (viii) the cost of any repair, clean-up, remedial, removal or
restoration work or detoxification if requirctl by any governmental or quasi-Lgoveranicahif agency
or body or deemed necessary in Landlord's reasonable judgment. Landlord shall have ilia right
(but mart the obligation) to join and reasonably participate in, at Landlord's expense, any legal
proceedings or notions initiated in connection with Tenam's or zany Tenant Party's Ilazzirdous
Materials Activities in, on or about tire Ground Lease llroptcrty� Teninit's obligations pursuant to
the, foregoing intleinnity shall survive the expiration or carly tennination of this Lease and shall
bind I'Llmint's successors and assigncus and inure to the heriefil of Landlord's successors and
assigirces. Notwithstanding anything to the contrary in this Section 6A.1 1, the indemnity
provided for under this Section 6A.11 shall not apply to (Y) ally Hazardous Materials
contarninition to the 0XILI'l the same is caused by the willful misconduct or ilia independent
gross negligence of Landlord or any Landlord Party, or to (z) any Claims, Damages and
1-"xpcnscs arising out of, or related in any %vay wlintsouver, to the Existing Contamination,
6A.12 Surrender ol`Grout'419susu 1'rtantM
Prior to tile r".xpiration Date, or ally sooner termination of this Lease, Tenant shill (i)
remediate (and complete remediation of) in compliance with the requirements of Section 6A. 10,
any Hazardous Materials released into ilia environment in, on, under or about ilia Ground ].case
Property or ilia Improvements during ilia 'I'cmi of this ].ease, (ii) oblain final closure of tiny
I lazMat Permit applicable to the Ground Lease Property and issued during the Term of this
Lease (which closure shall be without any continuing conditions or obligations) and (iii) remove
any personal Ground Ixase Property, equipment, fixture, frank and/or storage device or vessel
placed or installed in, oil or about ilia Ground Lease property during the Term of this Lease
%yllich is contaminated by or which has previously contained 11,T/ardous Materials.
Notwithstanding ilia foregoing, 'reliant shall have no obligation to take any action with respect to
the rcinctlintion of tiny of the Cxisting Contarnination, or the removal of any equipment, fixture.
tank andlor storage device or vessel placed or itustalle(I in, on or about the Ground Least:
Property that was used in connection with the Existing, Contamination.
s:\jAMUCHMR\DowntyA0rclund Lem\Downey0mundlxmv9.12-03-03.dm
20
6A.13 j- —is
. Tenant shall not permit or suffer any lien to be recorded against the Ground Lease
Property or any portion thereof its 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 time clean-up or any I hizutidous Materials in or about the Ground Lease Property;
provided, however. that such obligations of Tenant shall not be applicable to the extent any of
Ilic saine pertain to any Hazardous Materials contamination existing in, on, under or about the
Ground I.case property as of the 1,hective Date. The term "Taxes," as defined in Section
10.1(a), shall also include any levy, asscssineni, lien or chargu by any applicabic governmental
authority against the Ground Lease Property, the Improvernents, or I andlord assessed or imposed
oil account of or in connection with any Hazardous Materials located in, on or about the Ground
Lease Property.
6A.14 Riehl ol'Lniry
Notwithstanding any other term 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 fazardous Materials present on, emanating front or affecting the Ground Leasu
Property, or to discharge Teriont's obligations hereunder with respect to such liamidiclus
Matcrirds, provideti, however, Ibut with respect to to situation Nvhctv the Landlord is catcring time
Ormind Lease property to lake 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 tile
circumstances. All costs and expenses incurred by the Landlord in connection with perfortning
Tenant's obligations hereunder shall he reimbursed by Tenant to the Landlord within thirty (30)
days rafter Tenant's receipt of written requ"t therefore.
Prior to 1,andiord's acquisition of the NASA Site, of which the Ground Lease Property is
to part thereof, the NASA Site was owned turd operated by NASA. Tenant acknowledges that it
has been infornied that, as part of NASA*s use and ofocration of the NASA Site as research and
dcvelopincilt space, releases of Hazardous Materials occurred in, on, under or about the NASA
Site (the "Fxistbig Contamination"). in connection therewith, Tenant hereby acknowledges
receipt ortlic 1"xisling Environmental Docuinents described on Exhibit "C" allached hereto.
S:VAMUCUMR\DownqAQround Lcase\Dotyncy0rotindLc&wO.12-03-03.doc
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611.02 "Permit limmi&-ttion.
Tenam acknowledges, represents and warrants to tile 1,111djorti, it has, inspected.
-inalyzed, investigated, reviewed said evaluated all aspects and of ific Ground
Lease Property. including, wilbout limitation, dic physical nature and crwiromnemal condition of
tile Ground Lease Property (including Nviewilig all of file Existing tinvironmemal Documents),
to like fall satisfaction orTuriant, and will lease the (,;round Lease Property solely oil llic basis of
socli mraimations, and not on the basis of any information provided or to lie provided by the
Lanalloul or on the basis of any express or implied, oral or written representations, warranfic%,
indemnities, or obligations of the Imnrdlord, In connection tircrewith, Tenant expressly
ickilowIdges that neither the Landlord nor any agem, attorney, onployce, or representative or
the Landlord Itas made any mpresentation as to liar: physical imiure or crivironmental condition of
the (iround I.ca.w Property and that 'knint, in mculing, delivering and/or performing this
Lease bass not relied uponany reproentation Illade by or on bellall'of the Landlord,
61.1,03 "As -Is" Waiver
Tenant hurchy expressly acknowledgus 111111 is leasing (tic Ground Leww Properly in an
"As IsAYbore Is" condilion without wam, My of any kind,,expros or limited, including, withoot
fisnilmion, physical condition or the existence or absence of' flazardous Substances can tire
Ground Lease property, the existence of any violations of any l3tivirorinlental Laws, .31)(1,
hereafler, iftlic Ground Lease Property is not in all respects entirely suitable for the rise or uses
to w1kii the Ground Lease Property or any part thereof will bcput, then It is the sole
re%ponsibilily and obligation of Tenant to lake skieli action as may be necessary to Place, the
Ground Lxasc Property in a condition entirely suimble, for sucli use or uqm IN CONNIIECTION
WITH THE' ABOVE-, TENANT HEREBY ACKNOWLEDGES AND RPPRESF,,Nj'rS T()
LANDLORD THAT, TENANT HAS 14AD AMPLE OPPORTUNITY TO INSPECT AND
EVALUATE THE GROUND LFAS13 PROPERTY AND TI If." EXISTING
VNVIRONMENTA). DOCUMEN'IS AND 111113 FEASIBILITY OF TIM USES AND
ACTIvi'mis TENANT IS ENTITLED TO CONDUCT ON THE GROUND LEASE
PROPIAUJ'Y; THAT '113NANT IS EXPERIE.NCED IN REAL ESTATE DF-VE'LOPMENT;
TIIATTENANT MAY Rru,y rNTIRELY ONITENANT's EXPERIENCE, 1APERTISF, AND
ITS OWN INSPECTION 01- ']'fir- GROUND LEASE PROPERTY IN ITS CURREN I'STATV
IN PROCE-1-DING WITH 'I'llIS I.rASE;TIIATFXCV-I1T AS EXPIU'SSLY PROVIDED IN
Tll]8 LEASE, TEANNT WILL ACCEPT Tfir GROUND LFASE PROPERTY IN ITS
PRI'SENT CONDITION; AND THAT. TO THE EXTENT THAT TENAN'I"S OWN
FX1117,11TISE wri-ii juspix,r TO ANY of Tin, FOREGOINU IS INSIJI'VICIENT TO
ENABLE TENANT TO REACIT AN INFORMED CONCLUSION, TENANT HAS
FNGAGE"D THE 8F.RVICES OF PERSONS QUALIFIED 1-0 ADVISE TFNANT WITH
RF,spi-im ro SUCH MA"I'IT-RS. Tl,'.NtAN'I' 19 NOT RELYING ON ANY EXPRESS OR
IMPLIED, ORAL OR WRIT11N RI-PRUSFNTATIONS OR wARRANTIES MADE BY
LANDLORD Olt ANY LANDLORD PARTY WITH RFSPLCT TO CONDITION OF
THE OROUND I.E.ASEPROPERTY IN ENI-FRING INTOT1119 LEAYW 'file foregoing shall
11ol be decirred to limit or waive arly express cove ems, wartantics, representations or obligalions
of Landlord set forth in this Lease.
B.-NJAM\I,ICH'IT-.FL\DowntlACiround LcucoowncyCrowWLcmcy9.12-03-03,dar,
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613.04 'I I kcSuperior NASA Site
NASA Renliediglirg
(it) Ijubordination, Tenant hereby agrees that (j) each and all of its rights under this
Lease shall be folly subject and suboftlinnic 143 (A) the rights of MAD (and any successor to or
replaccincril for TRAD, for any reason) tinder the Assumption Agreement, and any and all
aincildnicnis or Inodifications of an any successor agreements therclo, hereinafter adopted,
created, clIbcted or put into place, (B) the rights of NASA. GSA andfor (tic United Slates of
America (colleclively. the "US Parties") tinder the NASA Documents, including, specifically,
the HSA and tiny 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 rirlas of the varra: when acting on behalf of one or
more of the "Ownurs." its those terms are defined in the Assumption Agreement, under the ISA
and/or the CC&Rs, and/or the NASA Documents and all mineadinents or modifications of (,aid
ally succcSsor agreements (0) (fie Sallie hereafter adopted, creared, effected or put into place
(Collectively. as the same wilay exist from time to linic, the "Superior NASA Documents"), (ii)
Tenant shall not take or pcnuii any action or omission in, on, under or about the (.'round Lease
Property which shalt breach or violate any of the obligation- of an "Owner" (including without
limitation, any ground Icssec) of all or any portion of the Ground Lease Property, under any of
the Superior NASA Documents, and (iii),renant Shall strictly and timely perform, each and all of
the obligations applicable to the "Owner'*, including without limitation, the obligations of cavil
subtenant of each portion of the Ground Lease Property, under each of who Superior NASA
Documents.
(b) i,andlorwl's Rclalionshin to parries in — to SIIpqiIr f IA4LA SLite Q jKu i LLL f,
Tenant acknowledges lbat Landlord has entered into the various Superior NASA Site Documents
in order to benefit the various owners and ground lessu" of the NASA S'itc, including, without
limitation, Tenant, and to facilitate execution and implementation of the Superior NASA
Documents, Tenant agrees that notwithstanding arly Provision of this I.Casu (or any other
document) to the contrary, and notwithstanding the Llindlord's designation and/or performance
as the "Coordinating Party" under one or more of the Superior NASA Site Documents, (i) in 110
event and in no case shall MAD (or any successor or replacement thereof) or any of (licir
respective agents, contractors, subcontractors, employecs or rcirresenta6ves (collectively, the
"I RAD Parties") be considered, characiefived, decilied or interpreted to be the agent, contractor,
subcontractor or represarnative of Landlord or any agency, depirtincrit or official thereof and in
no event shall Landlord Ix- legally responsible for any of acts, virlissions, negligence or
misconduct of the IRAD Parties tinder any legal theory whatsoever, (ii) in no event and in no
case shall ally of the US Parties or any of their respective agents, covilractors, subcontractor.,;,
employees or representatives (collectively, the "US Representative Parties") be considered,
characicrized, decined or interpreted to be (lie agent, contractor, subcontractor or representative
of Landlord (or any agency, department or official thereof) and in no event shall Landlord be
legally responsible or liable, in whole or it, part, for any or the acts or oinissiorn; orally oribv, us
Reprosentativc Parties tinder any legal theory %Yhotsoever, (iii) in no event shall tiny of the MAD
Parties or any US Representative Parks ever he considered a Landlord Party (tinder any legal
theory) for purposes of the application and interpretation of this Lease and (iv) Tenant shall
indemnify, defend and hold Landlord harmless frown any and all Chdins, Damages and Npenscs.
S:vJAM\LICHTER\Dowmy%Graund lAwc\Downey0mundLocw@v9.12-03-03-doc
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as defined in Section 10.01 (a), asserted agiinsl or incurred by Landlord in connection with any
claim or action by Tenant which is inconsistent 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 anti all Landlord Parties
front call present and fintirc claims, demands, suits, legal and administrative proceedings and front
all liability for damages, losses, costs, liabilities, fees and expense,-., present and ftjnjrc, arising
out of or in any way conneelcd with the Tenant's 11.1c. maintenance, ownership or operation of
the Ground pease Property, any physical, title or other delbets, in, of, or rclawd Io the Ground
Lcase Property, any Ilayardous Material% on the Ground Lease Property, or the existence of
Hazardous Nbacrials contamination in any state its, on, under, or adjacent to tile Ground Lease
Property. however they came to be placed there, without qualification. Tentint acknowledges
Ow it is aware of and flarniliar will) the provisions or Section 1542 of the California Civil ("ode
which provides as follows-
•
As such relates to this Section 6B.05, Tenant hereby waives and relinquishes all rights and
benefits which it may have kinder Section 1542 of the California Civil Code.
Tenant's Initials
NoWilwanding the foregoing, Ilia; release ,at forth in die Section 61.t.05 shrill not apply to tiny
claim, liabOily. obligation, demand or cause of action to the extent the sanic results front (j),my
default by Landlord in the peribmiance of its obligations under this Lcasc, or, subject to the
provision-, or the C(,*&, lks, under the CURS or (ii) any I layArdous Materials released into II)c
environment in violation of Environmental JAWs as Ilia result of any act of landlord lbilowing
the Commencement Date constituting gross negligence or willful misconduct.
6B.06. QccupauLlCqfqase
(a) Release ReqqjjyMgjg. Tenant hereby agrev's that it shall require each Istibicnant
and Occupant of any portion of the land or intproveracras constituting the Ground Lease
Property to execute and deliver to Landlord a release of claims in ilia fonu iniached as
hxhibit 'IN" (an "Occupant Release") prior to pertaining any such Subtenant or Occupant to
lease, sublease or otherwise obtain any tenancy, license, casement or other possession rights
under tiny document is to, or otherwise occupy, any portion of the land or improvements
constituting the (*)round Lease Property, To the extent permitted under tire NASA Documents, in
S:VAMUCHTERU!iumcywGround LAL%iMwncyGmundLeucv9,l2-03-03.dor,
24
lieu of requiring an Occupant Release to be signed by Wtch Subtenant or Occupant as set forth
herein, Tenant. in its discretion, may elect to indemnify and hold Landlord harmless from any
Losses or Liabilities resulting front any action brought or claimed by or through any Subicnint
or Occupant against Landlord which would have been released or barred had socii Subtenant or
Occupant signed the Occupant Release.
(b) Bhurit ip on Successors, The obligation to obtain the Occupant Release from cavil
Subrunant or Occupant shall be binding upon each party that acquires any type of leaschold
interest in all or any portion of' tire Ground Lease property at any time following the
Commencement Date, and such obligation shall be covenants naming with the land as to the
Ground Lease Property.
ARTICLE 7.
A!WIINTX�f �,-LUIE
7.01. C nnstrlc i n rat lmorovements and Xlajor Orr arale cars rats
Subject to the terms and condition,; contained in this Lease, Tenant, at its sole cost and
expense, shelf he entitled to (i) remodel, alter, repair, replace or make additions to any of the
lixisting improvements (defined it% Section 1.01), and (ii) to construct, cause tea be constructed,
or allow to be constructed by any Subtenant or Occupant, such new improvements oil or about
file Ground Lease Property as Tonant deans necessary or appropriate in connection with
Tenant's overall development of the Studio lImperty (the "Neiv Improvements"), 'nie i-xisting
Improvements and the New Improvements are each sometirries individually referred to as an
"Improvement" and collectively as die "Improvements," In the event that the total hard
construction costs for any individual Improvement cxc"ds $1,000,000,00, such hnprovemcnt
.shall be deemed to be a "Major Improvement."
7.02. Lprl.sJLugliqlrStandarrts
All construction, alteration or repair work permitted hernia shall be accomplished
expeditiously and diligently, Teriont shall take all reasonably necessary measures to minimize
any damage, disruption or inconvenience caused by such work and mike adequate provision for
tits safety and convenience of all persons affected thereby, In addition, Tenrall shall pay (or
cause to be paid) all oasts and expenses associated dicrewith and shall indemnify and hold
Landlord harmless from all damages, losses or claims attributntile to the performance of such
work, Dust, noise and other effects of such woik shall be controlled rising the best accepted
methods customarily utilized in order to control such deleterious effects associated with
construction projects in a populated or developed area. Tenant shall also crect and properly
maintain at all finles all necessary safeguards for the protection of workers and the public,
SMAMUCHTERVowneyk0round L=rlDowntyGmundL. ev9.12-03-D3.doe
25
Wig=
7.03. LLtility Work
Any work, performed by or on behalf of "Tenant or any Occupant or Subjenant to connect
to, repair, relocate, maintain or install tiny slono drain, saintary sewer, water line, gas line,
telephone conduit or any other public ufflily service shall he performs al so as to minimize
interference with the provision ol'such icrvicc% to occupants and other persons.
7.04. L9sc_q_1 lIaq�j LP
With respect to any Major Improvement, the contracts with any architect, Other design
prokisional or any general contractor shall Provide, in form and substance reasornibly
aalisfhctory to Landlord, for their assignment to 1-indlord in tile event that Uwe is tenninated
duc to Tenant's default hereunder. In such event, Landlord may. at its election, Lisa any plans and
specifications to which Tenant is then entitled pursuant to anysuch contract upon the payment of
any wants 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 defew the rights of any tender for
improvements constructed on the Ground Lease Property and Landlord shall execute such
agrectuenis as a leader may reimmably rctitiust to confirnisuch subordination.
7.05. Comoliance with Corwpkiqi2n, Q—Ktunents and Laws; Issuance of Permits
All Nc%v Improvements mid refurbisliment of existing unproN,ements; shall be constructed
in substantial compliance with all applicable local, state and federal laws and reguirujorls.
Tenant shall have the sole responsibility for obtaining all necessary permits and shall matte,
application for such permits directly to the person or governmental agencyhaving„ urisdiction.
7.06. LaLidlor$sC000cration
Landlord shall cooperate with and assist `tenant as reasonably required in 'Tenant's effmis
to obtain all governmental consents, approvals, permits or variances which may be required for
the performance of any construction permitted under the terms of this Lease. including
Landlord's joinder in any application for any such con -sent, approval, permit or variance wberc
joinder therein by the owner of the Ground Lease Property is required by Law, provided that any
suelljoinder shall be at no cost to Landlord.
7.07. -Rightg of Access
Provided they shall first present themselves to "Tenant's on -the jab sapervisor and furnish
reasonable evidence or their identity, representatives of Landlord shall have the right of
reasonable access to the Ground Lease Property and the IniptoVeracuts without charges or foes,
and at normal construction hours daring the period of constriction, for the purposes of
ascertaining compliance with the terms of this Lease, including, but not limited to, tile inspection
of" the construction work being performed. Undlord shall from time to time provide Tenant with
tire names of those radhorl7ed to perform such inspections. Landlord's access shall be reasonably
calculated to minimize interference with Tarrant's construction andfor operations.
S-.\JAM111CffMR%DovmtykGmund Leut\DowncyGroundLewev9.12-03-03.doe
26
alum=
7,08. Notice of Q�LmViefq)p
Upon completion of construction ol'any Major Improvement, Tenant shall rile or cause to
be filed in the Official Records of the County of Los Angeles a Notice of Completion (the
"Notice of Completion") with respect to each Major finprovement, and Tenant shall deliver to
Landlord, at no cost to Landlord, two (2) sets of crononc.x ormylar final as -built plans and
specifications of each Major Improvement.
7.09. 12cq)pU ilion tat" Innirovernents
l,andlord hereby acknowledges that file Exisling linprovenicirts have very little value and
are not part of Tenant's overall dcvelopincru plan for the Studio Property, including the Ground
Lease Property. Accordingly, Tenant may demolish tiny or till of the Bisting Improvements, is
and when Tenant deems appropriate, During (fie Territ, 'tenant may also remodel, repair, make
additions its, and deroolish any of ilic New Improvements, as 'retiant May deem ncecssury or
appropriate.
7.10. Llrorection of- ' 14 .41 1 M _9I
111CIPL
Nothing in this Lease shall be construed its, coilllittiling tire consent of Landlord, express
or implied, to tire perrormance orany labor or the furnishing ofany materials or any specific
improvements, alterations of or repairs to the Ground Lease Property of tiny part thereof by any
contractor, subcontractor, laborer or materialninn, nor as giving Tenant or any other person any
right. power or Authority to act as agent of or to contract for, or pennit the rendering of, any
services, or the frimishing of any materials, in such manner as Nvould givc rise to the filing of
mechanics' licns or other claims against the fee of the Ground Lease Property or any
Improvements thercon. Landlord shall have the right at all rcuisonable times to post, Intl Keep
posted, on the Ground Lease limficrty any notices which Landlord may deem necessary for dic
protection of Landlord and of the Ground I caic Property and the improvements from inechanics'
liens or other claims. Tenant shall give Lundhird ten (10) days prior written notice (if tire
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 1110de, prompt payment of all monics
elite and legally owing to all persons doing any work or ffirnishing any materials or supplies to
i'tairan Or any or its contractors or subcontractors in connection with lite Ground Lease Property
and the Improvements.
Subject to rcrtant's right to contest the same prior to payment, Tenant shall keep the
Ground l.cascr Property and the Improvements free and clear of all mechnnjcs' lions and other
liens on account of work done for Tenant or p"sons claiming under it. Tenant agrees to and
shall indemnify and save Landlord harmless against liability, loss, damages, costs, attorneys' fees
and till other expenses on account of claims of lien of laborers or materialincri or others fig work
perfon,ned or materials or supplies furnished to Tenant or persons claiming under it.
S.VAMUCM.Mwnq/Cffound LeawWowneyGroundLewul), 12-03-03.doo
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In rite event any lien is recorded, Tenant Oud), upon demand, furnish the boric) described
in California Civil Code Section 31,13, or sm-,cessorstalute, 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 lase Property,
7.11. Notice
Should any clainis of lien be filed against the Ground Lease Properly or da:
1111provernents, or any fiction affeeling the title to the Ground Lease Property or the
Improvements be communcud, tile party receiving the notice of such lien or action shall
forthwith give the other party written notice,
8,01. OwnershioofNcwJnjj)L o,eplcrils Djoirigicar
All Now improvements constructed on the Ground Lcaw Propciry by Tonacil shall.
during tire Tenn, he and remain tire property of Tconm provided, however, that Tenjun*s rights
and powers with respect to the New Improvements sire subject to the terms and limitations of this
Lease and Tenant's interest in such, New improvements shall terminate upon (lie expiration or
sooner termination of this Lease, Once constructed, Tenant shall not remove, waste or destroy
any New Improvements from or on the Ground Lease Property, except as specifically permitted
by this Lease,
8.02.
At tire expiration or sooner termination of the Term, Undlord may, at Landlord's sole
election, rcquirc the removal from the Ground Lease Property, at Tenant's sole cost anti expense,
orrin 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 normal expiration
of the Train shall be effected by notice given at least thirty (30) days before the expiration date,
A demand to take effect on any other termination of the Term shall lie effectuated by notice
Given concurrently with notice or such termination or within ten (10) days after such termination.
Tenant shall be liable to 1,iindlord (br costs incurred by Nindlord in effecting the rcinoval of
personal property whichTerrunt has hailed to remove after demand pursuarn to this Section.
Tenant may remove any per.sonni property front time-to-finre within ibrly-five (45) days
after the expiration of the Term. Tenant shall repair all damage (structural or offierwise) caused
by any such removal; provided that damage to improvements witich are obsolete economically
or functionally or which are not material need not be repaired so long is the hoprovclicalls 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 Tcriant and shall, without
SMAMUCHTEMDowncyWoound Lco3cNDowrwyCround]Aasew9.12.03-03.dm
28
a ".
compensation to Tenant, then become Landlord's property, free and clear of all claims to or
against them by Tenant or any other person.
M j I COD"'
Tenant shall pay when due and shall hold Landlord harn-Jess from any liability for all
charges for water, gas, sewage, electricity, telephone and other utility services supplied to the
Ground Lease Property.
ARTICLE 10.
MA-01VLA# VJJJIX�T�lj )T&Y-K #1OLTOWIV1,41
94T#111�- M
(a) "Claims, Damages and Expenses"' shall incarl, any and all clairils, dernands,
suits, Hens, unctriubrances, causes of action, liabilitim obligations, dallinges (including, Without
limitation, officr direct drmaagcs), penalties, lines, judgments, forfeitures, lo,,ses, costs, or
expenses (inchiefing reasonable attorncy'& colusultants" and expert lbes), but Specifically
excluding any form ofconsequcrifial damages.
(b) "Landlord Indenutified Parties" shall mean Landlord and each of its affiliates,
and cacti of their respective commis council mernbcrs, trustees, beneficiaries, officers,
directors, employees, attorneys, agents, successors and assigns,
(c) "Tenant Party" or ""Tenant Parties" shall mean one or more of Tenant, any
Subtenant, any Occupant or any of Ilicir respective partners, members, employees, officers,
managers, directors, agents, contractors, guests or invitees.
Except to the extent directly resulting front Landlord's gross negligence or willful
misconduct, Landlord shall not be liable, and'fenant hereby waives on its behalf, and on behalf
of any Tenant Party, all Claims, Damages and Expenses it, or any Tonant Parly may now or in
the future have or hold against Landlord or any Landlord Party for any loss, damage or injury of
art), kind or character to oily person or property (i) arising from any rise of the Ground Lease
Property, the Improvemcnis or any part thereof, (ii) caused by any defect in ally Improvements
or in any equipment or other facilities located on or about the Ground Lease Property, (iii)
cater; d by or arising from any net or omission of'renant orany Tenant Party, (jv) arising front
any accident in, on, or about the Ground Lease Property or any of the Improvements, or (v)
occasioned by the; failure of 'rennnt to rusiulnut the Ground Lease Property or any Improvements
in a safe condition.
S.qAMUCFTTE1uDowneyNQwund Lzm\Downcyriyoundlzmv9.12-03-03.doe
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10,03. indemnity bvTcnnnt
Tenant shall indemnify, defend by counsel selected by Tenant, and reasonably acceptable
to Landlord, and hold harmless each and all of the Landlord Indemnified Parties from and
against all Claims, Damages and Expenses asserted against or incurred by any ofthe Landlord
hiticinnificol Parties arising or resulting from, relating to, or in connection with (i) loss of life,
personal injury andlor damage to goods or property of sally Tenant Party arising rrorn or out of
ally occurrence, act, cause, event or omission occurring in, oil, under, upon, about or at the
Ground I case Property (or any Improvements thereon, during the Terns or any holdover period,
(ii) flic occupancy or use by Tenant of the Ground Lease Property (or any lu'ProvolUalls
thereon) or silly part thereof, (in) the negligence or willful misconduct ol—renant or slily of its
members, employees, officers, managers, directors, agents, contractors, guests or invitees, Ov)
Tenant's default under, breach or failure to comply with tiny provision or obligations of Tennot
under this Lease, or (v) any defect in the Ground Lease Property or the Improvements, except to
the extent such Claims. Darriages and Expen", tire caused by the negligence or willful
misconduct of Landlord (Collectively, the "Indemnity Obligrifions"). Tenant agrees to cause
any sublease ror all or any portion of tile (Ironind I .casc Property to include an indemnification
provision from such subtenant in favor of Landlord and Landlord Panics.
In case any of the Landlord Indemnified Parties shall be made a Party to any litigation
commenced by or against Tenant with respect to any of the Indemnity Obligations, 1-cmint shall
accept it tender of the defense and handling of such litigation by Landlord, and Tenant shut],
notwithstanding any allegation of negligence or raull, on the part of Landlord, defend tire
Landlord Indemnified parties in the manner set flulh 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,
cxpellses and reasonable attorneys fees thereafter incurred by Imridlord in providing its own
durcrisw. provided, however, that to the extent any of the Landlord Indemnified Parties is
ultimately held to be liable ror all or putt of any Clainis, Damages and Expenses, then Landlord
shall reimburse To I I lint its proportionate share or ibc cost of any Claims, Damage and Expenses
incurred by Tenant -,aid attributable to any of the Landlord Indemnified Parties,
FTRAEN It a IM
11.01. C�Uicrld insurance Rcqalr-enjM
All policies or insurance provided for herein (collectively. "Insurance") shall be %whicit
as primary policies (without "contribution" or "solely in excess of coverage carried by Landlord"
provisions (wiffi responsible and solvent insurance companies authoriycd to (to business in
California with n policyholder',% rating of "A-" or better and a financial rating of "Vill" or better
in Best's Insurance Reports. Prior to the Commencement j)atc, rcnant shall supply Landlord
(zard at all finics during the Tenn of the I.ease keep oil file with Landlord) a true anti correct copy
of all 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, thereafter, as additionni premiums hecome due, upon request, Tenant shall supply lAudlord
with satisfactory evidence: that said premiums have been paid. Notwithstanding nnything to the
S*UAWL1CHTCRkDowncAQmMd Lc=M)OwncyGroundlxascv9.12-03-03.dm
30
contrary contained within this provision, Tenant's obligations to cam' insurance as provided
herein amy be brought within the coverage of it so-called "blanket" policy or policies or
insurance carried and maintained by Tenant, so long as, such policy or policies segregates the
amount of' coverage applicable to the Ground I,eaqc Property, I" ior to the expiration of any
insurance policies required or Tenant by this Leasc,'fenant shall furnish to Landlord rcrunvals or
binders in a commercially reasonable form stifisfinctory in Landlord. In tile event that Tenant
fails to procure, maintain and/or pay for. at the times and for dic duration specilted herein, tiny
insurance required hereunder, or fails to carry insurance required fly any Law or Legal
Requircillent, ]..at dlord may (but without Obligation to (to so) at any time or front time to nine,
after tell (10) days' written notice, procure such insurance and slay the premiums flicteror, in
which event Ternint shall repay W landlord all sums so pint by Landlord, together with Interest
thercon and any costs or expenses incurred by landlord in connection therewith, within ten (10)
days following, Landlord's written demand to Tenant for stich payment.
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 Lease Property
and the operations of. or oil behalf of Tenant in, on or about the Ground Lease Property,
ittcluding„ but not limited to, oNvued and lured motor vehicle liability, cross -liability and
sevcrability Or interests, death and or personal injury, XC&U (during periods when excavating,
trenching, or underground digging is undertaken on the Ground Lease Property), broad form
contractuni (insuring all of Tenant's indemnity obligations under this Lease and naming
Landlord and any other party reasonably designated by Landlord as additional insured), owner's
protective, broad-fomi property damage, liquor liability, garage keepers legal liability (during
such periods as vniel parking services tire provided on the Ground Lease Vroperty, if any), and
product/conipMed operations liability coverage for not less than Ten Million and Noll 00 Dollars
($10,000,000,00) (Or Stich greater limits as may be required from time to time by Landlord
consistent with customary and commercially reasonable insurance coverage on properties
similarly constructed, occupied and maintained), combined limit per occurrence for bodily
injury, death and property damage liability:
(b) worker's compensation coverage as required by law, together %vith employers'
liability coverage with a limit of not less than One Million and No/100 1)(11 lors ($ I A0,000.00);
(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 less occasioned by reason of (i) earthquake, (H) flood (if the Ground Lease
Property shall be situated in art -area designated by the United States Governmeni, or any political
subdivision thereof, as a "flood area" or by similar designation tile rvsuit or whici, is to require
such insurance, coverage as a condition to obtaining federally funded mongage loans or obtaining
a mortgage loan from a federally regulated institution), and (iii) sprinkler IcAnge, in Ott aniouln
equal to the full replacement cost of the Improvements;
SAIAMICHTERMa"eyNGround Lease\DowneyrjroundLeac 9.12-03-03.doD
31
(d) insurance against tire, extended coverage, vandali-sni, malicious mischicrand such
other additional perils as now are or hereafter may be included in the standard Special Ferro
policy in general use in Los Angeles County, California, insuring the 1111provemcnts on the
Ground Lease Iltoperty, merchandise, trade fixtures, furnishings, equipments and other items of
personal property of Tenant located oil or in the Ground I.CaSC Property, in all wnount cqual to
not less than eighty percent (90%) of tile actual replaccrilent costs tircreor, and shall include
rental loss coverage for a minimum of twelve (12) months;
(c) boiler and pressure vessel insurance in amounts reasonably satisfactory to
Landlord;
(f) at all finics when any construction is in progress, builder's risk imurance,
completed value form, covering all physical loss in an amount and in a form reasonably
satisfactory to Landlord; and
(g) such other or furlher insurance, in such ainounts and in such forin, as is
customarily obtained by owner.,; (if properties similarly constincicti, occupied and maintained and
which is available at commercially reasonable rates,
11.03.
Each policy evidencing insurance rcquired to be carried by 'remant pursuant to section
11.02 herein, shall contain the Following provisions an(Vor 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 Londlord shall be
nonconlrihuting with respect to any policies carried by -renant. (iii) a Provision including
Landlord (arid Landlord's officers and eniployces with respect to (lie 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 caneel 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 income or business interruption, if any, shall be computed and slated 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"Nortnt or any Teriant, Party, any occupancy or use of the
Ground [,ease Property for purposes nion: hamrdous than permitted by such policy, tiny
foreclosure or other proceedings Mining to the Ground I.case Property or any change in title to
or ownership of tile Ground I.easc Property will not invalidate the policy as to Landlord. Tenant
may have reasonable deductibles solely in conjunction will$ the commercial general and
automobile liability coverage set forth above; proviricil, however, Tenant shall be responsible
for, pay, defend indemnify and hold Landlord harmless 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.
S:VAMXUCtMR\DumvAGFound Ia=\DowncyGmundLa=v9.12-03-03.doo
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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. C-goipli-nice 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. jV .Ltiver of Subroantiott
Landlord and Tcrillot, each waive any rights either MAY ))-live against the other on account
of any loss or damage occasioned to Undlord or Tenant, as the case juay be, their rcspccti%,c
property, cite Ground Lease llroper4, or the conicim of the Ground Lease Property arising from
any risk covered by casualty insurance carried (including, ter purposes sal` this provision, illy risk,
for which Landlord has elected to scif-insure) or required to be carried pursuant to this Article
11, when, and to the exici% that such loss or damage is actually cmilpensatril pursuant to such
insurance. Landlord and Tenant also agree that the instarance Policies, if any, obtained by each
of them pursuant to this Lease shall contain endorsentents waiving ally right of subrogation of
which tits insurer may otherwise have against tile nowinsuring party. The roreLping release and
(lie foregoing requitanicill for %vaiveis of.subrogallon shall be operative only so long as tile same
shall] neither preclude the obtaining of such insuraciec nor diminish, rctitice or impair the liability
of any insurer.
11.07. Self Insurance
Notwithstanding the foregoing requirements of (Isis Article 11, Tonant shall be entitled to allow
one or more Subtenints, as defined in Section 1.04, to self -insure all or it portion ofthc insurance
required tinder Section 11.2 provided each such Sullicnant hits and inruninitis a tangible uct worth
of at icast Twenty-five Million Mints ($25,0000,000), such aniount to he adjusted every five
(5) ycasrs iri aa:ecirclarnce svitli cii togas iri rite CPI in ilia aiirrrarier at set ftarth herein. Forpurposcof
this Section 11 W, the tangible net worth rquircincin. shall be adjusted based upon the increase
ill the coulainter Price Index for then current year, -,is shown in the Consoulker Price Index
("CPI") for "All Heols — U,S. City Average - Los Angeles" over the sauna C111 for 2003 the
"Base Yem"), eomputcd as a percentage of the base figure, For example, assurning, the C111 for
the 13me Year is 110 and the CPI for the current year is 121, (lie percentage to be applied would
be 1211110 - 1.10 - I 10 percent. In ilia event that the CPf is no longer available, the
replacement index to be used shall be the one reported it) the U.S. Department of Labor's inost
comprehensive official index then in use and most nearly answering the foregoing d"crilition of
the index to be used.
S:VAMlCHTEPM3owmy\Qrovnd LcmaMwncyGiounduucO.i2-03-03.doc
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(a) "Cundernnition" means (i) ilia exercise of any governmental power in emiajejjt
dornain, whether by legal proceedings or otherwise, by is condemnor, and (ii) a voluntirrysale or
transfar to any condemnor, either under threat of condemnation or while legal proceedings for
condemnation are pending.
(b) "Date of itaking" means the date the condemnor has the light 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) "Coridemnor" means any ptr0fic or quasi -public authority, or private corporation
or individual, having On: power of condemnation.
12.02. parties' Rialits and Oblipations to Ile Governed jjy_I.,gasq
If during file Terrut of this Lease, there is any taking of all or any part of the Ground ],ease
Property, any improvements on the Ground Lease Property or any interest in this Lease by
condemnation, the rights and obligations of ilia 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. LfrvcL qtj'a_rfinrry in
If any portion of the (;round Lease Property or tire Improvements thereon is taken by
condcrraraliuo, this Lcasc shall remain in effiact as to tile portion re"laining, except that Tenant
may elect to terminate this Lease if the remaining portion of ilia Ground Lease Property is
rendered unsuitable (as defined hercin) forTenants continued use. The remaining portion of the
G iround Lease Property shall be ticerned unsuitable for Tenant's continued use if, rvIjo%N,ing a
rmmonablc aniount of reconstruction, Tenant's business on the Ground Lease Property could not
be operated at .in economically feasible level as reasonably determined by Tenant. Tenant must
exercise its right to terminate by giving lAndlord written notice of its election within nincty (90)
days allcr ilia nature and extent of the taking have been finally determined, Such notice shall
also specify ilia date of termination, which shall not be prior to the date of taking, I-'ailurc to
properly exercise the clecCion 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 12.05 below.
SNAMUCHTERNI)DmoylGround LcoseVowncyGmundLeowv9.12-C3-03.doc
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12.05. L(Lect ol"Pirfiar[pk�lnz—qn Rent
If any portion of the Ground Lease Properly 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 ;in iniouju determiried by subtracting tile Rent,
as, the case may be, attributable to that portion or the Ground Lease Property so taken at the fire
immediately prior to such taking and taking into account such things as any improvements
located 1hercon. All other obligations of the Tenant under this Lcase shall rcmain in full force
and effect.
12.06. )�VaivfLr S sjf-CCP Section 126�.130_
Each party waives the provisions of the Code or civil Procedure Section 1265.130
allowing either party to petition the � urcrior Court to terminate this 1,eissc in the event of a
partial taking of the Ground Lease Property.
12.07. Award
Awards and other payments on account of a taking, less costs, fees and expenses incurred
in the collection thereof ("Not Awards and Payments") shall be applied as follows:
(a) Net Awards and Payments received on account of as taking other than a total
taking or as Inking for temporary use shall be field and applied to pay the cost of restoration or the
Ground Lease Property and any Improvements located thereon. The balance, if any, shall bus
divided between Landlord and Tenant in the ratio, as nearly as practicable, which (i) (lie then
value of Landlonfs interest in the Ground Leasc Property (including its interest hereunder) bears
to (i) the then value of Tenant's 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 (if 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 of the restoration as
provided for herein.
(b) Not 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:
Vsl,. There shall be paid to Landlord an amount equal to the present value of all
jr—
Rent which would become due until the end of the Term if it were not for the total
taking.
S �ond: There shall be paid to any mortgagec of Tenant an aniount equal to the
sum of any unpaid principal amount of the indebtedness secured by the Ground
S.-VAM%UCHTEROowncy%Ground LourNDovmeyGroundLom9,12-03-03.doe
35
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 an the Ground Lease
Property, determined as of flic date of such taking, after deducting the amount, if
any, paid to any mortgagee of Tervaid pursuant to clause Second- Sliell
dQtermination shall be made as if the Terin shall not have terlainaied 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").
f9urth: Any remaining balance shall be paid to Landlord.
12.08. Volonliry Convevance
A voluntary conveyance by Landlord to it public: Otilily„ agency or authority tinder threat
of a taking tinder the power (if cmincin domain in lieu of formal proceedings pursonill to tile
imposition o[' governmental requirements fbr dedicinion or otherwise shall he (jectned a Inking
within the meaning of this Article 12,
12,09, Llower of Lind1prd
Tenant ackiiowledges that the original named Landlord licreunder is compriied of it
public municipal corporation and that as such, Landlord and its City Council, Boards,
Conunissions, Departments, employees, officers, agents and representatives exercise certain
police powers, taxation powers, ,aid other governmental powers Julies and authorities over the
Ground Lease Property laid are required to follow applicable provisions and requirements of tile
City Charter (if the city of Downey, the Downey Municipal Code, the California Environmental
QuOity Act (Public Resources Code § 21000 of scq,, "CFQA"). and other ordinances,
regulations, statutes an(] laws (collectively the "Entillemcni LOWN") regarding the review,
consideration, processing and approval of all entitlements and offict-miministrative or ministerial
approvals, permits, plans or actions required for the development or (fie Ground Lvase Property,
The Entitlement Laws require, among other actions, the filing or applications, payinunt or
processing Jecs, and public notice and public hearings regarding the ally crttitlenacnts and the
Ground Lease Property. Tenant acknowledges that Landlord reserves the right (without
qualification or restriction tinder any statute, law ordinance, order, todc or regulation) to
approve, conditionally approve, modify, or deny any entillemmits; and all other adjujaistrative or
ministerial approvals, pcnnits, plans or actions required for the development of the Ground
Lease property, Nothing contained in this Lease shall it] any mariner (a) limit, restrict or affect
(or constitute any fann of promise to limit, restrict or affect in tile future) in any manner the
exercise by landlord of its police powers, taxation powers or any other governmental powers,
duties and authorities under the rntiflemcrit Laws or any other statutes, laws, ordinances, or
regulations or (b) except its expressly provided to the contrary herein, create any duty or
obligation of landlord (or any other governmental body) to cooperate with or assist Tenant in
S:UAMUCNTERWo%Twy%Gmund Lc=WuwncyGmuridtemev9.12-03-03.doc
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EXHIBIT A
-37-
(tic 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 sarne 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 Lundlord*s interest in (lie (!round Lease.
ARTICLE 13.
ASSIGNMENT AND SUBLETTING
13.01. ItC igrat —
Except as otherwise provided in Section 13,02, Article 15 Ind in the cvcnt of judicial
foreclosure, Inisice's sale or deed or assignment in lieu of roreciostst, or a Lcaschold Mortgage,
Tenant and its successors and assigns shall not assign their interest in this [,case or any portion
hereof without the prior written consent of 1,andlord. Landlord's consent shall be granted upon
the terms and conditions hereinafter provided, The consent by Landlord to an assipturtent
hereunder shall not in any way be construed to refievc Tenant front obtaining the express consent
in wriling of Unullord to any further assignment. NotwAlistanding any other provision of this
Lease, Tenam shall be entitled to assign (his Lease to ally entity in ",)rich Tenant, or any armiate
offenant, has a controlling interest.
13.02. Landlord's Conwrit
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 U1 force and effect and
either no default then exists or no default will exist upon consummation of the assignment;
(b) The assignce*s finaricial condition shall tic subject to Landlord's approval, which
i e equal o care than zipproval shall not be unreasonably withheld or delayed, and slurp b q to r gr r t the
Tonatil's condition at the thm 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 easel old rf
1,Jpon the foreclosure or trustees sale or deed or assignment in lieu of foreclosure of ally
Leaschold Mortgage, the person or entity which was Tenant under this Lease prior to such sale
or deed or assignment in lieu will not Ile liable for obligations arising under this J,casc, save and
except for Real accruing prior to such sale or deed or assignment in lieu; provided that the
purchaser at such sale or tran.sferce by such deed shall be liable, for tire payment cal' call Rent
becoming due with respect to the period during which such purchaser, transferee or other
successor is the holder of the leaschold estate hereunder,
S-.11AWL1CKlTRTo,vncy\Graund Lco3eTowney0mundLeimm9.12-03-03.&c
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i "..
13.04. 5,qblcascsi_aocuLrather Pos.segsory Interests
Nothing in this Article 13 shall limit Tenant's right to Subicase all or any portion of the
(-',round Lease Property for any of the issm licroutted pursuant to the tvans 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 frorn
Landlord shall be necc."ary with respect to arty Subiease
14.01. DefixillsbO'enaW
Any of the following occurrences shall constitute a "default" under this Leme:
(a) Tenant shall at any time be delinquent in the payment of any [tent 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, Tenant shall at any time rail to keel)
and perform any of its covenants or at herein coninined other than a Monetary Default
(a "Non -monetary Default"), and should such Non-incinctotry Default continue for thirty (30)
days after written notice thereof froin Landlord to Tenant (or in the case of any Non-111011cliny
Default which results in a condition of the Ground Lease Property which is hazardous to life,
within fourteen (14) days of written notice thereof) specifying the particulars of $rich default,
provided, however, that if such Non-nionctaxy Default is of a nature that curing, such default will
take more than thirty (30) clays (or in flic case of a default hazardous to life, fouricen (14) days)
and Tenant has comincticud such cure -ovilhin the foregoing time period, Tenant sholl 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 he 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 around Lease Property or any finprovernent thereon in
violation of this Lease;
(d) The abandonment of the Ground Lease Property, or any substantial portion
thereof, for as period (if thirty (30) (lays at any one (inie after written notice: from the City
Manager calling attention to such abandonment, except when prevented by any of the carums
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 ternis and conditions of the Acquisition Parcel
Purchase Agreement which is not cured in a timely manner as set forth therein.
SAJAMUCHTUMDowney\Ground Leasc\DowncyCiroundix4m9.12-03-03.doo
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14.02. Reigadatory 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 diligemly pursues whatever action is required to
obtain release front or reversal of such process, order or decree, Compliance with the process,
order or decree shall not excuse a Monetary Default.
14.03. Landlord's Remedies
Subject to the rights or any Leaschold Morigagees permitted tinder Article 15 of this
1,case, upon the occurrence of any such default, in addition to any and all other rights or
remedies of Landlord hereunder, or by InNv or in quity provided, 1andlord shall have the sole
option to exercise the following rights and remedies:
(a) Tcrtninate this Lease by giving Tenant notice of termination (the "Termination
Notice"). On the giving of the Termination 'Notice, (i) till of Tenant's rights it) the (,,round Lease
Property and in till hilplovc1luents shall tenninate, and (ii) Tenant shalt promptly surrender and
vacate the Ground Lease Properly and all Improvement,. -object to the provisions of Article 8
herein, respecting the right of certain sublenants to remain, Landlord may reenter and take
possession of the Ground Lease Property and all improvements and eject all parties in possession
or eject sonic and not others, or eject none, Tcrtuinallon under this Section shall not relieve
Tenant from the payment of any surn then due to Landlord or from any claim for thuriages
previously accrued or then accruing against Tenant.
(b) Without terminaling this Lease, Landlord only at any time and from time to finic
refer the Ground ].case Property and improvements or any part or parts of them for the account
and in the name of Tenant or otherwise, Landlord may at Landlords election eject all persons or
eject sonic and not others, or, eject none, provided, limvevcr, that landlord shall not have tile
right to eject any Subtenant Win is not in defaull tinder its respective sublease. Landlord agrees
to execute such non -disturbance agreements with Suluenants as Tenant may from time to time
reasonably request. Any reletting may be for the remainder of the terns or for a longer or shorter
period, Landlord may execute any leases inadc under this provision either in Landlord's name or
in Teriant's name, and shall be entitled to all tents from the use, operation or occupancy of the
Ground Lease Property at 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 ofTenant tinder this Lease, plus
Landlord's expenses, less the avails of any rcletting or attornincrit, including (by way of
example), but riot limited to, rctriodcling. expenses, commissions and advertising costs. No act
Tay or, on behalf of Landlord under this provision shall constitute a termination or this i.casc
unless Landlord gives Tenant notice of tennination.
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:
SAJAMICHTEROownt340mund 1.cm%Do"cyGroundlxwcv9.12-03-03.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 %yorib al the time of the award of the amount by which the unpaid tell[ that
would have been earned after the (laic of termintifion of this Least until life time or award
cxceed% the amount of the loss of rent that Tenant proves could have been reasonably avoided;
(c) ]*lie worth at the time of the award of the amount by wvhiuh the unpaid rent for the
balance of the Term of this Lease after the time of award exceeds the atuourit of the loss of rent
that Tenant proves could have been reasonably avoided, and
(d) Any other amount neecs",ry to compensate Landlord for all detriment
proximately causcd by Teriant's default, including, without limitation, costs of recovering
possession of the Ground Lease property, expenses of relculng, (incluJing necessary repair,
renovation and allcration of the ptoperty to meet the standard required by this Lease), reasonable
attorneys' fees and any other reasonable costs.
The "worth at the time of the nward," as used in subsections (a), ((i) amd (c) of this
Secticut, is to be computed by allowing interest at the maximum rate allowed by law. "Ilse "worth
at the time of the amard," as referral to in subsection (c) of this Section. is to be computed by
discounting the amount at the discount rate or the Federal Reserve Bank of San Francisco at the
tinic of the award, plus one percent (M),
14,05. !('qnvcvancc or
On the Expitation Date. title to all Improvements located on or ,About the Ground Least
Properly shall automatically Pass to Lnndlord's, ()ce 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 life necessity of any allowance, compensation, consideration or payment
by Landlord therefor, Teirant hereby grants, releases, transfers. SM over, assigns and conveys to
I,andlord oil of its rights, title and interest in and to all such Improvements, to be effective for h1l
purposes upon any such termivation of this Least. Notwithstanding the roregoing,'renant agteeN
to execute, acknowledge and deliver to Landlord promptly following the I:xpifation Date, a
proper recordable instrument quitelaiming and releasing to Landlord any right, title and interest
of Tenant in and to tic Ground Lease Property and all Improvements remaining thereon, and
giving such further assurances of title as may be reasonably required by Landlord or its
successors, assigns or title insurers. Nothing contained in this Section, 14.05, howe'mr, shall
adversely affect any right under this Lease that Tenant may have to quict enjoyment Rod
possession or to modify the Improvements front time to time. 'Tenant shall, upon such Lease
termination or expiration, surrender and deliver the Ground Lease Property to the possession and
use of Landlord, without delay.
SMAMUCIrrERZowncyNGtound LLL%%DovmcyQmundLuPY9.12-03-03.doo
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ARTICLE 15.
-Mk, KVZOkhm]
art conanions or=.K—rMffl—fY71u wiln ruspvct to Ile GroUna Lease troperty, to enc
mortgage or assign Tenant's interest in this Lease.
15.02. MqrtgqSq,,
With respect to the Ground Lease Property, or any portion thereof, Tenant's interest in
this 1xim may only be encumbered by one or more Leasehold Mortgages as defined in Section
151U. Any assignment of Tenant's interest hereunder as security for such a mortgage, however,
shall be subject to each and all of the covenants, conditions and restrictions set forth in this
lease, and in the event of nny conflict beiween the provisions of this Lease and the provisions of
it I.caschold Mortgage or any such a,,asilpuuent, the provisions of this Lease shall control
15.03. AuthorizcdFee Not SabordintavO
Subject to the applicable provisions of this Lease, Tenant inny mortgage or otherwise
encumber TerianCs leasehold estate to an Institutional Investor (as hereinafter defined) tinder one
or more Leasehold Mortgage(s) and assign this Lease a% security for such Mortgage(s). The
Leaschold Morigage(s) shall affect only Tenant's leaschold estate and shall be subject to all of
tile terms mid provisions of this Lease, Landlord's fce interest shall not be encumbered or
subordinated, One copy of any and all Lea schold Mortgages finally executed and recorded shall
be promptly filed with Landlord.
15.04. Notice to Landlord
Provided that Tenant provides Landlord with (j) notice of any Leasehold Morigage
properly entered into hereunder, together with a true copy of such Leasehold Mortgage, the note
and all other material documents relating to such Leasehold Mortgage, and (ii) the name and
address of the Lease -hold Mortgagee, Landlord and Tenant agree (hit, 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 or
as change of address of a Leasehold Mortgagee or of an assignee of such Lcuschold Mortgage,
notice or the new name .and address shall be provided to Landlord. Tenint shall thereafter also
provide Landlord from Banc to time with at 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.
SMAMICUM.RMoy\Gmund L"uNDowney0roundLAa&M.12-03-03.doe
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a MI*
15.05. !)q&njfion%
As used in this Article 15;
(a) The term "Institutional Investor" shrill refer n) 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 leader ofsabsiaticc which lierfbrros
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 rcimiWs leaschold estate is mortgaged, conveyed. assigned or
otherwise transferred to air Institutional Investor to secure debt or other obligation.
(c) Vie term "Leasehold Mortgagee" or "Mortgagee" shall refer to a holder of a
Lenschold Mortgage Willi 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 are applicablc.
15.06, CConscol of
I JFT�M i7sl ry' I OFF5 Mirt 4?
15.07. Default Notice
Landlord, upon providing Tenant any notice of default under this Lease, shall at the same
time provide a copy of such notice to each Leasehold Mortgagee, Notice by Landlord to Tenant
shall lie deemed to have been duly given even it) the absence of notice to a Leasehold Mortgagee,
provided, howover, drat the time periods with respect to Stich Leasehold Mortgagee shall not
conimence until notice is given to such Mortgagee. I-roni andafter such notice has been given to
the Leasehold Mortgagee, such 1-caschold Mortgagee shall have the same period, aftu the giving
or mach notice upon it, for remedying tiny default (or acts or omissions which are the sulircct
matter of Stich notice) or causing the same to be remedied, as is given Tenant, alter the giving of
Stich notice to Tenant, plus in each instance, the additional periods oftune specified in Sections
15,08 and 15,09 to remedy, cornmence remedying or cause to be remedied the defaults (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 Ixaschold Mortgagee as if Tenarit
had done the same. Tenant authorizes the I.caschold Mortgagee to take any such action at Stich
Leasehold Mortgagee's option and does hereby authorize entry upon the Ground Lease Property
by the Leasehold Mortgagee for such purpose.
15.08. NI-ptieLto —Lea OqkILI-M-ortgage Lq
If any 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 my right, power or remedy with respect to any default hereunder, and shall have no
S:\JAM,L1CHTERXDowncy\Cromd Lguc\MwneyaroundLtoscv9.12-03-03.doc
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right to tcrininate this Vease unless, following the giving (it' tile notice (it oily) required by
Suction w.ot or this 'Lease anti the expiration of the period of time (if any) given Turiant to core
such default (or the act or omission which gave rise to such defitali), Landlord shall notify the
Leasebold Mortgagee of Landlord's intent to so terminate at least thirty (30) days in advance of
the proposed effective date of site)) termination if such default is capable of tieing cured by ilic
payment of money, and at least sixty (60) days in advance of the proposed ciTcetive date of such
termination if such default is not capable of being cured by the payment or Inculey. 'file
provisions of'Swicin 15.09 below shall apply if, during such thirty (30) day or sixty (60) day
termination notice period, the Leasehold Mortgagee shall:
(a) Notify Landlord of such Leasehold Mortgagee's desire to nullify such notice;
(b) Pay or cruise it) be paid all Rent and other payments then 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 sueb termination notice, and that rVin
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 Ruth, will) diligence and contilnnty, commence to comply,
with all Non-monctary Dethurts reasonably susceptible of being complied with by such,
Leaschold Mortgagee; provided, however, that in (fie event such Leaschold Mortgagee shall
Commence foreclosurc proceedings within such thirty (30) day or sixty (60) day period, ,;act)
Leaschold Mortgagee shall not be required during such period 10 cure or continence to cure any
default consisting of 'Tenant's failure to satisfy and discharge any lion, charge or encumbrance
against the Tenant's interest in this Lease or the Ground Lease Properly junior in priority it) the
lien or the niortgage held by such Leasehold Mortgagee, and provided Further that if such
IA:isehold Marigaget: is restrained by a court of competent jurisdiction or by reason of tiny law,
regulation, order or rule from proceeding to commence foreclosure proceedings, the time periods
set forth above shall be tolled (notwithstanding which, Leasehold Mortgagee shall continue to
pay all Rent due mid becoming due during the period of such toll) art(] if default is cured,
Lvaschold Morigagec may discontinue such proceedings.
Arty notice to be given by Landlord to a Leasehold Mortgagee pursuant to any provision
or this Article 15 shall be deemed properly addressed if scant to the Leasehold Mortgagee
specified in the notice referred to in Section 15.04 at the address stated in such notice unless
notice Ora change of mortgage ownership has been given to 1,andlord purstiont to Section 15.04,
15.09. Mortilaace to VorecIl"s
If Landlord shall elect to terminate this Lease by reason of any default of Tenant and the
Leasehold Mortgagee shall have proceeded in the manner provided for by Section 15.08. the
specified date for tcrilairintiort ref this Lcasc as fixed by Landlord in its Termination Notice shall
be extended for a period of six (6) months, provided that such Leasehold Morigagce shall, (]tiring
such six (6) month period:
SAJAMUCKrEloDownefflmund Lcm\DowntyGroundLtucv9.12-03-03.doc
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a�A IFA lll�
(a) Pay, or cause to be paid, all Rent and ally other monetary obligations of Tenant
under this Lease with respect to such six (6) month period ;as the same become due, and continue
its good faith efforts to perform all of Tenant's other oblitations under this Lcasw, and
(b) If not enjoined or stayed, take Steps to acquire or sell Tenants interest in this
Lease by foreclosure of the Leasehold Mortgage or other appropriate means and prosecute the
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 then leiminatc, and the time for
completion by such Leasehold Mortgage, or its proceedings shall continuo so long as such
Leaschold Mortgagee is enjoined or stayed and thereafter for so long as such Leaschold
Mortgagee proceeds to complete steps to actillirc or sell Tenant's interest in this Lease by
foreclosure of the Lcuschold 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
bwyond tile orighud term hereof; nor to require a Leasehold Mortgagee to continue such
foreclosure proceedings after the dcffioll has been cored- If the default shall be cured and the
Leaschold Morlgagcc shall discontinue such Foreclosure proceedings, this lxwsc shall cottlinue in
fill] force and effect as ifTenont had not dellaulted under this Lease.
15.10. purchase anti Salq
If the Leasehold Mortgagee is complying with Section 15.09, upon the acquisition of
Tenants 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 encurnbraricc 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 or the terms or this Lease), this Lease shalf continue
in full force wind elTect as if Tenant had not defaulted under this Lease. The purchaser at any sale
of this Lease and of the leasehold estate hereby created in any proceedings for the lbreclosurc or
any Ixaschold Mortgage, including such leasehold Mmigai;Le, or the transferee under ally
instrument of assignment or transfer in lieu of the foreclosure of the t-e-aschold Mortgage shall be
deemed to have agreed to perforin all of the terms, covenants and conditions oil the part of the
'Tenant to be performed hereunder from and after the date of such purchase and assignment.
15.11 Mortimace'slose toSell
,
If the leasehold estate hereunder shall be acquired pursuant to foreclosure, nssignoleni in
lieu of foreclosure or outer proceedings, such transferee, upon acquiring Tenant's leasehold
estatc, may sell and assign the leaschold estate on %tell terms and to such persons and
organisations as are acceptable to such in, nsferce. The purchaser at such sale or the lransrerce
by such assignment and its successors as holders of the Ica-sabold estate hereunder shall not be
liable for tile 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 ill
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.,UAMUCWM-RWovmey)Ground txmU)McyOmundLessev9.12-03-03.dor,
44
am
the payment of all Rent becoming due with respect to the period during which such purchaser,
transteree or other successor k- the holder of the leasehold eslatc hereunder.
ARTICLE 15A.
REPRESENTATIONS, WARRANTIES
15A,01)Kcprcscn1ations. NVarranfics and ovenja s by awLitIdt
Effective as of the Commencement Date, Landlord hereby represents, warrants and
covcnians to Tenant, and acknowledges that Tenant is relying upon such representations,
warimmics: and cove rionts in leasing the Ground Lease Property, as follows:
(a) j,,a!jgqrd q�&%Aik tj. Landlord is a puOlic body, corporate and politic,
exercising governmental functions and Powers and organized and existing under the laws of the
State ofCalifornia and is fully authorized to execute this Lease and to fulfill its obligations as set
forth herein,
(b) LcasqN. Other than the allretmenis with NASA (listed on Exhibit "K"),
Landlord is unaware if goy leases or agreements affecting the Ground Lease Property or any
parties in possession other than related to the studio operations,
(c) Adverse CloirrLs. As of the C'onunencement Date, LAindlard is unawarc of
any pending or threatened claims with respect to the Ground Lease Property that ®mould have any
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 tic Ground Lease Property caused by
operations tit 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 Viointiop of The execution of this Lease does not
constitute a breach or violation of any other agreement to which Landlord is a patty,
(e) Lifiggli ci, As of the Commencement Date, there is no litigation, dispute,
action or clixim, against any person, whether pending or threatened, which may have a Material
adverse effect on the Ground Lease Property.
(t) j-,nyjMiAj),jenud InSurqtIc—c. Landlord shall cooperate with Tenant and use
its tvst efforts to cause Tentan and any present or future lender of Tenant to be added as
additional narned insureds on any environmental insurance policies arranged by Landlord and
HUD with respect to the NASA Site.
(g) Best Efforts. Subject to applicable federal, state and local laws, statutes
mid regulations, Landlord will exercise good faith and use its best effort% to (i) process oil .1
timely basis the City Entitlements required for Teriant's intended development of the Ground
Ixase Property, anti (6) assist Tenant in obtaining the other project approvals required by Tenant
&VAMUCHWIVIDownaMround LzucU)o"rjOmundLeasay9.12-03-03.doe
45
from other governmental agencies or third parties for Tenant's intended development of the
Ground Lease Property,
(h) infrastructure Other than as set forth in Sections 11.2.2 and
1123 of the Acquisition Parcel Purchase Agreement, Landlord acknowledges that Tenant is not
required to install, pay for, or reimburse Landlord for, any other an -site or off -site infixasinicture
improvenicnis in connection with Tenom's use of the Ground Lease Property as an intimproved
studio production facility/back-lot, exclutiing sets and temporary structures.
W LfTectivencss of Represetita ' timm Warimities and Covenants. The
reprewntations, warranties ;and covenants of Landlord contained herein shall be accu;atc'and true
in all material respects on the Commencement Date and shall, except as otherwise provided
above, continue through the Lease Term.
15A,02R -y `Lenant
Effective as of the Commencement Date, Tenant hereby represents, warr ants and
covenants to Landlord. and acknowledgcs that Landlord is relying upon such representations,
Nvarrantic.s and covenants in leasing the Ground Lease Property, as follows:
(n) J,, ,!q Pi ients:. Tenant has no( paid or given, land will not pay or give, arty
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 architccis, engineers and
attorneys.
(b) AuthqtiLty. Tenant is a limited liability company disly organized, qualified
and validly existing and in good standing under the laws of the State of Nevada, is duty qualified
to do business and in good standing under the laws of each other jui-Miction 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 cam on its business, as now
and whenever conducted, and to enter into and perform its obligations under this Lease,
(c) ),awful Overation. Tenant will obtain all licenses, permits, consents and
approvals required by all applicable gave rental authorities to own, operate and develop the
Ground Lease Property.
(d) tAki-ation and ComQl�iaqncc. To Tenant's knowledge, as of the
Commencement Onto there are no suits, other proccedings or investigations pending or
threatened against, or affecting the brisiness or the properties of Tenant which, if determined
adversely to Tenant, would have a materially adverse affect on the financial condition of Tcnmit,
nor is Tenant in violation of any laws or ordinances which would result in a material adverse
affect on the financial condition of Tenant.
(u) Proiect Compliance. 'Me construction and completion of any or all of tile
improvements to be constructed on the Ground Lease Property will: (i) comply with all
applicable governmental restrictions, including, without limitation, compliance with all laws and
S:VAWL[CWMR\Downty\Gmund L4m\Downey0roundLMCV9.12-03-03.doo
46
ordinances necessary to pen -nit development as permitted by this Lease; (ii) will be entirely on
the Ground !.,sass: Property; and (iii) will not violate any enforceable use, easement, license,
covenant, condition or restriction.
(0 L�Ileclivcncii of Renrewntations. Warranties and Covenaills, IU
representations, warranties and covenant$ of Tenant contained herein shall be accurate and true
in all material respects an the Commencement Date and, except as otherwise provided above,
shall continue through the Lease Tem.
15.A03 '—fitiq to the Ground Lease Pronvrtv
—
Landlord hereby agrees to provide Tenant with an ALTA Icasehold policy of title
insurance (thc "Leaschold Policy") in the face amount al' S7,840,000 showing title to the
Ground Lease Property vested of record in City subjoet only to the exceptions to title approved
by Tenant, Landlord and Tenant shall equally share the cost (If the Leaschold Policy,
lid I MIJ D9 R W.110, I
16.01. Liol4nigOver
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 expitation shall slot 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 Lcase 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 Term, 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 heroin
contained, except that the monthly Rent, which shall be payable in advance, shall be one hundred
fifty percent (I 5011/o) of an amount equal to the greater of (i) the their fair market monthly rent for
the Orround Lease property, as reasonably determined by Landlord, or (ii) the monthly Rent
payable by Tenant for the last full calendar month of the Term, increased to reflect any increases
in ilia CPI from the Commencement Date through the Expiration Date, If Tenant fails to
surrender the Ground Lease Property upon Ote expiration or sooner termination of this Lease,
Tenant shall indemnify, defend and hold Landlord harmless from and against any and all Claims,
Dronages and Expenses resulting from such holder, including, withmit limitation, any claims,
made by any succeeding (cruint founded on or resulting train such failure to surtcrider, and
Landlord shall be entitled to the benefit of all provisions of law respecting summary recovery of
possession to the same extent as if such statutory or other notice had been given,
16.02. AtLomm's —Fccs
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
SMAMUCHTEMDowncyNGrowd le=\DowncyCcoundlAnnO.12-03-03.doo
47
shall be entitled to recover, and the other party agrees to pay all fees and costs to be fixed by the
court therein including, but not limited to, reasonable attorneys' fees.
16.03. QqLqt session
J�
Landlord agrees That Tenant, so long as Tenant is not in default under this Lease and is
paying the rent and lictronning the covenants and conditions of this Lease, shall quictly tinve,
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 Commencement Date, there are no existing tenancies
on the Ground Lease Property.
16.04. Lprqjjp jcure
Except as to the payment of Yen[ or other nionciary scans due hereunder. neither of the
parties hereto shall be cliargcable with, liable for, or responsible to, the other for anything or in
any amount, and performance hereunder by either party shall nut be deemed to be it) default fair
any delay caused by fire, cartliquakc, explosion, Flood, hurricanc, the elcineins, acts of God or
the public cricrny, 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 (lie control of such parties mid any delay dia: to said
causes or any or 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 addrcsscd to the respective party as let
forth below and may be personally served, sent by ficsimile, or sent by a nationally recognized
ovemigbt courier or by U& Mail, first class, addressed as follows:
Landlord: City Hall
City of Downey
11111 Brookshire Avenue
Downey, California 90241
Attention: City Manager
Fax: (562) 923-6388
With copy to: Oliver, Vose, Sandifer, Murphy & Lee
281 S. Figueroa Street
Los Angeles, California 90012
Attention: Casey S. Vose, Esq.
Fax: (213) 621-2211
S:vJAWUCHTLrR\MwneYa:hoand LcodDowney(3mundlcaicv9.12-03-03-doo
46
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 Blvd., Suite I 100
Los Angeles, California 90064
Attention: John A. Mase, Esq.
Fax: (310) 473-8702
Any party may change their notice address and/or racsilinle number by giving written
notice thereof in accordance with this Section. All notices hereunder shall be deerned given: (1)
if served in person, when servcd-, (2) if seat by facsirni1c, on the date or transmission if before
6:00 Imm P,S.T.; provided ffint a hard copy of such notice is also sent by either a nationally
recognized overnight courier or by US, Mail, first class-, (3) if by ovemight courier, by a
nb6onnI)y recognized courier which bass a system of providing evidence of delivery, on the first
business day after delivery to the courier; or (4) if by UX Mail, on the third day afier deposit in
the mail, postage prepaid, certified mail, return receipt requested.
16.06. �grvrctLqf L'tqqu%q
If Tenant or any successor in interest of Tenant is not a resident of the State of California,
or is sin limited liability company or partnership without a member or partner resident of
California, or is a foreign corporation not registered to do business in the state or California,
Teriant shall file with the Undfard the name said address of a natural person Or entity qualified to
do business in the State of California as its dilly authoe=d agent of Tenant ffir the service of
process in any court action between Tenant anti Landlord, arising out of or baud upon this
I.cusc, and the delivery to such agent of writtco notice or a copy of any process in such action
shall constitute a valid service upon Tenant.
If for any reason service of stick written notice or or such procm% upon such agent is not
possible, then Tenant may be personally icrved with such written notice or process in or outside
of The Strite of Califirmia and such servicc shall constitute valid service upon Tenant, It is further
expressly agreed that Tenant is amenable to such process and submits to the Jurisdiction of the
court of the Slate of California and waives any and all objections and protests thereto. '111is
Lease shall be subject to the: application of the internal laws of Calilbmia and not California's
Conflict of Laws with respect to issues which arise hereunder.
Any waiver by Landlord or Tenant of any brcach of any one or more of (lie covenants,
conditions, terms and agreements or this [.case shall not be construed to be n waiver of any
subsequent or other breach of the sAnic or of any other covenant, condition, term or agreement of
lhis Uasc, nor shall failure on the part of Landlord or Tenant to require exact, flill and complete
S-.'UAM%L1CKrERU3owncyTaoand EtenDown cyGroundLzaw4.f2-03-03.doe
44
compliance Willi njiys of file covell"Ints, Conditions, lerols and agreements of this Lease be
construed as in any manner changing the terms hereof or estOPping the Otter party from
enforcing the fall provisions hereof, nor shall the terms ofthis Lease be changed or altered in any
manner wha0wever other than by xvrincn agreement of Landlord and Tenant. No dclu)% rioijure
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 real then or
thcreafier accrued shall impair any such right, power, privilege or option to be construed as a
wiriver of or acquiescence in such dchadt or as a relinquishment of any right. No notice to
Tenant shall be required to restore or revive "time of the essence" after file waiver by Litnollord or
any default. No option, right, pmvcr, remedy or privilege of Landlord shall be construed as
being exhausted by the exercise thereof in otic or more instance.
16.08 Surrender
The voluntary or other surrender of' this Lcasc by Tenant, or a Inutual cancellation
thereof, shall not work a merger, barn shall terminate all or any existing subleases unless the
sublessee has been formally penniticol by the Landlord or the Landlord expressly elects to treat
Such sui-randcr or canccllalion as anassigninicnii to Landlord of airy or all such subleascs,
SUbjCCl 10 the restrictions Set forth herein regarding assignment or the icaschoid estate,
each of the terms, covenants and conditions of this Lease shall extend to and Liss binding oil and
shall inure to the benefit of not only Landlord mid Tenant, but to each of their respective heirs,
administrators, executors, successors and assigns, Whenever in this Lease referenda is made to
either Landlord or Tenant, the reference shall be deemed to include, whercver applicable, the
heirs, administrators, executors, successors and assigns of such parties, the same as if in every
case expressed.
16.10 Authori
F ' ach individual executing this Lease on behalf of I.andford or Tenant represents and
warrants that he or she is duty authorized to execute and deliver the Lease of) behalf of such
party, and that this Lease is binding upon such party in accordance with its terms,
Landlord and its author vtol representatives shall have the right to enter the Ground Lease
Property at all reasonable times, idler giving Tenant three (3) business days prior written notice,
for any of the following purposcs: to determine whclhcr Tenant is complying will) 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 sale" signs oil any time during the term, so long is 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 pirrispectivc brokers, agcnts, buyers,
tenants or persons interested in an culninge, at any time during the terns„ and to do any act or
SMAMUCHTERVowneXro-d L—\Dowr"ComrvdLenev9.12-03-03.4m
50
am
thing necessary for the safety or preservation of the Ground Lease Property if any excavation or
other construction is undertaken or is about to be undertaken on any adjacent property or nearby
street.
Landlord shall use its best efforts to not to interfere with the operations of Tenant, or any
Subtenant or Occupant of the Ground Lease Property and, subject to the foregoing, Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss of business, nuisance,
or other damage arising out of Landlord's entry on the Ground Lease Property as provided in this
Section.
16.12. —Di%lainier of Partnershita
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 Tentart or to joint venturer with Temou in the conduct ofTcnant's business or otherwise. This
Leise 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. Memorandum
Upon the request of either party, Landlord and Tenant shall execute a montorandurn of
this Lease or any amendment or modification thereof for recordation in the official records of
Los Angeles County, California.
16.14. Ouitclairn
At the expiration or earlier termination of this ],case, 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 my reputable title company to remove the
cloud of this Lease from the real property subject to this Wise.
16.15. [Intentionally Deleted]
16.16. (Intentionally Deleted]
16.17. [Intentionally Deleted]
16,18. [Intentionally Deleted]
16.19, LnLcM�Ctafion
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!\1AM%1CHnR\DoWncy%C=md LemkDowncyGmund-9-12-03-03-60C
51
im
16.20. Covenants and Qm&tions
Each term and each provision, including, without limitation, the obligation for the
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,
This Lease, together with the exhibits and documents incorporated by reference,
constitutes the entire agreement lictwecii the parties concerning the Ground Lease property and
there are no conditions, representations or agreements regarding the niallers covered by this
Lease whicl,) are not expressed herein. No person, firm or corporation has at any time find any
authority from Landlord or Tenant to snake tiny representations or promises on behalf of such
party, and Tannin and Landlord each expressly agrees that if any such represcotat ions or
promises have been made by the other party or others, Tenant or Landlord, as the case may be,
waives all right to rely thereon, No verbal agreement (it implied covennin, shall be held to vary
these provisions.
16,22, E--mt ,�nqLCcWrvnc
jA-,—
If upon any sale, assignimrit, or hypothecation of the Ground Lease Properly by 1-4tridlord
,,in offset statement shall be required from Tenant, Tenant agrecs to deliver, within ten (10) days
after written request therefore by Landlord, a statement addressed to any such proposed
mortgagee or purchaser, or to Landlord, in a rorin reasonably requested by Landlord.,; mortgagee
or ptirchaser, certifying that this Lease is unniodificd and is in hill force and effect (if stith be the
case), certifying the Commencement Date and the Expiration Datc, certifying that there has been
no assignment of this Lease and that there are no defenses or offers herclo (or slating those
claimed by Tenant) and containing such other information as may reasonably be requested by ilia
party to whom such certificate is addressed. In the event Tcnani fails to deliver such offset
statement to Landlord within ilia 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 off'scis, against Landlord.
1623 jpiallord's Rialit to Sell
Landlord shall have the right to sell its fict: estate in the Ground Lease Property and assign
its interest in this Lease without limitation; provided, however, that any such sale or assignment
shall be ,;object to this Lease and Landlord shall first cxerrdsc 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 tinder this [.case other than those obligations which acented prior to
the date of such conveyance.
16,24. intentictindiv Qj�lcjqd
SMAMUCHTERWowncyWround LcmDowney0roundLcanv9.12-03-03.dK
52
Wherever a consent or approval is required by a party under this Lease, such consent or
approval shall not be unreasonably withheld, conditioned or delayed, except where such consent
or approval is in the sole discretion of such party. No consent or approval shall be unreasonably
delayed.
[Signatures on the following page]
S.VMd%LKIMPUXY*wj4mnd Le&wNDown*O*undLmwA.I2-M3.dw
53
EXHIBIT B
A,NIP,N[)MFNI**I'OA(.Iti:ENID,N"I'S IN GROUND LEASE
This Amendment to Agreements in Ground Lease (this "Lease Amendment") is
made as of this 151h day of March, 2012, by and betwecriTIM CITY OF DOWNE'Y, as municipal
corporation of the State of California ("Landlord") and PCCP IRG DOVvNEY, LLC, 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 "Tenant").
A. Landlord and Industrial Realty Group, LLC, a Nevada limited liability
company ("Original Tenant") (as landlord and tenant, respectively) entered into a Ground
Lease, dated on or about December 4, 2003 (the "Existing 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 Existing Ground Lease is attached hereto as Exhibit "A" and incorporated herein by
reference.
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
amend some of the rights and obligations specified in the Existing Ground Lease, all subject and
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 and
sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to amend,
modify and/or supplement the Existing Ground Lease as of the Amendment Effective Date as
follows:
- 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"). The 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.
6207A41186170 - I - 3/13/2012
m
2. Term. Notwithstanding 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 "Initial Expiration Date"),
3. T"xistine (;round Lease. Reciial 11, Recital H to the Existing Ground
Lease is amended to read in M as follows:
"M Tenant's proposed future development of the Property involves the demolition of
some of the existing improvements located thereon and the construction of retail
buddinp,v, office buildings, medical office buildings, parking structures and any other
uses permitted pursuant to the 'Entitlements" (as hereinafter defined) (the "Project').
Developer has, is or will be processing all discretionary governmental planning, land
use, zoning, development and environmental permits, plans, and approvals which are
required for the development, use and operation of the Properly (the "Entitlements').
The Entitlements include (but are not limited to) the following non-e-Vhauslive list Of
discretionary government approvals for the devetopment of the Ground Lease Properly
that do or may exist (the "City Entillements').
(i) Amending the Downey Landing Specific Plan, dated January 24, 2012,
which includes design guidelines (the "Specific Plan'); and
(H) 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 lite Properly area (the
"Construction Approvals').
Tenant acknowledges that the Entitlements may include (and the Ground Lease Properly is
subject to) required regulatory approvals and permits from government agencies other than the
City of Downey. "
4. Clarification on Converted Base RenCApplLicabilit -: If Tenant develops
parking for a large format retail sture pursuant to and subject to Section 3.8 of that certain Tierra
Luna Development Agreement by and between the City of Downey and Tenant, then the
development of that parking area shall not constitute a "conversion" of the use of the Ground
Lease Property wiQiin the meaning of the first paragraph of Section 3.02 of the Ground Lease;
provided, however, that immediately upon the Use Of 01 Or any portion of that parking area to
support converted uses on the Ground Lease Property, the parking area shall be deemed
"Convcrted 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 102 of the Ground Lease.
5, Counterini-ts. 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.
62074A 1 186M3 - 2 - 30U2012
IN WITNESS WHEREOF, the parties hereto have executed this Lease Amendment the
date and year first above written.
MWNTI1TEITITE6
CITY OF DOWNEY,
a Muni 'pal corporalion of the State of California
'on
fir
Narne;
Its: ra
o7qu-TUR
I . 0 a
I M VIA K VIT i , �tt-a III III kt I a I r. 111141AA%tal I), rl IP
By: PCQ1 LB TRG Downey, LLC,
its N t:nn xing Member
Name.
Title: A -Pun 'N t"811"m
Ulfi��
By: S.L. Properlics, Inc
By:
Namc:
Title:
6207441186170 -3- MY2012
1i.1411 ".1.11
I I
62074WL18617v3 _ 4 _ U13/2012
i i'
EXHIBIT C
SECIFITI) AMENDMENT TO EXISTING GROUND LEASE
SEC*0ND AMENDIVIENTI-0 AGUFNIRWIN IN GROUND LEANE
This Second Amendment to Agreements in Ground Lease (this "Second
Amendment") is madc as of thNt3_ day ol'6e0-e4v)bq.. 2017® by and between 1111' CITY
OF DOWNEY, a municipal corporation of the Stlate of California ("Landlord") and PUT IRG
DOWNI`.Y. LLC, a Delaware limited liability company. as to an undivided 90% interest, and
ljkG DOWNIiY. 11C, a Cnlifornut linuted liability company. as to no undivided 10% interest
(collectively "Tenant").
FUT94wil"
A. Landlord and Industrial Realty Group, LLC, a Nevada limited liability
company ("OriginulTentuit") entered into a (!round I.case. dated on or about December 4. 2001
(the "Existing Ground Lease"), purstaint, to which Landlord levsed to Originni Tenant ecrtain
real property described therein (the "Property") that was f6rinerly a part of* the NASA Industrial
Plant in Downey, California, A true and correct, copy of the Fxisting (iround Lease 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 beowvccn CITY OF DOWNEY and PCCII IRG DOWNFY, 11C, as Dclawarc
limited liability company, as to an undivided 90% interest, and 1110 DOWNFY, 11C, a
Califortlia limited liability company, as to an undivided 10% interest, doled 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 Development
Agreement contain various ongoing rights and obligations.
I E. All capitalized terms used herein but not herein 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
amcnd sonic of the rights and obligations specified in the Existing (,!round Wise and First
Anictidnient, all subject and pursuant to the tennis and conditions set faith in this ScCond
Aincridnient blow, The Existing Ground Lease, as antended by the first Amendment and this
Second Amendment, is hereinafter referred to as the "Lease."
Attachment "B"
EXHIBIT c
-2.
SIMMM
1. Effective Date, The effective date of this Second Amendment shall he the
date upon which Landlord and Tenant have each executed and delivered an executed counterpart
of this Second Amendment to the other (the "Second Amendment Effective (Date"). The
Second Amendment Effective Date will be rowed 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.
2. Term: Notwithstanding Section 2.01 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 Second
Amendment Effective Date (the "Amended Expimfion Date").
3. Q.Vlion _14qE'x(cqd: Section 2.03 of the Existing Ground Lease states that the
Lease shall be subject to an early termination if the Tenant fails to convert any portion of the
Ground Lease Property to a use permitted by the Specific Plan by the Early Toninination Date.
Landlord and Tenant hereby agree that Tenant shall have the sole and exclusive option to extend
the Early Termination Date by three (3) yews to April 30,2022 ("Amended Early Termination
Date"), to allow Tenant additional time to satisfy its obligations. To exercise this option, Tenant
shall provide written notice to Landlord of Tcnanfs intent to extend the Early Termination Date
on or before January 31, 2019 ("Termination Extension Date"). If Tenant fails to provide
written notice to Landlord by the Termination Extension Date, this Lease will expire on the Early
Termination Date.
4, mended I'luiv -LonknalLu—n: Notwithstanding Section 2.01 of the Existing
Ground Lease (as amended above in Section 2 of this Second Amendment) to the contrary, if
Tenant exercises the extension option provided above in Section 3 of this Second Amendment,
but 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),
then the Least shall tenninatc on the Amended Early Termination Date.
S. KJ)qi-vs-r-s"*q -. 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
Commencement Date and the Early Termination Date, and that any portion of the Ground Lease
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
#54151 025O
194442-00 A-11-114.0 -2-
EXHIBIT c
-3-
6, 11AILd 1)q -tQjjij)Lqjjj: Tenant shall set aside approximately 3 acres of the
-yL—
Ground I-cim Property for the Hotel Ocvcloptnant defined in Section 1,43 of the Development
Agreement (I'llotel Development Site"), Landlord and Tornot agree that the set-asidc acreage
shall only be developed 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 tancndcd).
Landlord and Tenant agree that the Hotel Development shall not proceed until Tenant an((
Landlord makes a doon-nination, based on Tenant's review of any and nil relevant market forces,
that construction of the I lotel Development is a reasonably prudent business decision. '17he
obligations of this Section 6 shall remain in effect following, and shall survive, the tormination
of this Lease, unless and until Landlord agrees in writing (tint smother use stay he developed air
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. Nglice: 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 LLP
600 West Broadway, 27th Floor
San Diego, Califomia 92101
Attn: Heather S. Riley
Fax: (619) 233-1158
8. Cooncralion: Notwithstanding Section 16.12 of the Existing Ground lcase,
Landlord and Tenant agree to work cooperatively in a commercially reasonable way to ensure
that the terms of the Lease are fulanceable by as third party construction lender.
9. CpjLnWw—prtq, 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 some insaument
10. QeY-c—nwg_-1A—Nv, This Second Amendment is made under and shall be
construed pursuant to the laws of the State of California.
AI —117 1 A 11' 1 LIE ri � 1 1, 1
A91VU0, l"3111y,11.11 11 ff 2MOUIUM
RSUSIMISD
194442-OOW218-24. 1 WNW -3.
EXHIBIT c
-4-
IN WITNESS WHEREOF, Landlord and Tcnant hereto have executed this Second
Amendment the date and year first above writtcn.
Approved as to Form:
e M, Abi h G.1'r I
Attoruey
CITY OF DOI.
Me 7
WIRMN6
By: PCCP LB IRG Downey, LLC,
-1Its Inaving Mcniller
4i0yura—
Name: —
hs� Authorized Signatory
"TEN."T"
IRG DOWNEY, LLC,
a California limited liability company
By-, IRG III, LLC
By; S.L. Properties, Inc.
By:-
Nasllc:
Its:
B34 IS I OMD
1 94442 -OD00219-11-17AW 4
CAUFORNIA ALL-PURPO$a ACKNOWLSOOMEWr CIVIL CODE § 1189
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 atlachacl, and not the truithfulnen, accuracy, or 4WAY of that dMonerit. I
State of California
I id
County of
On A tic y 9A4 A b 11'e-
before me,
Title
Date Here Insert Name and Title o the Officer
personally appeared
Name $o of Signevro
who provod to me on the baws of satisfactory evidence to be the poosoiq4j whose nanie()i Islak-
siobsc6bed to the vvithlin in0unient and acknowlodged to mo that holsbQlthay executed the some In
140%&Ahrir nuffiritized rapa6lyin;)Q, and That by hisnwMhtir sigoatuie(K) on the instrument the person(t),
or the entity upon behalf of whtch the perMA) noted, executed the onntfumenL
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
Is true and correct.
RE8E(XA ANN GUERRERO WITNESS my hat and official seal.
Corivoloods" 0 2112736
dra Nowifiloutou " California
Lee Aniiptn courtly Signature
Jon I % M 9 Slignaturne of Notary Public
Place Notary Sea/ Above
OMONAL
Though this section is optional, completing this information can dater alteration of OWAM6-ment or
fraudulent reattachment of this form to an unintended doConjonr.
Devecirliption of A Document
Title or Type of Document:
Document Date: Number 0 Pages:F)
Signer(s) Other Than Named Above:
Capacky(les) Claimed by Signer(a)
Signor's Narne7 Signer's Namw
0 Corporate Officer — Tltia(s): U Corporate Officer — fitle(s):
Cl Partner - n Limited U (jedb,at Q Partner — U limited Ll General
0 Individual 0 Aqjo- ?"'V In Fact Fl Individual 0 Attorney In Fact
U Trustee ieChlardian or Conservator D Trustee 0 Guardian or Conservator
0 Other. I-,- U Other -
Signer Is onting, Signer Is Representing:
02016 National Notary Assoclailon - www.Nationa[Natary.org - 1-BOD-US NOTARY (1-800-87MB27) ltem#5907
IN WITNESS WHEREOF, Landlord and Tenant hereto have executed this Second
Amendment the date and year first above written.
CITY OF DOWNEY,
ii
10414) is I "Its wilwal
ry DR MT-'.TZ-1 Fr. )HrT.1 Fm'111i Quo
- : I-, oil . 11
I coy) P. M 77r�l �1 r7il',T�
Attest: By:.
Name:
Its:
Maria Alicia Duarte. CKC
Interim City Clerk
"TENANT"
Approved as to Form: IRG DOWNEY, LLC,
a California limited liability company
By: IRG 111, LLC
Yvette M. Abich Garcia
City Attorney 13 : S.L. Properties, Inc,
By:
Name:__, v-, Wk,(P_
854151.MD
194442-000021&11-1 7AW/ -4-
EXHIBIT c
-7-
CALWORNIIA ALL-PURPOGE ACKNOWLEDGMENT CML CODE 6 1189
A notairy pubilo or other officer completing this oartillcate verifies only the Idenilly of the individual who signed the
documeM to which this cartflode Is attyhad. and not the truthfulness, accuracy, or valldity of that docurnert.
state of callifortsin
County Ulf 61W
before me, rr*V x
Alp eG
Date Here Insert Name and 77fle of the Officer
personally appeared Fun a4da A r-Z,
5Wo0Q of Signetiv
I certify under PENALTY OF PERJURY under the laws
of the State of Callfamia that the foregoing paragraph
Is true and �rrect.
Rf0tCCA ANN GU=ffifflO WITNESS my hand t d M let seal
C&nftb" 0 2112?36
FAIN: - California
Lee AWks Coo* Signature
Si gnature of Notary Pub#c
Place Notary Seal Above
OPTIONAL
Though this section Is optl completing this information can deter alteration of the
fraudulent reattachment of this form to an unintended documaint.
Denrliation of Attached Dmurnervit
TMe or Type of Docurnerit:
Document Date'
4� be, of Page■
s;
Sign") Other Than Named Above:
Capacity(les) Claimed by Sip a)
Signer's Namia: Signer's Name:
I Corporate Officer — Title(s); J Corporate Officer — Tiile(s):
LJ Partner — 17) Limited . I G r, n Partner — LJ UmItod j i General
n o
• Individual 0 AttomqW, Fact (J Indivicluit! Li Attomey In Fact
• Trustee 11 Upadjan or Conservator U Trustee LJ Guardian or Conservator
• Other_ __'_ �__ F1 Other:
Signer Is Hoprewnting: Signer Is Representing:
02016 National Notary AssoclidlDn - www.Nat!DnWNalary.org - I-W-US NOTARY (1-80D-670-6527) Hem 45907
EXHIBIT D
rr
i
I• : I i ;, 0 1 . 0
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DOWNEY
APPROVING A SECOND AMENDMENT TO THE TIERRA LUNA
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DOWNEY, PCCP
IRG DOWNEY, LLC., IRG DOWNEY, LLC., AND US V1 DOWNEY TO AMEND
THE TERM OF THE AGREEMENT
WHEREAS, on November 30, 2003, the City of Downey ("diy) sold thefiroperty now
known as the Promenade at Downey shopping center to PCCP IRG Downey, LLC, and IRG
Downey, LLC (collectively 'Developer); and,
WHEREAS, on March 15, 2012 the City and the Developer entered into the Tierra Lung'
Development Agreement for the Promenade at Downey shopping center, which is attached
hereto as Exhibit "N'and incorporated herein by reference; and,
WHEREAS, on August 2, 2017 the Manning Commission recommended a first
amendment to the Tierra Luna Development Agreement, which was approved by the City
Council on August 22,2017 which Is attached hereto as Exhibit "B" and incorporated herein by
reference; and,
WHEREAS, on September 20, 2018 the Developer sold tile property to US VI Downey,
LLG ('Now Owner") and entered into an Operating Agreement will) the New Owner to
Bellflower Boulevard; and,
WHEREAS, (lie City, the Developer, and New Owner now wish to enter into a second
attached hereto as Exhibit "C" and incorporated herein by reference; and,
WHEREAS, the Planning Commission held a duly noticed public hearing on February 6,
2019. aTd—,&1ar fultv coz%ldariin *It vrat 7;k1'V writh1wr Mqfillj IV -wki ftnfn nrie rg1&4,TQ zffwsJ M
N.01's
MORMONISM 110MI, ma US
IRG Downey, LLC., and US VI DOWNEY, LLC.: and,
WHEREAS, the City Council hold a duly noticed public hearino on March 20, 2019, to
fully consider all oral and written testimony and facts and opinions regarding the Second
Amendment to the Tierra Luna Development Agreement; and,
WHEREAS,the City Council finds, determines and declares the environmental impact of
the proposed project has been reviewed and has been found to be in compliance with the
Cafif# rxi-2 E*vIr*xmvjt?I *uality Act (CE#A) zhi is-c-2tvStrically ex;mpt frtxi M,- kkl�, �ursyzNl
to Guideline Section No. 15301 (Class 1, Existing Facilities); and,
WHEREAS, having considered all of the oral and written eviderice.presented to it at said
public hearing, the City Council further finds, determines and declares that:
I , The requested amendment to the Tierra Luna Development Agreement is consistent
with the City's adopted General Plan, The subject site has a General Plan Land Use
Designation of Mixed Use, which is Intended to provide a variety of uses (retail, office,
restaurant, entertainment) within close proximity to each other. Amending the Tierra
Luna Development Agreement achieves this goal by allowing the continual' growth of the
Promenade at Downey shopping center, and adjacent vacant 20 acres, This
i"
i0xiitw a
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.
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 3. The City Clerk shall certify the adoption of this Ordinance and cause the
same to be published in the manner prescribed by law.
APPROVED AND ADOPTED this gth day of April, 2019.
10
ATTEST:
- �-—a6ICAIA �DUARTE, Q��
City Clark
W-S Walm-m
-if April, 2019, by the following vote, to wit:
AYES; Council Members: Ashton, Frometa, Saab, Pacheco
NOES: Council Member. None.
ABSENT: Council Member None.
ABSTAIN: Council Member., Mayor R6driguaz
ROW
'-al�LICIA sDURT4,C
City Clark
am
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20120688430
Recorde4fFlIed In Officlat Records
Recorders Office. Los Am9eks Cou
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041201112 AT 08:00AM
Fri
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ORASJOITSEFIM UPOW"ItE.
RECORDING REQUESTED BY
AND WMW RECORDED MAIL TO:
CITYOFDOWNEY
I I I I I Brookshire
Downey, CA 90241
Attn: City Cleric
MM
(Space Above Ibis Lin is for Recordeet use o*)
IM19 Development Agreement 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
Gov eirnment Code § 27383.
TIERRALUNA.
DEVELOPKENT AGREEM[ENT
by and between
MY OF DOWNEY
and
:PC CP IRG DOWNEY, LLCV
a DdawM* limited liability company, as to an undivided 90% iutorci4
and IRG DOWNEY, LLC,
a Califomin Musited liability company, as to an undivided 10% interest
am
M
Ra*10111rt 111 1111 1110,111
TAB Lk OF CONTrAIS
V M.
2. Tf"-- .. I I ......... -- ...... .......
2.1 Term ............................................................ ..... . ......
2.1.1 Term without Enhanced Project Election ............... ......... .............
2.1.2 Tenn with Enhanced Project Election ..................... ......................... .. .
2.2 Provisions Surviving Expiration of Term ............................ —a .............. . ..............
3. DEVELOPMENT OF 11-113 PROPERTY—.— ..... ...... ---- .... -- ... .......... -- It
3.1
Applicable Regulations; Vcstcd Right to Develop ........... .... ---- .. . .... -- ...... 11
3,2
Tentative Subdivision ...... - .............. -- . . ......... ....... ....... —'-- ... 12
33
Processing of Applications and Permits ........................................................... 12
3.4
Other Governmental Permits .................. -- ... ... .... . . ....... ............. ........ 12
3.5
Subsequent General Plan Amendments and Zone Changes ............................... 12
3.6
Timing of Development ................................ 11-11.11-1- .... .... - ... —..11.-1.--1-- 13
3.7
Reservations of Authority ............... . .................... ......................... . .................. 13
Consistent Ptaurc City Regulations........ ........ ................ . ..................... 13
3.7,2 Overriding State and Federal Laws and Regulations ......................... 14
3.7A Uniform Construction Codes .............. ---- .......... ...... I,— ...... 14
PolicePower .......... I ... I ........ 1- . ................... . ......... -- .... . ... ---- ....... t4
3.8
Large Fonuat Retail DevelopratriL Parking Easement — .............................. 14
3.9
Signature ............ ....... ...... ... --- ... --- .... 15
3.10
CKY loftastruc-ture Improv,cments'.- ....... .......... ........ ............ 15
3.11
Flexible Ofrice Space on Developer Leased Property ................ ...................... 15
4. FEES, CONDMONS, PUBLIC BENEFITS, AND AUDIT RIGHTS ................... z.— 15
4.1
Temporary Fee Rebate ....... ..... . .. . ............... ... I.I.-I ............. ! ....... 15
4.2
Other Fees and Charges... .... . ..... ........... -- ... . .... -- 15
liLKVE-DJ.-- ............ ...... ...... ............... ........ ... -'— 16
4A
Acrounting and Review...—.. ..... ....... --- ............ --- ........ - ...... 16
Allocation of Costs and Expeases ....................... ..... I .......... 16
4.4.3 Non -Waiver By City .... ............ 16
4AA [RESERVEDJ--- ....... ........ -- ....... ... . ..... ......... 17
4.4.5 Survival of Audit Rights ............... I ...... I .................................................... 17
5. GENERAL DEVEEOPBR COVENANTS ................... . ............................ 17
5.1
Commencement of Improvements and Completion— ... ---- ............... ---, 17
5.2
Large Format and Remaining Commercial Development
5.3
(RPSERVPD) - ................ — - ..... . - ........ ....... ............. ......... 17
5.4
City Right to Inspect... ... — ........ .... . .. 17
5.5
Developer Attendance at City Is
680m2f1loam
-ECOOT an OFFICIAL RECORD.
16
Maintenance Covenant.................................................................................. is
5.6.1 General Maintenance of Property ........... ; ........... ................................... Is
542 Graffiti....7- ................ 1— ............. ...... —18
5.6.3 Lien .......... 19
6.
DEVELOPER. COVENANTS RELATING TO THE WHANCED PROJECT..; ........ 19
6.1
Developer Election To Develop Enhanced Project, ... 19
6.2
Applicability of Base Project Covenants ............................................................ 19
6.3
Operadng Covenant ........ .......... -- ....... 19
63.1 Conduct of Required Operations --- ...... ................ ....... 19
63.2 Annual Grant Payment .... — ........ ..... . ....... .......... 19
6.3.3 Certification ........ ........................... I.I.I.I."......,.°-,---,.."."...........'I * ....... 20
6.3.4 Use Restriction .......................... ........................................... I ................ 20
6.3.5 Covenant to Maintain Property on Tax .. . ............ 20
6.3.6 No Conveyance to Tax Exempt Entity ............. ; .............................. . ..... 20
63.7 Quality of Improvements ............ I .... I ..... I .......... --- ................. 20
6ACove
umm Running With the Land . ..... ...........................:.........:....::.....::.:a,,..:., 21
7.
NON-DISCRINEXATION .... ..................... ............ !.; .. ... ... 1; ...... 21
741
Obligation to Refrain from Discrimination ........................................................ 21
72
Form of'Non-discrimination and Non -segregation Clauses ............................... 21
7.2.1 in dcecb ..... ........ .......... .............. -- ......21
7.2.2 In le ...... ............................. ... .........21
7.2.3 In contracts. ......... ........ .... . .... — ....... ....... ........ --- 27
8.
FIRE
STATION DEDICATION AND DEVELOPMENT ........................................... 22
r
8.1
Election to Require Developmentof Fire Station Site., ........ ....... ° 22
92
Design and Construction Costs ........... ...... 22
8.3
Subdivision of Fire Station .......................... .............. —.-- ........ - 22
SA
Deveiopees Rental of Fire Station to City .............. ...... k,, ...... . ........... 22
8.5
Conveyance of Fire Station and Fire Station Site to City_,................................22
L 9.
DEFAULT, REMEDIES, AND TERMINATION ................... ...... A;.;23
9.1
Notice and Opportunity to Cum .................. . ...................... ...... 23
6
92
Daikult Remodies—...... ...... .......................... 1........... ..1-23
9.3
Developer's Exclusive Remedy ...... .......... 1----.— ...... ... 23
9.4
Force Wjeure ......................................... .......... .............. ........... �24
10.
ANNUAL REVIEW ............. . ....... 24
L
10.1 -
Timing of Annual Review . .................. .... . .... ...............
10.2
*..
Standards for Annual Review............. .......... ... . ... 24
2
103
Certificate OF Compliance ................. . ............ . . ...... 25
IL
MORTGAGEE RIG ............................. ..... . ... ....... 25
11.1
Encumbrances an the Property...."""'? " .................. * ............. ** ...... * ........... .....25
11.2
Mortgagee Protection ......... i .. . ........................................... . .............
E
C "H2111emn
q1q. =Kai 1.1 big
FM-
"OnIMM2
2m1. 78014/12
EM
15616 Time of .......... ... ....... .......... ...
32
15.17 Further Actions and Instraments . . .... ____ ...... .......
32
15.19 Scverability ...... ....... ....
A2
15,19 Legal Expenses ............ .... ..........
15.20 No Third Party Beneficiaria ...............................................
15-21 Relationship of Patties ... .. ....... __ ......... ....... ....................33
15.22 Development as a Private Undomking ........ ......... .... .........
33
15.23 inspection of Books and Records_.., ....
33
1514 Estoppel CwificAte...___ ...
1525 Applicable Low; Venue ...... ...... _ ........... .... _34
15.26 Non -Liability of City Offiscers and Employees ..................................34
15.27 Non -Liability of Developer's Officars, and Employees ....... __ ___.____34
15.28 Notices_ ........... __ ......... __ .......................... *"* ............................. t__.- ..... _34
15.29 Representation as to Ownership .... ____ ............. ......... ___ ... ..... ___35
15.30 Representation as to Ownership ......... ...... . ... ____
33
15.31 Authority to J'Accute .... ........ .............
35
15.3.2 Authority to Execute.... .............. 1 ........ .......... ...... .....
3S
15.33 Execution of Agreement, Counterparts ..............................................................
35
15.34 Exhibits ....... . .. __ ...... ...... ........ ........... ...... ......
35
in
M-1111-1661
.0
.0
M
X
DEVELOPMENTAGREEMNT
A. Vb strengthen the pulilic planning process, encourage private participation in
comprehensive planning, and reduce the economic risk of development, the Legislature of the
State of California adopted the "Development Agreement Statute," Sections 65864, et 5cq,, of
the Government Code. The Development Agreement Statute authorizes City to enter into an
agreement with any -person having a legal or equitable interest in real property and to provide for
the development of such property and to establish certain development rights ilvercin,
B. Developer owns that certain real property consisting ofapproximately 58 acres of
lud area located at 12214 Lakewood Boulevard in the Downey Lending Specific Plot% Area,
within the City of Downey. County of Los Angeles, State of California, as more particularly
described in the legal description attached hereto as g-�NtW and depicted ten 1�xhMltit "`lid {the
"Developer Owned Property").
C. Developer holds a leasehold interest in dial certain real property consisting of
approximately 20 acres of land area located at 12214 Lakewood Boulevard in the Downey
Lauding Specific Plan Area, within the City of Downey, County of Los Angcics, State of
California, as more particularly described in The legal description attached as and
depicted on Exhi '11." (the "Developer Leased Property"), Ile Developer Owned Prqmny
and tk Developer Leased Property abut each other.
D. The Developer Owned Property and the Developer Leased Prop" are
collectively described as the "Property." The Property is depicted ern a—I4b4_0F,--"
E. The Amended Downey Landing Specific Plan C'Specific Plan") allows for the
development of the Property with a mixed-usc commercial development consisting of up to
1,035,000 square feet of non - theater commerciallrelail, floor area; an additional 65,000 square
feet ofcommerchultelail floor area for a theater use, 300,000 square feet of0frice floor area; and
116,000 square fact of hotel floor area (150 hotel rooms). JU Specific Plan contemplates that,
subject to CirYs approval if placed on the Developer Owner Property, an additional 200,000
square Peer ol'office floor area may be incorporated into the proposed development so long as the
retail floor area is decreased by 200,00 square feet and the total square footage of the proposed
development does not exceed 1,516,O0D square feet. Development of the Property in any
manner consistent with the Specific Plan and the remaining Existing Land Use Regulations is
bercinaftr referred to as the 'Base Project."
269125213AMWAselM
out 1 1447/ IVAN
ago
I.. Through this Agreement, the City has committed to provide certain vested rights
to Developer in exchange for (a"the development of file Base Project on the Property, anti QI)
Developer's provision of certain additional public benefits to City.
G. Developer desires to develop the Property in a specific configuration that is
consistent with the Specific Plan, consisting of the Large Format Retail Development, the
Rentaining Commercial Development, the Theater Development, the Office Development, and
the Hotel Development. Developer's development of the Property within the parameters set
forth in this Recital, and in a manner consistent with the Existing Land Use Regulations, is
hereinafter referred to as the "Enhanced Project."
K Through this Agreement, the City has committed to provide certain additional
inducements and benefits to Developer in exchange for the development of the Enhanced Project
on. the Property.
1, 'this Agreement is intended to be, and shall be construed as, a development
agreement within die ineaning of die Development Agreement Statute. This Agreement will
eliminate uncertainty in planning for and socuro the orderly development of the Property, ensure
a desirable rand functional community environment, provide effective and efficitea development
of public facilities, infirastructum, and services appropriate for the development of the Property,
assure, attainment of the maximum effective 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 Development AS=cnic-nt 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 Agrmment and the Existing Land Use
Regulations (as defined below), all as more particularly set forth herein.
J. City has deterrivincell that die Base Project and, the Enhanced Project are consistent
with the goals and policies of the General Plan and imposes appropriate standards and
requirements With respect to the development of the Property in order to maintain the overall
quality of life anti 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 Rased Project and the Enhanced Project,
K. Oct December 21, 2011, the Downey City Planning Commission ("Planning
Commission") held a public hearing on this Agreement, made certain findings and
determinations with respect thereto, and recommended to the City Council of the City of
Downey ("City Council") that the Agreement be approved.
L. On January 10, 2012, the City Council held a public baring on this Agreement,
cons , Ideted the recommendations of the Planning Commission, and found that this Agreement is
consistent with (Igneral Plan, In accordance With the Development Agreement Statute and
applicable law, on January 24, 2012, the City Council adopted Ordinance No. 0$-10 approving
this Agreement.
26"SZOAM-9-00 -2-
0391 10M0L13-144MMI.
am
'ECORDER MEMO: This COPY Is NOT an OFFICIAL RECORD'-
MA144IRM
Based upon the foregoing Recitals, which are incorporated herein by this reference; and
for good and valuable consideration, the reecipt and sufficiency of which is hereby
acknowledged, City and Developer hereby agree as follows:
I PILFINITIONS.
The following terms when used in this: Agreement shall 6,Ve 6c meanings set forth
1.1 The term "Action" shall mean any proceeding bi&e6n City and Developer
seeking enforcement of any ofdw terms and provisions of this Agmmcnt,
1.2 The teen "Agreement" shall meart this Development Agreement by and among
City and Developer.
13 The term "Annual Rev1W shall have the meaning asciibid in $idion 10.1 of
this Agreement
1.4 The (trra "bonkru0cy Lxw�' shall mean Tide 11, United Statm Code, and any
other or successor state or federal statute relating to assignment for the benefit of cieditors,
appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium,
reorganization, or similar matters.
1.5 The term "Bankruptcy Proceeding" shall mean any OrbeeWing, W"er
voluntary or involuntary, under any Bankruptcy Law.
1.6 [RESERVED]
0.
0
W. 1.7 The term "Ban Project" shall mean Developer's development of.the Property
within the paramoters; set fortis in Rcc!W I— and in a manner otherwise oonsistent with the
Exisft Land Use Regulations.
S2
LL 1.8 The berm RCEQAO shag mean and refer to the California Envirownchtal Quality
O Act, Public Resources Code Sections 21000, et seq.
1.9 The term "Certificate of Occupancy" shall mean A Canificate of Occupancy es
defined in the Uniform Building Code,, 2010 Edition, published by the International Conferimce
Z of Building Officials, as may be amended fiarn time to time.
1.10 The term "CiWication" shall mem a written moifi6ri provided on or b6fdke
0 V rebruary 15 of each year during the Term, signed by Developoes managing member (i)
H. certifying its compliance with the operating covenant and all other covenants and restrictions set
forth in Artielt 6 for each Compliance Year for which Developer seeks a Grant (if Developer
makes Ore election authorized by Section 6.0. provided, however, that this portion of the
Certification shall not be required unless Developer elects to develop the Snhanc4d Project under
W
a 2MW.7fi)4.pUWU
X -3-
0
I I :
" Z A 111751M I : 6 : 6
Section 6.1 of this ,agreement, and (10 demonstrating Developer's good faith compliance all
term of this Agroomrnt for purposes: of conducting the at nuAl review requited by Section 10.
1.12 The tema"Ct ufiell" shall mean the City Council of the City of Downey.
1.14 The term "City tea and Charges" shall mean Development Fees and City
Processing Fees, to the extent such fees are collected by and an behalf of Cltyi
I, -!
1.16 The term "City Parties" shall mean City, City Council, City offictrg, employees,
attorneys and agents, I
NOW MEE=
review, and consideration of applications..
1.18 The term ""Claire" shall mean any claim, loss, cost, tinmage, expense, liability,
lien, action, cause of action (whether in fort, contract, under statute, at law, in equity Or
otherwise), charge, award, assessment rime or penalty of any kind (including consultant and
expert fees, Legal Costs, and ex and investigation costs of whatever kind or naturc), and
any judgment. Without limiting the foregoing, "Claims" include any matter that results or arises
in any way from any of the following: (0 the noncompliance by Developer or its contractor with
any applicable local, state and/or federal law or regulation, including, without limitation, any
applicable federal and/or state labor laws or regulations (including, without limitation, if
applicable, the requirement to pay state and/or federal prevailing wages and hire apprentices); (2)
the implementation of Labor Code Secticat 1781 and/or Davis -Bacon, or any other similar law or
regulation; and/or (3) failure Developer to provide any, required disclosure or idontification as
requited by Labor Code S*ction 1791 antVar Davis Bacon, as the same may be amended from
time to time, or any other similar law or regulation.
1.19 SERVED]
1.20 The term "Compffanee Year il shalt mean And tofu to a period of one year. TI)o
floit Cm.20iziaont Ycar c4mmeNces *4# A c4mancicems't lato 11a,
the anniversary of the operation Period Commencement Date. The second through twentieth
Compliance Yom follow therealler.
1;21 11je hm oDdfaulting Patty" thall have the meaning ad forth in SectiOn 9-1.
below.
2kftUI.7AW_V4M4
07RIQ*MO-14-12MNJIkG -4-
1,22 The term "Davii-Bacon" shall mean , 40 U.S.C. Section 3141, ct seq., and the
regulations promulgated thereunder set forth at 29 CFR Part 1, as the same may be amended
from tinic to time, or any other similar law or regulation.
1.23 Tire term "Developer" shall mean the individual or entity whid owns fee title to
the Developer Owned Property, or any portion Ibercof, and holds the leasehold interest in the
Developer Leased Property, or any portion thereof, and any permissible successoe or assignee to
the, rights, powers, and responsibilities of said individual or entity hereunder, in accordance, with
Section 12 of this Agreement
114 ne terror "Developer Leased Property" shall mean that certain real property that
abuts the Developer Owned Property, and consists of approximately twenty (20) acres of land
area located at 12214 Lakewood Boulevard in the Downey Lording Specific Plan Area, within
the City of Downey, County of Los Angeles, State of California, as mcne particularly described
in the legal description attached as &M LW_tL"_C" and depicted on EAh b t (j-
1.25 Tice term "Developer Owned Property" shall mean that certain real property
consisting of approximately fifty eight (58) acres of land area located at 12214 Lakcwood
Boulevard in the Downey Landing Specific Plan Area, within the City of Downey, County of
Los; Angeles, State of California, as more tnuticularly described in the legal deso;iptlen attached
hereto as EN(lihij "A" and depicted on E&Nk)aj W (the "Developer Owned Property',
1.26 The tam "Developer Representative" shall have The mrwing set forth in
Sedtion 5.5.
1.27 The ia6rm "Development Agreement Statute" shall ritean Sections 65864 through
659695 of the CaMmia Government Code, as the same may be amended from time to time.
129 The term "Development Fees" shall mean WI fees collected by and on behalf of
the City that are canted by the City at any time pursuant to the Mitigation Fee Act Government
Code sections 66000 et mg.
1'.29 The loan "Effective !Date Ail] mean March 15, 2012.
1.30 The term "Enhanced Project" shall rnean Developer's development - of the
Property within the parameters set forth in Recital G, and in a manner otherwise consistent with
the Existing land Ilse Regulations.
1,31 Tice term "Environmental Losses" means any and all claims, demands, damages,
losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits,
proceedings, costs, disbursements and cxpcnscs, including, without limitation, attorney fees,
disbursements and costs of attorneys, environmental consultants and other expert,;, and all
foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever that
may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded
against, City directly at indirectly relating to or arising from any Environmental Matters arising
during or from Developers ownership or use ofthe Property.
1.32 The term "Environmental Matters" means (i)the presence 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, look abatement- removal or
transportation of any Hazardous Substances on, in, under, from or affecting all or any portion of
Pro"; (N) the violation of any law, rule, regulation, judgment, order, permit, license,
agreement covenant, restriction, requirement or the like by Developer , its agents or contractors,
rotating to or governing in any way Hazardous Substances on, in, under, fi-Om. or affecting all or
any portion of.tile Property, (tv) 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; (Y) the implementation and enforcement by Developer, its agents or contractors of any
monitoring, notification or other precautionary measures that may, at any time, become
necessary to protect against the release, potential release or discharge of flazard us Substances
on, in, under, ftoni or af(coflng all or any portion of the Property; (W) the faiturc olDevoloper, its
agents or contractors, in compliance with all applicable Environmental Laws, to lawfifily
remove, contain, transport or dispose of any Hazardous Substances existing, stored or generated
on, in, under or from al I or any portion of the Property; and (W) any investigation, inquiry, order,
hewing, action or other -proc"rig by or before any Covernmbntal Agency in connection with
any Hazardous Substances on, in, under, 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 mew the General Plan, the
Specific Plan, the MOA (which is part of the Specific Plan) the Zoning Codc,i the Municipal
Corle, 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, inciuding 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 Uniform. Codes pertaining to
U
r 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,
the provisions of the Specific Plan control.
3
L
134 The tam "Equity Interest" shall mosri all or shy part of any direct or iiidirect
equity or ownership interests) (whether stock,- partriorship interest, beneficial interest in a bust,
VI membership interest, or other inmost of an ownership or equity nattire) in any entity at any tier
of owners* that directly or indirectly owns or holds any ownership or equity interest in a
• PeFson.
Knfi��
136 The term Tim Station" shall mean a minimum of an eight thousand (8,000)
squam foot portion of Building I that is required to be preserved in place by the MOA, The Fitt
Station shall be appointed with amenities and facilities that am the functional equivalent of those
at a typical fire station headquarters existing at the time of the development of the Fire Station.
am
Ek
1,37 Tbo Term "Fire Station Construction Costs" shalt 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 (100%).
1 1.38 'Do term "Fire Station Lease" shall mean a least by Developer to City of the
Fire Station and die Fire Station Site upon the following material terms: (1) initial rental rate
under the Fire Station Lease shall equal five percent (5*/4) of fire Fire Station Construction Costs
incurred by Developer in the construction of the Fire Station; and (2) City she(( receive rights of
access over the Property sufficient to meet the reasonable access and response time needs of the
Downey Fire Department, as reasonably determined by the Fire Chief of the Downey Fire
Depairtmeat
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
it
1.40 The term "Floor Area" shall Mean this total araii of A floors co a)
11toned. within the
exterior walk of all buildings on the Property.
1.41 The term "General Plan" shall mean and refor.to the City of Downey General
Plan, is said General Plan exists as of the Effective Date.
1,42 The term '*Grout Amount" means tip to Ono Million Dollars per year
(51,000,000.00) that, upon the satisfaction of certain conditions and requirements related to the
development of the Enhanced Project, shall be paid by City to Developer, pursuant to the terms
and conditions of this Agreement, commencing on Tune 30 of the first year aflor which die
Required Operations am established and maintained on the property, and continuing for nineteen
years thermfler; provided, however, that the Grant Amount shall not be payable an June 30
following any calendar year during which the Requited Operations are not maintained,
1.43 The term, "Hotel Development" shrill moan 116,000 square feet of boor area (ISO
hotel rooms) of development for hotel uses under the Enhanced Project which shall be operated
under one of the brand names set forth in or such other brand name approved by City,
in its sole and absolute discration; provided, however, that the City Manager shall have the
authority to grant up to a ten percent (10%) variance in the amount of hotel square footage and/or
the number of hotel rooms, and in the event such a variance is granted, the resulting development
shall constitute "Notal Development" under this Agreement
1.44 no term "Haaardaus Substances" means and refers to, y4thout limitation,
substances defined as "hazardous substances," "hazardous material," "toxic substance," "solid
waste," or "pollutant or contaminate* in the Comprehensive Environmental Response,
Compensation and Liability Act of 1930„ as amended, 42 U.S.C. Sections 9601, ct s%-, the
Toxic, Substances Control Act CISCK) (15 U.S.C, Sections 2601, ct s%); The Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, ct scq.; the Resource Conservation and
Recovery Act 42 U.S.C. Sections 6901, cc scq.; those substances listed in the United States
Department of "transportation (DOT) Table (49 CPR 1,72,101], or by the EPA, or any successor
authority, as hazardous substances [40 CFR Part 3021; and those substances defined as
.7-
0
--
"hazardous waste" in Section 25117 of the California Health and Safety Code or, as "hazardous
substances" in Section 25316 of the California HWth and Safety Code; other substances,
materials, and wastes that are, or become, regulated or classified as hazardous 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 designated 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,
landscaping, parking, and other related apputtenano6s 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 66 followifiji (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, welfare or retirement fund or system, real
estate investment trust (or an umbrella partnership or other entity of which a real estate
inv@stmoht 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 Persons described in
"(s)" of this Section.
1.47 [RESERVED]
1.49 [RESERVED]
1.50 The term "Lfte Format Retail Development" shall mean at least a total of
275,000 squan feet of flow am of retail development spread over at teat two retail
establishments, each of which comprises at least 90,000 square feet of floor area, which shall, be
constructed if Developer makes the election under Section 6.1 to build the Enhanced Project.
L51 The tdrrh "Legal Costs" shall mean, for Any Person, all actual and reasonable
costs and expenses such Person incurs in any legal proceeding (or other matter for which such
D
C Person is entitled to be reimbursed for its Legal Com), including reasonable attorneys' fees,
M court costs and expenses, including in or as a result of any: (a) Bankruptcy Proceeding;
(b) litigation between the Parties; (6) negotiating or documenting any agreement with a ffird
party mqmtcd by the other Party, (d) requirement or request that such Person or its employees
La act as a witness in artyproce"ag regarding this Agrement or the otherParty; end (a) review or
P-
L approval that the other Party requests of such Person. All references to Legal Costs shall include
D the salaries, benefits and costs of in-house or contract general counsel to City or Developer,
respectively, and the lawyers employed In the office of such general counsel who provide legal
services regarding aparticular matter, adjusted to or billed at an hourly rate and multiplied by the
time spent on such matter rounded to increments of ont-tonth of an hour, in addition to Lego
Costs of outside counsel retained by City or Developer, respectively, for such matter,
26MULUM.W"
Call 10-MVI-1441b rMfim
111.1 0 a C
1.57 Vie win "Maintenance Deficiency" shall mcan an occurrence of an adverse
condition on any area of the Property that is subject to public view in contravention of the
general maintenance standard described in Section 5.6.1, bOIDW,
133 The term "Maximumi Fee* Sbaring Amount" sbs(l- mW three mill . ion eight
hundred thousand dollars'(33,800,001)).
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 Officer and the City of Downey,
1.55 The term "Afortgage" 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 The term "Mortgagee" shall mean the holder of a Wneficlil interest under a
Mortgage, or any successor or assignee of any such Mortgagee.
1.57 The term "Municipal Code" shall mean and refor to the City of Downey
Municipal Code, as the Municipal Code exists as of the Effective Date.
1.58 [RESERVED].
1.59 The lam "Non-DaUuWC Parly" s1hall Nift the meaning set forth in Section 9.1,
beldiv.:
1.60- The tann "Office Development" shall mean 36,600 square feet of floor area of
development for office uses.
1.61 The tam "Operating Po0od" shall mean the pmiod commencing upon the
X Operation Period Commencement Date and ending on the twentieth (2&) anniversary -thereof
J
1.62 Illice tem "Operation Period Commencement bate' shall men and refer to the
date on which the Required Operationsvm established.
1.63 The term "Pardes" shall mean Developer and City, and dwir itipbetivt
e. successoraa3al
.
1.64 the term "Person" shall mean any association; - corporation, government,
z individual, joint venture, joint-stock company, limited liability company, partnership, trust,
unincorporated organization or other entity of any kind.
0.
0 1,65 The term "Poll tkal Reform Act" shall mean Government Code section 19000'it
seq.
L66 'Me torm "Prop"" shall mean the Developer Owned Property and the
Developer Leased Property, as jointly do ictedon,ExhibitT."
-9.
0
R Ts I • "; M M 0
1.67 The term "Remaining Commercial Development" shall mean all retail,
commercial, restaurant development on the Property other than (rthe Large Format Retail
Development, and (ii) the Theater Development.
1 1.68 The term "Required Operations" shall niW and'tt'fe't to operations conduc6ed
or caused to be conducted by Developer an the Property that includes at least the opening for
sales to the public of 100% of the Large Format Retail Development, As part of the Required
Operations, all sales of taxable goods shall be subject to any and all sales and use taxes under the
laws of California, with the City designated as the point of sale for any and all such sales subject
to California sales and use taxes.
1.69. The term "Sales Tax Revenues" shall mean shift 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 "Specific Plan" shall mean and refer to the Amended DLending
Specific Plan; as it exists as of the Effective Date.
1.71 The term "Term" shall mean the period of d66 during which this Agreidractit
shall be in effect and bind the Parties 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 shall be in effect and bind the Parties and their respective successors and assigns
for in perpetuity. as more particularly describod in Sections 2.2.
1.72 The term "Theater D6*elopeaene shall mean 65,000 square feet of development
for one or more theater uses.
1.73 The term 'Transfeii" shift 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: (i) any assignment, conveyance, grant,
hypothecation, mortgage, pledge, said, or other transfer, whether dkvd or indirect, of all or any
part of such property, eight or obligation, or of any legal, beneficial, or equitable interest cc estate
in such property, right or obligation or any part of it (including the grant of any casement, lien, or
other encumbrance), Q6 any conversion, exchange, issuance, modification, reallocation, sale, or
other transfer of any direct or inditwt Equity Interest(s) in the owner of such property, right or
obligation by the holders of such Equity Interest(s); (M) any transaction described in "(io" 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 "(i)"
through "(iv)" of this Section shall be deemed a Transfer by Developer even though Developer is
not technically the transferor. A "Transfer" shall not, -however, Include any of the following
(provided that the other Party to this Agreement has received notice of such occurrence) relating
to any Equity Entered: (i) A mccc 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
Stale real estate transfer tax, (11) A conveyance to member(s) of the immediate femily(ics) of the
We, holds an Equity Interest in the entity whose Equity Interest is being lransf:rrcd
1.74 Tie term Zouing Code' shall mean and refer to the City of Downq Zoning
Code, as said'Zoiting Code exists as of the Eftectiva Date of this Agreement, and " it may
further be amended by City from time.
OHMWM
2.1.1 1]er�nwithout Subject to Section 2.2, if
Developer does not make the election authorized by Section C1 within the time required by
Section 6,1, the Term shall commence on the Effective Date and shall continue thereafter for a
period of seven (7) years from and after the Motive Date, unless this agreement Is terminated,
modified, or extended by circumstances set forth in this Agreement or by mutual written consent
of the Parties.
2,1.2 yorrin with; Enhanced Proiect Electi0q. Subject to Scction2.2, if
Developer makes the election authorized by Section 6.1 within the time required by Section 6. 1,
the 'I*em shall commence on the Effeetive Date and shall continue thereaflef 6 a period of
twenty-five (25) years from and after the Effective Date, unless this Agreement is terminated,
modified, or extended by circumstances set forth in this Agreement or by mutual written consent
of the Panics,
2.2 flovisinns Surviving Ex
I_gf Term. The provisions, rights, and obligations
sot 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 4A.5. 111c
provisions, rights, and obligations set forth in, Article 8 shall remain effective and binding on
City and Developer (and/or its successor(a) in interest) until the expiration of die time periods set
forth in Article 8. 'Cite provisions, eights, and obligations set forth in Section 12.4 shall remain
effective and binding on City and Developer (anti/or its sucecssor(s) in interest) until the
expiration or earlier termination of that certain Ground Ucasc By and Between City of Downey
M: and Industrial Realty Group, ILLC, tinted on or about December 4, 2003, no provisions, rights,
u- and obligations set forth in Section 13.2 shall remain effective and binding on the City and
0
Developer (and/or its successor(s) in interest) until tile expiration of the statute of limitations an
any and every Claim. The provisions, rights, and obligations set forth in Article 5 shall remain
O effective and binding on the City and Developer (and/or its successor(s) in interest) for a period
fA of twenty five (25) yew from and after the Effective Date.
Z- 3, DEV ELOPME NT OF THE PRORFR!-X
P
33 AforoliCablt RqVlA6OnS- Vest other than as expressly Set
C- forth herein, during the Term, the terms and conditions of development applicable to the
Property, including but not limited to the permitted uses of the propoetty, the density and intensity
of use, maximum height and si2z of proposed buildings, and provisions for tile reservation laid
dedication of land for public purposes, shall be those set forth in the ExistingLand Use
Regulations. in connection therewith, subject to the teritn+ and conditions of this Agreement,
lucre vsc<.,
Developer (and/or its succcssor(s) in interest) shall. blve the vested right toearry out and develop
the Base Project and/or the Enhanced Pmject on the Property in accordance with the Existing
Land Use Regulations. Developer shall also have a vested right to: (Q receive from City all
future development approvals for the Due Project and/or the Enhanoad Project that are
consistent with, and implement, the Existing Land Use Regulations and this Agreement; (to not
to have such approvals for ft Base Project and/or the Enhanced Project be conditioned of
delayed for reasons inconsistent With the Existing Land Use Regulations or this Agreement, and
(fisl develop the Base Project and/or the Enhanced Project in a manner consistent with such
approvals in accordance with the Existing Land Usc Regulations and this Agreement.
3.2 leaLajIV, Subdivision MM. With respect to applications by Developer flai
tentative subdivision maps for portions of the Property, City agrees that Developer may (ile and
process vesting tentative maps in accordance with Chapter 4.5 (commencing with
Section 66499A) of Division 2 of Title 7 of the California Government Code and the applicable
provisions of City subdivision ordinance, as the same may be amended from time to time. If
final in" are not recorded for an entire parrel before such tentative map(s) would oilierwise
expire, the to of such tentative map(s) automatically shall be extended until the expiration of
the Tam or the earlier termination of this Agreement. If final maps me not recorded prior to the
expiration of the Term or the earlier termination of this Agreement, but such maps have not
otherwise expired under State law, the Municipal Code and/or the Zoning Code, then such maps
shall remain efftctivo until and to the extent otherwise required under State law, the Municipal
Code, and/or the Zoning Code.
3.3 Lro_qSsAin1_pf Appl:ns and, I�qrmits. Upon satisfactory completion by
. _gk
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
applications for Base Project and/or the Enhanced Project development and building approvals
within the times set forth in the Permit Strearraining Act (Chapter 4.5 (commencing with
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
r. Code), and other applicable provisions of law, as the same may be amended from time to time.
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3.4 Other Qovernm ' entat PealLils. . Provided that Developer pays the ramnable cost
L of such coo Lions aftr City has approved the development or any portion of the Property,
City shall reasonably cooperate with Developer in its efforts to obtain such additional permits
and approvals as may be required by any other governmental or quasi-gavcnimental 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
not warrant or represent that any other governmental or quasi-gavemmental permits or approvals
will be granted.
3.5 _S. _ u iscavait �3enerpl In consideration for
the bencrits 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
the zone designations for the Property which may be Initiated by Developer. Notwithstanding
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the foregoing, this Section 3.5 shall not limit Developer's statutory, constitutional, or common
law right(s) (if any) to seek future legislative approvals from City.
3.6 -7-i—m—ii%jor Deydontripat. 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, 'rho timing and rate of development depend on numerous factors such as market
demand, interest rates, absorption, completion schedules, and other factors which are not Within
the control of Developer or City, In Pardee Construction Co, v City of Camarillo (1984) 37
CnOd 465, the California Supreme Court held that a construction company was not exempt from
a city's gpelvilli control ordinance notwithstanding that the construction company and the city
had, prior to the adoption of flint ordinance, entered into a consent judgment (tantamount to a
contract under California low) establishing the company's vested lights to develop its property in
accordance with the existing zoning. The California Supreme Court ruched this result on the
basis that the consent judgment failed to address the tinting of development. itisthaintent of
the Parties to avoid the result of the Pardee case by hereby acknowledging and providing ill this
Agreement that Developer shall have the vested right to develop the Base Project and/or the
Enhanced Project on the Property in such order and at such rate and at such little as Developer
deems appropriate within the exercise of Developers sole subjective business judgment,
notwithstanding she adoption of an initiative or any other mcarsum after the Effective Date by
City's electorate to the contrary, In addition to all ' d not in limitation of the foregoing, but except
as set forth in the following sentence, it is the intent of Olt Parties that no City moratorium or
other sWW limitation misting to the rate or tinting of the development of the SM Project
and/or the Enhanced Project on the Property or any portion thereof, whether adopted by initiative
or otherwise, shall apply to (tic Hese project and/or the Enhanced Project on the Property to the
extent such moratorium or other similar limitation is in conflict with the express provisions of
this Agiccractu. Notwithstanding the foregoing, Developer acknowledges and agrees that
nothing herein is intended or shall be construed as overriding any of the provisions refining to the
timing of and/or conditions to the provision or any benefit to Developer under Section 4.1,
Section 4.3. Section 6.1, Section 6.2 and Section 6.3, or any Section that otherwise requires that
Developer perform an obligation an at before a specified calendar date and/or event, and/or
within a specified period of time.
3.7 Resetvations of Aulhorhy. Notwithstanding any provision set forth in this
Agreement. to the contrary, the laws, rules, regulations, and official policies set forth in this
Section 17- shall apply to and govern development of the Base Project and/or the Enhanced
Project an the Property.
3.7.1 Qjnsistent Future CRX Jkg&L iUn .
City ordhuutces, resolutions,
regulations, and official policies adopted at approved after the Effective Date pursuant to
procedures provided by law which do not conflict with the Eslmg Land Use Regulations shall
apply to and govern development of the Property, Any future City regulations which reduce the
intensity of the development of the Property below that permitted by the Existing /.and Use
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.
so
3.7,2 OverridinA State and Fedeq! Laws and fie ulations. State and federal
laws and regulations which override Devcloper's vested rights set forth in this Agreement shall
apply to die Property, together with any City ordinances, resolutions, regulations, and official
policies which are neemary to enable City to comply With such overriding State and federal
laws and regulations; provided, however, that (0 Developer does not waive its right to challenge
or contesit the validity of any such State, federal, or local laws, regulations or official policies;
and Q0 in the event that any such State or federal low or regulation, (or City ordinance,
resolution, regulation, or official policy uridertalten Pursuant them) prevents or precludes
compliance with one or more provisions of this Agreement, the Parties agree to consider in good
faith amending or suspending such previsions 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 dris Agreement unless' this Agreement is amended in accordance with the procedures
applicable to the adoption of development agreements is set forth in the Development
ACmvmerrt Statute and each Party retains full discretion with respect thereto.
3.73 Public Health and Safety. Any City ordinance, resolution, regulatidni or
official policy, which is necessary to protect persons on the Property or in the intmerilate
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 cy other similar
limitation would result in the impairatcut of Dovelope?a vested eights under this Agreement.
33.4 JUnifor Construction Cg_dcs. Provisions of the bulidinj standards set
!forth in the Uniform Construction Codes shall apply to the Property. As used heircin, the term
"Uniform Construction Codes" collectively refers to the 2010 California Building Codas, the
2010 California Electric Code, the 2010 California Plumbing Code, the 2010 Cidiftimia
Mechanical Code, the 2009 Uniform Soler Energy Cok the 2009 Uniform Swimming Pool, Spa
and Hot Tub Code, the 2010 Green Numbing and Mechanical Code, and the 2010 California
Fire Code (including amendments the by the Downey Fitt 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 'r9LtcS_±q_wer, In all respects not provided for in this Agreement, City
shall retain full rights to exami3a its police power to regulate the development of the Property.
Any uses or developments requiring a site plan, tentative (met map, conditional use ptrmlt,
variance, or other discretionary permit or approval in accordance with the Existing Land Use
Regulations shed require a permit or approval pursuant to this Agmomumt, and, notwithstanding
any other provision ad forth heroin, this A4moment is not intended to vest Developet'i right to
the issuance of such permit or approval nor to restrict City's exerciso 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 forth in the Specific Plan,
0 3.8 LUr a Format Retail 1)-09LOrn,ent Patlrfqg F 1-eg, During the Term,
Developer may request in writing that City enter into negotiations for the provision, at no
additional charge to Developer, of a parRitag casement and/or license agreement to accommodato
tip to twenty (20) parking spaces on no mom than forty five one hundredths 0.45) acres of
property adjacent to the Property and owned by City. The Parties shall negotiate In good faith to
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determine the initial location and other terms and conditions for the provision of the casement or
license, with a sinned objective of recording die casement or license within ninety (90) days after
Developer's request to enter into negotiations. City shall have the light to terminate die
casement or license, and/or relocate the parking to a different location owned by City aild
adjacent to the Property if, in City's reasonable business and/or regulatory judgment, relocation
of the parking is necessary to allow for the sale, lease, or other use: of any property owned by
City. If it elects to terminate or relocate tile easement or license, City shall provide at least
ninety (90) days advanced notice to Developer, If it elects to relocate the casement or license,
Developer shall be responsible for all costs of improving the newly -designated parking area and
of removing improvements on die prior -designated parking area.
3.9 j9V1aqyrq_knswcc. City and Developer agree to work together in good faith, at
no " to City, toward the design, approval, and development of a signaluro entrance to the
property for the Base Project and/or the Enhanced Project.
3.10 LALy jTiAgnr1qL%"T pLqygmtAM. 'to the extent required by applicuble laws, tile
City shall pay prevailing wages for intersection and groundwater well iniprovetrients; that are
funded (in part or in whole) by Developer as conditions of approval of the Project, City makes
no representation or warranty to Developer concerning the legal effect, If any, of the City's
construction of such improvements on Developer's rights and responsibilities tinder state low,
federal law, and/or this AgreemeniL
3.11 Notivithstanding anything
to the con" 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 Liessed Property
without further discretionary action by the City, so long as the retail floor am is decrused by
200,000 square fed and the total square footage of the proposed development does not exceed
1,516,000 square feet
4.1 Merroorary fee Rebate, Within thirty (30) days following the end of each
calendar quarter during the Teart. Developer shall submit to City written evidence of all City
Fees and Charges paid during the preceding calendar quarter. Within fifteen (15) days after
submission of such written evidence, City shall notify Developer of any deficiencies in the
evidences by Developer and/or any niced for additional information, Developer shall
provide such information as is reasonably requested by City in response to any request therefor.
Within sixty (60) days after receipt of sufficient documentation of the payment of City fees and
Charges, City shall remit to Developer fifty percent (50%) of said City Fees and Charges. The
pYoeci sot forth in this Section 4.1 shall continue until the earlier of (0 the expiration of the
Term, and (it) such time as die total amount of City Fees and Charges rebated to Developer
equals the Maximum fee Sharing Airnount Notwithstanding anything to the can" in this
Agreement, Developer shall only be eligible for the temporary fee rebate provided in this Section
4.1 if and after it makes the election under Section 6.1 to build the Enhanced Project
4.2 _QtbcrFms and Cbygq, Except asspecifically set forth in this Section 4, nothing
set forth in this Agreement is intended or shall be construed to limit or restrict City's authority to
impose. on now development within the City, new fees, charges, assessments, or taxes that apply
to the development of the Property or that increase any existing fees, 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 Few 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.
4.4 ARwxaft V� ,and Re 'ew.
4.4.1 MaintenanccA(ftq9_k:s and Recordg. Developer (and/or its successor(s) in
interest) shall cause to be prepared and maintained complete, proper and accurate books,
accounts and iccord& of all matters or amona; relevant to any calculation of any and all sums
owed to or by City under this Agreement, including without limitation the City Fees and Charges
subject -to rebate under Section 4. 1, the Grant Amount under Section 6.3.2, and the Fire Station
Construction Costs under Section 8 so that said payments can be accurately determined for all
relevant periods; provided, however, that City shall not have a right of audit of the temporary fee
rebate under Section 4.1 or the Grant Amount under Scotian 63,2 unless developer elects under
Section 6.1 to build the Enhanced Project All such books, accounts and records, including true
copies of all revenue and other income statements and tax returns, shall tx. maintained at
Devetopees (and/or its successor(s) in interest) address in Southern California,- or at another
location reasonably designated by each Development Party in Southern Califbmia, for a period
of at least five (5) calendar years after the expiration of the year during Which the 3MMC Mates.
U 4.4,2 Allocirtiqn of and Expenses. In allocating any item of cost, expense,
C J receipts or income to a particular portion of the Property, commercially reasonable Mal estate
r accounting principles, consistently applied; shall be utilized.
4.43 Nqn-Wa(ver BY&itI. The acceptance by the City of a pa or the
provision by City to Developer of a payment, requited by this Agreement shall be without
prejudice to the Citys right to examine and to audit Developees (and/or its successor(s). in
interest) books, accounts and records to verify the accuracy of any information supplied by
Developer (and/or its successors) in interest), and to challenge the accuracy and validity of any
such payment(s). Developer (and/or its successor(s) In interest) shall make "table 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 successors) in interest!a) books, accounts and rewds relating to the development of
the Property (and all matters which am the subject of this Agreement), which books, amounts
E and records may be copied or extracted in whole or in pact by the City or the Citys designated
U representatives, but which will be maintained by City as proprietary and confidential business
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infiamation to the extent permitted by the California Public Records Act (Government Code
section 6250, et seq.) the Ralph M. Brown Act (Government Code section 54950,vt seq.) "or
any other applicable state or federal laws respecting the disclosure of information held by a
public agency.
MSMR��
4.4.5 5-u—rvLxaJ__qL-A-1uJ— h . LL_RNotwithstanding any provision of this
Agreement to the con", all of the City's rights under this Agreement to audit and review any
calculations or information submitted thereunder and collect any payments due Ott City shall
survive any expiration of this Agreement as follows: (t) if DoWeper elects under Section 6.1 to
build the Enhanced Project, Olen any audit right of the tomporary 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; (1t) if Developer elects under Section 6.1 to build the Enhanced Project. then
any audit tight of the Grant Amount under Section 631 shall continue until two (2) years after
the expiration of the Operating Period; (Q 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 Stafion.
5. LiL-N—MAIDEVELOPER COANTS
5.1 Commencemeq_9f lnttarovenumtq and tar
taplctiart, hx accordance with
Section 3.6. Developer shall commcoce and complete, or cause to be commenced and completed,
at Developer's sale cost and expense the construction of the haprovements. Developer shall be
responsible for all costa 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 pm -development and pre -construction associated therewith, including inspection and
land surveying work„ for the Improvements. Once construction has commenced, Developer shall
use commercially reasonable efforts to proceed to complete or cause to be completed the Base
3: JJ Project andlor the Enhanced 111rqJccA in a good and workmanlike mattrier.
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5.2 Develooment Reudletx. All Large
j. Format Retail Development and Remaining Commercial Development shall be operated under
J-
one of the retail brand names sat forth in Egbibd _14" or such other retail brand name approved
by City, in its sole and absolute discretion.
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5.3 [REST EL
M 5.4 9bLU, Officers, employees, agents and representatives of City
Ln shall have die right of reasonable access to tile Property, without the payment of charges or fees,
during normal construction hours, during the period of construction and operation of the Base
Project and/or the Enhanced Project. Developer shall make a representative or Developer
available to accompany City representatives onto the Property, at all times, during normal
construction hours, upon reasonable advance notice from City. Developer understands and
agrees that any such City inspec4ons are for the sole purpose of protecting City's rights under
this Agreement, are made solely for City's henefit, 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
Xmnit t« -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
inspcetion(s) as consfittaing City's approval, satisfaction or acceptance of any materials,
workmanship, conformity ot 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/ot 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 L_ peveloxt Att�ndancc aL City tin&% Developer shall ensure that one or more _Mg--
o . f its employees or consultants who are knowledgeable regarding this Agreement and the
construction and installation of the Improvements, such that such person(s) M meaningfully
respond to City questions regarding the progress of the Improvements and attend nacefings of the
City Council and City staff, %vhcn masonnbly requested to do so by City staff ("Developer
Representative"). Developet shall identify Cite Developer Representative in writing to City
within 30 days of the Effective Date, and shall identify any changes in the identity or the
Developer Representative in writing to City immediately upon such change.
5.6' ManIteriance Coverilig. Developer f6r itself, its succeswits; mid 061giss,
covenants lind agrees that:
5,63 _QtMLaLM,4irdc;nmqt; or, Proma. The arm of the Property that are
subject F. public view (including all improvements and the existing and futom improvements,
paving, walkways, landscaping, "teriorsignage and ansomentation),shall be maintained in good
repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If at any time
prior to the end of the Term, there is an occurrence of a Maintenance Deficiency, then City may
notify Developor in writing of the Nfamlenitnee Deficiency. If Developer falls to cure or
commence and diligently puriale to cure the Maintenance Deficiency within thirty (30) calendar
days of its receipt of notice of the Maintenance Deficiency, City shafl have the right to enter the
Property, as necessary, and perform all acts neemary to cm the Maintenance Deficiency, or to
J take any other action at law or in equity that may then be available to City to accomplish the
abatement of the Maintenance Deficiency. Any sum expended by City for the abatement of a
Nfaintenance Dcricioncy, as authorized by this Section, shall become the debt of Developer. If
the amount of the debt is net paid by Developer wn thirty (30) calendar days after written
3 demand for payment fmm City to Developer, City shall have the right to citforce collection by
ii any available legal trima including without limitation the withholding of the amount ofthe debt
:z from any future payments and/or rebates to Developer under this Agreement.
5.6.2 !amft. 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 4acem or
contiguous to the Property shall be removed by Developer by either painting over the evidence
of such vandatism, with a point 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 gralfiti, City shall have the light 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
2G9W1.'Ff"WMV0W 411-
I — 4
become the debt of Developer. If the amount of the debt is not paid by Dcvaloper within thirty
(30) calendar days after written dernand for payment from City to Developer, City shall have the
right to' enforce collection by any available legal means including without limitation ft
withholding of tire amount of the debt from any future annual Grant payment tinder this
AgreemenL I
543 Lien ltirdits< *file obligations of Developer and its successors and assigns
under this Section 5.6 shall be secured by a lion against the Property, Developer hereby grant; to
the City R Security interest in the Property with the poiNves to establish and enforce a lion or other
encumbrance against the Property, in the manner provided in Civil Code Sections 2924, 2924b
and 2924c. to secure Ole obligations of the Developer and it successors under this Section,
including Legal Costs and other costs of the City associated with the abatement of a Maintenance
Deficiency or removal of graffiti. This Agreementshall provide notice of such security interest
in favor of the City. The City shall reasonably subordinate its lien rights under Otis Section to
security instruments or teats securing bonsfide financing from Institutional Lenders to the
Developer for construction of the Base Project and/or the Cithanced Project, upon written request
from Developer and on the condition that Developer reimburse the City all of its costs (including
Legal Costs) incurred in providing such subordination.
6.1 P1v-q-1wr Fleclim) To Davejort 9Uhani;0—J!Lq "cc . At any time during the first
rive (5) years following the 8fiective Date, Developer may in its sole and absolute discretion
elect to develop the Enhanced Project, Such an election shall be effective upon the provision of
notice of such election in writing to the City.
AWLfl�S&Wlhy of Base Proiect Covenanti. If, pursuant to-Stinion 6.1, Developer
ix elects to develop the Enhanced Project, the following covenants, in addition to those set forth in
0. AfLicle 5 shaill remain applicable and binding upon the parties.
M- 63 ftratine CovernmL The provision to City of an election to develop the
Uthanced Project putswant to Section 6.1, shall constitute Developer's binding commitment to be
Q bound by the Operating Covenant contained k this Section 6.3, wh!ch consists of the fallowing
t unm and conditions:
0
63.1 !2gildkict of Rcouired, Oncrations., During the Operating Period, Developer
hereby covenants and agreos to diligently endeavor to continuously conduct or cam to be
conducted the Requirod Operations on Ike Property, The failure of Developer to maintain the
-Z Required Operations during any Compliance Year within Operating Period shall, (titer alla,
excuse the City from die obligation to make any annual Grant payment parstumt to Section 6.32
for that Compliame Year.
63.2 Annual Gropk_Rayffieig, Subject to Developoes continued compliance
tinder this Agrccrncfd� on or before Juno 30 following each caltrular yea during Operating
Period in which Developer maintains the Required Operations, City agrees to pay Developer file
0 Grant Amount, provided, however, that City shalt not be required to pay the Great Amount for
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IM:a k.7hu*-rous
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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 mid of each
Compliance . Year for which Developer claims an entitlement to receive an annual Grant Amount;
Developer shall file a Certification.
6.3.4 UnS_&_sV_tcf Lt_m. Throughout the Operating Period, the Property shall
include buildings and facilities sufficient to support the Required Operations,
63.5 Co , vcoant to Mai u!a7tq_rrou5r1v oil Tax Rolf. Developer covenants to
cause the Property to remain on the County of Los Angeles secured real property lax 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 Term, Notwithstanding
the foregoing, the City may, in its sole and absolute diserction, 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 ftom tho County of Los Angeles secured real property tax rolls.
6.3.6 No Convcyancglo Tax Lxemot Entity; Developer coveniltits 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 A 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'a,11 or any ptntion of property taxc3 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 am material to the City and its decision to enter into this Agreement as
the City receives significant financing from property tax revenues front development within the
City and that any violation of such covenants will result in financial injury to ft City by
depriving the City of property tax revenues from all or a portion of the Property or the Base
Project widlor tiro Enhanced Project Additionally, Developer acknowledges and agices that the
restrictions on Transfers set forth In this Section am reasonable under, the circumstances because
of the City*s interest in pro" tax revenues from The Pro". Notwithstanding the foregoing,
Developer and City acknowledge that upon its transfer in accordance with Section 9 of this
Agreement, ownership of the Fire Station Site may be held 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 further consents under this Section 6.3.6.
6.3.7 uuIRVAU1-n 1®ronmont. Developer shalV cause the Improvements for
Q1 .the Enhanced Project to be constructed in a first class manner and at an average cost (Le'. cost
spread over all Improvements on the Property) of no loss than two hundred thirty five dollars
($235,00) per square foot (including design, permitting. and construction costs), adjusted on an
3 J annual basis fmin and after the Effective Date based on to year -over -year change in the
th California Highway Construction Cost (or, if the California Righway Construction Cost
Index is discontinued, a substantially similar index selected by the City). Ali improvements will
be maintained in a condition substantially identical (or batter) than their original condition. All
Large Former Retail Development and Rmairing Commercial Development shall be operated
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under one of the retail brand names set forth in or such other retail brand name
approved by City, in its sole and absolute discretion.
6A Qyruapts Runninu, with rho --faii . 'rho provisions of this Afticle 6 shall be
covenants running with the land of the Property during dw Operating Period for the benefit of
and shall be enforceable solely by the City in its sole discretion.
NPN--DISCR IM I NATION
7.1 -0XJggtLqnJq Rp(rain from Discrimination, Developer covenants and agrees for
itself, its successors, its assigns and all persons claiming under or through them to the Property or
any part thereof, that there shall be, no discrimination against or sr"ation of any person or
group of persons an account of race, color. creed, religion, sex, marital status, ancestry of
national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, nor shall Developer itself, or any person claiming tinder or through it, establish or
Immift any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, orsub1cssces of the
Property, 1110 foregoing covenants shall run with the land and %hull remain at effect daring the
Extended Term.
71 fq_rm 9_f V-2 ti-discrmf�inando -tqgmtiqa Clauses. Developer covenants
and agrees for itself, its successors, its assigns. and all persons claiming under or through them to
the Property that Mvelotict, such successors and suchpssigm shall refrain from restricting the
sale, lease, sublease, rental, transfer, use, owipancy, tea urc or enjoyment of the property on the
basis orswr, marital status, race, color, religion, creed, ancestry or notional origin of any persom
All deeds, losses or contracts pertaining to all or any portion of the Property shall contain at be
subject to substantially the foltmving non-discrimination or 11(m-segregatirar covenants,,
8 7.11 fri_jkgAs, 'no grantee herein covenants by and for itself, its successors
and assigns, and all pensons, claiming under at through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
.J
religion, sex, marital status, national origin, or ancestry in tire safe, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed, not shall the grantee or any
person claiming under or through it, establish or permit any such practice or practices of
0 discrimination or segregation with reference to the selection, location, number, use or occupancy
C of tenants, lessees, sub ants, or itub,-Icasm in the premises herein conveyed. The foregoing
covenants shall nm With the land."
b
z 7.2.2 Ln Icakeq. "The Lessee herein covenants by and for itself,its suaessots
and assigns, and all persons claimingundcr or through them, and this least is made and accepted
upon and subject to the following conditions, That there shall be no discrimination against or
0 segregation of any person or group of persons, on account of race, color, creed, religion, sex,
0 R marital status, national origin, or ancestry, in the loosing, subleasing, transferring, use,
M occupancy, tenure, or enjoyment of the premises herein [eased nor shall the lessee itself, at any
I-- person claiming under or through it, establish at permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
UJ occupancy, of tenants, lessees, sub -lessees, or sub -ten -ants in the premises herein lcased."
Is
D
7.2.3 In contracts, "Them shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status.
national origin, or ancestry, in the sale, ]case, sublease, transfer,- use, occupancy, tenure, or
enjoyment of the premises hcrcht conveyed or lewd, 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, sub4cssecs, or sub -tenants of the premises herein transferred." The foregoing provision
shaft be binding upon and shall obligate the contracting party or parties and any subcontracting
party or parties, or other trarisflerces under the instrument.
1719--.ILQN DEPTCATJON AND QrY&Q—PM-lRN1.
9.1 LFlection to Reouite 1?evelooment of Fite Stntjqtj Sit& At any time during the
J _
twenty-five years period following the Effective Date, City may request in writing that
Developer begin design and ultimately tonstntct the Fire Shtion on the Fire Stat�on Sitc. upon
issuing such request in writing, and upon furnishing approved specificatiom for the development
of die Fire Station to Developer, Developer shall be required to diligently commenec design and
other predeyelopment, :activities, and to diligently pmcced 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 Panics 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 Fite Station on the Fire Station Site, but said
timeline shall be extended based on force majeure events under Section 9.4, and based on
unreasonable delays in the issuance of permits or authorizations from governmentA authorities.
81 PSsiggi and Construction Costs. D evaloper shall bear all costs, fens, burdens, and
charges associated with the design, perinitting, construction and delivery of the Fire Station in a
rr manner that conforms to the specifications firdsited by City pursuant to Section &.I. City shall
waive all City Fees and Charps 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 -uboivjslon of fire Station Site. Within two years following the issuance of a
L Cartifidate'of Occupancy for the Fire Station, Developer and City shall cause'the Fite 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 Q9 13 yctqvce,g lien I of Fire Station 19—Gity- Upon issuance of a Certificate of
Occupancy for the Fire Statio
n, n,'eas City and Develuper shall enter into the Fire Station Le. This
Agreement a present obligation to enter into the Fire Station Lease. Allmaterlall terms
and requirements to be included 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 terms set fattli in this Agreement
8.5 C9D-V'ncp'nf Fire %g Uln and Fire Station Site !2 City Upon payment by City
to Developer of the Flit Station *Construction Costs, which shall be paid by City to Developer as
U. rent over a period of twenty (20) years, the Fire Station Lease shall terminate. Upon the
U
269tsIUAMMMONS
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=*- 1111!117�m
termination of the Fire Station Lease, Developer shall convey fee title to the Fire 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. I)EFAOLT, REMEDIES. ANDjY3RM1XATIQN,
9A Eq1!ic_c.and_ QpL3ortunitv to Curq. Before this Agreement may be terminated or
action may be taken to obtain judicial fidid, the Party seeking relief ("Noo-defaulting Party")
shall comply, with the notice and cure provisions of (his Section 9.L A Nondefauking Party in
its discretion may elect to declare a default tinder this Agreement in accordance with the
procedures hereinafter set forth for any failure or breach otany other Party ("Defaulting Pgf()f`)
to perform arty material duty or obligation of said Defaulting Party in accordance with the terms
of this Agreement. I-lowevet, the Non -Defaulting Party must provide written notice to the
Defaulting Party setting ford% the nature or the breach or failure and the actions, if any, required
by the NondelaultingPluly to cure such breach or failure. Ut Defaulting Party 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 fkftccn (15) days after the date of such notice (for monetary
defaults), within thirty (30) days after die date of such notice (for non-monclaty defaults), or
within such lesser time as may be specifically provided in this Agreemea If, however, a non -
monetary default cannot be cured within such Way (30) day period, as long as the Defaulting
Party dots each of the following, then the Defaulting Party shall not be deemed in breach of this
Agreement: (l) notifies the Non -Defaulting Party in writing with a reasonable explanation as to
the masons the asserted default is not curable within the thirty (30) day period; (h) notifics the
Non -Defaulting party or the Defaulting Party's proposed course of action to cure the default,,
(HO promptly comiucrums to cure the default within the thirty (3p) day period; (iv) makes
periodic reports to the Won -Defaulting Party as to the progress of the program of cure; and
(v) difigoody prosecutes such cure to completion. Notwithstanding the foregoing, the Defaulting
Party shall be deemed in default of its obligations set forth in this Agreorrivilt if said breach or
failure involves the payment of money but the Defaulting Party has failed to completely cure
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.
92 V_pArott Rernediu!i. Subject to Section 93, in the event at a default, the Non -
Defaulting Marty, at its option, may institute legal action to cure, correct, or remedy such default,
0 enjoin any threatened or attempted violation, enforce the terms of this Agreement by specific
a
ca porforniance, or putsucany 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
default by Developer, may give notice of its intent to terminate or modify this Agreement
pursuant to the Development Agreement Statute, in which event the matter shaft be scheduled for
consideration and review by the City Council in the manner set forth in the Development
0 Agreement Statute.
0
Ma 9.3 RaveLoqcr's Preclusive Reared , 'rho Parties acknowledge that City would not
have entered into this Agreement if it were to be liable in damages under or with respect to this
Agreement, or the Existing Lund Use Regulations, or the application thereof, or any permit or
ippmv4 sought by Developer in accordance with the Existing Land Use Regulations,
2 LU Accordingly, Developer covenants an behalf of itself and its successors and assigns, not to sue
R.
�21 iW3S7L7M&.W0tA '
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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
Patties 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 pctfortuance shall not be
construed as an action for damages.
9.4 EorgjL It gjqtu� 'rhe obligations by any Party hereunder shall i W deemed to be
q, no
in default where delays or failures to perform are due to any cause waoul the raP and beyond
the reasonable control of such Party, Including to the extent applicable, the following: war,
insurrection; strikes; walk -cuts-, the unavailability of shortage of labor, material.lor equipment;
riots-, floods; earthquakes; the discovery and resolution of tumardous waste -or significant
geologic, hydrologic, archaeological, paleontological, or endangered species problems an the
Property; fires; casualties; acts of God; governmental testrietons imposed or mandated by other
governmental entities, with regard to delays of Developer's performance, delays caused by City's
failure to ad or timely perform its obligations set forth horcirt; with regard to delays of City*a
performance, delays caused by Dcvelopces failure to act or timely perform M obligations set
forth hernia; inability to obtain necessary permits or approvals from other governmental entifics;
enactment of conflicting state or federal statutes or regulations; judicial decisions; or litigation
not commenced by such Pony. Notwithstanding the foregoing, any Way mused by the Marc
of City or any agency, division, or office of City to timely issue rd license, permit, or approval
required pursuant to this Agreements not constitute an event or force maicum extending the
time for Citys performance hereunder. If written notice of such delay or impossibility of
performance is provided to the other Parties -within a reasonable time after the commencement of
such delay or condition of impossibility, an extension of time for such cause Will be granted In
writing for thie period of the enforced delay, or longer as may be mutually agreed upon by the
Parties in writing, or the performance tendered impossible may be excused in writing by the
Party so notified. Theo event shall adverse market or financial conditions constitute an event of
force majeum extending the time for such Party's per(ormace 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 Majeum.
10.1 TivoLnILof Annual Review, Durring the Tem of thisi,Agreement at least once
during every twelve (12) month period from the Effective Date, after receipt of each annual
Certification front Developer, City shall, review the good faith compliance of Developer with the
terms, of this Agreement ("Annual Review"). 'Me Annual Review shall be conducted by the
City Council or its designee in accordance with the Development Agreement Staute.
10.2 ends foLA a R ew. During the AnnuAl. Review Developer shall be
naUJ_
S
required to demonstrate good -fifth compliance with the term of this Agreement. If City or its
designee finds and determines float Developer lies not complied with any of the, terms or
conditions bf this Agrcemcot, then City may declare a default by Developer in accordance with
ui,7 to -24-
Article 9 herein. City may exercise its rights and remedies relating to any such event of default
only after die period for coring a default as set (otth in Article 9 has expired without cure ofthe
default, The costs incurred by City in connection with the Annual Review process shall be paid
by Developer.
10.3 Will) respect to each year ill whicb City,approves
Devoloper's compliance with this Agreement, City shall, upon written request by Developer,
provide Developer Nvith a written ccrtificale of good faith compliance within thirty (30) days of
City's reecipt of Developces request for same,
IL MORTGAGI;E R ig MI,
11.1 fsttcaltn Iataees on the rap 'Me Parties hereto agrec that this Agreement
shall not prevent or limit Developer, in any truirmer, from encumbering the Property or any
portion thercof or any improvements thereon with any Mortgage sceoring financing with respect
to the construction, development, use, or operation of the Base Project and/or, the Hilluniced
ProjecL
111 M9rr a AYrQIpgflQn. *Fbis Agreement shall be superior and senior to the lien of
any Mortgage. Notwithstanding the foregoing, no breach of thk- Agreement shelf defeat, tender
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. &44 ;n lien of
foreclosure, lease termination, orotherwise) shall be subject to all of the terms and conditions of
this Agreement and any such Mortgagee who takes title core the Property or any portion thereof
shall be entitled to the bastards &rising under this Agreemem
11.1 MplW_agee; Not Oblivated, Notwithstanding the provisions of this Article 11, a
Mortgagee will not have any obligation or duty pursuant to the terms set forth in this Agreement
to perform the obligations of any of Developer or other affirmative covenauts of Developer
hereunder, or to guarantee such performance, except that (i) the Mortgagee shall have no right to
develop the Property under the Existing tand Use Regulations without fully complying with the
Court% of this Agreement and (it) to die extent that any covenant to be performed by Developer is
a Condition to the performance of a covenant by City, the performance thereof shall continue to
be a condition pr=&nt to City's performance hereunder.
lamee; Rivht of Mum
ttr_tttre. Each Mortgagoe
shall, upon written request to City, be entitled to receive written notice from City of the results of
the Mutual Review and of any default by Developer of its obligations set forth in this
Agreement. &ch Mortgagee shall have a further right, but not an obligation, to cure such
default within fifteen (15) days after receipt of such notice (for monetary defaults), within thirty
(30) days alter receipt of such notice (for non -monetary defaults) or, if such, default can only be
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 rocciver or otherwise, and to reinctly or cure such default within thirty (30) days after obtaining
possession, and, except in case of emergency or it) protect the public health or safety, City may
not exorcise any of its judicial remedies set forth in this Agreement until expiration orsuch thirty
-25-
•
(30) day period; provided; however, that in the can of a default which cannot with diligence be
remedied or cured within such thirty (30) day period, the Mortgagees have such additional
time as is reasonably necessary to remedy of cum such default provided Mortgagee promptly
commences to cure the default within the thirty (30) day period and diligently prosecutes such
cure to completion.
12.
12.1 BjgbkJq-APbqJpA. Subject to City's Prior written consent; which shall not be
tintessonably withheld, Developer shall have the fight to assign its rights and obligations under
this Agreement in connection with a Transfer of Developer's interest in the Property. In the
event of any such assignmenk the assignee shall be liable for the performance of the assigned
obligations of Developer. In determining whether to grant consent to an assignment under this
Section, Wors that may be considered by the City include, but are not limited to, the extent of
the assignee's ownership interest in the Property (or any portion thereof), tbe desire to have the
master developer of the Property hold substantially all of the rights under the greement, the
assignee's demonstrated experience in developing and/or opertbting larojccts otlike kind and
scale as the Dom Project (or the Enhanced Project, if Developer makes the clectiort authorised by
Section 61), the a9signec's commitment to dovolOp and maintain the Base Project (or the
Enhanced Project, if Developer makes the election authorized by Section 6.1), and the financial
ability of the assignee to complete development and/or maintain operation ofthe Base Project (Or
the CrdmncodProject, if Developer makes the election authorized by Section 6A). In the event
of Transfers to and users such as those who will develop Large Format Retail Developinent or
Remaining Commercial Development, if such Transfer(s) is(iim approved by the City, such
transferee(s) shall inure to the benefits and burdens of this Agreement; provided, however, that
such trwisferee(s) shall not receive the beneflits of set forth In Section 4.1 and Section 6.3.
112 RtL=qe VAirm Transferff Aereement. Upon ft written consent of City to the
partial or complete assignment of this Agreement (which consent shrill not by unreasonably
withhold) and the exp= written assumption in a form approved by City of such assigned
obligations of Developer under this Agreement by the assignee, Developer shall be relieved of its
legal duty to perform the assigned obligations set forth. in rids Agreemerrt, except to the extent
Developer is in default hereunder prior to said transfer.
12.3 Asslanee Suh,ject to Terms Af iNorcamenl, Following an assignment or transfer of
any of the rights and interests of Developer set forth in this Agreement In acoardanec with
Sections 12.1 and 12.2, the assignee's exercise, use, and enjoyment of the Property shall be
subject to the terms of this Agreement to the same went as if the smigow or transferee w=
Developer.
12.4 Ltelonse Ocen Transfer o[IntregUn- 1,0gZL1'rgM. :upon the written consent
of City to the partial or complete transfer of Developer's interest In the Leased Property pursuant
to Section 13.01 of that certain Ground Lease By and Between City of Downey and Industrial
Realty, Group, LLC, dand on or about December 4, 2003 (which consent shall not be
unreasonably withhcld) and the express written assumption in a form approved by City of such
assigned obligations of Developer under said Ground Lease by that assignee, Developer shall be
2ffl%t0AXWwoMW
Qn11D M2G-i44V8TMfl4a -26-
except to the extent Developer is in defitult thereunder prior to said transfer.
13. JnTVIR�N XJUANADRMULMM-
190901MMI
MIA Base Project .1r11.;jLMAqA. Developer shall procure and maintain on the
Developer Ussed Property the insurance required wider that certain Groul Lease dated
December 4, 2003 bOween City and Industrial Realty Group, LL( trilled liability
company.
13,1.2 g9knUeLtMi cc[ insurance, if Developer elects tinder Section 6.1 to
.
build the Enhanced Project, then Developer shall procure and maintain insuranction the Property
in the types and amounts required under that certain Ground Lease dated December 4, 2003
between City and Industrial Realty Group, LLC, a Nevada limited liability company.
13.1.3 1psonance Does Not insurance coverage in the
minimum amounts so forth in this Agreement shall not be construed to relieve Devolopor of any
liability, whether within, outside, or in excess of such coverage, and regardless or solvency cc
insolvency of the insurer that issues the coverage; nor shall it preclude City &om taking such
other actions as am avaitable to it under any other provision of this Agreement or otherwise at
law.
associa costs paid by City -for such Insurance verilge, Any el 'on by City to purchase or
13.2 Indemnities by UiqvsLqw�
M1 1 _Qencrat ItildemnJU. Developer agrees to indemnify, protect, defend, and
hold harmless the City Panics from and against any and all Claimswhich may arise, directly or
indiptletly, from the'sots, 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 fire intentional or active negligence of the City Panics.
Notwithstanding the toregoin& City shall have the right to select and retain counsel to defend
any such action or actions and Developer shall Pay the rest 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 Prevailing Wilke. JadMilly 4114 kloticq_1Q_D_PYc of I or dffi
Section 1181. In connection with, but without limiting, the Foregoing, Developer hereby
expressly acknowledges and agrees that the City is not by t1his Agmeinesit affirmatively
201111.79AMOPCM
Oil I HIM01344-12/1rMAN -27-
i ",
representing, and W not previously affirmatively represented, to the Developer or any
contractor(s) of Developer., for any construction on or development on or adjacent to the
Property, in writing or otherwise, in a call for bids or any agreement or otherwise, that any work
to be undertaken on the Property, as may be referred to in this Agreement or construed under this
Agreement, Is not a "public work," as defined in Section 1720 of the Labor Code or under Davis -
Bacon, or under any similar existing or hereinafter enacted law or regulation, The'Partics agree
that, in connection with the development and construction (as defined by applicable law) of the
Base Project (or the Enhanced Project if Developer makes the election authorized by Section
6.1), including, without limitation, any and all public works (as defined by applicable law),
Developer shall bear all risks of payment or non-payment of prevailing wages under California
law "or federal law arid/or the implementation of Labor Code Section 1781, as the same may
be amended from time to time, and/or Davis Bacon and/or any other similar law. With respect to
the foregoing, Developer shall be solely responsible, expressly or impliedly and legally and
financially, for determining and effectuating compliance with all appticablo federal, stalc and
local public works requirements, prevailing wage laws, and labor laws and stan4ards, and City
makes no representation, either legally and/or financially, as to the applicability or non -
applicability of any federal, state and local laws to the construction of the Bow Project and/or the
Enhanced Project
Without limiting the taMoing, Developer shall indemnify, protect, defend and hold harmless the
City and its officers, employees, agents, representatives, and attorneys, with counsel reasonably
acceptable to City, from and against "increased costs" as defined in California Labor Code
Section 1791 (including City's reasonable attorneys' fees, court and litigation costs, and fees of
expert witnesses) in connection with the development or construction (as defined by applicable
law) of or on the Property, that results or arises in soy way from (1) noncompliance by
Developer of the requiromen4 if and to the extent applicable, to pay federal or state prevailing
wages and hire apprentices; or (2) failure by Developer to provide any required disclosure or
identification as required by California Labor Code Sections 1720 et bq, including without
limitation spcci6c&Uy Section 1781, as the same may be amended from time to time. The
foregoing indemnity shall survive the expiration or earlier terrainittion of this Agreement,
132.3 Ravi%nm tal IndemnaX. Developer agrees, In addition to any other
indemitity obligations of.Developer to City under this Agwinent or any other agreement
between the Parties ancl at Developer's so[* cost and expense, to indemnify, protect, deftd. hold
harmless, (with counsel reasonably acceptable to City) the City Parties and each of dwm* ftom
and against any and all Environmental Losses that may, at any time, be imposed upon, incurred
or suffered by, or claimed, asserted or awarded against, City directly or indirectly relating to or
arising from any Environmental bUtten arising during or as a result of Developer's ownership or
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
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 or
consolidate their defense of any Environmental Lowea'that are subject to the indemnification
provisions of this Section 13.2.3. The indemnity provisions set forth in this Agreement shall
survive terTrilhation of this Agreement until the expiration of the statute of limitations fdr the
applicable Claim.
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1*1111410
13.3 hdMM&AjPr d t�s, Whatever this Agreement requires any indemnitar to
indemnify any indemnitee:
133.1 PtqMpLNot!c S� City shall promptly notify Developer in writing of any
Claim:
1312 Co ,gegii iAL. City shall rrasonablycoopmte with Developer'silefeaso,
_
proVidedDeveloper reimburses City's actual reasonable out of pocket expenses (including Legal
Coals) of such cooperation.
13.33 5LWe"e . Any settlement shall require the prior written consent of both
`City gild Developer. which consent shall not be unrentinably withhold.
13.3,4 CjLyC�f u. City shall reasonably cooperate with Developer's
defeaw, provided Developer reimburses City for its actual reasonable out of pocket expenses
(including Legal Costs) of such cooperation.
13.3.5 luvimgo �Developer's obligations shall be reduced by net
i
insurance proceeds City actually receives for the matter giving, rise to indemnificaqon,
14. JUR2fAKJYJ&GALQJ&LLWQ�-,
14A PJvesper _QQygaant o Derktrid this AgMqtg1l, 'Developer acknowledges that
City is U "Public entity" and/or a "public agency" as defined under applicable California law.
711crefore, City must satisfy the requirements of certain California statutes relating to the actions
otpublic entities, including, Without limitation, CBQA. Also, as a public body, City's action in
approving this Agreement die Specific Plan, Maps, and/or any other current or future action of
City in connection with the approval or implementation of the, Bose Project mullor tile Clillainced
Project may be subject to proceedings to invalidate this Agreement or mandamus. Developer
L. assumes the risk of and waives and releases any claims for delays and damages that may result to
Developer from any third -party legal actions related to City's approval of this Agreement the
X activities contemplated under this Agreement the Specific Plan, Maps, and/or any other current
< or fiature action of City in connection with the approval or implementation of the Base Project
and/or the EAthanced Project, even in the event that an error, omission or abuse of discretion by
the City is determined to have occurred. If at third party Mrs a legal action regarding City's
approval of this Agrectntru, the pursuit of the activities contemplated by this Agreement, the
Spccific Plan, Maps, and/or any other current or future action of City in connection will, the
approval or implementation of the Base Project and/or the Dthanced Project, Developer shall
indemnify and defend the City, With legal counsel reasonably selected by the City, against such
U) third -party legal action, and Shall Pay all of the court costs, attorney fees, monetary awards,
sanctions, attorney fee awards, expert witness and consulting'fem and any expenses of any and
all financial or performance obligations resulting from the disposition of the legal action. If
Developer breaches its obligations to defend and indemnify City as detailed in this Section tail ,
City may terminate this Agreement on thirty (30) calendar days, written nodca to Developer of
City's intent toterminate this Agreement, referencing this Section 14.1, without any further
obligation on the Part Of City to Perform the terms of this Agreement. Nothing contained In this
Section 14.1 shall be deemed or construed to be an express or implied admission that City is
Ju
=1 2e"911.7M4mWDM
z -29-
liable to Developer or any other person or entity for damages alleged from any alleged or
established
18hed failure of City to comply with any statutei including, without limitation, CFQA-
15. AS M.'ANEOV—S.
I - SJ -Casliplince wiih Auplic3ble Law. Nvel6per shall carry out the construction of
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 _�,ovcnants. The provisions of this Agreement shall constitute covenants which
shall tan with the tand 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. 1
153 Mutual Covenants, The covenants contained in this Agreement are mutual
covenants and constitute conditions precedent or concurrent to the subsequent or concurrent
performance by the Party benefited by the covenant(s).
15.4 Rctordsfipp of AP_mt_mInA- 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 Clark of the City Council, within the period
required by Section 65868.5 of Govemment Code. Developer authorizes the recording urall
such docurncms against the Property, and each and every parcel within the Property, whether
preceding, during or afket the Extended Term. 1
15.5 cljyp N AJSc and Accr _qIgnec. Subject to Article 12, every person who
Ic 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 evory provision contained herein, whether or not any reference to this
Agreement is contained in tho instrument by which such person acquired an interest in the Base
Project and/or the Enhanced Project or the Property.
L. 15,6 59Lcess2t&4L ItiteriLq, Subject to Section 12. 1, the burdens of this Agreement
L shall be binding upon and the benefits of this Agreement shall inure to all successors in interest
to the Parfies. All provisions of this Agreement shall be enforceable as equitable servitudes and
constitute covenants running with the land of the Property. Subject to Section 12.1, each
covenant of this Agreement to do or refrain from doing some act regarding development of the
Property: (r) is for the benefit of and is a burden upon every portion of the Property; (IQ nuts
with every portion of the Property; and (fir) is binding upon Developer and each successor in
interest to Developer in ownership of the Property or any portion of the Property-
15.7 _Qj&MnjLqXer IrnPIcmctLt_afion. City shall implement this Agreement through its
City Manager. The City Manager is hereby authorized by City to issue approvals, interpretations
or waivers and enter into certain amendments to this Agreement an behalf of City, to the extent
that any such action(s) does/do not materially or substantially change the Improvement or
E U increase the monetary obligations of City by more than Seventy Five Thousand Dollars
E ($75,000) in the aggregate, provided, however, that in the event the Specific Plan allows certain
C
tt
r USE I G-WOV3- 14- IVJTMAn -30-
approvals by the Community Development Director, his designee or tire Community
Development Department, the procedures in fire 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 specific 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 kgtLdcal I(c(Qnn &I 'Me 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 Survival of Arrtftmenl. All of the provisions of (his Agreement shall be
applicable to any dispute between the Panics raising from this Agreement, whether prior to or
following expiration or termination of this Agreement, until any such dispute is finally and
completely resolved between the Patties, either by writton settlement, entry of a Ln-appealable
judgment or expiration of offlicablit statutory limitations periods and at) terms land conditions
of this Agreement relating to dispute resolution and linthations on damages or remedies shall
survive any expiration or tormination of Us Agreetnend.
and 6111OWW9M, Viis Agreement constitutes the
entire understanding and agreement of the Parties and superactics all previous negotiations,
discussions, and agreements among the Patties with respect to all or part of the subject matter
hereof. No parole evidence of any prior or other agreement shall be permitted to contradict or
d vary tire terms of this Agreement Faiture by a Party to insist upon the strict performance of any
0: or the provisions of this AW"ement by any other Party, or the fidluroby a Party to exercise its
0 Q rights upon the default of the other Party, shall not constitute a waiver of such liarty's right to
LLJ insist and demand strict compliance by the other Parties with the terms of this Agreement
0C
-1 thercaftor, Any amendments or modifications to this Agreement must be in writing, signed by
< duty authorized representatives of each of the Parties hereto, and recorded in the Official
U Pcccuds of Los Angeles County, California,
ic
U-
0 No inference in favor of or against any Parry shall be
a drawn from the fact that such Party has drafted any part of this Agreement The Parties have
(a 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, term or phrase
V 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
a: Agreement no words "include" and "including" in this Agreement shall be construed to be
8 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
15 1
2 Agreement), and includes all exhibits, schedules, addenda and riders to such document, fire
LU word "or" in this Agreement includes the word "and," Every reference to a low, statute,
2
2M06N=W0M
0 Iroheu a>s sa a -31-
regulation, order, form or similar governmental requirement refers to each such req&ernerit as
amended, modified, renumbered, superseded or succeeded, from time to time.
15.12 Lngcotv tigao is seeding this Agreement
-Qla LkqsAjs. Ibb Recitals of fact dot forth Or
art true and correct and are incorporated into this Agreement in their entirety by this reference.
15.13 Section Heidirws And Section and Article ReNroji�_eq, 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 die
referenced Article.
. 15.14 Sinvular mid Plural. As used in this Agreement, the singular of any1word includes
the plural.
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 years shall be to consecutive
calendar years. Any reference to business days in this Agreement shall mean consecutive
business days.
2. tima is or die essence in the peAmmnce of did provisions of
this Agreement as to which time is an clertimt I
S 15.17 Further Actions and Ingnmealt, Each of the Parties shall cooperate with and
providd reasonable assLstance to the other Parties to the extent nwxssary 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
instruments and writings and take any actions as may be reasonably necessary to implement this
Agreement or to evidence or consummate the transactions contemplated by this Agreement.
L 15.18 If any term, provision, covenant, or condition of this Agreement is
hold by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisionsaof this Agn:cment shall continue in: full form and effect, unless and to the extent the
S rights and obligations of any Patty has been materially altered or abridged by such holding.
15.19 LUALXARMU. In any Action proceeding between City and Developer, the
prevailing party in such Action shall recover all of its actual and reasonable costs and expenses
(whether or not the same would be recoverable pursuant to Code of Civil Procedure
Section 10315 or Civil Code Section 1717 in the absence of this Agreement), including expert
witness flees, attorneys fees, and costs of Investigation and preparation prior to the
commencement of the Action. However, such recovery shall not exceed the dollar amount of the
actual costs and eVems of die 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 patty's expenses. The right to recover such costs and expenses shall acme upon
u
3
-32-
am
commencement of the Action, regardless of whether the Action is prosecuted to a final judgment
or decision.
15-20 Partyrft iciqrLics. This Agreement and all of its terms, conditions,
and provisions arc 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 Property that does not timely enter into and perform this
Agreement or a substantially similar agreement with City shall have no benefit from, anti shall
not be a beneficiary of, arty of the provisions of this Agreement
1511 itcltttinnshiu of fatties. City and Developer hereby renounce the existence of any
form of joint venture or partnership between them and agree that nothing contained herein at in
any document executed in connection herewith shall be construed as making City and Developer
joint venturers or partners.
)5.22 DadqpMeof as a The Parties acknowledgOand agree that
the development of the Development is a private development. Neither Party is acting as the
agent of the otlivir 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
Agrecmcol. No partnership, joint venture or other association of any kind is formed by this
Agreement, Met than the relationship between City and Developer with rcqwct to the
Developer I. sod Property, the only relationship between City and Developer is that of a
government entity regulating the development of private property and the owner of sucl,
property.
1123. 1W s and Records. Subject to the limitations set forth in Section
4.4.5, City shall have the right at all reasonable times, at City's soft cost and expense, to inspect
the books and records of veloper relating to this Agrccmcnt, the Property, the Base Project
andlor the Enhanced Pmjcc4 and any development approvals for the Base project andJor the
Enhanced project, to the "tent relevant to City's rights or obligations under this Agreement, but
excluding any proprietary information or attomcyRrlicnt privileged communications. Developer
shall also have the right at all reasonable times, at Developer's sale cost and expense, to inspect
the books and records of City relating to this Agreement, the Property, the Base Project and/or
(fie Fnh"ccd Project, and any development approvals for the Base project andlat die Enhanced
Project, to the extent relevant to Developers rights or obligations under this Agreement, but
excluding any proprietary information, closed -session information or attorney -client privileged
communications.
IA 15.94 Ksigp 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, (ithis Agreement is in full force and effect and a binding obligation of the
Party; (it) this Agreement has not been nmended or modified either orally or in writing, or if so
to amended, iacruifying the amendments; and (W) flu: requesting Party is not in default in the
performance of its obligations sot forth in this Agreement or, if in default, to describe therein the
nature and amount of any such defaults. A Party receiving a request hereunder shall execute and
rctum.such cortiricate within sixty (60) days following (fie mccipt thcreof, Any third party
including a Mortgagee shall he entitled to rely on the Ctrtificate.
-33-
15.23 AnD('cable Law: Wage. This Agreement shall be construcd and enforced in
accordance with the internal laws of the State of California. Any sedan 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 tied
in the Superior Court of the County of Log Angeles, State of California or the United States
District Court f6r the Central District of California, Los Angeles Division, and the Parties hereto
waive all provisions of law providing for the removal or change of venue to anyother court.
15.27 IN zt-[,�tsbility of Dev "IpLrLs ()Ytq0i§ f-'-,m Leg.
&— _ _- - - —kjjd _21u— No official, officer,
employee, agent or representative of Deveipper shall be personally liable to any of the City
Parties for any loss arising out or or connected With this Agrecment, the Existing Land Use
Regulations, or the development of the Property.
15.28 NofiLr&. 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
saint shall be deemed to have been given and received on the date of actual receipt by the
addressee designated hercinbelow as the Party to whom the notice is send. If personally
delivered, a notice shaft be deemed 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 transmission to the facsimile number, A Party hereto
may at any time, by giving ten (10) days' written notice to the other Parties hereto, designate any
other address in substitution of the address to, which such notice or communication shall be
given. Such notices or communications shall be given to the Parties at their addresses set forth
below:
T12-Liti.- City of Downey
city Hall
t I I I I Brooksbirie
Downey, CA 90241
Attn: City Manager
Tclephone: (562) 904-7294
Telecopy. (562) 923-46339
With a CODY to. Rmtsn & Tucker, LLP
611 Anton Blvd., Suite 1400
Costs Mesa, CA 92626
Attn: Jeffrey T. MelchihZ Esq.
Telephone: (714)641-5100
Telocopy: (714) 546-9035
-34-
j DcvclqV_qr: Manarino Realty LLC
15615 Alton Parkway #450
trvint, CA 92618
Aum RobertA.Man arina
Telephone: (949) 748-7800
Talempy: (949)748-7807
tW"ltia_a cry to: Allen Malkins Lock Gamble Matfory & Naltsis LLF
ThmEmbruvadvroContcr, IPI'loor
San Francisco, CA 94111-4074
Ann- Sonia Ransom, Esq.
Telephone. (415) 937-1515
Telecopy: (415) 837-1516
15.29 as, to Ownk$jlp, Developer represent and'
warrants that
Developer is the owner in fee of the Developer Owned Property,
15,30 fee: reserttattinn its in Ownerlbip. City represcrite and wxmts that City is the
owii6r in fee of the Developer Lcascd Propeqy,
1531 L Authority to ��,eoyte. Orw0oper warrants and represents that (I) it is duly C _
organized and existing„ (U) it is duly authotiY:cd to execute and deliver this Agreement, (ffo by so
executing this Agreement, Developer is formally bound to the provWoini of this Agrcoment,
(iv) Developer's entering into and performance ofils obligations set forth in this Agreement does
not violate any provision of any other agrecruent to which Developer is bound, and (-.,) there is no
existing or threatened litigation or legal proceeding of which Developer is aware which could
prevent Developer from entering into or performing Its obligations set forth in this Agreement.
0 15.32 AuthqrqXAo&xccutc. City wamins and represents that (t) it is ditty organized
and existing, (1i) it is duly authorized to execute and deliver this Agreement, (ffi) by so executing
this Agreeincrit, City is formally bound to the provisions of this Agreement, (N) laity's entering
qC into and performance of its obligations set forth in this Agreement does not violate any prevision
(j, of any other agreement to which City is bound, and (v) there is no existing or threatened
a: litigation or legal proceeding of which City is aware which could prevent City from entering into
LL
0 or performing its obligations set forth in this Agreement.
C
(a
15,33 E?� �utiop of �Arqc ��u Mx% Ibis Agreement may be "coutcd by the
Parties in counterparts, each of which when so executed shall be deemed to be an original and all
of which taken together shall constitute one and the same agroornent, This Agreement shall
M constitute a valid and enforceable agreement between City and Developer.
L
8 15.34 A9 Ljbgs. This Ag=mcnt contains nine (9) exhibits; attat;W.'heand made a
pact hereof by this reference. Said exhibits am Identified as followsa
A Legal Description of Developer Owned Property
B Depiction of Developer owned Property
LUa C Legal Description of Developer Leased Property
2 D Depiction of Developer Leased Property
cc
0
E Depiction orptopetty
F Fire Station Site Plan
[RESERVED]
Pre -Approved Retail Development Brand Noma
Pre -Approved Hotel Development Brand Names
Iffigoamm on hw Vage]
MIMA001' ' v,
I - U-17 N 717-Wro-I UNIT=
AMOVED AS TO FORM:
ty A
e.
x
_u
No
W*t"
Crff OF DOWNEY,
a ctleful, city
By: pp 1�
C
CE?iOR151il't' 4 C. MEMO:'ThIs COPY Is NOT an OFFICIAL RECORD..
... ®a ''.
"DEVELOPER"
PCCPIRODOWNBY,:LLCj.
a Dalawam limited liability company
Br. PCCO LB IRG Downey, LLC,
its MM!7�"'
By:
Name: William It undsly
Tific.. —MulorizoaSipMory,
IRG DOWNEY, LLC,
a Callfomlia limited liability company
Ely: IRG 11% LLC
Byi S,-L P pzrlits, In
Br
Name: f -AAm UCAf4ft-
Title: df`�Lg f
ail I "a,
STATE OF CALFORNIA
COUNTV'OF LOS ANGELES)
1.
acted, executed the instrument I caritty undni PENALTY OF PERA)AY under the lam of U
Witness my hand and official scal. $W(e 01 CaNOMIA th at (NO ta6a�llrlg ig V02 aGa MeCt
WAR L WILW
cor"ITdoll" 0 1839053
Mowry
LQO Pulft - CoMerr0a
omp courdy
(SEAL] 4,�OM UP", 44, 9. 20131
STATE OF CALIFORNIA
)ss
COUNTY OF LOS ANGELES)
on d before me, personally
appeared
personally known to me (or proved to me can the basis of satisractory ovidente) to be the
porson(s) whose nnnic(s) istare subscribed to the within histnimcm and acknowWged to ine that
he/shelthey executed the same in hi !their Authorized cripacky(ics), and that by hWher/their
sIgnature(s) on the Instrument the person(s) or the entity upon behalf of which the persons)
acted, executed the instrament.
Witness my hand am official sea[.
ME
.39-
I
15
I
-1
Slateof Calitomill
Counly of �os
ZObeloro me, adeo' wk� 11A
N" W Wft a" UW41
personally a0pared
whI plowed lo me orw I_ of saWhdoty Wdence to
be dw personon0lose narnaKistam subscribed to the
b
L r within Instrument and acknowledged to ne that
hekhaey ewcuted the same in Wh4w&& auftrized
capa*Qp� and OW by hM)w**W signatimW an the
Instrument the pBmori*, or the andly upon behaff of
:h the person(s) acted, execifted the Instrument.
I cartify under PENALTY OF PERAY under the iaws
of I: of Caftrnia that ft bregoing panligraph is
true and correct
WITNESS ��.an �aoffi kZal.1
signatu'05
OP77ONAL
ThaWh dw Womw *4 kokw b no mqzft d by Am 6 nw pmw tokpoW b pe rw oa mfft &v w 9 dam ow I
&W O%M PmwO baud"I mmoW and msnmh~ of d* ftm to another d=mwL
Descripbon at Attached Document
Cepeclltoes) CI® WW by Signer(e)
Bigneft Name. —
El IndIvIdual
C) Cor0orals Cgloor ---m TWa(s):
0 Partner —a United 0 General
0 Attorney In Fed OWN"
TOP ON w"M roo
(I Guardlaft or Conservator
C! CIther
la Representing,
Oil—
SIgner's Nanw—
w In"Us!
A Corporate Officer
M Partner — 0 Urnited 0 General
D Attorney In Fact
Mirusles 01 owt b&V
• Guardian or Conservator
• 00wr
Representinq—
U-flga,RM4
state of California
County of —),-m
to Pulrltc
On -V%AYJA-U bal ore rne,
o1w
personally appeared
Ing
who proved to me on die basis of salts Clary e to
Wdenc
W the poison($) wha IT'subsclibed to the
vAthIn imitiament and acialowle4gled to me that
h0sit aMey executed the wme In is ** authorized
cailacfty(les), and that by WhorAhok sIgnehiro(s) on the
instrument cite person(s), or the entity upon behalf of
which the parson(s) acted, exewtod the Instruirient.
I WINOWWOM
WNESS my hand and otlicial wWj
signatt
OPWNAlt�&�
ThaOft kft-arkwi bmw Is reap reWwdby low, Ar;WAvw ernes to pOrom l#Vnq on ft dovxlxw
aft kMM ioaaftof nl
Desedption of AftcW Bacumsm
TWe or of Doowmaft
Document Date: NumW of Paps:
Slipter(s) OMw Then NOMW
Capacity( les) CWM&d by ftkar(s)
ftnees NaM!
SOWN% NaMw,
E3 Indbildual
0 IrKWkkiW
U Corporate Offlost — Tftls(z)-
0 Corporate Officer
13 PaMar — 11 United 0 General
El Partner — CI Urnited 0 Gemral
0 Aftomely in Fad
0 AtWM In Fact
El Thistes 111P I
01hufte TOP d M" Iwo
0 Guardian or Conserator
Q Guardian or Consarvalor
0 01hor
n othar!
I
R-TUTTM,7-�4 i Qt NLl,'
'ECORDER MEMO: This COPY is NOT an OFFICIAL RECORD.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES)
On 1 before me, 160— a
appeared
1*100" proved to me on the hnsis of satisfactory evidence) to be (lit
person(;) Whose rjamejs� istW subscribed to the widli n instrument and acknowledged to me that
jlejAtmho)� executed the same in higle4t6k autilorizcd capacity*), and that by hisAmAhok
signature(s) on the instrument the PersonO Or (Ile entity t1poll behalf of wliicli the person(O
actexi, executed the instrument. I caft9y urder PENALT4( OF PERJURY under the Im of the
8�ft of calfFornia that the tbregoing is tale " correct.
Witness my hand and official
OMENE1
Notary Public
W'1W 0 1911284
C1=K
7 I
ftbly P" - caulartil
(SEAL] 1,13 Anpa cavrlty
Dmaiz4W
STATEOFCALir, NIA
)83
COUNTY OF LOS
on before me. personally
appeared e on Me basis of satisfactory evidence) ta be th�
personally known to mO (or Proved Pcknowled ed to mr that
acted, executed the instrument.
Witness my hand and official seal.
IMIJAM"Iwa
anala-MV.1,44-tvamw
99
ZECORDER-49ii6.-iii—is66PPY6 koT an OFOI'CIAL'RECORD_
EXHIBIT "A"
Ambacription of Developer Owned Pivocti-Y
ti
OWANCU OF' 641." FEEr T`fWNCV NORM *03OW fMr 3214t FWr TO MV
11COMM OF A TMMW CtXW COWAVE SWJMEVMY AW tWVWO A
RAIMI Of 41BW FM IN9" DOUDEMMMY AkQW &W 0JRVE THIML04 A
CE)MM AMME OF IrWW, A OWARM, OF 01M FECT TO SAO UNE MY)WIMM
THE POW OF IIEW"M AMU IM SOUTIMEST CX)AWR OF TW GOUTIWW
OUARM OF 'THE NWTHEM QI.MM OF THE SWMW QU%RM OF
Mwno"At SECTION W weoca No"t ooiww ow, AWW VAQ uw A
VWAHM OF lZ)0$F=-TTOTWTMWF0WTtW OW204M
3
CONTAINIM AN AIWA OF 2AMPM 9MWW FWT, MM OR UEM
ALL All SMWM ON UGiMr qr A7TMM MMO NO M" APART HEREXIF.
eta
may
0
Gn
>r
o
0
Aa
IECORDER MEMO: This COPY is NOT an OFFICIAL RECORD.
EXHIBIT *B"
-ACOJMM P4MV
me Www
We-
100 41,
Aw?
My
3 0
. um
I
a
I
Propetiv
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am
IECOR DER MEMO. This COPY It NOT art OFFICIAL RECORD.
Ai QY`
EWBIT 08"
wam war
LK TABU SAWRT AM
fbmtv w A�Av
Am
il WYK
41
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"now $I A"Wimm WL
a.." ONO"
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1 *4 i 11:1 10
'EC6 RDe4 WWO. Thlm'COPY Is NOT an OM&C & 6OR+.
■
NO
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0
CA-1--- ---
ff-u��
f.ce,aID0scrh)flol)ofDcvcIoqtrT sedPropvrjX
m
'ECORDER M�-MO: -[�:s OPY is NOT an OFFICIAL RECORD.
EKHMIT "Ar
TAW LIAMCEIMMM
vWUffFWALRfArVGFWW-G9QtJMLFA3E
7MT PORTM Of LOT 2 Pf TM NOW$6WST OUWTM OF fRACTIOWL MOM itl,
JOWNW 3 Soum RA"(w u yew, IN -ow PANCM SAWA GFATAVOM
TOWMM WPM A PM" OF TLE WAMM QUAFITM OF "ll FRACT)ONAL
wmm fk IN THE Cffy OF oowstM cow" OF LOS Ah*filus� STATS OF
MOORM AS W-OMMO IN SDOK i. PAOR 50 OF MWWMEOUS 11600"
PaMRM k4TWOFFMOF THEMMY RECDM" OF4AVCOWYUCSCMGW
AS POLLOft
UMHWQ At A POW 04 THI! MOMWEMY UM OF &W LOT 2 017K NMWW
OUAnM Of FnAULKOJAL set;" to, UO UK ALSO MM TM NOMMLYUNC
OF OTEWAW AW GRAY FlOAM 00 FEEr V110e DWAKr THUMON UOM DMI46'
WOW M"t na FROM P* WMMW 0DkM OF UM 1MT Z THUMONA UNE
DeTWEM wo POW OF em"W Ate ME GO(MlYgm COW" OF Im
oFnvzroKcwmN % somwiverwEsTlimorwTormum Pow
op gg=#W: t"cu At FWW AWM TO YK EASTEMY UNE OF " LOT Z
&W CAMPLY URE ALOO GONG TM CMMURC OF BELLFLOWER WAEVAM
NMH NW?r 5W6020 FMTOAPOW INA UNCTIM 9S PMALLIELWMIANO
f)WrANTV&cwjq,y 4om FW hwAMM hT AWM MMES, FWW 8" EAWWLY
LINE Of LOT 4, TLOCE SOUTH MOM VM. ALOP0 &W PARNJXL LIC A
DWANCc OF %64 FCrr To T"9 WTOUCIM OF SAM PMWIM UX& WTH A
VW THAY 18 PARAUBL WMi AM OWW it.... 4(t0Q FW. MEAWWO AT
RJ%ff ANUM, FROM THE eASTMY UK OF =0 QfW= QUW" OF WID
FRWTVM SECTOR 11% T100M 90knH Wl"l-r CAST. ALD"OtAllr &W PMWIM
UW- A DWAWE OF 12rM MWT TO A UM TMT M PAMM Wfl" AND VkSTMT
A vommy woo FT. meAmFo Ar wwa A"mm, P 7M SWn*WY LIM
OF GM NORT"FMT OOMTER OF 7116 MMfMST allAFtM OF FMCWHAL
seCT04 lk MWHW SOUM WSiUV WK, ALOW UW SKAD PAWUL UNe, A
MTN" of 2MI FM TO TM OM"MG OF A TMrAW tUFM 00WAVE:
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-MAP
This First Amendment to Tierra Luna Development Agreement ("First Amendment") is
made and entered into efficc6vc as ofW * 2017, by and between the CJOF
DOWNEY, a California charter city, ("City"), *CP �IR6 DOWNEY, LIX'. a Delawam limited
liability company, as to on undivided 90% interest, and JRG DONVNEY, LLC, aCalifornia limited
liability company, as to an undivided 10% interest (collectively, "DLVELOPER"). City and
Developer are collectively refenvA to herein as the "Parties."
A. . Whereas, on March 15,2012, the Parties entered into the TTerra Luna Development
Agreement ('Development Agreement");
B. Whereas; the Development Agreement allowed Developer to develop the Property
with eithei the Base Project or the Enhanced Project;
C.. Whereas, Developer `vas rquired by Scctioii 6'.1 to make dh election in writing
ftiihg the first five years of the Development Agretment's term if Developer wished to develop
the Enhanced Project on the Property;
D. Where=. 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
Agre-iincra.
Whereas, the Parties also wish to amend certain sections of the Develcpni6ni
F-TTMISE5
NOW, THEREFORE, based Upon the foregoing Recitals, which are incorporated herein by
reference, and for good and valuable consideration, the receipt and skiffici@ncy of which is hereby
acknowledged, the Parties hereby agree as follows:
1. PEVEI-OPMENTOF"IEUMM
I.I. qjV _EL _q. Developer has elected to carry out and develop
the Base Project on the Property in accordance With the Existing Land Use Regulations. As a
result, Developer hereby reaffirms that it will comply with the provisions of the Development
Agreement that apply to the Base Project.
1.2. DLycJQppr rilc0on to Proip;.t.- Developer has not and will not
mike an election to develop the Enhanced Project on the Property pursuant to Section 6.1 of the
Development Agreement. In light of Developer's decision to develop the Base Project, the
provisions of Article 6 of the Development Agreement do not and will not apply to the
development of the Property. Article 6 of the Development Agreement shall therefore be deleted
in its entirety.
1.1 1 JVrm with 0"fion- Section2.1.2 of the Development
Agreement shall be deleted in its entirety given theDeveloper's decision to proceed with the Base
Project.
2. S7tENERAL DEVJIW-eJjtfQYJ-tAbU
2.1. L4,UAfprmst and Remaining Counmerciii Devq-1upment llelailm'x. Section 52 of
the Development Agreement shall be amended and replaced as follows:
11,wac Fonunt mcnt Rclnilqu. All Large Fbmat
Retail Development and Remaining Commercial Development developed as part of the
Base Project shall be operated under one of the retail brand names set forth in
or such other retail brand name in the Developer's sole discretion.
3. IfJIM STATION-DLDICATION AND DEVKLOMr
3.1. 12tYclMnent or tht. " �-S rtfi�' . Article 8 of the Development Agreement
allows the City to request in writing that the Developer design and construct a Fire Station on the
Pro pertyi 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. MISCELLANr:QU
4.1. NgLLq0, Section 15.28 of the Development Agreement shall be amended to replace
the Developer and its counsel with the following:
PCCP IRG Downey, LLC
555 Callfbmia Street, Suite 3450
Son Francisco, California 94104
Attn; Aaron Giovara
Telephone: (415) 732-7645
Telcoppy. (415) 732-7547
)M ,I —acomix Alleii W&ins Leck C;ambfe M�JW6 & Natsis LU
Oue America Plaza
600 West Broadway, 27th Floor
San Diego, California 92101-
Attn. Heather S. Riley
Telephone: (619) 23361155
Telecopy: (619) 233-1158
4.2 Pqfjncd Terinq: Capital tarns that am not specif!Wly defined in this First
Amendment shall have the meaning assigned to those terms in the Development Agreement,
4.3 C2M=UM 'als First Amendment may be executed in any numbir of
counterparts, each of which shall be deemed an original, but all of which, taken togohcr, shall
constitute one and the same instrument
[St rues of Next Page)
WX II I all I a V
� �i
IN WUNESS WIMREOF, the Parties have executecl this FIM Amendment as of the day and year
first above written.
hcrNn
"DEVELOPER"
PCCP IRG DOWNEY, LLC,
a Delaware limited liability o6mpany
By: PCCP LB IRG Downey, LLC;
its Managing Member
By;
Name:
Its:
"IRG"
IRG DOWNEY, LLC,
a California limited liability company
By: IRG M, LLC
By: S.L.P ropertic-9, line.
By:.
Name:
o2zuu-wa2Xi4.f7Aw,jn -I-
CAUFORMA ALL-PURPOSS ACKNOWILROGM111INT MI. COUE 6 1169
A notary pubito or other officer completing ft wIlicate votillas only the Identity of U* ln&tduM who stgned the
document Iowhlch M carlikatelsaftchod, and not thattuthfutnags, accuracy, orvaldity ofthaldowmant.
State of California
County of LOS AV46ag-5
On —2T tW 4 &- 16, P I I before me, - 9"4&X K Als key A�
Date Here Insert Name and M of ft Offlaw
;t-rimonalli appeared do Vusetz—
Nam a (s) of SigreWs)
who proved to me on the bests of satisfactory evidence to Nye the persons( whose warm eW Is/am
subscribed to the vAthin Inseumont and achnoModged to MO that 1101414944Y eXectited the same In
hIv)wWftir authorized oaWol"), and that by hI~h* oilinature(14 on the insiturnesit the petsrrnjA�,
or the entity upon behalf of which the ponron(10 acted, executed the InstrurneAt.
I codify under PENALTY OF PERJURY tinder the towir
of the State of Odfomla that the foregoing paragraph
Is true and correct
RUEDCAAWNGUIRRIR0 WITNESS my ha wW official sool.
CWFIMMMGR * 2111735
No" Puble - GIONDMIA
Los Pip%$ P'Ovpty Sionaturo it &AX
O'V.6.200=2 Junil"d SIgnah" of Notivy Public
Plow Notaq Soal Above - OFT70NAL
Though this sectIon Is optional, compledrig thfs Information can dater aftration of Me document or
linucluient reaftchment of this form to an Linintended dotrument
Description of Attachod Document
Title or Type of Documer&
Document Date: IV Nr of Pages:
SIgner(s) Other Than Named Above:
Copeftoes) Clatmed bir ftner(a)
Si Signees N gnar's Nomm a
...... re
11 Corporate OffIcer — TMO(s), 0 Corporate Officer — Title(a):
El Partner — 0 Umftad 0 Gonsralll-'� 0 Partner — 0 Umrmd 0 General
• IndhrIdUal 0 Attorney 1, 0 Individual 11 Attorney In Fact
• Trustee 0 Ga nsomator 11 Thates 0 Guardian or Conservator
• Other. 13 Other
Signer Is 9;5�;7-9: Signer Is Reprosenfing:
ONA
101".170 EX
a M.-
-------------
On beko me, —A�jbX
Date Hato �SortNaM�oandVtftooft 2
penwhailly appeared AaMA-LUD=�
Namq4olsignarW
mlx
375'r- r or We on* =.1 = I ZhMN41' 01=7w.n
I cartIfy under PENALTY OF PERJURY under the taws
of the State of 091t1mia that the foregolng pwagraph
WHIFNEY ANN ALLEN Is true and convot.
NO" poft - CmarrJA WITNESS my hand agowiddl SM1.1-
9N FmOolove Courily
My COMM. FItINS AX 24,2020 Signatur .
ftnftia of Misty Public
Place AbfaTS96! Above _ OPMWAL
ThoWh M sectlon Is optional, comple" this Informallon cori dkw aftratbr; of the dowment or
fraudulent reaftschment of 6V9 fonn to an unIntended doement.
Dewripilloh of AMohed Document
71119 or Type of Document
Document Date: Number of Pages;
Signer(a) Offw Than Named Above:
mis-ji I;J2�1 =U,
SIgrWs Name:. Signer's Name:
13 Corporate Offiber — Ttle(a): 0 Corporate Officer — TItle(e):
El Partner — 0 Umtted 0 General D Partner — 0 Umited 0 General
• Individual 0 AtIomey in Fact 0 Individual 0 Attoft* In Fact
• Trustee Ej Guardian or Conservator [IThatee [I Guardian or Conservator
• Other 0 Other
SIgner Is Roprownfinw, Signer Is Representing:
I W11-141 oil
IN WIMSS WHEREOF, the Parties have exo6wed this FligtAmendment as of the day mind Year
first above written.
"CITY"
By: -
Name;
hs-
W97W " �1MN
II ' 11 I's I A
Attdiitl. By: PCCP LB IRG Dowiiey, LLIC,
Its managing Member
By.'-_-;�
Ra—rin Alivia Duarte, CMC Namo--AwmA-G1QYAM—
Interim City Clerk
Approved id to Fbtdt "IR15"
IRG DOWNEY. LLC.
a California limited liability company
Yvette 14. Abich Garcia
City Attoiney By. IRO 111, L LC
By: S.L. Prbodrddti Inc:
By -
Name:.
Its:.
UKV�•;�
D
on —,&ukqjt-1 A,2102—, before me, Lteng jVni Oadona Majo ary P _q LittiI t ublic
personally appened ----Jplin A.,Njasc . who proved to tire on the basis of satisfactory
evidence to bo the person whose nanie is subscribed to the ivithin instrurnent and acknowledged to
me that he executed the same in his authorimd capacity and that by his signature on the instrurnent
the person or the entity upon behalf of which the person acted, executed the instrument.
Ippaill-pi'll, I I 1 11 11:11 T I �: 1 11 1
fbregbing paragraph is true and correct.
WM-4ESS my hand and of Sciml seal.
Signature
-
am
S.4
PAM:
LEADSHEET
009759347
m
DAR - Counter (Upfront Scan)
11010111111111111010
A THIS FORM 13 NOT TO BE DUPLICATED
I"
WOK
ktd6Abikd ktQUESt
CITY OF DOWNEY
CITY CLERK
WHEN RECORDED MAIL T06
City of Downey
Attn: City Clark
11111 Brookshire'AiFen'ue
Downey, CA 90241
I
e'Qu Eumpt-Govommoril Coda G,C j MW 1 (a)(1) SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
CI DICS' 43LIKOE4 0331 120YA I M U
City of Downey
Attn: City Clerk
I I I I I Brookshire Avenue
Downey, CA 90241
,$1,,(�QNQ &kIrNALr* —A L,—"NA
WL—V I
laxW2, 1") 2!9-CITY Cr DQNVN
IRC, l)OWNr-,Y,.LI,,c,
jLtLd US VI DL )WNFY, LLC
This Second Amendment to Tierra Luna Development Agreement ("Second
Amendinew") is inadc and entered into effective; as of AV ' 'I -nong the
d_J�—UL I �, 2019, by and ai
CrJ,Y OF DOWNFly, a California charter city (T, ;'), PCCP JRU DOWNEY, 11C, a
Delaware limitcd liability company, as to an undivided 90% interest, IRG DOWNEY, LLC, a
California limited liability company, as to an undivided 10% interest (collectively, "Developer"),
and US VI Downey, LLC, a Delaware limited liability company ("Buyer"). City, Developer and
Buyer are collectively referred to herein as the "Parties."
Q.
A. Whereas, on March 15, 2012, the Parties entered into the Tierra Luna
Development Agreement ("Development Agreement");
B. Whereas, the Development Agreement allowed Developer to develop the Prbp&ty
with either the Base Project or the Enhanced Project;
C. Whereas, on September 13, 2017, the parties entered into the First Amendment to
the Tierra Luna Development Agreement ("First Amendment");
D, Whereas, Developer was required by Section 6.1 of the Development Agreement
to make an election in writing during the first five years of the Development Agreement's larm if
Developer wished to develop the Enhanced Project on the Property,
E. Whereas, Developer did not make such 9.6 election and Developer codified in
writing its decision to develop the Base Project on the Property in the First Amendment,
Mmut MI
F. Whereas, the Developer Owned Property has been sold to Buyer, but Developer
has retained the Developer Leased Property; and
G. Whereas as part of the sale of the Developer Owned Pr6peny, Developer and Buyer
have entered into an Operating Agreement, dated Septorn1wr 21, 2018 ("Operating Agreement"),
NOW, THLRI'VORE, bascd upon the rbrogoiog Recitals, which are incorporated herein by
reference, and for good anti valuable consivicration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows;
1. ' Rh4OFT111-'A(;RIJ':Mr
IT" Ar
IA xten inat 01-Fernt. City, Developer and Buyer hcrebyagicc to cmend the Term of
IN Development Agreement p1srsuant to the authoriva(ion iti Section 2,11 of the Development
Agreement. no extended term of the J)aN,ojujvncw Agreement shall eonuuwwc(: uptr) 111c
E-ffective Date of this Second Atnell (III) Olt and Shall Continue flicrealler for fivc (5) years.
2.
IA No—fices, 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 BIM c/o Northwood investors LLC
11355 W. Olympic Blvd., Suite 100
Los Angeles, California 90064
Attn: Daniel Palmieri
Facsimile: (310) 943-1685
WithAssalmo.: Pitcher Nichols & Meeks LLF
1901 Avenue of the Stars Suite 1200
Los Angeles, California 4067
Attn-. Real Estate Notices (DBG/ADK/5080001.5)
Facsimile; (310) 201-9922
2.2 lkflmCj`t«mLs: Capitalized terms that are not specifically
Ifically defined in this Second
Amendment shall have the meaning assigned to those terms in the Development Agreement or the
First Amendment,
23 —Full All applicable temis and provisions of the Development
Agreement, the First Amendment and the Operating Agreement remiun, in full force and efTeel,
except those that aretipccificafly modified in this Second Amendment.
(SECOND AMENDMENT CONTINUrsD ONNExTpAGE)
9= F
1*11#110
2.4 Ns Second Amendment may be executed in any number of
cowterparts, each of which shall be deemed an original, but all of which, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, City, Developer and Buyer hereto have executed this Secany
Amendment the date and year first above written.
ATTEST:
AAF)AI ft IAADUXV�, �-CXC
City Clerk
I.Ciwlq
C= OF DOWNEY,
Ely.
"DEVELOPER"
PCCP IRG DOWNEY, LLC,
its Managing Member
"DEVELOPER"
IRG DOWNEY, LLC,
CALIFORNIA ALL4nJRPOSM ACKNOWLEDGMENT CMLCODE §1189
si
A notery Public or oftr offiso; comploifnit this Coflffiealo war', vs wily ft identity of the Individuat who signed the
document to which th's certtricato Is alfirched, aid not the truthlojias, mfliracy, or validity of that dDcvriant.
State of California
County of. 1 e-5
On_ '(;r!VrA-,IA,—,&Q1—&1— beforemie,
Date Here Insert Name and Tille of the Offirar
personally appeared
Namap) of Signer(s)
who proved to me on the basis of salisfacloty evidence to be the personK whose name(4' Wwe
subscribed In the Nvfthln Instrument and acknowledged to me that he/oVuley executed the same In
h1rjrW/II`*r nuthorized capacity64 and that by the Instrumunt the ponoanisr,
or the entity upon IvIiall' of which the, porsonW acted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws
of the Slate of California that the foregoing paragraph
MAMAM)MAn Is true and correct.
WITNESS my hand and official
220M
.0-M-1-44i
Signatur'911a
Signature of k
Place Notary Seat Above
OPTIONAL
Though this section Is optional, completing this information can deter alteration of the d0VI 1010
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document:
X
Document Date: r of Pages:
Sfgner(s) Other Than Named Above:
Capaotty(fies) Claimed by Signer(s) U�'
Signer's Name: Igner's Name:
DCorporate Officer —Tille(s 11 Corporate Officer — Title(s):
U Partner — 171 Limited L% General 0 Partner — 0 Limited 0 General
11 Individual [I Attorney In 0 Individual n Attorney In Fact
11 Trustee 0 Gua or Conservator 0 Trustee 0 Guardian or Conservator
171 Other._,.
11 Other.
Signer Is Repr ing: Signer is Representing:
National Notary Asso'clallon - www.NatlonaiNotary.org - 1-600-US NOTARY (1400-876A$627) Item#5907
6"
A n6taiy public or other of war completing this certificate verifies only the identity of the Individual who signed the
!!oTumont to which this certificate is ottached. and not the truillfulnoNs, accuracy, orvalit1hy ofthat docuntem I
9tate of California
County of
On Mewrv� o _Xpv) iAre a N�otary Public,
-t before me, j�4 il I--5,
personally aPpcared ,c, , who proved to me on the basis of
satisfactory evidence to be the persoxiKwhose namt," i0arc sUbScribcd to tile Within
insinurtent and acknowledged to me that helsVJIDdy c\ccoted the saute in hill WAIA
authori,mdcapacity(i and that by instrument the peNonK or
the entity t. rof Which tile pelsollo acted, cxcciaed the hostminunt.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and oorrect
WITNESS my hand and official seal.
Signature - 4-Z
2.4 This Second Amendment may be "xcuted in any number of
countetpart.§, cash of which shall be deemed an original, but ull ot'which, taken together, shall
constitute one and the same instrument
IN WITNESS WHEREOF, City, Developer and Buyer hereto have executed this Second
Amendment the date and year first above written.
11c][Iffil
CITY OF DOWNEY,
a Municipal corporation'of the State of California
By.
Name:
liv.
11DETELOPER11
PCCP IRG DOWNEY, LLC,
a Delaware limited liability company
By: PCCP LB IRG Downey, LLC,
,"Managing Member
13y:
Nam/ )ievu TbVAO'-
Its: Anthped Slgqa O�
"DEVELOPER"
IRG DOWNEY, LLC,
A iff-iTia li-trite"IWT M& �1111 �
By: IRG III, LLC
Properties, Inc.
1290830.2
A notary public or other officer Cornpleling this certificate verifies only the Identity ofthe Individual who S ipTl W, the
document to which this certificate is winubcd, and not the accuracy, or validity of that documeni-
State of California
county OfA. ?A.S-
Oil —McAv On 12 )IC , me, -'q0S a Notary Public,
_ZC_ _1, before �:�
personally appeared NAw proved to me on the basis of
satisfactory evidence to be the personW whose nai oc(* lvd to the wilhit,
instnunciii and acknowledged to me dial be/sWhey executed the same in hisft-Mttir
authorind capucity(j4, and that lay hh,;A2pM*ir signature(PT n the insinnnent ilic per%on(s),or
the entity upon behalf of which the person(>nocki, executed the inslronlcl%
I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
1290930L2
C- K HICIN05
j$-^ Los Angeles County
CGmml 'IM 12197743
PAy CMM
MM=
US V1 DOWNEY, LLC,
Illy: us V1 -Cpj Lpj
T. Delaware limited partnershipi
its Sole Member
By: BVK US VI CA G', LLC,
a Delaware limited'liability
company,
its General Partner
i ".
13y:
Name!
Title:
Nme k K
notary public or other officer completingthis certificate verifies only the idothy of the individual who signed the
document to which this icertificate is attached. and not the truthfulness, accuracy, or validity of that document.
State of (�Rjjfortlju
Countyof.
On M !n�xWlt 4— a Notary Public,
AV (A, - qI, -7-01 (10bre me to "me on the basis of
personally apivarect K�, C, 1, e Ael
satisfactory evidence to be the person(s) whose n;nnXs)Jqm,-.Wbscribed to the within
instrument and acknowledged to me that h0s -ecuted the same in his/hmfteire
authorized capacity(ics), and that by hi -A gnat ure(s) on the instrument the person(s), or
the entity upon behalf of which the perso=a) Nai, excewed the instniment.
MI-MM-2,TIM-M.- 5265" —IRWOUG53M,
Coregoing paragraph is true and correct.
WITNESS my band and official seal.
Isigitatttt
ELAINE S ASHE
NOTAfly PUSLIC=STME OP NEW VOnX
No. DIA54073607
Ovallhoo in Suffolk CO,,n,,
Mycol"mbbffitl fn*JJroh In. 14,2022
A notary public or other oMwconiplcfing this certificate verifies only the identity of the individual who signed the
document to which ibis certificnfc b otinchtd, and nol the frothfulnoss, accuincy, or val0ty ofthatdo"inlc7ru
State Oft 1btrnia- /Je-
County of
On !j4a)f before nie, s a ot A,, C S a Not Public,
cf
personally appeared __.�hjya 0. A�&
�4- . P proved to me on the basis of
satisfactory evidence to be the person(s) Nwname(s) is Ar . UlbscribW to the wilhin
instrument and acknowledged to me that 111, 01"q xemiled the same in hi&4terAhvh
�19 aturets) on the instrument the person(s), or
authorized capacity(ies), and that bylik4liei 2pul'
the entity upon behalf of which the person(g) acted, executed the instrument.
I certify under PENALTY OF PERJURY unddr the laws of the State of California that the
f6regoing paragraph is true and correct,
WITNESS my band and official seal.
DIANE ANDREWS
NOTARY PUBLIC -STATE OF NEW YORK
a.01AN8359017
Qualified In Richmond County
Signature
MyCominhislon impires05-22-2021
3- oe'�
EXHIBIT E.
.4.SSIGNMENT AND ASSUMPTION OF GROUND LEASE
iaz�o
®MrMERICAMMUMOMMY
COPYol DocumentR Id
At ReMer
Has riot beon mmpred`4 o ig 1.
has 31190 4
stdl Anumpflonoisoundl Lowe
m®
„ or onfun uniue Ru I n *n4 oncumbmws remaining otUM01Me.
9 nt mnnro aP d mripin$
ti
a
OM
IwAsig I , 1 1* 1 ,
V01OW3141 Wet"160M ummorm
-ajp-Amwn 2,qkn-M.asp an Lp
Qor4oaA-R1ussrn - T-
11100 Santa Monica Blvd, Suite 870
Los Angeles, California 90025
Attn: Dean Sussman
(Above Space for Recorder's Use Only)
Assign mentand -Assumption of Ground Lease
THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE, made effective as of
the MA day of April, 2019 by PCCP IRG DOWNEY, LLC, a Delaware lbinted liability
company ("Assignor"), in favor of HOLDINGS DOWNEY, LLC, a Delaware limited liability
company ('Assignee):
any_=.
This Assigmuent and Assumption of Ground Lease is being executed and delivered
trid jj#,sp van ,
arnong ASSlga0r,-X5-5V9--n—eC, A-24' ='
LLC.
KVTJITITTT� �=
lessor laund Industri Rca4 *roup, as lessee, as disclosed by a Mernorandurn of Lease
WINE. loliP'lilip, ".101
110-P 161 ii11
6QW""` W&WAI 'WWWW I
11141146HU110 'I "I'' 'I , H
mom WIN 1�
MWE33M
Memorandum of Ground Lem dated October 13, 2017 and recorded on November 27, 2017 as
Instrument No, 20171359699 of Official Records„ all Vdth respect to the parcel of real property
described on the attached Exhibit A (as assigned and arrunded from tinto to time, the "Ground
TO HAVE AND TO HOLD, the same unto Assignee, its successors and assigns, from and
after the date hereof, subject to the terms, covenants, conditions and provisions contained in the
Ground Lessen
'his assignment is made without recourse (except as expressly set forth bereln) or
representation or warranty, express, implied or by operation of law, of any kind and nature
whatsoever.
Assignee hereby accepts the foregoing assignment mid hereby assumes all duties and
obligations of Assignor under the Ground Lease to the extent aiising from and after the date hereof
and agrees to perforni all of the terms, covenants and conditions of the Ground Lease on the part
of Assignor to beperformcd thereunder which arise from and after the date hereof Assignee shall
defend, isideninify and hold barnfless Assignor from and against any and all "Claints" asserted
against or incurred by Assignor as a result of Assignee's failure to perform all duties and
obligations assumed by Assignee in this Assignment and Assumption of Gioural Lease. Assignor
shall defend, indemnify and hold harmless Assignee from and against any and all "Claims"
asserted against or incurred by Assignee as a result of Assignor's rhilure to ,perform all dutics and
obligations to be performed by it under the Ground Lease prior to the date hereof (but excluding
any Claim arising because of the failure of the Assignee (or Affiliate) to perfbnn an obligation
required to be performed by such Assignee (or Affiliate), "Claims" incans claims, demands,
causes of action, losses, darnages, liabilities, judgments, costs and expenses (including attorneys'
fees, whether suit is instituted or not).
This Assignment shall inure to the benefit of, and be binding upon, the respective loge
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.
I I I
a "I
IN WrlrNESS WHEREOF, Assignor and Assignee have duly executed this
as of the day fast above written.
�Ul)
PCCP IRG DOWNEY, LLC
lawarc limited liability company
By:
Name -
Title: pv)li�i4d n
am
a Delaware limited liability company
-__
a4*0 1,,
mi
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 truthfiflness, accuracy, or
validity of that document.
State of California
County of
On q1 g/.zoll before mb,
a notary public, personally appeared - S. k�-e�
who proved to me on the basis of satisfactory evidei ce to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/slieftey executed the same in hisilier/their authorized capacity(ics), and that
by his/her/their signature(s) on the instrument The pm. on(s), or the entity upon
behalf of which the person(s) acted, executed the instrarnent.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct
W hand and official seal.
(Affix Seal)
CHERYL":-'q'-':M*N-'� 0
Notary PWIC - callfar.l.
AV CamftLt! EVIm L23
— f
EXHIBIT E
-7-
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.docuracid— - _ ,
State of California
County of An, ews,
On -4!tL q, jAa- before me
,
a notary public, personally appeared
who provetl to nic on the basis of satisfactory evidence to be the person(s) whose
name( ,4 isla;t subscribed to the within instrument and acknowledged to me that
he/s)fehl}ey executed the same in hisnier/th* authorised capacity(jeI), and that
by his/lj6rIdW4r signaturc(4 on the instrument the person($), or the entity Open
behalf of which the persono acted, executed the instrument.
I certify under PENALTY OF PERRMY under the laws of the State of California
that the foregoing paragraph is true and correct - - - a — -
ACRAY tUNE CARDONA MAROVEJ
E. yhan and offici fscal. 01e.,111
LwAngmtewCounly
c®12182550
MYCOMM.6pharebIl
(Affix Seal) � Fignaturc)
m
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APN: 62564004-909 (portion)
Ma
SALE AGREEMENT
This Sale Agreement and Escrow Instructions ("Agreement") is entered into on
, 2020 ("Effective Date") by THE CITY OF DOV;NEY, a California
municipal corporation ("Seller"), and HOLDINGS DOWNEY, LLC, a Delaware limited liability
("Holdings") and IRG DOVVNEY, 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 ExIdbit "A" attached hereto ("Property").
13. 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
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)
IV Till odifies Ae re -it u-i4er the Lease. (iii) extends the term of the Lease iv)modifies
on" —e--�Ieffiase
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 p-1 s (ii) the appraised value of the land that is subject to Owner Uses.
F. As further consideration under this Agreement, Buyer has agreed to set aside land
_-nwwte._-;�L2.xT**fffficien0 for a one hundred fil't ' ' 150)� room hotel with sufficient I arkingJ"Hotel
Development) on the Property, notwithstanding the fact that other uses may be permitted on the
Property by the Specific Plan.
680m2uo-0o24 -l-
Purchase and Sale; Purchase Price.
1.1 Purchase and Sale. Seller shall sell the Property to Buyer and Buyer shall
purchase the Property from Seller subject to the terms and conditions set forth in this Agreement.
1.2 PurchasePrice. The purchase price of the Property including the 'Troperty
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
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 Deposif '
(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 Parties 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 an Escrow instructions r6gredd bb Escrow H
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 ($200,000) ("Initial Deposit'). If requested by Buyer, the
Initial Deposit shall be placed by Escrow Holder in an interest -bearing account with interest
accruing for the benefit of Buyer.
2.2.2 Additional Deposit. If Buyer provides Seller with the "Notice of
A roval'(asdefinedin c
68W0281 10-0024
1496644110 a05/08/20 -2-
2.2.3 Feasibility Consideration. Notwithstanding any other provision of
this Agreement to the contrary, One Hundred Dollars ($ 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
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,
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
wkw_aui�r-i 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 ExIiibit "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
e5gkil A W"
WON "I- I f. 11
MY W 111 1
Approval Date — if within one hundred twenty (120) days following the Property Approval Date,
680/028110-0024
14Q66441 10 a05108/20 -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.
690/0281 1 0-0024
14Q66442e10 a05/08/1-0
(2) Buyer's Obligations. Buyer is not in material default under
and each material obligation of B , er to be,,verfoqned, ?-rior 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.
RUH03=1
(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
P�arties. 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
SOME
shall be retumedTo i5uyer. ir Escrow Tails to I WITICIL11 1-di
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
r 'OF d fi t B er and Seller a current preli t tie r
i to e iver o u
690/028110-0024
14966442,10 a05/09/1-0
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
rd JW#
su ec 0 e Mini e xce
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
4WMkVill. YJAI,
2.6 Title Insurance. Seller shall cause the Title Company to commit to issue
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
11 rtl - -z --
V tIrt, PerwiVt�4�c --irtioTs.
I A,,Y,wners policy or fifie insurance 757yer s 1 10 elenUe-1117-C-11INt Mr, 6WRII&I-q-
a.�cg 4.xe-kiAxsP- nLt
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 Rigbts. 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.
680/028110-0024
1496644Z 10 aWOWO -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 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
except
f i .r;f ' r 1r
2.9.1 Taxes. All current general • special taxes and assessments on the
1111roperty shall be prorated by Escrow Holder based upon the latest available information as shown
in the tax statements provided to Escrow Holderby Seller, using customary escrowprocedures.
Seller shall provide Buyer with written evidence of the payment or satisfaction of such taxes.
garcel ("Assessment Parcet") 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
• i•'` (based on unimproved based on - percentage of i ;r rs` of -
Assessment Parcel located on the Property, which acreage figures for allocation purposes shall be
fairly and equitably determined and supplied to Escrow Holder by Buyer and Seller, Buyer and
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 transfers, improvements or other occurrences before the Close of Escrow shall be the
i• r •T ••1, Ni•I I - {r irider Vie Lease).
2.9.2 General. All pro rations provided for herein shall be on an "actual
f.`,. basis and .:: three hundred - 31 day year, The provisionsis this Sectionshall
survive Close of Escrow. If either Party fails to pay its pro rata share of taxes or other expenses
by provided, interest shall accrue• f r f amounts fromowing
allowedpaid at the maximum rate allowed by law. Any errors or omissions made in calculating
adjustments and prorations; shall be corrected promptly upon the discovery thereof If any
e ardin or prorations, the Parties shall
at the maximum rate by
690/0281 W-0024
14966442.10 a05l0€,20 ®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 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 offiscl'mv I-loldcrarecustomariiy horne by sellers of real property in the County. Atleast
three (3)) business days prior to the Closing Date Escrow Holder shall furnish Buyer and Seller
with a preliminary Escrow clositig 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 ciose orEscrow, Escrow Flolder 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
order and delivered as provided below):
2.11.1 Grant Deed. One (1) fully executed and acknowledged copy of the
grant dced on Tille Company's standard )'orm convcying the Property to Buyer ("Grant Deetf'),
Conformed copies ot'llic 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-Forcign Transferor Declaration; Preliminary Cbange in
Ownership Report, Internal lZevenue Service Form 1099-S, and California FranchiseTix Board
Fonn 593 and any other applicable state tax withholding Fornis, asapplicable, as, applica tile
As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver
copics of all closing documents, including, without limitation, those listed above, the Title
additional escrow instructionsand Ilie final Escrow
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 F-scrow',2in4,f#M7MWMI--
4� withholding agent"and withhold Ii-orn proceeds due Seller ally anIOUnts required under the above
code sections to be wiffilield by Buyer and pay same to the California Franchise Tax Board or
Intemal 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 agrecinent relating to the Property to which Seller is a Party and which the
680102% 11 00024
)4966442 1005108/20 -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,
of the Property to Buyer. Buyer and Seller agree to indemnify, defend and hold each other free
and hanuless 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, licenseii-
or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party,
respectively, in connection with this transaction.
.q,FMMFMMMW"-Ul
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 earlicr 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"),
b I M areement shall automaticall terminate and neither Part shall have a further
f L I I EVA! k1 T IT I re-ID&I _Irf Uc7wl
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. Additional Agreements.
5.1 Buyer's Investigation. Buyer shall be entitled to conduct such independent
a JV ted to, (i) Buyer's
u er deems necessary or ate conce, nim., but not limi
00 j 1 111
to - 1 .8 1 1•11 4 - a I RON.
. — a a a A- 0 1=111111r.111011mr.1 11WRINWRI
6S0/028110-0024
14966442J0 0903120 -9-
Ing
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,
environment
Real Estate ("BRE") (it shall be Buyer's obligation, if applicable, to obtain all required public
reports, as a condition to offering horlies to purchasers) in(] all other governiriental pernlits,
approvals or acts (collectively, the "Perinits"); (V) the necessity and existence of' a]) dedications,
17ces, charges, costs or assessments iVhich 1113Y be hriposed by any Governinerital Anthority in
connection with the"FroTtosed dew
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
Agreenient and as an indticement to Buyer to purchase the Property from Seller, Seller inakes the
fol lowing representations and warranties which shall lie true and correct as of the Effective Date
and the Close of Escrow and each of which is material and being relied upon 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 to any material untruth, incompleteness or inaccuracy existing on the
Effective Date, that was known of or should have been known of bgA tler�nMq
written notice of same and Seller shall have seven (7) to from the date of receipt of Buyer's
notice (and the Closing Date shall be extended to permit the running of such seven (7) day period)
("Seller Cure Period') to correct any fact or circumstance that makes such, representation or
warranty triaterially untrue or inaccurate to Buyer's reasonable satisfaction, If Seller fails to niake
such correction within the Seller Cure Period, tben Bnyer by written notice to Seller within three
(3) days after the expiration ol'the Seller Cure'Period (and the ('losing Date shall be extended to
perrilit the ninning ofstich three (3) day period)shall be entitled (a) to terminate this' Agreenient
and obtain a full refund of the Deposit or (b) continue this Agreeirient in ful I force and eNect with
no r aS:
Seller, The roregoing is not a waiver or release of any of Buyer's rights or reinedies for any
material untruth, incompleteness or inaccuracy in a representation or warranty of Seller of which
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
N
6801028110-0024
?4Q66442J0aQW&?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 of 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
ending, or threatened against Seller or [he Prope nor are there
14066,142.10 05108,'20
are no other documents, materials, studies, surveys or other information in the possession or
(m)--tTolof a material and adverse effect on Bu%er's abiliti to own; develop
and/or market the Property.
(11) Other Agreements. Except as set forth in the Property
1it .1 law or regulation. -
Seller has not made any commitment or representation to or entered into any agreement of any
kind with any governinent authority, or any adjoining or surrounding property owner, group or
leir-i-atiftiu�a . which be binding on Buyer -. and Seller will not make U_R:,l such re:�resentations 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
a -tr—ustee 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
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
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,
6801028110-0024
14966442,10 a05/08/20 -12-
incompleteness or inaccuracy in a representation or warranty of Buyer of which Seller obtains
knowledge after the Close of Escrow.
(1) Mahorization. Buyersare linlited liability companies dtily
formed and validly existing underthe laws of the State of DeliNvareano the State of Californiaand
are caeb qualified to transact business in the State of Cafflbrnia, Mlyers hive full povver and
authorily to enter into this Agreement and to perform all its obligations heretinder, and have taken
all action required by law, its governing instrunients or ollierwiw- to authorize the execution,
delivery and perrormance of this Agreement. Each individual who has executed this A.greenient
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. Fxcepl Im the Kaiser SLible-isc,
neither the execution nor delivery of this Agreenient, nor the consumniation of the transaction
conteniplated 1wrein will conflict with or result in a breachco
to which Boyer is a party or by which BUYU is bound., or constitutea dcfault therettlider.
(3) Proceedings. To the best of Boyer's knowledge, no I",al 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 willi
respect to Buyer nor any nicniber or man-ager of BuyerThere is not pending or threatened ally
case, proceeding or other action seeking reorganization, arrangenlent, adtustnient, liquidation,
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 enforcenient may be limited by applicable bankruptcy, insolvency,
inoratoriurn and other principles relating to or limiting the rights of contracting parties generally.
'6) Material Oiange. Buyer shall proniptly notify Seller if
Buyer obtains information that would make aiiy of the representations or warranties conutined 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.
II,
(a) Notwithstanding this Section 5.2 or any other provision in
this Agreement to (fie contrary, nothing in this Agreenient shall relieve Seller of its liability lbr
(a) any breach of' Seller's representations and warranties contained in this Agreenient and/or
documents executed and delivered by Seller at or contemporaneously with the Close of Escrow,
680/028110-0074
14966442.10 a05108120 -13-
(b) any breach by Seller of its covenants in this Agreement, (c) Seller's fraud, (d) any matter for
which Buyer is to be indemnified by Seller under this Agreement, (e) any of Seller's liabilities to
ownership oProperty, • or omissions from• after the Close•
Escrow.
i) Notwithstanding this Secti• or any other provision
this Agreement to the contrary, nothing in this Agreement shall relieve Buyer of its liability for
(a) any breach of Buyer's representations and warranties contained in this Agreement and/or
•• •and delivered bN Buyer at or contemyoraneously• ` of Escrow,
Escrow.which Seller is to be indemnified by Buyer under this Agreement, (e) any of Buyer's liabilities to
third persons or obligations to third parties with respect to matters which arise or accrue during
Buyer's ownership of the Property, or (f) Buyer's acts or omissions from and after the Close of
ROMMMUMESM
5.4 Seller's Additional Covenants. Seller hereby covenants and agrees that:
-tot 1 • r advertise.or conveyof the Property or enter
• f rf i i' i ;1 r. ::Mrais •, - • 11jor-adi `i. • - • • _ _i
upon uyer s request, Sener Will IIOL LRKU, UPPI, 0 TU VI U irlscnbot a 'elf 11['11
change the zoning, use, permits or entitlement of or for the Property; and (d) shall not record or
cooperate in the recording against the Property or any portion thereof, of any lien, encumbrance,
agreement, easement, right of or other matter without•
Except5.6 Disclaimers Bv Seller. /forth in this Agreement
that Seller and Seller's officers, officials, mernbers, agents, representatives, or employees have not
at any time made and are not now making, and they specifically disclaim, any warranties,
representations •.:. guaranties of any kind or character, express or implied, with respectt.
the
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
••:geological•ing, without limitation,subsidence, r
conditions, table, underground water reservoirs,limitations -..f • the withdrawal
water and geologic faults and the resulting damage of past and/or future faultin d) whether, and
VAMMIMU
68OM28t 10-00?4
14966442.10 a05(08120 -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,
(m) 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
or (t) the operation, repair or financial matters and any other matter or -thing with respect to the
5.7 Sale "As Is, Wliere Is". Buyer acknowledges and agrees that upon
Closing, Seller shall sell and convey to Buyer and Buyer shall accept the Property "AS IS,
WHERE IS, WITH ALL FAULTS," except to the extent expressly provided otherwise in this
Agreement. Except as to the extent expressly provided otherwise in this Agreement, Buyer has
not relied and will not rely on, and Seller has not made and is not liable for or bound by, any
or information pertaining to
given, directly or indirectly, orally or in writing. Buyer represents that it is a knowledgeable,
experienced and sophisticated buyer of real estate and that, except as expressly set forth in this
Agreement, it is relying solely on its own expertise and that of Buyer's consultants in purchasing
the Property and shall make an independent verification of the accuracy of any and all documents
and information provided by Seller. Buyer will conduct such inspections and investigations of the
Buyer deemed necessary to satisfy itself as to the condition of the Property and the existence or
non-existence or curative action to be taken with respect to any hazardous materials on or
defects or adverse environmental, health or safety conditions, may not have been revealed by
Buyer's inspections and investigations. Buyer hereby represents and warrants to Seller that:
(a) Buyer is represented by legal counsel in connection with the transaction contemplated by this
Agreement; and (b) Buyer is purchasing the Property for business, commercial, investment or
other similar purpose. Buyer waives any and all rights or remedies it may have or be entitled to,
deriving from disparity in size or from any significant disparate bargaining position in relation to
6801028110-0024 -l5-
a Is I A 110401
I 1 :1 A 10 1
5.8 Seller- R.cleasetl fropi-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,
[*;eriod, 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
� 31 -F I i, Aal, -eyvi 1 0 1 mintal or leial comiliance status of the ProW, whether
dris-tI6 11MOVIC In . - -
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 fin-ther 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 INITIMAS
680/028110-0024
14966442. 10 a05/08/20 -16-
6.2 Right to Cure. Buyer shall be deemed to be in default under this
Agreement if : - r ., r •
includingcomply with, or perform any material covenant, agreement, or obligation required on its part,
depositor delivery of • ,; • in the manner required
• r
cure such default within ten (10) business days after the receipt of such notice (unless the curing
*f such default cannot reasonably be accomplished within such ten (10) business day period in
680'026110-0024
14966442. i D a04108A)O —17—
7.1 In the event that Seller fails to perform any of the material covenants or
agreements contained herein which are to be %erformed bp -Se B-Tp
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 remedg at law or egffitj for such default of Seller*inc1Mkftv
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 perfon-n 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 -
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).
Addi(ional Considcration.
8.1 Pi-esetitatiotiofRe-S,ile0j)l)oi-titnities: Buyer shall present to Seller each
signed letter of intent ("LOT') and/or proposed purchase and sale agreement ("PSA") that i!
receives and/or proposes for all or a portion of the Property. Until April 3 0, 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
price per acre below the Presumed Value Seller may, in its dis
V gla jj4** C--'Ivaj6c
thex.r A
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
Procee,jfs."
8.2 Owner 1.1ses: If Buyer seeks to develop all or any portion of the Property
then, prior to commencing any physical development of such Portion B
otAw Seller
G801026110-0024
14966442J0 05/08120 -18-
8.3 V lisohl Prop�j-Lv: 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 Proceeds Above file Division Threshold: 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 commencement of physical development of each portion of the Property developed by the
Buyer. Remaining 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 Threshold.
8.5 11otel Development Covenant: Buyer shall set aside land necessary tr
develop the Hotel Development defined in Section 1.43 of the Tierra Luna Developmewi
Agreement by and between CITY OF DOWNEY and Buyer, dated on o r about March 15, 2012
�"ffotel Develgriment Site-:. Seller andllu�,�Agree
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
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-Oblieations: The obligations set forth in this Section 8 shall
survive the Close of Escrow and shall
(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
1496644110 05/08120 -19-
SELLER: The City of Downey
11111 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
INFORMATION1
An:
Phone No,:
Fax No.:
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
as as�set f �rthab�ove it shall be deemed to have been
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
690I428110-0(124
1496644110 05/08/20 -20-
I -Mell I M1 70(17,TrL =0 . - I
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
proceeding for any relief against the other, declaratory or otherwise, in any way arising out of or
in connection this Agreement **C-A6m6rcy� �--- �' �- qgff&m 097-1-r,%
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 granteii
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 faci
011 "M 4-14-10011 "M `�Ifw
NUIL LF INVIC P I C1UllO")7CJ Lll"UICI fdltj �i llluj4:f alp-lifell oil fliaJol
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;
gation.
11. Miscellaneous.
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 Readings. 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,
1.1 1 sit Of
690/028110-0024
14966442AO aO5!08/20 -21®
11111111111 1111!11 1
ffimll a 6 0
Y 5-YTYT§ a YXT I '097TV14M
no express waiver shall affect a default other than as specified in such waiver. The consent or
�,?�rirnal)Fy cithzi
shall not be deemed to waive or render unnecessary the consenting Party's consent or approval t*
or of any subsequent similar acts by the other Party.
11.8 Severability. 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 contexi
requires otherwise), the masculine, feminine and neuter genders and the singular and the plural
i,-t.cll)de one anoAer.
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 TimeReferences. 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
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
ached hereto and referred to herein are incornorated 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
690/028110-0024
14966442, 10 a05/08/20 -22-
70707717' an s T inc ae a voill
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 D.
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
'i i MVkHWWWWX**-f 2,1AW#1Wi JV9 �Mi�IVQOW41 iT 1% A W X#� �66
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
i-R�Oaew-Lel--v.%Ior��Wff-inateAhi�s—Ag,reement and the Deyosit shall be - roinvaly 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
77
condemnation award related to the portion of the Property condemned.
11.16 Venue. In the event of any legal action to enforce or interpret this
'1157MUr Z .11MIMMMMIMMusioe nenue shall bethe Sucerior Court of the Courni andtheParties
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
which shall be deemed an original, but all of which together shall be construed as one instrument.
11.18 Assignment. Except as provided below, Buyer may not assign its rights or
9 7 •u t
ntity is the managing member and which Buyer holds an ownership interest and any other entity
of such entity or (c) which is wholly or partially owned by Buyer's acquisition and/or development
reacquire residential lots in the Property prior to sale to the public (an off balance sheet
transaction). Buyer shallpTovide 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
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
690/02 6 110-0024
I49(6442_10 45108!20 -23-
obligations of Seller, whether known or own by Seller or Buyer. Except as provided
otherwise in this WILT
"W"111 MUNIN a - . . 'I Ali
1"I'l IN I IMAM I I I I I I Ur —to N
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
Revenue Code, which shall include the signing of reasonably necessary exchange documents;
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
property shall nonetheless be consummated as provided herein.
11.21 Nonliabitity. 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 managers), nor any agents of any
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.?@—ai—ns—t _suchdfi_rtcAors,�ficer�s
members and managers of such members or managers), or agents, whether disclosed or
undisclosed.
(V11111i illil ;J11 11;
6SO1018 110-004
14966442, 10 a05/09/20 -24®
[SIGNATURE PAGE TO
I — , In" - Ire.
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: Cal
By:
"Seller" John so
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
By: S.L. Properties, Inc., a
Delaware corporation
Its: N4 pager
""g
By:
Jo A. Ma e
Ixecidive Officer
xecutix, �
Its: Chief, 1c,
"Bu er"'
!P
680/028110-0024
1496W2. 10 a05108/20 -25-
[SIGNA TURE PA GE TO
SALE A GREEMENT AND ESCR 0 W INSTR UCTION&
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: Manager
"Seller"
Rutan Tucker, LLP
M
John A. Mase
Its: Chief Executive Officer
IRG DOWNEY, LLC, a
By: IRG 111, LLC, a
Delaware limited liability company
Its: Managing Member
680/028110-0024
14966442, 10 a05/08/20 -25-
Properties,
Delaware corporation
Its: Manager
LE
John A. Mase
Its: Chief Executive Officer
"Buyer"
EXHIBIT G
SOUTH PARCEL DESCRIPTION AND DEPICTION
RECORD OF SURVEY
SHEET I OF I SPiECT
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