City Council - Successor Agency - Housing Authority
December 20, 2022

RESOLUTION NO. 2022-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON,

CALIFORNIA, ADOPTING A MITIGATED NEGATIVE DECLARATION

AND MITIGATION MONITORING AND REPORTING PROGRAM UNDER

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT , APPROVING THE

DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN

THE CITY OF FULLERTON AND WESTPARK INVESTMENTS, LLC AND TA PARTNERS FOR THE SALE OF PROPERTY LOCATED AT 212 EAST SANTA FE AVENUE, FULLERTON, CALIFORNIA (APN 033-030-18) AND

AUTHORIZING THE CITY MANAGER TO TAKE ALL ACTIONS

NECESSARY TO EFFECTUATE THIS ACTION
W
HEREAS, the City owns approximately 2.05 acres of real property at 212 East Santa Fe Avenue (“Property”).

W
HEREAS, the City entered into an Exclusive Negotiation Agreement (“ENA”) with Developer, West Park Investments, LLC and Parkwest Contractors, to develop a portion of a city -owned public parking lot, located at the southwest corner of East Santa Fe Avenue and South Pomona, into an upscale boutique hotel.

W
HEREAS, the City has subsequently entered into extensions of the ENA.

W
HEREAS, since the extension of the ENA in August 2021, Developer has modified the project to entail construction of 140 residential units, a 124-room hotel, 3,570 square feet of retail, a 3,570 square foot restaurant and 412 parking stalls (City, Residential, and Hotel parking) (the “Project”).

W
HEREAS, The City of Fullerton (“City”) is the lead agency for the proposed Project under the California Environmental Quality Act (“CEQA”).

W
HEREAS, The City prepared a Draft Initial Study / Mitigated Negative Declaration (“Draft MND”) for the Project under CEQA based on substantial evidence that the Project would not have a significant impact on the environment with the implementation of mitigation.

W
HEREAS, The City mailed a Notice of Intent to Adopt a Mitigated Negative Declaration in October 2022 to all necessary parties, including responsible and trustee agencies and members of the public who previously requested such notice in writing in accordance with State CEQA Guidelines Section 15072(b).

W
HEREAS, the City circulated the Draft MND for a 30- day review period from O ctober 13, 2022 through November 14, 2022 in accordance with State CEQA Guidelines section 15073.

W
HEREAS, the City responded to each of the comment letters received during the public Resolution No. 2022-XXX

review period in a Final Initial Study / Mitigated Negative Declaration and Response to Comments that addressed the matters raised in the comment letters (the Draft MND and the Final Initial Study / Mitigated Negative Declaration and Response to Comments together are hereinafter referred to collectively as the “MND”).

WHEREAS, The City has considered the MND together with all comments received during the public review process pursuant to State CEQA Guidelines Section 15074, subdivision (b),.

WHEREAS, Attachment “1” contains the Mitigation Monitoring and Reporting Program (“MMRP”) prepared for the Project.

WHEREAS, the purchase price payable by the Developer for the Property pursuant to the Disposition and Development Agreement (“DDA”) is not less than the fair market value of the Property as determined by an appraisal within the preceding six months. Attachment “2” contains a copy of the DDA.

WHEREAS, the Project will provide much needed housing and hotel space in the transit corridor and facilitate the City’s efforts to revitalize and stimulate development in the area consistent with the City’s General Plan.

WHEREAS, City Council adopted a resolution on November 15, 2022, declaring its intent to sell the property, declaring the property exempt surplus land and set ting a public hearing for December 6, 2022 to consider to hear any protests to the proposed transaction and to take action on the DDA.

WHEREAS, City Council continued consideration of these items at the December 6, 2022 hearing to a public hearing scheduled for December 20, 2022 at 5:30 p.m. in the Fullerton City Council Chambers.

WHEREAS, City Council afforded members of the public an opportunity to comment upon the Project and the MND at the December 6 and December 20, 2022 public hearings.

WHEREAS, City Council has endeavored in good faith to set forth the basis for its decision on the Project’s compliance with CEQA, as contained herein,.

WHEREAS, the City has satisfied all requirements of the Public Resources Code and the State CEQA Guidelines in connection with preparation of the MND, which is sufficiently detailed so that all the potentially significant environmental effects of the Project, as well as feasible mitigation measures, have been adequately evaluated.

WHEREAS, the MND prepared in connection with the Project sufficiently analyzes the feasible mitigation measures necessary to avoid or substantially lessen the Project’s potentially significant environmental impacts to a level of less than significant.

Resolution No. 2022-XXX

WHEREAS, City Council based the findings and conclusions in this Resolution on the oral and written evidence presented as well as the entirety of the administrative record for the Project, incorporated herein by this reference. The findings are not based solely on the information provided in this Resolution.

WHEREAS, prior to taking action, City Council has heard, been presented with, reviewed and considered all of the information and data in the administrative record, including but not limited to the Initial Study, MND and MMRP and all oral and written evidence presented during all meetings and hearings.

WHEREAS, the MND reflects the independent judgment of City Council and is deemed adequate for purposes of making decisions on the merits of the Project.

WHEREAS, no comments made in the public hearings and no additional information submitted to City Council have produced substantial new information requiring recirculation of the MND or additional environmental review of the Project under CEQA.

WHEREAS, City Council has duly considered the MND and MMRP and all terms and conditions of the proposed DDA and City Council believes that development of the Project on the Property is in the best interest of the City of Fullerton and the health, safety and welfare of its residents and in accord with the public purposes and provisions of applicable state and local laws and requirements.

WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FULLERTON RESOLVES AS FOLLOWS:

1. RECITALS. City Council hereby finds the foregoing recitals true and correct and incorporated herein as substantive findings of this Resolution.

2. COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. City Council has reviewed and considered the information contained in the MND and MMRP, comments received and other documen ts contained in the administrative record for the Project. City Council find s that the MND contains a complete and accurate reporting of the environmental impacts associated with the Project and finds that the MND and MMRP have been completed in complia nce with CEQA and the State CEQA Guidelines.

3. FINDINGS ON ENVIRONMENTAL IMPACTS. Based on the whole record before it, including the MND, MMRP, the administrative record and all other written and oral evidence presented to City Council, City Council finds that all environmental impacts of the Project are either less than significant or can be mitigated to less than significant levels with the implementation of the mitigation measures outlined in the MMRP. City Council further finds that there is no substantial evidence in the Resolution No. 2022-XXX

administrative record supporting a fair argument that the Project may result in any significant environmental impact . City Council find s that the MND contains a complete, objective and accurate reporting of the envir onmental impacts associated with the Project and reflects the independent judgment and analysis of the City.

4. ADOPTION OF THE MITIGATED NEGATIVE DECLARATION. City Council hereby adopts the MND.

5. ADOPTION OF THE MITIGATION MONITORING AND REPORTING PROGRAM.

City Council approves and adopts the MMRP prepared for the Project, attached hereto as Attachment “1”.

6. LOCATION AND CUSTODIAN OF RECORDS. The documents and materials that constitute the record of proceedings on which these findings are based are located at Fullerton City Hall, 303 West Commonwealth Avenue, Fullerton, CA 92832. The Director of Community Development is the custodian of the record of proceedings.

7. APPROVAL OF THE DDA . City Council hereby finds, based upon all evidence presented to City Council, that public convenience and interest support the sale of the Property and approve the DDA, attached hereto as Attachment 2 in substantially final form, by and between the City of Fullerton and Westpark Investments, LLC and TA Partners for the sale of property located at 212 East Santa Fe Avenue, Fullerton, CA (APN -033-030-18) and authorizes the City Manager to take all actions necessary to effectuate this action.

8. EFFECT. This resolution shall take effect from and after its date of adoption.

ADOPTED BY THE FULLERTON CITY COUNCIL ON DECEMBER 20, 2022 ________________________
Fred Jung
Mayor

ATTEST:

___________________________
Lucinda Williams, MMC
City clerk

Attachments:
• Attachment 1: Disposition and Development Agreement
• Attachment 2: Mitigation Monitoring and Reporting Program 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

DISPOSITION AND DEVELOPMENT AGREEMENT
(Parkwest Hotel and Residential Development)
between

THE CITY OF FULLERTON
a California municipal corporation
and

WESTPARK INVESTMENTS, LLC
a California limited liability company
and
TA Partners, LLC
a California limited liability company
[Dated as of December 6, 2022, for reference purposes only] 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -1-
This 2 022 D ISPOSITION A ND D EVELOPMENT A GREEMENT ( Parkwest H otel) (“Agreement”) is dated as of December 6, 2022 (“Date of Agreement”), for reference purposes only, and is entered into by and between the City of Fullerton, a California municipal corporation (“City”), a nd W estpark I nvestments, L LC, a C alifornia l imited l iability c ompany a nd T A Partners, L LC, a C alifornia l imited l iability c ompany ( “Developer”). T he C ity a nd t he Developer a re s ometimes r eferred t o i n t his A greement, e ach i ndividually, a s a “ Party,” o r collectively, as the “Parties.”

RECITALS
This A greement i s e ntered i nto w ith r eference t o t he f ollowing r ecitals o f f act (“Recitals”) t hat C ity a nd D eveloper b elieve t o b e t rue a s o f t he E ffective D ate o f t his Agreement:

A. The City is the owner of approximately 2.05 acres of certain real property located at t he s outhwest c orner o f E ast S anta Fe A venue a nd S outh P omona A ve, i dentified as APN 033-030-18, commonly known as 212 E. Santa Fe Avenue, Fullerton, California and desires to sell approximately 1.66 acres to Developer as more specifically described in Exhibit A attached hereto and incorporated herein by this reference (“Property”) B. On D ecember 4 , 2 018, t he C ity a pproved a n e xclusive r ight t o n egotiate a n agreement with the Developer for potential development of the Property, which is currently used as a public parking lot. The Developer proposed to acquire the Property and redevelop a portion as an upscale boutique hotel.

C. On November 19, 2019, the Fullerton City Council approved a first amendment to the ENA extending the period of exclusive negotiations by 12 months to allow for additional time to complete the analysis of various components of the Project (as defined in Section 1.1.58).

The first amended negotiation period was scheduled to terminate on December 1, 2020.

D. On S eptember 1 5, 2 020, t he F ullerton C ity C ouncil a pproved a s econd amendment to the ENA extending the period of exclusive negotiations by 12 months to allow for additional t ime t o c omplete t he a nalysis o f v arious c omponents o f t he P roject ( as d efined i n Section 1.1.58). T he s econd a mended n egotiation p eriod w as s cheduled t o t erminate o n December 1, 2021.

E. On August 17, 2021, the Fullerton City Council approved a third amendment to the ENA extending the period of exclusive negotiations by 12 months to allow for additional time to complete the analysis of various components of the Project (as defined in Section 1.1.58).

The third amended negotiation period terminates on December 31, 2022.

F. The D eveloper’s p roposed a cquisition o f t he P roperty a nd s ubsequent construction a nd c ompletion o f t he P roject o n t he P roperty p ursuant t o t he t erms o f t his Agreement i s i n t he b est i nterest o f t he C ity a nd t he h ealth, s afety a nd w elfare o f t he C ity’s taxpayers and residents and is in accordance with the public purposes set forth in applicable law.

Implementation of this Agreement will further the goals and objectives of the City’s general plan 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -2-
by: (i) strengthening the City’s land use and social structure, and (ii) alleviating economic and physical blight on the Property and in the surrounding community.

G. The City desires to sell the Property to the Developer for the development of the Project and the Developer desires to purchase the Property from the City for the same purpose.

NOW, T HEREFORE, i n c onsideration o f t he m utual p romises s et f orth i n t his Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by City and Developer, the Parties agree as follows:

TERMS AND CONDITIONS

ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES;

EFFECTIVE DATE

1.1 Definitions. A ll i nitially c apitalized t erms n ot o therwise d efined i n t his Agreement shall have the following meanings:

1.1.1 “Additional I nsureds” h as t he m eaning a scribed t o s uch t erm i n Section 5.10.

1.1.2 “Affiliate” means a nd r efers t o a ny p erson o r e ntity, d irectly o r indirectly, Controlling or Controlled by or under common Control with the Developer, whether by direct or indirect ownership of equity interests, by contract or otherwise.

1.1.3 “CEQA” m eans t he C alifornia E nvironmental Q uality A ct, P ublic Resources Code Sections 21000, et seq.

1.1.4 “Certificate o f Completion” means the written certification of City that t he c onstruction o f t he P roject h as b een c ompleted i n c ompliance w ith t he t erms a nd conditions of this Agreement, substantially in the form of Exhibit G attached to this Agreement.

1.1.5 “City” means the City of Fullerton, California, a California municipal corporation.

1.1.6 “City M anager” means t he C ity M anager o f t he C ity o r h is o r h er designee or successor in function.

1.1.7 “City Requirements” has the meaning ascribed to the term in Section

2.6.1. 1.1.8 “City’s T itle N otice R esponse” m eans t he w ritten r esponse o f t he City to the Developer’s Title Notice, in which the City either (i) elects to cause the removal from the P reliminary R eport o f a ny m atters s hown i n S chedule B o f t he P reliminary R eport a s 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -3-
exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice, or (ii) elects not to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice.

1.1.9 “Close o f E scrow” o r “ Closing” m eans t he r ecording o f t he G rant Deed for the Property in the Official Records of the Recorder of the County, and completion of each o f t he a ctions s et f orth i n ARTICLE I II b y t he E scrow H older f or t he C ity t o s ell t he Property to the Developer and the Developer to purchase the Property from the City.

1.1.10 “Completion of Construction” means the issuance of a Certificate of Completion confirming that the final certificate of occupancy for the Project, based on the plans submitted by the Developer to the City, has been issued.

1.1.11 “Construction Costs” means the total cost incurred by Developer in acquiring the Property and constructing the Project in accordance with this Agreement.

1.1.12 “Construction L ender” m eans a L ender(s) t hat p rovide(s) a Construction L oan t o t he D eveloper t o p ay t he C onstruction C osts o f a ll o r a p ortion o f t he Project.

1.1.13 “Construction L oan” m eans a Loan o btained b y D eveloper f rom a Construction L ender t o f inance a ll o r p art o f t he C onstruction C osts i n c onformity w ith t he Financing Plan.

1.1.14 “Construction Loan Deed of Trust(s)” means the Lien(s) required by a Construction Lender to secure the Developer’s performance under the associated Construction Loan.

1.1.15 “Control” means and refers to possession, directly or indirectly, of the power t o d irect o r c ause t he d irection o f t he m anagement a nd p olicies o f a p erson o r e ntity, whether by ownership of equity interests, by contract or otherwise.

1.1.16 “Controlling” and “Controlled” m ean a nd r efer t o e xercising o r having Control.

1.1.17 “County” means the County of Orange County, California.

1.1.18 “Developer’s T itle N otice” m eans a w ritten n otice f rom t he Developer t o t he C ity i ndicating t he D eveloper’s a cceptance o f t he s tate o f t he t itle t o t he Property, as described in the Preliminary Report, or the Developer’s objection to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title P olicy f or t he P roperty, d escribing i n s uitable d etail t he a ctions t hat t he D eveloper reasonably believes are indicated to cure or correct each of the Developer’s objections.

1.1.19 “Developer’s Title Notice Waiver” means a written notice from the Developer t o t he C ity w aiving t he D eveloper’s p revious o bjection i n t he D eveloper’s T itle 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -4-
Notice t o s pecific m atters s hown i n S chedule B o f t he P reliminary R eport a s e xceptions t o coverage under the proposed Title Policy for the Property.

1.1.20 “Due Diligence Investigations” means the Developer’s due diligence investigations of the Property to determine the suitability of the Property for development and operation of the Project, including, without limitation, investigations of the environmental and geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of the Developer, all at the sole cost and expense of the Developer.

1.1.21 “Due D iligence I nvestigation C onclusion N otice” m eans a w ritten notice of the Developer delivered to the City and the Escrow Holder, prior to the end of the Due Diligence P eriod, i ndicating t he D eveloper’s a cceptance o f t he c ondition o f t he P roperty o r indicating t he D eveloper’s r ejection o f t he c ondition o f t he P roperty a nd r efusal t o a ccept a conveyance o f f ee t itle t o t he P roperty, d escribing i n r easonable d etail t he a ctions t hat t he Developer reasonably believes are indicated to allow the Developer to accept the condition of the Property.

1.1.22 “Due Diligence Period” means the date commencing on the Effective Date a nd e nding a t t he e arlier o f: ( i) 5 :00 p .m. o n t he o ne h undred t wentieth ( 120th) d ay following the Effective Date, or (ii) December 29, 2022. City shall provide written notice to Developer what the Effective Date is within seven (7) days of the Effective Date.

1.1.23 “Earnest M oney D eposit” m eans O ne H undred T housand D ollars ($100,000.00) payable in cash or other immediately available funds.

1.1.24 “Effective Date” has the meaning ascribed to the term in Section 1.3.

1.1.25 “ENA” means the Exclusive Negotiation Agreement, dated December 4, 2018, by and between City and Developer, as amended on November 19, 2019, and extended to December 1, 2020, as amended on September 15, 2020, and extended to December 1, 2021, and as amended on August 17, 2021, and extended to and terminating on December 31, 2022.

1.1.26 “Environmental C laims” h as t he m eaning a scribed t o t he t erm i n Section 5.9.

1.1.27 “Environmental Laws” means all federal, state, local, or municipal laws, r ules, o rders, r egulations, s tatutes, o rdinances, c odes, d ecrees, o r r equirements o f a ny government a uthority r egulating, r elating t o, o r i mposing l iability o f s tandards o f c onduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, o r r egulations r elate t o h azardous s ubstances o n, u nder, o r a bout t he P roperty, occupational or environmental conditions on, under, or about the Property, as now or may at any later t ime b e i n e ffect, i ncluding w ithout l imitation, t he C omprehensive E nvironmental Response, C ompensation a nd L iability A ct o f 1 980 ( “CERCLA”) [ 42 U SC S ection 9 601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -5-
2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 6 55 a nd 6 57]; t he C alifornia U nderground S torage o f H azardous S ubstances A ct [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account A ct [ California H ealth & S afety C ode S ection 2 5300 et seq.]; t he C alifornia S afe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any o ther f ederal, s tate, o r l ocal l aw, s tatute, o rdinance, o r r egulation n ow i n e ffect o r l ater enacted t hat p ertains t o o ccupational h ealth o r i ndustrial h ygiene, a nd o nly t o t he e xtent t he occupational h ealth o r i ndustrial h ygiene l aws, o rdinances, o r r egulations r elate t o h azardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.

1.1.28 “Environmental M atters” h as t he m eaning a scribed t o t he t erm i n Section 5.9.

1.1.29 “Escrow” has the meaning ascribed to the term in Section 2.1.

1.1.30 “Escrow C losing D ate” h as t he m eaning a scribed t o t he t erm i n Section 3.6.

1.1.31 “Escrow Holder” means Chicago Title Insurance Company.

1.1.32 “Escrow O pening D ate” h as t he m eaning a scribed t o t he t erm i n Section 3.1.

1.1.33 “Event of Default” has the meaning ascribed to the term in Section

7.1. 1.1.34 “Financing C ommitment” m eans ( a) o ne o r m ore c ommitment(s) from o ne o r m ore C onstruction L ender(s) a greeing t o p rovide s ufficient f unds w hich, w hen combined with the Developer’s equity contribution and the financial assistance to be provided by the City pursuant to this Agreement, is sufficient, as determined by the City in its reasonable discretion, t o f ully f und t he P roject’s C onstruction C osts, o r ( b) a l etter f rom o ne o r m ore Construction Lender(s) indicating approval of a loan to the Developer for the development of the Property.

1.1.35 “Financing Plan” means a written statement demonstrating there will be s ufficient f unds t o f ully f inance t he d evelopment a nd c onstruction o f t he P roject, i n accordance with this Agreement, which shall identify the funds and their sources, including but not limited to a Financing Commitment.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -6-

1.1.36 “FIRPTA Affidavit” means an affidavit complying with Section 1445 of the United States Internal Revenue Code.

1.1.37 “Grant D eed” m eans a d eed i n t he f orm o f Exhibit D t o t his Agreement, conveying all of the City’s interest in the Property to the Developer.

1.1.38 “Governmental Agency” means any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, or otherwise) whether now or later in existence.

1.1.39 “Governmental Requirements” means all codes, statutes, ordinances, laws, p ermits, o rders, a nd a ny r ules a nd r egulations p romulgated t hereunder o f a ny Governmental Agency.

1.1.40 “Hazardous S ubstances” m eans, w ithout i mplied l imitation, substances defined as “hazardous substances,” “hazardous material,” “toxic substance,” “solid waste,” o r “ pollutant o r c ontaminate” i n t he C omprehensive E nvironmental R esponse, Compensation a nd L iability A ct o f 1 980, a s a mended, 4 2 U .S.C. S ections 9 601, et seq.; t he Toxic S ubstances C ontrol A ct ( “TSCA”) [ 15 U .S.C. S ections 2 601, et seq.]; t he H azardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery A ct, 4 2 U .S.C. S ections 6 901, et seq.; t hose s ubstances l isted i n t he U nited S tates Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor authority, a s h azardous s ubstances [ 40 C FR P art 3 02]; a nd t hose s ubstances d efined a s “hazardous waste” in Section 25117 of the California Health and Safety Code or, as “hazardous substances” i n S ection 2 5316 o f t he C alifornia H ealth a nd S afety C ode; o ther s ubstances, 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 s hall a lso i nclude m anure, a sbestos, p olychlorinated b iphenyl, f lammable e xplosives, radioactive m aterial, p etroleum p roducts, a nd s ubstances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317.

1.1.41 “Hotel” m eans a nd r efers t o t he h otel p ortion o f t he P roject, a s specifically described in the Scope of Development.

1.1.42 “Hotel Agreement” means and refers to a written franchise agreement made by and between the Developer and a major nationally-recognized hotel brand, in form and substance a cceptable t o t he C ity, b y w hich s aid h otel brand franchises the use, operation and management of its hotel brand on the Property to the Developer for a minimum time period of ten (10) years from the date of issuance of a final Certificate of Occupancy by the City for the Hotel. The Hotel shall include, at minimum, the following amenities: swimming pool, hot tub, restaurant, b ar, c oncierge, f ull s ervice l aundry, f ree W i-Fi, a ir c onditioning, b usiness c enter, meeting rooms, fitness center, and valet parking. Hotel shall be a minimum of a three star rating and t he b rand s hall b e a pproved b y t he C ity M anager i n t he C ity M anager’s r easonable discretion.

1.1.43 “Indemnified P arties” h as t he m eaning a scribed t o t he t erm i n Section 5.9.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -7-

1.1.44 “Lender” m eans a ny s tate o r f ederally c hartered b ank, s avings a nd loan, capital investment group, or other third party financial institution which routinely makes Loans t o d evelopments a nd d evelopers s uch a s t he P roject a nd t he D eveloper i n t he n ormal course of business and which has been approved by the City pursuant to Section 6.3.

1.1.45 “Lien” means any mortgage, deed of trust, or other security instrument encumbering Developer’s fee interest in the Property and/or Project, or any part thereof, or any pledge or other agreement given as security for the repayment of a Loan and by which a Lender would b e a ble t o a cquire a ny i nterest i n t he D eveloper u pon t he D eveloper’s b reach o f a ny obligation under the Lender’s Loan Documents.

1.1.46 “Loan” means any loan or third party equity/capital contribution (e.g. mezzanine financing) for the Project other than that provided by the City.

1.1.47 “Loan D ocuments” m eans t he v arious d ocuments a nd i nstruments made b y a nd b etween t he D eveloper a nd a Lender t hat e vidence a Loan a nd t he s ecurity f or repayment of such Loan.

1.1.48 “Maintenance D eficiency” h as t he m eaning a scribed to the term in Section 5.3.1.

1.1.49 “Normal B usiness H ours” m eans t he n ormal b usiness h ours o f t he City. As of the Effective Date, the City’s normal business hours are Monday through Thursday, between the hours of 7:30 a.m. and 5:30 p.m. Pacific Time.

1.1.50 “Notice of Agreement” means the notice in the form of Exhibit E to this A greement t o b e r ecorded a gainst t he P roperty a t t he C lose o f E scrow t o p rovide constructive record notice of the existence and application of this Agreement to the Property.

1.1.51 “Party” means, individually, the City or the Developer, as applicable.

1.1.52 “Parties” means, collectively, the City and the Developer.

1.1.53 “PCO S tatement” m eans a p reliminary c hange o f o wnership statement provided for in California Revenue and Taxation Code Section 480.3.

1.1.54 “Permitted E xceptions” m eans ( i) a ny a nd a ll i tems s hown i n Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the Developer accepts, pursuant to Section 2.4; (ii) any exceptions from coverage under the proposed T itle P olicy r esulting f rom t he D eveloper’s a ctivities o n t he P roperty; ( iii) non-delinquent property taxes and assessments; (iv) this Agreement; or (v) the Grant Deed.

1.1.55 “Permitted Transfer” means and refers to any of the following types of T ransfers b y t he D eveloper, w here t he p erson o r e ntity t o w hich s uch T ransfer i s m ade expressly assumes the obligations of the Developer under this Agreement in a written instrument satisfactory to the City.
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1.1.55.1 Any T ransfer o f s tock o r e quity o f t he D eveloper t hat d oes n ot change management or operational Control of the Property or the Project;

1.1.55.2 Any Transfer of any interest in the Developer or the Property or Project or any portion thereof irrespective of the percentage of ownership (i) to any other owner of any interest in the Developer; or (ii) to any Affiliate, or (iii) or to any single-purpose limited liability c ompany o r o ther s uch e ntity o rganized, s et u p, o wned a nd c ontrolled b y D eveloper which will assume all rights and obligations of Developer under this Agreement including, but not l imited t o t aking t itle t o t he P roperty i n i ts n ame a t c lose o f e scrow, o r ( iv) t o a ny o ther person o r e ntity i n w hich a ny h older o f a n i nterest ( including a ny b eneficial i nterest) i n t he Developer i s a m anager, o fficer o r p artner o r i n w hich a ny o f t he a forementioned i s a shareholder, member or partner (including a beneficial owner); and

1.1.55.3 Any Lien given to Lender in connection with a Loan approved by the City pursuant to Section 6.3.

1.1.56 “Plans and Specifications” has the meaning ascribed to the term in Section 2.6.1.

1.1.57 “Preliminary Report” means a preliminary report issued by the Title Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title P olicy. T he P arties a cknowledge t hat t hey m ay p repare o ne ( 1) o r m ore P reliminary Reports for each parcel, or group of parcels, comprising the Property. In such case, all reports, notices, a nd o bjection l etters w hich p ertain t o t he P reliminary R eport f or t he e ntirety o f t he Property shall apply separately to each Preliminary Report associated with a parcel or a group of parcels.

1.1.58 “Project” means the construction and redevelopment of the Property as a c ommercial d evelopment, i ncluding a ll r equired o r a ssociated o n-site a nd o ff-site improvements, all hardscape and all landscaping, all as specifically described in the Scope of Development, a nd a ll t o b e d eveloped i n a ccordance w ith t he P lans a nd S pecifications t o b e approved by the City and any conditions imposed by the City in its approval of the Plans and Specifications.

1.1.59 “Project C ompletion D ate” m eans t hat d ate s et f orth t herefor b y which a Certificate of Completion shall be issued for the Project, as more particularly provided in the Schedule of Performance. The Project Completion Date shall be no later than the date which is eighteen (18) months from when building permits are issued for the Project, which date shall be extended by the period of any Unavoidable Delay in accordance with Section 4.5.

1.1.60 “Property” m eans t hat r eal p roperty, a nd a ll c urrent a nd f uture improvements thereon (including, without implied limitation, the Project), legally described in Exhibit A.
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1.1.61 “Property Transfer” means and refers to any “change in ownership,” as d efined i n R evenue a nd T axation C ode S ections 6 0, et seq., o f a ll o r a ny p ortion o f t he Property.

1.1.62 “Purchase Price” means the amount of Two Million Three Hundred Fifteen Thousand Dollars ($2,315,000), in cash or immediately available funds.

1.1.63 “Record”, “recorded”, “recording” or “recordation” each mean and refer t o r ecordation o f t he r eferenced d ocument i n t he o fficial r ecords o f t he R ecorder o f t he County of Orange County, California.

1.1.64 “Schedule of Performance” means the schedule for the performance of c ertain a ctions b y t he P arties p ursuant t o t his A greement, a ttached t o t his A greement a s Exhibit C.

1.1.65 “Scope of Development” means the detailed description of the Project attached to this Agreement as Exhibit B.

1.1.66 “Title Company” means Chicago Title Insurance Company.

1.1.67 “Title P olicy” m eans a s tandard C LTA o wners’ p olicy o f t itle insurance issued by the Title Company, with coverage in the full amount of the Purchase Price and i nsuring f ee t itle t o t he P roperty, s ubject o nly t o t he P ermitted E xceptions. H owever, a t Developer’s option, Developer may acquire an ALTA extended coverage policy. City shall pay for t he s tandard C LTA p olicy. D eveloper s hall p ay f or a ny a dditional o r A LTA e xtended coverage policy.

1.1.68 “Transfer” means any of the following:

1.1.68.1 Any total or partial sale, assignment, conveyance, trust, power, or transfer i n a ny o ther m ode o r f orm, b y t he D eveloper o f m ore t han a 4 9% i nterest i n t he Developer’s interest in this Agreement, the Property, or a series of such sales, assignments and the l ike t hat, i n t he a ggregate, r esult i n a d isposition o f m ore t han a 4 9% i nterest i n t he Developer’s interest in this Agreement, the Property or the Project; or

1.1.68.2 Any t otal o r p artial s ale, a ssignment, c onveyance, o r t ransfer in any other mode or form, of or with respect to any interest in the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in any interest in the Developer; or

1.1.68.3 Any merger, consolidation, sale, or lease of all or substantially all of t he a ssets o f t he D eveloper o r a s eries o f s uch s ales, a ssignments a nd t he l ike t hat, i n t he aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or

1.1.68.4 Any Property Transfer; or
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1.1.68.5 Except f or t he L oan m ade b y a L ender o n t he P roperty, t he recordation o f a ny d eed o f t rust, m ortgage, L ien o r s imilar e ncumbrance a gainst a ll o r a ny portion of the Property or the Project.

1.1.69 “Unavoidable Delay” means any delay that is caused exclusively by an event that is beyond the control of the City or the Developer, including, but not limited to, delay caused by strikes, acts of God, weather, inability to obtain labor or materials, inability to obtain g overnmental p ermits o r a pprovals, g overnmental r estrictions, c ivil c ommotion, epidemics, p andemics, r iots, f ire o r s imilar c auses, b ut e xcluding c ircumstances s ubject t o Section 8.7.2.

1.2 Representations and Warranties.

1.2.1 City R epresentations a nd W arranties. T he r epresentations a nd warranties of City contained in this Section 1.2.1 shall be based upon the actual knowledge of the City Manager as of the Effective Date. All representations and warranties contained in this Section 1.2.1 are true and correct as of the Effective Date. City’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. City hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties:

1.2.1.1 City i s a C alifornia m unicipal c orporation, d uly f ormed a nd operating under the laws of the State of California. City has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby.

1.2.1.2 The p ersons e xecuting a ny i nstruments f or o r o n b ehalf o f C ity have been authorized to act on behalf of City and this Agreement is valid and enforceable against City in accordance with its terms and each instrument to be executed by City pursuant hereto or in c onnection t herewith w ill, w hen e xecuted, s hall b e v alid a nd e nforceable a gainst C ity i n accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by City.

1.2.1.3 City h as t aken a ll r equisite a ction a nd o btained a ll r equisite consents for agreements or matters to which City is a party in connection with entering into this Agreement a nd t he i nstruments a nd d ocuments r eferenced h erein a nd i n c onnection w ith t he consummation of the transactions contemplated hereby.

1.2.1.4 If the City becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the City under this Agreement, whether as of the date given or any time thereafter, whether or not such representation o r warranty was based upon the City’s knowledge and/or belief as of a certain date, the City will give immediate written notice of such changed fact or circumstance to the Developer.
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1.2.2 Developer R epresentations a nd W arranties. T he r epresentations and w arranties o f D eveloper c ontained i n t his S ection 1.2.2 s hall b e b ased u pon t he a ctual knowledge o f C raig H ostert a s o f t he E ffective D ate. A ll r epresentations a nd w arranties contained in this Section 1.2.2 are true and correct as of the Effective Date. Developer’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing.

Developer h ereby m akes t he f ollowing r epresentations, c ovenants a nd w arranties a nd acknowledges that the execution of this Agreement by City has been made in material reliance by City on such covenants, representations and warranties:

1.2.2.1 Developer is comprised of a California limited liability company, lawfully entitled to do business in the State of California and the City. Developer has the legal right, p ower a nd a uthority t o e nter i nto t his A greement a nd t he i nstruments a nd d ocuments referenced h erein a nd t o c onsummate t he t ransactions c ontemplated h ereby. T he p ersons executing this Agreement and the instruments referenced herein on behalf of Developer hereby represent and warrant that such persons have the power, right and authority to bind Developer.

1.2.2.2 Developer has taken all requisite action and obtained all requisite consents i n c onnection w ith e ntering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for Developer’s authorization to enter into Agreement.

1.2.2.3 Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which Developer is a party or by which Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or a ny w rit, i njunction, o rder o r d ecree o f a ny c ourt o r g overnmental b ody a pplicable t o Developer or to the Property.

1.2.2.4 This A greement i s, a nd a ll a greements, i nstruments a nd documents to be executed by Developer pursuant to this Agreement shall be, duly executed by and shall be valid and legally binding upon Developer and enforceable in accordance with their respective terms. No approval, consent, order or authorization of, or designation or declaration of a ny o ther p erson, i s r equired i n c onnection w ith t he v alid e xecution a nd d elivery o f a nd compliance with this Agreement by Developer.

1.2.2.5 If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer’s knowledge and/or belief as of a c ertain d ate, t he D eveloper w ill g ive i mmediate w ritten n otice o f s uch c hanged f act o r circumstance to the City.

1.3 Effective Date. This Agreement is dated _______, 2022 for reference purposes only. This Agreement shall not become effective until the date on which all of the following are true ( “Effective D ate”): ( i) t his A greement i s a pproved a nd e xecuted b y t he a ppropriate authorities of Developer and delivered to City; (ii) Developer has delivered to City a certified 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -12-
copy o f t he o fficial a ction t aken b y a ll o f t he m embers o f t he D eveloper a pproving t his Agreement, i n t he f orm a ttached t o t his A greement a s Exhibit F ; ( iii) f ollowing a ll l egally required n otices a nd h earings, t his A greement i s a pproved b y t he C ity C ouncil; a nd ( iv) t his Agreement is executed by the authorized representatives of City.

1.4 Exhibit List. The following is a list of the Exhibits attached to this Agreement.

Each of the Exhibits is incorporated by this reference into the text of this Agreement.

Exhibit A Legal Description of Property
Exhibit B Scope of Development
Exhibit C Schedule of Performance
Exhibit D Form of Grant Deed
Exhibit E Form of Notice of Agreement
Exhibit F Form of Official Action of Developer
Exhibit G Form of Certificate of Completion

ARTICLE II

PROPERTY DISPOSITION

2.1 Purchase a nd S ale. I n e xchange f or t he P urchase P rice a nd t he D eveloper’s other covenants and undertakings set forth in this Agreement, the City shall sell the Property to the Developer and the Developer shall purchase the Property from the City pursuant to the terms and c onditions o f t his A greement. F or t he p urposes o f e xchanging f unds a nd d ocuments t o complete the sale from the City to the Developer and the purchase by the Developer from the City of the Property pursuant to the terms of this Agreement, the City and the Developer agree to open a n e scrow ( “Escrow”) w ith t he E scrow H older. ARTICLE I II o f t his A greement constitutes the joint escrow instructions of the Parties to the Escrow Holder for completion of the Escrow for the sale of the Property, as contemplated by this Agreement. The Developer and the City s hall e xecute s uch f urther e scrow i nstructions, c onsistent w ith t he p rovisions o f t his Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict between t he p rovisions of this Agreement and any other escrow instructions requested by the Escrow Holder, the provisions of this Agreement shall control.

2.2 Payment of Purchase Price. The Developer shall deposit the Purchase Price into Escrow, subject to credit to the Developer for the Earnest Money Deposit.

2.3 Earnest M oney D eposit. C oncurrent w ith i ts o pening o f t he E scrow, t he Developer s hall d eposit i nto E scrow t he E arnest M oney D eposit. T he E scrow H older s hall deposit the Earnest Money Deposit into an interest bearing account. All interest earned on such funds s hall b e a dded t o t he o riginal p rincipal a mount o f t he E arnest M oney D eposit a nd b e considered p art o f t he s ame. T he E arnest M oney D eposit s hall b e n onrefundable u pon t he conclusion o f t he D ue D iligence P eriod i f t he P roperty i s r ejected o r d eemed r ejected b y Developer a nd C ity e lects to cancel Escrow as set forth in Section 2.5.1. Upon the Close of Escrow, the Earnest Money Deposit shall be credited to the Developer toward the Purchase Price and paid to the City as part of the Purchase Price. Should Escrow fail to close due to a breach or 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -13-
default by Developer, the Earnest Money Deposit shall be forfeited by Developer and shall be paid to the City upon the cancelation of Escrow in accordance with Section 3.11.

2.4 Title Approval. As soon as practicable following the opening of the Escrow, the City s hall o btain f rom T itle C ompany t he P reliminary R eport a nd d eliver a c opy o f t he Preliminary Report to the Developer. Within thirty (30) business days following the Developer’s receipt o f a P reliminary R eport f or t he e ntire P roperty, t he D eveloper s hall d eliver t he Developer’s T itle N otice t o t he C ity. I f t he D eveloper f ails t o d eliver t he D eveloper’s T itle Notice t o t he C ity w ithin t hirty ( 30) b usiness d ays f ollowing t he D eveloper’s r eceipt o f t he Preliminary Report, the Developer will be deemed to disapprove the status of title to the Property and refuse to accept title to the Property, in which case the City shall have the right, subject to Section 2.4.2, to cancel the Escrow and terminate this Agreement, in the City’s sole discretion, without l iability t o t he D eveloper o r a ny o ther p erson, b y d elivery o f a w ritten n otice o f termination to the Developer and Escrow Holder. Within twenty (20) business days following receipt by the City of Developer’s Title Notice, if any, the City shall serve City’s Title Notice Response. If Developer’s Title Notice does not object to any matter in the Preliminary Report, the City shall not be required to serve City’s Title Notice Response. If the City does not serve City’s Title Notice Response, if necessary, within twenty (20) business days following its receipt of Developer’s Title Notice, the City shall be deemed to elect not to remove any matter objected to in Developer’s Title Notice, if any, from the Preliminary Report. If the City elects in City’s Title Notice Response to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, the City shall cause the removal of each such objectionable matter from the Preliminary Report within sixty (60) business days following receipt by the Developer of City’s Title Notice Response or such other period of time that may be agreed to in writing by both the City and the Developer. If the City is unwilling or unable to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, then, within ten (10) business days following the Developer’s receipt of City’s Title Notice Response stating that the City is unwilling to remove or cause the removal of any matter objected to in Developer’s Title Notice or upon the expiration of the above sixty (60) business day time period during which the City elected to remove such objectionable matters from the Preliminary Report and was unable to d o s o, t he D eveloper m ay e ither ( 1) r efuse t o a ccept t he t itle t o a nd c onveyance o f t he Property, in which case the Parties shall have the right, subject to Section 2.4.2, to cancel the Escrow and terminate this Agreement without liability to either Party or any other person, by delivery of a written notice of termination to the Escrow Holder, or (2) waive its objection to any items set forth in Developer’s Title Notice by delivering Developer’s Title Notice Waiver to the City. Failure by the Developer to deliver Developer’s Title Notice Waiver, where City’s Title Notice Response or the City’s failure to serve City’s Title Notice Response indicates the City’s election not to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, for the City to deliver City’s Title Notice Response under this Agreement, will be deemed the Developer’s continued refusal to accept the title to and conveyance of the Property, i n w hich c ase t he C ity s hall h ave t he r ight, s ubject t o S ection 2.4.2, t o c ancel t he Escrow a nd t erminate t his A greement, i n t he C ity’s s ole d iscretion, w ithout l iability t o t he Developer or any other person, by delivery of a written notice of termination to the Developer and Escrow Holder.

2.4.1 If at any time prior to the Close of Escrow the Title Company issues an updated Preliminary Report containing any previously undisclosed matter affecting title to the 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -14-
Property, or the City becomes aware of any previously undisclosed matter affecting title to the Property, following the delivery of the Developer’s Title Notice, the City shall provide written notice to the Developer of such matter, together with any updated Preliminary Report related to such matter. The City and the Developer shall have such rights and obligations with respect to such previously undisclosed title matters as they did with respect to any title matters set forth in the original Preliminary Report as set forth in Section 2.4.

2.4.2 Before exercising any right a Party may have under this Section 2.4 to cancel t he E scrow a nd t erminate t his A greement, s uch P arty s hall n otify t he n on-terminating Parties in writing of its election to terminate and shall, upon a non-terminating Party’s request, which must be delivered, if at all, within three (3) days following its receipt of the terminating Party’s n otice o f e lection t o t erminate, m eet a nd c onfer w ith t he n on-terminating P arty f or a period o f t hirty ( 30) d ays. D uring s uch t ime, t he P arties s hall m eet a s o ften a s r easonably requested b y a ny P arty t o n egotiate, i n g ood f aith, m ethods a nd m eans b y w hich t he objectionable t itle m atter m ay b e e liminated o r m itigated. N othing h erein s hall c onstitute a n agreement, r epresentation, o r w arranty b y a ny P arty t hat a n a cceptable r esolution o f t he objectionable title matter will be achieved, nor shall any Party be obligated to expend any funds or undertake any other action whatsoever with respect to such title matter unless such agreement is reduced to a writing which is approved by all Parties, in their sole and absolute discretion. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of resolving such title matter, or if any proposed agreement is disapproved by the C ity C ouncil, t he E scrow s hall b e c ancelled, t his A greement s hall b e t erminated w ithout liability to any Party, and the Parties shall proceed pursuant to Section 3.11. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -15-

2.5 Developer Investigations.

2.5.1 The D eveloper s hall h ave u ntil t he e xpiration o f t he D ue D iligence Period t o c omplete a ll o f i ts D ue D iligence I nvestigations w ith r espect t o t he e ntirety o f t he Property. The Developer shall complete all of its Due Diligence Investigations within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations o f t he P roperty, i ncluding, w ithout l imitation, i nvestigations r egarding geotechnical s oil c onditions, c ompliance w ith a pplicable l aws p ertaining t o t he u se o f t he Property by the Developer and any other matters relevant to the condition or suitability of the Property for the Project, as the Developer may deem necessary or appropriate. City makes no representation or warranty to the Developer relating to the condition of the Property or suitability of t he P roperty f or a ny i ntended u se o r d evelopment b y t he D eveloper. T he D eveloper shall deliver a Due Diligence Investigation Conclusion Notice to the City and the Escrow Holder prior to the end of the Due Diligence Period. If the Developer does not unconditionally accept the condition o f t he P roperty b y d elivery o f i ts D ue D iligence I nvestigation C onclusion N otice indicating such acceptance prior to the end of the Due Diligence Period, the Developer shall be deemed to have rejected the condition of the Property and refused to accept conveyance of title to the Property. If the condition of the Property is rejected or deemed rejected by the Developer, then the City shall have the right, subject to Section 2.5.3, to cancel the Escrow and terminate this A greement, i n the C ity’s s ole d iscretion, w ithout l iability t o t he Developer o r a ny o ther person, by delivery of a written notice of termination to the Developer and Escrow Holder. The Developer s hall a ccept a ll c onditions o f t he P roperty, w ithout a ny l iability o f t he C ity whatsoever, upon the Developer’s acceptance of the condition of the Property indicated in its Due Diligence Investigation Conclusion Notice. The Developer’s delivery of its Due Diligence Investigation C onclusion N otice i ndicating t he D eveloper’s u nconditional a cceptance o f t he condition of the Property shall evidence the acceptance of the condition of the Property by the Developer in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, as of the last day of the Due Diligence Period. In its sole discretion, the Developer may accept the Property in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition at any time before the end of the Due Diligence Period. The Developer shall conduct during the Due Diligence P eriod s uch e nvironmental a ssessment(s) o f t he P roperty a s t he D eveloper d eems appropriate. If such assessment(s) do not reveal the presence of any Hazardous Substances on the P roperty i n l evels t hat e xceed applicable Governmental Requirements, then the City shall promptly and at its sole cost and expense install security fencing around the Property.

2.5.2 Any D ue D iligence I nvestigations o f t he P roperty b y t he D eveloper shall n ot u nreasonably d isrupt a ny t hen e xisting u se o r o ccupancy o f t he P roperty o r t he operations of the City. The Developer shall be liable for any damage or injury to any person or property arising from the acts of the Developer, its employees, agents or representatives during the c ourse o f a ny D ue D iligence I nvestigations o n t he P roperty a nd t he D eveloper s hall indemnify, defend with counsel reasonably acceptable to the City and hold harmless the City and its e lected o fficials, o fficers, d irectors, a ttorneys, c ontractors, a gents a nd e mployees f rom any and a ll a ctual o r a lleged l iens, c laims, d emands o r l iability a rising f rom a ny D ue D iligence Investigations b y t he D eveloper o n t he P roperty. P rior t o c ommencing a ny D ue D iligence Investigations on the Property, the Developer shall deliver copies of policies or certificates of 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -16-
insurance to the City evidencing compliance by the Developer with the insurance requirements of Section 5.10.

2.5.3 Before exercising any right a Party may have under this Section 2.5 to cancel t he E scrow a nd t erminate t his A greement, s uch P arty s hall n otify t he n on-terminating Parties in writing of its election to terminate and shall, upon a non-terminating Party’s request, which must be delivered, if at all, within three (3) days following its receipt of the terminating Party’s n otice o f e lection t o t erminate, m eet a nd c onfer w ith t he n on-terminating P arty f or a period o f t hirty ( 30) d ays. D uring s uch t ime, t he P arties s hall m eet a s o ften a s r easonably requested b y a ny P arty t o n egotiate, i n g ood f aith, m ethods a nd m eans b y w hich t he objectionable D ue D iligence m atter m ay b e e liminated o r m itigated. N othing h erein s hall constitute an agreement, representation, or warranty by any Party that an acceptable resolution of the o bjectionable D ue D iligence m atter w ill b e a chieved, n or s hall a ny P arty b e o bligated t o expend any funds or undertake any other action whatsoever with respect to such Due Diligence matter unless such obligation is reduced to a writing which is approved by all Parties, in their sole and absolute discretion. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of resolving the objectionable Due Diligence matter, or if any proposed agreement is disapproved by the City Council, the Escrow shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties shall proceed pursuant to Section 3.11.

2.6 Developer to Obtain all Project Entitlements.

2.6.1 Pursuant to the ENA, Developer has developed and presented to City staff a nd t he C ity C ouncil, f or r eview, t he f ollowing ( collectively, t he “ Plans a nd Specifications”):

2.6.1.1 A p reliminary f inancial f easibility a nalysis a nd m arket study, including development costs and a development pro-forma;

2.6.1.2 A P roject d escription a dequate i n s cope t o b egin environmental analysis of the Project;

2.6.1.3 Preliminary Project plans, including Site, Floor, Landscape, and Elevation plans;

2.6.1.4 All r equired d evelopment a pplications, i ncluding a ny General P lan A mendment, S pecific P lan A mendment, C onditional U se P ermit a nd o ther Project-specific entitlements; and

2.6.1.5 Written p rogress r eports t o C ity C ouncil o n t he s teps, actions, and accomplishments taken by the Developer to meet the Negotiation Period milestones;

2.6.2 The C ity’s z oning, b uilding a nd l and u se r egulations ( whether contained in ordinances, the City’s municipal code, conditions of approval, policies, practice or elsewhere) ( collectively, t he “ City R equirements”), s hall b e a pplicable t o t he u se a nd development of the Project on the Property by the Developer. The Developer acknowledges that all Plans and Specifications and any changes to the Plans and Specifications shall be subject to 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -17-
the City Requirements. No action by the City with reference to this Agreement or any related documents s hall b e d eemed t o c onstitute a w aiver o f a ny C ity R equirements r egarding t he Property, t he P roject, t he D eveloper, a ny s uccessor-in-interest o f t he D eveloper o r a ny successor-in-interest to the Property. The City Requirements may only be changed or waived by modification o r v ariance a pproved b y t he C ity a nd c onsistent w ith t his A greement. N o entitlement, p ermit o r o ther a pproval f rom t he C ity f or d evelopment o f t he P roject o n t he Property shall attach to any portion of the Property or otherwise become effective to allow the Developer to develop the Project on the Property until after the Developer owns fee title to that portion of the Property to which such entitlement, permit or other approval pertains. Under no circumstances shall the Developer commence development of any portion of the Project on the Property prior to the Developer owning fee title to the Property.

2.6.3 The approval of the Scope of Development shall not be binding on the City C ouncil o r t he P lanning C ommission o f t he C ity r egarding a ny a pprovals o f t he P roject required by such bodies. Such required approvals include appropriate CEQA analysis for any and a ll P roject e ntitlements. T he D eveloper o btains n o r ight t o d evelop t he P roject o n t he Property or any portion of the Property by virtue of this Agreement alone, except that following the Close of Escrow, the Developer shall possess the same rights as any other owner of property within the City that desires to develop its property in a manner consistent with the City’s General Plan. Those rights include the right to begin development on any portion of the Property to which Developer owns fee title, provided Developer has obtained any required entitlements and permits for s uch w ork, c onsistent w ith S ection 2 .6.2, a bove. I f a ny r evisions o f t he S cope o f Development are required by a Governmental Agency (other than the City) having jurisdiction over the Property or the Project, the Developer shall promptly make any such revisions that are generally consistent with the Scope of Development.

2.6.4 Notwithstanding a ny p rovision t o t he c ontrary i n t his A greement, following the Close of Escrow, the Developer agrees to accept and comply fully with any and all conditions o f a pproval a pplicable t o a ll a pprovals, p ermits a nd o ther g overnmental a ctions regarding the development or operation of the Project on the Property, so long as such conditions of approval are consistent with the Scope of Development and this Agreement in all material respects.

2.6.5 Developer to Pay All Costs and Expenses. The Parties agree that the City shall not provide any financial assistance to the Developer in connection with the Project except a s m ay b e e xpressly s et f orth i n t his A greement. T he D eveloper s hall b e s olely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Project. The Developer shall pay any and all fees pertaining to the review and approval of the Project by the City, any other Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by a Governmental Agency pertinent to the development or operation of the Project on the Property, including, but not limited to, specifications, drawings, plans, m aps, p ermit a pplications, l and u se a pplications, z oning a pplications, e nvironmental review and disclosure documents and design review documents. The Developer shall pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections, that may be required in development o f t he P roject, w hether l ocated o n o r o ff o f t he P roperty. T he D eveloper s hall 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -18-
obtain a ny a nd a ll n ecessary a pprovals, p rior t o t he c ommencement o f a pplicable p ortions o f construction, a nd t he D eveloper s hall t ake r easonable p recautions t o e nsure t he s afety a nd stability o f s urrounding p roperties d uring s aid c onstruction. I n a ccordance w ith t his S ection

2.6.5, Developer shall be responsible for the costs, or immediate reimbursement to the City upon delivery of an invoice for the costs, of the following:

2.6.5.1 all f ees o r e xpenses o f e ngineers, a rchitects, f inancial consultants, legal, planning or other consultants or contractors, retained by the Developer and City f or a ny s tudy, a nalysis, e valuation, r eport, s chedule, e stimate, e nvironmental r eview, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project, including the negotiation and drafting of this Agreement, that may be undertaken by the Developer and City;

2.6.5.2 all f ees, c harges a nd c osts r elated t o, a nd m aking a ll deposits a nd p roviding a ll b onds o r o ther s ecurity a ssociated w ith t he s ubmission t o a nd processing by the City of any and all applications and other documents and information to be submitted to the City by the Developer pursuant to this Agreement or otherwise associated with the Project; and

2.6.6 The D eveloper s hall o btain a ll e ntitlements, p ermits a nd o ther approvals f or u se a nd d evelopment o f t he P roject o n t he P roperty f rom e ach G overnmental Agency, w ithin t he t ime p eriod f or s uch a ctions s pecifically s et f orth i n t he S chedule o f Performance, s ubject t o a ny e xtensions o f t ime a uthorized b y t his A greement u pon t he occurrence of an Unavoidable Delay.

ARTICLE III

ESCROW INSTRUCTIONS

3.1 Opening o f E scrow. F or p urposes o f t his A greement, t he o pening o f E scrow shall b e t he f irst d ate o n w hich a f ully e xecuted c opy o f t his A greement a nd E arnest M oney Deposit a re d eposited w ith E scrow H older ( “Escrow O pening D ate”). T he D eveloper s hall cause the Escrow to be opened within five (5) days following the Effective Date. Escrow Holder shall promptly confirm in writing to each of the Parties the date of the Escrow Opening Date.

This ARTICLE III shall constitute the joint escrow instructions of the City and the Developer to Escrow H older f or c onduct o f t he E scrow t o c omplete t he p urchase a nd s ale o f t he P roperty between them, as contemplated in this Agreement.

3.2 Conditions to Close of Escrow. The conditions set forth below shall be satisfied or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition shall not be required to proceed to close Escrow.

3.2.1 Developer’s C onditions t o C lose o f E scrow. T he D eveloper’s obligation to purchase the Property from the City on the Escrow Closing Date shall be subject to the s atisfaction o f t he f ollowing c onditions p recedent, e ach o f w hich c an o nly b e w aived i n writing by the Developer:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -19-

3.2.1.1 The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.4;

3.2.1.2 The D eveloper d elivers i ts D ue D iligence I nvestigation Conclusion Notice to both the City and Escrow Holder indicating the Developer’s unconditional acceptance of the condition of the Property, prior to the expiration of the Due Diligence Period;

3.2.1.3 The Title Company is unconditionally committed to issue the Title Policy for the Property, subject to any Permitted Exceptions, to the Developer;

3.2.1.4 The City deposits the items into the Escrow required by Section

3.4;

3.2.1.5 The representations, warranties and covenants of the City set forth in Section 1.2.1 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;

3.2.2 City’s Conditions to Close of Escrow. The City’s obligation to sell the P roperty t o t he D eveloper o n o r b efore t he E scrow C losing D ate s hall b e s ubject t o t he satisfaction of the following conditions precedent, which can only be waived in writing by the City:

3.2.2.1 The Developer has deposited the Purchase Price less the Earnest Money Deposit into Escrow;

3.2.2.2 The Developer agrees to accept the title to and conveyance of the Property, pursuant to Section 2.4;

3.2.2.3 The D eveloper d elivers i ts D ue D iligence I nvestigation Conclusion Notice to both the City and Escrow Holder indicating the Developer’s unconditional acceptance of the physical condition of the Property, prior to the expiration of the Due Diligence Period;

3.2.2.4 The Title Company is unconditionally committed to issue the Title Policy for the Property, subject to any Permitted Exceptions, to the Developer;

3.2.2.5 The Developer delivers to the City, at least thirty (30) days prior to t he E scrow C losing D ate, i n f orm a nd s ubstance a cceptable t o t he C ity, t he F inancing Commitment(s) applicable to the Property;

3.2.2.6 The D eveloper h as c ompleted a ll o f i ts m aterial o bligations required by this Agreement to be completed prior to the Close of Escrow;

3.2.2.7 The r epresentations, w arranties a nd c ovenants o f t he D eveloper set forth in Section 1.2.2 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date; and
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -20-

3.2.2.8 The D eveloper d eposits t he f unds a nd i tems i nto t he E scrow required by Section 3.3 for the Escrow.

3.3 Developer’s Escrow Deposits. Following satisfaction or waiver of each of the Developer’s c onditions t o C lose o f E scrow s et f orth i n S ections 3.2.1, a s a pplicable, t he Developer shall deposit the following funds and documents into Escrow at least two (2) business days prior to the Escrow Closing Date in a writing delivered to the Parties:

3.3.1 Purchase Price and Other Funds. Purchase Price, less the amount of the Earnest Money Deposit, plus any additional funds required to be deposited into Escrow by the D eveloper u nder t he t erms o f t his A greement t o c lose t he E scrow, a ll i n i mmediately available funds.

3.3.2 PCO S tatement. A P CO S tatement e xecuted b y t he a uthorized representative(s) of the Developer.

3.3.3 Acceptance o f G rant D eed. T he C ertificate o f A cceptance o f t he Deed, in the form attached to the Grant Deed, executed by the authorized representative(s) of the Developer in recordable form.

3.3.4 Notice o f A greement. T he N otice o f A greement e xecuted b y t he authorized representative(s) of the Developer in recordable form.

3.4 City’s Escrow Deposits. Following satisfaction or waiver of each of the City’s conditions to Close of Escrow set forth in Sections 3.2.2, as applicable, the City shall deposit the following d ocuments i nto E scrow a t l east t wo ( 2) b usiness d ays p rior t o t he E scrow C losing Date:

3.4.1 Grant D eed. T he G rant D eed e xecuted b y t he a uthorized representative(s) of the City in recordable form.

3.4.2 FIRPTA A ffidavit ( City). T he F IRPTA A ffidavit c ompleted a nd executed by the authorized representative(s) of the City.

3.4.3 Notice o f A greement. T he N otice o f A greement e xecuted b y t he authorized representative(s) of the City in recordable form.

3.5 Closing Procedure. When each of the Developer’s Escrow required deposits, as set forth in Section 3.3, and each of the City’s Escrow required deposits, as set forth in Section

3.4, are deposited into Escrow, Escrow Holder shall request confirmation in writing from both the City and the Developer that each of their respective conditions to the Close of Escrow, as set forth i n S ection 3.2, a re s atisfied o r w aived. U pon E scrow H older’s r eceipt o f w ritten confirmation from both the City and the Developer that each of their respective conditions to the Close of Escrow are either satisfied or waived, Escrow Holder shall close the Escrow for the Property by doing all of the following:

3.5.1 Recordation of Documents. File the following with the Office of the Recorder of the County, for recordation in the order set forth in Section 3.7: (i) the Grant Deed, 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -21-
with the Developer’s certificate of acceptance attached, (ii) the Notice of Agreement, and (iii) if applicable, the Construction Loan Deed of Trust.

3.5.2 Distribution o f R ecorded D ocuments. D istribute e ach r ecorded document to the Party or person designated for such distribution in Section 3.7.

3.5.3 PCO S tatement. F ile t he P CO S tatement w ith t he O ffice o f t he Recorder of the County.

3.5.4 FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal Revenue Service.

3.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.

3.5.6 Purchase Price. Deliver the Purchase Price to the City, less the City’s share of Escrow closing costs, and less any other charges to the account of the City, and return any remaining funds held by Escrow Holder for the account of the Developer to the Developer, less the Developer’s share of Escrow closing costs, and less any other charges to the account of the Developer.

3.6 Close of Escrow. Close of Escrow shall occur no later than the earlier of: (1) the tenth (10th) business day following Escrow Holder’s receipt of written confirmation from both the City and the Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow for the Property, or (2) thirty (30) days from the end of the Due Diligence Period (the “Escrow Closing Date”), provided that the Developer has satisfied the conditions precedent set forth i n S ection 3 .2.1. H owever, i n n o e vent s hall e scrow c lose a ny l ater t han D ecember 3 0, 2022. If for any reason the Close of Escrow has not occurred by the Escrow Closing Date, then any P arty n ot t hen i n d efault o f t his A greement m ay c ancel t he E scrow a nd t erminate t his Agreement, subject to the notice and cure provisions of Section 7.1 (to the extent applicable), without liability to any other Party or any other person for such termination and cancellation, by delivering written notice of termination to the other Party(ies) and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 3.11 if the non-terminating Party is not in default or pursuant to Section 7.2 or 7.3 (as applicable) if the non-terminating Party is in default. Without limiting the right of any Party to terminate this Agreement, pursuant to the preceding sentence, if Escrow d oes n ot c lose o n o r b efore t he E scrow C losing D ate, a nd n o P arty h as e xercised i ts contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow shall close as soon as reasonably possible following the first date on which Escrow Holder is in a position to close the Escrow pursuant to the terms and conditions of this Agreement.

3.7 Holdback P ending P roperty C haracterization. A t t he C lose o f E scrow, Escrow Holder shall hold back and retain in Escrow, in accordance with the instructions in this Section, the sum of Five Hundred Thousand Dollars ($500,000.00) from funds otherwise due to City ( “Holdback”). E scrow H older s hall d eposit t he H oldback f unds i n a n i nterest b earing account, w ith i nterest a ccruing t o t he b enefit o f C ity. A s s oon a s r easonably p racticable, Developer shall cause the Property to be mass graded in accordance with grading plans approved by t he C ity. I f H azardous S ubstances a re d iscovered i n t he P roperty, C ity s hall r eimburse Developer the actual costs to handle and manage (and if required, remove and lawfully dispose 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -22-
of) s uch H azardous S ubstances i n t he m anner a pproved b y G overnment a uthorities w ith jurisdiction, but only up to the amount necessary to remediate Hazardous Substances that were not a lready c onsidered i n t he a ppraisal t he P arties u sed t o e stablish t he P urchase P rice. I f Developer is required to remove the Hazardous Substances from the Property and dispose of the same, any permit needed for such removal, transport and/or disposal shall list Developer as the hazardous materials “generator.” As part of City’s obligation to reimburse Developer the costs for handling and managing any such Hazardous Substances, Developer shall submit to Escrow Holder, w ith a c opy t o C ity, i nvoices a nd o ther r easonable d ocumentation s upporting a disbursement request by Developer. City shall have thirty (30) days to review and approve the reimbursement. City’s approval of the expense shall not be unreasonably withheld, conditioned or delayed. Escrow Holder shall not disburse the same to Developer without City’s consent to disbursement. Escrow Holder shall disburse funds within ten (10) days of receiving City’s notice of approval. If Hazardous Substances are not discovered in the Property when all excavation and over-excavation has been completed in the course of grading the site to its approximate rough grade, and prior to any final or post-grading excavations for foundations, underground utilities, or o ther u nderground f acilities o r s tructures, D eveloper a nd C ity s hall p rovide w ritten instructions to Escrow Holder directing the Escrow Holder to disburse the Holdback funds to City a nd c lose t he H oldback e scrow. I f D eveloper a nd C ity h ave n ot j ointly s ubmitted instructions t o E scrow H older r egarding d isposition o f a ny r emaining H oldback f unds a nd closure o f t he H oldback e scrow a ccount w ithin e ighteen ( 18) m onths f ollowing t he C lose o f Escrow, Escrow Holder shall be entitled (but not obligated) at that point to give written notice to the p arties a sking f or s uch i nstructions a nd i f t he H oldback escrow account cannot be closed within three (3) additional months after Escrow Holder’s notice, Escrow Holder shall have the right (but not the obligation) at that point to file an action in interpleader with the Superior Court of C alifornia, C ounty o f O range, r equiring t he P arties t o l itigate t heir c laims/rights t o t he Holdback f unds. I f s uch a n a ction i s f iled, t he P arties j ointly a nd s everally a gree ( a) t o p ay Escrow Holder’s cancellation charges, costs and reasonable attorneys’ fees, and (b) that Escrow Holder is fully released and discharged from all further obligations under the Holdback escrow.

3.8 Recordation a nd D istribution o f D ocuments. A s a pplicable, E scrow H older shall cause the following documents to be recorded in the official records of the Recorder of the County in the following order of priority at the Close of Escrow: (i) the Grant Deed, with the Developer’s c ertificate o f a cceptance a ttached, ( ii) t he N otice o f A greement, a nd ( iii) t he Construction Loan D eed o f T rust, i f a pplicable, a nd ( iv) a ny o ther d ocuments t o b e r ecorded through Escrow upon the joint instructions of the Parties. All recorded documents shall provide that they are to be returned to Escrow Holder after recordation. When originals of such recorded documents are returned to Escrow Holder, Escrow Holder shall deliver: (i) the original Grant Deed, w ith t he D eveloper’s o riginal c ertificate o f a cceptance a ttached, t o t he D eveloper a nd copies t o t he C ity, e ach s howing a ll r ecording i nformation, ( ii) t he o riginal o f t he N otice o f Agreement to the City, with copies to the Developer, each showing all recording information, (iii) the Construction Loan Deed of Trust to the Construction Lender for the Project, with copies to the Developer and the City, each showing all recording information, and (iv) the original of any other document recorded at the close of Escrow to the Party or other person designated in the joint escrow instructions of the Parties for such recordation and a copy of each such document to the other Party or Parties, each showing all recording information. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -23-

3.9 Escrow Closing Costs, Taxes and Title Policy Premium. The Developer shall pay the Escrow fees and such other costs as Escrow Holder may charge for the conduct of the Escrow. Escrow Holder shall notify the Developer of the costs to be borne by the Developer at the Close of Escrow by delivering the Escrow Holder’s estimated closing/settlement statement to the Developer at least four (4) business days prior to the Escrow Closing Date. The City shall pay the premium charged by the Title Company for the standard Title Policy for the Property, exclusive of any endorsements or other supplements to the coverage of such Title Policy that may be requested by the Developer, as well as documentary transfer taxes and any and all other charges, fees and taxes levied by a Governmental Authority relative to the conveyance of any portion of the Property through the Escrow transaction contemplated in this Agreement. The Developer shall pay any and all recording fees relative to the conveyance of any portion of the Property through the Escrow transaction contemplated in this Agreement.

3.10 Escrow C ancellation C harges. I f t he E scrow f ails t o c lose d ue t o e ither t he City’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, t he C ity s hall p ay a ll o rdinary a nd r easonable E scrow a nd t itle o rder c ancellation charges. I f t he E scrow f ails t o c lose d ue t o t he D eveloper’s m aterial d efault u nder t his Agreement and the Escrow is cancelled and this Agreement is terminated, the Developer shall pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close for any reason other than the material default of either the Developer or the City and the Escrow is cancelled and this Agreement is terminated, the Developer and the City shall each pay one-half (1/2) of any ordinary and reasonable Escrow and title order cancellation charges.

3.11 Escrow Cancellation. If this Agreement is terminated and the Escrow cancelled pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement and cancel the Escrow, other than due to the material default of another Party, the Parties shall do each of the following:

3.11.1 Cancellation I nstructions. T he P arties s hall, w ithin t hree ( 3) business d ays o f r eceipt o f E scrow H older’s w ritten r equest, e xecute a ny r easonable E scrow cancellation instructions requested by Escrow Holder;

3.11.2 Return of Funds and Documents. Within ten (10) days of receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Holder: (i) the Developer or Escrow Holder shall return to the City any documents previously delivered by the City to the Developer or Escrow Holder, (ii) the City or Escrow Holder shall return t o t he D eveloper a ll d ocuments p reviously d elivered b y t he D eveloper t o t he C ity o r Escrow H older; ( iii) E scrow H older s hall r eturn t o t he D eveloper a ny f unds d eposited b y Developer i nto E scrow, i ncluding t he E arnest M oney D eposit, l ess t he D eveloper’s s hare o f customary and reasonable Escrow and title order cancellation charges, if any; and (iv) Escrow Holder shall return to the City any funds deposited by City into Escrow if it has already been deposited, less the City’s share of customary and reasonable Escrow and title order cancellation charges, if any.

3.12 Report t o I RS. F ollowing t he C lose o f E scrow a nd p rior t o t he l ast d ate o n which s uch r eport i s r equired t o b e f iled w ith t he Internal R evenue S ervice, i f s uch r eport i s required pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder shall report 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -24-
the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, Escrow Holder shall deliver a copy of the filed form to the City and the Developer.

ARTICLE IV

PROJECT DEVELOPMENT

4.1 Developer C ovenant t o U ndertake P roject. T he D eveloper c ovenants, f or itself, its successors and assigns, to and for the exclusive benefit of the City, that the Developer shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope o f D evelopment, t he S chedule o f P erformance, a ny a nd a ll p lans, s pecifications a nd similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 4.1 shall run with the land of the Property until the earlier of the date of recordation of the Certificate of Completion or the fifteenth (15th) anniversary of the date of the Close of Escrow.

4.1.1 Developer c ovenants t o provide not less 12% of the base maximum density (60 DU/acre) allowed by the specific plan as housing affordable to households earning between 6 0% a nd 1 20% o f a rea m edian i ncome. D eveloper s hall e nter i nto a R egulatory Agreement w ith t he C ity c oncurrent w ith e ntitlements t o e nsure t he u nits a re a ffordable a s provide for herein for not less than 55 years.

4.1.2 Developer c ovenants t hat n ot l ess 1 64 p arking s paces w ill r emain available to the public in perpetuity following the issuance of a Certificate of Completion for the Project. Not less than 138 of the spaces shall be provided on site with the remaining potentially provided off site with City Manager approval.

4.1.3 Developer covenants to use its best efforts to utilize union labor for the construction of the project.

4.2 Developer C hanges t o P lans a nd S pecifications D uring C ourse o f Construction.

4.2.1 The Developer shall have the right during the course of construction of the Project to make “minor field revisions”. “Minor field revisions” shall be defined as detail changes from the approved Plans and Specifications that have little to no substantial effect on the Project or are made in order to expedite the work of construction in response to field conditions such as structural detail revisions or interior finish revisions. “Minor field revisions” exclude modifications t o t he p roject, i ncluding t he s ite p lan a nd architecture, as approved pursuant to 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -25-
Major Site Plan ZON19-00034. All detail revisions must be documented and stamped by the licensed architect or licensed engineer and/or other design professional as deemed necessary.

The Developer shall submit all “minor field revisions” to the City for its review and approval prior to the date that the Developer intends to implement such changes. The City shall have five (5) business days from its receipt of such proposed changes to review the same and advise the Developer in writing whether such changes are acceptable to the City in its reasonable discretion.

4.2.2 All work that does not meet the definition of a “minor field revision” shall be resubmitted for approval as an amended set of construction documents. The Developer shall submit all other changes, i.e. those changes which are not “minor field revisions”, to the City for its review and approval no less than fifteen (15) business days prior to the date that the Developer intends to implement such changes. The City shall have twelve (12) business days from i ts r eceipt o f s uch p roposed c hanges t o r eview t he s ame a nd a dvise t he D eveloper i n writing w hether s uch c hanges a re a cceptable t o t he C ity i n i ts r easonable d iscretion. T he Community D evelopment D irector m ay a pprove m inor m odifications t o M ajor S ite P lan ZON19-00034, but major modifications shall require rehearing by the same process utilized to approve the original Major Site Plan, pursuant to Fullerton Municipal Code Section 15.47.040.D.

4.2.3 Nothing contained in this Section 4.2 shall be deemed to constitute a waiver o f o r c hange i n t he C ity R equirements, a s d efined in Section 2.6.2, governing “minor field revisions” or other changes or in any approvals by the City otherwise required for “minor field revisions” or other changes.

4.3 Construction S tart a nd C ompletion o f P roject. T he D eveloper s hall commence c onstruction o f t he P roject i n a ccordance w ith t he S chedule o f P erformance a nd, thereafter, s hall d iligently p roceed t o c omplete t he c onstruction o f t he P roject i n a g ood a nd workmanlike m anner i n s ubstantial c onformity w ith t he a pproved p lans, s pecifications, a nd conditions f or t he P roject a pproved b y t he C ity a nd t he S chedule o f P erformance. T he Developer shall obtain a Certificate of Completion on or before the Project Completion Date.

The Developer will, promptly upon completion of construction of the Project, cause the Project to be inspected by each Governmental Agency with jurisdiction over the Project, shall correct any defects and deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all occupancy certificates and other licenses, permits and authorizations necessary for the operation and occupancy of the completed Project. The Developer shall do and perform all of t he f oregoing a cts a nd t hings a nd c ause t o b e i ssued a nd e xecuted a ll s uch o ccupancy certificates, licenses, and authorizations for the Project on or before the date set forth therefor in the S chedule o f P erformance a s t he c ompletion d ate f or t he P roject, s ubject t o U navoidable Delays. After commencement of the work of improvement of the Project, the Developer shall not permit the work of improvement of the Project to cease or be suspended for a time period in excess of thirty (30) consecutive calendar days, subject to Unavoidable Delays.

4.4 Compliance w ith L aws. All w ork p erformed i n c onnection w ith t he development of the Project shall comply with all Governmental Requirements.

4.5 Schedule o f P erformance. T he S chedule o f P erformance e stablishes v arious dates and times for the accomplishment of various tasks assigned to the City and the Developer and the satisfaction of the conditions precedent to the close of the Escrow. The Parties agree that 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -26-
time i s o f t he e ssence i n t he p erformance o f s uch t asks a nd t he s atisfaction o f c onditions precedent, in view of the large investment of resources that all Parties recognize will be required for t he u ndertaking o f t he P roject. I f t he d ate o r t ime f or t he p erformance o f a t ask o r t he satisfaction of a condition, as set forth in either the text of this Agreement or in the Schedule of Performance, may not be achieved, then prior to such date or time set forth in the text of this Agreement or the Schedule of Performance, the Parties shall consider whether a modification to the t ext o f t his A greement o r t o t he S chedule o f P erformance i s w arranted. A ny d ecision t o approve a modification to a time or date established in either the text of this Agreement or the Schedule of Performance shall be subject to the sole discretion of each Party. Any modification of a time or date for performance of a particular task or satisfaction of a particular condition that does not result in a change of more than one hundred eighty (180) days may be approved on behalf of the City by the City Manager, in his or her reasonable discretion. A modification of a time o r d ate f or p erformance o f a t ask o r s atisfaction o f a c ondition ( or a s eries o f s uch modifications) that results in an aggregate change of more than one hundred eighty (180) days shall b e s ubject t o t he a pproval o f t he C ity C ouncil, i n i ts s ole a nd a bsolute d iscretion. I f performance of a task or satisfaction of a condition in the Schedule Performance is prevented or delayed by Unavoidable Delays, the deadline for completion of such task or satisfaction of such condition shall be extended by the period of such Unavoidable Delays.

4.5.1 Post Closing Conditions:

4.5.1.1 Developer shall use its best efforts to have obtained all necessary entitlements f rom t he C ity w ithin o ne h undred t wenty ( 120) d ays o f c lose o f e scrow.

Notwithstanding the foregoing and subject to Unavoidable Delay, failure to obtain all necessary entitlements within one hundred eighty (180) days of close escrow shall be a Default under this Agreement a nd C ity s hall h ave t he r ight t o i mmediately c ommence p roceedings p ursuant t o Section 7.6, Power of Termination, and retake possession of the Property.

4.5.1.2 Developer s hall u se i ts b est e fforts t o s ubmit c omplete development p lans t o C ity f or r eview a nd a pproval w ithin o ne h undred e ighty ( 180) d ays o f receiving entitlements. Notwithstanding the foregoing and subject to Unavoidable Delay, failure to submit complete development plans within two hundred forty (240) days of close escrow shall be a D efault u nder t his A greement a nd C ity s hall h ave t he r ight t o i mmediately c ommence proceedings p ursuant t o S ection 7 .6, P ower o f T ermination, a nd r etake p ossession o f t he Property.

4.5.1.3 Developer s hall p rocess t he a ppropriate e ntitlement t o m odify parcel boundaries consistent with the metes and bounds legal description utilized at the close of escrow.

4.6 Developer Attendance at City Meetings. The Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to City questions regarding the progress of the Project, attend City Council meetings, when requested to do so on not less than ten (10) days prior written notice by City staff. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -27-

4.7 City’s Right to Inspect Project and Property. Officers, employees, agents and representatives of the City shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction of t he P roject. S uch o fficers, e mployees, a gents o r r epresentatives o f t he C ity s hall be those persons who are designated by the City Manager. Any and all officers, employees, agents or representatives of the City who enter the Property shall identify themselves at the construction management office on the Property, upon their entrance on to the Property, and shall at all times be a ccompanied by a representative of the Developer, while on the Property. The Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours, upon reasonable notice from the City. The City shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the City of the right of access to the Property provided in this Section 4.7, other than injury, property damage o r l iability a rising f rom t he n egligence o r w illful m isconduct o f t he D eveloper o r i ts officers, agents or employees. The City shall inspect relevant portions of the Property, prior to issuing any written statements reflecting adversely on the Developer’s compliance with the terms and c onditions o f t his A greement p ertaining t o d evelopment o f t he P roject. I f i n t he C ity’s reasonable judgment it is necessary, the City shall have the further right, from time to time, to retain a consultant or consultants to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such inspections are for the sole purpose of protecting the City’s rights under this Agreement, are made solely for the City’s benefit, that the inspections may be superficial and general in nature, and are for the purposes of informing the City of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement, and that the Developer shall not be e ntitled t o r ely o n a ny s uch i nspection(s) a s c onstituting a n a pproval, s atisfaction o r acceptance o f a ny m aterials, w orkmanship, c onformity o f t he P roject w ith t his A greement o r otherwise. T he D eveloper a grees t o m ake i ts o wn r egular i nspections o f t he w ork o f construction of the Project to determine that the quality of the Project and all other requirements of the work of construction of the Project are being performed in a manner satisfactory to the Developer. T he D eveloper a lso a grees t o i mmediately n otify t he C ity i n w riting s hould t he Developer’s i nspections s how a ny m atters t hat w ill p revent t he e ntire P roject f rom b eing completed by the Project Completion Date set forth therefore in the Schedule of Performance.

Without limiting the foregoing, the Developer shall permit the City upon reasonable notice to examine and copy all books and account records and other papers relating to the Property and the construction of the Project. The Developer will use commercially reasonable efforts to cause all contractors, s ubcontractors a nd m aterialmen t o c ooperate w ith t he C ity t o e nable s uch examination.

4.8 Cost of Construction. The cost and expense of undertaking and completing the Project, i ncluding, w ithout l imitation, c onstructing a ll l egally i mposed o n- a nd o ff-site improvements, and providing all utilities therefor, shall be borne by Developer at its sole cost, expense and liability. Developer shall be solely responsible for payment of all City land use, construction, inspection, plan check and development impact fees (collectively, “Development Fees”) imposed by the City with respect to the development of the Project. Developer shall bear all costs and expenses associated with the processing and obtaining of the entitlements and shall bear all costs and expenses (except to the extent expressly set forth otherwise in this Agreement), 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -28-
associated w ith a ny a nd a ll t erms, c onditions, r equirements, m itigation m easures a nd o ther exactions imposed on, or required in connection with, the entitlements.

4.9 Prevailing Wages.

4.9.1 The D eveloper a cknowledges t hat t he C ity h as n ot m ade a ny representation, express or implied, to the Developer or any person associated with the Developer regarding whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. The Developer agrees with the City that t he D eveloper s hall a ssume t he r esponsibility a nd b e s olely r esponsible f or d etermining whether o r n ot l aborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification.

4.9.2 The Developer, on behalf of itself, its successors, and assigns, waives and releases the City from any right of action that may be available to it pursuant to Labor Code Sections 1726 and 1781. The Developer acknowledges the protections of Civil Code Section 1542 relative to the waiver and release contained in this Section 4.9, which reads as follows:
“A G ENERAL R ELEASE D OES N OT E XTEND T O C LAIMS

THAT THE CREDITOR OR RELEASING PARTY DOES NOT

KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT

THE T IME O F E XECUTING T HE R ELEASE A ND T HAT, IF

KNOWN B Y H IM O R H ER, W OULD H AVE M ATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES T HE P ROVISIONS O F S ECTION 1542 SOLELY IN CONNECTION W ITH THE WAIVERS AND RELEASES OF THIS SECTION 4.9.2.
_________________
Developer’s Initials

4.9.3 Additionally, i n a ccordance w ith S ection 7.7, t he D eveloper s hall indemnify, defend with counsel acceptable to the City and hold the City harmless against any claims p ursuant t o L abor C ode S ections 1 726 a nd 1 781 a rising f rom t his A greement o r t he construction or operation of the Project.

4.10 Certificate of Completion.

4.10.1 Following t he s ubstantial c ompletion o f c onstruction o f t he P roject, and upon written request from the Developer for issuance of a Certificate of Completion for the Project, t he C ity s hall i nspect t he P roject t o d etermine w hether o r n ot t he P roject h as b een substantially c ompleted i n c ompliance w ith t his A greement. I f t he C ity d etermines t hat t he Project is complete and in compliance with this Agreement, the City Manager shall furnish the Developer w ith a C ertificate o f C ompletion f or t he P roject. I f t he C ity d etermines t hat t he Project is not in compliance with this Agreement, the City Manager shall send written notice of 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -29-
each non-conformity to the Developer. Upon issuance of the final certificate of occupancy for the development of the Project, based on the plans submitted by the Developer to the City, the City shall furnish the Developer with a Certificate of Completion for the Project.

4.10.2 Upon t he D eveloper’s s ubstantial c ompletion o f t he P roject, t he Developer shall request and be entitled to receive a Certificate of Completion, including the right of the City Manager to issue the Certificate of Completion.

4.10.3 The City shall not unreasonably withhold the issuance of a Certificate of C ompletion. A C ertificate o f C ompletion s hall b e e vidence o f t he C ity’s c onclusive determination of satisfactory completion of the Project to which it pertains pursuant to the terms of t his A greement. A fter t he r ecordation o f a C ertificate o f C ompletion f or t he P roject, a ny person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property i mproved w ith t he P roject s hall n ot ( because o f s uch o wnership, p urchase, l ease o r acquisition) i ncur a ny o bligation o r l iability u nder t his A greement r egarding c onstruction o r installation of the Project except that such person shall be bound by any reservations, covenants, conditions, r estrictions a nd o ther i nterests r ecorded a gainst t he P roperty p ursuant t o t his Agreement and the Grant Deed.

4.10.4 If t he C ity f ails o r r efuses t o i ssue a C ertificate o f C ompletion following written request from the Developer, the City shall, within fifteen (15) calendar days of the Developer’s written request or within three (3) calendar days after the next regular meeting of the City Council, whichever date occurs later, provide the Developer with a written statement setting forth the reasons for the City’s failure or refusal to issue a Certificate of Completion. The statement shall also contain the City’s opinion of the action(s) the Developer must take to obtain a Certificate of Completion from the City. If the reason for the Developer’s failure to complete the P roject i s c onfined t o t he i mmediate u navailability o f s pecific i tems o r m aterials f or construction o r l andscaping a t a p rice r easonably a cceptable t o t he D eveloper o r o ther m inor building “punch-list” items, the City may issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to the C ity i n a n a mount r epresenting t he f air v alue o f t he w ork o n t he P roject r emaining to be completed, a s r easonably d etermined b y t he C ity. I f t he C ity f ails t o p rovide s uch w ritten statement, w ithin t he s pecified t ime p eriod, t he D eveloper s hall b e d eemed c onclusively a nd without f urther a ction o f t he C ity t o h ave s atisfied t he r equirements o f t his A greement w ith respect to the Project, as if a Certificate of Completion had been issued by the City pursuant to this Agreement.

4.10.5 A C ertificate o f C ompletion s hall n ot c onstitute e vidence o f compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Project, or any parts thereof.

A C ertificate o f C ompletion s hall n ot b e d eemed t o c onstitute a n otice o f c ompletion u nder Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or conditions contained in the Grant Deed or any other instruments recorded against the P roperty p ursuant t o t his A greement. A C ertificate o f C ompletion i s not evidence of the compliance o f t he P roject w ith a ny C ity R equirements o r a ny b uilding c ode, c onditions o f 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -30-
approval, land use, zoning or other requirements of the City or any Governmental Agency with jurisdiction over the Property, other than the City.

ARTICLE V

DEVELOPER COVENANTS

5.1 Covenant t o M aintain P roperty o n T ax R olls. The D eveloper f or i tself, i ts successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.1.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of a certificate of occupancy for the Project.

5.1.2 The D eveloper s hall p ay a ll p roperty t ax b ills w ith r espect t o t he Property and all improvements thereon on or before the last day for the timely payment of each property t ax i nstallment o n e ach D ecember 1 0 a nd A pril 1 0 d uring s uch t ime p eriod a nd t o timely p ay a ll s upplemental t ax b ills r egarding t he P roperty i ssued b y t he C ounty. T he Developer further covenants and agrees to provide to the City, on or before July 31 of each year, commencing i n t he c alendar y ear f ollowing t he c alendar y ear i n w hich a C ertificate o f Completion is recorded and in each calendar year, thereafter, for the full term of this covenant:
(i) a true and correct copy of all property tax assessment notices, property tax bills and property tax a ssessment c orrespondence b y a nd b etween t he D eveloper a nd t he C ounty r egarding t he Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Developer in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon (or other reasonably acceptable evidence of such payment), with respect to the preceding County fiscal year.

5.1.3 The c ovenants o f t his S ection 5.1 s hall r un w ith t he l and o f t he Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.2 Payment in Lieu of Sales Tax.

5.2.1 Developer a nd C ity a nticipate t hat D eveloper s hall b e o pen f or business and generating sales tax collected pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Revenue and Taxation Code Section 7200, et seq.) (“Sales Tax Law”) in the City by November 2026. Developer has anticipated that Developer will generate approximately $7,750 p er q uarter i n S ales T ax r eceived b y C ity ( “City S ales T ax”). I f D eveloper h as n ot commenced generating sales tax received by the City by March 2027, Developer, its successors or assigns shall pay to the City, in lieu of payment of such taxes, the City Sales Tax amount per quarter until such time as City is receiving sales tax from the Project. If the City determines that the City Sales Tax amount is payable by Developer to the City as an in-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the City for that quarter within fifteen (15) days following transmittal by the City to the Developer of an invoice for payment of the City Sales Tax in-lieu amount.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -31-

5.2.2 Developer a nd C ity a nticipate t hat D eveloper s hall b e o pen f or business a nd c ollecting T ransient O ccupancy T ax ( “TOT”) a s r equired u nder t he C ity’s municipal code. Developer has anticipated that Developer will collect approximately $200,000 per quarter in TOT received by City (“City TOT”). If Developer has not commenced collecting TOT received by the City by November 2026, Developer, its successors or assigns shall pay to the City, in lieu of payment of such taxes, the City TOT amount per quarter until such time as City i s r eceiving T OT f rom t he P roject. I f t he C ity d etermines t hat t he C ity T OT a mount i s payable by Developer to the City as an in-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the City for that quarter within fifteen (15) days following transmittal b y t he C ity t o t he D eveloper o f a n i nvoice f or p ayment o f t he C ity T OT i n-lieu amount.

5.2.3 If D eveloper i s n ot o pen f or b usiness a nd g enerating s ales t ax pursuant t o t he S ales T ax Law a nd T OT p ursuant t o t he m unicipal c ode by November 2026, Developer shall be in Default under this Agreement.

5.2.4 The c ovenants o f t his S ection 5 .2 s hall r un w ith t he l and o f t he Property and shall be enforceable against the Developer and its successors and assigns, and shall be a covenant set forth in the Grant Deed.

5.3 Maintenance C ondition o f t he P roperty. T he D eveloper f or i tself, i ts successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.3.1 The areas of the Property that are subject to public view (including all existing a nd f uture i mprovements, p aving, w alkways, l andscaping, e xterior s ignage a nd ornamentation) s hall b e m aintained i n g ood r epair a nd a n eat, c lean a nd o rderly c ondition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of t he P roperty t hat i s s ubject t o p ublic v iew i n c ontravention o f t he g eneral m aintenance standard d escribed a bove ( a “ Maintenance D eficiency”), t hen t he C ity s hall n otify t he Developer i n w riting o f t he M aintenance D eficiency. I f t he D eveloper f ails t o c ure o r commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the City shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the M aintenance D eficiency. A ny s um e xpended b y t he C ity f or t he a batement o f a Maintenance Deficiency on the Property pursuant to this Section 5.3.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 5.3.3.

5.3.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, d etergents o r w ater, a s a ppropriate. I f a ny s uch g raffiti i s n ot r emoved w ithin 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -32-
ninety-six (96) hours following the time of the discovery of the graffiti, the City shall have the right to enter the Property and remove the graffiti, without notice to the Developer. Any sum reasonably expended by the City for the removal of graffiti from the Property pursuant to this Section 5.3.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Developer from the City, the City shall have the right to enforce its lien in the manner provided in Section 5.3.3.

5.3.3 The P arties f urther m utually u nderstand a nd a gree t hat t he r ights conferred upon the City under this Section 5.3 expressly include a grant by the Developer of a security i nterest i n t he P roperty w ith t he p ower t o e stablish a nd e nforce a l ien o r o ther encumbrance against the Property or any portion thereof, in the manner provided under Civil Code S ections 2 924, 2 924b a nd 2 924c, t o s ecure t he o bligations o f t he D eveloper a nd i t successors u nder Section 5.3.1 or Section 5.3.2, including the reasonable attorneys’ fees and costs o f t he C ity a ssociated w ith t he a batement o f a M aintenance D eficiency o r r emoval o f graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the City” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

5.3.4 The provisions of this Section 5.3, shall be a covenant running with the l and o f t he P roperty, s hall b e e nforceable a gainst t he D eveloper a nd i ts s uccessors a nd assigns, and shall be covenants set forth in the Grant Deed. Nothing in the foregoing provisions of t his S ection 5 .3 s hall b e d eemed t o p reclude t he D eveloper f rom m aking a ny a lteration, addition, o r o ther c hange t o a ny s tructure o r i mprovement o r l andscaping o n t he P roperty, provided that any such changes comply with applicable zoning and building regulations of the City.

5.4 Obligation t o R efrain f rom D iscrimination. T he D eveloper f or i tself, i ts successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.4.1 There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or a ncestry i n t he s ale, l ease, s ublease, t ransfer, u se, o ccupancy, t enure o r e njoyment o f t he Property nor shall the Developer, itself or any person claiming under or through it, establish or permit a ny s uch p ractice o r p ractices o f d iscrimination o r s egregation w ith r eference t o t he selection, l ocation, n umber, u se o r o ccupancy o f t enants, l essees, s ub-tenants, s ub-lessees o r vendees of the Property.

5.4.2 The covenant of this Section 5.4 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed and the Notice of Agreement.

5.5 Form o f N on-Discrimination and Non-Segregation Clauses. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -33-

5.5.1 The D eveloper, s uch s uccessors a nd s uch a ssigns s hall r efrain f rom restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry o r n ational o rigin o f a ny p erson. A ll d eeds, l eases o r c ontracts p ertaining t o t he Property s hall c ontain o r b e s ubject t o s ubstantially t he f ollowing n on-discrimination o r non-segregation covenants:

5.5.1.1 In d eeds: “ The g rantee h erein c ovenants b y a nd f or i tself, i ts successors and assigns, and all persons claiming under or through them, that there shall be no discrimination a gainst o r s egregation o f, a ny p erson o r g roup o f p ersons o n a ccount o f r ace, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, u se, o ccupancy, t enure, o r e njoyment o f t he p remises h erein c onveyed, n or s hall t he grantee o r a ny p erson c laiming u nder o r t hrough i t, e stablish o r p ermit a ny s uch p ractice o r practices of discrimination or segregation with reference to the selection, location, number, use or o ccupancy o f t enants, l essees, s ub-tenants, s ub-lessee, o r v endees i n t he p remises h erein conveyed. The foregoing covenants shall run with the land.”

5.5.1.2 In l eases: “ The L essee h erein c ovenants b y a nd f or i tself, i ts successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against o r s egregation o f a ny p erson o r g roup o f p ersons, o n a ccount o f r ace, c olor, c reed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination o r s egregation w ith r eference t o t he s election, l ocation, n umber, u se, o r occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.”

5.5.1.3 In c ontracts: “ There s hall b e n o d iscrimination a gainst o r segregation o f a ny p erson o r group o f p ersons o n a ccount o f r ace, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person c laiming u nder o r t hrough i t, e stablish o r p ermit a ny s uch p ractice o r p ractices o f discrimination o r s egregation w ith r eference t o t he s election, l ocation, n umber, u se, o r occupancy, o f t enants, l essees, s ub-lessees, s ub-tenants, o r v endees o f t he p remises h erein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument.

5.5.2 The covenant of this Section 5.5 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.6 Covenant to Maintain Flag Hotel. The Developer covenants to the City that the Hotel shall continuously be operated for the ten (10) years immediately following the date of issuance of a final Certificate of Occupancy by the City for the Hotel and that the Developer shall not amend or otherwise modify or terminate the Hotel Agreement during the ten (10) years immediately following the date of issuance of a final Certificate of Occupancy by the City for the Hotel, without the prior written consent of the City. The Developer may submit a written request 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -34-
to the City for approval to change the name, flag or brand of the Hotel to another national hotel franchise name, flag or brand. Any such request to change the name, flag or brand of the Hotel shall be accompanied by a detailed statement of the reasons for the proposed change and a hotel franchise a greement e xecuted b y b oth t he D eveloper a nd t he p roposed n ew n ational h otel franchisor, c ontingent u pon t he C ity’s a pproval o f t he D eveloper’s r equest. T he C ity m ay approve or disapprove any request from the Developer to change the name, flag or brand of the Hotel in the City’s sole and absolute discretion. Any approval or disapproval of a change in the name, flag or brand of the Hotel by the City shall be in writing.

5.7 Survival of Special Development Covenants. All of the covenants set forth in ARTICLE V, inclusive, shall be a covenant running with the land of the Property and each such special development covenant shall survive the Close of Escrow, execution and recordation of the G rant D eed, a nd i ssuance a nd r ecordation o f a ny C ertificate o f C ompletion f or t he t ime period s pecifically s et f orth i n e ach s uch s pecial d evelopment c ovenant. T he P arties acknowledge t hat a lthough t he s pecial d evelopment c ovenants a pply t o t he e ntirety o f t he Property, portions of the Project and Property may, in accordance with the Permitted Transfer requirements, b e s old o r o therwise t ransferred t o v arious s uccessors a nd a ssigns o f t he Developer. Accordingly, the City agrees that with respect to enforcement of any of the special development covenants, it is understood and agreed that, in the event of a breach of any of the special development covenants, the City will seek to enforce those covenants only against the then-current owner(s) of that portion of the Property which is not in compliance with any one or more the special development covenants. No owner of any portion of the Property which is in compliance with the special development covenants shall be liable for the breach of any of the special d evelopment c ovenants b y a ny o ther o wner o f a ny o ther p ortion o f t he P roperty; provided, however, that the foregoing shall not preclude City from seeking damages against any prior owner of any portion of the Property if, during the tenure of such owner’s ownership, such owner’s p ortion o f t he P roperty w as n ot i n c ompliance w ith a ny o ne o r m ore o f t he s pecial development covenants.

5.8 Developer Covenant to Defend this Agreement. The Developer acknowledges that the City is a “public entity” and/or “public agency” as defined under applicable California law. Therefore, the City must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies including, without limitation, CEQA. Also, as a public body, the City’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Developer assumes the risk of delays and damages that may result to the Developer from any third-party legal actions related to the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the City is determined to have occurred. If a third-party files a legal action regarding the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the City may terminate this Agreement on thirty (30) d ays w ritten n otice t o t he D eveloper o f t he C ity’s i ntent t o t erminate t his A greement, referencing t his S ection 5.8, w ithout a ny f urther o bligation t o p erform t he t erms o f t his Agreement and without any liability to the Developer resulting from such termination, unless the Developer u nconditionally a grees t o i ndemnify a nd d efend t he C ity, w ith l egal c ounsel acceptable to the City, against such third-party legal action, as provided in the next sentence.

Within thirty (30) days of receipt of the City’s notice of intent to terminate this Agreement, as provided i n t he p receding s entence, t he D eveloper m ay o ffer t o d efend t he C ity, w ith l egal 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -35-
counsel reasonably acceptable to the City, in the third-party legal action and pay all of the court costs, a ttorney f ees, m onetary a wards, s anctions, a ttorney f ee a wards, e xpert w itness a nd consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Developer must be in writing and r easonably a cceptable to the City in both form and substance. Nothing contained in this Section 5.8 shall be deemed or construed to be an express or implied admission that the City is liable to the Developer or any other person or entity for damages alleged from any alleged or established failure of the City to comply with any statute, including, without limitation, CEQA.

The D eveloper’s d efense o f s uch t hird p arty a ctions a s d escribed i n t his S ection 5.8 s hall constitute an Unavoidable Delay.

5.9 Environmental I ndemnity o f t he C ity b y t he D eveloper. T he D eveloper agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel s elected b y t he D eveloper a nd a pproved b y t he C ity) t he C ity a nd i ts c ommissions, agents, a ttorneys, o fficers, e mployees, a nd a uthorized r epresentatives ( collectively, t he “Indemnified P arties”), f rom a nd a gainst a ny a nd a ll c laims, d emands, d amages, l osses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and c osts o f a ttorneys, e nvironmental c onsultants a nd o ther e xperts, a nd a ll f oreseeable a nd unforeseeable d amages o r c osts o f a ny k ind o r o f a ny n ature w hatsoever ( collectively, “Environmental Claims”) that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or arising f rom a ny o f t he f ollowing “ Environmental M atters” e xisting o r o ccurring d uring o r arising f rom t he D eveloper’s o wnership o f t he P roperty o r c onstruction o r o peration o f t he Project:

5.9.1 The presence of Hazardous Materials on, in, under, from or affecting all or any portion of the Property or the Project.

5.9.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under, from or affecting the Property or the Project.

5.9.3 The v iolation o f a ny l aw, r ule, r egulation, j udgment, o rder, p ermit, license, agreement, covenant, restriction, requirement or the like by the Developer, its agents or contractors, r elating t o o r g overning i n a ny w ay H azardous M aterials o n, i n, u nder, f rom o r affecting the Property or the Project.

5.9.4 The f ailure o f t he D eveloper, i ts a gents o r c ontractors, t o p roperly complete, o btain, s ubmit a nd/or f ile a ny a nd a ll n otices, p ermits, l icenses, a uthorizations, covenants and the like in connection with the Developer’s activities on the Property or regarding the Project.

5.9.5 The implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -36-
become n ecessary t o p rotect a gainst t he r elease, p otential r elease o r d ischarge o f H azardous Materials on, in, under, from or affecting the Property or the Project.

5.9.6 The failure of the Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous M aterials e xisting, s tored o r g enerated o n, i n, u nder o r f rom t he P roperty o r t he Project.

5.9.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

5.9.8 The D eveloper s hall p ay t o t he I ndemnified P arties a ll c osts a nd expenses i ncluding, w ithout l imitation, r easonable a ttorneys' f ees a nd c osts, i ncurred b y t he Indemnified P arties i n c onnection w ith e nforcement o f t he a forementioned e nvironmental indemnity.

5.10 Insurance. In order to protect the City and its commissions, agents, attorneys, officers, employees and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss and damage resulting from the Developer’s actions i n c onnection w ith t his A greement, t he P roperty, and the Project, the Developer shall secure and maintain the insurance coverage, described in and required by this Section 5.10. The City s hall n ot h ave a ny o bligation u nder t his A greement u ntil t he D eveloper p rovides t he required policies and/or certificates evidencing the insurance required by this Section 5.10 to the City and the City approves such evidence of insurance. The Developer shall pay any deductibles and self-insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. Developer shall retain all insurance policies as set forth in this Section 5.10 until recordation of the Certificate of Completion.

5.10.1 Workers’ Compensation Insurance Requirement. The Developer shall s ubmit w ritten p roof t hat t he D eveloper i s i nsured a gainst l iability f or w orkers’ compensation i n a ccordance w ith t he p rovisions o f S ection 3 700 o f t he L abor C ode. B y executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code which r equire e very e mployer t o b e i nsured a gainst l iability f or workers’ c ompensation o r t o u ndertake s elf-insurance i n accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement.”
The Developer shall require each contractor and sub-contractor performing work on the Project to p rovide w orkers’ c ompensation c overage f or a ll o f s uch c ontractor’s o r s ub-contractor’s employees, u nless t he c ontractor’s o r s ub-contractor’s e mployees a re c overed b y w orkers’ compensation insurance provided by the Developer. If any class of employees engaged in work 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -37-
or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide and/or require each contractor or sub-contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this Section 5.10.1 shall contain a full waiver of subrogation clause in favor of the Additional Insureds.

5.10.2 Liability and Permanent Insurance Requirements.

5.10.2.1 The D eveloper s hall m aintain i n f ull f orce a nd e ffect, u ntil t he issuance of the Certificate of Completion, subject to Section 5.10.2.4, the following insurance coverage:

5.10.2.1.1 Commercial General Liability Insurance coverage, including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically covering all indemnity o bligations o f t he D eveloper p ursuant t o t his A greement), P roducts-Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property Damage for l iability a rising o ut o f t he c onstruction o f t he P roject a nd/or t he D eveloper’s o perations concerning t he P roperty o r t he P roject. T he c ommercial g eneral l iability i nsurance c overage shall have minimum limits for Bodily Injury and Property Damage liability of TWO MILLION DOLLARS ( $2,000,000) e ach o ccurrence a nd F OUR M ILLION D OLLARS ( $4,000,000) aggregate.

5.10.2.1.2 Automobile L iability I nsurance a gainst c laims o f P ersonal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and n on-owned v ehicles u sed b y t he D eveloper w ith m inimum l imits f or B odily I njury a nd Property D amage o f O NE M ILLION D OLLARS ( $1,000,000) e ach o ccurrence a nd T WO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy.

5.10.2.1.3 If the Developer hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, t he D eveloper s hall r equire e ach s uch c onsultant t o p rovide P rofessional L iability (Errors a nd O missions) I nsurance, f or l iability a rising o ut o f, o r i n c onnection w ith, t he performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000).

5.10.2.1.4 Upon acceptance of the Project or any portion thereof, from each c ontractor, t he D eveloper s hall m aintain F ire a nd E xtended C overage I nsurance o n t he Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Project so accepted.

5.10.2.2 During the construction of the Project, the Developer shall require that each contractor performing work on the Project maintain the following insurance coverage, as s pecified b elow, a t a ll t imes d uring t he p erformance o f s aid w ork, o r t he D eveloper s hall provide f or s uch c ontractors “ wrap” c overage, a s s pecified b elow, a t a ll t imes d uring t he performance of said work:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -38-

5.10.2.2.1 The Developer shall maintain Builder’s Risk Insurance to be written o n a n All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work.

5.10.2.2.2 Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Developer during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others.

5.10.2.2.3 Each general contractor and each sub-contractor shall maintain Automobile Liability Insurance a gainst c laims o f p ersonal i njury ( including b odily i njury a nd death) and property damage covering all owned, leased, hired and non-owned vehicles used in the p erformance o f t he c ontractor’s o bligations w ith m inimum l imits f or b odily i njury a nd property d amage o f O NE M ILLION D OLLARS ( $1,000,000) e ach o ccurrence a nd T WO MILLION D OLLARS ( $2,000,000) a ggregate. S uch a utomobile l iability i nsurance s hall b e provided by a business or commercial vehicle policy.

5.10.2.3 The i nsurance r equired i n S ection 5.10.2.1 and Section 5.10.2.2 above s hall i nclude e ndorsements n aming t he A dditional I nsureds a s a dditional i nsured f or liability arising out of this Agreement and any operation related to this Agreement.

5.10.2.4 Any insurance coverage required under this Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section 5.10.2.4 shall survive any expiration or termination of this Agreement and the recordation of the Grant Deed and any Certificate of Completion.

5.10.2.5 Receipt by the City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.

5.10.2.6 Subject to Section 5.10.2.4, all of the insurance coverage required under this Section 5.10 shall be maintained by the Developer or its contractors, as required by the terms o f t his A greement, u ntil t he i ssuance o f t he C ertificate o f C ompletion a nd s hall not be reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the City.

Also, p hrases s uch a s “ endeavor t o” a nd “ but f ailure t o m ail s uch n otice s hall i mpose n o obligation or liability of any kind upon the company” shall not be included in the cancellation wording o f a ny c ertificates o f i nsurance o r a ny c overage f or t he A dditional I nsureds. T he Developer s hall i mmediately o btain r eplacement c overage f or a ny i nsurance p olicy t hat i s terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.

5.10.2.7 All i nsurance t o b e o btained a nd m aintained b y t he D eveloper under t his S ection 5.10 s hall b e i ssued b y a c ompany or companies listed in the then current 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -39-
“Best’s Key Rating Guide” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California by the State of California Department of Insurance.

5.10.2.8 The C ity w ill n ot a ccept s elf-insurance i n s atisfaction o f t he insurance requirements of this Section 5.10.

5.10.2.9 All i nsurance o btained a nd m aintained b y t he D eveloper i n satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.

5.10.2.10 Insurance c overage i n t he m inimum a mounts s et f orth i n t his Section 5.10 s hall n ot b e c onstrued t o r elieve t he D eveloper o f a ny l iability, w hether w ithin, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that i ssues t he c overage; n or s hall i t p reclude t he A dditional Insureds f rom taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.

5.10.2.11 Failure b y t he D eveloper t o m aintain a ll i nsurance c overage required by this Section 5.10 in effect shall be an Event of Default by the Developer. The City, at its sole option, may exercise any remedy available to them in connection with such an Event of Default. Alternatively, the City may, at its sole option, purchase any such required insurance coverage a nd t he C ity s hall b e e ntitled t o i mmediate p ayment f rom t he D eveloper f or a ny premiums and associated costs paid by the City for such insurance coverage. Any election by the City to purchase or not to purchase insurance otherwise required to be carried by the Developer shall not relieve the Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement.

ARTICLE VI

PROJECT FINANCING

6.1 Recordation of Construction Loan Deed of Trust. The Developer covenants to the C ity t hat, i f D eveloper h as a rranged a ny s ecured C onstruction L oan, t he D eveloper s hall cause the Construction Loan Deed of Trust(s) to be recorded against the Property within ninety (90) days following the Close of Escrow.

6.2 Unauthorized Liens. Except as provided in Section 6.3, until recordation of the Certificate of Completion, the Developer shall not record, and shall not allow to be recorded, against t he P roperty, o r a ny p ortion t hereof, a ny L ien n ot e xpressly a uthorized b y t his Agreement. Until recordation of the Certificate of Completion, the Developer shall remove, or shall have removed, any unauthorized Lien made or recorded against the Property or any portion of the Property, or shall assure the satisfaction thereof to the satisfaction of the City. After one hundred twenty (120) calendar days prior written notice to the Developer, the City shall have the right, b ut n ot t he o bligation, t o s atisfy a ny u nauthorized L ien m ade o r r ecorded p rior t o recordation of the Certificate of Completion and receive reimbursement from the Developer for any amounts paid or incurred in satisfying any such Lien, upon demand. Nothing in this Section

6.2, though, shall require the Developer to pay or make provisions for the payment of any tax, assessment, l ien, o r c harge t hat t he D eveloper i s i n t he p rocess o f c ontesting t he v alidity o r 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -40-
amount thereof, in good faith, and so long as such contest shall not subject the Property, or any portion thereof, to forfeiture or sale.

6.3 Rights of Lenders and City Regarding Permitted Loans and Liens.

6.3.1 The City shall have the right of reasonable review and approval of any Lender f rom w hich t he D eveloper p roposes t o o btain a ny Loan, w hether o r n ot s uch Loan i s secured by a Lien against the Property or any portion thereof. The City shall not unreasonably withhold, condition or delay its approval of any proposed Lender or Loan. The City shall not disapprove of a proposed Lender or Loan if the Lender and Loan meet the following criteria:

6.3.1.1 Lender is a state or federally chartered bank, savings and loan, or other f inancial i nstitution w hich r outinely p rovides c onstruction f inancing t o d evelopment projects such as the Project;

6.3.1.2 The t erms o f t he L oan a re r easonable a nd c ustomary w hen compared to the financing terms of similar development projects in the County;

6.3.1.3 The size and financial strength of the proposed Lender is suitable for the Project; and

6.3.1.4 Any changes requested by the Lender to either this Agreement or any o f t he e xhibits t o t his A greement d o n ot a dversely a ffect t he C ity’s r ights a nd r emedies hereunder.

In connection therewith, in any notice requesting approval of a proposed Lender and Loan, the Developer s hall i nclude a s tatement i dentifying a ny a mendments, m odifications, o r o ther changes to this Agreement or its exhibits which the proposed Lender will request in connection with the Developer’s obtaining of the Loan. The City agrees to reasonably consider, but shall not be obligated to accept, any amendment, modification, or other change to this Agreement or any of the exhibits to this Agreement which materially restricts, diminishes, or burdens the City’s rights and remedies.

6.3.2 Whenever t he C ity d elivers a ny n otice o r d emand t o t he D eveloper regarding any breach or default by the Developer under this Agreement that, if not timely cured by the Developer, would entitle the City to terminate this Agreement, the City shall send a copy of s uch n otice t o e ach a ffected L ender o f w hich t he C ity h as r eceived n otice a nd a c ontact address for transmittal of such notices. Whenever the City delivers any notice or demand to the Developer regarding any breach or default by the Developer under this Agreement that, if not timely cured by the Developer, would entitle the City to exercise its power of termination of the fee estate of all or any portion of the Property pursuant to Section 7.6, the City shall at the same time s end a c opy o f s uch n otice o r d emand t o e ach a ffected L ender o f w hich t he C ity h as received n otice a nd a c ontact a ddress f or t ransmittal o f s uch n otice. E ach a ffected L ender receiving a copy of any such notice shall have the right, at its option, to commence the cure or remedy of any such default of the Developer and to diligently and continuously proceed with such c ure o r r emedy, w ithin o ne h undred e ighty ( 180) c alendar d ays f ollowing i ts r eceipt o f notice of the default. If a default of the Developer under this Agreement cannot, with diligence, be remedied or cured, or the remedy or cure of such default cannot be commenced, within such 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -41-
one hundred eighty (180) calendar day period, the Lender shall have such additional time as is reasonably necessary to remedy or cure such default of the Developer, but in no event beyond three hundred sixty five (365) calendar days following its receipt of notice of the default. If such default of the Developer can only be remedied or cured by the Lender upon obtaining possession of the Property, the Lender shall seek to obtain possession of the Property with diligence and continuity t hrough a r eceiver o r o therwise, a nd s hall r emedy o r c ure s uch d efault o f t he Developer w ithin o ne h undred e ighty ( 180) c alendar d ays a fter o btaining p ossession o f t he Property. N othing c ontained i n t his A greement s hall b e d eemed t o p ermit o r a uthorize a ny Lender to undertake or continue the construction of any portion of the Project (beyond the extent necessary to conserve or protect improvements or construction already made), without expressly assuming the Developer’s obligations under this Agreement by written agreement approved by the City, in which the Lender agrees to complete, in the manner provided in this Agreement, the improvements t o w hich t he L ien o r t itle o f t he L ender r elates, w hich a pproval s hall n ot unreasonably be withheld, delayed, or conditioned by the City.

6.3.3 In a ny c ase w here, o ne h undred e ighty ( 180) c alendar d ays a fter delivery of notice of a default of the Developer under Section 6.3.2, an affected Lender has not exercised the option provided in Section 6.3.2 to construct the applicable portions of the Project, or has exercised the option, but has not proceeded diligently and continuously with construction, the City shall have the option, in the City’s sole and absolute discretion, to purchase the Loan of such Lender and any security interest of such Lender under its Loan Documents by payment to the Lender of the amount of the unpaid Loan, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the Lender by the Developer under its Loan D ocuments a nd, i f t he o wnership o f t he P roperty o r a ny p ortion o f t he P roperty h as previously vested in such Lender, the City, at its option but not as its obligation, shall be entitled to a conveyance of any title or interest in the Property vested in such Lender from such Lender.

6.3.4 After expiration of the one hundred eighty (180) calendar day period provided for in Section 6.3.3, any affected Lender may demand, in writing, that the City act to exercise o r f orego t he o ption g ranted i n S ection 6.3.3. I f t he C ity f ails t o e xercise t he r ight granted in Section 6.3.3 within sixty (60) calendar days from the date of the City’s receipt of such written demand from a Lender, the City shall be conclusively deemed to have waived its right of purchase of that Lender’s interest pursuant to Section 6.3.3.

6.3.5 In the event of a default or breach by the Developer under any Loan Documents, where the Lender has not exercised its option to complete the Project under Section

6.3.2, the City may cure the default of the Developer under the applicable Loan Documents, but is under no obligation to do so, prior to completion of any sale or foreclosure of the Property or any p ortion t hereof u nder t he a pplicable L oan D ocuments. T he C ity s hall b e e ntitled t o reimbursement from the Developer of all costs and expenses incurred by the City in curing any default of the Developer under any Loan Documents.

6.3.6 In any case where a Lender has acquired title to all or any portion of the Property or Project through foreclosure, deed in lieu of foreclosure, or any other means, and such Lender proposes to enter into an agreement to transfer the Property and/or Project, or any portion thereof, to a third party transferee, the Lender shall provide the City with written notice thereof, which notice shall include a reasonably detailed description of the terms and conditions 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -42-
of the proposed transaction. The City shall have the option, but not the obligation, to purchase the Property and/or Project on substantially the same terms as described in the Lender’s notice, which option, if ever, shall be exercised by written notice from the City to the Lender within twenty (20) days following the City’s receipt of the Lender’s notice. If the City elects not to exercise i ts o ption, t hen, s ubject t o S ection 8.2.2, t he L ender m ay c omplete t he t ransaction described in its notice, provided that such transaction is closed on materially identical terms and conditions as those described in the Lender’s notice to the City. If the Lender and third party transferee desire to materially amend the terms of their proposed transaction, the Lender shall give the City written notice of the proposed modifications and the City shall once again have the right to elect to acquire the Property and the Project (or portion thereof) on terms and conditions substantially s imilar t o t hose m odified t erms. I f, f or a ny r eason, t he p roposed t ransaction between the Lender and third party transferee fails to close within two hundred forty (240) days following the date on which the City first receives notice of the proposed transaction (or notice of the proposed modified transaction, whichever is later), then the City once again shall have the right to elect to acquire the Property and/or Project pursuant to this Section 6.3.6.

6.3.7 The restrictions set forth in this Section 6.3 shall remain in effect only until the recordation of the Certificate of Completion for the Project.

6.4 Evidence of Financing. Within one hundred twenty (120) days of being eligible to pull permits to commence construction, Developer shall provide City with evidence, to the City’s r easonable s atisfaction, t hat D eveloper h as s ecured f inancing from c apital p roviders, including but not limited to, private lenders, commercial banks and any other domestic or foreign financial i nstitute, o r h as l iquid a ssets a vailable, i n a n a mount n ecessary t o f ully f und t he development of the Project. Subject to Unavoidable Delay, failure to provide said evidence to the City within one hundred twenty (120) days of being eligible to pull permits shall be a Default under t his A greement a nd C ity s hall h ave t he r ight t o i mmediately c ommence p roceedings pursuant to Section 7.6, Power of Termination, and retake possession of the Property. Developer shall b e d eemed e ligible t o p ull p ermits a t t he p oint w here t he o nly r emaining a ction i s t he payment of necessary fees and costs to receive the first permit to commence construction. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -43-

ARTICLE VII

DEFAULTS, REMEDIES AND TERMINATION

7.1 Defaults - General.

7.1.1 Events of Default Subject to Cure. Subject to any extensions of time provided for in this Agreement, failure or delay by any Party to perform any term or provision of this Agreement shall constitute an “Event of Default” under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written notice from the injured Party specifying such default, a nd s hall d iligently a nd c ontinuously p rosecute s uch c ure, c orrection o r r emedy t o completion (and where any time limits for the completion of such cure, correction or remedy are specifically s et f orth in this Agreement, then within said time limits), such Party shall not be deemed to be in default under this Agreement and no Event of Default shall be deemed to have occurred.

7.1.1.1 The injured Party shall give written notice of default to the Party in d efault, s pecifying the default complained of by the non-defaulting Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

7.1.1.2 Any failure or delays by any Party in asserting any of their rights and/or r emedies a s t o a ny d efault shall not operate as a waiver of any default or of any such rights or remedies. Delays by any Party in asserting any of its rights and/or remedies shall not deprive that Party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any such rights or remedies.

7.1.2 Events o f D efault N ot S ubject t o C ure. I n a ddition t o o ther a cts o r omissions of the Developer that may legally or equitably constitute a default or breach of this Agreement, t he o ccurrence o f a ny o f t he f ollowing s pecific e vents, p rior t o t he i ssuance o f a Certificate o f C ompletion f or t he P roject, s hall c onstitute a n “ Event o f D efault” u nder t his Agreement and are not curable by Developer using the provisions of Section 7.1.1:

7.1.2.1 Any material default by the Developer under any Loan Documents for any purpose or reason that remains uncured following any applicable notice and expiration of any applicable cure period under such Loan Documents.

7.1.2.2 Any representation, warranty or disclosure made to the City by the Developer regarding this Agreement or the Project is materially false or misleading, whether or not such representation or disclosure appears in this Agreement.

7.1.2.3 The D eveloper f ails t o m ake a ny p ayment o r d eposit o f f unds required under this Agreement or to pay any other charge set forth in this Agreement, following seven (7) days’ written notice to the Developer from the City of such failure. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -44-

7.1.2.4 The c onstruction o f t he P roject i s d elayed o r s uspended f or a period in excess of that permitted under Section 4.3 or the Developer has not been issued, or entitled to be issued, a Certificate of Completion by the Project Completion Date.

7.1.2.5 There o ccurs a ny e vent o f d issolution, r eorganization o r termination of the Developer that adversely and materially affects the operation or value of the Property or the Project, and such event is not corrected within five (5) days following written notice of such event from the City to the Developer.

7.1.2.6 The D eveloper T ransfers i ts i nterest i n t his A greement, t he Property, o r t he P roject, o r a ny p ortion t hereof, w hether v oluntarily o r i nvoluntarily o r b y operation of law, in violation of the terms and conditions of this Agreement and such action is not cured within the period prescribed in Section 8.2.2.

7.1.2.7 The D eveloper b ecomes i nsolvent o r a r eceiver i s a ppointed t o conduct the affairs of the Developer under state or federal law.

7.1.3 Business L egal S tatus. N otwithstanding t he n otice a nd c ure p eriod provisions of Section 7.1.1, in the event Developer’s legal status as a California limited liability company authorized by the Secretary of State of the State of California to transact business in California i s s uspended o r t erminated, D eveloper s hall i mmediately n otify t he C ity o f i ts suspended or terminated status and commence to cure its status within seven (7) days from when Developer becomes aware that its status is no longer active. Failure of Developer to commence to r evive i ts s tatus w ithin t he s even-day c ure p eriod s hall b e t reated a s a m aterial d efault f or which City may terminate this Agreement.

7.2 LIQUIDATED DAMAGES TO THE CITY. UPON THE OCCURRENCE OF

AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO

THE C LOSE O F E SCROW, T HE C ITY M AY C ANCEL T HE E SCROW P URSUANT T O SECTION 3.11, AND UPON CANCELLATION OF THE ESCROW, THE CITY SHALL BE

RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT TO SELL OR CONVEY

THE P ROPERTY O R A NY P ORTION T HEREOF A ND A NY S UCH E SCROW

CANCELLATION S HALL B E W ITHOUT A NY L IABILITY O F T HE C ITY T O T HE DEVELOPER OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. THE CITY

AND T HE D EVELOPER ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND

IMPRACTICAL, IF NOT IMPOSSIBLE, TO ASCERTAIN THE AMOUNT OF DAMAGES

THAT WOULD BE SUFFERED BY THE CITY IN THE EVENT OF A CANCELLATION OF

THE E SCROW D UE T O T HE O CCURRENCE O F A N E VENT O F D EFAULT B Y T HE DEVELOPER U NDER T HIS A GREEMENT P RIOR T O T HE C LOSE O F E SCROW.

HAVING M ADE D ILIGENT B UT U NSUCCESSFUL A TTEMPTS T O A SCERTAIN T HE

ACTUAL D AMAGES T HE C ITY W OULD S UFFER I N T HE E VENT O F A

CANCELLATION O F T HE E SCROW D UE T O T HE O CCURRENCE O F A N E VENT O F

DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF

ESCROW, T HE C ITY A ND T HE D EVELOPER A GREE T HAT A R EASONABLE ESTIMATE O F T HE C ITY’S D AMAGES I N S UCH E VENT I S T HE A MOUNT O F T HE EARNEST M ONEY D EPOSIT S ET F ORTH I N S ECTION 1 .1.23, A BOVE ( THE “LIQUIDATED D AMAGES A MOUNT”). T HEREFORE, U PON T HE C ANCELLATION 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -45-

OF T HE E SCROW B Y T HE C ITY D UE T O T HE O CCURRENCE O F A N E VENT O F

DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF

THE E SCROW, E SCROW H OLDER S HALL I MMEDIATELY C ANCEL T HE E SCROW

AND P AY T HE L IQUIDATED D AMAGES A MOUNT T O T HE C ITY F ROM T HE EARNEST MONEY DEPOSIT WITHIN FIVE (5) DAYS OF ESCROW CANCELLATION.

RECEIPT O F T HE L IQUIDATED D AMAGES A MOUNT S HALL B E T HE C ITY’S S OLE

AND E XCLUSIVE REMEDY UPON THE CANCELLATION OF THE ESCROW DUE TO

THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW. TO THE EXTENT AN EVENT OF DEFAULT IS NOT SUBJECT TO SECTION 7.1.4, THIS SECTION APPLIES ONLY AFTER

THE EVENT OF DEFAULT HAS NOT BEEN CURED IN ACCORDANCE WITH SECTION

7.1.1. CITY’S INITIALS: _____ DEVELOPER’S INITIALS: _____ ____

7.3 DEVELOPER’S E LECTION R E: S PECIFIC E NFORCEMENT O F

AGREEMENT O R W AIVER O F R IGHT T O S PECIFIC P ERFORMANCE A ND LIMITATION O N R ECOVERY O F D AMAGES P RIOR T O C LOSE O F E SCROW.

UPON T HE O CCURRENCE O F A N E VENT O F D EFAULT P ERTAINING T O T HE

CONVEYANCE OF THE PROPERTY BY THE CITY UNDER THIS AGREEMENT PRIOR

TO C LOSE O F E SCROW, T HE D EVELOPER S HALL, A S I TS S OLE A ND E XCLUSIVE

REMEDY, HAVE THE RIGHT TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES DESCRIBED I N S ECTIONS 7.3.1 A ND 7.3.2. T HE D EVELOPER’S E LECTION, O NCE MADE, SHALL BE IRREVOCABLE.

7.3.1 WAIVER O F R IGHT T O S PECIFIC P ERFORMANCE A ND LIMITATION ON RECOVERY OF DAMAGES. THE DEVELOPER MAY WAIVE THE REMEDIES S ET F ORTH I N S ECTION 7.3.2 A ND M AY C ANCEL T HE E SCROW PURSUANT T O S ECTION 3 .11, A ND U PON C ANCELLATION O F THE ESCROW, THE

DEVELOPER SHALL BE RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT

TO P URCHASE O R A CCEPT T ITLE T O T HE P ROPERTY A ND A NY S UCH E SCROW

CANCELLATION SHALL BE WITHOUT ANY LIABILITY OF THE DEVELOPER TO THE CITY OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. THE DEVELOPER

SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY EXPENDED BY

THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT PRIOR TO THE

DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE CITY, NOT TO EXCEED FIFTY T HOUSAND D OLLARS ( $50,000). T HE D EVELOPER W AIVES A NY

RIGHT TO RECOVER ANY OTHER SUMS FROM THE CITY ARISING FROM AN EVENT OF DEFAULT BY THE CITY PRIOR TO THE CLOSE OF ESCROW. THE DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE W AIVER A ND R ELEASE C ONTAINED I N T HIS S ECTION 7.3.1, W HICH C IVIL CODE SECTION READS AS FOLLOWS:
“A G ENERAL R ELEASE D OES N OT E XTEND T O C LAIMS

THAT THE CREDITOR OR RELEASING PARTY DOES NOT

KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT

THE T IME O F E XECUTING T HE R ELEASE A ND T HAT, IF
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -46-

KNOWN B Y H IM O R H ER, W OULD H AVE M ATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.”

OTHER THAN THE RIGHTS OF DEVELOPER AS SET FORTH IN THIS SECTION

7.3.1, BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES T HE P ROVISIONS O F S ECTION 1542 SOLELY IN CONNECTION W ITH THE WAIVERS AND RELEASES OF THIS SECTION 7.3.1.

DEVELOPER’S INITIALS ____________
IN C ONNECTION W ITH T HE W AIVERS O F T HIS S ECTION 7.3.1, T HE

DEVELOPER FURTHER WAIVES THE RIGHT TO RECORD A NOTICE OF PENDENCY

OF A CTION A GAINST A LL O R A NY P ORTION O F T HE P ROPERTY E XCEPT

DEVELOPER MAY RECORD SUCH A NOTICE IN CONNECTION WITH ANY SUIT FOR

SPECIFIC P ERFORMANCE P ERMITTED H EREUNDER I N T HE E VENT D EVELOPER

ELECTS N OT T O W AIVE I TS R IGHT T O S EEK S PECIFIC P ERFORMANCE U NDER SECTION 7.3.2.

7.3.2 SPECIFIC PERFORMANCE. THE DEVELOPER MAY WAIVE
THE REMEDIES SET FORTH IN SECTION 7.3.1 AND, IN ACCORDANCE WITH CIVIL CODE S ECTION 3 384, ET SEQ., I NSTITUTE A N A CTION A GAINST T HE C ITY F OR

SPECIFIC P ERFORMANCE O F T HE T ERMS O R P ROVISIONS O F T HIS A GREEMENT

WHICH WERE TO HAVE BEEN COMPLETED BY THE CITY PRIOR TO THE CLOSE OF ESCROW.

7.4 Legal Actions.

7.4.1 Except as otherwise provided by Section 7.3, any Party may institute legal a ction t o c ure, c orrect o r r emedy a ny d efault, t o r ecover d amages f or a ny d efault, o r t o obtain any other remedy available to that Party under this Agreement or at law or in equity. Such legal actions must be instituted in the Superior Court of the State of California in and for the County of Orange County, California,

7.4.2 The p rocedural a nd s ubstantive l aws o f t he S tate o f California shall govern the interpretation and enforcement of this Agreement, without regard to conflicts of laws principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed i n a nd r elates t o r eal p roperty l ocated i n t he C ity o f F ullerton, C ounty o f O range County, California.

7.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this A greement, t he r ights a nd r emedies o f t he P arties s et f orth i n t his ARTICLE V II a re non-exclusive and cumulative, and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party(ies). 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -47-

7.6 City Power of Termination Regarding the Property.

7.6.1 The C ity h ereby r eserves a p ower o f t ermination p ursuant t o C ivil Code Sections 885.010, et seq., exercisable by the City, in its sole and absolute discretion, upon thirty ( 30) c alendar d ays w ritten n otice t o t he D eveloper r eferencing t his S ection 7.6, t o terminate t he f ee i nterest o f t he D eveloper i n t he P roperty a nd/or a ny i mprovements t o t he Property and revest such fee title in the City and take possession of all or any portion of such real property and improvements, without compensation to the Developer, upon the occurrence of an uncured E vent o f D efault b y t he D eveloper f ollowing t he C lose o f E scrow a nd p rior t o Certificate of Completion.

7.6.2 The thirty (30) calendar day written notice specified Section 7.6.1 shall specify t he E vent o f D efault b y t he D eveloper t riggering t he C ity’s e xercise o f i ts p ower o f termination. T he C ity s hall p roceed w ith i ts r emedy s et f orth i n S ection 7.6.1 o nly i f t he Developer continues in default for a period of sixty (60) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion.

7.6.3 The r ights o f t he C ity u nder t his S ection 7.6 s hall b e s ubject a nd subordinate to, shall be limited by and shall not defeat, render invalid or limit:

7.6.3.1 Each L ien r ecorded a gainst t he P roperty a nd s pecifically authorized by this Agreement as a Permitted Transfer;

7.6.3.2 Any leases, declarations of covenants, conditions and restrictions, easement a greements o r o ther r ecorded d ocuments o r i nterests a pplicable t o t he P roperty a nd specifically authorized by this Agreement as a Permitted Transfer.

7.6.4 Upon the City’s exercise of its power of termination pursuant to this Section 7.6, the Developer or its successors or assigns shall convey by grant deed to the City title to the Property, as specified in the City’s notice pursuant to Section 7.6.1, and all improvements thereon, i n a ccordance w ith C ivil C ode S ection 1 109, a s s uch c ode s ection m ay h ereafter b e amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the Developer and a notary in a manner suitable for recordation. The City may enforce its rights pursuant to this Section 7.6 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction.

7.6.5 Upon the revesting in the City of title to the Property, whether by grant deed o r c ourt d ecree, t he C ity s hall e xercise i ts r easonable g ood f aith e fforts t o r esell t he Property at its then fair market value, as soon and in such manner as the City shall, in its sole discretion, f ind f easible a nd c onsistent w ith t he o bjectives o f t he C ity’s G eneral P lan, t o a qualified a nd r esponsible p erson o r p ersons ( as r easonably d etermined b y t he C ity) w ho w ill assume the Developer’s obligations to begin and/or complete and/or operate that portion of the Project located on the Property, or such other replacement development acceptable to the City, in its sole and absolute discretion. Upon any such resale of the Property (or any portion thereof), the proceeds to the City from such sale shall be applied as follows:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -48-

7.6.5.1 First, to pay any and all amounts required to release/reconvey any Lien recorded against all or any portion of the Property; and

7.6.5.2 Second, to reimburse the City on its own behalf or on behalf of the City for all actual internal and third-party costs and expenses previously or currently incurred by the City related to the Property, the Project, or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third-party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City with respect to the Property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Developer with respect to the acquisition of the Property or the construction of the Project; and amounts otherwise owing to the City by the Developer or its successors or assigns pursuant to the terms of this Agreement; and

7.6.5.3 Third, t o t he e xtent t hat a ny p roceeds f rom s uch r esale a re, thereafter, a vailable, t aking i nto a ccount a ny p rior e ncumbrances w ith a c laim t hereto, t o reimburse the Developer, or its successors in interest to the equal to the sum of: (1) the Purchase Price; a nd ( 2) t he t hird-party c osts a ctually i ncurred a nd p aid b y the Developer regarding the development of the Project located on the Property, including, but not limited to, pro rata costs of carry, taxes, and other items as set forth in a cost certification to be made by the Developer to the City p rior t o a ny s uch r eimbursement, w hich c ertification s hall b e s ubject t o t he C ity’s reasonable a pproval; p rovided, h owever, t hat t he D eveloper s hall n ot b e e ntitled t o reimbursement for any expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the City pursuant to the provisions of sub-sections 7.6.5.1 or

7.6.5.2 above.

7.6.5.4 Any p ortion o f t he p roceeds f rom t he r esale o f t he P roperty remaining a fter t he f oregoing a pplications s hall b e r etained b y t he C ity a s t heir s ole a nd exclusive property.

7.6.6 IMMEDIATELY F OLLOWING T HE S IXTY ( 60) D AY P ERIOD SPECIFIED I N S ECTION 7.6.2, A BOVE, T HE C ITY, I TS E MPLOYEES A ND A GENTS

SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY

AND A NY I MPROVEMENTS T HEREON, W ITHOUT F URTHER N OTICE O R COMPENSATION TO THE DEVELOPER. BY INITIALING BELOW, THE DEVELOPER

HEREBY E XPRESSLY W AIVES, T O T HE M AXIMUM E XTENT A LLOWED B Y L AW,

ANY A ND A LL R IGHTS T HAT T HE D EVELOPER M AY H AVE U NDER C ALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, A S T HOSE S TATUTES M AY B E A MENDED, R EPLACED, R ENUMBERED O R

SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

DEVELOPER’S INITIALS ____________
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -49-

7.6.7 THE DEVELOPER ACKNOWLEDGES AND AGREES THAT THE
CITY’S E XERCISE O F I TS P OWER O F T ERMINATION A ND R IGHT O F R EENTRY PURSUANT TO THIS SECTION 7.6 MAY WORK A FORFEITURE OF THE ESTATE IN

THE D EFAULTED P ORTION O F T HE P ROPERTY C ONVEYED T O T HE D EVELOPER THROUGH THE GRANT DEED. THE DEVELOPER HEREBY EXPRESSLY WAIVES, TO

THE M AXIMUM E XTENT A LLOWED B Y L AW, A NY A ND A LL E QUITABLE A ND

LEGAL D EFENSES T HAT T HE D EVELOPER M AY H AVE T O S UCH F ORFEITURE,

INCLUDING, B UT N OT L IMITED T O, T HE D EFENSES O F L ACHES, W AIVER, ESTOPPEL, S UBSTANTIAL P ERFORMANCE O R C OMPENSABLE D AMAGES. T HE

DEVELOPER F URTHER E XPRESSLY W AIVES, T O T HE M AXIMUM E XTENT

ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE DEVELOPER MAY H AVE U NDER C ALIFORNIA C IVIL C ODE S ECTION 3 275 O R A NY O THER STATUTE O R C OMMON L AW P RINCIPLE O F S IMILAR E FFECT. T HE D EVELOPER

ACKNOWLEDGES T HAT T HE T ERMS A ND C ONDITIONS O F T HIS A GREEMENT

REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE CITY’S POWER OF TERMINATION PROVIDED IN THIS SECTION 7.6 AND FURTHER

ACKNOWLEDGE T HAT I T H AS R ECEIVED I NDEPENDENT A ND A DEQUATE

CONSIDERATION F OR I TS W AIVER A ND R ELINQUISHMENT O F R IGHTS A ND REMEDIES PURSUANT TO SECTION 7.6.6. AND THIS SECTION 7.6.7.

DEVELOPER’S INITIALS ____________

7.7 Developer I ndemnification o f t he C ity. I n a ddition t o a ny o ther s pecific indemnification o r d efense o bligations o f t he D eveloper s et f orth i n t his A greement, t he Developer a grees t o i ndemnify, d efend ( upon w ritten r equest b y t he C ity) a nd w ith c ounsel reasonably acceptable to the City and hold harmless the Indemnified Parties, from any and all losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and expenses, i ncluding, b ut n ot l imited t o r easonable a ttorney’s f ees o f c ounsel r etained b y t he Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature, that are in any manner directly or indirectly caused, occasioned or contributed to in whole or i n p art, t hrough a ny a ct, o mission, f ault o r n egligence, w hether a ctive o r p assive, o f t he Developer o r t he D eveloper’s o fficers, a gents, e mployees, i ndependent c ontractors o r subcontractors of any tier, relating in any manner to this Agreement, any work to be performed by t he D eveloper r elated t o t his A greement, t he P roperty, o r t he P roject, o r a ny a uthority o r obligation exercised or undertaken by the Developer under this Agreement. Without limiting the generality of the foregoing, the Developer’s obligation to indemnify the Indemnified Parties shall include injury or death to any person or persons, damage to any property, regardless of where located, i ncluding t he p roperty o f t he I ndemnified P arties, a ny w orkers’ c ompensation o r prevailing wage determination, claim or suit or any other matter arising from or connected with any g oods o r m aterials p rovided o r s ervices o r l abor p erformed r egarding t he P roject o r t he Property on behalf of the Developer by any person or entity. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -50-

ARTICLE VIII
GENERAL PROVISIONS.

8.1 Incorporation o f R ecitals. T he R ecitals o f f act s et f orth p receding t his Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference.

8.2 Restrictions on Transfers.

8.2.1 The Developer acknowledges that the qualifications and identity of the Developer a re o f p articular i mportance t o t he C ity. T he D eveloper f urther r ecognizes a nd acknowledges that the City has relied and is relying on the specific qualifications and identity of the D eveloper i n e ntering i nto t his A greement w ith t he D eveloper a nd, a s a c onsequence, Transfers a re p ermitted o nly a s e xpressly p rovided i n t his A greement. T he D eveloper s hall promptly n otify t he C ity i n w riting o f a ny a nd a ll c hanges w hatsoever i n t he i dentity o f t he business entities or individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such person, of which information the Developer or any of its partners, members or officers are notified or may otherwise have knowledge or information.

8.2.2 Except a s e xpressly p ermitted i n t his A greement, t he D eveloper represents to the City that it has not made and agrees that it will not make or create, or suffer to be made or created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by operation of law, until after the recordation of a Certificate of Completion for the Project subject t o t he T ransfer; p rovided, h owever, t hat t he C ity m ay a pprove i n i ts r easonable discretion, Transfers other than Permitted Transfers prior to the recordation of a Certificate of Completion. In deciding whether to approve or disapprove any proposed Transfer, the City may consider t he p roposed t ransferee’s f inancial s trength a nd t he e xperience o f t he p roposed transferee and its senior management in undertaking and successfully completing projects of a similar type and size as the Project or that portion of the Project proposed to be transferred. Any Transfer made in contravention of this Section 8.2 shall be voidable at the election of the City and this Agreement may be terminated by the City or the City may exercise any other remedy available to the City under the terms of this Agreement, provided, however, that (i) the City shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any o ther r emedy, a nd ( ii) t he D eveloper s hall h ave t wenty ( 20) c alendar d ays f ollowing i ts receipt of such written notice to commence and, thereafter, diligently and continuously proceed to c ure t he d efault o f t he D eveloper a nd s ubmit e vidence o f t he i nitiation a nd s atisfactory completion of such cure to the City, in a form and substance reasonably satisfactory to the City.

The Developer shall reimburse the City for all costs and fees incurred by the City in connection with its review of a Transfer for approval or voidability.

8.2.3 The Developer shall provide the City no less than thirty (30) days prior written notice of any proposed Permitted Transfer which the Developer desires to enter into prior to the recordation of a Certificate of Completion for the Project subject to the Transfer, other than a Permitted Transfer for which no notice shall be required. The Developer shall have the burden o f d emonstrating t o t he C ity’s r easonable s atisfaction t hat t he p roposed P ermitted 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -51-
Transfer m eets t he c onditions a nd r equirements o f t his A greement w ith r espect t o P ermitted Transfers.

8.2.4 In connection with the City’s review of any request for approval of any proposed T ransfer u nder t his S ection 8.2, o r o f a ny L ender o r L oan u nder S ection 6 .3, t he Developer agrees to reimburse the City for those third party costs and expenses incurred by the City in connection with its review of the Developer’s request for approval, including, without implied limitation, the reasonable fees and costs of those outside consultants and legal counsel retained b y t he C ity t o a ssist i t i n i ts r eview o f t he D eveloper’s r equest, i ncluding t he C ity Attorney.

8.2.5 Anything i n t his A greement t o t he c ontrary n otwithstanding, t he restrictions a nd p rohibitions o n T ransfers c ontained i n t his S ection 8.2 s hall t erminate u pon issuance of a Certificate of Completion for the Project.

8.3 Notices, Demands and Communications Between the Parties.

8.3.1 Any a nd a ll n otices, d emands o r c ommunications s ubmitted b y a ny Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and d ispatched b y m essenger f or i mmediate p ersonal d elivery, b y a n ationally r ecognized overnight courier service or by registered or certified United States Mail, postage prepaid, return receipt requested, to the principal office of the City or the Developer, as applicable, as designated in Section 8.3.2. Such written notices, demands or communications may be sent in the same manner t o s uch o ther a ddresses a s e ither P arty m ay f rom t ime t o t ime d esignate. A ny s uch notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States Mail, as provided in this Section 8.3.

8.3.2 The f ollowing a re t he a uthorized a ddresses f or t he s ubmission o f notices, demands or communications to the Parties:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -52-
City of Fullerton
303 W. Commonwealth Avenue
Fullerton, California 92832
Attention: City Manager
(T) 714-738-6310
(F) 714-738-3110
COPY TO:

COPY TO:

Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T) 949-263-2600
(F) 949-260-0972
TO DEVELOPER:

8.4 Conflict of Interest. No member, official or employee of the City, having any conflict of interest, direct or indirect, related to this Agreement, the Property, or the development or o peration o f t he P roject s hall p articipate i n a ny d ecision r elating t o t his A greement. T he Parties represent and warrant that they do not have knowledge of any such conflict of interest.

8.5 Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 8.5, shall n ot i nclude p ersons t o w hom f ees a re p aid f or p rofessional s ervices, i f r endered b y James A. Stearman
Attorney at Law
1235 N. Harbor Blvd., Suite 200
Fullerton, CA 92832
Phone (714) 871-1132
Fax (714) 871-5620
Westpark Investments, LLC
Attn: Craig Hostert
3156 E. La Palma Avenue, Suite J
Anaheim, CA 92806
Phone (714)632-8001
Fax (714) 632-8420
TA Partners, LLC
Attn: Johnny Lu
16800 Aston St., Suite 275
Irvine, CA 92606
Phone (949) 627-9114
Fax n/a
TO CITY:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -53-
attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer.

8.6 Non-liability o f C ity, O fficials a nd E mployees. N o m ember, o fficial o r employee of the City shall be personally liable to the Developer, or any successor in interest of the Developer, in the event of any default or breach by the City under this Agreement or for any amount that may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except as may arise from the gross negligence or willful acts of such member, official or employee.

8.7 Unavoidable Delay; Extension of Time of Performance.

8.7.1 Subject to specific provisions of this Agreement, performance by any Party under this Agreement shall not be deemed, or considered to be, in default where any such default is due to an Unavoidable Delay that is not attributable to the fault of the Party claiming an extension of time to perform. An extension of time for any Unavoidable Delay shall be for the period of the Unavoidable Delay and shall commence to run from the date of occurrence of the Unavoidable Delay, if the Party asserting the existence of the Unavoidable Delay provides the other Parties with written notice of the occurrence of the Unavoidable Delay, within thirty (30) days of the commencement of such asserted Unavoidable Delay. Otherwise, the extension of time for an Unavoidable Delay shall commence on the date of receipt of written notice of the occurrence o f t he U navoidable D elay b y t he P arties n ot r equesting a n e xtension o f t ime t o perform due to such Unavoidable Delay.

8.7.2 The P arties e xpressly a cknowledge a nd a gree t hat c hanges i n e ither general economic conditions or changes in the economic assumptions of either of them that may have p rovided a b asis f or e ntering i nto t his A greement a nd t hat o ccur a t a ny t ime a fter t he execution of this Agreement, do not constitute an Unavoidable Delay and do not provide any Party with grounds for asserting the existence of an Unavoidable Delay in the performance of any covenant or undertaking arising under this Agreement. Each Party expressly assumes the risk t hat c hanges i n g eneral e conomic c onditions o r c hanges i n s uch e conomic a ssumptions relating t o t he t erms a nd c ovenants o f t his A greement c ould i mpose a n i nconvenience o r hardship on the continued performance of such Party under this Agreement.

8.8 Inspection of Books and Records. The City shall have the right at all reasonable times, a t t he C ity’s c ost a nd e xpense, t o i nspect t he b ooks a nd r ecords o f t he D eveloper pertaining t o t he P roperty a nd/or t he P roject. T he D eveloper s hall a lso h ave t he r ight a t a ll reasonable times, at the Developer’s sole cost and expense, to inspect the books and records of the City pertaining to the Property and/or the Project, to the extent relevant to the Developer’s obligations under this Agreement. Nothing in this Section 8.8 or elsewhere in this Agreement shall, however, constitute a waiver or modification of any right or privilege which any Party may have w ith r espect t o a ny d ocument, s tatement, o r o ther r ecord, i ncluding, w ithout i mplied limitation, the attorney-client privilege, the attorney-work product privilege, any privilege arising under any state or federal evidentiary code or rule, or any privilege or exclusionary right arising under any state or federal freedom of information or public records disclosure law. The rights 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -54-
and obligations of the Parties under this Section shall terminate upon issuance of the Certificate of Completion.

8.9 Real E state C ommissions. T he C ity s hall n ot b e l iable f or a ny r eal e state commissions, brokerage fees or finder fees that may arise from or be related to this Agreement.

The Developer shall pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals.

8.10 Binding on Successors and Assigns. This Agreement shall be binding upon and inure t o t he b enefit o f t he P arties a nd t heir r espective h eirs, e xecutors, a dministrators, l egal representatives, successors, and assigns.

8.11 Entire Agreement.

8.11.1 This Agreement shall be executed in three (3) duplicate originals, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement includes fifty-two (52) pages (exclusive of signature pages) and s even ( 7) e xhibits, t hat c onstitute t he e ntire u nderstanding a nd a greement o f t he P arties regarding the Property, the Project, and the other subjects addressed in this Agreement.

8.11.2 This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to the Property, the Project, and the other subjects addressed in this Agreement.

8.11.3 None o f t he t erms, c ovenants, a greements o r c onditions s et f orth i n this Agreement shall be deemed to be merged with any deed conveying title to the Property and this Agreement shall continue in full force and effect before and after such conveyances.

8.11.4 All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representative(s) of all Parties.

8.12 Execution of this Agreement. Following execution of three (3) originals of this Agreement b y t he a uthorized r epresentative(s) o f t he D eveloper a nd p rompt d elivery o f s uch originals, thereafter, to the City, accompanied by an official action of the governing body of the Developer authorizing the individuals executing this Agreement on behalf of the Developer to execute a nd p erform t his A greement, i n f orm a nd s ubstance a cceptable t o t he C ity, t his Agreement s hall b e s ubject t o the review and approval by the City Council, in their sole and absolute discretion, no later than forty-five (45) calendar days after such date of delivery to the City. If the City have not approved, executed, and delivered an original of this Agreement to the Developer within the foregoing time period, then no provision of this Agreement shall be of any force or effect for any purpose.

8.13 Survival o f I ndemnity O bligations. A ll g eneral a nd s pecific i ndemnity a nd defense o bligations o f t he P arties s et f orth i n t his A greement s hall s urvive t he e xpiration o r termination o f t his A greement, t he e xecution o r r ecordation o f t he G rant D eed, a nd/or t he issuance and recordation of any Certificate of Completion. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 -55-

8.14 Time Declared to be of the Essence. As to the performance of any obligation hereunder as to which time is a component thereof, the performance of such obligation within the time provided is of the essence.

8.15 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise.

8.16 Legal A dvice. E ach P arty r epresents a nd w arrants t o t he o ther t he f ollowing:
they h ave c arefully r ead t his A greement, a nd i n s igning t his A greement, t hey d o s o w ith f ull knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation b y o r o n b ehalf o f t he o ther P arty, o r t heir r espective a gents, e mployees o r attorneys, e xcept a s s pecifically s et f orth i n t his A greement, a nd w ithout d uress o r c oercion, whether economic or otherwise.
[Signatures on Following Pages]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

SIGNATURE PAGE
TO

DISPOSITION AND DEVELOPMENT AGREEMENT
(Parkwest Hotel)
CITY:

THE CITY OF FULLERTON
a California municipal corporation
Dated:_________________, 2021 By:

City Manager
ATTEST:
____________________________
City Clerk
APPROVED AS TO LEGAL FORM:

BEST BEST & KRIEGER LLP
By: _______________________
Elizabeth W. Hull, Esq.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

SIGNATURE PAGE
TO

DISPOSITION AND DEVELOPMENT AGREEMENT
(Parkwest Hotel)
DEVELOPER:

WESTPARK INVESTMENTS, LLC, a California
limited liability company
Dated:_____________________ By:
[TITLE]
TA PARTNERS, LLC, a California limited liability
company
Dated:_____________________ By:
[TITLE]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT A-1

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY
[Attached Behind This Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT B-1

EXHIBIT B

SCOPE OF DEVELOPMENT
[Attached Behind This Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT C-1

EXHIBIT C

SCHEDULE OF PERFORMANCE
Developer and City shall open escrow not later
than 5 days after the Effective Date
.

Within 120 days after Close of Escrow
Within 180 after obtaining entitlements.

Within 120 after obtaining entitlements.

MILESTONES

6. Obtain Permits

7. Commence Grading

8. Commencement of vertical above grade
construction
. 9. Completion of Project and Issuance of
Certificate of Occupancy
Estimated January 31st, 2024
Within 90 days of obtaining grading permit
(Estimated April 30th, 2024).

Within 180 days of completion of grading
(Estimated October 31st, 2024)
No later than October 21, 2026

2. Close of Escrow December 30th, 2022 Escrow Closing Date.

1. Open Escrow

COMPLIANCE DATE/DEADLINE
(SUBJECT TO UNAVOIDABLE DELAY)

3. Obtain Entitlements

4. Submit plans

5. Submit Financing Plan
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT D-1

EXHIBIT D

FORM OF GRANT DEED
[Attached Behind This Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Documentary Transfer Tax is $ _______________.;

PART ONE
FOR A V ALUABLE C ONSIDERATION, r eceipt o f w hich i s h ereby a cknowledged, CITY O F F ULLERTON, a C alifornia m unicipal c orporation ( “Grantor”), h ereby g rants t o [INSERT N AME O F N EW L LC T O B E F ORMED B Y D EVELOPER] ( “Grantee”), t hat certain r eal p roperty l ocated i n t he C ity o f F ullerton, C ounty o f O range, S tate o f C alifornia, specifically described in Exhibit “A” attached to this Grant Deed (“Property”) and made a part of this Grant Deed by this reference.

The Property conveyed under this Grant Deed is being granted pursuant to an agreement entered i nto b y a nd b etween G rantor a nd G rantee e ntitled D isposition a nd D evelopment Agreement ( Parkwest H otel a nd R esidential D evelopment), d ated a s o f _ _________ ( the “Agreement”). A copy of the Agreement is on file with the City of Fullerton and is available for inspection and copying by interested persons as a public record of the City at the City Clerk’s office located at 303 W. Commonwealth Ave., Fullerton, CA 92832, during the City’s regular business hours. Capitalized terms not defined herein have the meanings ascribed to them in the Agreement.

PART TWO
The conveyance of the Property by the Grantor to the Grantee in Part One is subject to the following conditions, covenants and restrictions:

RECORDING REQUESTED BY:

City of Fullerton

WHEN RECORDED MAIL TO AND MAIL
TAX STATEMENTS TO:
_________________________
________________________
________________________
Attn: ___________________
Exempt from Recording Fees pursuant to
Government Code sections 27383 and 27388.1(a)(2)
SPACE ABOVE FOR RECORDER’S USE ONLY

GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(S):
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Section 1. Grantee Covenant to Undertake Project. The Grantee covenants, for itself, its successors and assigns, to and for the exclusive benefit of the Grantor, that the Grantee shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Grantee covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of the Agreement, the Scope of Development, the Schedule of Performance, any and all plans, specifications and similar development documents required by the Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 1 shall run with the land of the Property until the earlier of the date of recordation of the Certificate of Completion or the fifteenth (15th) anniversary of the date of the Close of Escrow.

Section 2. Covenant to Maintain Property on Tax Rolls. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

2.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of a certificate of occupancy for the Project.

2.2 The Grantee shall pay all property tax bills with respect to the Property and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 during such time period and to timely pay all supplemental tax bills regarding the Property issued by the County. The Grantee further covenants and agrees to provide to the Grantor, on or before July 31 of each year, commencing in the calendar year following the calendar year in which a Certificate of Completion is recorded and in each calendar year, thereafter, for the full term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Grantee and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Grantee in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon (or other reasonably acceptable evidence of such payment), with respect to the preceding County fiscal year.

2.3 The covenant of this Section 2 shall run with the land of the Property in perpetuity and shall be enforceable against the Grantee and its successors and assigns in perpetuity.

Section 3. Payment in Lieu of Sales Tax. Grantee and Grantor anticipate that Grantee shall be open for business and generating sales tax collected pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Revenue and Taxation Code Section 7200, et seq.) (“Sales Tax Law”) in the Grantor by ____________. Grantee has anticipated that Grantee will generate approximately $____ per quarter in Sales Tax received by Grantor (“City Sales Tax”).

If Grantee has not commenced generating sales tax received by the Grantor by _____________, Grantee, its successors or assigns shall pay to the Grantor, in lieu of payment of such taxes, the City Sales Tax amount per quarter until such time as Grantor is receiving sales tax from the 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Project. If the Grantor determines that the City Sales Tax amount is payable by Grantee to the Grantor as an in-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the Grantor for that quarter within fifteen (15) days following transmittal by the Grantor to the Grantee of an invoice for payment of the City Sales Tax in-lieu amount.

3.2 Grantee and Grantor anticipate that Grantee shall be open for business and collecting Transient Occupancy Tax (“TOT”) as required under the City’s municipal code.

Grantee has anticipated that Grantee will collect approximately $____ per quarter in TOT received by Grantor (“City TOT”). If Grantee has not commenced collecting TOT received by the Grantor by _____________, Grantee, its successors or assigns shall pay to the Grantor, in lieu of payment of such taxes, the City TOT amount per quarter until such time as Grantor is receiving TOT from the Project. If the Grantor determines that the City TOT amount is payable by Grantee to the Grantor as an in-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the Grantor for that quarter within fifteen (15) days following transmittal by the Grantor to the Grantee of an invoice for payment of the City TOT in-lieu amount.

3.3 If Grantee is not open for business and generating sales tax pursuant to the Sales Tax Law and TOT pursuant to the municipal code by _____________, Grantee shall be in Default under the Agreement.

3.4 The covenant of this Section 3 shall run with the land of the Property in perpetuity and shall be enforceable against the Grantee and its successors and assigns in perpetuity.

Section 4. Maintenance Condition of the Property. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is 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 above (a “Maintenance Deficiency”), then the Grantor shall notify the Grantee in writing of the Maintenance Deficiency. If the Grantee fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the Grantor shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the Grantor to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Grantor for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 4.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Grantor to the Grantee, the Grantor shall have the right to enforce the lien in the manner provided in Section

4.3. 4.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Grantee by either painting over the evidence of such vandalism with a paint that has been 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 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 ninety-six (96) hours following the time of the discovery of the graffiti, the Grantor shall have the right to enter the Property and remove the graffiti, without notice to the Grantee. Any sum reasonably expended by the Grantor for the removal of graffiti from the Property pursuant to this Section 4.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Grantee from the Grantor, the Grantor shall have the right to enforce its lien in the manner provided in Section 4.3.

4.3 The Parties further mutually understand and agree that the rights conferred upon the Grantor under this Section 4 expressly include a grant by the Grantee of a security interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Grantee and it successors under Section

4.1 or Section 4.2, including the reasonable attorneys’ fees and costs of the Grantor associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the Grantor” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

4.4 The provisions of this Section 4, shall be a covenant running with the land of the Property in perpetuity and shall be enforceable against the Grantee and its successors and assigns in perpetuity. Nothing in the foregoing provisions of this Section 3 shall be deemed to preclude the Grantee from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City.

Section 5. Obligation to Refrain from Discrimination. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Grantee, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property.

5.2 The covenant of this Section 5 shall run with the land of the Property in perpetuity and shall be enforceable against the Grantee and its successors and assigns in perpetuity.

Section 6. Form of Non-Discrimination and Non-Segregation Clauses. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that: The Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Property shall contain or be subject to substantially the following non-discrimination or non-segregation covenants: In deeds: “The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.” (b) In leases: “The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.” (c) In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of the premises herein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument.

6.2 The covenant of this Section 6 shall run with the land of the Property in perpetuity and shall be enforceable against the Grantee and its successors and assigns in perpetuity.

Section 7. Covenant to Maintain Flag Hotel. The Grantee covenants to the Grantor that the Hotel shall only be operated under the name, flag or brand of _______________ throughout each of the ten (10) years immediately following the date of issuance of a final Certificate of Occupancy by the City for the Hotel and that the Grantee shall not amend or otherwise modify or terminate the Hotel Agreement during the ten (10) years immediately following the date of issuance of a final Certificate of Occupancy by the City for the Hotel, without the prior written consent of the Grantor. The Grantee may submit a written request to the Grantor for approval to change the name, flag or brand of the Hotel to another national hotel franchise name, flag or brand. Any such request to change the name, flag or brand of the Hotel shall be accompanied by a detailed statement of the reasons for the proposed change and a hotel franchise agreement executed by both the Grantee and the proposed new national hotel franchisor, contingent upon the Grantor’s approval of the Grantee’s request. The Grantor may 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 approve or disapprove any request from the Grantee to change the name, flag or brand of the Hotel in the Grantor’s sole and absolute discretion. Any approval or disapproval of a change in the name, flag or brand of the Hotel by the Grantor shall be in writing.

Section 8. Survival of Special Development Covenants. Each of the covenants set forth in this Part Two, inclusive, shall be a covenant running with the land of the Property and each such special development covenant shall survive the Close of Escrow, execution and recordation of this Grant Deed, and issuance and recordation of any Certificate of Completion for the time period specifically set forth in each such special development covenant. Grantor and Grantee acknowledge that although the special development covenants apply to the entirety of the Property, portions of the Project and Property may, in accordance with the Permitted Transfer requirements, be sold or otherwise transferred to various successors and assigns of the Grantee.

Accordingly, the Grantor agrees that with respect to enforcement of any of the special development covenants, it is understood and agreed that, in the event of a breach of any of the special development covenants, the Grantor will seek to enforce those covenants only against the then-current owner(s) of that portion of the Property which is not in compliance with any one or more the special development covenants. No owner of any portion of the Property which is in compliance with the special development covenants shall be liable for the breach of any of the special development covenants by any other owner of any other portion of the Property; provided, however, that the foregoing shall not preclude Grantor from seeking damages against any prior owner of any portion of the Property if, during the tenure of such owner’s ownership, such owner’s portion of the Property was not in compliance with any one or more of the special development covenants.

Section 9. Grantee Covenant to Defend the Agreement. The Grantee acknowledges that the Grantor is a “public entity” and/or “public agency” as defined under applicable California law. Therefore, the Grantor must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies including, without limitation, CEQA. Also, as a public body, the Grantor’s action in approving the Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Grantee assumes the risk of delays and damages that may result to the Developer from any third-party legal actions related to the Grantor’s approval of the Agreement or the pursuit of the activities contemplated by the Agreement, even in the event that an error, omission or abuse of discretion by the Grantor is determined to have occurred. If a third-party files a legal action regarding the Grantor ’s approval of the Agreement or the pursuit of the activities contemplated by this Agreement, the Grantor may terminate the Agreement on thirty (30) days written notice to the Grantee of the Grantor’s intent to terminate the Agreement, referencing this Section 9, without any further obligation to perform the terms of the Agreement and without any liability to the Grantee resulting from such termination, unless the Grantee unconditionally agrees to indemnify and defend the Grantor, with legal counsel acceptable to the Grantor, against such third-party legal action, as provided in the next sentence. Within thirty (30) days of receipt of the Grantor’s notice of intent to terminate this Agreement, as provided in the preceding sentence, the Grantee may offer to defend the Grantor, with legal counsel reasonably acceptable to the Grantor, in the third-party legal action and pay all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Grantee must be in writing and reasonably acceptable to the Grantor in both form and 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 substance. Nothing contained in this Section 9 shall be deemed or construed to be an express or implied admission that the Grantor is liable to the Grantee or any other person or entity for damages alleged from any alleged or established failure of the Grantor to comply with any statute, including, without limitation, CEQA. The Grantee’s defense of such third party actions as described in this Section 9 shall constitute an Unavoidable Delay.

Section 10. Environmental Indemnity of the Grantor by the Grantee. The Grantee agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel selected by the Grantee and approved by the Grantor) the Grantor and its commissions, agents, attorneys, officers, employees, and authorized representatives (collectively, the “Indemnified Parties”), from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and costs of attorneys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever (collectively, “Environmental Claims”) that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or arising from any of the following “Environmental Matters” existing or occurring during or arising from the Grantee’s ownership of the Property or construction or operation of the Project:

10.1 The presence of Hazardous Materials on, in, under, from or affecting all or any portion of the Property or the Project.

10.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under, from or affecting the Property or the Project.

10.3 The violation of any law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Grantee, its agents or contractors, relating to or governing in any way Hazardous Materials on, in, under, from or affecting the Property or the Project.

10.4 The failure of the Grantee, 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 the Grantee’s activities on the Property or regarding the Project.

10.5 The implementation and enforcement by the Grantee, 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 Hazardous Materials on, in, under, from or affecting the Property or the Project.

10.6 The failure of the Grantee, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Materials existing, stored or generated on, in, under or from the Property or the Project.

10.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

10.8 The Grantee shall pay to the Indemnified Parties all costs and expenses including, without limitation, reasonable attorneys' fees and costs, incurred by the Indemnified Parties in connection with enforcement of the aforementioned environmental indemnity.

Section 11. Insurance. In order to protect the Grantor and its commissions, agents, attorneys, officers, employees and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss and damage resulting from the Grantee’s actions in connection with the Agreement, the Property, and the Project, the Grantee shall secure and maintain the insurance coverage, described in and required by this Section 11. The Grantor shall not have any obligation under the Agreement until the Grantee provides the required policies and/or certificates evidencing the insurance required by this Section 11 to the Grantor and the Grantor approves such evidence of insurance. The Grantee shall pay any deductibles and self-insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. Grantee shall retain all insurance policies as set forth in this Section 11 until recordation of the Certificate of Completion.

11.1 Workers’ Compensation Insurance Requirement. The Grantee shall submit written proof that the Grantee is insured against liability for workers’ compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Grantee makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code which r equire e very e mployer t o b e i nsured a gainst l iability f or workers’ c ompensation o r t o u ndertake s elf-insurance i n accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement.”
The Grantee shall require each contractor and sub-contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or sub-contractor’s employees, unless the contractor’s or sub-contractor’s employees are covered by workers’ compensation insurance provided by the Grantee. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Grantee shall provide and/or require each contractor or sub-contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this Section 11.1 shall contain a full waiver of subrogation clause in favor of the Additional Insureds.

11.2 Liability and Permanent Insurance Requirements.
(a) The Grantee shall maintain in full force and effect, until the issuance of the Certificate of Completion, subject to Section 11.2(d), the following insurance coverage:
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 (i) Commercial General Liability Insurance coverage, including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically covering all indemnity obligations of the Grantee pursuant to this Agreement), Products-Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of the construction of the Project and/or the Grantee’s operations concerning the Property or the Project. The commercial general liability insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of TWO MILLION DOLLARS ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate.
(ii) Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and non-owned vehicles used by the Grantee with minimum limits for Bodily Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy.
(iii) If the Grantee hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, the Grantee shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000). (iv) Upon acceptance of the Project or any portion thereof, from each contractor, the Grantee shall maintain All Risk Property Insurance on the Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Project so accepted. Such coverage shall name the Grantor as a loss payee as their interests may appear.
(b) During the construction of the Project, the Grantee shall require that each contractor performing work on the Project maintain the following insurance coverage, as specified below, at all times during the performance of said work, or the Grantee shall provide for such contractors “wrap” coverage, as specified below, at all times during the performance of said work:
(i) The Grantee shall maintain Builder’s Risk (Course of Construction) Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work. Such coverage shall name the Grantor as a loss payee as their interests may appear.
(ii) Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Grantee during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 (iii) Each general contractor and each sub-contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used in the performance of the contractor’s obligations with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such automobile liability insurance shall be provided by a business or commercial vehicle policy.
(c) The insurance required in Section 11.2(a) and Section 11.2(b) above shall include endorsements naming the Additional Insureds as additional insured for liability arising out of the Agreement and any operation related to the Agreement. (d) Any insurance coverage required under the Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section 11.2(d) shall survive any expiration or termination of the Agreement and the recordation of this Grant Deed and any Certificate of Completion.
(e) Receipt by the Grantor of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.
(f) Subject to Section 11.2(d), all of the insurance coverage required under this Section 11 shall be maintained by the Grantee or its contractors, as required by the terms of the Agreement, until the issuance of the Certificate of Completion and shall not be reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the Grantor. Also, phrases such as “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Additional Insureds. The Grantee shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.
(g) All insurance to be obtained and maintained by the Grantee under this Section 10 shall be issued by a company or companies listed in the then current “Best’s Key Rating Guide” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California by the State of California Department of Insurance. (h) The Grantor will not accept self-insurance in satisfaction of the insurance requirements of this Section 11.
(i) All insurance obtained and maintained by the Grantee in satisfaction of the requirements of the Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.
(j) Insurance coverage in the minimum amounts set forth in this Section 11 shall not be construed to relieve the Grantee of any liability, whether within, outside, 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Additional Insureds from taking such other actions as are available to them under any other provision of the Agreement or otherwise at law.

11.3 Failure by the Grantee to maintain all insurance coverage required by this Section 11 in effect shall be an Event of Default by the Grantee. The Grantor, at its sole option, may exercise any remedy available to them in connection with such an Event of Default.

Alternatively, the Grantor may, at its sole option, purchase any such required insurance coverage and the Grantor shall be entitled to immediate payment from the Grantee for any premiums and associated costs paid by the Grantor for such insurance coverage. Any election by the Grantor to purchase or not to purchase insurance otherwise required to be carried by the Grantee shall not relieve the Grantee of its obligation to obtain and maintain the insurance coverage required by the Agreement.

The u ndersigned d eclares e xemption f rom t he r ecording f ee u nder G overnment Code Section 27388.1 per Section 27388.1(a)(2); recorded concurrently in connection with a transfer subject to the imposition of documentary transfer tax. [Signatures on Next Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 [NEW, LLC, a California limited liability company
To be formed by developer]
By: ___________________________
Its: [TITLE]
GRANTOR:

CITY OF FULLERTON, a California municipal
corporation
By: ___________________________
Its: City Manager
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT 1
TO

GRANT DEED
Property Legal Description
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT E-1

EXHIBIT E

FORM OF NOTICE OF AGREEMENT
[Attached Behind This Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Exempt from Recording fee
pursuant to Gov’t Code § 27383

NOTICE OF AGREEMENT

DISPOSITION AND DEVELOPMENT AGREEMENT
TO A LL I NTERESTED P ERSONS P LEASE T AKE N OTICE t hat W estpark Investments, LLC, a C alifornia l imited l iability c ompany a nd T A P artners, LLC, a C alifornia limited liability company (the “Developer”) and the City of Fullerton, a California municipal corporation ( the “ City”) e ntered i nto a n a greement e ntitled D isposition a nd D evelopment Agreement ( Parkwest H otel), d ated a s o f _ _________ ( the “ Agreement”). A c opy o f t he Agreement i s o n f ile w ith t he C ity a nd i s a vailable f or i nspection a nd c opying b y i nterested persons a s a p ublic r ecord o f t he C ity a t t he C ity C lerk’s o ffice l ocated a t 3 03 W .

Commonwealth Ave., Fullerton, CA 92832, during the City’s regular business hours.

The Agreement affects the real property described in Exhibit A attached to this Notice of Agreement (the “Property”). The meaning of defined terms, indicated by initial capitalization, used in this Notice of Agreement shall be the same as the meaning ascribed to such terms in the Agreement.

PLEASE TAKE FURTHER NOTICE that the Agreement contains certain development covenants running with the land of the Property and other agreements between the Developer and t he C ity a ffecting t he P roperty, a s s et f orth b elow ( all s ection r eferences a re t o t he Agreement):

Section 4.1 of the Agreement provides:

4.1 Developer C ovenant t o U ndertake P roject. T he D eveloper c ovenants, f or itself, i ts s uccessors a nd a ssigns, t o a nd f or t he b enefit o f t he C ity, t hat t he D eveloper s hall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, t he S chedule o f P erformance, a ny a nd a ll p lans, s pecifications a nd s imilar development d ocuments r equired b y t his A greement, e xcept f or s uch c hanges a s m ay b e

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Fullerton
303 W. Commonwealth Avenue
Fullerton, California 92832
Attn: _________
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 4.1 shall run with the land of the Property until the date of recordation of the Certificate of Completion.

Article V of the Agreement provides:

ARTICLE V

DEVELOPER COVENANTS

5.1 Covenant to Maintain Property on Tax Rolls. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.1.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of a certificate of occupancy for the Project.

5.1.2 The D eveloper s hall p ay a ll p roperty t ax b ills w ith r espect t o t he Property and all improvements thereon on or before the last day for the timely payment of each property t ax i nstallment o n e ach D ecember 1 0 a nd A pril 1 0 d uring s uch t ime p eriod a nd t o timely p ay a ll s upplemental t ax b ills r egarding t he P roperty i ssued b y t he C ounty. T he Developer further covenants and agrees to provide to the City, on or before July 31 of each year, commencing i n t he c alendar y ear f ollowing t he c alendar y ear i n w hich a C ertificate o f Completion is recorded and in each calendar year, thereafter, for the full term of this covenant:
(i) a true and correct copy of all property tax assessment notices, property tax bills and property tax a ssessment c orrespondence b y a nd b etween t he D eveloper a nd t he C ounty r egarding t he Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Developer in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon (or other reasonably acceptable evidence of such payment), with respect to the preceding County fiscal year.

5.1.3 The c ovenants o f t his S ection 5.1 s hall r un w ith t he l and o f t he Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.2 Payment in Lieu of Sales Tax.

5.2.1 Developer a nd C ity a nticipate t hat D eveloper s hall b e o pen f or business and generating sales tax collected pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Revenue and Taxation Code Section 7200, et seq.) (“Sales Tax Law”) in the City by ____________. Developer has anticipated that Developer will generate approximately $____ p er q uarter i n S ales T ax r eceived b y C ity ( “City S ales T ax”). I f D eveloper h as n ot commenced g enerating s ales t ax r eceived b y t he C ity b y _ ____________, D eveloper, i ts successors or assigns shall pay to the City, in lieu of payment of such taxes, the City Sales Tax amount per quarter until such time as City is receiving sales tax from the Project. If the City determines t hat t he C ity S ales T ax a mount i s p ayable b y D eveloper t o t he C ity a s a n i n-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the City for 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 that q uarter w ithin f ifteen ( 15) d ays f ollowing t ransmittal b y t he C ity t o t he D eveloper o f a n invoice for payment of the City Sales Tax in-lieu amount.

5.2.2 Developer a nd C ity a nticipate t hat D eveloper s hall b e o pen f or business a nd c ollecting T ransient O ccupancy T ax ( “TOT”) a s r equired u nder t he C ity’s municipal code. Developer has anticipated that Developer will collect approximately $____ per quarter in TOT received by City (“City TOT”). If Developer has not commenced collecting TOT received by the City by _____________, Developer, its successors or assigns shall pay to the City, in lieu of payment of such taxes, the City TOT amount per quarter until such time as City is receiving TOT from the Project. If the City determines that the City TOT amount is payable by Developer to the City as an in-lieu payment pursuant to this Section in any quarter, then such amount shall be paid to the City for that quarter within fifteen (15) days following transmittal by the City to the Developer of an invoice for payment of the City TOT in-lieu amount.

5.2.3 If Developer is not open for business and generating sales tax pursuant to the Sales Tax Law and TOT pursuant to the municipal code by _____________, Developer shall be in Default under this Agreement.

5.2.4 The c ovenants o f t his S ection 5 .2 s hall r un w ith t he l and o f t he Property and shall be enforceable against the Developer and its successors and assigns, and shall be a covenant set forth in the Grant Deed.

5.3 Maintenance C ondition o f t he P roperty. T he D eveloper f or i tself, i ts successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.3.1 The areas of the Property that are subject to public view (including all existing a nd f uture i mprovements, p aving, w alkways, l andscaping, e xterior s ignage a nd ornamentation) s hall b e m aintained i n g ood r epair a nd a n eat, c lean a nd o rderly c ondition, ordinary wear and tear excepted. If there is 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 a bove ( a “ Maintenance D eficiency”), t hen t he C ity s hall n otify t he D eveloper i n writing o f t he M aintenance D eficiency. I f t he D eveloper f ails t o c ure o r c ommence a nd diligently p ursue t o c ure t he M aintenance D eficiency w ithin t hirty ( 30) d ays o f i ts r eceipt o f notice o f t he M aintenance D eficiency, t he C ity s hall h ave t he r ight t o e nter t he P roperty a nd perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or i n e quity t hat m ay t hen b e a vailable t o t he C ity t o a ccomplish t he a batement o f t he Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 5.3.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 5.3.3.

5.3.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 color-matched t o t he s urface o n w hich t he p aint i s a pplied, o r g raffiti m ay b e r emoved w ith solvents, d etergents o r w ater, a s a ppropriate. I f a ny s uch g raffiti i s n ot r emoved w ithin ninety-six (96) hours following the time of the discovery of the graffiti, the City shall have the right to enter the Property and remove the graffiti, without notice to the Developer. Any sum reasonably expended by the City for the removal of graffiti from the Property pursuant to this Section 5.3.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Developer from the City, the City shall have the right to enforce its lien in the manner provided in Section 5.3.3.

5.3.3 The P arties f urther m utually u nderstand a nd a gree t hat t he r ights conferred upon the City under this Section 5.3 expressly include a grant by the Developer of a security i nterest i n t he P roperty w ith t he p ower t o e stablish a nd e nforce a l ien o r o ther encumbrance a gainst t he P roperty o r a ny p ortion t hereof, i n the manner provided under Civil Code S ections 2 924, 2 924b a nd 2 924c, t o s ecure t he o bligations o f t he D eveloper a nd i t successors u nder S ection 5.3.1 o r S ection 5.3.2, i ncluding t he r easonable a ttorneys’ f ees a nd costs o f t he C ity a ssociated w ith t he a batement o f a M aintenance D eficiency o r r emoval o f graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the City” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

5.3.4 The provisions of this Section 5.3 shall be a covenant running with the land of the Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed. Nothing in the foregoing provisions of this Section 5.3 shall be deemed to preclude the Developer from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City.

5.4 Obligation t o R efrain f rom D iscrimination. T he D eveloper f or i tself, i ts successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.4.1 There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or a ncestry i n t he s ale, l ease, s ublease, t ransfer, u se, o ccupancy, t enure o r e njoyment o f t he Property nor shall the Developer, itself or any person claiming under or through it, establish or permit a ny s uch p ractice o r p ractices o f d iscrimination o r s egregation w ith r eference t o t he selection, l ocation, n umber, u se o r o ccupancy o f t enants, l essees, s ub-tenants, s ub-lessees o r vendees of the Property. The covenant of this Section 5.4 shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement.

5.4.2 The covenant of this Section 5.4 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

5.5 Form o f N on-Discrimination and Non-Segregation Clauses. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.5.1 The D eveloper, s uch s uccessors a nd s uch a ssigns s hall r efrain f rom restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry o r n ational o rigin o f a ny p erson. A ll d eeds, l eases o r c ontracts p ertaining t o t he Property s hall c ontain o r b e s ubject t o s ubstantially t he f ollowing n on-discrimination o r non-segregation covenants:

5.5.1.1 In d eeds: “ The g rantee h erein c ovenants b y a nd f or i tself, i ts successors and assigns, and all persons claiming under or through them, that there shall be no discrimination a gainst o r s egregation o f, a ny p erson o r g roup o f p ersons o n a ccount o f r ace, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, u se, o ccupancy, t enure, o r e njoyment o f t he p remises h erein c onveyed, n or s hall t he grantee o r a ny p erson c laiming u nder o r t hrough i t, e stablish o r p ermit a ny s uch p ractice o r practices of discrimination or segregation with reference to the selection, location, number, use or o ccupancy o f t enants, l essees, s ub-tenants, s ub-lessee, o r v endees i n t he p remises h erein conveyed. The foregoing covenants shall run with the land.”

5.5.1.2 In l eases: “ The L essee h erein c ovenants b y a nd f or i tself, i ts successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against o r s egregation o f a ny p erson o r g roup o f p ersons, o n a ccount o f r ace, c olor, c reed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination o r s egregation w ith r eference t o t he s election, l ocation, n umber, u se, o r occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.”

5.5.1.3 In c ontracts: “ There s hall b e n o d iscrimination a gainst o r segregation o f a ny p erson o r group o f p ersons o n a ccount o f r ace, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person c laiming u nder o r t hrough i t, e stablish o r p ermit a ny s uch p ractice o r p ractices o f discrimination o r s egregation w ith r eference t o t he s election, l ocation, n umber, u se, o r occupancy, o f t enants, l essees, s ub-lessees, s ub-tenants, o r v endees o f t he p remises h erein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument.

5.5.2 The covenant of this Section 5.5 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.6 Covenant to Maintain Flag Hotel. The Developer covenants to the City that the Hotel shall only be operated under the name, flag or brand of _______________ throughout each 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 of t he t en ( 10) y ears i mmediately f ollowing t he d ate o f i ssuance o f a f inal C ertificate o f Occupancy by the City for the Hotel and that the Developer shall not amend or otherwise modify or terminate the Hotel Agreement during the ten (10) years immediately following the date of issuance of a final Certificate of Occupancy by the City for the Hotel, without the prior written consent of the City. The Developer may submit a written request to the City for approval to change the name, flag or brand of the Hotel to another national hotel franchise name, flag or brand. Any such request to change the name, flag or brand of the Hotel shall be accompanied by a d etailed s tatement o f t he r easons f or t he p roposed c hange a nd a h otel f ranchise a greement executed by both the developer and the proposed new national hotel franchisor, contingent upon the City’s approval of the Developer’s request. The City may approve or disapprove any request from the Developer to change the name, flag or brand of the Hotel in the City’s sole and absolute discretion. Any approval or disapproval of a change in the name, flag or brand of the Hotel by the City shall be in writing.

5.7 Survival of Special Development Covenants. All of the covenants set forth in ARTICLE V, inclusive, shall be a covenant running with the land of the Property and each such special development covenant shall survive the Close of Escrow, execution and recordation of the G rant D eed, a nd i ssuance a nd r ecordation o f a ny C ertificate o f C ompletion f or t he t ime period s pecifically s et f orth i n e ach s uch s pecial d evelopment c ovenant. T he P arties acknowledge t hat a lthough t he s pecial d evelopment c ovenants a pply t o t he e ntirety o f t he Property, portions of the Project and Property may, in accordance with the Permitted Transfer requirements, b e s old o r o therwise t ransferred t o v arious s uccessors a nd a ssigns o f t he Developer. Accordingly, the City agrees that with respect to enforcement of any of the special development covenants, it is understood and agreed that, in the event of a breach of any of the special development covenants, the City will seek to enforce those covenants only against the then-current owner(s) of that portion of the Property which is not in compliance with any one or more the special development covenants. No owner of any portion of the Property which is in compliance with the special development covenants shall be liable for the breach of any of the special d evelopment c ovenants b y a ny o ther o wner o f a ny o ther p ortion o f t he P roperty; provided, however, that the foregoing shall not preclude City from seeking damages against any prior owner of any portion of the Property if, during the tenure of such owner’s ownership, such owner’s p ortion o f t he P roperty w as n ot i n c ompliance w ith a ny o ne o r m ore o f t he s pecial development covenants.

5.8 Developer Covenant to Defend this Agreement. The Developer acknowledges that the City is a “public entity” and/or “public agency” as defined under applicable California law. Therefore, the City must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies including, without limitation, CEQA. Also, as a public body, the City’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Developer assumes the risk of delays and damages that may result to the Developer from any third-party legal actions related to the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the City is determined to have occurred. If a third-party files a legal action regarding the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the City may terminate this Agreement on thirty (30) d ays w ritten n otice t o t he D eveloper o f t he C ity’s i ntent t o t erminate t his A greement, referencing t his S ection 5.8, w ithout a ny f urther o bligation t o p erform t he t erms o f t his 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Agreement and without any liability to the Developer resulting from such termination, unless the Developer u nconditionally a grees t o i ndemnify a nd d efend t he C ity, w ith l egal c ounsel acceptable to the City, against such third-party legal action, as provided in the next sentence.

Within thirty (30) days of receipt of the City’s notice of intent to terminate this Agreement, as provided i n t he p receding s entence, t he D eveloper m ay o ffer t o d efend t he C ity, w ith l egal counsel reasonably acceptable to the City, in the third-party legal action and pay all of the court costs, a ttorney f ees, m onetary a wards, s anctions, a ttorney f ee a wards, e xpert w itness a nd consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Developer must be in writing and r easonably a cceptable to the City in both form and substance. Nothing contained in this Section 5.8 shall be deemed or construed to be an express or implied admission that the City is liable to the Developer or any other person or entity for damages alleged from any alleged or established failure of the City to comply with any statute, including, without limitation, CEQA.

The D eveloper’s d efense o f s uch t hird p arty a ctions a s d escribed i n t his S ection 5.8 s hall constitute an Unavoidable Delay.

5.9 Environmental I ndemnity o f t he C ity b y t he D eveloper. T he D eveloper agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel s elected b y t he D eveloper a nd a pproved b y t he C ity) t he C ity a nd i ts c ommissions, agents, a ttorneys, o fficers, e mployees, a nd a uthorized r epresentatives ( collectively, t he “Indemnified P arties”), f rom a nd a gainst a ny a nd a ll c laims, d emands, d amages, l osses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and c osts o f a ttorneys, e nvironmental c onsultants a nd o ther e xperts, a nd a ll f oreseeable a nd unforeseeable d amages o r c osts o f a ny k ind o r o f a ny n ature w hatsoever ( collectively, “Environmental Claims”) that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or arising f rom a ny o f t he f ollowing “ Environmental M atters” e xisting o r o ccurring d uring o r arising f rom t he D eveloper’s o wnership o f t he P roperty o r c onstruction o r o peration o f t he Project:

5.9.1 The presence of Hazardous Materials on, in, under, from or affecting all or any portion of the Property or the Project.

5.9.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under, from or affecting the Property or the Project.

5.9.3 The v iolation o f a ny l aw, r ule, r egulation, j udgment, o rder, p ermit, license, agreement, covenant, restriction, requirement or the like by the Developer, its agents or contractors, r elating t o o r g overning i n a ny w ay H azardous M aterials o n, i n, u nder, f rom o r affecting the Property or the Project.

5.9.4 The f ailure o f t he D eveloper, i ts a gents o r c ontractors, t o p roperly complete, o btain, s ubmit a nd/or f ile a ny a nd a ll n otices, p ermits, l icenses, a uthorizations, 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 covenants and the like in connection with the Developer’s activities on the Property or regarding the Project.

5.9.5 The implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, become n ecessary t o p rotect a gainst t he r elease, p otential r elease o r d ischarge o f H azardous Materials on, in, under, from or affecting the Property or the Project.

5.9.6 The failure of the Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous M aterials e xisting, s tored o r g enerated o n, i n, u nder o r f rom t he P roperty o r t he Project.

5.9.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

5.9.8 The D eveloper s hall p ay t o t he I ndemnified P arties a ll c osts a nd expenses i ncluding, w ithout l imitation, r easonable a ttorneys' f ees a nd c osts, i ncurred b y t he Indemnified P arties i n c onnection w ith e nforcement o f t he a forementioned e nvironmental indemnity.

5.10 Insurance. In order to protect the City and its commissions, agents, attorneys, officers, employees and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss and damage resulting from the Developer’s actions i n c onnection w ith t his A greement, t he P roperty, and the Project, the Developer shall secure and maintain the insurance coverage, described in and required by this Section 5.10. The City s hall n ot h ave a ny o bligation u nder t his A greement u ntil t he D eveloper p rovides t he required policies and/or certificates evidencing the insurance required by this Section 5.10 to the City and the City approves such evidence of insurance. The Developer shall pay any deductibles and self-insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. Developer shall retain all insurance policies as set forth in this Section 5.10 until recordation of the Certificate of Completion.

5.10.1 Workers’ Compensation Insurance Requirement. The Developer shall s ubmit w ritten p roof t hat t he D eveloper i s i nsured a gainst l iability f or w orkers’ compensation i n a ccordance w ith t he p rovisions o f S ection 3 700 o f t he L abor C ode. B y executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement.” The Developer shall require each contractor and sub-contractor performing work on the Project t o p rovide w orkers’ c ompensation c overage f or a ll o f s uch c ontractor’s o r 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 sub-contractor’s employees, unless the contractor’s or sub-contractor’s employees are covered by workers’ compensation insurance provided by the Developer. If any class of employees engaged in w ork o r s ervices p erformed i n c onnection w ith t he P roject i s n ot c overed b y L abor C ode Section 3 700, t he D eveloper s hall p rovide a nd/or require each contractor or sub-contractor to provide a dequate w orkers’ c ompensation i nsurance c overing s uch e mployees. E ach w orkers’ compensation p olicy p rocured p ursuant t o t his S ection 5.10.1 s hall c ontain a f ull w aiver o f subrogation clause in favor of the Additional Insureds.

5.10.2 Liability and Permanent Insurance Requirements.

5.10.2.1 The D eveloper s hall m aintain i n f ull f orce a nd e ffect, u ntil t he issuance of the Certificate of Completion, subject to Section 5.10.2.4, the following insurance coverage:

5.10.2.1.1 Commercial G eneral Liability Insurance coverage, including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically covering a ll i ndemnity o bligations o f t he D eveloper p ursuant t o t his A greement), Products-Completed O perations H azards, P ersonal I njury ( including b odily i njury a nd d eath), and P roperty D amage f or l iability a rising o ut o f t he c onstruction o f t he P roject a nd/or t he Developer’s operations concerning the Property or the Project. The commercial general liability insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of TWO MILLION DOLLARS ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate.

5.10.2.1.2 Automobile L iability I nsurance a gainst c laims o f Personal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and non-owned vehicles used by the Developer with minimum limits for Bodily Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy.

5.10.2.1.3 .

5.10.2.1.4 If the Developer hires a consultant to provide design services, s uch a s a rchitectural o r e ngineering s ervices i n c onnection w ith t he P roject, o r a ny portion of the Project, the Developer shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000).

5.10.2.1.5 Upon a cceptance o f t he P roject o r a ny p ortion thereof, from each contractor, the Developer shall maintain All Risk Property Insurance on the Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Project so accepted. Such coverage shall name the City as a loss payee as their interests may appear.

5.10.2.2 During the construction of the Project, the Developer shall require that each contractor performing work on the Project maintain the following insurance coverage, 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 as s pecified b elow, a t a ll t imes d uring t he p erformance o f s aid w ork, o r t he D eveloper s hall provide f or s uch c ontractors “ wrap” c overage, a s s pecified b elow, a t a ll t imes d uring t he performance of said work:

5.10.2.2.1 The D eveloper s hall m aintain B uilder’s R isk (Course of Construction) Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work. Such coverage shall name the City as a loss payee as their interests may appear.

5.10.2.2.2 Each g eneral c ontractor a nd e ach s ub-contractor shall m aintain C ommercial G eneral L iability I nsurance w ith l imits o f n ot l ess t han O NE MILLION D OLLARS ( $1,000,000) p er o ccurrence a nd T WO M ILLION D OLLARS ($2,000,000) a ggregate t o p rotect t he D eveloper d uring t he c onstruction o f t he P roject f rom claims involving bodily injury and/or death and damage to the property of others.

5.10.2.2.3 Each g eneral c ontractor a nd e ach s ub-contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used in the performance of the contractor’s obligations with minimum limits for bodily injury and p roperty d amage o f O NE M ILLION D OLLARS ($1,000,000) each occurrence and TWO MILLION D OLLARS ( $2,000,000) a ggregate. S uch a utomobile l iability i nsurance s hall b e provided by a business or commercial vehicle policy.

5.10.2.3 The i nsurance r equired i n S ection 5.10.2.1 and Section 5.10.2.2 above s hall i nclude e ndorsements n aming t he A dditional I nsureds a s a dditional i nsured f or liability arising out of this Agreement and any operation related to this Agreement.

5.10.2.4 Any insurance coverage required under this Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section 5.10.2.4 shall survive any expiration or termination of this Agreement and the recordation of the Grant Deed and any Certificate of Completion.

5.10.2.5 Receipt by the City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.

5.10.2.6 Subject to Section 5.10.2.4, all of the insurance coverage required under this Section 5.10 shall be maintained by the Developer or its contractors, as required by the terms o f t his A greement, u ntil t he i ssuance o f t he C ertificate o f C ompletion a nd s hall not be reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the City.

Also, p hrases s uch a s “ endeavor t o” a nd “ but f ailure t o m ail s uch n otice s hall i mpose n o obligation or liability of any kind upon the company” shall not be included in the cancellation wording o f a ny c ertificates o f i nsurance o r a ny c overage f or t he A dditional I nsureds. T he Developer s hall i mmediately o btain r eplacement c overage f or a ny i nsurance p olicy t hat i s 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.

5.10.2.7 All i nsurance t o b e o btained a nd m aintained b y t he D eveloper under t his S ection 5.10 s hall b e i ssued b y a c ompany or companies listed in the then current “Best’s Key Rating Guide” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California by the State of California Department of Insurance.

5.10.2.8 The C ity w ill n ot a ccept s elf-insurance i n s atisfaction o f t he insurance requirements of this Section 5.10.

5.10.2.9 All i nsurance o btained a nd m aintained b y t he D eveloper i n satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.

5.10.2.10 Insurance c overage i n t he m inimum a mounts s et f orth i n t his Section 5.10 s hall n ot b e c onstrued t o r elieve t he D eveloper o f a ny l iability, w hether w ithin, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that i ssues t he c overage; n or s hall i t p reclude t he A dditional Insureds f rom taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.

5.10.2.11 Failure b y t he D eveloper t o m aintain a ll i nsurance c overage required by this Section 5.10 in effect shall be an Event of Default by the Developer. The City, at its sole option, may exercise any remedy available to them in connection with such an Event of Default. Alternatively, the City may, at its sole option, purchase any such required insurance coverage a nd t he C ity s hall b e e ntitled t o i mmediate p ayment f rom t he D eveloper f or a ny premiums and associated costs paid by the City for such insurance coverage. Any election by the City to purchase or not to purchase insurance otherwise required to be carried by the Developer shall not relieve the Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement.
[Signatures on Next Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Dated: ______________, 2021 CITY:

CITY OF FULLERTON, a California
municipal corporation
By: _______________________________
City Manager
DEVELOPER:

WESTPARK INVESTMENTS, LLC, a
California limited liability company
By: ___________________________
TA PARTNERS, LLC, a California limited
liability company
By: ___________________________
This NOTICE OF AGREEMENT is dated as of _________________, 20__, and has been executed on behalf of the Developer and the City by and through the signatures of their authorized representative(s) set forth b elow. T his N otice o f A greement m ay b e e xecuted i n counterparts a nd w hen f ully e xecuted e ach c ounterpart s hall b e deemed to be one original instrument.

ATTEST:
____________________________
City Clerk
APPROVED AS TO LEGAL FORM:

BEST & KRIEGER LLP
By: _______________________
City’s Counsel
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

EXHIBIT A
TO

NOTICE OF AGREEMENT
Legal Description of Property
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT F-1

EXHIBIT F

FORM OF OFFICIAL ACTION OF DEVELOPER

DISPOSITION AND DEVELOPMENT AGREEMENT
(Parkwest Hotel)
The undersigned, all the members/managers of Westpark Investments LLC, a California Limited Liability Company, and TA Partners, LLC, a California Limited Liability Company, do hereby certify that Westpark Investments LLC, a California Limited Liability Company, and TA Partners, LLC, a California Limited Liability Company, will serve as the Developer of Parkwest Hotel u nder t he A greement d escribed b elow. N o c onsent o r a pproval o f a ny o ther p erson i s required for the undersigned to make the certifications set forth in this Certificate.

The Developer further certifies that the following named person(s):

Craig Hostert
is, without any additional or further consent of any person, authorized and empowered for and on behalf of and in the name of the respective entity set forth above to: (1) sign and deliver that c ertain D isposition a nd D evelopment A greement ( Parkwest H otel a nd r esidential development), dated as of _______, 2022 (“Agreement”), regarding the development of certain real property located in the city of Fullerton, California, and performance of other obligations of the “Developer” as set forth in the Agreement; (2) sign and deliver all other documents on behalf of the respective entity identified set forth above to be signed or executed in connection with the transactions contemplated in the Agreement; and (3) take all actions on behalf of the respective entity i dentified a bove t hat m ay b e c onsidered n ecessary t o c onclude t he t ransactions a nd complete the development contemplated in the Agreement.

The authority conferred and certified to in this Certificate shall be considered retroactive and any and all acts authorized in this Certificate that were performed before the execution of this Certificate are approved and ratified by each entity identified above. The authority conferred and certified to in this Certificate shall continue in full force and effect until the City Manager or his/her designee receives written notice of the revocation of this Certificate.

The Developer further certifies that the activities covered by the authorities conferred and certified to in this Certificate and the foregoing certifications constitute duly authorized activities of each entity identified above; that these authorities and certifications are now in full force and effect; and that there is no provision in any document under which either of the entities identified above is organized and/or that governs such entity’s continued existence or limits the power of the undersigned to confer the authorities or make the certifications set forth in this Certificate, and that the same are in conformity with the provisions of all such documents. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 Dated: DEVELOPER:

WESTPARK INVESTMENTS, LLC, a
California limited liability company
By: ___________________________
TA PARTNERS, LLC, a California limited
liability company
By: ___________________________
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 EXHIBIT G-1

EXHIBIT G

FORM OF CERTIFICATE OF COMPLETION
[Attached Behind This Page]
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Westpark Investments, LLC
3156 E. La Palma Avenue, Suite J
Anaheim, CA 92806
Attention: Craig Hostert
Exempt from Recording fee
pursuant to Gov’t Code § 27383

THE CITY OF FULLERTON

CERTIFICATE OF COMPLETION
(Parkwest Hotel)
I, __________________, City Manager of the City of Fullerton (the “City”) certify that:

Section 1. The P roject r equired t o b e c onstructed i n a ccordance w ith t hat c ertain Disposition a nd D evelopment A greement ( Parkwest H otel), d ated _ ____ ( the “ Agreement”), between the City and Westpark Investments, LLC, a California limited liability company, and TA Partners, LLC a California limited liability company (the “Developer”), on that certain real property s pecifically d escribed i n t he l egal d escription(s) a ttached t o t his C ertificate o f Completion as Exhibit A (the “Property”), is complete in accordance with the provisions of the Agreement.

This C ertificate o f C ompletion c onstitutes c onclusive e vidence o f t he C ity’s determination of the Developer’s satisfaction of its obligation under the Agreement to construct and i nstall t he P roject o n t he P roperty, i ncluding a ny a nd a ll b uildings, p arking a reas, landscaping a reas a nd r elated i mprovements n ecessary t o s upport o r m eet a ny r equirements applicable t o t he P roject a nd i ts u se a nd o ccupancy o n t he P roject, w hether o r n ot s uch improvements are located on or off the Property or on other property subject to the Agreement.

Notwithstanding a ny p rovision o f t his C ertificate o f C ompletion, t he C ity m ay e nforce a ny covenant surviving this Certificate of Completion in accordance with the terms and conditions of the A greement r ecorded a gainst t he P roperty b y t he D eveloper a nd t he C ity u nder t he Agreement. The Agreement is an official record of the City and a copy of the Agreement may be inspected at the City Clerk’s office located at 303 W. Commonwealth Avenue, Fullerton, CA 92832, during the City’s regular business hours.

DATED AND ISSUED this _____ day of ______________, _____.

CITY OF FULLERTON, a California
municipal corporation
55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 _____________________________
Name
_____________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18 __________________________________
Name
__________________________________
Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF ____________)
On _ ___________________, b efore m e, _ __________________________, N otary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 55463.00101\33870656.1733870656.1855463.00101\33870656.1733870656.18

EXHIBIT A
TO

CERTIFICATE OF COMPLETION
Legal Description of the Property
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MITIGATION MONITORING AND

REPORTING PROGRAM
Parkwest Project
December 2022
City of Fullerton
Community & Economic Development Department
303 W. Commonwealth Avenue
Fullerton, California 92832
Parkwest Project

i Table of Contents

TABLE OF CONTENTS

Section Page
Mitigation Monitoring and Reporting Program .......................................................................... 1

1. Introduction ............................................................................................... 1

2. Mitigation Monitoring Procedures............................................................... 1

3. Mitigation Monitoring and Reporting Program ............................................ 1

4. Project Location and Setting ........................................................................ 2

5. Project Description Summary ..................................................................... 2

Parkwest Project

1 Mitigation Monitoring and Reporting Program

MITIGATION MONITORING AND REPORTING PROGRAM

1. INTRODUCTION
In accordance with the requirements of Section 21081.6 of the California Public Resources Code, and as part of its certification of the adequacy of Final Mitigated Negative Declaration (Final MND) for the Parkwest Project (Project), the City Council (Council) of the City of Fullerton (City) adopts the following Mitigation Monitoring and Reporting Pr ogram (MMRP). The Council adopts this MMRP in its capacity as the lead agency for the Final MND in accordance with the provisions of the California Environmental Quality Act (CEQA) (California Public Resources Code Section 21000 et seq.), the State CEQA Gu idelines ( California Code of Regulations, Title 14, Section 15000 et seq.), and the City of Fullerton Monitoring Requirements.

2. MITIGATION MONITORING PROCEDURES
The principal purpose of the MMRP is to ensure that the Council -approved mitigation measures and development requirements for the adopted Project are reported and monitored to ensure compliance with the measures’ requirements. In general, City of Fullerton, Community and Economic Development Department is responsible for overseeing implementation an d completion of the adopted measures. This includes the review of all monitoring reports, enforcement actions, and document disposition, unless otherwise noted in the attached MMRP Table.

3. MITIGATION MONITORING AND REPORTING PROGRAM
The MMRP is provided in tabular format to facilitate effective tracking and documentation of the status of mitigation measures regulatory requirements . The attached MMRP Table provides the following monitoring information:
• Regulatory Requirements. All adopted regulatory requirements for the Project from the Final MND are included.
• Mitigation Measures. All adopted mitigation measures for the Project from the Final MND are included.
• Responsible for Implementation. The Project Applicant or designated representative is the responsible party for implementing the mitigation measures and regulatory requirements , and the City of Fullerton or a designated representative is responsible for monitoring implementation of the mitigation measures and regulatory requirements , unless noted differently.
• Timing of Mitigation Measures and Regulatory Requirements. A time frame is provided for performance of the mitigation measure s and regulatory requirements, and the specific action deadline is designed to ensure that impact -related components do not proceed without establishing that the mitigation measure or regulatory requirement is implemented. • Responsibility for Monitoring. The City Department(s) or other public agency(ies) responsible for overseeing the implementation and completion of mitigation measures and regulatory requirements is listed.
• Completion Date. The date s the mitigation measures and regulatory requirements are completed are to be filled in by the approving/verifying authority at a later date. Upon completion, the MMRP and associated documentation will be kept on file at the City of Fullerton Community and Economic Development Department.

Parkwest Project

2 Mitigation Monitoring and Reporting Program

4. PROJECT LOCATION AND SETTING
The approximate 2.82-acre project site (i.e., 2 acres in Site 1 and 0.82 acre in Site 2) is within the Fullerton Transportation Center (FTC) Specific Plan, in the City of Fullerton, in Orange County, California. The two southern parcels (Site 1) are located to the south of East Santa Fe Avenue, and the third parcel (Site 2) is at the northeast corner of South Pomona Avenue and East Santa Fe Avenue. The southern parcels are bound by Metrolink and Amtrak Transportation corridor to the south and Terry’s Automo tive to the east. Local access to the site is provided by Harbor Boulevard, Commonwealth Avenue, and Lemon Street, and regional access is provided by SR-57 to the east, I -5 to the west, SR -91 to the south, and SR -90 to the north. Regional access is also provided by Santa Fe Train Depot (Fullerton Amtrak/Metrolink station).

5. PROJECT DESCRIPTION SUMMARY
The proposed Parkwest Project, within the FTC Specific Plan, would involve re -development of the 2.82-acre site with apartment units, hotel, retail, restaurant, and parking. The proposed Project is a multi -story development, 6-stories in height. The Project proposes to: 1) construct 140 residential units (i.e., 97 one -bedroom apartments, 10 two -bedroom apartments, 33 studios), 124-room hotel, 3,570 square feet of retail, 3,570 square feet of restaurant, and 412 parking stalls (i.e., 138 City parking, 150 residential parking, and 124 hotel and retail parking) in Site 1 at the southeast corner of South Pomona Avenue and East Santa Fe Avenue; 2) demolish the existing parking structure including the private parking lot at the northeast corner of South Pomona Avenue and East Santa Fe Avenue and construct 146 residential units (i.e., 80 one - bedroom apartments, 10 two-bedroom apartments, and 56 studios) and 248 residential parking stalls; 3) provide amenities in both sites; and 4) reconfigure the surface parking lot in front of the Train Depot to provide better flow and parking.

The proposed Project will include a total of 14,052 square feet of amenities (i.e., 7,397 square feet in Site 1 and 6,655 square feet in Site 2). The proposed amenities include social lounge with chef kitchen; outdoor cabanas; outdoor pet area; indoor/outdoor fitness c enter; yoga studio; game room; playground; outdoor BBQ; bike storage with electrical vehicle (EV) charging station; putting green; pet wash; nature garden; and business center. Additionally, the Project (Site 1) provides approximately 10,280 square feet of common open space, which exceeds the requirement of 7,000 square feet.

Construction activities are anticipated to begin in 4th quarter of 2023 through 2nd quarter of 2025, for a total of approximately 20 months. Construction activity would occur for 8 hours per day, and 6 days per week, in accordance with the City’s permitted hours of construction. Construction stages such as demolition, site preparation, gr ading/excavation, utility installation, building construction, paving, and architectural coating may occur concurrently.

Parkwest Project

3 Mitigation Monitoring and Reporting Program
PARKWEST PROJECT
MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)

AESTHETICS
Standard Conditions of Approval
COA AES‐1 For future development located in or immediately adjacent to residentially zoned properties,
construction documents shall include language that
requires all construction contractors to strictly
control the staging of construction equipment and
the cleanliness of construction equipment stored
or driven beyond the limits of the construction
work area. Construction equipment shall be parked
and staged within the project site, as distant from
the residential use, as reasonably possible. Staging
areas shall be screened from view from residential
properties.

Contractor During construction Community & Economic
Development
Department

COA AES‐2 Construction documents shall include language requiring that construction vehicles be kept clean
and free of mud and dust prior to leaving the
development site. Streets surrounding the
development site shall be swept daily and
maintained free of dirt and debris.

Contractor During construction Community & Economic
Development
Department

COA AES‐3 Construction worker parking may be located off- site with prior approval by the City. On-street
parking of construction worker vehicles on
residential streets shall be prohibited.

Contractor During construction Community & Economic
Development
Department

AIR QUALITY
Standard Conditions of Approval
COA AQ‐1 Prior to issuance of any Grading Permit, the Community Development Director and the Building
Official shall confirm that the Grading Plan,
Building Plans, and specifications stipulate that, in
compliance with SCAQMD Rule 403, excessive
fugitive dust emissions shall be controlled by
regular watering or other dust prevention
measures, as specified in the SCAQMD’s Rules and
Regulations. In addition, SCAQMD Rule 402
requires implementation of dust suppression
Community
Development
Director/Building
Official/Contractor
Prior to issuance of
grading permit/
During construction
Public Works
Parkwest Project

4 Mitigation Monitoring and Reporting Program

WALNUT GROVE RESIDENTIAL PROJECT

MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
techniques to prevent fugitive dust from creating a
nuisance off-site. Implementation of the following
measures would reduce short-term fugitive dust
impacts on nearby sensitive receptors:
• All active portions of the construction site shall
be watered twice daily to prevent excessive
amounts of dust;
• Non-toxic soil stabilizers shall be applied to all
inactive construction areas (previously graded
areas inactive for 20 days or more, assuming no
rain), according to manufacturers’
specifications;
• All excavating and grading operations shall be
suspended when wind gusts (as instantaneous
gust) exceed 25 miles per hour;
• On-site vehicle speed shall be limited to 15
miles per hour;
• All on-site roads shall be paved as soon as
feasible, watered twice daily, or chemically
stabilized;
• Visible dust beyond the property line which
emanates from the project shall be prevented to
the maximum extent feasible;
• All material transported off-site shall be either
sufficiently watered or securely covered to
prevent excessive amounts of dust prior to
departing the job site;
• Track-out devices shall be used at all
construction site access points;
• All delivery truck tires shall be watered down
and/or scraped down prior to departing the job
site;
• A construction relations officer shall be
appointed to act as a community liaison
concerning on-site construction activity
Parkwest Project

5 Mitigation Monitoring and Reporting Program

WALNUT GROVE RESIDENTIAL PROJECT

MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
including resolution of issues related to fugitive
dust generation;
• Streets shall be swept at the end of the day if
visible soil material is carried onto adjacent
paved public roads and use of SCAQMD Rule
1186 and 1186.1 certified street sweepers or
roadway; and
• Replace ground cover in disturbed areas as
quickly as possible. (Mitigation Measure AQ-1
of The Fullerton Plan PEIR).

BIOLOGICAL RESOURCES
Standard Conditions of Approval
COA BIO-1 Prior to the issuance of any grading permits, the Community Development Director or designee
shall verify that the following requirements for
nesting birds and preconstruction survey are
completed by the Project Applicant:
• The start of demolition and site-preparation
activities shall be scheduled outside of the bird
nesting and breeding season (typically March 1
through August 15). If demolition or site-
preparation activities start during the nesting
season, a qualified Biologist shall conduct a
nesting bird survey in potential bird nesting
areas within 200 feet of any proposed
disturbance.
• The survey shall be conducted no more than
three days prior to the start of ground
disturbance activities (i.e., grubbing or
grading).
• If active nests of bird species protected by the
Migratory Bird Treaty Act (MBTA) and/or the
California Fish and Game Code (which,
together, apply to all native nesting bird
species) are present in the impact area or
within 200 feet of the impact area, a temporary
Community
Development
Director or
Designee/Project
Applicant
Prior to issuance of
grading permit
Community & Economic
Development
Department

Parkwest Project

6 Mitigation Monitoring and Reporting Program

WALNUT GROVE RESIDENTIAL PROJECT

MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
buffer fence shall be erected a minimum of 200
feet around the nest site. This temporary buffer
may be greater or lesser depending on the bird
species and type of disturbance, as determined
by the Biologist.
• Clearing and/or construction within
temporarily fenced areas shall be postponed or
halted until juveniles have fledged from the
nest and there is no evidence of a second
nesting attempt. The Biologist shall serve as a
construction monitor during those periods
when disturbance activities will occur near
active nest areas to ensure that no inadvertent
impacts on these nests will occur.

CULTURAL RESOURCES
Standard Conditions of Approval
COA CUL-1 In the event that cultural resources (archaeological, historical, paleontological) resources are
inadvertently unearthed during excavation and
grading activities of any future development
project, the contractor shall immediately cease all
earth disturbing activities within a 100-foot radius
of the area of discovery. The project proponent
shall retain a qualified professional (i.e.,
archaeologist, historian, architect, paleontologist,
Native American Tribal monitor), subject to
approval by the City of Fullerton, to evaluate the
significance of the finding and appropriate course
of action. If avoidance of the resource(s) is not
feasible, salvage operation requirements pursuant
to Section 15064.5 of the CEQA Guidelines shall be
followed. After the find has been appropriately
avoided or mitigated, work in the area may resume.

Project Applicant During excavation
and grading
Community & Economic
Development
Department

COA CUL-2 In the event that human remains are unearthed during excavation and grading activities of any
future development project, all activity shall cease
immediately. Pursuant to State Health and Safety
Project Applicant During excavating
and grading
Community & Economic
Development
Department

Parkwest Project

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MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
Code Section 7050.5, no further disturbance shall
occur until the County coroner has made the
necessary findings as to origin and disposition
pursuant to Public Resources Code Section
5097.98. If the remains are determined to be of
Native American descent, the coroner shall within
24 hours notify the Native American.

Mitigation Measures
The following from the FTC Specific Plan PEIR is applicable:

MM 3-1 Trenching and Shoring: Prior to the issuance of the first demolition, grading, or building permit
(whichever is first) for future development projects
within the FTC Specific Plan area, a qualified
geotechnical engineer shall survey the subsurface soil
conditions beneath and adjacent to the historic
resources located adjacent to the identified project
development area to establish baseline conditions and
allow for the subsequent preparation of the shoring
design for new construction. The qualified
geotechnical engineer shall monitor all trenching and
shoring construction activities to ensure that
undermining, surcharge and other excavation/
construction problems are limited to the greatest
extent possible. The qualified geotechnical engineer
shall hold a valid license to practice geotechnical
engineering in the State of California and have
demonstrated experience specific to historic buildings.

The lead agency shall determine qualifications prior to any work being performed. The qualified geotechnical
engineer shall submit to the lead agency for review
and approval, a technical soils report that establishes baseline conditions to be monitored during design and
construction. This shall occur prior to the design of the proposed project’s structural system. All subsurface
historic resource foundation systems shall be fully
protected from exposure to water with flood
protection systems, including protective coverings,
Lead Agency (City
of Fullerton,
Community &
Economic
Development
Department)/
Geotechnical
Engineer
Prior to issuance of
demolition/grading
/building permit
(whichever comes
first)
Community & Economic
Development
Department

Parkwest Project

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Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
self-activating drainage pumps, and water evacuation
systems.

MM 3-2 Vibration Protection: Prior to issuance of the first demolition, grading, or building permit (whichever is
first) for future development projects within the FTC
Specific Plan area adjacent to a historic resource, a pre- construction survey shall be performed by a qualified
structural engineer with expertise in vibration analysis to establish baseline conditions and vibration levels.

The qualified structural engineer shall hold a valid
license to practice structural engineering in the State of California and have demonstrated experience
specific to historic buildings. The lead agency shall
determine the structural engineer’s qualifications
prior to any work being performed. The structural
engineer and shoring design shall specify threshold
limits for vibration causing activities, as well as specify a minimum distance for pile drilling, as determined by
baseline conditions of historic buildings. These
vibration limits shall be set in accordance with the
California Department of Transportation’s (Caltrans’)
Transportation and Construction-Induced Vibration
Guidance Manual prepared by David Buehler, P.E. of
Jones & Stokes, which documents the proper
techniques for mitigating vibratory damage due to
construction. Vibration levels due to the use of
vibration generating equipment or processes in the
immediate vicinity of or adjacent to a historic property shall be monitored and controlled during construction
to ensure that no damage occurs to historical
resources. If feasible, alternative means of setting piles, such as predrilled holes or hydraulic pile driving, shall be employed.

Owners of historic properties within the FTC Specific
Plan area shall be contacted prior to, and throughout,
construction to determine if damage occurs to their
properties. At the conclusion of vibration causing
construction, the qualified structural engineer shall
issue a follow-up letter describing damage to any
Lead agency (City of
Fullerton,
Community &
Economic
Development
Department)/
Structural Engineer
Prior to issuance of
demolition/grading
/building permit
(whichever comes
first)
Community & Economic
Development
Department

Parkwest Project

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Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
adjacent or immediate historic resource. The letter
shall include recommendations for repair, as may be
necessary, in conformance with the Secretary of the
Interior’s Standards for the Treatment of Historic
Properties. Repairs to the adjacent or immediate
historic resources shall be undertaken by the project
developer/builder and completed in conformance with
all applicable codes, including the California Historical Building Code (Part 8 of Title 24), prior to issuance of any temporary or permanent Certificate of Occupancy
for the new building.

ENERGY
Standard Conditions of Approval
COA ENE-1 The Project must be designed in accordance with the applicable Title 24 Energy Efficiency Standards
for Residential and Nonresidential Buildings
(California Code of Regulations [CCR], Title 24, Part
6). These standards are updated, nominally every
three years, to incorporate improved energy
efficiency technologies and methods.

Project Applicant Design Phase Community & Economic
Development
Department, Building &
Safety Division

COA ENE-2 The Project is subject to the California Green Building Standards Code (CALGreen) (CCR, Title
24, Part 11). These standards are updated,
nominally every three years, to incorporate
improved energy efficiency technologies and
methods.

Project Applicant Design Phase Community & Economic
Development
Department, Building &
Safety Division

GEOLOGY AND SOILS
Standard Conditions of Approval
COA GEO-1 The Project Applicant shall adhere to the 2019 California Building Code (California Code of
Regulations, Title 24, Part 2), including but not
limited to structural design requirements that
provide minimum standards for mitigating the
effects of seismic shaking and adverse soil
conditions.

Project Applicant Design Phase Community & Economic
Development
Department, Building &
Safety Division

Parkwest Project

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Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)

HAZARDS AND HAZARDOUS MATERIALS
Standard Conditions of Approval
COA HAZ-1 Prior to construction, the Applicant shall prepare a Traffic Control Plan for implementation during the
construction phase, as deemed necessary by the
City Traffic Engineer. The Plan may include the
following provisions, among others:
• At least one unobstructed lane shall be
maintained in both directions on surrounding
roadways.
• At any time only a single lane is available, the
developer shall provide a temporary traffic
signal, signal carriers (i.e., flagpersons), or
other appropriate traffic controls to allow
travel in both directions.
• If construction activities require the complete
closure of a roadway segment, the developer
shall provide appropriate signage indicating
detours/alternative routes.

Project Applicant Prior to
construction
Public Works
Department, Traffic
Engineering Division

HYDROLOGY AND WATER QUALITY
Standard Conditions of Approval
COA HYD-1 Prior to issuance of any Grading or Building Permit, and as part of the future development’s compliance
with the NPDES requirements, a Notice of Intent
shall be prepared and submitted to the Santa Ana
RWQCB providing notification and intent to comply
with the State of California General Construction
Permit. Also, a Stormwater Pollution Prevention
Plan (SWPPP) shall be reviewed and approved by
the Director of Engineering for water quality
construction activities on-site. A copy of the SWPPP
shall be available and implemented at the
construction site at all times. The SWPPP shall
outline the source control and/or treatment
control BMPs to avoid or mitigate runoff pollutants
at the construction site to the “maximum extent
Project Applicant Prior to issuance of
Grading or Building
Permit
Fullerton Public Works
Department,
Engineering Division

Parkwest Project

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Responsible for
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Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
practicable.” All recommendations in the Plan shall
be implemented during area preparation, grading,
and construction. The project applicant shall
comply with each of the recommendations detailed
in the Study, and other such measure(s) as the City
deems necessary to mitigate potential stormwater
runoff impacts.

COA HYD-2 Prior to the issuance of any grading or building permits, if construction dewatering or discharges
from other specific activities (e.g., dewatering from
subterranean seepage, potable water system
maintenance discharges, fire hydrant flushing, etc.)
are required, the Project Applicant will notify the
Santa Ana RWQCB, and any discharges into surface
waters will be conducted in compliance with the
Santa Ana RWQCB’s Order No. R8-2015-0004
(NPDES No. CAG998001), which includes General
Waste Discharge Requirements (WDRs) for
discharges to surface water that pose an
insignificant (de minimis) threat to water quality.

The General WDRs include provisions mandating
notification, testing, and reporting of dewatering
and testing-related discharges, and contain
numeric and performance-based effluent limits
depending upon the type of discharge.

Project Applicant Prior to issuance of
Grading or Building
Permit
Fullerton Public Works
Department,
Engineering Division

COA HYD-3 Prior to issuance of any Grading Permit, the Applicant shall provide, to the satisfaction of the
Director of Engineering, a Water Quality
Management Plan or Stormwater Mitigation Plan,
which includes Best Management Practices (BMPs),
in accordance with the Orange County DAMP. All
recommendations in the Plan shall be implemented
during post construction/operation phase. The
Applicant shall comply with each of the
recommendations detailed in the Study, and other
such measure(s) as the City deems necessary to
mitigate potential water quality impacts.

Project Applicant Prior to issuance of
Grading Permit/
Post construction &
operation phase
Fullerton Public Works
Department,
Engineering Division

Parkwest Project

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MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
NOISE
Standard Conditions of Approval
COA NOI-1 Per Section 1206 Sound Transmission of the
California Building Code, interior noise levels
attributable to exterior sources shall not exceed 45
dBA Community Noise Equivalent Level/day-night
average sound level (CNEL/Ldn) in any habitable
room. Prior to issuance of building permits, an
Acoustical Study shall be prepared to demonstrate
that necessary acoustical controls are incorporated
into the design of the Project to limit interior noise
in habitable rooms to 45 dBA CNEL/Ldn or less.

Project Applicant Prior to issuance of
building permit
Community & Economic
Development
Department

Mitigation Measures
MM NOI-1 Prior to the start of construction activities occurring within 25 feet of the WM Will Mann, Inc.

Precision Sheet Metal Fabrication. The construction
contractor shall coordinate scheduling and
activities with the manager at WM Will Mann, Inc.

Precision Sheet Metal Fabrication to avoid any
manufacturing process that may be affected by
vibration from construction activities for the
proposed Project.

Contractor Prior to
construction
withing 25 feet of
the WM Will Mann,
Inc. Precision Sheet
Metal Fabrication
Community & Economic
Development
Department

MM NOI-2 Prior to the issuance of each grading permit, the Project’s contractor shall produce evidence
acceptable to the Manager of Building & Safety, or
designee demonstrating that the equipment to be
used for construction or demolition activities that
would occur within 25 feet of an occupied
structure shall not include vibratory rollers, large
bulldozers, loaded trucks or similar heavy
equipment that weigh in excess of 24,000 lbs.

Contractor Prior to issuance of
each grading permit
Community & Economic
Development
Department, Building &
Safety Division

Parkwest Project

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Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)

PUBLIC SERVICES
Regulatory Requirements
COA PS-1 All development in the City shall comply with the Fullerton Fire Prevention Ordinance (Chapter 13 of
the City’s Municipal Code), which addresses fire
prevention and includes the City’s Fire Code. All
development shall also comply with the City’s
Building Code (Chapter 14 of the City’s Municipal
Code), which adopts the California Building Code and
other codes related to building construction, in order
to prevent the creation of fire hazards in the City.

Project Applicant Design phase/Prior
to issuance of
building permit
Community & Economic
Development
Department and
Fullerton Fire
Department

COA PS-2 The Project Applicant shall pay the applicable park fee, in accordance with Chapter 21.12, Fee for Parks
on the Construction of Dwelling Units, of the
Fullerton Municipal Code, for the purpose of
providing park and recreational facilities to serve
future residents of the Project development. Prior to
the issuance of building permits, the Project
Applicant shall submit evidence to the City of
Fullerton that legally required school impact
mitigation fees have been paid per the mitigation
established by the applicable school district.

Project Applicant Prior to issuance of
a building permit
Community & Economic
Development
Department

TRANSPORTATION
Standard Conditions of Approval
SC TRA-1 The City Community Development Department shall consult with the Fullerton Police Department to
disclose temporary closures and alternative travel
routes, in order to ensure adequate access for
emergency vehicles when construction of future
projects would result in temporary lane or roadway
closures.

Project
Applicant/Commun
ity & Economic
Development
Department
During construction Fullerton Public Works
Department, Traffic
Engineering Division

Parkwest Project

14 Mitigation Monitoring and Reporting Program

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MITIGATION MONITORING AND REPORTING PROGRAM

Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)

TRIBAL CULTURAL RESOURCES
Standard Conditions of Approval
COA TCR-1 If human remains are encountered during any
Project-related ground-disturbing activities, Section
7050.5 of the California Health and Safety Code
states that no further disturbance shall occur until
the County Coroner has made a determination of
origin and disposition of the materials pursuant to
Section 5097.98 of the California Public Resources
Code. The provisions of Section 15064.5 of the
California Environmental Quality Act Guidelines
shall also be followed. The County Coroner must be
notified of the find immediately. If the remains are
determined to be prehistoric, the Coroner shall
notify the Native American Heritage Commission
(NAHC). The NAHC will determine and notify a Most
Likely Descendent (MLD). With the permission of
the landowner or his/her authorized representative,
the MLD may inspect the site of the discovery. The
descendent must complete the inspection within 24
hours of notification by the NAHC. The MLD may
recommend scientific removal and nondestructive
analysis of human remains and items associated
with Native American burials. These requirements
shall be included as notes on the contractor
specification and verified by the Community and
Economic Development Department, prior to
issuance of grading permits. This measure shall be
implemented to the satisfaction of the City in
consultation with the County Coroner.

Project Applicant/
Developer/
Contractor
During ground
disturbing activities
Community & Economic
Development
Department

UTILITIES AND SERVICE SYSTEMS
Standard Conditions of Approval
COA UTL-1 As part of the plan check process for building construction, the Project Applicant shall be required
to demonstrate to the City Engineer that the water
lines that would be provided on site to serve the
Project comply with the City’s regulations, as
Project Applicant During Plan Check Fullerton Public Works Department,
Engineering Division

Parkwest Project

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Mitigation Measures
Responsible for
Implementation
Timing of
Mitigation
Responsibility of
Monitoring
Completion Date
(Signature Required)
contained in Chapter 12.04, Water Regulations, of
the Fullerton Municipal Code and the City’s Water
Rates, Rules, and Regulations, including service
charges, water line extensions, water meters, and
fire protection.

COA UTL-2 The Project contractor shall recycle, reuse, and/or salvage at least 65 percent of demolition and
construction debris, in accordance with Section

4.408 of the CALGreen Code.

Contractor During construction Fullerton Public Works
Department,
Engineering Division

5 Hutton Centre Drive,
Suite 300
Santa Ana, CA092707
www.Psomas.com