Laguna Hills City Council
July 14, 2026

18 for an initial period of fifteen (15) years thereafter, terminating at the end of the day on the fifteenth (15th) anniversary of the Development Agreement Date, subject to the mandatory extension provisions of Section 2.2, the termination provisions of Sections 2.3, 2.4, and 10.6, the mutual cancellation provisions of Section 17, the periodic review provisions of Section 18, the Default provisions of Section 19, and the excusable delay tolling provisions of Section 22.1, respectively, of this Development Agreement.

2.2 Extension of Term. The Term of this Development Agreement shall be automatically extended an additional five (5) years if, and only if, prior to expiration of the initial Term, as defined in Section 2.1, Owner has Completed Construction of all required portions of Phase Two Required Improvements. Notwithstanding the foregoing, the Parties may mutually agree to extend the Term of the Development Agreement, regardless of whether the mandatory extension provisions of this Section 2.2 are applicable.

2.3 Termination Due to Judicial Order. Subject to Section 22.3, this Development Agreement shall terminate and be of no further force and effect upon the occurrence of the entry of a final judgment or issuance of a final order, after all appeals have been exhausted, directed to City as a result of any lawsuit filed against City to set aside, withdraw or abrogate the approval of the City Council of this Development Agreement.

2.4 Automatic Termination upon Completion of 2026 Project. If not already terminated by reason of any other provision in this Development Agreement, or for any other reason, this Development Agreement shall automatically terminate and be of no further force and effect upon Completion of Construction of the 2026 Project pursuant to the terms of this Development Agreement and any further amendments thereto and the issuance of all occupancy permits and acceptance by City of all dedications and improvements as required by the Development of the 2026 Project.

2.5 Effect of Expiration of Term Prior to Completion of 2026 Project. Except as otherwise expressly provided in Section 5 or any other provision of this Development Agreement, if not already terminated by reason of any other provision in this Development Agreement, or for any other reason, this Development Agreement and the life of all Development Approvals, Subsequent Development Approvals, and Major Project Modifications shall automatically terminate and be of no further force and effect upon expiration of the Term, regardless of whether the 2026 Project has been completed, and Owner’s rights to proceed with Development of the 2026 Project pursuant to this Development Agreement shall also automatically terminate and be of no further force and effect. This Section 2.5 shall not be construed to automatically terminate (i) Owner’s right, pursuant to Section 5 of this Development Agreement, to Complete Construction of structures it has Commenced Construction of prior to expiration of the Term, or (ii) Owner’s rights under applicable law to continue to use any structure or portion of the 2026 Project that Owner Completes Construction of pursuant to this Development Agreement.

SECTION 3 BINDING COVENANTS
The provisions of this Development Agreement, to the extent permitted by law, shall constitute covenants which shall run with the Property for the benefit thereof, and the benefits

19 and burdens of this Development Agreement shall bind and inure to the benefit of the Parties and all successors in interest to the Parties hereto.

SECTION 4 EFFECT OF AGREEMENT
As a material part of the consideration of this Development Agreement, unless otherwise provided in the Development Approvals or in this Development Agreement, the Parties agree that the Existing Land Use Regulations shall be applicable to Development of the Project. In connection with all Subsequent Development Approvals that are Discretionary Actions, Discretionary Approvals, or Discretionary Permits, which City takes or has the right to take under this Development Agreement relating to the Project, including any review, approval, renewal, conditional approval or denial, City shall exercise its discretion or take action in a manner which complies and is consistent with the Existing Land Use Regulations (as same may be modified in accordance with this Development Agreement) and such other standards, terms and conditions expressly contained in this Development Agreement. City shall accept and timely process, in the normal manner for processing such matters as may then be applicable, all applications for Subsequent Development Approvals requested by Owner with respect to the Project called for or required under this Development Agreement.

SECTION 5 DEVELOPMENT OF PROJECT

5.1 Rights to Develop; Owner Applications for Limited Density Increase.

5.1.1 Rights to Develop. Subject to and during the Term of this Development Agreement, including Section 10 (Fees), Section 12 (Future Approvals) and Section 16 (Reserved Authority), Owner shall have a vested right to Develop the 2026 Project in accordance with, and to the extent of, the Development Plan. No Subsequent Land Use Regulation shall apply to Development of the 2026 Project, or shall delay, hinder, or impede the purpose or the effect of this vested right or apply to Development of the 2026 Project, except as specifically permitted by this Development Agreement or agreed to in writing by Owner. Subject to Section

12.1, the 2026 Project shall remain subject to all Subsequent Development Approvals required to complete the 2026 Project as contemplated by the Development Plan. Except as otherwise provided herein, the permitted uses of the Property, the density and intensity of use, the maximum height and size of proposed buildings, and provisions for reservation or dedication of land for public purposes shall be those set forth in the Development Plan. Notwithstanding the foregoing, while this Development Agreement is in effect, Owner waives any right Owner may have to a density bonus under Government Code Section 65915 through 65918 or the Zoning Code, as they may be amended from time to time. Densities vested hereunder include all densities available as density bonuses under the Zoning Code and Government Code Section 65915 through 65918. In addition, while this Development Agreement is in effect, Owner waives any right Owner may have to approval by the City of any Major Project Modification under California law or the Zoning Code and agrees that the City shall have sole and absolute discretion in determining whether to approve, conditionally approve, or deny any Major Project Modification requested by Owner.

5.1.2 Owner Applications for Limited Density Increases. During the Term of this Agreement Owner may submit one or more applications to the Director to modify buildings

20 shown on the Site Plan for the purpose of adding additional Residential Units provided that the total number of Units in the Project overall does not exceed 1,500. The Director will review any such application in his or her discretion and may approve the application administratively, which approval may include waiver of any development standard to accommodate the replanned Residential Units, provided that proposed modifications to the Site Plan do not result in: (i) any reductions in required parking; (ii) alterations of streets depicted in the Development Approvals; (iii) reductions in open space or (iv) increases in maximum build height as prescribed in the Specific Plan. Modifications to the Site Plan approved pursuant to this Section 5.1.2 shall not be deemed Major Project Modifications for purposes of this Agreement.

5.2 Vesting of Rights of Developer. The City agrees that the right to Develop the 2026 Project consistent with the Development Plan is vested in Owner by this Development Agreement. Owner’s right to develop the 2026 Project consistent with the Development Plan shall be vested in accordance with this Development Agreement and the Development Agreement Statute. Notwithstanding the foregoing, Owner shall have no vested right to Develop the 2026 Project in accordance with any Major Project Modification until and unless such Major Project Modification is approved by the City, in its sole and absolute discretion, and is expressly incorporated into the Development Plan.

5.3 Effect of Development Agreement on Land Use Regulations. Except as otherwise provided in the Development Approvals or under the terms of this Development Agreement, the only rules, regulations and official policies governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction standards and specifications applicable to Development of the 2026 Project, shall be those set forth in the Existing Land Use Regulations and the Subsequent Land Use Regulations to which Owner has consented in writing in Owner’s sole and absolute discretion, subject to the terms of this Development Agreement.

5.4 Timing of Development. For purposes of this Development Agreement, the components of the Project required or authorized to be Developed within specified time periods are described by reference to "Phase One" and "Phase Two." Owner expressly understands and agrees that its commitment to satisfy the Milestones and to Commence and Complete Construction of the Phase One Required Improvements and Phase Two Required Improvements pursuant to this Section 5.4 is a material inducement to City’s approval of this Development Agreement.

5.4.1 Phase One. Except as otherwise expressly provided herein, Owner shall be subject to the following provisions pertaining to the scope and timing of Development of Phase One.
(A) Commencement of Phase One Required Improvements. Except as otherwise expressly provided herein, Owner shall have Commenced Construction of the Phase One Required Improvements on or before the date that is four (4) years from the Development Agreement Date (Exhibit D, Milestone Six).
(B) Commencement of Phase One Elective Improvements. Provided that Owner is not in Default or Breach and is otherwise in compliance with this Development

21 Agreement, and upon (i) the Commencement of Construction of the Phase One Required Improvements and (ii) Owner’s execution of an Affordable Housing PSA with the Affordable Housing Developer, Owner shall be entitled to Commence Construction of any of the Phase One Elective Improvements.
(C) Substitution for Lot 9 & 10 North Residential. At Owner’s election, and as part of the Phase Two Elective Improvements, Owner may submit to City applications to modify the Development Approvals to substitute up to sixty Attached For-Sale Residential Units or Detached For-Sale Residential Units in lieu of the construction of the building identified on the Site Plan as Lot 9 & 10 North Residential, provided that the buildings are not less than three (3) stories. Such a modification shall not be deemed a Major Project Modification as described in Section 1.5 provided that if Owner proposes to remove Shops B or Shops C (as shown on the Site Plan), Owner’s revised site plan shall provide for an equivalent amount of New Retail fronting on Village Drive. The Community Development Director shall review corresponding modifications to the Site Development Permit and Precise Plan and approve the same administratively provided that: (i) the amendments are consistent with this Subsection 5.4.1(C); (ii) amendments do not require preparation of a subsequent or supplemental environmental impact report pursuant to CEQA; and (iii) associated traffic and parking analyses demonstrate that the Project as modified will maintain consistency with the Specific Plan Trip Budget Allocation and relevant Zoning Code parking ratios, as applicable. (D) Completion of Phase One Required Improvements. Except as otherwise expressly provided herein, Owner shall have Completed Construction of the Phase One Required Improvements by the earlier of (i) two (2) years following Commencement of Construction, or (ii) on or before the date that is five (5) years from the Development Agreement Date (Exhibit D, Milestone Seven); provided, however, that with respect to the Affordable Housing Project, Owner shall Complete Construction of the Affordable Housing Project within three (3) years following Commencement of Construction of the Affordable Housing Project, regardless of when construction of other Phase One Required Improvements commenced. In addition, the five (5)-year outside deadline shall not apply to the Affordable Housing Project if Commencement of Construction of the Affordable Housing Project has occurred on or before such deadline and Owner thereafter diligently prosecutes construction to completion, with no reasonable basis to conclude that the Affordable Housing Project will not achieve Completion of Construction within such three (3)-year period.

5.4.2 Phase Two. Except as otherwise expressly provided herein, Owner shall be subject to the following provisions pertaining to the scope and timing of Development of Phase Two.
(A) Commencement of Phase Two Required Improvements. Owner shall be entitled to Commence Construction of the Phase Two Required Improvements at any time during the Term.
(B) Commencement of Phase Two Elective Improvements. Provided that Owner is not in Default or Breach and is otherwise in compliance with this Development Agreement, and upon Commencement of Construction of: (i) the Phase Two Required Improvements; (ii) both Hotels; and (iii) the Affordable Senior Housing Project, Owner shall be

22 entitled to Commence Construction of any of the Phase Two Elective Improvements; provided, however, that Owner shall Commence Construction of Lot 9 & 10 North Residential, whether Developed as a Multifamily Building or as Attached For-Sale Residential Units upon Owner’s election pursuant to Subsection 5.4.1(D), prior to the Commencement of Construction of the Multifamily Building Lot 24 South Residential if Owner elects to Develop any of the foregoing.

If at the time Pad 4 retail is otherwise required to be delivered to enable Commencement of Phase Two Elective Improvements there is a condemnation proceeding initiated (as evidenced by the agency making a good-faith offer to purchase the property) that includes all or part of Pad 4, Phase Two Elective Improvements may proceed notwithstanding that Pad 4 improvements have not Commenced provided that Owner is using commercially reasonable best efforts to relocate the Pad 4 retail square footage pursuant to Section 12.4.

5.4.3 Right and Obligation to Complete Development. Owner shall have the right and obligation to Complete Construction of the Senior Affordable Housing Project until the Senior Affordable Housing Lot is conveyed to the Housing Developer, at which time the Affordable Housing Developer shall be responsible for Completion of Construction of the Senior Affordable Housing Project, and of each Hotel, Retail Building, Multifamily Building, Attached For-Sale Residential Units, or Detached For-Sale Residential Unit has Commenced Construction of prior to expiration of the Term pursuant to this Section 5.4.3 provided Owner continues to diligently Develop such Hotel, Retail Building, Multifamily Building, Attached For-Sale Residential Units, or Detached For-Sale Residential Units to completion and no applicable Ministerial Approvals or Ministerial Permits for such use, structure, or building are revoked or expire.

5.4.4 Owner’s Discretion in Timing of Development. The Parties acknowledge that Owner cannot at this time predict when or the precise rate at which the Property shall be developed. Such decisions depend upon numerous factors which are not within the control of Owner, such as market orientation and demand and other similar factors. The California Supreme Court held in Pardee Construction v. City of Camarillo (1984) 37 Cal.3d 465, that the failure of the parties therein to provide for the timing of development resulted in a latter-enacted initiative restricting the timing of development to prevail over such parties’ agreement. It is the Parties’ intent to cure that deficiency by expressly addressing the timing of Development.

Except as expressly set forth in the Development Plan, including, without limitation, this Development Agreement and, in particular, the development obligations as to Phase One Required Improvements as conditions precedent to the Development of Phase One Elective Improvements and the development obligations as to Phase Two Required Improvements as conditions precedent to Development of Phase Two Elective Improvements as set forth in Section 5.4, regardless of any future enactment, whether by initiative or otherwise, Owner shall have the vested right to Develop the various components of the Project in such order, at such rate, and at such times as Owner deems appropriate within the exercise of its subjective business judgment.

5.4.5 Owner’s Obligation to Keep City Informed of Development Status. In addition to Owner’s obligation to submit information to the City pursuant to Section 18.2 of this Development Agreement, within thirty (30) days of receipt of written request of the City, Owner shall: (i) inform the City in writing regarding the status of, anticipated timeframe for, and actual or potential constraints to Development of the various components of the 2026 Project; (ii)

23 inform the City in writing regarding Owner’s actual or intended efforts to reach an agreement with hotel operators for the development and operation of the Hotels and (iii) afford the City the opportunity to provide input to the Owner regarding the foregoing.

5.4.6 Construction of Hotels; Excusable Delay re Hotel. Notwithstanding anything herein to the contrary, Commencement of Construction of Hotel 1 shall occur prior to the Commencement of Construction of the Phase One Elective Improvements as set forth in Subsection 5.4.1(B); provided, however, that during any period in which an Excusable Delay re Hotel is established, Owner shall be permitted to Commence Construction of the Phase One Elective Improvements notwithstanding that Commencement of Construction of Hotel 1 has not yet occurred, provided all other conditions precedent to the Commencement of Phase One Elective Improvements have been satisfied. To demonstrate Excusable Delay re Hotel, Owner must provide City with a Hotel Feasibility Study prepared by a Qualified Hotel Consultant which determines that Hotel 1 is not feasible due to market conditions as of the date for which Owner claims Excusable Delay re Hotel ("Updated Hotel Feasibility Study"). Upon receipt of the Updated Hotel Feasibility Study, City shall engage an independent Qualified Hotel Consultant to evaluate the Updated Hotel Feasibility Study and to provide an additional opinion on feasibility.

If the City’s Qualified Hotel Consultant disagrees with the conclusions of the Updated Hotel Feasibility Study and determines that Hotel 1 is feasible, Owner and City will seek the opinion of a third Qualified Hotel Consultant, and Owner will be entitled to claim Excusable Delay re Hotel only if at least two out of the three Qualified Hotel Consultants determine that Hotel 1 is infeasible. In order for Owner to be entitled to continue to claim Excusable Delay re Hotel, the process described above for demonstrating the existence of Excusable Delay re Hotel shall be repeated at least once every eighteen (18) months following Owner’s initial invocation of Excusable Delay re Hotel until either Commencement of Construction of Hotel 1 or termination of this Development Agreement. Excusable Delay re Hotel shall end, and Owner’s obligation to Commence Construction of Hotel 1 shall recommence immediately, if (i) Owner fails to submit an Updated Hotel Feasibility Study within eighteen (18) months of the date of the immediately previous determination that Hotel 1 is infeasible, (ii) an Updated Hotel Feasibility Study concludes that Hotel 1 is feasible, or (iii) at least two out of the three Qualified Hotel Consultants do not determine that Hotel 1 is infeasible. Excusable Delay re Hotel shall not excuse Owner from its obligation to timely pay Community Benefit Fees described in Subsection 10.5.2.

5.5 Tentative Subdivision Map and Other Entitlement Extensions. In accordance with California Government Code Sections 65863.9 and 66452.6, the life of all tentative subdivision maps or tentative parcel maps, whether vesting or not, or any other Development Approvals, Subsequent Development Approvals, or Major Project Modifications, except for grading and building permits and certificates of occupancy, which may be approved by the City in connection with Development of the 2026 Project, is hereby extended to be coterminous with the Term of this Development Agreement. The Parties also agree that up to six (6) phased Final Maps may be processed and recorded. All tentative maps prepared for the 2026 Project shall comply with the provisions of Government Code Section 66473.7 to the extent applicable hereto.

5.6 Project Trip Budget Allocation. During the Term of this Development Agreement, the City shall adjust the number of A.M. and P.M. peak hour vehicle trips in the Specific Plan Area Trip Budget Allocation that are available for other future new development in the Specific Plan area in an amount equal to the Project Trip Budget Allocation. During the

24 Term of this Development Agreement, the Project Trip Budget Allocation shall be automatically adjusted without the need to amend this Development Agreement, to account for future changes in the trip generation rates published in future editions of the ITE’s Trip Generation Manual.

Prior to issuance or approval of any permits or land use entitlements for the expansion or intensification of existing uses or the construction of new development in the Specific Plan area that would necessitate adjustment to the Specific Plan Area Trip Budget Allocation, the City Manager shall review the trip generation rates published in the then latest edition of the ITE’s Trip Generation Manual and determine whether the Project Trip Budget Allocation should be automatically adjusted in accordance therewith. If the City Manager determines, in his or her reasonable discretion, that the Project Trip Budget Allocation should be automatically adjusted due to changes in the published trip generation rates, City shall make corresponding adjustments to the number of A.M. and P.M. peak hour vehicle trips in the Specific Plan Area Trip Budget Allocation available for other future new development in the Specific Plan area.

The purpose of this Section 5.6 is to ensure that sufficient peak hour vehicle trips remain in the Specific Plan Area Trip Budget Allocation during the Term of this Development Agreement to accommodate Development of the 2026 Project at the densities and intensities authorized by the Development Plan. The Parties expressly acknowledge and agree that this Section 5.6 and this Development Agreement shall not be interpreted to give Owner a vested right to a specific number of peak hour vehicle trips from the Specific Plan Area Trip Budget Allocation for the purpose of either expanding or limiting Owner’s vested rights to Develop the 2026 Project at the densities and intensities authorized by the Development Plan in the event that the published trip generation rates in the ITE Trip Generation Manual change. The Parties further expressly acknowledge and agree that no adjustment to the Project Trip Budget Allocation by the City for any reason whatsoever after the Development Agreement Date (including, but not limited to, changes to applicable ITE trip generation rates, changes to surrounding projects’ trip budget allocations, or other changed circumstances) shall operate to impede Developer’s vested right to develop the 2026 Project, including but not limited to the full range of uses and intensities specified in the Development Approvals.

SECTION 6 ENFORCEMENT
Unless this Development Agreement is terminated or cancelled pursuant to the provisions of this Development Agreement, this Development Agreement or any amendment hereto, shall be enforceable by any Party hereto notwithstanding any change hereafter in any applicable general plan, specific plan, zoning ordinance, subdivision ordinance or building ordinance adopted by City which alters or amends the rules, regulations or policies of Development of the Project as provided in this Development Agreement pursuant to Section 65865.4 of the Development Agreement Statute; provided, however, that the limitations of this Section shall not apply to changes mandated by State or Federal laws or other permissible changes or new regulations as more particularly set forth in Section 16 of this Development Agreement.

SECTION 7 PUBLIC BENEFITS

7.1 Payment of Community Benefit Fees. As material consideration for City’s entering into this Development Agreement, Owner shall pay City nonrefundable Community Benefit Fees in accordance with Section 10.5 of this Development Agreement. Because

25 Community Benefit Fees are an obligation arising from this Development Agreement, they are not subject to the Mitigation Fee Act or the Quimby Act.

7.2 Affordable Housing. Owner recognizes City’s obligations under State law to facilitate the development of housing at various levels of affordability and the policy of the City stated in the General Plan Housing Element to coordinate with the private sector in the development of affordable housing. As material consideration for City’s entering into this Development Agreement, Owner agrees to coordinate with the City in the provision of affordable housing by executing the Affordable Housing PSA and complying with Owner’s obligations thereunder, and by recording a covenant against the Affordable Senior Housing Lot substantially similar to the Affordable Senior Housing Covenant (Exhibit F) concurrent with the close of escrow for the Affordable Housing PSA. Notwithstanding anything to the contrary herein, the Affordable Senior Housing Covenant shall be subject to such modifications as may be reasonably required by Affordable Housing Developer’s tax credit investor, construction lender, permanent lender, bond issuer, HCD, CDLAC, TCAC, HUD, or other governmental funding source, provided such modifications do not reduce the minimum affordability obligations required by this Agreement. Upon conveyance of the Affordable Senior Housing Lot to Affordable Housing Developer and Commencement of Construction of the Affordable Senior Housing Project, the Affordable Senior Housing Lot shall be released from all obligations under this Development Agreement other than those expressly applicable to the Affordable Senior Housing Project.

This Agreement and the Affordable Senior Housing Covenant require construction of the Affordable Senior Housing Project on the Affordable Senior Housing Lot for use as affordable age-restricted housing for seniors. The Affordable Senior Housing Project will be constructed and serviced by utility stubs sufficient to accommodate at least two hundred 200 Affordable Units consistent with and subject to compliance with Affordable Housing Laws, including, but not limited to, the requirement to record necessary covenants against the affected real property.

The Affordable Senior Housing Covenant also requires that one hundred percent (100%) of the Affordable Units be marketed, leased, and operated as age-restricted housing for Seniors as an Affordable Senior Housing Project, subject to compliance with applicable law. The Affordable Senior Housing Covenant may also include additional preferences for Veterans, including Veterans of the City adopted 3rd Battalion, 5th Marines, and households that live or work within the City, in each case solely to the extent permitted by applicable fair housing laws, TCAC requirements, CDLAC requirements, HCD requirements, HUD requirements, and the requirements of any other applicable funding source, including applicable fair housing laws, TCAC requirements, CDLAC requirements, HCD requirements, and any requirements of Affordable Housing Developer’s lenders, investors, or governmental funding sources.

Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the requirements and restrictions set forth in the Affordable Senior Housing Covenant, and Owner covenants that it shall not enter into any agreement that is inconsistent with such requirements and restrictions without the express written consent of the City. The provisions of the Affordable Senior Housing Covenant shall be senior, non-subordinate covenants and an encumbrance running with the land for the full Term of this Agreement. In no event shall the provisions of the Affordable Senior Housing Covenant be made junior or subordinate to any deed of trust or other documents providing financing for

26 Development or operation of the 2026 Project, or any lien or encumbrance whatsoever for the entire Term of this Development Agreement. Nor shall the provisions of the Affordable Senior Housing Covenant be made junior or subordinate to any extension, amendment, or modification of any lien recorded against the Property prior to the Development Agreement Date.

Notwithstanding anything herein to the contrary, the Affordable Housing Developer is not a party to this Development Agreement and shall not be deemed to have assumed or be responsible for any obligations imposed upon Owner under this Development Agreement except as expressly set forth in the Affordable Senior Housing Covenant or a separate written agreement executed by the Affordable Housing Developer.

7.3 Provision of the Village Park Improvements. In accordance with the Development Plan, Owner shall Complete Construction of the Village Park in Phase Two of the 2026 Project pursuant to Subsection 5.4.2 of this Development Agreement. Although the Village Park will be available for public access and will be publicly accessible, the Village Park shall be privately owned, operated, and maintained by Owner. The Covenant Agreement shall contain a provision requiring the Village Park to be accessible and usable by the public, subject to reasonable limitations on public access to address, among other things, public safety, the security of users of the Village Park, reasonable late-night and after-hours restrictions, noise levels or occasional private events which provision shall be made enforceable by the City.

7.4 Provision of Public Art and Payment of Public Art In-Lieu Fees. Owner shall furnish Public Art in connection with the 2026 Project, and/or pay a Public Art In-lieu Fee, pursuant to the terms of this Development Agreement ("Owner’s Public Art Obligation").

Pursuant to the Specific Plan, the minimum aggregate value of Owner’s Public Art Obligation shall be one-half percent (0.5%) of the total aggregate construction costs of the 2026 Project, which shall be based on the valuation as determined by the City’s Community Development Director and indicated on the building applications submitted in order to obtain permits for construction of the 2026 Project. The Parties agree that (a) Six Hundred Fifty Thousand Dollars ($650,000) of Owner’s Public Art Obligation shall be satisfied by the Three Hundred Thousand Dollar ($300,000) credit and Three Hundred Fifty Thousand Dollar ($350,000) nonrefundable advance described in Section 10.4 of this Development Agreement, and (b) that portion of Owner’s Public Art Obligation that exceeds Six Hundred Fifty Thousand Dollars ($650,000) must be satisfied through the provision of actual Public Art on the Property by Owner, as approved by the City, and may not be satisfied through contribution to the City’s Public Art InLieu Fund. Allowable expenses, construction and material standards, and general location restrictions for all Public Art shall be as set forth in the "Public Art" provisions of Section V, and pages 39-40, of the Specific Plan. The Parties understand and agree that the City shall have the right to approve, in advance, the proposed type, size, art medium, location, and content of all Public Art. The procedures, timing, and requirements for preparation, submittal, review, and approval of plans and specifications for all Public Art shall be as specified in Exhibit H attached hereto.

7.5 Provision of Public Improvements. Owner shall pay for and/or construct and install, and where required, maintain, the public improvements required by the Development Approvals, the Existing Land Use Regulations, this Development Agreement, and the Specific Plan to support the 2026 Project as specified in the Development Approvals.

27 7.6 Provision of Private Infrastructure Improvements On and Within the Property. To the extent required by, and in accordance with timing and phasing conditions of, the Development Approvals, Subsequent Development Approvals, and Major Project Modifications (including, but not limited to the District Sequencing Plan reflected in the conditions of approval to the Development Approvals), Owner shall complete construction and installation of all private infrastructure improvements on or within the Property, including, but not limited to the following: streets; sidewalks and pedestrian walkways; bicycle lanes and pathways; private bus access improvements; street furniture; pet waste stations; parking improvements; lighting; landscaping; directional signage; entry monuments and features; storm drain lines; debris gates and full capture trash screens for all private catch basin inlets; low impact development, hydromodification, and other structural BMPs described in the approved Water Quality Management Plan for the 2026 Project; infrastructure improvements that create coordinated and compatible linkages between the Property and the adjacent Oakbrook Village Shopping Center, including, but not limited to, bicycle and pedestrian connections at the existing vehicular connection between the two properties and a pedestrian walkway that connects the Oakbrook Village property with the Laguna Hills Transportation Center; and other private infrastructure improvements required by the Development Approvals and/or any Subsequent Development Approvals or Major Project Modifications. Although certain private streets, sidewalks, bus stops, street furniture, pedestrian pathways, bicycle lanes and pathways, parking areas, and other developed portions of the Property will be available for public access and will be publicly accessible, all such areas of the Property shall be privately owned, operated, and maintained by Owner. The Covenant Agreement shall contain a provision expressly making the areas described in the previous sentence available for public access, subject to reasonable limitations to public access to address, among other things, public safety, the security of users of the area, reasonable late night and after-hours restrictions, noise levels, or occasional private events, which provision shall be expressly made enforceable by the City.

SECTION 8 PUBLIC IMPROVEMENTS AND SERVICES

8.1 Public Improvements Required to Support the 2026 Project. As material consideration for City’s entering into this Development Agreement, Owner shall pay for and/or undertake the construction and installation of, public improvements required by the Development Approvals, the Existing Land Use Regulations, this Development Agreement, and the Specific Plan to support the 2026 Project as specified in Exhibit E. Exhibit E constitutes a complete list of all required public improvements for the 2026 Project, unless the 2026 Project is modified, requiring the modification of Exhibit E.

8.2 Cooperation by City and Owner for Public Improvements. The required public improvements shall be designed and constructed in phases as required to service the 2026 Project or as otherwise required by the 2026 Project conditions of approval and/or this Development Agreement. Owner shall design and construct these public improvements in accordance with all applicable federal, state and City laws, ordinances, regulations, codes, standards, and other applicable requirements. These improvements shall be subject to City’s approval and acceptance. City shall cooperate with Owner for the purpose of coordinating all public improvements constructed under the Development Approvals, Subsequent Development Approvals, Major Project Modifications, or this Development Agreement to existing or newly constructed public improvements, whether located within or outside of the Property. Owner

28 shall be responsible for and use good faith efforts to acquire any right(s)-of-way necessary to construct the public improvements required by, or otherwise necessary to comply with the conditions of, this Development Agreement, the Development Approvals, any Subsequent Development Approvals, and/or any Major Project Modifications. Should it become necessary due to Owner’s failure or inability to acquire said right(s)-of-way within four (4) months after Owner begins its efforts to so acquire said right(s)-of-way, City shall negotiate the purchase of the necessary right(s)-of-way to construct the public improvements as required by, or otherwise necessary to comply with the conditions of, this Development Agreement and, if necessary in accordance with the procedures established by State law, and the limitations hereinafter set forth in this Section, City may use its powers of eminent domain to condemn said required right(s)-ofway. Owner agrees to pay for all costs associated with said acquisition and condemnation proceedings. If City cannot make the proper findings or elects not to exercise its discretion to adopt a resolution of necessity, or if for some other reason under the condemnation laws City is prevented from acquiring the necessary right(s)-of-way to enable Owner to construct the public improvements required by, or otherwise necessary to comply with the conditions of, this Development Agreement, then the Parties agree to amend this Development Agreement to modify Owner’s obligations accordingly. Any such required modification shall involve the substitution of other considerations or obligations by Owner (of similar value) as are negotiated in good faith between the Parties. Nothing contained in this Section shall be deemed to constitute a determination or resolution of necessity by City to initiate condemnation proceedings.

8.3 Timing, Phasing and Sequence of Public Improvements and Facilities. The timing, phasing and sequence of the construction of public improvements, facilities or the payment of fees therefore shall be constructed or paid in accordance with the timing, phasing and sequence set forth in the Development Plan.

8.4 Maintenance of Public Improvements. City shall not be responsible or liable for the maintenance or care of public improvements, intended to be dedicated to the City, until City approves and accepts them. City shall exercise no control over the public improvements until accepted. Any use by any person of the public improvements, or any portion thereof, shall be at the sole and exclusive risk of the Owner at all times prior to City’s acceptance of the public improvements. Owner shall maintain all the public improvements in a state of good repair until they are completed by Owner and approved and accepted by City. City shall not be responsible or liable for any damages or injury of any nature in any way related to or caused by the public improvements or their condition prior to acceptance. Approval and acceptance of public improvements shall not be unreasonably withheld by the City. Notwithstanding the foregoing, to the extent the Development Approvals, Subsequent Development Approvals, and Major Project Modifications require Owner to maintain public improvements after acceptance by the City, Owner shall be responsible and liable for the maintenance and care of such public improvements to the standards specified therein. If Owner fails to properly prosecute its maintenance obligation under this Section, City may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Owner under this Development Agreement.

8.5 Acceptance of Improvements; As-Built or Record Drawings. If the public improvements are properly completed by Owner and approved by the City Engineer, and if they comply with all applicable federal, state and local laws, ordinances, regulations, codes,

29 standards, and other requirements, the City shall accept the public improvements. Prior to the total or partial acceptance of the public improvements by City, Owner shall file with the Recorder’s Office of the County of Orange a notice of completion for the accepted public improvements in accordance with California Civil Code section 8182, at which time the accepted public improvements shall become the sole and exclusive property of City without payment therefore. Issuance by City of occupancy permits for any buildings or structures located on the Property shall not be construed in any manner to constitute City’s acceptance or approval of any public improvements. Notwithstanding the foregoing, City may not accept any public improvements unless and until Owner provides the required sets of "as built" or record drawings or plans to the City for review and approval for all such public improvements. The drawings shall be certified and shall reflect the condition of the public improvements as constructed, with all changes incorporated therein.

SECTION 9 DEDICATIONS AND EXACTIONS

9.1 Dedications In Conjunction With Public Improvements. Right-of-way or property for required public improvements shall be irrevocably offered for dedication as required by the Development Approvals, Subsequent Development Approvals, or Major Project Modifications.

These dedications shall be in fee or as an easement at the discretion of City. The City may accept the Owner’s offer of dedication upon Owner’s completion and acceptance by City of the associated improvements in compliance with the specifications as approved by City. Nothing contained in this Development Agreement, however, shall be deemed to preclude City from exercising the power of eminent domain with respect to the Property or the 2026 Project, or any part thereof.

9.2 Dedication for Enhanced Parkway Improvements Along Avenida de la Carlota.

Owner shall dedicate a landscape and/or pedestrian access easement to the City associated with the enhanced parkway improvements along Avenida de la Carlota described in Exhibit E, paragraphs 10 and 11, for any area described therein not already included within the public right of way. Such dedication shall be made by an instrument in a form acceptable to the City’s Public Services Director and City Attorney.

9.3 Dedication of Landscape Maintenance Easement for Entry Monuments. Owner shall dedicate a landscape maintenance easement to City to coincide with and matching the rear curbline of the corner entry monuments at the Property’s entrance on the southerly side of El Toro Road at Regional Center Drive. Such dedication shall be made pursuant to the applicable Final Map or by a separate dedication instrument in a form approved by the City’s Public Services Director and City Attorney, to be recorded prior to the issuance of a Certificate of Occupancy for any building.

9.4 Dedication of Easement for Traffic Signal Equipment. Owner shall dedicate a traffic signal maintenance easement to City to coincide with any traffic signal equipment, if any, that is installed on the Property in association with construction an installation of the traffic signal at the intersection of Avenida de la Carlota and the extension of Health Center Drive described in paragraph 5 of Exhibit E. Such dedication shall be pursuant to a separate dedication instrument in a form approved by the City’s Public Services Director and City Attorney, to be recorded prior to completion of construction of the traffic signal.

30 SECTION 10 FEES

10.1 Development Fees Applicable to the 2026 Project. Subject to the provisions of this Section 10, Owner shall pay all existing impact and development fees applicable to the 2026 Project on the Development Agreement Date charged by City for the purpose of defraying all or a portion of the cost of public facilities related to development of the 2026 Project ("Development Fees"). For avoidance of doubt, Community Benefit Fees are not Development Fees and the only Development Fees that shall apply to the 2026 Project are those listed in Exhibit B.

The Parties acknowledge that the following fees, taxes, and charges do not constitute Development Fees and that nothing in this Development Agreement is intended or shall be construed to release Owner from the obligation to pay these fees, taxes, and charges, including increases, if and when they become due:
(a) City’s normal fees for processing, environmental assessment and review, tentative tract and parcel map review, plan checking, site review and approval, administrative review, building permit, grading permit, inspection, and similar fees imposed to recover City’s costs associated with processing, reviewing, and inspecting project applications, plans, and specifications; and
(b) The annual Development Agreement administration fee required to be paid pursuant to Section 10.7, below.
(c) Any fees and charges required to be paid by Owner or Assignee pursuant to the Affordable Senior Housing Covenant.
(d) Fees and charges levied by any other public agency, utility, district, or joint powers authority, regardless of whether City collects those fees and charges; and (e) Community facility district special taxes or special district assessments or similar assessments, business license fees, bonds or other security required for public improvements, sales taxes, property taxes, sewer lateral connection fees, water service connection fees, and new water meter fees.

10.2 Fees Applicable for Modified Development Approvals. Notwithstanding Section

10.1 of this Development Agreement, if and to the extent that the Development Approvals are modified or amended after the Development Agreement Date and Owner is authorized under the modified Development Approvals to develop any additional density or intensity of use beyond what is allowed as of the Development Agreement Date, City shall retain the right to require Owner to pay all City fees for such additional density or intensity of use to the extent such fees would be applicable in the absence of this Development Agreement.

10.3 Public Park In-lieu Fees.

10.3.1 Amount of Fee. Owner hereby agrees that Chapter 8-06 of the Laguna Hills Municipal Code pertaining to park dedication and in-lieu fee requirements shall apply to the 2026 Project, regardless of whether Owner proposes a subdivision map for each Residential

31 Building. Accordingly, as part of the Development Fees applicable to the 2026 Project pursuant to this Development Agreement, Owner hereby agrees to, and shall, pay City a public park inlieu fee equivalent to the fee required under City Resolution No. 2018-11-13-3 for each Unit constructed as part of the 2026 Project, which amount the Parties agree is the applicable per dwelling unit fee calculated pursuant to Chapter 8-06 of the Laguna Hills Municipal Code.

10.3.2 Nonrefundable Guaranteed Fees. As material consideration for City’s entering into this Development Agreement, the Owner expressly agrees that, except as provided in Subsection 10.5.8 and Section 17.4 of this Development Agreement, notwithstanding any provision of Chapter 8-06 of the Laguna Hills Municipal Code, the Quimby Act, or other provisions of law, Twenty Million Dollars ($20,000,000), which represents an amount equal to the Public Park In-lieu Fees attributable to the first one thousand one hundred sixty two (1,162) Units anticipated to be Developed by Owner, based on an aggregated fee assumed for the various proposed Unit densities as shown on the Site Plan, shall be nonrefundable and guaranteed, and must be paid to City even if no or less than one thousand one hundred sixty two (1,162) Units are actually constructed. Owner agrees to pay these nonrefundable guaranteed fees at the times set forth in Subsection 10.3.3, below, and Exhibits B and D. To the extent any portion of said fees are paid prior to the issuance of a vertical building permit for a Attached For-Sale Residential Unit, a Detached For-Sale Residential Unit, or a Multifamily Building containing any Residential Unit to which the fees apply pursuant to Subsections 10.3.3 (A)-(B) and 10.34 below, including the total of Four Million Dollars in fees described in Subsections 10.3.3 (A) and (B), such portion shall constitute Community Benefit Fees when paid, subject to Subsection 10.5.4, but shall be credited against and applied to reduce the amount of the Public Park In-lieu Fee due at the time of issuance of a vertical building permit for the Attached For-Sale Residential Units, Detached For-Sale Residential Units, or a Multifamily Building containing said Residential Unit, provided a vertical building permit is issued for an Attached For-Sale Residential Unit, a Detached For-Sale Residential Unit, or a Multifamily Building containing the Residential Unit during the Term of this Development Agreement and such building permit is not revoked and does not expire. No portion of the nonrefundable, guaranteed fees that are paid or owed pursuant to this Section 10.3 shall be credited or applied to any Units on the Property for which a vertical building permit is issued after the expiration or termination of this Development Agreement.

Said payments shall be subject to Subsection 10.5.4 of this Development Agreement, and Owner expressly agrees that these payments shall be nonrefundable and guaranteed, and that the City may retain and expend that portion, if any, of such nonrefundable guaranteed fees that are paid by Owner to City, which are attributable to Units which are not actually constructed, or which City would otherwise be required to refund to Owner or other record owners of the Property pursuant to Chapters 8-06 or 8-07 of the Laguna Hills Municipal Code, the Quimby Act, or any other provision of law. Notwithstanding any other provision of this Development Agreement, to the extent, and for the period, necessary to implement the provisions hereof, this Subsection

10.3.2 shall survive termination of this Development Agreement and remain enforceable and executory by the Parties notwithstanding termination of the remainder of this Development Agreement.

10.3.3 Timing of Payment of the Community Benefit Fees that may be deemed Credits Against Public Park In-lieu Fees. Notwithstanding any provision of Chapters 8-06 or

8.07 of the Laguna Hills Municipal Code, the Quimby Act, or other law, the Parties expressly

32 agree that the Public Park In-lieu Fees attributable to the Units constructed, or anticipated to be constructed, as part of the 2026 Project, have been paid as follows:
(A) Owner paid the City Two Million Dollars ($2,000,000) on or before the date that was ninety (90) days after the Original Development Agreement Date (Exhibit D, Milestone One). This payment remains subject to Subsection 10.3.2, above. (B) Owner paid the City Two Million Dollars ($2,000,000) on or before the earlier of: (i) the date the City issues a vertical building permit for any Retail Buildings; or (ii) the date that was four (4) years after the Original Development Agreement Date (Exhibit D, Milestone Three). This payment remains subject to Subsection 10.3.2.

10.3.4 Fee Credits. Owner shall pay City the fee per dwelling unit required under City Resolution No. 2018-11-13-3 prior to issuance of a building permit for any Multifamily Building, Townhome, Detached For-Sale Residential Unit, or Affordable Senior Housing Project. Because Owner prepaid a total of Four Million Dollars ($4,000,000) in fees as described in Subsections 10.3.3(A) and (B), Owner is entitled to an equivalent credit that may be applied during the term to fees otherwise required under this Subsection 10.3.4, and may assign its rights to a credit, in whole or in part, to authorized Assignees hereunder. If, by the date that is seven (7) years from the Original Development Agreement Date, fees paid under this Subsection

10.3.4 plus credits for fees paid per Subsections 10.3.3(A) and (B) total less than Ten Million Dollars ($10,000,000), Owner shall pay to City the difference between such fees previously paid plus credits and Ten Million Dollars ($10,000,000). (Exhibit D, Milestone Five). If, by the date that is fifteen (15) years from the Original Development Agreement Date, Owner’s total payments under this Subsection 10.3.4 plus credits for fees paid per Subsections 10.3.3(A) and (B) are less than Twenty Million Dollars ($20,000,000), Owner shall pay to City the difference between all payments made pursuant to this Section 10.3.4 and credits and Twenty Million Dollars ($20,000,000). (Exhibit D, Milestone Nine). These payments shall be subject to Subsection 10.3.2, above, and Owner’s obligation to make the payments by the date set forth herein shall not be subject to extension pursuant to the provisions of Section 22.1 (Excusable Delay) of this Development Agreement, except as otherwise expressly provided in Subsection

22.1.4 (Deferral of Payment of Public Park In-lieu Fees During Pendency of Litigation Delay).

10.3.5 The Parties expressly acknowledge and agree that the Public Park In-lieu Fee payment obligations set forth in this Section 10.3 may be assumed, in whole or in part, by a residential developer or other person or entity that purchases a portion of the Property on which any Residential Unit is designated to be Developed, and agrees to assume such payment obligations in accordance with the provisions of Section 21 of this Development Agreement.

10.4 Public Art In-lieu Fees. The Parties expressly agree that Owner’s Public Art Obligation shall be subject to the provisions set forth in Subsections 10.4.1 and 10.4.2, below.

10.4.1 Credit. The City acknowledges and agrees that Owner paid a Public Art In-lieu Fee to the City in the amount of Three Hundred Thousand Dollars ($300,000) for improvements authorized by the 2016 Five Lagunas Entitlements that were ultimately not constructed. Accordingly, the City agrees it will credit this payment towards Owner’s Public Art Obligation for the 2026 Project.

33 10.4.2 Nonrefundable Advance. Owner paid City a nonrefundable guaranteed Public Art In-lieu Fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000) on or before the date that was ninety (90) days after the Original Development Agreement Date (Exhibit D, Milestone One). Owner’s obligation to make this payment by the date set forth herein shall not be subject to extension pursuant to the provisions of Section 22.1 (Excusable Delay) of this Development Agreement. The City shall credit this payment against Owner’s Public Art Obligation for the 2026 Project. However, said payment shall be subject to the provisions of Subsection 10.5.3, below, and Owner expressly agrees that this payment shall be guaranteed and nonrefundable to Owner, and that the City may retain and expend such payment, even if Owner’s Public Art Obligation for the 2026 Project is less than Three Hundred Fifty Thousand Dollars ($350,000). Owner acknowledges and agrees that the Three Hundred Thousand Dollar ($300,000) credit provided for in Subsection 10.4.1, above, shall not be applied to reduce Owner’s obligation to pay the nonrefundable guaranteed fee required by this Subsection 10.4.2. Notwithstanding any other provision of this Development Agreement, to the extent, and for the period, necessary to implement the provisions hereof, this Subsection 10.4.2 shall survive termination of this Development Agreement and remain enforceable and executory by the Parties notwithstanding termination of the remainder of this Development Agreement.

10.5 Community Benefit Fees. In addition to Development Fees payable by Owner pursuant to the foregoing provisions of this Section 10, as material consideration for City’s entering into this Development Agreement, the Owner agrees to pay City, in addition to the payment of Community Benefit Fees pursuant to Section 10.3, which remain Community Benefit Fees unless and until such fees are credited to Public Park In-lieu Fees, nonrefundable guaranteed Community Benefit Fees in accordance with this Section 10.5 of this Development Agreement. Because Community Benefit Fees are an obligation arising from this Development Agreement, they are not subject to the Mitigation Fee Act or the Quimby Act, and City may deposit such payments into the City’s general fund and expend such funds for any lawful purpose.

10.5.1 Guaranteed Community Benefit Fees. Owner has paid or shall pay a nonrefundable guaranteed Community Benefit Fee as follows:
(A) Owner paid the City One Million One Hundred Thirteen Thousand Five Hundred Thirty-Three Dollars ($1,113,533) on or before the date that was ninety (90) days after the Original Development Agreement Date (Exhibit D, Milestone One). (B) Owner paid the City One Million One Hundred Thirteen Thousand Five Hundred Thirty-Three Dollars ($1,113,533) on or before the date that was fifteen (15) months after the Original Development Agreement Date (Exhibit D, Milestone Two). (C) Owner shall pay the City Two Million Five Hundred Thousand Dollars ($2,500,000) in five (5) installments of Five Hundred Thousand Dollars ($500,000) each to be paid to City on the first, second, third, fourth, and fifth anniversaries of the Original Development Agreement Date. Owner has paid the first four (4) of these five (5) installments as of the Development Agreement Date and shall make the fifth on or before April 22, 2027 (Exhibit D, Milestone Four). Owner’s obligation to make this payment by the date set forth

34 herein shall not be subject to extension pursuant to the provisions of Section 22.1 (Excusable Delay) of this Development Agreement.

10.5.2 Community Benefit Fees with respect to Hotel 1 and/or Hotel 2. In addition to any other Community Benefit Fees payable pursuant to this Section 10.5, the Owner shall pay to the City the amount of $396 each year, increased at the rate of three percent (3.0%) per year, compounded annually, commencing on the first anniversary of the Original Development Agreement Date and annually thereafter, for each Residential Unit for which a Certificate of Occupancy has been issued. Owner’s obligation to pay this additional Community Benefit Fee shall terminate upon the earliest to occur of: (i) the Completion of Construction of Hotel 1 with respect to Phase One Elective Improvements, or Hotel 2 with respect to Phase Two Elective Improvements; (ii) the end of the Twenty Year Period; or (iii) Owner’s termination of this Development Agreement as a result of Default by the City.

10.5.3 Nonrefundable Public Art In-lieu Fee Advance Deemed an Additional Community Benefit Fee in Event 2026 Project Not Developed. In addition to any other Community Benefit Fees payable pursuant to the other provisions of this Section 10.5, that portion, if any, of the nonrefundable guaranteed Public Art In-lieu Fee payment advance made by Owner pursuant to Subsection 10.4.2 of this Development Agreement, which is in excess of Owner’s Public Art Obligation for the 2026 Project, or which City would otherwise be required to refund to Owner or other record owner(s) of the Property pursuant to the Specific Plan, the Mitigation Fee Act, or other law, shall be deemed a Community Benefit Fee for purposes of this Development Agreement. Notwithstanding any provision of the Mitigation Fee Act or other law, under no circumstances shall the City be obligated to return this Public Art In-Lieu Fee Advance to the Owner or other record owner(s) of the Property.

10.5.4 Nonrefundable Guaranteed Public Park In-lieu Fee Payments Deemed Community Benefit Fees in Event Residential Units Not Timely Developed. In addition to any other Community Benefit Fees payable pursuant to the other provisions of this Section 10.5, in the event the Owner Develops no or fewer than One Thousand One Hundred Sixty-Two (1,162) Units during the Term of this Development Agreement, that portion, if any, of the nonrefundable guaranteed Public Park In-lieu Fees paid by Owner to City pursuant to Subsection 10.3.2 of this Development Agreement, which are attributable to Units that are not actually constructed, or which City would otherwise be required to refund to Owner or the subsequent owners of the Property pursuant to Chapters 8-06 or 8-07 of the Laguna Hills Municipal Code, the Quimby Act, or any other provision of law, shall be deemed Community Benefit Fees for purposes of this Development Agreement. Notwithstanding any provision of the Mitigation Fee Act, Quimby Act, or other law, under no circumstances shall the City be obligated to return said fees to the Owner or other record owner(s) of the Property.

10.5.5 Community Benefit Fees with respect to Retail. In addition to any other Community Benefit Fees payable pursuant to the other provisions of this Section 10.5, in the event that Owner has not Completed Construction of the Phase One Required Improvements by the date Owner Completes Construction of any of the Residential Units in the Phase One Elective Improvements, Owner shall pay City an additional Community Benefit Fee in the amount of One Hundred Thirty-One Dollars and Thirteen Cents ($131.13) per year, increased at the rate of three percent (3%) per year, compounded annually, commencing on the first

35 anniversary of the Original Development Agreement Date and annually thereafter, for each Residential Unit in the Phase Two Elective Improvements for which Owner has received Certificates of Occupancy. Owner’s obligation to pay this additional Community Benefit Fee shall commence upon issuance of a Certificate of Occupancy for any Residential Units in the Phase One Elective Improvements and shall terminate on the earlier to occur of the following:
(i) the date that Owner Completes Construction of the Phase One Required Improvements; or (ii) the later to occur of either (x) the end of the Twenty Year Period or (y) expiration of the Term of this Development Agreement.

10.5.6 Additional Community Benefit Fees. In addition to any other Community Benefit Fees payable pursuant to the other provisions of this Section 10.5, Owner shall pay City an additional Community Benefit Fee in the amount of One Hundred Twenty Dollars ($120) per year, increased at the rate of three percent (3.0%) per year, compounded annually, commencing on the first anniversary of the Development Agreement Date and annually thereafter, for each Residential Unit located in a Residential Building for which Owner has received a Certificate of Occupancy. Notwithstanding any other provision of this Development Agreement, Owner’s obligation to pay the Community Benefit Fees described in this Subsection 10.5.6 shall terminate upon the expiration of this Development Agreement. Owner shall remain obligated to pay the Community Benefit Fees required in this Subsection 10.5.6 for the period of time that is equivalent to sixteen (16) years from the date of the Development Agreement Date if Owner terminates this Development Agreement for a reason other than City Default or City terminates this Development Agreement for cause under Sections 18 or 19.

10.5.7 Survival of Termination of Development Agreement. Notwithstanding any other provision of this Development Agreement to the contrary, to the extent, and for the period, necessary to implement the provisions hereof, this Section 10.5 shall survive termination of this Development Agreement pursuant to Section 2.4, Section 10.6, Section 18 and/or Section 19 of this Development Agreement and remain enforceable and executory by the Parties notwithstanding termination of the remainder of this Development Agreement. Notwithstanding the previous sentence, in the event the City exercises its right to unilaterally terminate this Development Agreement pursuant to Section 10.6, Section 18 and/or Section 19 of this Development Agreement before Owner has Completed Construction of the required components of Phase One pursuant to Subsection 5.4.1(D) of this Development Agreement, the City shall be deemed to have waived all rights it may otherwise have pursuant to this Development Agreement to collect from Owner that portion, if any, of the Six Million Dollars ($6,000,000) in Public Park In-lieu Fees attributable to that portion of the 805th through 1,162nd Units that Owner does not Develop, which are owed pursuant to Subsection 10.3.3(C), but which have not yet been paid, and Owner’s obligation to pay nonrefundable guaranteed Public Park In-lieu Fees pursuant to Subsections 10.3.2 and 10.5.4 of this Development Agreement that are attributable to Units Owner does not Develop shall be capped at Fourteen Million Dollars ($14,000,000).

10.5.8 Community Benefit Fee; Final Multifamily Building for Phase Two Elective Improvements. In addition to any other Community Benefit Fees payable pursuant to the other provisions of this Section 10.5, if Owner proceeds to develop the Phase Two Elective Improvements, no building permit for the final Multifamily Building constructed as part of the Phase Two Elective Improvements shall issue until Owner pays City Two Million Dollars ($2,000,000) as a non-refundable Community Benefit Fee.

36 10.5.9 Additional Community Benefit Fee Payment for Failure to Timely Develop Hotels. In addition to any other Community Benefit Fees payable pursuant to this Section 10.5, in the event the Owner has not Completed Development of either or both Hotels within eight (8) years of the Development Agreement Date, the Owner shall pay the City an additional Community Benefit Fee in the amount of Five Hundred Thousand Dollars ($500,000) for each such Hotel for which Completion of Construction has not occurred on or before the date that is eight (8) years after the Development Agreement Date (Exhibit D, Milestone Eight).

Owner's obligation to make this payment by the date set forth herein shall not be subject to extension pursuant to the provisions of Section 5.4.6 (Excusable Delay re Hotel 1) and/or Section

22.1 (Excusable Delay) of this Development Agreement.

10.6 Additional City Remedies for Non-Payment of Fees Owed by Owner. In the event the Owner fails to pay any Development Fees or Community Benefit Fees within the times set forth in this Section 10, in addition to all other legal remedies City may have pursuant to this Development Agreement and applicable law, City shall be entitled to withhold any further Ministerial Actions, Ministerial Approvals, and/or Ministerial Permits until all fees owed are paid in full. In addition to the rights granted City under Sections 17, 18, and 19, or any other provisions of this Development Agreement, and without complying with the provisions of Sections 17, 18, and 19, it is expressly understood and agreed by the Parties that the City Council may unilaterally terminate this Development Agreement if, following notice and a public hearing in accordance with applicable law, the City Council finds that Owner has failed to pay any overdue Development Fees or Community Benefit Fees in full within thirty (30) days of the date the City provides written notice to the Owner stating the type and amount of overdue fees owed.

Notwithstanding Section 5.5 of this Development Agreement, this Development Agreement, the Development Approvals, all Subsequent Development Approvals, and all Major Project Modifications shall automatically expire, terminate and be of no further force and effect upon the effective date of an ordinance adopted by the City Council terminating this Development Agreement based on such a finding pursuant to this Section. Notwithstanding anything to the contrary in this Section 10.6 or elsewhere in this Development Agreement, from and after the execution of the Affordable Housing PSA, and so long as the Affordable Housing Developer is diligently pursuing the development of the Affordable Senior Housing Project and remains in compliance with the Affordable Senior Housing Covenant (to the extent then applicable), the City shall not withhold, condition, delay, suspend, or deny any Ministerial Action, Ministerial Approval, Ministerial Permit, building permit, grading permit, inspection approval, temporary certificate of occupancy, permanent certificate of occupancy, or other approval required for the Affordable Senior Housing Project based upon Owner’s failure to pay any Development Fees, Community Benefit Fees, DA Administration Fee, public park in-lieu fees, public art in-lieu fees, CFD obligations, assessment obligations, or other fees or charges owed by Owner under this Development Agreement or otherwise relating to any portion of the Project other than the Affordable Senior Housing Project.

10.7 Annual Development Agreement Administration Fee. Commencing July 1, 2027, and annually, on or before July 1st of every year thereafter through and including July 1, 2036, Owner shall pay City a fixed fee to partially offset the costs incurred by the City to administer this Development Agreement (the "DA Administration Fee"). The initial amount of the DA Administration Fee shall be Twenty Thousand Dollars ($20,000). Commencing July 1, 2028,

37 and on each subsequent July 1st through and including July 1, 2036, the amount of the DA Administration Fee to be paid by Owner to City shall increase by three percent (3.0%).

SECTION 11 EXISTING USES; AUTOMATIC RESCISSION OF 2016 FIVE LAGUNAS

ENTITLEMENTS

11.1 Existing Uses. City and Owner agree that those existing legally established uses on the Property may be retained until the 2026 Project is implemented.

11.2 Rescission of Prior Entitlements. Pursuant to the Original Agreement, the 2016 Five Lagunas Entitlements, and all of Owner’s rights thereunder, whether vested or not, terminated and became null, void, and of no further force and effect at such time. Pursuant to this Development Agreement, the Original Development Agreement, and the entitlements granted on or about March 8, 2022, whether vested or not, are hereby terminated and become null, void, and of no further force and effect upon approval of this Development Agreement.

SECTION 12 FUTURE APPROVALS

12.1 Basis for Denying or Conditionally Granting Future Subsequent Development Approvals. Before Owner can begin Development of the 2026 Project, Owner must secure additional Subsequent Development Approvals from City. The Parties agree that to the extent said Subsequent Development Approvals are Ministerial Actions, Ministerial Approvals or Ministerial Permits, City shall not, through the enactment or enforcement of any subsequent ordinances, rules, regulations, initiatives, policies, requirements, guidelines, or other constraints, withhold such approvals as a means of blocking construction or of imposing conditions on the 2026 Project which were not imposed during an earlier approval period unless City has been ordered to do so by a court of competent jurisdiction. The Parties further agree that to the extent said Subsequent Development Approvals are Discretionary Actions, Discretionary Approvals or Discretionary Permits, City shall exercise its discretion in a manner consistent with and in recognition of the Development Plan and which complies and is consistent with the Existing Land Use Regulations (as same may be modified in accordance with this Development Agreement), those Subsequent Land Use Regulations to which Owner has consented to in writing (which consent shall be in Owner’s sole and absolute discretion), and such other standards, terms and conditions expressly contained in this Development Agreement.

Notwithstanding the previous two sentences, City and Owner will use reasonable efforts to ensure each other that all applications for and approvals of all required Subsequent Development Approvals necessary for Owner to develop the 2026 Project in accordance with this Development Agreement are sought and processed in a timely manner.

12.2 Standard of Review of Subsequent Development Approvals. Except as otherwise provided under the Development Approvals or the terms of this Development Agreement, the rules, regulations and policies that apply to any Subsequent Development Approvals which Owner must secure prior to the Development of the Property shall be the Existing Land Use Regulations, as defined in this Development Agreement.

12.3 City Review of Major Project Modifications. The rules, regulations and policies that apply to any Major Project Modification requested by Owner shall be those rules,

38 regulations and policies in effect on the date Owner submits a complete application for said Major Project Modification. Notwithstanding the foregoing sentence or anything herein to the contrary, Owner expressly agrees that, while this Development Agreement is in effect, City shall have sole and absolute discretion whether to approve, conditionally approve, or deny any Major Project Modification requested by Owner, and Owner expressly waives any right Owner may otherwise have to approval by the City of any Major Project Modification under California law or the Zoning Code. Notwithstanding anything to the contrary in this Development Agreement, modifications to the location and configuration of buildings, improvements, or Project elements proposed by Owner to maintain all Phase One Required Improvements and/or Phase Two Required Improvements in response to third-party governmental agency actions affecting the availability or configuration of any portion of the Property shall be processed administratively by the Director, unless any such modification would result in (i) the Development of more than 1500 Units on the Property; (ii) the Development of fewer than two hundred (200) Affordable Units; (iii) the Development of fewer than 225 hotel rooms on the Property combined between the Hotels; (iv) the Development of less than 140,120 square feet of New Retail Space on the Property; and/or (v) the Development of a Village Park that is less than two and a half (2.5) acres in size.

12.4 Potential Condemnation of Pad 4 and Hotel 1. The Parties are aware of a potential future action pursuant to which all or a portion of the Property designated as Pad 4 and/or Hotel 1 may become subject to an eminent domain action by a third-party agency. To address that scenario, Owner will, within six (6) months of the Development Agreement Date, submit an application to amend the Project Approvals to authorize the relocation of Hotel 1 and all or a portion of the retail proposed for Pad 4 to alternative locations within the Property. Such application will not be considered a Major Project Modification, provided it satisfies the requirements of Section 12.3 relating to the relocation of buildings (including not triggering the criteria enumerated in subsections (i) – (v) of Section 12.3), and will be reviewed for consistency with the UVSP and this Agreement first by the City Council ad hoc committee described in Resolution No. [____________] prior to consideration for approval, conditional approval, or denial by the Director. The Director will expeditiously review Owner’s submittal of complete applications and associated technical studies (e.g., noise analysis and utility reports). Further, if the Property contemplated for Hotel 1 and/or Pad 4 is condemned through an eminent domain proceeding, and such condemnation results in the loss of retail development square footage contemplated by this Agreement for Pad 4, Owner shall be required to use commercially reasonable efforts to provide approximately the same square footage of replacement retail development as a Required Phase Two Improvement consistent with Section 5.4.2. Any such action by a third-party agency shall not relieve the Owner from its obligation to Develop Hotel 1 or to use commercially reasonable efforts to construct comparable retail square footage elsewhere on the Property.

SECTION 13 AMENDMENT

13.1 Initiation of Amendment. Either Party may propose an amendment to this Development Agreement.

39 13.2 Procedure. The procedure for proposing and adopting an amendment to this Development Agreement shall be the same as the procedure required for entering into this Development Agreement in the first instance.

13.3 Consent. Except as provided elsewhere within this Development Agreement, any amendment to this Development Agreement shall require the consent of both Parties, each in their sole and absolute discretion. No amendment of this Development Agreement or any provision hereof shall be effective unless set forth in writing and signed by duly authorized representatives of each Party hereto.

13.4 Effect of Amendment to Development Agreement. The Parties agree that except as expressly set forth in any such amendment, an amendment to this Development Agreement shall not alter, affect, impair, modify, waive or otherwise impact any other rights, duties or obligations of either Party under this Development Agreement.

13.5 Operating Memoranda. The provisions of this Development Agreement require a close degree of cooperation and flexibility between the City and Owner. The Development of the 2026 Project may demonstrate that clarifications to the Development Plan or clarifications or modifications to this Development Agreement are appropriate with respect to the details of performance of the City and Owner. To the extent allowable by law, Owner shall retain a certain degree of flexibility as provided herein with respect to all matters, items and provisions covered in general under this Development Agreement. When and if the Owner finds it necessary or appropriate to make changes, adjustments or clarifications to matters, items or provisions, the Parties shall effectuate such changes, adjustments or clarifications through operating memoranda ("Operating Memoranda") approved by the Parties in writing which reference this Section 13.5.

City agrees to promptly process Operating Memoranda when requested by Owner. Operating Memoranda are not intended to constitute either a substantive change or an amendment to this Development Agreement, but are ministerial clarification; therefore public notices and hearings shall not be required. Operating Memoranda may be used and thus deemed non-substantive and/or procedural if they do not result in, for example: (i) a material changes in fees or costs; (ii) an increase in density or intensity of use; (iii) a change in permitted uses; (iv) an increase in the maximum height and size of buildings; (v) a decrease in the amount of land to be dedicated for public purposes; or (vi) the reduction of improvement and construction standards and specifications for the 2026 Project. The City Attorney shall be authorized, upon consultation with, and approval of, the Owner, to determine whether a requested clarification may be effectuated pursuant to this Section or whether the requested clarification is of such character to constitute either a substantive change or an amendment to this Development Agreement which requires compliance with the provisions of Section 13.2 of this Development Agreement.

SECTION 14 NON-CANCELLATION OF RIGHTS
Subject to defeasance pursuant to Sections 2, 10.6, 17, 18, 19, 21 or 22 of this Development Agreement, Owner’s rights pursuant to the Development Approvals shall be vested in the Property upon recordation of this Development Agreement.

40 SECTION 15 UNDERTAKINGS AND ASSURANCES CONTEMPLATED AND

PROMOTED BY DEVELOPMENT AGREEMENT STATUTE
The mutual undertakings and assurances described above and provided for in this Development Agreement are for the benefit of City and Owner and promote the comprehensive planning, private and public cooperation and participation in the provision of public facilities, and the effective and efficient development of infrastructure and facilities supporting development which was contemplated and promoted by the Development Agreement Statute.

City agrees that it will not take any actions which are intended to circumvent this Development Agreement; provided, however, that any action of the electorate shall not be deemed an action for purposes of this Section.

SECTION 16 RESERVED AUTHORITY

16.1 Reservation of Authority With Respect to Subsequent Development Approvals and Major Project Modifications. In addition to the normal and customary discretion exercised by the City in connection with consideration of applications for land use entitlements in accordance with Section 12, Owner expressly understands and agrees that all Subsequent Development Approvals that are Discretionary Actions, Discretionary Approvals, or Discretionary Permits, and all Major Project Modifications, shall also be subject to review by the City pursuant to CEQA, including but not limited to CEQA Guidelines sections 15162-15164.

Notwithstanding any other provision set forth in this Development Agreement to the contrary, City reserves the right, after the Development Agreement Date to exercise the same degree of discretion and control in its consideration of Subsequent Development Approvals and Major Project Modifications that it would have in the absence of this Development Agreement to impose conditions under CEQA, and other applicable laws and regulations that apply to all similar development throughout the City, in order to mitigate the 2026 Project’s impact on the environment. In addition, consistent with Section 5.1 of this Development Agreement, notwithstanding any provision of California law or the Zoning Code to the contrary, City reserves the right after the Development Agreement Date to exercise sole and absolute discretion and control in its consideration of any Major Project Modification requested by Owner.

16.2 State and Federal Laws and Regulations. In the event that the State or Federal laws or regulations enacted after this Development Agreement has been entered into prevent or preclude compliance with one or more provisions of the Development Agreement, such provisions of the Development Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations, provided, however, that this Development Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce.

16.3 Uniform Codes. This Development Agreement shall not prevent City from applying new rules, regulations and policies contained in Uniform Codes as long as adoption of the Uniform Codes applies to all development in the City.

16.4 Public Health and Safety. This Development Agreement shall not prevent City from adopting new rules, regulations and policies, including amendments or modifications to

41 Uniform Codes described in Section 16.3 of this Development Agreement, which directly result from findings by City that failure to adopt such rules, regulations or policies would result in a condition injurious or detrimental to the public health and safety.

SECTION 17 CANCELLATION

17.1 Initiation of Cancellation. Either Party may propose cancellation of this Development Agreement.

17.2 Procedure. The procedure for proposing a cancellation of and cancelling this Development Agreement shall be the same as the procedure required for entering into this Development Agreement in the first instance. Such procedures are set forth in Section 65868 of the California Government Code.

17.3 Consent of Owner and City. Subject to the Parties’ rights and obligations regarding cancellation set forth in Section 22.3, except as otherwise provided in Section 10.6 of this Development Agreement, any cancellation of this Development Agreement shall require the mutual written consent of Owner and City, each in their sole and absolute discretion.

17.4 Fee Payment Obligations. In the event this Development Agreement is cancelled pursuant to the provisions of this Section 17, City shall be entitled to retain and/or seek payment from Owner of all Development Fees and Community Benefit Fees due to be paid pursuant to the terms of this Development Agreement prior to the date cancellation is proposed by a Party; however, Owner shall have no obligation to pay any Development Fees or Community Benefit Fees that are subject to deferral pursuant to Section 22.1.4 as of the date of cancellation or are due to be paid pursuant to the terms of this Development Agreement after the date cancellation is proposed by a Party.

SECTION 18 PERIODIC REVIEW

18.1 Time for Review. In accordance with the procedures set forth in the Development Agreement Ordinance, City shall, at least every twelve (12) months after the Development Agreement Date, review the extent of good faith compliance by Owner with the terms and conditions of this Development Agreement. Such periodic review shall determine compliance with the terms of this Development Agreement pursuant to California Government Code Section 65865.1 and other successor laws and regulations. If City fails to review the 2026 Project and the Owner’s compliance with the material terms of this Development Agreement, Owner will be deemed to be in compliance with the provisions of this Development Agreement, and the Development Agreement will be deemed in full force and effect. The City’s failure to review the 2026 Project or Owner’s compliance with the terms of the Development Agreement, or Owner’s failure to submit evidence concerning its good faith compliance with the material terms of the Development Agreement as specified in Section 18.2 of this Development Agreement, shall not constitute or be asserted by either Party as a breach of the Development Agreement by the other Party.

18.2 Owner’s Submission. Each year, not less than forty-five (45) days nor more than ninety (90) days prior to the anniversary of the Development Agreement Date, Owner shall

42 submit evidence to the City’s Community Development Director demonstrating its good faith compliance with the terms and conditions of this Development Agreement.

18.3 Findings. Within sixty (60) days after the submission of Owner’s evidence, the City Council shall determine, on the basis of substantial evidence, whether or not Owner has, for the period under review, complied in good faith with the terms and conditions of this Development Agreement. The burden of proof on this issue shall be on the Owner. If the City Council finds that Owner has so complied, the review for that period shall be deemed concluded.

If the City Council finds and determines, on the basis of substantial evidence, that Owner has not complied in good faith with the terms and conditions of this Development Agreement for the period under review, Owner shall be deemed to be in non-compliance of the Development Agreement, and City may proceed in accordance with Section 18.5.

18.4 Initiation of Review by City. In addition to the periodic review set forth in this Development Agreement, the City may at any time initiate a review of this Development Agreement upon the giving of written notice thereof to Owner. Within thirty (30) days following receipt of such notice, Owner shall submit evidence to the City’s Community Development Director of Owner’s good faith compliance with this Development Agreement and such review and determination shall proceed in the manner as otherwise provided in this Development Agreement.

18.5 Non-Compliance by Owner. If the City Council finds and determines, on the basis of substantial evidence, and subject to limitations on remedies in this Development Agreement, that Owner has not complied in good faith with the terms and conditions of this Development Agreement, City may, by written notice to Owner, specify the manner in which Owner has failed to so comply and state the steps Owner must take to bring itself into compliance. Owner shall be given at least sixty (60) days to cure such non-compliance and if the actions required to cure such non-compliance take more than sixty (60) days, then City shall give Owner additional time provided that Owner is making reasonable progress towards such end. If during the cure period, Owner fails to cure such noncompliance or is not making reasonable good faith progress towards such end, then, the City Council may, at its discretion, proceed to modify or terminate this Development Agreement or establish a time schedule for compliance in accordance with the procedures set forth in Section 18.5 or 18.11 of this Development Agreement. Notwithstanding anything to the contrary in this Section 18, from and after the conveyance of the Affordable Senior Housing Lot to the Affordable Housing Developer and Commencement of Construction of the Senior Affordable Housing Project, pursuant to the Affordable Housing PSA, and so long as the Affordable Housing Developer and the Affordable Senior Housing Project remain in compliance with the Affordable Senior Housing Covenant, any schedule for compliance, and any modification or termination of this Development Agreement shall not impair, limit, delay, condition, suspend, or terminate the rights of the Affordable Housing Developer or the owner of the Affordable Senior Housing Lot to develop, finance, construct, lease, operate, or obtain permits, inspections, approvals, or certificates of occupancy for the Affordable Senior Housing Project, except to the extent of any obligation assumed by Affordable Housing Developer pursuant to this Development Agreement (e.g. Completion of the Affordable Senior Housing Project once Commenced) or to the extent the non-compliance relates solely to the Affordable Senior Housing Project and is within the control of the Affordable Housing Developer or owner of the Affordable Senior Housing Lot.

43 18.6 Notice to Owner. City shall give notice to Owner of the City Council’s intention to proceed to modify or terminate this Development Agreement or establish a time schedule for compliance within ten (10) days of making City’s findings.

18.7 Public Hearing. The City Council shall set and give notice of a public hearing on modification, termination or a time schedule for compliance to be held within forty-five (45) days after the City Council gives notice to Owner.

18.8 Decision. The City Council shall announce its findings and decisions on whether this Development Agreement is to be terminated, how this Development Agreement is to be modified or the provisions of the Development Agreement with which Owner must comply and a time schedule therefore not more than ten (10) days following completion of the public hearing.

18.9 Standard of Review. Any determination by City to terminate this Development Agreement because Owner has not complied in good faith with the terms of this Development Agreement must be based upon a finding by the City Council, on the basis of substantial evidence, that Owner is in Default and has not cured that Default in the timeframe permitted by Sections 18 and 19 of this Development Agreement, as applicable.

18.10 Implementation. Modifying or terminating this Development Agreement shall be accomplished by City enacting an ordinance. The ordinance shall recite the reasons which, in the opinion of City, make the modification or termination of this Development Agreement necessary. Not later than ten (10) days following the adoption of the ordinance, one copy thereof shall be forwarded to Owner. This Development Agreement shall be terminated or this Development Agreement as modified shall become effective on the effective date of the ordinance terminating or modifying this Development Agreement.

18.11 Schedule for Compliance. Setting a reasonable time schedule for compliance with this Development Agreement may be accomplished by City enacting a resolution. The resolution shall recite the reasons which, in the opinion of City, make it advisable to set a schedule for compliance and why the time schedule is reasonable. Not later than ten (10) days following adoption of the resolution, one copy thereof shall be forwarded to Owner. Compliance with any time schedule so established as an alternative to modification or termination shall be subject to periodic review as provided in this Development Agreement and lack of good faith compliance by Owner with the time schedule shall be basis for termination or modification of this Development Agreement.

SECTION 19 DEFAULTS AND REMEDIES

19.1 Default. In addition to the rights and remedies described in Section 18, either party may avail itself of the rights and remedies pursuant to this Section 19. Subject to Excusable Delay, Excusable Delay re Hotel, and limitations on remedies in this Development Agreement, as applicable, and compliance with the provisions of this Development Agreement, failure or delay by either party to perform any material term or provision of this Development Agreement (a "Breach") following notice and failure to cure as described hereafter constitutes a "Default" under this Development Agreement.

44 19.2 Notice of Default / Cure. The non-defaulting party shall give written notice of any Breach to the party in Breach, specifying the Breach complained of by the non-defaulting party ("Notice of Default"). Delay in giving such Notice of Default shall not constitute a waiver of any Breach nor shall it change the time of Breach. Upon receipt of the Notice of Default, the party in Breach shall promptly commence to cure the identified Breach at the earliest reasonable time after receipt of the Notice of Default and shall complete the cure of such Breach not later than thirty (30) days after receipt of the Notice of Default, or, if such Breach cannot reasonably be cured within such thirty (30) day period, then as soon thereafter as reasonably possible, provided that the party in Breach shall diligently pursue such cure to completion ("Cure Period").

Failure of the party in Breach to cure the Breach within the Cure Period set forth above shall constitute a Default hereunder.

Any failures or delay by either party in asserting any of its rights and remedies as to any Breach or Default shall not operate as a waiver of any Breach or Default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

19.3 Remedies. After implementation of the 2026 Project, Owner may be foreclosed from other choices it may have had to utilize the Property and provide for other benefits. Owner has invested significant time and resources and performed extensive planning and processing of the 2026 Project in agreeing to the terms of this Development Agreement and will be investing even more significant time in implementing the 2026 Project in reliance upon the terms of this Development Agreement, and it is not possible to determine the sum of money which would adequately compensate Owner for such efforts. For the above reasons, City and Owner agree that damages would not be an adequate remedy if City fails to carry out its obligations under this Development Agreement. Therefore, specific performance of this Development Agreement is the only remedy which would compensate Owner if City fails to carry out its obligations under this Development Agreement, and City hereby agrees that Owner shall be entitled to specific performance in the event of a Default by City hereunder. City and Owner acknowledge that, if Owner fails to carry out its obligations under this Development Agreement, City shall have the right, subject to Excusable Delay, Excusable Delay re Hotel, limitations on remedies in this Development Agreement, and Notice of Default and Cure Period obligations of the City in this Development Agreement, to refuse to issue any permits or other approvals which Owner would otherwise have been entitled to pursuant to this Development Agreement. If City issues a permit or other approval pursuant to this Development Agreement in reliance upon a specified condition being satisfied by Owner in the future, and if Owner then fails to satisfy such condition, City shall be entitled to specific performance for the sole purpose of causing Owner to satisfy such condition. Except as expressly provided in the next sentence, City’s right to specific performance shall be limited to those circumstances set forth above, and City shall have no right to seek specific performance to cause Owner to otherwise proceed with the Development of the 2026 Project in any manner. Notwithstanding the foregoing, in the event Owner Defaults on an obligation to pay any fee at the time required pursuant to Section 10 of this Development Agreement, City shall be entitled to pursue whatever legal or equitable remedies are available to collect any such amounts due subject to Notice of Default and Cure Period provisions elsewhere in this Development Agreement. Notwithstanding anything to the contrary in this Section 19.3, from and after the execution of the Affordable Housing PSA, and so long as the Affordable

45 Housing Developer is diligently pursuing the development of the Affordable Senior Housing Project and remains in compliance with the Affordable Senior Housing Covenant (to the extent then applicable), City shall not refuse to issue, withhold, condition, delay, suspend, or deny any permit, approval, inspection, temporary certificate of occupancy, permanent certificate of occupancy, or other authorization for the Affordable Senior Housing Project based upon any Breach, Default, or failure to perform by Owner under this Development Agreement, except to the extent such Breach, Default, or failure relates solely to the Affordable Senior Housing Project and is within the control of the Affordable Housing Developer or owner of the Affordable Senior Housing Lot.

SECTION 20 [INTENTIONALLY OMITTED]
SECTION 21 ASSIGNMENT

21.1 Right to Assign. Subject to Section 21.3, Owner shall have the right to sell, mortgage, hypothecate, assign or transfer this Development Agreement, and any and all of its rights, duties and obligations hereunder, to any person, partnership, joint venture, firm or corporation at any time during the Term of this Development Agreement, provided that any such sale, mortgage, hypothecation, assignment or transfer must be pursuant to a sale, assignment or other transfer of the interest of Owner in the Property, or a portion thereof. In the event of any such sale, mortgage, hypothecation, assignment or transfer, (a) Owner shall notify City of such event and the name of the transferee, together with the corresponding entitlements being transferred to such transferee, and (b) the agreement between Owner and such transferee shall provide that either Owner or the transferee or both shall be liable for the performance of any or all obligations of Owner pursuant to this Development Agreement, the Development Approvals, the Subsequent Development Approvals, and/or any Major Project Modifications. Such transferee and/or Owner shall notify City in writing which entity shall be liable for the performance of such obligations, and upon the express written assumption of any or all of the obligations of Owner under this Development Agreement by such assignee, transferee or purchaser shall, relieve Owner of its legal duty to perform said obligations under this Development Agreement with respect to the Property or portion thereof, so transferred, except to the extent Owner is in Default under the terms of this Development Agreement and/or City’s consent to the assignment is required pursuant to Section 21.3. Notwithstanding the foregoing, neither the Affordable Housing Developer nor any owner of the Affordable Senior Housing Lot shall be required to assume any obligations under this Development Agreement other than those expressly applicable to the Affordable Senior Housing Project, the Affordable Senior Housing Covenant, or expressly assumed in a separate written agreement with the City. Without limiting the foregoing, Owner shall have the right, without further approval of the City, to assign all or a portion of its rights and obligations under this Development Agreement relating solely to the Affordable Senior Housing Project and the Affordable Senior Housing Lot to the Affordable Housing Developer pursuant to a partial assignment and assumption agreement in a form acceptable to Owner (the "Partial Assignment and Assumption Agreement"), Affordable Housing Developer and City, each in their respective, reasonable discretion. Upon execution of the Partial Assignment and Assumption Agreement, the Affordable Housing Developer shall succeed only to those rights and obligations expressly assigned therein and shall not be deemed to have assumed any obligations relating to any other portion of the Project.

46 21.2 Release upon Transfer. It is understood and agreed by the Parties that the Property may be subdivided following the Development Agreement Date. Subject to Section

21.3, one or more of such subdivided parcels may be sold, mortgaged, hypothecated, assigned or transferred to persons for development by them in accordance with the provisions of this Development Agreement. Effective upon such sale, mortgage, hypothecation, assignment or transfer, the obligations of Owner shall become several and not joint. Upon the sale, transfer, or assignment of Owner’s rights and interests under this Development Agreement as permitted pursuant to Section 21.1 of this Development Agreement, Owner shall be released from its obligations under this Development Agreement with respect to the Property, or portion thereof so transferred, provided that (a) Owner is not then in Breach or Default under this Development Agreement, (b) Owner has provided to City the notice of such transfer specified in Section 21.1 of this Development Agreement, and (c) the transferee executes and delivers to City a written agreement in which (i) the name and address of the transferee is set forth and (ii) the transferee expressly and unconditionally assumes all the obligations of Owner under this Development Agreement, the Development Approvals, the Subsequent Development Approvals, and the Major Project Modifications with respect to the property, or portion thereof, so transferred; provided however, in the case of a transfer of the Affordable Senior Housing Lot to the Affordable Housing Developer, the Affordable Housing Developer shall assume only those rights and obligations expressly applicable to the Affordable Senior Housing Project pursuant to the Partial Assignment and Assumption Agreement and shall not assume any obligations relating to any other portion of the Project. Non-compliance by any such transferee with the terms and conditions of this Development Agreement shall not be deemed a Default hereunder or grounds for termination hereof or constitute cause for City to initiate enforcement action against the other Party or persons then owning or holding interest in the Property or any portion thereof and not themselves in Default hereunder. The provisions of this Section shall be self-executing and shall not require the execution or recordation of any further document or instrument. Any and all successors, assigns and transferees of Owner shall have all of the same rights, benefits and obligations of Owner as used in this Development Agreement and the term "Owner" as used in this Development Agreement shall refer to any such successors, assigns and transferees unless expressly provided herein to the contrary.

21.3 City’s Consent. The City’s consent shall not be required to a transfer or assignment between Owner(s). Moreover, the City’s consent to a transfer or assignment pursuant to this Section 21 shall not be required unless, at the time of the transfer or assignment, Owner is in Default under the terms of this Development Agreement. If Owner is in Default under the terms of this Development Agreement, City shall consent in writing to any transfer or assignment which provides adequate security to City, in the reasonable exercise of the City’s discretion, to guarantee the cure of the Default upon completion of the transfer or assignment.

SECTION 22 GENERAL

22.1 Excusable Delay.

22.1.1 Types of Delay. Except as otherwise expressly provided in this Development Agreement, and subject to Subsections 22.1.2 and 22.1.3 below, performance by either Party of its obligations under this Development Agreement shall be excused, and the Term shall be extended during which any of the following events prevent, prohibit, or unreasonably

47 delay the Owner's ability to proceed with the Development of the 2026 Project within the time required by this Development Agreement for periods equal to the duration of any of the following:
(A) Economic Delay. A recession, as defined by the National Bureau of Economic Research, excluding the period from the Development Agreement Date through March 31, 2027.
(B) Force Majeure Delay. Floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the Party’s control (including the Party’s employment force), epidemics, pandemics, government regulations, court actions (such as restraining orders or injunctions), or other similar events beyond the Party’s control.
(C) Administrative Delay. Actions of the City or other governmental agency and beyond the control of the Owner such as delays in processing and acting on applications for the Ministerial Actions, Ministerial Approval, Ministerial Permits, or other permits or approvals by the City or other governmental agencies that are described in Exhibit G attached hereto shall be deemed to be unreasonable if they exceed the applicable time periods set forth in Exhibit G. Delays in processing and acting on applications for the Ministerial Actions, Ministerial Approval, Ministerial Permits, or other permits or approvals by the City or other governmental agencies that are not described in Exhibit G shall be deemed to be unreasonable if they exceed the average time it normally takes the agency to process and act on similar applications by more than thirty (30) days.
(D) Litigation Delay. Pendency of a lawsuit, petition for writ of mandate, or other legal challenge by a third party to this Development Agreement, any of the Development Approvals, or any of the Subsequent Development Approvals ("Third Party Challenge"). For purposes of this Subsection 22.1.1(D), a Third Party Challenge shall be deemed to be pending from the time it is filed until such time as (a) such Third Party Challenge has been dismissed with prejudice and any period for judicial appeal or other legal challenge in connection with the challenged approvals has expired with no such appeal or legal challenge having been filed; (b) such Third Party Challenge has been finally adjudicated to judgment upholding all challenged approvals and any period for judicial appeal or other legal challenge in connection with the challenged approvals has expired with no such appeal or legal challenge having been filed; or (c) such Third Party Challenge has been otherwise resolved through settlement, release, or similar agreement and accompanying dismissal with prejudice in a manner that allows no further appeal or legal challenge to the challenged approvals. In the event of a Third Party Challenge that results in the setting aside of any portion of this Development Agreement or one or more Development Approvals necessary for Development of the 2026 Project, then excusable delay pursuant to this Subsection 22.1.1(D) shall extend until such time as Owner has proposed, and City has approved, modifications or corrective actions to reapprove the challenged Development Approvals in a form that is mutually acceptable to the Parties, each in its sole and absolute discretion, and the time for administrative appeal, judicial appeal, or other legal challenge relating to such corrective actions and/or reapproval has expired with no such appeal or challenge having been filed.

48 (E) Affordable Housing Financing Delay. Delays in obtaining or closing financing for the Affordable Senior Housing Project, including tax-exempt bond allocation, low-income housing tax credits, local public financing, lender approvals, investor approvals, or other governmental or private financing required for the Affordable Senior Housing Project; provided, however, that application of delay pursuant to this subsection shall not operate to allow development of Phase Two Elective Improvements to proceed.

22.1.2 Notice. If City or Owner seeks excuse from performance pursuant to this Section 22.1, it shall provide written notice of such delay to the other Party within thirty (30) days after the Party reasonably becomes aware of the commencement of such delay. If the delay or Default, whether material or immaterial, is beyond the control of the Party seeking excuse from performance, it shall be excused, and extension of time for such cause shall be granted in writing for the period of the Excusable Delay, or longer as may be mutually agreed upon in writing. Any disagreement between the Parties with respect to whether this Section 22.1 applies to a particular delay or Default is subject to the filing by either Party of an action for judicial review of the matter, including requests for declaratory and/or injunctive relief.

22.1.3 Certain Fee Payment Obligations Not Subject to Excusable Delay.

Notwithstanding Subsections 22.1.1 and 22.1.2, above, except as otherwise expressly provided in Subsection 22.1.4, below, Owner expressly acknowledges and agrees that it is obligated to pay the nonrefundable guaranteed Development Fees and Community Benefit Fees described in Subsections 10.3.3(A)-(C), 10.4.2, 10.5.1, and 10.5.2 of this Development Agreement, and Exhibit D, Milestones One, Two, Three, Four, Five and Eight, at the times specified in said provisions and Exhibit D, and that the excusable delay provisions of this Section 22.1 shall not apply to or operate to extend the time by which Owner is obligated to pay said Development Fees and Community Benefit Fees.

22.1.4 Deferral of Payment of Public Park In-lieu Fees During Pendency of Litigation Delay. Notwithstanding Subsection 22.1.3, above, subject to the provisions of this Subsection 22.1.4, Owner may defer payment of those Public Park In-lieu Fees that would otherwise be due to City pursuant to Subsections 10.3.3 (A), (B), and/or (C) and Exhibit D Milestones One, Three, Five, and/or Eight during the pendency of any Litigation Delay pursuant to Subsection 22.1.1(D). Within ten (10) business days after the date the period of Litigation Delay ends, and provided that this Development Agreement is not terminated pursuant to Subsection 2.3 or cancelled pursuant to Subsections 22.3.2 or 22.3.3 hereof, Owner shall remit all deferred Public Park In-lieu Fees to City. By means of example, if the period of Litigation Delay ends on a date that is one year from the Development Agreement Date (and this Development Agreement is not terminated or cancelled), Owner will remit to City the first Public Park In-lieu Fee payment of Two Million Dollars ($2,000,000) corresponding with Milestone One within ten (10) business days; however, if the Development Agreement is terminated pursuant to Subsection 2.3 or cancelled pursuant to Subsection 22.3.2 or 22.3.3 hereof, Owner shall not be required to remit said payment to the City. This Subsection 22.1.4 shall not be interpreted or construed to extend or relieve Owner of the obligation to pay Public Park In-lieu Fees due at the time of issuance of a vertical building permit for an Attached ForSale Residential Unit, Detached For-Sale Residential Unit, or Multifamily Building.

49 22.1.5 Excusable Delay Not Applicable to Section 5.4. Notwithstanding anything herein to the contrary, Excusable Delay does not modify the timing of Development set forth in Section 5.4.

22.2 Construction of Development Agreement. The language in all parts of this Development Agreement shall in all cases, be construed as a whole and in accordance with its fair meaning. The captions of the paragraphs and subparagraphs of this Development Agreement are for convenience only and shall not be considered or referred to in resolving questions of constructions. This Development Agreement shall be governed by the laws of the State of California. The Parties understand and agree that this Development Agreement is not intended to constitute, nor shall it be construed to constitute, an impermissible attempt to contract away the legislative and governmental functions of City, and in particular, City’s police powers. In this regard, the Parties understand and agree that this Development Agreement shall not be deemed to constitute the surrender or abnegation of City’s governmental powers over the Property.

22.3 Severability; Court Finding Materially Impairing Consideration; Cancellation For Protracted Litigation Delay or Significant CEQA-Related Costs.

22.3.1 Severability. Except as to the requirements set forth in Sections 5.4.1(B) and 5.4.2(B), if any other provision of this Development Agreement shall be adjudged to be invalid, void or unenforceable, such provision shall in no way affect, impair or invalidate any other provision hereof, unless such judgment affects a material part of this Development Agreement, and the Parties hereby agree that they would have entered into the remaining portions of this Development Agreement not adjudged to be invalid, void or illegal. In the event that all or any portion of this Development Agreement is found to be unenforceable, this Development Agreement or that portion which is found to be unenforceable shall be deemed to be a statement of intention by the Parties; and, subject to Section 17 and Subsection 22.3.2, below, the Parties further agree that in such event they shall take all steps necessary to comply with such public hearings and/or notice requirements as may be necessary in order to make valid this Development Agreement or that portion which is found to be unenforceable.

22.3.2 Court Finding Materially Impairing Consideration. Notwithstanding any other provisions of this Development Agreement, in the event (i) any material provision of this Development Agreement, any of the Development Approvals approved prior to the Development Agreement Date, and/or any of the Existing Land Use Regulations are found by a court to be unenforceable, void, or voidable, (ii) such court finding materially impairs the bargained-for consideration to be received by either Party under this Development Agreement, including, but not limited to, by preventing Owner from Developing the 2026 Project in accordance with the Existing Land Use Regulations or by voiding or limiting the requirements of Sections 5.4.1(B) or

5.4.2(B) or by reducing or eliminating any of the public benefits, fees, public improvements or services, or dedications to be received by City pursuant to this Development Agreement, and (iii) any provision found to be unenforceable, void or voidable cannot be made valid by the undertaking of additional environmental review pursuant to CEQA, the holding of additional public hearings, and/or compliance with additional notice requirements, then the Parties agree that they will meet and confer in good faith to attempt to agree, each in its sole and absolute discretion, to modifications and/or other corrective actions consistent with state law; provided,

50 however, that if the Parties are unable to agree to mutually acceptable modifications and/or corrective action within ninety (90) days of the court’s finding, then, upon the written request of either Party, Owner and City agree they shall take all steps necessary to mutually cancel this Development Agreement in accordance with the provisions of Section 17 hereof.

22.3.3 Cancellation for Protracted Third-Party Litigation or Significant CEQARelated Costs. Owner acknowledges that the pendency of any Third Party Challenge shall not give rise to an immediate right to seek cancellation of this Development Agreement. However, Owner shall have the right to initiate cancellation of this Development Agreement pursuant Section 17, and City shall take all necessary steps to mutually cancel this Development Agreement, if either of the following occur: (i) the period of Litigation Delay lasts longer than four (4) consecutive years; or (ii) Owner is required to provide additional mitigation, improvements, or services that have a cost to Owner equal to or in excess of Five Million Dollars ($5,000,000) as a result of additional environmental review pursuant to CEQA that is undertaken as a result of a successful Third Party Challenge.

22.4 Cumulative Remedies. Subject to express limitations on remedies elsewhere in this Development Agreement, including but not limited to Sections 5.4.3, 5.4.6, 18.8 and 19.3, either Party may institute legal action to cure, correct or remedy any Default, to enforce any covenant or agreement herein, or to enjoin any threatened or attempted violation, including suits for declaratory relief, specific performance, relief in the nature of mandamus and actions for damages. All of the remedies described above shall be cumulative and not exclusive of one another, and the exercise of anyone or more of the remedies shall not constitute a waiver or election with respect to any other available remedy.

22.5 Indemnification. Owner agrees to, and shall, to the fullest extent permitted by law, defend (with legal counsel approved or selected by City and at Owner’s sole cost and expense), indemnify and hold City and City’s elective and appointive councils, boards, commissions, officers, officials, agents, representatives and employees harmless from any liability for damages or claims for damage for personal injury, including death, and from claims for property damage which may arise from the construction activities of Owner or Owner’s contractors, subcontractors, agents, or employees which relate to the 2026 Project whether such activities be by Owner, or by any of Owner’s contractors, subcontractors, or by anyone or more persons directly or indirectly employed by, or acting as agent for Owner or any of Owner’s contractors or subcontractors. Additionally, Owner agrees to, and shall, to the fullest extent permitted by law, defend (with legal counsel approved or selected by City and at Owner’s sole cost and expense), indemnify, and hold harmless City and City’s elective and appointive councils, boards, commissions, officers, officials, agents, representatives and employees from and against each and every claim, action, proceeding, cost, fee, legal cost, damage, award or liability of any nature whatsoever arising out of City’s approval of or its performance under this Development Agreement and/or the Development Approvals, Subsequent Development Approvals and/or Major Project Modifications. City may in its discretion participate in the defense of any such legal action. The provisions of this Subsection shall not be binding on Owner to the extent the liability arises out of the gross negligence or willful misconduct of City, or its elective and appointive councils, boards, commissions, officers, officials, agents, representatives or employees. Owner’s indemnity obligations set forth in this Development Agreement shall survive termination of this Development Agreement.

51 22.6 Cooperation in the Event of Legal Challenge. In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Development Agreement and/or the Development Approvals, Subsequent Development Approvals, or Major Project Modifications, the Parties hereby agree to cooperate fully with each other in defending said action and the validity of each provision of this Development Agreement; however, it is expressly understood and agreed to by Owner that Owner shall be solely liable for all legal expenses and costs incurred in defending any such action. The Parties mutually agree that staff time spent by City employees in relation to any such action does not constitute legal expenses or costs payable by Owner. City shall have the right to approve or select legal counsel to defend against any such legal action. Owner shall pay any attorneys’ fees awarded against City or Owner, or both, resulting from any such legal action.

Owner shall be entitled to any award of attorneys’ fees arising out of any such legal action.

22.7 Public Agency Coordination. City and Owner shall cooperate and use reasonable efforts in coordinating the implementation of the Development Approvals, Subsequent Development Approvals, and/or Major Project Modifications with other public agencies, if any, having jurisdiction over the Property or the 2026 Project.

22.8 Initiative Measures. Both City and Owner intend that this Development Agreement is a legally binding contract which will supersede any initiative, measure, moratorium, referendum, statute, ordinance or other limitation (whether relating to the rate, timing or sequencing of the Development or construction of all or any part of the 2026 Project and whether enacted by initiative or otherwise) affecting parcel or subdivision maps (whether tentative, vesting tentative or final), building permits, occupancy certificates or other entitlements to use approved, issued or granted within City, or portions of City, and which Agreement shall apply to the 2026 Project to the extent such initiative, measure, moratorium, referendum, statute, ordinance or other limitation is inconsistent or in conflict with this Development Agreement. Should an initiative, measure, moratorium, referendum, statute, ordinance, or other limitation be enacted by the citizens of City which would preclude construction of all or any part of the 2026 Project, and to the extent such initiative, measure, moratorium, referendum, statute, ordinance or other limitation be determined by a court of competent jurisdiction to invalidate or prevail over all or any part of this Development Agreement, Owner shall have no recourse against City pursuant to the Development Agreement, but shall retain all other rights, claims and causes of action under this Development Agreement not so invalidated and any and all other rights, claims and causes of action at law or in equity which Owner may have independent of this Development Agreement with respect to the 2026 Project. The foregoing shall not be deemed to limit Owner’s right to appeal any such determination that such initiative, measure, referendum, statute, ordinance or other limitation invalidates or prevails over all or any part of this Development Agreement. City agrees to cooperate with Owner in all reasonable manners in order to keep this Development Agreement in full force and effect, provided Owner shall reimburse City for its out-of-pocket expenses incurred directly in connection with such cooperation and City shall not be obligated to institute a lawsuit or other court proceedings in this connection.

22.9 Attorneys’ Fees. In the event of any dispute between the Parties involving the covenants or conditions contained in this Development Agreement, the prevailing party shall be entitled to recover reasonable expenses, attorneys’ fees and costs.

52 22.10 No Waiver. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Development Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either Party of any of the covenants or conditions to be performed by the other Party shall not be construed as a waiver of any succeeding breach of nonperformance of the same or other covenants and conditions hereof.

22.11 Authority to Execute. The person executing this Development Agreement on behalf of Owner represents and warrants that he/she has the authority to execute this Development Agreement on behalf of his/her partnership and represents and warrants that he/she has the authority to bind Owner to the performance of Owner’s obligations hereunder.

22.12 Notice.

22.12.1 To Owner. Any notice required or permitted to be given by City to Owner under or pursuant to this Development Agreement shall be deemed sufficiently given if in writing and delivered personally to an officer of Owner or mailed with postage thereon fully prepaid, registered or certified mail, return receipt requested, addressed; to Owner as follows:

MGP Fund X Laguna Hills, LLC
4365 Executive Drive, Suite 1400
San Diego, California 92121
Attn: Scott McPherson, Managing Partner and Jamas Gwilliam, Managing Director
With copies to: Perkins Coie LLP
505 Howard Street Suite 1000
San Francisco, CA 94105
Attn: Matthew Gray
or such changed address as Owner shall designate in writing to City.

22.12.2 To City. Any notice required or permitted to be given to City under or pursuant to this Development Agreement shall be made and given in writing, if by mail addressed to:

City Manager
City of Laguna Hills
24035 El Toro Road
Laguna Hills, California 92653
With copies to: City Attorney
Colin Burns
Harper & Burns LLP
453 S. Glassell Street
Orange, California 92866

53 or such changed address as City shall designate in writing to Owner. Alternatively, notices to City may also be personally delivered to the City Clerk, at the Laguna Hills City Hall, 24035 El Toro Road, Laguna Hills, California 92653, together with copies marked for the City Manager and the City Attorney or, if so addressed and mailed, with postage thereon fully prepaid, registered or certified mail, return receipt requested, to the City Council in care of the City Clerk at the above address with copies likewise so mailed to the City Manager and the City Attorney, respectively and also in care of the City Clerk at the same address. The provisions of this Section shall be deemed permissive only and shall not detract from the validity of any notice given in a manner which would be legally effective in the absence of this Section.

22.13 Captions. The captions of the paragraphs and subparagraphs of this Development Agreement are for convenience and reference only and shall in no way define, explain, modify, construe, limit, amplify or aid in the interpretation, construction or meaning of any of the provisions of this Development Agreement.

22.14 Consent. Except as otherwise provided herein, any consent required by the Parties in carrying out the terms of this Development Agreement shall not unreasonably be withheld.

22.15 Further Actions and Instruments. Each of the Parties shall cooperate with and reasonably provide to the other to the extent contemplated hereunder in the performance of all obligations under this Development Agreement and the satisfaction of the conditions of this Development Agreement. Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Development Agreement to carry out the intent and to fulfill the provisions of this Development Agreement or to evidence or consummate the transactions contemplated by this Development Agreement.

22.16 Subsequent Amendment to Authorizing Statute. This Development Agreement has been entered into in reliance upon the provisions of the Development Agreement Statute in effect as of the Development Agreement Date. Accordingly, to the extent that subsequent amendments to the Development Agreement Statute would affect the provisions of this Development Agreement, such amendments shall not be applicable to this Development Agreement unless necessary for this Development Agreement to be enforceable or unless this Development Agreement is modified pursuant to the provisions set forth in this Development Agreement and California Government Code Section 65868 as in effect on the Development Agreement Date.

22.17 Governing Law. This Development Agreement, including, without limitation, its existence, validity, construction and operation, and the rights of each of the Parties shall be determined in accordance with the laws of the State of California.

22.18 Effect on Title. Owner and City agree that this Development Agreement shall not continue as an encumbrance against any portion of the Property as to which this Development Agreement has terminated.

54 22.19 Mortgagee Protection. Entering into or a breach of this Development Agreement shall not defeat, render invalid, diminish, or impair the lien of Mortgagees having a mortgage on any portion of the Property made in good faith and for value, unless otherwise required by law.

No Mortgagee shall have an obligation or duty under this Development Agreement to perform Owner’s obligations, or to guarantee such performance prior to any foreclosure or deed in lieu thereof.

22.20 Notice of Default to Mortgagee, Right of Mortgagee to Cure. If the City Clerk timely receives notice from a Mortgagee requesting a copy of any Notice of Default given to Owner under the terms of this Development Agreement, City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the Notice of Default to Owner. The Mortgagee shall have the right, but not the obligation, for a period up to sixty (60) days after the receipt of such notice from City to cure or remedy, or to commence to cure or remedy the Default unless a further extension of time to cure is granted in writing by City. If the Default is of a nature which can only be remedied or cured by such Mortgagee upon obtaining possession, such Mortgagee shall seek to obtain possession with diligence and continually through foreclosure, a receiver or otherwise, and shall thereafter remedy or cure the Default or noncompliance within thirty (30) days after obtaining possession. If any such Default or noncompliance cannot, with diligence, be remedied or cured within such thirty (30) day period, then such Mortgagee shall have such additional time as may be reasonably necessary to remedy or cure such Default or non-compliance if such Mortgagee commences cure during such thirty (30) day period, and thereafter diligently pursues and completes such cure.

22.21 Bankruptcy. Notwithstanding the foregoing provisions of Section 22.20 of this Development Agreement, if any Mortgagee is prohibited from commencing or pursuing and prosecuting foreclosure or other appropriate proceedings in the nature thereof by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving City, the times specified in this Section for commencing or prosecuting foreclosure or other proceedings shall be extended for the period of the prohibition.

22.22 Disaffirmance.

22.22.1 New Development Agreement upon Most Senior Mortgagee’s Request. City agrees that in the event of termination of this Development Agreement by reason of any Default by City, or by reason of the disaffirmance hereof by a receiver, liquidator or trustee for Owner or its property, City, if requested by any Mortgagee, shall enter into a new Development Agreement for the 2026 Project with the most senior Mortgagee requesting such new agreement, for the remainder of the Term, effective as of the date of such termination, upon the terms, provisions, covenants and agreements as herein contained to the extent and subject to the law then in effect, and subject to the rights, if any, of any parties then in possession of any part of the Property, provided:
(a) The Mortgagee shall make written request upon City for the new Development Agreement for the 2026 Project within thirty (30) days after the date of termination;

55 (b) The Mortgagee shall pay to City at the time of the execution and delivery of the new Development Agreement for the 2026 Project expenses, including reasonable attorneys’ fees, to which City shall have been subjected by reason of Owner’s Default; and (c) The Mortgagee shall perform and observe all covenants herein contained on Owner’s part to be performed, and shall further remedy any other conditions which Owner under the terminated agreement was obligated to perform under its terms, to the extent the same are curable or may be performed by the Mortgagee.

22.22.2 New Development Agreement Not Required. Nothing herein contained shall require any Mortgagee to enter into a new Development Agreement pursuant to Subsection 22.22.1 of this Development Agreement, nor to cure any Default of Owner referred to above.

22.23 No Third Party Beneficiaries. This Development Agreement and all provisions hereof is made and entered into for the sole protection and benefit of City, Owner and their successors and assigns. No other person shall have right of action based upon any provision in this Development Agreement.

22.24 Jurisdiction and Venue. Any action at law or in equity arising under this Development Agreement or brought by a Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Development Agreement shall be filed and tried in the Superior Court of the County of Orange, State of California, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.

22.25 Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the 2026 Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Development Agreement. No partnership, joint venture or other association of any kind is formed by this Development Agreement. The only relationship between City and Owner is that of a government entity regulating the development of private property and the owner of such private property. The Parties mutually acknowledge and agree that this Development Agreement does not confer upon or entitle Owner to any subsidy or reduction in fees from City pertaining to Owner’s Development of the 2026 Project or the Parties’ rights and obligations hereunder.

22.26 Restrictions. Owner shall place in any agreements to sell or convey any interest in the Property or any portion thereof, provisions making the terms of this Development Agreement binding on any successors in interest of Owner and express provision for Owner or City, acting separately or jointly, to enforce the provisions of this Development Agreement and to recover attorneys’ fees and costs for such enforcement.

22.27 Recitals. The recitals in this Development Agreement constitute part of this Development Agreement and each Party shall be entitled to rely on the truth and accuracy of each recital as an inducement to enter into this Development Agreement.

56 22.28 Recording. The City Clerk shall cause a copy of this Development Agreement to be executed by City and recorded in the Official Records of Orange County no later than ten (10) days after the Development Agreement Date.

22.29 Entire Agreement. This Development Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Development Agreement, and this Development Agreement supersedes all previous negotiations, discussions and agreements between the Parties, and no parol evidence of any prior or other agreement shall be permitted to contradict or vary the terms hereof.

22.30 Successors and Assigns. The burdens of the Development Agreement shall be binding upon, and the benefits of the Development Agreement inure to all successors in interest and assigns of the Parties to the Development Agreement.

22.31 Exhibits. All exhibits, including attachments thereto, are by this reference incorporated herein in their entirety, and shall be enforceable by the Parties, except as otherwise expressly provided herein.

22.32 Waiver of Right to Protest. Execution of this Development Agreement is made by Owner without protest. Owner knowingly and willingly waives any rights it may have under Government Code Section 66020 or any other provision of law to protest the imposition of any fees, dedications, reservations, or other exactions which are specifically imposed on the 2026 Project by this Development Agreement.
[Signatures appear on the following page]

57 IN WITNESS WHEREOF, City and Owner have executed this Development Agreement as of the date and year first above written.
"CITY"
CITY OF LAGUNA HILLS, a California
municipal corporation
By:

BOB WINGENROTH,
City Manager
"OWNER"
MGP FUND X LAGUNA HILLS, LLC, a
Delaware limited liability company
By:

Name:_________________________
Title:__________________________
By:

Name:_________________________
Title:__________________________
ATTEST:
,
City Clerk
APPROVED AS TO FORM:

STRADLING YOCCA CARLSON &
RAUTH,
Thomas P. Clark Jr.

All signatures to be acknowledged by a Public Notary

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

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ______________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
________________________________________
Notary Public
(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.

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ______________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
________________________________________
Notary Public
(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.

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ______________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
________________________________________
Notary Public
(seal)

Exhibit A-1

EXHIBIT A

PROPERTY DESCRIPTION AND DEPICTION
Real property in the City of Laguna Hills, County of Orange, State of California, described as follows:

PARCEL ONE:

LOTS 1, 2 AND A OF TRACT NO. 19265, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1009, PAGES 5 THROUGH 19 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

TOGETHER WITH LOT 4 OF TRACT NO. 18115, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 978, PAGES 1 THROUGH 25 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

TOGETHER WITH LOT 6 OF TRACT NO. 18115, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 978, PAGES 1 THROUGH 25 OF

MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, EXCEPTING THEREFROM ANY PORTION LYING WITHIN TRACT NO. 19265 AS PER MAP FILED IN BOOK 1009, PAGES 5 THROUGH 19 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

TOGETHER WITH PARCELS “B”, “C” AND “D” AS DESCRIBED IN EXHIBIT “C” ATTACHED TO LOT LINE ADJUSTMENT LLA 0003-2022, RECORDED FEBRUARY 23, 2023 AS INSTRUMENT NO. 2023000041002 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA.

TOGETHER WITH PARCELS “B AND PARCEL “C” AS DESCRIBED IN EXHIBIT “C” ATTACHED TO LOT LINE ADJUSTMENT LLA 0004-2022, RECORDED APRIL 24, 2023 AS INSTRUMENT NO. 2023000092625

OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA.

TOGETHER WITH PARCEL “A” AS DESCRIBED IN EXHIBIT “C” ATTACHED TO LOT LINE ADJUSTMENT LLA 0004-2022, RECORDED APRIL 24, 2023 AS INSTRUMENT NO. 2023000092625 OF

OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, IN THE CITY OF LAGUNA HILLS, COUNTY

OF ORANGE, STATE OF CALIFORNIA, EXCEPTING THEREFROM ANY PORTION LYING WITHIN TRACT NO. 19265 AS PER MAP FILED IN BOOK 1009, PAGES 5 THROUGH 19 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APNS: 621-221-04, 621-221-20, 621-221-22, 621-221-23, 621-221-26, 621-221-27, 621-221-28, 621- 221-29, 621-221-30, 621-051-53, 621-051-54 AND 621-051-55 PARCEL TWO:

THAT PORTION OF LOT 2 OF TRACT NO. 5061, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 183, PAGES 4 THROUGH 8 OF

MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THAT CERTAIN COURSE DESCRIBED AS PARCEL 1 OF THE DEED TO THE STATE OF CALIFORNIA, RECORDED DECEMBER 30, 1959 IN BOOK 5035, PAGE 383 OF OFFICIAL RECORDS, AS HAVING A BEARING AND DISTANCES OF "SOUTH 70° 41' 56" EAST, 504.42 FEET"

Exhibit A-2
DISTANT ALONG SAID CERTAIN COURSE, SOUTH 69° 58' 43" EAST, 326.23 FEET FROM THE NORTHWESTERLY TERMINUS THEREOF; SAID POINT BEING ALSO THE BEGINNING OF A TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 565.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE, THROUGH AN ANGLE OF 15° 04' 30", AN ARC DISTANCE OF148.66 FEET; THENCE SOUTH 45° 28' 31" EAST, 925.52 FEET TO A TANGENT CURVE, CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 5175.00 FEET; SAID LAST MENTIONED CURVE BEING ALSO CONCENTRIC TO AND DISTANT SOUTHWESTERLY, 5.00 FEET FROM THAT CERTAIN CURVE IN THE SOUTHWESTERLY BOUNDARY OF SAID PARCEL 1 DESCRIBED IN SAID DEED AS "HAVING A RADIUS OF 5170.00 FEET"; THENCE SOUTHEASTERLY ALONG SAID CONCENTRIC CURVE, THROUGH AN ANGLE OF 5° 25' 19", AN ARC DISTANCE OF 489.71 FEET TO THE SOUTHEASTERLY LINE OF SAID LOT 2; THENCE ALONG SAID SOUTHEASTERLY LINE, NORTH 40° 23' 54" EAST, 5.00 FEET TO SAID SOUTHWESTERLY BOUNDARY OF SAID PARCEL 1; THENCE IN A

GENERAL NORTHWESTERLY DIRECTION ALONG SAID SOUTHWESTERLY BOUNDARY TO THE POINT OF BEGINNING.

PARCEL THREE:

THAT PORTION OF LOT 2 OF TRACT NO. 5061, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 183, PAGES 4 THROUGH 8 OF

MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, LYING WITH A STRIP OF LAND 40.00 FEET IN WIDTH, THE NORTHEASTERLY LINE OF WHICH IS DESCRIBED AS FOLLOWS:

BEGINNING AT THE CENTER LINE INTERSECTION OF EL TORO ROAD WITH AVENIDA DE LA CARLOTA AS SHOWN ON A MAP ATTACHED TO A DEED RECORDED JUNE 17, 1970 IN BOOK 9320, PAGE 71 OF OFFICIAL RECORDS OF SAID COUNTY (FOR THE PURPOSE OF THIS DESCRIPTION THE BEARING OF NORTH 46° 42' 13" EAST WAS USED FOR THE CENTER LINE OF EL TORO ROAD); THENCE SOUTH 43° 17' 47" EAST, 96.54 FEET TO A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 500.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 26° 40' 56" AN ARC DISTANCE OF 232.85 FEET; THENCE TANGENT TO SAID CURVE SOUTH 69° 58' 43" EAST, 276.48 FEET TO A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 600.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 24° 30'12" AN ARC DISTANCE OF 256.60 FEET; THENCE TANGENT TO SAID CURVE SOUTH 45° 28' 31" EAST,877.90 FEET TO THE TANGENT INTERSECTION WITH A CURVE CONCAVE NORTHEASTERLY AND HAVING 5153.00 FEET, SAID CURVE BEING CONCENTRIC WITH AND 17.00 FEET NORTHEASTERLY FROM A CURVE IN THE NORTHEASTERLY LINE OF SAID LOT 2; THENCE SOUTHEASTERLY ALONG SAID CONCENTRIC CURVE THROUGH A CENTRAL ANGLE OF 5° 25' 39" AN ARC DISTANCE OF 488.13 FEET TO THE NORTHEASTERLY PROLONGATION OF THE SOUTHEASTERLY LINE OF SAID LOT 2.

EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN THE LAND DESCRIBED IN PARCEL 5 OF A DEED RECORDED SEPTEMBER 4, 1970 IN BOOK 9397, PAGE 172 OF OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 10 AS SHOWN ON STATE HIGHWAY MAP BOOK 7, PAGES 14 THROUGH 29, RECORDS OF SAID COUNTY.

PARCEL FOUR:

A STRIP OF LAND 80.00 FEET IN WIDTH THE CENTER LINE OF WHICH IS DESCRIBED AS FOLLOWS:

BEGINNING AT THE CENTER LINE INTERSECTION OF EL TORO ROAD WITH AVENIDA DE LA CARLOTA AS SHOWN ON A MAP ATTACHED TO A DEED RECORDED JUNE 17, 1970 IN BOOK 9320, PAGE 71 OF OFFICIAL RECORDS, FOR THE PURPOSE OF THIS DESCRIPTION THE BEARING OF NORTH 46° 42' 13" EAST, WAS USED FOR THE CENTER LINE OF EL TORO ROAD; THENCE SOUTH 43° 17' 47" EAST, 96.54 FEET TO A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 500.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 26° 40' 56" AN ARC DISTANCE OF 232.85 FEET; THENCE TANGENT TO SAID CURVE

Exhibit A-3
SOUTH 69° 58' 43" EAST, 276.48 FEET TO A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 600.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 24° 30' 12" AN ARC DISTANCE OF 256.60 FEET.

PARCEL FIVE:

THAT PORTION OF PARCEL 1, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 74, PAGES 4 THROUGH 10 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 1; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL SOUTH 46° 42' 39" WEST, 3.08 FEET; THENCE LEAVING SAID SOUTHEASTERLY LINE NORTH 72° 27' 41" WEST, 157.25 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY HAVING A RADIUS OF 606.50 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 23° 48' 14" AN ARC DISTANCE OF 251.97 FEET; THENCE TANGENT TO SAID CURVE NORTH 48° 39' 27" W., 34.67 FEET; THENCE SOUTH 89° 01' 31" WEST, 31.69 FEET TO THE NORTHEASTERLY PROLONGATION OF THAT

CERTAIN COURSE IN THE NORTHWESTERLY LINE OF SAID PARCEL, SHOWN ON SAID MAP AS HAVING A BEARING OF NORTH 46° 42' 52" EAST AND A LENGTH OF 38.00 FEET; THENCE SOUTH 46° 42' 29" WEST, 41.45 FEET ALONG SAID PROLONGATION TO THE NORTHEASTERLY TERMINUS OF SAID CERTAIN COURSE; THENCE ALONG THE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY LINES OF SAID PARCEL, THE FOLLOWING COURSES: (1) NORTH 37° 37' 04" EAST,

50.64 FEET, (2) NORTH 46° 42' 39" EAST, 10.84 FEET, (3) SOUTH 82° 19' 49" EAST, 42.56 FEET, (4) SOUTH 43° 18' 10" EAST, 11.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 540.00 FEET, (5) SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 26° 40' 46" AN ARC DISTANCE OF 251.45 FEET AND (6) SOUTH 69° 58' 56" EAST, 171.23 FEET TO THE POINT OF BEGINNING.

PARCEL SIX:

THAT PORTION OF PARCEL 3, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 74, PAGES 4 THROUGH 10 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHERLY CORNER OF SAID PARCEL 3; THENCE ALONG THE NORTHEASTERLY LINE OF SAID PARCEL SOUTH 69° 58' 56" EAST, 52.28 FEET; THENCE LEAVING SAID NORTHEASTERLY LINE SOUTH 20° 01' 04" WEST, 25.88 FEET; THENCE NORTH 69° 58' 56" WEST,

19.50 FEET; THENCE NORTH 27° 55' 06" WEST, 35.05 FEET; THENCE NORTH 72° 27' 41" WEST, 8.15 FEET TO THE NORTHWESTERLY LINE OF SAID PARCEL; THENCE ALONG SAID NORTHWESTERLY LINE NORTH 46° 42' 39" EAST, 3.08 FEET TO THE POINT OF BEGINNING.

PARCEL EIGHT:

THE NORTHEASTERLY 6.00 FEET OF PARCEL NOS. 3, 4 AND 5, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 74, PAGES 4 THROUGH 10 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN PARCEL D OF LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF OFFICIAL RECORDS.

APN: 621-051-50
PARCEL NINE:

THE NORTHEASTERLY 6.00 FEET OF PARCEL NOS. 3 AND 5, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 74, PAGES 4 THROUGH

Exhibit A-4
10 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM THAT PORTION LYING NORTHWESTERLY OF THE SOUTHEASTERLY LINE OF PARCEL NO. 134, AS DESCRIBED IN GRANT DEED RECORDED JULY 22, 1997 AS INSTRUMENT NO. 19970346524 OF OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM THAT PORTION LYING WITHIN PARCEL D OF LOT LINE ADJUSTMENT NO. LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF OFFICIAL RECORDS.

PARCEL TEN:

THAT PORTION OF PARCEL D AS DESCRIBED IN EXHIBIT C ATTACHED TO LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF OFFICIAL

RECORDS, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST EASTERLY CORNER OF SAID PARCEL D; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL D, SOUTH 40° 23' 58" WEST 6.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE SOUTH 40° 23' 58" WEST 8.83 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 4981.50 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 38° 55' 32" WEST; THENCE LEAVING SAID SOUTHEASTERLY LINE NORTHWESTERLY 200.60 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 02° 18' 26"; THENCE NON-TANGENT TO SAID CURVE NORTH 88° 55' 33" WEST 19.82 FEET; THENCE NORTH 60° 48' 22" WEST 45.94 FEET; THENCE NORTH 44° 59' 48" WEST 6.00 FEET; THENCE NORTH 01° 23' 07" WEST 30.89 FEET TO A NONTANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 4981.50 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 42° 14' 00" WEST; THENCE NORTHWESTERLY 7.03 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 00° 04' 51" TO A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 4981.00 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 43° 32' 24" WEST; THENCE NORTHWESTERLY 23.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 00° 16' 08" TO A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 4981.00 FEET; A RADIAL LINE TO SAID CURVE BEARS SOUTH 42° 34' 59" WEST; THENCE NORTHWESTERLY 172.15 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 01° 58' 49"; THENCE NON-TANGENT TO SAID CURVE NORTH 82° 16' 47" WEST

18.60 FEET; THENCE NORTH 52° 39' 15" WEST 44.58 FEET; THENCE NORTH 44° 58' 45" WEST 8.00 FEET; THENCE NORTH 00° 13' 48" EAST 24.32 FEET; THENCE NORTH 44° 31' 52" WEST 158.42 FEET TO THE SOUTHEASTERLY LINE OF PARCEL A OF SAID LOT LINE ADJUSTMENT; THENCE ALONG SAID SOUTHEASTERLY LINE NORTH 45° 00' 01" EAST 5.50 FEET TO THE SOUTHWESTERLY LINE OF

THAT LAND DESCRIBED IN THE GRANT DEED TO THE CITY OF LAGUNA HILLS RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 2017000349638, OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTH 45° 28' 30" EAST 240.55 FEET ALONG SAID SOUTHWESTERLY LINE TO A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 5199.00 FEET; THENCE SOUTHEASTERLY 491.38 FEET ALONG SAID CURVE AND SAID SOUTHWESTERLY LINE THROUGH A CENTRAL ANGLE OF 05° 24' 55" TO THE TRUE POINT OF BEGINNING.

APN: 621-051-48

Exhibit A-5
PARCEL ELEVEN:

THAT PORTION OF PARCEL D AS DESCRIBED IN EXHIBIT C ATTACHED TO LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF OFFICIAL

RECORDS, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST NORTHERLY CORNER OF PARCEL A OF SAID LOT LINE ADJUSTMENT; THENCE ALONG THE NORTHWESTERLY LINE SOUTH 45° 00' 01" WEST 6.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID NORTHWESTERLY LINE SOUTH 45° 00' 01" WEST 21.60 FEET; THENCE LEAVING SAID NORTHWESTERLY LINE NORTH 43° 48' 04" WEST 38.97 FEET; THENCE NORTH 45° 00' 21" WEST 0.04 FEET TO THE NORTHWESTERLY LINE OF SAID PARCEL D; THENCE ALONG SAID NORTHWESTERLY LINE THE FOLLOWING TWO COURSES:
1) NORTH 45° 00' 01" EAST 4.13 FEET TO A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 30.00 FEET;
2) NORTHEASTERLY ALONG SAID CURVE 17.22 FEET THROUGH A CENTRAL ANGLE OF 32° 53' 30"

TO THE SOUTHWESTERLY LINE OF THAT LAND DESCRIBED IN THE GRANT DEED TO THE CITY OF LAGUNA HILLS RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 2017000349638 OF OFFICIAL RECORDS; THENCE ALONG SAID SOUTHWESTERLY LINE SOUTH 45° 28' 30" EAST 43.81 FEET TO THE TRUE POINT OF BEGINNING.

APN: 621-051-47
PARCEL TWELVE:

THAT PORTION OF PARCEL A AS DESCRIBED IN EXHIBIT C ATTACHED TO LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF

OFFICIAL RECORDS, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST NORTHERLY CORNER OF SAID PARCEL A; THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL A SOUTH 45° 00' 01" WEST 6.00 FEET TO THE

SOUTHWESTERLY LINE OF THAT LAND DESCRIBED IN THE GRANT DEED TO THE CITY OF LAGUNA HILLS RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 2017000349639 OF OFFICIAL RECORDS, AND THE TRUE POINT OF BEGINNING; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LAND SOUTH 45° 28' 30" EAST 130.49 FEET TO THE SOUTHEASTERLY LINE OF SAID PARCEL A; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL A SOUTH 45° 00' 01" WEST 5.50 FEET; THENCE NORTH 44° 31' 52" WEST 103.43 FEET; THENCE NORTH 89° 46' 06" WEST 25.60 FEET; THENCE NORTH 45° 00' 21" WEST 8.85 FEET; THENCE NORTH 43° 48' 04" WEST 0.04 FEET TO THE NORTHWESTERLY LINE OF SAID PARCEL A; THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL A NORTH 45° 00' 01" EAST 21.60 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL THIRTEEN:

THAT PORTION OF PARCEL C AS DESCRIBED IN EXHIBIT C ATTACHED TO LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF

OFFICIAL RECORDS, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST EASTERLY CORNER OF SAID PARCEL C, BEING THE NORTHERLY TERMINUS OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 30.00 FEET, A RADIAL LINE TO SAID CORNER BEARS NORTH 87° 07' 39" EAST; THENCE SOUTHERLY ALONG SAID CURVE AND THE SOUTHEASTERLY LINE OF SAID PARCEL C 7.84 FEET THROUGH A CENTRAL ANGLE OF 14° 58'

Exhibit A-6
52" TO THE SOUTHWESTERLY LINE OF THAT LAND DESCRIBED IN THE GRANT DEED TO THE CITY OF LAGUNA HILLS RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 2017000349639 OF OFFICIAL RECORDS AND THE TRUE POINT OF BEGINNING; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LAND NORTH 45° 28' 30" WEST 159.54 FEET; THENCE SOUTH 44° 31' 52" EAST 137.53 FEET; THENCE SOUTH 00° 13' 54" WEST 25.32 FEET; THENCE SOUTH 45° 00' 21" EAST 8.98 FEET TO THE SOUTHEASTERLY LINE OF SAID PARCEL C; THENCE ALONG THE SOUTHEASTERLY AND EASTERLY LINES OF SAID PARCEL C THE FOLLOWING TO COURSES:
1) NORTH 45° 00' 01" EAST 4.13 FEET TO A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 30.00 FEET;
2) NORTHEASTERLY 17.22 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 32° 53' 30" FEET TO THE TRUE POINT OF BEGINNING: 621-221-15
PARCEL FOURTEEN:

THAT PORTION OF PARCEL C AS DESCRIBED IN EXHIBIT C ATTACHED TO LOT LINE ADJUSTMENT LLA 3-16-3493 RECORDED AUGUST 4, 2016 AS INSTRUMENT NO. 2016000360834 OF

OFFICIAL RECORDS, IN THE CITY OF LAGUNA HILLS, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST EASTERLY CORNER OF SAID PARCEL C, BEING THE NORTHERLY TERMINUS OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 30.00 FEET, A RADIAL LINE TO SAID CORNER BEARS NORTH 87° 07' 39" EAST; THENCE SOUTHERLY ALONG SAID CURVE AND THE SOUTHEASTERLY LINE OF SAID PARCEL C 7.84 FEET THROUGH A CENTRAL ANGLE OF 14° 58' 52" TO THE SOUTHWESTERLY LINE OF THAT LAND DESCRIBED IN THE GRANT DEED TO THE CITY OF LAGUNA HILLS RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 2017000349639 OF OFFICIAL

RECORDS, THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LAND THE FOLLOWING TWO COURSES:
1) NORTH 45° 28' 30" WEST 159.54 FEET;
2) NORTH 45° 28' 30" WEST 79.24 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID SOUTHWESTERLY LINE NORTH 45° 28' 30" WEST 25.85 FEET; THENCE SOUTH 44° 31' 08" WEST 16.52 FEET; THENCE SOUTH 45° 00' 21" EAST 8.85 FEET; THENCE SOUTH 89° 46' 06" EAST 23.76 TO THE TRUE POINT OF BEGINNING.

APN: 621-221-17

Exhibit B-1

EXHIBIT B

DEVELOPMENT FEES
Public Park In-lieu Fees
Amount of Fee. Owner hereby agrees that Chapter 8-06 of the Laguna Hills Municipal Code pertaining to park dedication and in-lieu fee requirements shall apply to the 2026 Project, regardless of whether Owner proposes a subdivision map for each Residential Building.

Accordingly, as part of the Development Fees applicable to the 2026 Project pursuant to this Development Agreement, Owner hereby agrees to, and shall, pay City a public park in-lieu fee per Unit constructed as part of the 2026 Project calculated on a per-unit basis consistent with City Resolution No. 2018-11-13-3.

Nonrefundable Guaranteed Fees. As material consideration for City’s entering into this Development Agreement, the Owner expressly agrees that, except as provided in Subsection

10.5.8 and Section 17.4 of this Development Agreement, notwithstanding any provision of Chapters 8-06 or 8-07 of the Laguna Hills Municipal Code, the Quimby Act, or other provisions of law, Twenty Million Dollars ($20,000,000), which amount the Parties agree represents an amount equal to the Public Park In-lieu Fees attributable to the first one thousand one hundred sixty two (1,162) Units anticipated to be Developed by Owner, shall be nonrefundable, and must be paid to City even if no or less than one thousand one hundred sixty two (1,162) Units are actually constructed. Owner agrees to pay these nonrefundable fees at the times set forth in Section 10.3.3 and Exhibits B and D of this Development Agreement. To the extent any portion of said fees are paid prior to the issuance of a vertical building permit for the building containing any Unit to which the fees apply pursuant to Subsections 10.3.3 (A)-(C) of this Development Agreement, such portion shall constitute Community Benefit Fees when paid, subject to Section

10.5.4, but shall be credited and applied to reduce the amount of the Public Park In-lieu Fee due at the time of issuance of a vertical building permit for the building containing said Unit, provided a vertical building permit is issued for the building containing the Unit during the Term of this Development Agreement and such building permit is not revoked and does not expire.

No portion of the nonrefundable, guaranteed fees that are paid or owed pursuant to Section 10.3 of the Development Agreement shall be credited or applied to any Units on the Property for which a vertical building permit is issued after the expiration or termination of this Development Agreement. Said payments shall be subject to Section 10.5.4 of this Development Agreement, and Owner expressly agrees that these payments shall be nonrefundable, and that the City may retain and expend that portion, if any, of such nonrefundable fees that are paid by Owner to City, which are attributable to Units which are not actually constructed, or which City would otherwise be required to refund to Owner or other record owners of the Property pursuant to Chapters 8-06 or 8-07 of the Laguna Hills Municipal Code, the Quimby Act, or any other provision of law. Notwithstanding any other provision of this Development Agreement, to the extent, and for the period, necessary to implement the provisions hereof, Section 10.3.2 of the Development Agreement shall survive termination of this Development Agreement and remain enforceable and executory by the Parties notwithstanding termination of the remainder of this Development Agreement.

Exhibit B-2
Timing of Payment of Public Park In-lieu Fees and/or Community Benefit Fees that may be deemed Credits Against Public Park In-lieu Fees. Notwithstanding any provision of Chapters 8- 06 or 8-07 of the Laguna Hills Municipal Code, the Quimby Act, or other law, the Parties expressly agree that the Public Park In-lieu Fees attributable to the Units constructed, or anticipated to be constructed, as part of the 2026 Project, shall be paid in the amounts and at the times specified below:
(A) Owner previously paid City Two Million Dollars ($2,000,000) on or before the date that was ninety (90) days after the Original Development Agreement Date (Exhibit D, Milestone One). This payment is subject to Section 10.3.2. Owner is entitled to a credit equivalent to Two Million ($2,000,000) for prior payment of this fee against future Public Park In-Lieu Fees pursuant to Section 10.3.2.
(B) Owner previously paid City Two Million Dollars ($2,000,000) on or before the date that was four (4) years after the Original Development Agreement Date (Exhibit D, Milestone Three). This payment is subject to Section 10.3.2. Owner is entitled to a credit equivalent to Two Million ($2,000,000) for prior payment of this fee pursuant to Section 10.3.2. (C) Owner shall pay City the fee per dwelling unit required under City Resolution No. 2018-11-13-3 prior to issuance of a building permit for any Multifamily Building, Townhome, or Detached For-Sale Residential Unit. Because Owner prepaid a total of Four Million Dollars ($4,000,000) in fees as described in Subsections 10.3.3(A) and (B), Owner is entitled to an equivalent credit that may be applied during the term to fees otherwise required under this Subsection 10.3.3(C), and may assign its rights to a credit, in whole or in part, to authorized Assignees hereunder. If, by the date that is seven (7) years from the Original Development Agreement Date, fees paid under this Subsection 10.3.3(C) plus credits for fees paid per Subsections 10.3.3(A) and (B) total less than Ten Million Dollars ($10,000,000), Owner shall pay to City the difference between such fees previously paid plus credits and Ten Million Dollars ($10,000,000). (Exhibit D, Milestone Five). If, by the date that is fifteen (15) years from the Original Development Agreement Date, Owner’s total payments under this Subsection 10.3.3(C) plus credits for fees paid per Subsections 10.3.3(A) and (B) are less than Twenty Million Dollars ($20,000,000), Owner shall pay to City the difference between all payments made pursuant to this Section 10.3.3(C) and credits and Twenty Million Dollars ($20,000,000). (Exhibit D, Milestone Nine). These payments shall be subject to Subsection 10.3.2, above, and Owner’s obligation to make the payments by the date set forth herein shall not be subject to extension pursuant to the provisions of Section 22.1 (Excusable Delay) of this Development Agreement, except as otherwise expressly provided in Subsection 22.1.4 (Deferral of Payment of Public Park In-lieu Fees During Pendency of Litigation Delay).
(D) Owner shall pay Public Park In-Lieu Fees for all Units beyond the 1,162nd unit prior to the issuance of a vertical building permit for the Residential Building containing the Unit, consistent with City Resolution No. 2018-11-13-3; provided, however, that such fees are not guaranteed and are not Community Benefit Fees pursuant to this Development Agreement.

The Parties expressly acknowledge and agree that the Public Park In-lieu Fee payment obligations set forth in Section 10.3 of this Development Agreement may be assumed, in whole or in part, by a residential developer or other person or entity that purchases a portion of the

Exhibit B-3
Property on which a Residential Building is designated to be Developed, and agrees to assume such payment obligations in accordance with to the provisions of Section 21 of this Development Agreement (Assignment).

Public Art / Public Art In-Lieu Fees
Owner shall furnish Public Art in connection with the 2026 Project, and/or pay a Public Art Inlieu Fee, pursuant to the terms of the Development Agreement ("Owner’s Public Art Obligation").

Pursuant to the Specific Plan, the minimum aggregate value of Owner’s Public Art Obligation shall be one-half percent (0.5%) of the total aggregate construction costs of the 2026 Project, which shall be based on the valuation as determined by the City’s Community Development Director and indicated on the building applications submitted in order to obtain permits for construction of the 2026 Project. The Parties agree that (a) Six Hundred Fifty Thousand Dollars ($650,000) of Owner’s Public Art Obligation shall be satisfied by the Three Hundred Thousand Dollar ($300,000) credit and Three Hundred Fifty Thousand Dollar ($350,000) nonrefundable advance described in Section 10.4 of the Development Agreement, and (b) that portion of Owner’s Public Art Obligation that exceeds Six Hundred Fifty Thousand Dollars ($650,000) must be satisfied through the provision of actual Public Art on the Property, as approved by the City, and may not be satisfied through contribution to the City’s Public Art In-Lieu Fund. Allowable expenses, construction and material standards, and general location restrictions for all Public Art shall be as set forth in the "Public Art" provisions of Section V, at pages 39-40, of the Specific Plan. The Parties understand and agree that the City shall have the right to approve, in advance, the proposed type, size, art medium, location, and content of all Public Art. The procedures, timing, and requirements for preparation, submittal, review, and approval of plans and specifications for all Public Art shall be as specified in Exhibit H to the Development Agreement.

Credit. The City acknowledges and agrees that Owner paid a Public Art In-lieu Fee to the City the amount of Three Hundred Thousand Dollars ($300,000) for improvements authorized by the 2016 Five Lagunas Entitlements that were ultimately not constructed. Accordingly, the City agrees it will credit this payment towards Owner’s Public Art Obligation for the 2026 Project.

Nonrefundable Advance. Owner paid City a nonrefundable guaranteed Public Art In-lieu Fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000) on or before the date that was ninety (90) days after the Original Development Agreement Date. Owner’s obligation to make this payment by the date set forth herein shall not be subject to extension pursuant to the provisions of Section 22.1 (Excusable Delay) of this Development Agreement. The City shall credit this payment against Owner’s Public Art Obligation for the 2026 Project. However, said payment shall be subject to the provisions of Section 10.5.3 of this Development Agreement and Owner expressly agrees that this payment shall be guaranteed and nonrefundable to Owner, and that the City may retain and expend such payment, even if Owner’s Public Art Obligation for the 2026 Project is less than Three Hundred Fifty Thousand Dollars ($350,000). Owner acknowledges and agrees that the Three Hundred Thousand Dollar ($300,000) credit provided for in Subsection 10.4.1 of the Development Agreement shall not be applied to reduce Owner’s obligation to pay the nonrefundable guaranteed fee required by Subsection 10.4.2 of the Development Agreement.

Notwithstanding any other provision of this Development Agreement, to the extent, and for the period, necessary to implement the provisions hereof, Section 10.4.2 of this Development Agreement shall survive termination of this Development Agreement and remain enforceable and

Exhibit B-4
executory by the Parties notwithstanding termination of the remainder of this Development Agreement.

Traffic Impact Mitigation Fees
The 2026 Project, as initially approved pursuant to the Development Approvals, does not trigger payment of the traffic impact mitigation fee in accordance with Chapter 9-102 of the Laguna Hills Municipal Code. If, however, there are future amendments or modifications to the 2026 Project, prior to issuance of any building permits, the Owner shall, pursuant to Chapter 9-102, pay a traffic impact mitigation fee, if applicable.

Exhibit C

EXHIBIT C

PROJECT SITE PLAN (AT FULL BUILD-OUT)

Exhibit C

Exhibit D-1

EXHIBIT D

DEVELOPMENT AGREEMENT MILESTONES
Milestone Outside Date Nature of Obligation Subject to
Excusable
Delay?
Milestone One 90 Days From Original
Development Agreement
Date
Owner shall have submitted the
following Fees to the City:
• Public Art In-lieu Fee
Advance Payment of $350,000
(§10.4.2)
• 1st Nonrefundable Public Park
In-lieu Fee Payment of
$2,000,000 (§10.3.3(A))1
• 1st Nonrefundable Community
Benefit Fee Payment of
$1,113,533 (§10.5.1(A))
Status: Obligation satisfied.

No
Milestone Two 15 Months from Original
Development Agreement
Date
Owner shall have submitted the
following Fees to the City:
• 2nd Nonrefundable
Community Benefit Fee
Payment of $1,113,533
(§10.5.1(B))
Status: Obligation satisfied.

No
Milestone Three 4 Years (48 Months) from
Original Development
Agreement Date
Owner shall have submitted the
following Fees to the City:
• 2nd Nonrefundable Public Park
In-lieu Fee Payment of
$2,000,000 (§10.3.3(B)) 1
Status: Obligation satisfied.

No
1 Owner’s obligation to make this nonrefundable guaranteed fee payment is not subject to Excusable Delay; however, Owner may defer payment of this fee during the pendency of Litigation Delay pursuant to Subsection

22.1.4 (Deferral of Payment of Public Park In-lieu Fees During Pendency of Litigation Delay) of the Development Agreement.

Exhibit D-2
Milestone Outside Date Nature of Obligation Subject to
Excusable
Delay?
Milestone Four Five years (60 months)
from Original
Development Agreement
Date
Owner shall pay to City $500,000
as the final of five Community
Benefit Payments (§10.5.1(c).

No
Milestone Five Seven years (84 months)
from Original
Development Agreement
Date
Owner shall pay City the amount
equivalent to $10,000,000 less any
credits for fees paid under

10.3.3(A)-(B) or prior fees paid
under 10.3.4. (§10.3.4)
No
Milestone Six 4 Years (48) Months from
Development Agreement
Date
Owner shall have Commenced
Construction of Phase One
Required Improvements
(§5.4.1(A))
Yes
Milestone
Seven
Five Years (60 months)
from the Development
Agreement Date
Owner shall have Completed
Construction of the Phase One
Required Improvements
(§5.4.1(B))
Yes
Milestone Eight Eight Years from the
Development Agreement
Date
Owner shall pay to City $500,000
as a Community Benefit Fee if
Hotel 1 and/or Hotel 2 is not
Complete. (§10.5.9)
No
Milestone Nine 15 years from Original
Development Agreement
Date
Owner shall pay City the amount
equivalent to $20,000,000 less any
credits for fees paid under

10.3.3(A)-(B) or prior fees paid
under 10.3.4. (§10.3.4)
No

Exhibit E-1

EXHIBIT E
[INTENTIONALLY OMITTED]

Exhibit F-1

EXHIBIT F

AFFORDABLE HOUSING REGULATORY AGREEMENT
AND

DECLARATION OF RESTRICTIVE COVENANTS
FORM

Exhibit F-2

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Laguna Hills
c/o City Clerk
24035 El Toro Road
Laguna Hills, California 92653
______________________________________________________________________________ (Space Above Line for Recorder’s Use)
Exempt from Recorder’s Fees Pursuant to
Government Code §§ 6103 and 27383

AFFORDABLE HOUSING REGULATORY AGREEMENT
AND

DECLARATION OF RESTRICTIVE COVENANTS

BY AND BETWEEN
THE CITY OF LAGUNA HILLS, a municipal corporation, duly organized and existing under the Constitution and laws of the State of California AND
______________________________, a ________________________________

Exhibit F-3

AFFORDABLE HOUSING REGULATORY AGREEMENT

AND DECLARATION OF RESTRICTIVE COVENANTS
This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into for reference purposes as of __________________ (the “Effective Date”), by and between the City of Laguna Hills, a municipal corporation, duly organized and existing under the Constitution and laws of the State of California (“City”) and ________________________, a _________________________ (“Affordable Housing Developer”). City and Affordable Housing Developer are individually referred to herein as a “Party” and collectively as the “Parties.”

RECITALS
A. Affordable Housing Developer is the owner of that certain real property located in the City of Laguna Hills, generally located at [ADDRESS], Laguna Hills, California, as more particularly described in the legal description attached hereto as Exhibit A and incorporated herein (“Site”).

B. On [DATE], the Laguna Hills City Council adopted Resolution No. ___ conditionally approving Case No. USE-0__-20__ authorizing modifications to the Village at Laguna Hills mixed use project previously approved pursuant to Resolution No PA2022-03-08- 02, subject to certain conditions of approval (the “2026 VLH Development Approvals”).

C. On [DATE], the Laguna Hills City Council adopted Ordinance No. _____ approving that certain Amended and Restated Development Agreement between the City and MGP FUND X Laguna Hills, LLC for the Village at Laguna Hills mixed use project (the “Amended & Restated Development Agreement” (“MGP”). The Amended & Restated Development Agreement became effective on [DATE] and was recorded on [DATE] in the official records of Orange County, California, as Document No. ________________.

Development of the Site is subject to the terms and provisions of the Amended and Restated Development Agreement, and Affordable Housing Developer is a partial assignee of said agreement.

D. As material consideration for the long term assurances, vested rights, and other City obligations provided by the Amended & Restated Development Agreement and as a material inducement to City to enter into the Amended and Restated Development Agreement, MGP agreed to provide certain public benefits to the City as specified in the Amended & Restated Development Agreement, including the transfer of the Site in fee to Affordable Housing Developer for the construction and operation of the Affordable Senior Housing Project. The Amended & Restated Development Agreement provides for the Affordable Housing Developer to enter into and record this Agreement against the Site concurrent with Affordable Housing Developer’s close of escrow on the Affordable Housing PSA.

E. On [DATE], the Laguna Hills City Council approved Final Tract Map No. ___, which established the Site as a separate legal parcel.

Exhibit F-4
F. Affordable Housing Developer subsequently acquired the Site pursuant to the Affordable Housing PSA and assumed certain rights and obligations under the Development Agreement with respect to the Site.

G. Affordable Housing Developer intends to construct the Affordable Senior Housing Building on the Site along with associated parking facilities, common areas, sidewalks, landscaping, lighting, signage, amenities, and other improvements on the Site in accordance with the VLH Development Approvals and the Amended & Restated Development Agreement.

H. To ensure the continued affordability of the Affordable Units in perpetuity, Affordable Housing Developer is required to record this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants against the Site.

I. The purpose of this Agreement is to restrict the occupancy and rents of _______ (__) of the Affordable Units for the benefit of Extremely Low Income Households and to restrict the occupancy and rents of _______ (__) of the Affordable Units for the benefit of Restricted Income Households as required by the Amended & Restated Development Agreement. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Affordable Housing Developer and Affordable Housing Developer’s successors and assigns for the full Term of this Agreement.

AGREEMENT

1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits:
“2026 VLH Development Approvals” is defined in Recital B. “Adjusted for Family Size Appropriate for the Unit” means adjusted for a household of one person in the case of a studio unit, two persons in the case of one-bedroom unit, three persons in the case of a two-bedroom unit, and four persons in the case of a three-bedroom unit. “Affordable Housing PSA” means the purchase and sale agreement between Affordable Housing Developer and the MGP Fund X Laguna Hills, LLC or its permitted successors and assigns for the conveyance of the site in fee to Affordable Housing Developer. “Affordable Rent for Restricted Income Households” means a monthly Gross Rent that does not exceed a rate of thirty percent (30%) to seventy percent (70%) of the imputed income limitation applicable to the Affordable Unit occupied by such household pursuant to Internal Revenue Code Section 42(g)(2)(C), where the household occupying the Affordable Unit is deemed to have an income level not exceeding a range of thirty percent (30%) to seventy percent (70%) of Area Median Gross Income.

Exhibit F-5
“Affordable Senior Housing Building” means the residential building Affordable Housing Developer will construct on the Site consistent with the Amended & Restated Development Agreement, the 2026 VLH Development Approvals and this Agreement. "Affordable Senior Housing Project" means the development and operation of between 200 and 250 Affordable Units on the Site, which Affordable Units shall (i) be Restricted Income Units, (ii) have an average level of affordability, across the entire Affordable Senior Housing Project, of sixty percent (60%) of Area Median Gross Income, and (iii) at least ten percent (10%) of which shall be affordable to Extreme Low Income Households at no greater than thirty percent (30%) of AMI, subject to the terms of this Agreement.
“Affordable Units” means a unit or units of housing that is/are located within the Affordable Senior Housing Building that is/are affordable to Restricted Income Households, as those terms are defined herein.
“Affordable Housing Laws” means all state, federal and local laws, rules, regulations and program requirements governing the financing, development, operation, marketing, occupancy and affordability of housing subject to income or age restrictions, including, without limitation, Internal Revenue Code Section 42, CDLAC regulations, TCAC Regulations, HUD requirements, fair housing laws, and any requirements imposed by public lenders or governmental funding sources.
“Gross Rent” means all amounts paid by household for occupancy of an Affordable Unit determined consistent with Internal Revenue Code Section 42(g)(2). “Area Median Gross Income” means the income for each Affordable Unit as determined consistent with Internal Revenue Code Section 42(g)(1)(B) as published by the California Tax Credit Allocation Committee at the time the Affordable Units are put in service. “City” means the City of Laguna Hills, a municipal corporation, duly organized and existing under the Constitution and laws of the State of California.
“CDLAC” means the California Debt Limit Allocation Committee. “City Manager” means the City Manager of the City of Laguna Hills or his or her designee. “City Resident” means an individual whose domicile was located within the City of Laguna Hills for the twelve (12) month period preceding his or her application for occupancy of an Affordable Unit.
“Development Agreement” is defined in Recital C.
"Extremely Low-Income Households" means a household earning not greater than thirty percent (30%) of Area Median Gross Income.
“HUD” means the United States Department of Housing and Urban Development.

Exhibit F-6
“Restricted Income Households” means a household for which Gross Rent is not more than a rate of 30% of the imputed income limitation applicable to the Affordable Unit occupied by such household pursuant to Internal Revenue Code Section 42(g)(2)(C) and applicable TCAC requirements.
“Restricted Income Units” means the __________ (__) Housing Units which are required to be made available for, rented to, and occupied by Restricted Income Households at an Affordable Rent for Restricted Income Households pursuant to the provisions of this Agreement. “Rent” means the total of monthly payments for (a) use and occupancy of each Affordable Unit and land and facilities associated therewith, (b) any separately charged fees or service charges assessed by Affordable Housing Developer which are required of all tenants, other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone, internet, television or digital access services, and (d) possessory interest, taxes or other fees or charges assessed for use of the land and real property facilities associated therewith by a public or private entity other than Affordable Housing Developer.
“Senior” means an individual that is fifty-five (55) years of age or older. “Site” is defined in Recital A.
“Term” shall mean ninety-nine (99) years from the Effective Date of this Agreement. “TCAC” means the California Tax Credit Allocation Committee. “TCAC Regulations” means Title 4, Division 17, Chapter 1 of the California Code of Regulations as amended from time to time.
“Tenant Household” means a household occupying an Affordable Unit. “Veteran” means an individual that is a United States armed forces veteran.

2. Covenants of Affordable Housing Developer. Affordable Housing Developer hereby covenants and agrees, for itself and its successors and assigns, for the Term of this Agreement, that the Affordable Units shall be used solely in compliance with the 2026 VLH Development Approvals, the Amended & Restated Development Agreement, and this Agreement, as each may be amended from time to time. Affordable Housing Developer represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the requirements of this Agreement, and Affordable Housing Developer covenants that it shall not enter into any agreement that is inconsistent with the requirements of this Agreement without the express written consent of the City.

4. Affordability Restrictions for Restricted Income Units.

Exhibit F-7
(A) Unless otherwise agreed to by the City pursuant to a written amendment to this Agreement, Affordable Housing Developer hereby agrees to make available, restrict occupancy to, and rent _____ (__) of the Affordable Units to Restricted Income Households at an Affordable Rent for Restricted Income Households in accordance with this Section. The ______ (__) Restricted Income Units shall at all times consist of a mix of studio units, one-bedroom units, two-bedroom units, and three-bedroom units in the following proportion; provided, however, that the Affordable Housing Developer may substitute a unit with more bedrooms for a unit with fewer bedrooms:
______ (__) three-bedroom units;
______ (__) two-bedroom units;
______ (__) one-bedroom units; and
______ (__) studio units.
(B) A Tenant Household who qualifies as a Restricted Income Household at the time he/she/it first occupies a Restricted Income Unit shall be deemed to continue to be so qualified until such time as a recertification of such Tenant Household’s income in accordance with Section 7 below demonstrates that such Tenant Household no longer qualifies as a Restricted Income Household.
(C) In the event a Tenant Household occupying a Restricted Income Unit initially qualifies as a Restricted Income Household but the income of such Tenant Household increases, such increase shall not be deemed to result in a violation of the restrictions of this Agreement concerning limitations upon income of occupants, provided that the occupancy by such Tenant Household is consistent with the TCAC Regulations. If and when such occupancy becomes inconsistent with TCAC Regulations, the Affordable Housing Developer must make the Affordable Unit available to another qualifying Tenant Household, subject to termination of the prior Tenant Household’s lease and Affordable Housing Developer’s lawful recovery of possession of the Affordable Unit.
(D) Notwithstanding anything herein to the contrary, the Affordable Senior Housing Project shall be operated such that one hundred percent (100%) of the Affordable Units are incomerestricted Affordable Units, with at least ten percent (10%) of the Affordable Units reserved for Extremely Low Income Households and the Affordable Units maintaining an average affordability level of sixty percent (60%) of Area Median Gross Income. Subject to the foregoing requirements, individual Affordable Units may be designated at affordability levels ranging from thirty percent (30%) to seventy percent (70%) of Area Median Gross Income.

Upon acquisition of the Site by a lender or other successor owner through foreclosure, deed in lieu of foreclosure, or similar proceeding, the affordability restrictions shall automatically be deemed satisfied so long as all Affordable Units are restricted to occupancy by households earning not more than eighty percent (80%) of Area Median

Exhibit F-8
Gross Income, unless more restrictive requirements are imposed by any senior regulatory agreement, financing source, or applicable law.
5 Occupancy Limits. The maximum occupancy for each of the Affordable Units shall be consistent with the TCAC Regulations.

6. Selection of Tenants and Priority for Leasing of Affordable Units. Affordable Housing Developer shall be responsible for the selection of Tenant Households for the Affordable Units in compliance with lawful and reasonable criteria, applicable state and federal housing laws, Affordable Housing Laws, and other requirements of this Agreement. The Affordable Senior Housing Project shall be operated as senior housing in accordance with applicable law and the requirements of the Affordable Housing Covenant. To the extent permitted by applicable law, fair housing requirements, and applicable financing and regulatory restrictions, Affordable Housing Developer may implement a tenant selection preference within the pool of otherwise qualified senior applicants for (i) Veterans and/or (ii) persons who live or work within the City. The specific manner in which any such preference is implemented shall be determined by Affordable Housing Developer in consultation with applicable funding sources and regulatory agencies and shall be subject to all applicable Affordable Housing Laws and fair housing requirements. Nothing in this Agreement shall require Affordable Housing Developer to implement any preference that is not permitted by applicable law or that would jeopardize financing, tax credits, governmental approvals, or compliance with fair housing requirements.

7. Income Verification and Certification. For each Affordable Unit, prior to the initial occupancy, and annually thereafter throughout the Term of this Agreement, Affordable Housing Developer or Affordable Housing Developer’s Property Manager shall obtain from each Tenant Household a written certification in such format and with such supporting documentation as City may reasonably require demonstrating that such Tenant Household meets the applicable income and eligibility requirements established for the Affordable Unit. Such written certification shall include, without limitation, (i) the identity and age of each member of the Tenant Household; and (ii) a computation of the total combined, gross, pre-tax income of all adult occupants of the Tenant Household, as calculated pursuant to California Code of Regulations, Title 25, Section 6914, or such other applicable standard approved by City. Affordable Housing Developer shall verify, or shall cause its Property Manager to verify, the income certification of the Tenant Household.

Affordable Housing Developer shall retain such certifications for not less than five (5) years, and upon City's request, shall provide copies of such certificates to City and make originals available for City inspection.

8. Annual Report. No later than thirty (30) days after Affordable Housing Developer submits its annual TCAC compliance report to TCAC, Affordable Housing Developer shall provide a true and correct copy of same to City (each an “Annual Report”).

9. Recordkeeping Requirements; Access to Information; Inspections. Affordable Housing Developer shall maintain Affordable Unit tenant leases, income certifications, and other books, documents, and records related to the rental or leasing of the Affordable Units and operation of the Site for a period of not less than five (5) years after creation of each such record. In connection with monitoring compliance with this Agreement, upon at least three (3) business days'

Exhibit F-9
prior written notice, City shall be entitled to inspect any such books, documents, or records and to conduct an independent audit or inspection of such records at a location that is reasonably acceptable to the City Manager. Within forty-eight (48) hours' notice, during normal business hours and as often as may be deemed necessary, City and its authorized agents and representatives shall be permitted access to the Site and the right to examine the Housing Units and to interview tenants and employees, for the purpose of verifying compliance with this Agreement. Affordable Housing Developer agrees to cooperate with City in making the Site and such books, documents, and records available for such inspections or audits.

10. Marketing; Property Management; Maintenance.

A. Marketing of Affordable Units. Affordable Housing Developer shall market the Affordable Units in accordance with Section 6 of this Agreement and in accordance with the Marketing and Management Plan approved by the City.

B. Management Responsibilities. Affordable Housing Developer shall be responsible for all management functions with respect to the Affordable Senior Housing Project and the Affordable Units, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for construction, rehabilitation, management, repair, maintenance or marketing of the Project or the Affordable Units.

C. Property Manager. Affordable Housing Developer shall provide the City with the name and qualifications of any professional property management company or other organization retained by Affordable Housing Developer to manage the Affordable Units (including leasing, property management, maintenance and repair services, and reporting obligations) and ensure that Affordable Housing Developer's obligations under this Agreement are satisfied ("Property Manager"). Entering into an agreement with a Property Manager shall not relieve Affordable Housing Developer of its duties and obligations pursuant to this Agreement. Any such Property Manager shall have the requisite skill and qualifications to implement the Marketing and Management Plan approved by the City. If the City determines that the performance of the Property Manager is deficient based upon the standards set forth in the approved Marketing and Management Plan and in this Agreement, City shall provide notice of such deficiencies and Affordable Housing Developer shall use its best efforts to correct such deficiencies. In the event such deficiencies have not been cured within the time set forth in Section 17 hereof, City shall have the right to require Affordable Housing Developer to immediately remove and replace the Property Manager with another property manager or property management company which is reasonably acceptable to the City Manager, which is not related to or affiliated with Affordable Housing Developer, and which has not less than five (5) years' experience in property management, including significant experience managing housing facilities of the size, quality and scope of the Project.

Exhibit F-10
D. Maintenance. Affordable Housing Developer shall maintain or cause to be maintained the interior and exterior of the Affordable Housing Project and the Site in a decent, safe and sanitary manner, and in accordance with the standard of maintenance of first class multifamily rental apartment complexes within Orange County. Affordable Housing Developer shall provide adequate security measures for the Project, including without limitation, the installation of adequate lighting and deadbolt locks. If at any time Affordable Housing Developer fails to maintain the Project or the Site in accordance with this Agreement and such condition is not corrected within five (5) days after written notice from City with respect to graffiti, debris, and waste material, or thirty (30) days after written notice from City with respect to general maintenance, landscaping and building improvements, then City, in addition to whatever remedy it may have at law or at equity, shall have the right to enter upon the applicable portion of the Project or the Site and perform all acts and work necessary to protect, maintain, and preserve the Project and the Site, and to attach a lien upon the Site, or to assess the Site and/or bill Affordable Housing Developer, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by Affordable Housing Developer to City upon demand.

E. Marketing and Management Plan. Prior to the issuance of a certificate of occupancy for the Affordable Senior Housing Building, Affordable Housing Developer shall prepare and submit for City review and approval a plan for marketing and managing the Affordable Units (the "Marketing and Management Plan" or "Plan"). The Plan shall address in detail, without limitation, the following matters:
i. how Affordable Housing Developer plans to market the Affordable Units to prospective Extremely Low Income Households and Restricted Income Households in accordance with fair housing laws, Affordable Housing Laws, and this Agreement, including a plan for marketing and leasing the Affordable; ii. procedures for the selection of Tenant Households in accordance with this Agreement, including a description of how Affordable Housing Developer plans to certify the eligibility of Extremely Low Income Households and Restricted Income Households and implement the tenant selection priority provisions set forth in Section 6, above;
iii. procedures for annually verifying income and recertifying the eligibility of Tenant Households;
iv. procedures for ensuring that the required number and unit size mix of Affordable Units is maintained;
v. Affordable Housing Developer's procedures for complying with its monitoring and recordkeeping obligations;

Exhibit F-11
vi. the standard form(s) of rental agreement(s) Affordable Housing Developer proposes to enter into with Extremely Low Income Households and Restricted Income Households;
vii. Affordable Housing Developer's property management duties; viii. Affordable Housing Developer's plan to manage and maintain the Project and the Affordable Units;
ix. the identity of the Property Manager, if any, to be contracted with to provide property management services at the Project and a description of the management team;
x. all written management policies with respect to the Affordable Units; and xi. a security system and crime prevention program.

The Marketing and Management Plan shall be approved by the City Manager prior to the issuance of a certificate of occupancy for the Affordable Senior Housing Building. Any proposed amendment or change to the Marketing and Management Plan during the Term of this Agreement shall be submitted to the City and approved by the City Manager. If the City Manager fails to respond to the submittal or resubmittal of an initial or amended Management Plan within fortyfive (45) days, such Plan or amended Plan shall be deemed approved. The marketing, leasing, and management of the Affordable Units shall be in compliance with the Marketing and Management Plan, or amended Marketing and Management Plan, as approved by the City Manager.

Affordable Housing Developer shall reimburse City for all actual legal and third-party consulting costs incurred by City in reviewing the initial Marketing and Management Plan and any amendments thereto. Concurrent with its submittal of the initial Marketing and Management Plan and any subsequent amendment, Affordable Housing Developer shall provide a deposit to the City in an amount sufficient to cover the estimated costs of the City's review, as determined by the City Manager in his or her reasonable discretion. Upon completion of review of the Plan or an amendment to the Plan by the City, the City shall provide Affordable Housing Developer with an invoice containing an accounting of the actual legal and third-party consulting costs incurred by the City and the amount(s) of all deposits provided by Affordable Housing Developer. If the actual legal and third-party consulting costs incurred by the City for such review are less than the amount of the deposit(s) made by Affordable Housing Developer, City shall reimburse Affordable Housing Developer for the difference at the time it provides the invoice. If the actual legal and third-party consulting costs incurred by the City for such review exceed the amount of the deposit(s) made by Affordable Housing Developer, Affordable Housing Developer shall pay City the difference within thirty (30) days of receipt of the invoice from the City.

11. Annual Monitoring Fee. Concurrent with submittal of each Annual Report, Affordable Housing Developer agrees to pay an annual monitoring and administration fee to the City in an amount established from time to time by the City Manager to reimburse City for the estimated reasonable costs incurred by the City in monitoring Affordable Housing Developer's compliance

Exhibit F-12
with, and otherwise administering, this Agreement, including, but not limited to, City's review of Annual Reports and conduct of inspections and/or audits of the Site and/or records as provided in this Agreement. The amount of such fee shall not exceed such estimated reasonable costs, as determined by the City Manager in his or her reasonable discretion, taking into account actual documented reasonable costs in prior year(s). City shall provide the basis for calculation of such fee to Affordable Housing Developer promptly upon request. The Parties estimate that the fee will not exceed Ten Thousand Dollars ($10,000) per year, increased at the rate of three percent (3%) per year, compounded annually.

12. Use of the Site. All uses conducted on the Site, including, without limitation, all activities undertaken by Affordable Housing Developer pursuant to this Agreement shall conform to all applicable provisions of the Laguna Hills Municipal Code and other applicable federal, state, and local laws, rules, and regulations. The Site shall at all times during the Term of this Agreement be used as a residential apartment project and none of the Housing Units shall at any time be utilized on a transient basis, nor shall the Housing Units or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, emergency shelter, supportive housing facility, transitional housing facility, hospital, nursing home, sanitarium or rest home, short-term or vacation rental, or be converted to condominium or cooperative ownership or tenantship. All of the community facilities and any social programs provided to the residents of the Housing Units shall be available at all times on an equal, non-discriminatory basis to residents of all Housing Units.

13. Duration of Affordability Restrictions and Requirements. The Affordable Units and the Site shall be permanently operated for the duration of the Term of this Agreement.

14. Indemnity. To the fullest extent permitted by law, Affordable Housing Developer shall, at its expense, defend (with counsel acceptable to City and subject to approval by Affordable Housing Developer), indemnify, and hold harmless City, and its officers, agents, employees, attorneys and representatives from any and all losses, liabilities, claims, lawsuits, causes of action, judgments, settlements, court costs, attorneys' fees, expert witness fees, and other legal expenses, costs of evidence of title, costs of evidence of value, and other damages of whatsoever nature arising out of or in connection with Affordable Housing Developer's ownership, construction, operation, management, marketing, leasing, or operation of the Site and/or the Affordable Units, Affordable Housing Developer's evaluation and determination of a Tenant Household's gross income, or Affordable Housing Developer's failure to perform any obligations as and when required by this Agreement, except for such liability arising from the gross negligence or willful misconduct of City. The provisions of this Section 14 shall survive the expiration or earlier termination of this Agreement.

15. Covenants Run with the Land; Priority. In no event shall this Agreement be made junior or subordinate to any deed of trust or other documents providing financing for the construction or operation of the improvements on the Site, or any other lien or encumbrance whatsoever for the entire Term of this Agreement. Nor shall this Agreement be made junior or subordinate to any extension, amendment, or modification of any lien or encumbrance recorded against the Site prior to the date hereof.

Exhibit F-13

16. Mortgage Protection. No breach or default under this Agreement shall defeat, terminate, extinguish, render invalid or otherwise affect the lien of any junior mortgage or deed of trust encumbering the Site or any part thereof or interest therein; provided, however, that any successor in interest to the Site shall be bound by this Agreement, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale, or otherwise.

17. Default. An event of default occurs under this Agreement when: (a) there is a breach of any condition, covenant or promise set forth herein; (b) written notice thereof has been given to the defaulting Party; and (c) such breach has not been cured within thirty (30) days after such notice was given to the defaulting Party or, if such breach cannot reasonably be cured within such thirty (30) day period, the defaulting Party fails to commence to cure the breach and/or fails thereafter to diligently proceed to complete such cure. A waiver by either Party of any such breach shall not be construed as a waiver of any succeeding breach of the same or other condition, covenant or promise.

18. Remedies. The occurrence of an event of default hereunder shall give the non-defaulting Party the right to proceed with any and all remedies available at law or equity. Such remedies may include an action for damages, an action or proceeding for specific performance, and/or an action or proceeding for injunctive relief. Such actions or proceedings may require the defaulting Party to pay damages, to perform its obligations and covenants under this Agreement, and to enjoin and cease and desist from acts which may be unlawful or in violation of the provisions of this Agreement.

19. Additional Remedies for Certain Defaults; Remedy For Excessive Rent Charge. (A) It shall constitute a default for the Affordable Housing Developer to charge or accept for any Restricted Income Unit rent amounts in excess of an Affordable Rent for Restricted Income Households. In the event that the Affordable Housing Developer charges or receives such higher rental amounts, in addition to any other legal or equitable remedy that the City shall have for such default, the Affordable Housing Developer shall be required to pay to the City an amount equal to the difference between the rent that should have been charged and the amount of the rent received from the Tenant Household, plus interest compounded at the maximum rate allowable for judgments. (B) It shall also constitute a default for the Affordable Housing Developer to fail to rent any of the required Extremely Low Income Units to an Extremely Low Income Household, to knowingly (or without investigation as required herein) to knowingly (or without investigation as required herein) initially rent any Restricted Income Unit to a tenant who is not a Restricted Income Household. In the event the Affordable Housing Developer violates this provision, in addition to any other remedy at law or equity that the City shall have for such default, the Affordable Housing Developer, for each separate violation, shall be required to pay to the City an amount equal to the total rent the Affordable Housing Developer received from such ineligible tenant, plus interest compounded at the maximum rate allowable for judgments.

Exhibit F-14

20. Attorneys' Fees and Costs. In addition to any other remedies provided hereunder or available pursuant to law, if either Party to this Agreement commences an action against the other Party to this Agreement arising out of or in connection with this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs of investigation, and costs of suit from the losing Party.

21. Rights and Remedies Cumulative. The rights and remedies of the parties are cumulative, and the exercise by either Party of one or more of its 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.

22. Time of Essence. Time is expressly made of the essence with respect to the performance by City and Affordable Housing Developer of each and every obligation and condition of this Agreement.

23. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Orange County, California or in the Federal District Court for the Central District of California.

24. Headings; Construction; Statutory References. The headings of sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. All references in this Agreement to particular statutes, regulations, ordinances or resolutions of the United States, the State of California, or the City of Laguna Hills shall be deemed to include the same statute, regulation, ordinance or resolution as hereafter amended or renumbered, or if repealed, to such other provisions as may thereafter govern the same subject.

25. Third Party Beneficiaries. No persons or entities other than the Parties and their successors and assigns shall have any right of action under this Agreement.

26. City Approvals and Actions. Whenever any approval, notice, direction, consent or request by City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager.

27. Successor and Assigns. This Agreement shall run with the land, and all of the terms, conditions, restrictions, and covenants contained in this Agreement shall be binding upon Affordable Housing Developer, City, their permitted successors and assigns, and all successors in interest to all or any portion of the Site or the Project. Whenever the terms "Affordable Housing Developer" or "City" are used in this Agreement, such terms shall include any other successors and assigns as herein provided. Not later than thirty (30) days prior to a transfer of any interest in the Site or the Project or any interest in Affordable Housing Developer, Affordable Housing Developer shall provide written notice to the City of such transfer.

Exhibit F-15

28. Notices. Any approval, disapproval, demand, document or other notice which either Party may desire to give to the other Party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, (iii) mailing in the United States first-class mail, postage prepaid, or (iv) by email, with confirmation of receipt to the intended recipient, addressed to the address of the Party as set forth below, or at any other address as that Party may later designate by notice:

If to the City: City of Laguna Hills
24035 El Toro Road
Laguna Hills, California 92653
Attn: City Manager
Email: _______________________
If to the Affordable Housing Developer: _____________________________ _____________________________
_____________________________
Attn: _______________________
Email: _______________________

29. Amendment. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party.

Each alteration, change, or modification to this Agreement shall be recorded against the Site in the Official Records of Orange County, California. The City Manager is authorized to enter into amendments of this Agreement on behalf of the City.

30. Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby.

31. Legal Advice. Each Party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel, 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 by or on behalf of the other Party, or their respective agents, employees or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.

32. Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the development of the Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement.

Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. The relationship of Affordable Housing Developer and City shall not be construed as a joint venture, equity venture, partnership or any other relationship. City

Exhibit F-16
neither undertakes nor assumes any responsibility or duty to Affordable Housing Developer (except as expressly provided in this Agreement) or to any third party with respect to the Project.

Affordable Housing Developer and its employees are not employees or agents of City, and Affordable Housing Developer and its employees shall at no time pretend to be or hold themselves out as employees or agents of the City. Except as City may specify in writing, Affordable Housing Developer shall not have any authority to act as an agent of City or to bind City to any obligation.

33. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. [Signatures appear on following page.]

Exhibit F-17
IN WITNESS WHEREOF, City and Affordable Housing Developer have executed this Development Agreement as of the date and year first above written. “CITY”
CITY OF LAGUNA HILLS, a California municipal corporation By: _____________________________
_____________________________,
City Manager
ATTEST:
_____________________________________
_____________________________________,
City Clerk
APPROVED AS TO FORM:
_____________________________________
_____________________________________,
City Attorney
“AFFORDABLE HOUSING DEVELOPER”
_____________________________________,
a ___________________________________
By: _____________________________
Name:________________________
Title:________________________
By: _____________________________
Name:________________________
Title:________________________
All signatures to be acknowledged by a Public Notary

Exhibit F-18
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ____________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
_______________________________________
Notary Public
(seal)

Exhibit F-19
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ____________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
_______________________________________
Notary Public
(seal)

Exhibit F-20
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
On ____________________, before me, _________________________________, Notary Public, personally appeared ________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same 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.
_______________________________________
Notary Public
(seal)

Exhibit F-21

EXHIBIT A

LEGAL DESCRIPTION OF SITE

Exhibit G-1

EXHIBIT G

REASONABLE APPROVAL PROCESSING TIMES
[Pursuant to Subsection 22.1.1(C) (Administrative Delay] Type of City or Other Agency Action,
Approval, or Permit
Reasonable Time Period for Processing
and Acting on
Request/Submittal/Application
City Staff Review of Each Complete Phased
Final Subdivision Map Submittal (Including
City Plan Check of Map, Closure Calcs, and
Title Report)
First Check: 20 Working Days
Second Check: 15 Working Days
Third and Subsequent Checks: 10 Working
Days
County Review and Approval of Each Phased
Final Subdivision Map
120 Days (Cumulative)
**Includes the cumulative time for County
staff review of all submittals and resubmittals of a Phased Final Map. Does not include periods of time Owner is making
corrections between submittals.

City Council Consideration / Approval of
Each Phased Final Subdivision Map
(Following Approval by County and payment
of fees)
30 days after approval of Phased Final Map
by County, payment of fees, and Owner’s
execution of City Subdivision Improvement
Agreement (if applicable), or at next regularly
scheduled City Council meeting if more than
30 days after all of the above.
**City approval of a Phased Final Map is
contingent upon the Final Map being in
compliance with all applicable conditions of
approval and/or Owner’s execution of a
Subdivision Improvement Agreement and
provision of acceptable security acceptable to
City.

Public Property Encroachment Permit
(Including City Plan Check of Improvement
Plans)
First Check: 15 Working Days

Exhibit G-2
Type of City or Other Agency Action,
Approval, or Permit
Reasonable Time Period for Processing
and Acting on
Request/Submittal/Application
On-Site Grading Permits / On-Site
Improvements (Including City Plan Check of
Rough and/or Precise Grading Plans,
Hydrology Study, WQMP, SSWMP,
Improvement Plans, Hydraulic Analysis,
Storm Drain Plans, etc.)
First Check: 20 Working Days
City Engineer Review of Surveyor’s Pad
Elevation Certificate and the Geotechnical
Engineer’s Final Soils Certification
First Check: 5 Working Days
City Plan Check Completion (Per Plan Type)
--Building Plan Check
--Construction and Staging Plan Review
--Lighting and Photometric Plan Review
--Waste Management Plan Review
--Outdoor Dining / Patio Plan Review
First Submittal: 20 Working Days
Second Submittal: 15 Working Days
Third and Subsequent Submittals: 10
Working Days
City Building Permit Issuance 5 Working Days
Landscape Plan Compliance Review (LHMC
Chapters 9-46 and 9-47)
First Submittal: 20 Working Days
Second Submittal: 20 Working Days
Third and Subsequent Submittals: 10
Working Days
Waste Reduction and Recycling Plan Review
(LHMC Chapter 5-48)
First Submittal: 20 Working Days
Second Submittal: 20 Working Days
Third and Subsequent Submittals: 10
Working Days

Exhibit G-3
Type of City or Other Agency Action,
Approval, or Permit
Reasonable Time Period for Processing
and Acting on
Request/Submittal/Application
All Other Governmental Agency
Permits/Approvals (i.e., approvals by
governmental agencies other than City)
** County of Orange review of Phased Final
Subdivision Maps addressed separately,
above.
**Other Governmental Agencies may
include, but not be limited to, Orange County
Fire Authority, Orange County Health Care
Agency, El Toro Water District, Saddleback
Valley Unified School District (payment of
fees only), and the State of California
(elevators).
**Administrative Delay does not apply to
review or approvals of utility companies or
other agencies that are not governmental
agencies, including, but not limited to,
Southern California Edison, Southern
California Gas Company, AT&T, etc.
90 Days (Cumulative)
**Includes the cumulative time for Agency
review following submission of an initial
complete application to the Agency for which
a permit or ministerial approval is requested.

Does not include periods of time Owner is
making corrections between submittals.

EXHIBIT H

PROCEDURES AND REQUIREMENTS FOR PREPARATION, SUBMITTAL,

REVIEW, APPROVAL, AND INSTALLATION OF PUBLIC ART
This Exhibit H sets forth the procedures and requirements for preparation, submittal, review, approval, and installation of Public Art for the Village at Laguna Hills Mixed Use Project (the "2026 Project") in accordance with Section 7.5 of the Development Agreement.

The 2026 Project is an integrated mixed-use development on approximately 68 acres consisting of multiple components, including Public Art installations, which Owner contemplates developing in multiple phases over the Term of the Development Agreement. This Exhibit H is intended to establish procedures and requirements to ensure that the Public Art required in conjunction with the 2026 Project is installed in an integrated, thought-out, and cohesive manner consistent with the goals, objectives, and standards of the Specific Plan’s "Public Art" provisions.

I. Owner’s Public Art Obligation
A. Owner’s Public Art Obligation. Section 7.5 of the Development Agreement provides that Owner shall furnish Public Art in connection with the 2026 Project and/or pay a Public Art In-lieu Fee with a combined minimum aggregate value of one-half percent (0.5%) of the total aggregate construction costs of the 2026 Project ("Owner’s Public Art Obligation").

For this purpose, construction costs are based on the valuation as determined by the City’s Community Development Director and indicated on the building applications submitted in order to obtain permits for construction of all of the 2026 Project components. City will determine the portion of Owner’s Public Art Obligation attributable to each discrete 2026 Project component at the time City receives an application for permits for construction of such 2026 Project component by multiplying the construction cost of such 2026 Project component, as determined by City, by one-half percent (0.5%) ("Component Public Art Obligation"). The sum at any point in time of the Component Public Art Obligation for each building permit that has been approved and/or applied for is referred to herein as "Owner’s Accrued Public Art Obligation." B. In-Lieu Payment Contribution. Pursuant to Section 7.5 of the Development Agreement, the Parties have agreed that Six Hundred Fifty Thousand Dollars ($650,000) of Owner’s Public Art Obligation will be satisfied by the Three Hundred Thousand Dollar ($300,000) credit and Three Hundred Fifty Thousand Dollar ($350,000) nonrefundable advance described in Section 10.4 of the Development Agreement (collectively, "Owner’s In-Lieu Payment Contribution"). Owner and City agree that Owner’s In-Lieu Payment Contribution correlates to a total aggregate construction cost of One Hundred Thirty Million Dollars ($130,000,000) [$650,000 / 0.5% = $130,000,000].

C. Actual Art Obligation. Pursuant to Section 7.5 of the Development Agreement, the Parties have agreed that that portion of Owner’s Public Art Obligation that exceeds Six Hundred Fifty Thousand Dollars ($650,000) must be satisfied through the actual provision of Public Art on the Property ("Owner’s Actual Art Obligation"). Unless otherwise proposed by

Owner and included as a requirement within the Conceptual Project Art Program approved pursuant to Section II, Owner and City agree that Owner’s Actual Art Obligation will not be triggered until the estimated total aggregate construction cost of 2026 Project components exceeds One Hundred Thirty Million Dollars ($130,000,000). Consistent with the Specific Plan, expenses that may be attributed to Owner’s Actual Art Obligation include the artist fee for design and fabrication, mountings and bases for installation of the artwork, and lighting that is integral to the artwork, but do not include landscaping surrounding the art, delivery expenses, or installation costs. That portion of Owner’s Accrued Public Art Obligation that exceeds Six Hundred Fifty Thousand Dollars ($650,000) is referred to herein as "Owner’s Accrued Actual Art Obligation."
II. Conceptual Project Art Program
A. Conceptual Project Art Program Required. Before the first building permit for any building in the 2026 Project is issued, Owner shall prepare, submit, and obtain City approval of a concept Public Art program for the entire 2026 Project (the "Conceptual Project Art Program"). All Public Art that is thereafter constructed and installed on the Property must be consistent with the approved Conceptual Project Art Program.

B. Conceptual Project Art Program Components. The Conceptual Project Art Program shall include the following components:

1. Goals and Objectives. A description of the goals and objectives of the Conceptual Project Art Program.

2. Theme. A description of the proposed theme of the Public Art to be installed on the Property.

3. Standards. Standards governing type, media, materials, size, scope, and content of Public Art to be installed on the Property. All standards should be consistent with the Specific Plan provisions for Public Art. Owner shall consider the following when developing proposed standards for Public Art installations:
a. Relevance of the artwork to the City, its values, culture, and people;
b. Suitability of the artwork for outdoor display, including its maintenance and conservation requirements.
c. Relationship of the artwork to the site, especially how it serves to activate or enhance public space.
d. Appropriateness of the scale of the artwork.
e. Community standards of decency;

f. Construction and material standards for Public Art set forth in the "Public Art" provisions of Section V of the Specific Plan. Pursuant to the Specific Plan, permissible types of Public Art include, but are not limited to, sculptures, paintings, graphic arts, mosaics, photographs, fountains, decorative arts, and the preservation of historical or cultural resources. The Specific Plan also requires that artwork be constructed of durable, long-lasting materials that can withstand outdoor display and require low maintenance. Recommended materials include bronze, stainless steel, high-grade aluminum or hard stones. In addition, the Specific Plan states that artworks incorporating water features must be designed so that the artwork can stand on its own should the water cease to function properly.

4. Location. A description and depiction of the locations where Public Art is anticipated to be installed and standards for locating Public Art. Consistent with the Specific Plan, Public Art installations (i) should be located in places that are open and easily accessible to the public; (ii) should be prominently placed within the Property; (iii) should be oriented toward the pedestrian experience of the 2026 Project and/or located within the Village Park; and (iv) should not be sited near monument signs, walls, benches, or utility boxes, since these structures may block viewing the art and diminish the aesthetic value of the artwork.

5. Criteria for Selection of Artists. A description of how artists commissioned to create or fabricate original art for the 2026 Project shall be selected and the criteria that shall be used to select artists. Pursuant to the Specific Plan, artists selected must have experience in design concepts, fabrication, installation and long-term durability of large-scale outdoor artworks, and be approved by the City’s Planning Agency prior to selection. Owner may, but is not required, to include a list of proposed artists and their qualifications as part of the Conceptual Project Art Program.

6. Drawings and Illustrations. Owner is encouraged to include concept drawings, illustrations, and/or visual examples depicting the type, nature, size, scale, and location of the types of Public Art envisioned by the Conceptual Project Art Program. At Owner’s option, Owner may include illustrations of specific proposed Public Art installations.

7. Phasing Plan. A phasing plan for the funding and installation of Public Art.
a. The phasing plan shall provide for the funding and installation of Public Art on the Property within timeframes consistent with the anticipated phasing of the 2026 Project components and infrastructure and shall establish outside dates within the Term of the Development Agreement by which Public Art installations at specified locations or areas of the Property shall be completed.

At a minimum, the phasing plan shall ensure that Public Art with a minimum value equal to or exceeding the amount of Owner’s Accrued Actual Art Obligation attributable to the 2026 Project components Owner is required to Develop in Phase One shall be installed prior to the date Owner is required to

Complete Construction of such required Phase One components pursuant to Subsection 5.4.1 of the Development Agreement.
b. If the phasing plan contemplates that funds will be accumulated within a Public Art Fund established pursuant to Section V to facilitate the financing and planning of larger Public Art installations serving the 2026 Project, it shall address the anticipated amounts needed to fund such Public Art installations, the anticipated timing of completion of such Public Art installations, and any applicable requirements or limitations with respect to deposits to or withdrawals from the Public Art Fund for such Public Art installations. c. The phasing plan shall address how Owner’s In-Lieu Payment Contribution shall be applied to satisfy Owner’s Public Art Obligation in relation to the sequence of issuance of building permits for construction of 2026 Project components. Unless otherwise proposed by Owner and included as a requirement within the approved Conceptual Project Art Program, Owner is not required to install any Public Art until the estimated total aggregate construction cost of 2026 Project components exceeds One Hundred Thirty Million Dollars ($130,000,000).

Notwithstanding the foregoing, at Owner’s option, the phasing plan may require the installation of Public Art in conjunction with the construction of 2026 Project components before the estimated total aggregate construction cost of the 2026 Project components exceeds One Hundred Thirty Million Dollars ($130,000,000). d. At Owner’s option, the phasing plan may include requirements for the funding and/or installation of Public Art in conjunction with the development of specific parcels of the Property and/or components of the 2026 Project, which shall be binding on and enforceable against future transferees, assignees, and developers.

8. Maintenance Standards. Proposed minimum maintenance standards for Public Art that is installed on the Property.

9. O&M Funding and Implementation. A description of the mechanism through which operation and maintenance of Public Art installed on the Property shall be funded and implemented for the life of the 2026 Project.

C. Review and Approval by Planning Agency. The Conceptual Project Art Program shall be subject to review by the City’s Planning Agency for conformance with the requirements and goals of the Specific Plan’s Public Art provisions. Owner understands and agrees that approval of Owner’s submitted Conceptual Project Art Program is subject to the discretionary approval of the City's Planning Agency, subject to applicable limits of state and federal law.

D. Amendments. The Conceptual Project Art Program may be amended from time to time with the approval of the City’s Planning Agency.

III. Final Art Submittals
A. Final Art Submittal Required. Before fabricating and installing any piece of Public Art, Owner must prepare, submit, and obtain City approval of final plans and specifications for such Public Art ("Final Art Submittal").

B. Required Content of Final Art Submittals. Each Final Art Submittal shall describe and demonstrate how the proposed Public Art is consistent with the approved Conceptual Project Art Program and the Specific Plan and shall include, without limitation, detailed plans and specifications, schematics, and descriptions of the type, size, medium/material, location, content, and value of the proposed Public Art, a description of the proposed artist(s), a proposed timeline for installation of the Public Art, and a complete application for any Subsequent Development Approvals required for installation of the Public Art. More than one Public Art installation may be combined in a single Final Art Submittal.

C. Review and Approval by Planning Agency. The design, artist, type, size, medium, location, content, estimated value, and timeline for installation of each Public Art installation shall be subject to review by the City’s Planning Agency for consistency with the Conceptual Project Art Program and conformance with the requirements and goals of the Specific Plan’s Public Art provisions. Owner understands and agrees that approval of each Final Art Submittal is subject to the discretionary approval of the City's Planning Agency, subject to the applicable limits of state and federal law; provided, however, that the Planning Agency may not deny or impose conditions on a proposed Final Art Submittal based on aspects of the proposed Public Art that conform to the Conceptual Project Art Program approved by the Planning Agency.

IV. Installation of Approved Public Art
A. Obligation. Owner shall install approved Public Art within the timeframes set forth in the Conceptual Project Art Program phasing plan and each Final Art Submittal approved by the City’s Planning Agency.

B. Time Extensions. Time extensions not exceeding six (6) months may be approved by the City Manager, in his or her reasonable discretion. Time extensions exceeding six (6) months shall require approval of the Planning Agency, in its reasonable discretion.

C. Excusable Delay. The timeframes in which Owner is required to install Public Art shall be subject to extension for periods equal to the duration of any Excusable Delay pursuant to Section 22.1 of the Development Agreement.

D. Withholding of Permits for Noncompliance. In addition to any other remedies available to City, Owner’s failure to complete installation of Public Art within required timeframes shall entitle City to withhold future building permits or certificates of occupancy for the 2026 Project until Public Art of a value equal or exceeding the amount of Owner’s Accrued Actual Art Obligation has been installed.

V. Public Art Fund
A. Establishment of Public Art Fund. Rather than installing a separate Public Art installation in conjunction with the construction of each building to satisfy Owner’s Actual Art Obligation, Owner may accumulate funds in a fund held in trust by the City (the "Public Art Fund") to facilitate the financing and planning of larger Public Art installations serving the 2026 Project as provided in the approved Conceptual Project Art Program.

B. Effect of Deposits into Public Art Fund. Subject to any applicable requirements or limitations set forth in the approved Conceptual Project Art Program, deposits by Owner into the Public Art Fund in an amount equal to one-half percent (0.5%) of the estimated construction cost of any discrete 2026 Project component, as determined by City, shall permit Owner to obtain building permits and/or certificates of occupancy for such 2026 Project component prior to approval of Final Art Submittals for, and/or installation of, specified Public Art installations.

Such deposits into the Public Art Fund shall not be deemed to satisfy or excuse Owner’s obligation under the Development Agreement to install actual Public Art.

C. Withdrawals from Public Art Fund. Following approval by the City’s Planning Agency of a Final Art Submittal for a Public Art installation intended to be financed with funds held in the Public Art Fund, Owner may withdraw funds from the Public Art Fund in an amount up to the estimated value of the Public Art installation, as determined by the Planning Agency in conjunction with approval of the Final Art Submittal. Consistent with the Specific Plan, allowable expenses attributable to the value of a Public Art installation include the artist fee for design and fabrication, mountings and bases for installation of the artwork, and lighting that is integral to the artwork, but do not include landscaping surrounding the art, delivery expenses, or installation costs.

D. Forfeiture in the Event of Expiration, Termination, or Cancellation of Development Agreement. In the event the Development Agreement expires or is terminated or cancelled pursuant to the terms of the Development Agreement, and Owner’s Accrued Actual Art Obligation has not been satisfied by the date of such expiration, termination or cancellation, that portion of the funds, if any, held in the Public Art Fund equal to the difference between Owner’s Accrued Actual Art Obligation and the value of Public Art that has actually been installed shall be forfeited to the City and deposited into City’s Public Art In-Lieu Fund.

VI. Project Building and Occupancy Permits
A. Building Permits. In order to be entitled to issuance of a building permit for any discrete 2026 Project component, Owner must demonstrate that the combination of (1) the value of specific Public Art installations already approved by the City’s Planning Agency; and (3) the amount deposited by Owner into a Public Art Fund to fund larger Public Art installations serving the 2026 Project pursuant to the approved Conceptual Project Art Program.

B. Certificates of Occupancy. In order to be entitled to issuance of a final certificate of occupancy for any building in the 2026 Project, Owner must demonstrate that it is in

185792712.50
compliance with the timeframes for installation of Public Art set forth in the Conceptual Project Art Program phasing plan and all approved Final Art Submittals.

The Village at Laguna Hills
Attachment 4 - 13
City Council and Planning Agency Joint Public Hearing, July 14, 2026 Attachments 4 – 13 for the Village at Laguna Hills staff report can be viewed and downloaded at:
https://lagunahillsca.gov/176/Village-at-Laguna-Hills-Project-Document